RP202 History of Wall Street

 RP202 History of Wall Street

What is now New York City was once a Dutch colony. After the Dutch bought the land from the Native Americans in the area, they built a wall to protect themselves from attacks. The wall lasted for about 50 years in the mid-1600s, but the name it gave to the street that ran along it has lived for centuries.

Wall Street became a center of commerce early in New York's history. Though it was only a handful of blocks long, it connected the East River with other major streets, which made it a convenient place to set up warehouses for imported goods and facilities for exports.

The idea of buying and selling bonds, contracts, and other investments in businesses wasn't new. The first stock exchange was set up in Belgium in 1531, followed by exchanges in Amsterdam and Paris. In New York, wealthy merchants along Wall Street traded stocks by word of mouth. They would meet under a buttonwood tree at the end of the street. In 1792, they got tired of this informal state of affairs. That year, a group of men formally established what they called The Stock Exchange Office, a formal, regulated entity to buy and sell stocks through.

The stock exchange in New York wasn't an instant success. On the contrary, in 1817, some members were upset with the poor performance of their exchange and went to observe the bustling, thriving exchange in Philadelphia. They came back with new ideas and made the first of many changes. In 1863, the organization was given its current name, the New York Stock Exchange (NYSE).

The NYSE has weathered the storms, from bubbles, panics, and depression to acts of terrorism. So far, it continues to dominate American finance. In 1800, only about 20 companies were traded publicly. Today, a billion shares change hands every day. Prices rise and fall, but the bell that opens the NYSE every morning just keeps ringing.