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Published on Aug 22, 2013 in Featured Articles, News, North America

The Origin of Wall Street

Wall Street is synonymous with the stock market and the financial district in New York City. But to some, Wall Street is a symbol of much more. It’s become a symbol of the entire U.S. financial markets. However, few people know where the term Wall Street came from.

Wall Street, in fact, has its origins in the 17th century. At that time the area of lower Manhattan was sparsely populated and was largely comprised of a settlement called New Amsterdam. This community was, for the most part, agricultural in nature and property at this time was divided into plots of land separated by picket and plank fences.

In 1653 the residents of New Amsterdam decided to erect a 12 foot wall of timber and earth around the settlement as a defense against Indians and the British. Although the British ultimately dismantled the fence in 1699, the northern boundary of the New Amsterdam settlement was referred to among locals as Wall Street. It kept that name. The street itself is only 0.7 miles long and started at Pearl Street, the shoreline at the time, and ran to Trinity Place, the other shoreline at that time.

Wall Street has, from its beginning, integrated itself into American history. It was a center of commerce and trade. It was a site where both traders and speculators would gather under a buttonwood tree at the foot of Wall Street to trade securities. In fact, in 1792, trading in securities became so prevalent that traders decided to formalize their association with one another in the Buttonwood Agreement. This agreement was the origin of the New York Stock Exchange and put structure around the trading of securities, set a commission structure, and tried to cut down on manipulative auctions.

Image from www.flickriver.com

Image from www.flickriver.com

Seven years later, on April 30, 1789, Wall Street was the scene for the inauguration of George Washington where he took his oath of office on the balcony of Federal Hall. This same location was where the Bill of Rights was passed. A century later, in 1889, a stock report, the Customers’ Afternoon Letter, eventually became the Wall Street Journal, a reference to the actual street on which trading was conducted, rather than to the financial markets.

From the beginning there was constant competition between Wall Street and Washington, D.C. for the nation’s security business. Both areas were, even at that time, very philosophically different from each other. Eventually the District of Colombia became increasingly oriented towards politics and Wall Street retained its securities business focus. In the 1840s and 1850s, as Wall Street grew and became more congested, residents started moving north to midtown and migrated away from the tip of Manhattan.

Gradually the economy in lower Manhattan changed from agricultural to financial and, between 1860 and 1920, New York became the world’s second largest financial capital, rivaled only by London. Today it’s the world’s leading financial center.

Alan Refkin

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