For more than 400 years Manhattan has been the site of big trades, big gains and big losses. The island was originally purchased in 1626 from the Lenape Native Americans for a sum of 60 Dutch guilders, the equivalent of roughly $24, by the Walloon director-general Peter Minuit. At this time the city was hailed New Amsterdam.
Four decades later the Dutch lost the island to the English but gained another island, Run – one of the smallest of the Banda Islands of Indonesia – after a century of struggle over its ownership. The island was coveted for its nutmeg trees, from which both the spice nutmeg and mace were traded globally. Just before the Treaty of Breda was signed, following the end of the second Dutch-Anglo War of 1665-1667, the Duke of York renamed New Amsterdam New York. Unfortunately, in 1817, the Dutch monopoly on spice trade was ended when nutmeg trees that were sent and planted on various British colonies began yielding.
In the oldest sector of Manhattan Wall Street, originally called de Waal Straat, is thought to have received its name for an earthen fortress built on the northern boundary of the original New Amsterdam settlement. However, others believe the name was selected for the Walloons – a French-speaking people from Belgium. Thirty of the first families to step off the ship Nieu Nederlandt on Manhattan’s shores in 1624 were of this descent.
Later colonists and slaves, with the help of the government, fortified the wall, which started at Pearl Street, crossed Broadway and ran until the opposite shoreline. From the 17th Century merchants and traders gathered at various points along the Wall to buy and sell shares. A buttonwood tree became the marker for a meeting point at which speculators and traders would come to haggle securities. In 1792 the Buttonwood Agreement was created to formalize the association, creating with it a standard commission structure. This was the beginning of the New York Stock Exchange.
Just three years before, in 1789, George Washington was inaugurated the first president to lead the United States in New York’s Federal Hall on Wall Street. It was also on Wall Street that the first Bill of Rights was passed, and later Alexander Hamilton, the United State’s first treasury secretary, was buried at Trinity Church.
Wall Street: from the 19th Century On
Eventually any residences that occupied space on Wall Street were pushed out by the growing business sector to back-quarters known for their squalid conditions and high infant mortality rates. In the 19th Century, with the opening of the Erie Canal, the area became the ‘money capital of America’, prevailing even over Washington D.C., and becoming the second ranking financial capital in the world after London, England.
In 1884 Charles Dow, writer for the Wall Street Journal, began tracking 12 stocks he felt represented the American economy, and producing their average. These stocks included the American Tobacco Company, American Sugar Company, the Tennessee Coal, Iron and Railway Company, among other oil and gas firms. Of these original 12 the only stock still traded on the market today is that of General Electric.
When averages went up Dow deemed the economy in a bull market, and when they went down he termed it a bear market, descriptors still used abundantly today. The Dow Jones & Company was formed by Dow, fellow Wall Street journalist and statistician Edward Jones, and Charles Bergstresser.
At the turn of the 20th Century 23 Wall Street marked the corner of America, or perhaps the world’s, financial neighborhood as the headquarters for J.P. Morgan & Company. In 1920 a bomb exploded near to the Morgan Bank, killing 38 people, wounding many more, and fuelling the Red Scare, the second radical anti-communist movement of the time. Nine years later the stock market crash of 1929 would mark the start of the Great Depression in which 25 per cent of America’s population became unemployed, hungry and desperate.
During a period in the 1940s the government clamped down on Wall Street activity, mandating that stocks be purchased on margin, not credit, though these policies softened as time passed. By 1967 stock activity was flooding Wall Street, keeping brokers active at all hours. The 1970s saw large reform in how stocks were traded. No longer did transactions have to occur on the “Big Board” (NYSE) floor. This opened the doors to electronic and bank trading, meaning increased competition between stock brokers and traders as the market opened up to an increasing number of players.
The Reagan-era push for increased capitalism saw a time of posh commerce and drug swaps between young executives in pricey cars parked on Wall Street, but in 1987 the market crashed again. Floors of Manhattan buildings became vacant and Wall Street took on a somber air. However, a real estate push in the 1990s saw the island recover. In 1998 the City made a $900-million deal with the NYSE to stay put in Manhattan, rather than move to Jersey, while NASDAQ picked up from Washington, D.C. to settle down in the Big Apple.
At the turn of the millennium Wall Street was still considered the world’s financial center, with the NYSE the most prestigious stock market on the globe; but the 2001 attack on the World Trade Center made an irreversible effect. Though the NYSE re-opened within one week of September 11, many firms moved to midtown, Jersey, and even Boston, Chicago and Denver. Many brokers lost their year-end bonuses, concrete barriers were built to thwart vehicular bombings, and the district changed.
Government help encouraged some re-growth to the area throughout the decade, though economic forecasts remained grim, unemployment rose to nearly 10 per cent and housing prices plummeted. The Fed allowed Wall Street to borrow directly, a controversial move, though by 2010 Wall Street appeared to be coming back to life. The NYSE closed two of its trading floors in favour of increased electronic trade, and reforms affecting credit card rates and lending requirements came into place.
Today the Dow Jones Industrial Average (DJIA) is still one of the most commonly watched U.S. benchmark indices used to track stock market activity. Thirty big-name, publicly owned companies based out of the U.S. are tracked on this index.
Wall Street reports a brutal close to a grim week, month and overall quarter, down roughly 10 per cent, the biggest point drop since the end of 2008. A 110-point Dow plummet is thought to be largely influenced by global slowdown; specifically dismal economic data reported from China and Europe. NASDAQ has also seen a 37-point fall.
Despite this news, American spending and equipment orders were up this August and September, permeating a bit of needed optimism into the uncertain economic climate. Sitting at an apparent crossroads, the general sentiment in the Federal Reserve and on Wall Street seems to be “wait and see”.