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Wall Street runs for a short eight blocks in lower Manhattan and is headquarters of America’s financial markets. But Wall Street is far more than a location—it has been adopted as a term to describe all U.S. financial institutions and U.S. economic power. It has been portrayed alternatively as powerful, hot-shot, corrupt, greedy, excessive and bullish. Below is a timeline of the location—and all that it has come to represent—through history.
Wall Street as a Wooden Wall
• 1652: During the Anglo-Dutch Wars, hostilities between England and the Netherlands spilled over into North America. The Dutch settlers of Manhattan Island, called New Amsterdam at the time, feared England was planning to attack and constructed a wooden wall as defense.
Costing the settlement 5,000 guilders and constructed from 15-foot planks and dirt, the wall was 2,340 feet long and nine feet tall. It featured cannons and spanned between two gates, one located at what is now the corner of Wall Street and Pearl Street, and the other on Wall Street. and Broadway. Called “de Waal Straat,” the earthen part of the structure came from earlier fortifications built to defend against possible attacks by Native Americans and pirates. The labor on the wall is believed to have been performed by slaves.
After a half century, the wall fell into disrepair and was slated for demolishment but was instead restored in 1693 in fear of a French invasion. It was finally demolished in 1699.
• December 13, 1711: Wall Street was made the site of the government-sanctioned slave market in New York City. In operation until 1762 at the site of one of the original Wall gates on Pearl Street, the market was a wooden building that provided the city with tax dollars from the active trade inside.
• 1731: A first attempt at creating a public library was made by the Society for the Propagation of the Gospel in Foreign Parts, located in City Hall on Wall Street.
• 1788: City Hall was officially renamed Federal Hall after New York City became the first capital of the United States. It was the site of several important historical events, such as the drafting of the Bill of Rights by Congress and the inauguration of George Washington as the first president. Federal Hall was later the first home of the New York Historical Society but was demolished in 1812.
The Buttonwood Traders
• May 17, 1792: Security traders who the previous year had begun to meet and make transactions under a Buttonwood tree on Wall Street banded together officially under the Buttonwood Agreement. The agreement was crafted to keep out government intervention and outsiders who wanted to join. Anyone who wasn’t a group member who wanted to buy stock had to do so through an approved broker. The signees first set up offices at the Tontine Coffee House, on the corner of Wall Street and Water Street. The building was also used for slave trading. The board moved into the Merchants’ Exchange building at 55 Wall Street 10 years later.
• March 8, 1817: After visiting and observing the Philadelphia Merchants Exchange, the Buttonwood traders used that as a model for their own version which they called the New York Stock and Exchange Board. The board created a constitution and elected a president, Anthony Stockholm, who oversaw each morning by announcing the stocks being traded.
The exchange had a dress code, with members suited in top hats and dress coats. To gain a seat on the exchange, a person had to be voted in and willing to pay the fee of $25. It rose to $100 by 1837 and to $400 by 1848.
• December 16, 1835: The Great Fire of 1835 decimated 700 buildings in lower Manhattan, totaling $40 million in damage, though only two died in the fires. Wall Street suffered numerous property losses, including the Tontine Coffee House and the Merchants’ Exchange building.
• 1837: Samuel Morse opened a telegraph demonstration office on Wall Street, charging 25 cents to see his invention. Brokers embraced the telegraph and soon, the area was filled with telegraph wires allowing brokerages to communicate remotely.
Wall Street History in Photos
The Stock Ticker Is Born
• 1867: The stock ticker was introduced on Wall Street. A creation of Edward A. Calahan of the American Telegraph company, the bulky machines featured wheels of narrow paper strips detailing transactions. The reports were dispensed to clerks, who delivered them to typists via pneumatic tube. The typists sent the information to brokers through the telegraph.
• February 5, 1870: The first Wall Street stock brokerage owned by women opened. Ohio-born sisters Victoria Woodhull and Tennessee Claflin were funded by Cornelius Vanderbilt. Vanderbilt was a grieving widower whom the sisters had targeted with seances. Tennessee eventually became his lover.
Women would have a tougher time infiltrating the New York Stock Exchange directly. Women were allowed out of the back rooms in the 1940s to work on the trading floor, but it wasn’t until 1967 that Muriel Siebert became the first woman to own a seat on the NYSE.
• 1882: The first electricity plant in the world is launched on Pearl Street by Thomas Edison in order to power 7,200 lamps on Wall Street.
• July 8, 1889: The Wall Street Journal debuted with a two-cent cover price, published by Dow Jones & Company. Its most popular feature was the “Dow-Jones Industrial Average,” an index that charted the stock performance.
• 1903: After two years of construction, the new New York Stock Exchange building opened at 18 Broad Street. Designed by architect George B. Post, the building boasted grand Corinthian pillars, statues by John Quincy Adams Ward, a marble trading floor and a 70-foot high ceiling. The building was the earliest in America to feature air conditioning, with a system designed by engineer Alfred Wolff. Beneath the building were hundreds of underground vaults where stock certificates were kept.
Explosion at J.P. Morgan
• September 16, 1920: A wagon parked in front of the Assay Office exploded at 12:01 p.m. The explosion was so powerful that it reverberated through the streets and sent a car flying into the 34th floor of the Equitable Building, before crashing down to the ground. Thirty people were killed and hundreds injured. Many horses also died and several buildings were destroyed. The area was bombarded with police as trading immediately ceased.
Investigators believed the target to be J.P. Morgan’s bank since the majority of victims were clerks and stenographers working there, though Morgan, himself, was on vacation.
Anonymous anarchists left flyers in mailboxes threatening further bombings and the crime was eventually pinned on an Italian anarchist group called the Galleans. A three-year investigation by the Bureau of Investigation never yielded any arrests.
• October 24, 1929: The stock market surged as high as 50 percent starting in 1928, despite indications that the economy was on the wane and predictions of stock market collapse by economist Roger Babson. It came to an end on what is now called Black Thursday, when the market dropped 11 percent.
By October 28, known as Black Tuesday, a panic ensued with 16 million shares traded away, and the over the next day, the market lost $30 billion. There was immediate recovery, but the damage was done and the market continued to slide until 1932, when it reached its lowest level ever.
It took all of the 1930s for the market to recover, a period called the Great Depression, which was defined by mass unemployment and poverty.
• October 19, 1987: Wall Street experienced one of the largest single-day crashes in 1987 with a $500 billion loss as markets plummeted worldwide. The computers of Wall Street were programmed to sell stock at specific price thresholds. A domino effect of computers liquidating thousands of stocks ensued, with clerks unable to stop the transactions. The automated program also prevented buying, which wiped away any bids. After this, special rules were implemented to allow automated protocols to be overridden and prevent future disasters.
• September 11, 2001: Terror attacks in the financial district result in 2,996 deaths, over 6,000 injuries and the destruction of the twin towers of the World Trade Center. Destruction and debris in the neighborhood created limited access to the financial offices that survived and damaged communication networks, shutting down the market for seven days. The disaster was followed by a period of heavy development in the area with a number of building projects arising, most notably One World Trade Center.
Subprime Mortgage Crisis
• September, 2008: In 2008, Wall Street was at the center of the worst financial crash since the Great Depression. Largely the result of mishandling of subprime mortgages, the crisis resulted in Freddie Mac and Fannie Mae being taken over by the government and Lehmann Brothers filing for bankruptcy.
With many other banks expected to follow, a federal bailout for trillions of dollars was announced. A crash in housing prices followed and across the country, there were massive foreclosures and seizures of homes.
• September 17, 2011: As part of a response to the aftermath of the financial crash and housing market disaster, the protest movement Occupy Wall Street descended on Zuccotti Park. Protestors set up an encampment to draw attention to economic inequality and call for the prosecution of the banks behind the financial crisis. Across the country, Occupy encampments and protests sprang up.
The movement was considered a leader-less one, operating on the principle of anarchy. Forced out of Zuccotti Park on November 15, 2011, the Occupy movement shifted its actions to other locations, organizing activist groups in the long term that re-emerged during the 2016 presidential election.
Occupy Wall Street: From A Blog Post To A Movement
The Occupy Wall Street protests have inspired similar events around America, and in dozens of countries. Here, a truck has been painted with a sign supporting the Occupy Portland protests in Oregon.
Don Ryan/AP hide caption
The Occupy Wall Street protests have inspired similar events around America, and in dozens of countries. Here, a truck has been painted with a sign supporting the Occupy Portland protests in Oregon.
After more than 30 days, the Occupy Wall Street movement has evolved from a protest in New York City into a growing international movement. And it all started in July, as a single blog post inspired by the Arab Spring.
Here's a look at significant developments in the Occupy Wall Street timeline, as the movement gathered momentum and spread to other U.S. cities.
Timeline: Tracking Occupy Wall Street's Growth
July 13: Adbusters publishes a blog post calling for "a shift in revolutionary tactics" and urging tens of thousands of people to converge on lower Manhattan. The plan: "set up tents, kitchens, peaceful barricades and occupy Wall Street for a few months. Once there, we shall incessantly repeat one simple demand in a plurality of voices."
The protest will have no leadership, the post notes. And its sole demand will not be determined until the gathered mass of protesters agree on what it should be.
But the post's authors can't resist offering a candidate: "[We] demand that Barack Obama ordain a Presidential Commission tasked with ending the influence money has over our representatives in Washington. It's time for Democracy Not Corporatocracy, we're doomed without it."
The post, signed "Culture Jammers HQ," also introduces the #occupywallstreet hashtag.
For anyone wanting to catch up on media coverage of Occupy Wall Street, here are some links to get you started:
July 26: The Occupy Wall Street website is launched the group also uses Twitter and Facebook to promote the Sept. 17 demonstration. Adbusters calls for similar protests to be held in central financial districts in Germany, Japan, Britain and around the world.
Aug. 23: The activist hacking group Anonymous releases a video supporting Occupy Wall Street and uses its Twitter feed to promote the demonstration.
Sept. 17: The rally and march take place, and the protesters set up a temporary city in lower Manhattan's Zuccotti Park. Soon it will have its own newspaper, food supply chain and Wi-Fi. Reports of arrests and clashes with police emerge almost daily. Many of the incidents are filmed and posted on YouTube.
Sept. 24: New York police officers arrest more than 80 protesters as they march to Union Square. The conflict brings fresh charges that the police are overly zealous in using force and pepper spray.
Oct. 1: More than 700 demonstrators are arrested during a march across the Brooklyn Bridge. Police officials say they targeted only those protesters who clogged traffic lanes instead of taking the pedestrian walkway.
Oct. 5: Many of America's largest unions announce their support for Occupy Wall Street as the movement holds a large march in Manhattan. In a poll, the group's approval rating is measured at 33 percent — 19 points higher than that of Congress.
Oct. 6: Demonstrations spread to more cities, including Washington, D.C., where protesters pledge to remain in place for weeks to come.
Oct. 11: Reports spread about a group seeking to counter Occupy Wall Street by claiming to be "the 53 percent of Americans subsidizing these people so they can go hang out on Wall Street to complain." Inspired by conservative blogger Erick Erickson's blog post on Oct. 5, the group's slogan is a play on "the 99 percent."
Oct. 12: New York Mayor Michael Bloomberg visits the protesters' camp in Zuccotti Park, telling them they have two days to vacate the park so its owners, Brookfield Office Properties, can clean it. His office cites "unsanitary conditions." Protesters begin cleaning the park themselves.
Oct. 14: Brookfield Properties announces that it will not force Occupy Wall Street to leave Zuccotti Park. On his radio show, Bloomberg says the company bowed to pressure from elected officials.
Oct. 15: Loosely coordinated demonstrations inspired by Occupy Wall Street take place in 951 cities in some 82 countries, according to organizers.
Oct. 17: Adbusters proposes an Oct. 29 "#RobinHood Global March" — and a candidate for the group's unifying demand: "On October 29, on the eve of the G20 Leaders Summit in France, let's the people of the world rise up and demand that our G20 leaders immediately impose a 1 percent #ROBINHOOD tax on all financial transactions and currency trades."
Oct. 19: The New York City Police Department says one its officers — who famously pepper-sprayed women during a Sept. 24 protest — will be disciplined and is likely to lose vacation days.
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Wall Street Was a Slave Market Before It Was a Financial Center
The Occupy Wall Street movement brought a lot of attention to Wall Street and the New York City financial district as the center of economic inequality in the United States. The 1 percent, the bankers, brokers, and hedge fund operators who dominate the global economy and politics in the United States own and make their home on Wall Street.
The Wall Street wealthy are equal opportunity buyers of influence, contributing mightily to both major political parties. In the 2008 presidential election, political action committees (PACs), employees, and owners of major Wall Street firms gave money to both Democrats and Republicans. The Obama campaign received over a million dollars from PACs, individuals, and groups associated with Goldman Sachs, $800,000 from Morgan Chase, $700,000 from Citigroup, and $500,000 from Morgan Stanley. The McCain campaign, while it did not fare quite as well, received over $300,000 from PACs, individuals, and groups associated with Morgan Chase and Citigroup, a quarter of a million dollars from Goldman Sachs, $200,000 from Wachovia, and over $350,000 from Merrill Lynch.
According to the non-partisan Americans for Campaign Reform, individuals and PACs in finance, insurance, and real estate contributed over $2 billion to federal campaigns between 1990 and 2008. "Members of the U.S. House and Senate received an average $142,663 and $1,042,663, respectively, in Wall Street contributions as of July 28, 2008." The total Wall Street "contribution" to people running for federal office in 2008 was over THREE HUNDRED MILLION DOLLARS.
Wall Street influence, and the battle between main Street and Wall Street stretches way back in United States history. Mary E. Lease was a well-known "stump" speaker for the Farmers' Alliance and the Populist Party. They called her and her colleagues stump speakers because they stood on tree stumps to be seen over the crowd. Between 1890 and 1896 she toured the country making speeches telling farmers to "raise less corn and more hell." Some scholars believe Mary E. Lease was the model for the character Dorothy in Frank Baum's The Wonderful Wizard of Oz. In one of her best-known speeches she told her audience:
"Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street. The great common people of this country are slaves, and monopoly is the master. Our laws are the output of a system which clothes rascals in robes and honesty in rags."
But the sordid history of Wall Street is actually much older and darker. December 13, 2011 was the three hundredth anniversary of the law passed by the New York City Common Council that made Wall Street the city's official slave market for the sale and rental of enslaved Africans.
1711 Law Appointing a Place for the More Convenient Hiring of Slaves
Source: Minutes of the Common Council of the City of New York, vol. II, 458, December 13, 1711
Be it Ordained by the Mayor Recorder Aldermen and Assistants of the City of New York Convened in Common Council and it is hereby Ordained by the Authority of the same That all Negro and Indian slaves that are lett out to hire within this City do take up their Standing in Order to be hired at the Markett house at the Wall Street Slip untill Such time as they are hired, whereby all Persons may Know where to hire slaves as their Occasions Shall require and also Masters discover when their Slaves are so hired and all the Inhabitants of this City are to take Notice hereof Accordingly.
The predecessor bank of Citibank, which has offices at 111 Wall Street, was actually founded by a banker and sugar trader deeply involved in financing the illegal slave trade bringing Africans into Cuba in the 19th century. When Moses Taylor died in 1882, he was one of the wealthiest men of that century with an estate reportedly worth $70 million, or about $1.6 billion in today's dollars.
There is now an online petition addressed to Mayor Bloomberg and the City Council calling for a historical marker at the site of the Wall Street slave market detailing its role in the history of New York City. I signed the petition and welcome others to join the campaign. The letter reads:
December 13th is the 300th anniversary of the law establishing the first slave market in New York. That market was located at the end of Wall Street where present day Water Street is. Yet there is not a single sign, plaque, marker, statue, memorial or monument with any reference to slavery or the slave trade in Lower Manhattan (with the exception of the African Burial Ground memorial).
The fact is that New York's first City Hall was built with slave labor. The first Congress passed the Bill of Rights there and George Washington gave his inaugural speech there. Slaves helped build the wall that Wall Street is named for. Slavery was such a big part of early New York that during the colonial era one in five people living in New York was an enslaved African. One in five. Yet there are no permanent signs acknowledging the role slaves played in early New York.
Even after the discovery of a massive, 6.6 acre burial ground where Africans -- free and enslaved -- were buried, with thousands of individuals possibly still in the ground, their contribution to New York is and has been completely invisible. After 300 years it is finally time to tell their story.
Timeline: A History of Insider Trading
Over the years, the Securities and Exchange Commission, the United States attorney for the Southern District of New York and the Manhattan district attorney have pushed to investigate and prosecute those accused of insider trading. Below are some of the key cases.
The Supreme Court established a rule that the director of a company must either disclose the inside information or abstain from trading. Although the case, Strong v. Repide, made it clear that an executive could not use privileged information for profit, it did not address the issue of who was an insider.
The law contains a key provision, Section 10, broadly outlawing certain forms of stock fraud. Based on Section 10, the Securities and Exchange Commission in 1942 adopted Rule 10b-5, making the fraud provisions applicable to purchases as well as sales of securities. Section 10 and Rule 10b-5 became the key provisions to prosecute illegal insider trading. Neither provision actually defines insider trading.
Acting on a tip that the Texas Gulf Sulphur Company had discovered a site near Timmins, Ontario, rich with copper ore, company officials traded heavily in the stock before disclosing the find.
The officials were sued by the Securities and Exchange Commission and by shareholders, who contended that the executives had traded on inside information. The United States Court of Appeals for the Second Circuit in New York ruled that anyone who possessed inside information of a consequential nature must either disclose it to all of the investing public or abstain from trading until that information was public.
In 1978, the S.E.C. said Vincent F. Chiarella, a printer at Pandick Press, had pieced together the names of corporate targets from confidential documents and then traded on that information. A federal court convicted Mr. Chiarella of 17 counts of securities fraud and sentenced him to one year in prison.
The Supreme Court said there must be a confidential relationship, or fiduciary duty, between any defendant and someone else for there to be a violation of the securities law.
The Supreme Court rules that Raymond Dirks, a financial analyst, did not commit illegal insider trading by telling clients to sell their stock in Equity Funding.
Mr. Dirks had uncovered a huge fraud in 1973. Rather than make his discovery public, he told clients to get rid of their stock in the company.
The court said the duty of a person who receives an inside tip, known in securities jargon as a tippee, depended entirely on whether the source of the tip had breached a legal duty to the corporation’s shareholders in passing the information along.
Ivan F. Boesky, the former stock speculator, agreed to settle insider trading charges and provide evidence about other wrongdoing on Wall Street. He was known as a loner, a man called “Ivan the Terrible” for his apparent success in trading stocks.
Mr. Boesky was a specialist in risk arbitrage, where stocks are bought in anticipation of a takeover, a merger or change in corporate ownership. His case is said to have influenced Oliver Stone’s movie “Wall Street.”
The Supreme Court upheld, 8 to 0, the conviction of R. Foster Winans on federal fraud charges for using advance knowledge of articles about publicly traded stocks to make illegal profits.
In the largest settlement ever of federal securities law violations, Drexel Burnham Lambert pleaded guilty to six felony counts. The deal ended an investigation lasting more than two years into Drexel’s relationship with Mr . Boesky .
The agreement was reached after a showdown between the firm’s chief executive and the United States attorney, Rudolph W. Giuliani, who gave the investment house until 4 p.m. to settle or be indicted.
The five principals of a defunct New Jersey investment partnership and a former trader with Drexel Burnham Lambert were found guilty of creating illegal tax losses through fraudulent stock deals.
The defendants in the case, which focused on trading by the partnership, Princeton/Newport Partners, were the first to be charged with racketeering as part of the government’s investigation that began in 1986 into crime on Wall Street.
Salim B. Lewis, a leading Wall Street trader who was once a special adviser to the Securities and Exchange Commission, pleaded guilty to criminal charges that he helped manipulate a stock price in 1986, in an action that benefited the American Express Company.
Mr. Lewis, known as Sandy, said only that he had acted after observing that a wave of short-selling was depressing the stock. President Bill Clinton pardoned him, and a federal court judge later said Mr. Lewis acted out of pure reforming impulse.
There was a long-held suspicion of insider trading in nearly every major takeover in the 1980s. “It was like free sex,” said the head of one of Wall Street’s largest investment banks. “You definitely saw the abuses growing, but you also saw the absence of people getting caught.”
Sweeping charges were leveled by the government and then dropped in 1987, five months after prosecutors arrested Robert A. Freeman of Goldman Sachs and two other traders, one being led from his office in handcuffs and another spending a night in jail before being charged.
The former head of risk arbitrage at Goldman was sentenced to four months in prison and fined $1 million for a single incident of insider trading.
Mr. Giuliani later said the case was perhaps the biggest mistake he had made as a prosecutor because the indictment had been brought too hastily.
Wall Street is the name of a street in lower Manhattan that began life in the 17th century as the wall that formed the northern boundary of the New Amsterdam settlement erected for defensive purposes. But Wall Street has come to be more than just a street.
Today when people refer to Wall Street, the term encompasses the businesses directly related to stock exchanges and the financial market. These are the companies that list on any of the stock exchanges as well as those companies, like investment firms, that invest in those companies and help companies "go public" (issue stocks and bond). Used even more broadly, many use "Wall Street" to symbolize big business and investing in the United States.
The resources in the section of this guide are related to researching the history of Wall Street more generally. If you are interested in researching particular exchanges see the exchanges part of this guide. Also, if you are interested in researching particular events related to Wall Street those can be researched on their own, for example:
Warren Buffett was born in Omaha, Nebraska, August 30, 1930. He came from a business family – his grandparents owned a grocery business and his father was an investment specialist and later was elected to Congress in 1942.
Warren Buffett purchased his first stock, Cities Service Preferred, for $38 a share when he was 11 years old. Buffett took to stock-picking like a seasoned professional, and had amassed approximately $53,000 in portfolio assets (in today’s dollars) by the time he was 16 years old.
His early lessons on stock picking have held firm over the decades. As a young investor, Buffett learned that picking stocks was tough, so when he found a good one, he hung on to it as long as he could.
Buffett continued investing into his 20s and at 32 years old, uncovered a New England textile company called Berkshire Hathaway.
Founded in 1839 as the Valley Falls Company (so named because it resided in Valley Falls, R.I.), the company owned multiple textile companies in the region, and eventually merged into the Hathaway Manufacturing Company in 1888.
After decades of industry growth, Hathaway Manufacturing and Berkshire Fine Spinning Associates merged in 1955. That company, headquartered in Bedford, Mass., employed 12,000 workers and generated more than $120 million in annual revenues, making the newly formed Berkshire Hathaway as one of the most successful textile firms in the U.S.
Yet by the end of the 1950s, the U.S. textile industry fell into disrepair, and Berkshire-Hathaway fell with it, losing seven of 15 plants in the New England region, setting up an uncertain future for the company.
Even with the company’s troubles, Buffett remained a believer. In 1962, intrigued by the company’s long-term business success and strong balance sheet, Buffett began buying up Berkshire Hathaway stocks, at a price of $7.60 a share.
By 1965, he owned a total of $14 million in Berkshire Hathaway stock, and wound up taking control of the company in May of that year. At that point, the company was a shell of its former self, with only two manufacturing plants and just over 2,000 employees – down from 12,000 in its glory days.
Change was in the air. Berkshire Hathaway had made its mark as a textile company (its founders had all owned textile firms in the New England region), but by 1967 Buffett was taking the company on a different path, into the insurance and investment sector.
It was one of the most successful bets in U.S. business history.
These Wall Street millionaires literally plotted to overthrow the president
P resident Franklin Roosevelt made an enemy of the richest Americans with remarkable haste. By his first term, his heavily progressive New Deal taxes and the suspension of the gold standard inspired vocal opponents within the highest echelons of industry. Among them was an irate William Randolph Hearst, who filmed a message decrying the “impudent” and “despotic” new tax code. Yet of all of Roosevelt’s powerful enemies, perhaps none were more formidable, or incensed, than those who considered throwing him out of office by way of a fascist military coup.
It is impossible to say exactly how close the Business Plot — also called the White House Coup and Wall Street Putsch — came to overthrowing the president. Nearly all we know about the plot is the result of an investigation conducted by the House McCormack-Dickstein Committee in November, 1934. Its chief whistleblower was one Major General Smedley Butler, a respected and tenured military leader with a talent for rallying support to his side. His part in the story began on July 1, 1933, the day he met with two members of the American Legion who had ties to Wall Street heavies.
At the time, Butler was enjoying the boost of a positive public profile, as a result of his enthusiastic advocacy for veterans. American Legion members Bill Doyle and Gerald MacGuire wanted to harness this when they asked Butler to appear at the Legion convention in Chicago, as part of a campaign to undermine the body’s leadership. Butler was sympathetic: He had long known of the Legion’s capacity for ignoring its members.
In a second meeting, MacGuire, a $150-a-week bond salesman for the financier Grayson M. P. Murphy, proposed Butler bring along a few hundred veterans for support, and showed him bank statements amounting to $106,000, to pay for their travel expenses. A skeptical Butler surmised that no coalition of veterans could have gathered those funds. Adding to his bemusement was the speech they wanted him to deliver. It lacked populist, pro-veteran rhetoric, and read heavily as a screed in favor of the gold standard, a policy which President Roosevelt had suspended about a month earlier.
The gold standard, as Butler’s subsequent research would uncover, was a major concern for the country’s wealthiest citizens. Bankers especially did not want to be paid back on their gold-backed loans with cheaper, ever-inflating paper. Keynesian economics be damned: To the capital interests of the country, a break from gold meant ravaging the nation’s wealth and savings.
At this point, Butler knew MacGuire was taking orders from someone, and requested to speak up the chain of command. It was then he met with Robert Sterling Clark, whose net worth of $30 million owed much to a recent inheritance from the Singer sewing machine fortune. Butler remembered Clark as a “millionaire lieutenant,” from when they served together during the Boxer Rebellion. Clark was blunt about his concerns. He and his associates hoped Butler would encourage support within the Legion and perhaps the country for the reinstatement of the gold standard. “I am willing to spend half of the 30 million to save the other half,” Clark confessed. As Butler suspected, this appeared less and less to be about veterans’ interests.
Clark also bankrolled MacGuire’s seven-month trip abroad in December of 1933, in which the bond salesman was to survey the transforming political tides of Europe. He observed the ascending Nazis. He appreciated the Italian Fascists and their symbiotic relationship with the country’s powerful business interests. But MacGuire’s ultimate model ended up being a right-wing nationalist league in France called the Croix-de-Feu, which had managed to summon 150,000 supporters, many of whom were veterans.
Gerald MacGuire was a portly, sweaty man, and made a habit of talking to Butler about his concerns with frustrating vagueness and equivocation. But after his trip, he brought Butler up to speed and came forward with an even larger proposal. Yes, MacGuire admitted, it was true that the money came from a coalition of concerned captains of industry. At the moment, they had invested $3 million in the project, and MacGuire estimated he could raise $300 million need be. What he wanted, he told Butler, was for the major general to assemble a paramilitary force of some 500,000 veterans, and to use them to throw President Roosevelt out of office.
MacGuire informed Butler that the press would soon make an announcement about the league of businessmen fatigued by the president’s reckless economic reforms. They planned to plant stories about Roosevelt’s ill health, and expected the president to comply with orders from his fellow patricians to hand over the highest seat of government. He would be permitted a ceremonial position while Butler and his allies steered the country in the proper direction.
An astounded Butler debated where to turn first, and decided to enlist a liberal Philadelphia paper to verify the details of his outlandish story. The paper sent their star reporter Paul Comly French who feigned anti-Roosevelt sympathies to interview MacGuire, who was candid about his views and details of the plot. He mentioned that the Remington arms manufacturers would supply the army, thanks to a working relationship with the DuPonts. “We need a Fascist government in this country,” he told the reporter, “to save the nation from the communists who want to tear it down and wreck all that we have built in America. The only men who have the patriotism to do it are the soldiers and Smedley Butler is the ideal leader. He could organize a million men overnight.”
Now that he had a second witness, Butler brought his story to the Feds. The committee began hearings on November 20, 1934. “To be perfectly fair to Mr. MacGuire,” Butler said, “He didn’t seem bloodthirsty. He felt that such a show of force in Washington would probably result in a peaceful overthrow of government.” French corroborated Butler’s testimony. Gerald MacGuire, however, denied everything but that the Legion solicited Butler’s support for the gold standard.
In a few days, the story hit the news cycle. “$3,000,000 Bid for Fascist Army Bared,” read one headline. Much of the press found the story risible. “Details are lacking to lend verisimilitude to an otherwise bald and unconvincing narrative,” wrote the New York Times. “The whole story sounds like a gigantic hoax … It does not merit serious discussion.”
Those implicated agreed. Banker Grayson M.P. Murphy called it a “damned lie” and said he wasn’t “able to stop laughing” at the thought he, a prominent citizen and veteran of the Spanish-American War would attempt such treason. Thomas Lamont, a Wall Street banker implicated, called it “perfect moonshine. Too unutterably ridiculous to comment upon.”
Shortly before the committee hearings, in September of 1934, the newly formed American Liberty League—made up of leaders and captains of industry opposed to the president “fomenting class hatred” and his handling of the Depression—released a statement. Among its members were the DuPonts, S.B. Colgate, Sewell Avery, John Raskob, Alfred P. Sloan, and former secretary of State Elihu Root. Butler noticed Robert Sterling Clark’s name on the list, as well as Grayson M. P. Murphy, Gerald MacGuire’s boss.
Also implicated in the plot was Al Smith, former New York governor and 1928 Democratic presidential nominee, as well as Prescott Bush, a banker, future Connecticut senator, and father to George H. W. Bush and grandfather to George W. Bush.
Of these wealthy and prominent people, none was called for testimony, and none was punished.
Butler went on to rise in public profile, championing populism and pacifism with his 1935 book, War Is a Racket, but for the beneficial publicity, the committee as well as French agree that he was telling truth. And only recently has the public learned of a letter to Congress sent from an official at the company building the Hoover Dam, in which the writer warned of a plot by the “American Fascist Veterans Association” to overthrow the president.
What remains for many historians to debate is how wide the gap was in this scheme between contemplation and fruition. Butler’s whistleblowing certainly stopped it short, but one wonders if nothing else would have brought down such a complicated and inauspicious plan. Still, as historian Sally Denton points out, “The Fascist plot which General Butler exposed did not get very far, but that plot had in it three elements which make successful wars and revolutions: men, guns, and money.”
In the 1930s, Germany and Italy proved that no form of government should be taken for granted. At this exigent time in America — brought forth by the Depression, a destabilized world, and a transformative president — the rich doubled down on what they always do: protecting their own.
While Wall Street started as a street in lower Manhattan in the 17th century, today the term has come to mean more. Now it refers to the businesses directly related to stock exchanges and the financial markets, and even more broadly, big business and investing in the United States.
In this guide you will find items that look at the history of Wall Street. Also, given the importance of the specific stock exchanges, we have also included some general titles as well as material that will look at several of the larger exchanges including the New York Stock Exchange, the American Stock Exchange, and the NASDAQ. We have included older items which can provide a different perspective on Wall Street than we have now, by providing insight into how previous generations viewed Wall Street.
The "Roaring Twenties", the decade following World War I that led to the crash,  was a time of wealth and excess. Building on post-war optimism, rural Americans migrated to the cities in vast numbers throughout the decade with the hopes of finding a more prosperous life in the ever-growing expansion of America's industrial sector. 
Despite the inherent risk of speculation, it was widely believed that the stock market would continue to rise forever: on March 25, 1929, after the Federal Reserve warned of excessive speculation, a small crash occurred as investors started to sell stocks at a rapid pace, exposing the market's shaky foundation.  Two days later, banker Charles E. Mitchell announced that his company, the National City Bank, would provide $25 million in credit to stop the market's slide.  Mitchell's move brought a temporary halt to the financial crisis, and call money declined from 20 to 8 percent.  However, the American economy showed ominous signs of trouble:  steel production declined, construction was sluggish, automobile sales went down, and consumers were building up high debts because of easy credit. 
Despite all the economic warning signs and the market breaks in March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 (the Dow Jones average gained more than 20% between June and September). The market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking at 381.17 on September 3, 1929.  Shortly before the crash, economist Irving Fisher famously proclaimed "Stock prices have reached what looks like a permanently high plateau."  The optimism and the financial gains of the great bull market were shaken after a well-publicized early September prediction from financial expert Roger Babson that "a crash is coming, and it may be terrific".   The initial September decline was thus called the "Babson Break" in the press. That was the start of the Great Crash, but until the severe phase of the crash in October, many investors regarded the September "Babson Break" as a "healthy correction" and buying opportunity.
On September 20, 1929, the London Stock Exchange crashed when top British investor Clarence Hatry and many of his associates were jailed for fraud and forgery.  The London crash greatly weakened the optimism of American investment in markets overseas:  in the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes were interspersed with brief periods of rising prices and recovery.
Selling intensified in mid-October. On October 24, "Black Thursday", the market lost 11% of its value at the opening bell on very heavy trading.  The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, and so investors had no idea what most stocks were trading for.  Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor.  The meeting included Thomas W. Lamont, acting head of Morgan Bank Albert Wiggin, head of the Chase National Bank and Charles E. Mitchell, president of the National City Bank of New York.  They chose Richard Whitney, vice president of the Exchange, to act on their behalf. [ citation needed ]
With the bankers' financial resources behind him, Whitney placed a bid to purchase 25,000 shares of U.S. Steel at $205 per share, a price well above the current market.  As traders watched, Whitney then placed similar bids on other "blue chip" stocks. The tactic was similar to one that had ended the Panic of 1907 and succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. [ citation needed ]
On October 28, "Black Monday",  more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 12.82%. 
On October 29, 1929, "Black Tuesday" hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. The next day, the panic selling reached its peak with some stocks having no buyers at any price.  The Dow lost an additional 30.57 points, or 11.73%, for a total drop of 23% in two days.    
On October 29, William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market, but their efforts failed to stop the large decline in prices. The massive volume of stocks traded that day made the ticker continue to run until about 7:45 p.m. [ citation needed ]
|October 28, 1929||−38.33||−12.82||260.64|
|October 29, 1929||−30.57||−11.73||230.07|
After a one-day recovery on October 30, when the Dow regained 28.40 points, or 12.34%, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60. The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28, and reaching a secondary closing peak (bear market rally) of 294.07 on April 17, 1930. The Dow then embarked on another, much longer, steady slide from April 1930 to July 8, 1932, when it closed at 41.22, its lowest level of the 20th century, concluding an 89.2% loss for the index in less than three years. 
Beginning on March 15, 1933, and continuing through the rest of the 1930s, the Dow began to slowly regain the ground it had lost. The largest percentage increases of the Dow Jones occurred during the early and mid-1930s. In late 1937, there was a sharp dip in the stock market, but prices held well above the 1932 lows. The Dow Jones did not return to the peak closing of September 3, 1929, until November 23, 1954.   
In 1932, the Pecora Commission was established by the U.S. Senate to study the causes of the crash.  The following year, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities. 
After, stock markets around the world instituted measures to suspend trading in the event of rapid declines, claiming that the measures would prevent such panic sales. However, the one-day crash of Black Monday, October 19, 1987, when the Dow Jones Industrial Average fell 22.6%, as well as Black Monday of March 16, 2020 (−12.9%), were worse in percentage terms than any single day of the 1929 crash (although the combined 25% decline of October 28–29, 1929 was larger than that of October 19, 1987, and remains the worst two-day decline as of 25 March 2021 [update] ). 
World War II Edit
The American mobilization for World War II at the end of 1941 moved approximately ten million people out of the civilian labor force and into the war.  World War II had a dramatic effect on many parts of the economy and may have hastened the end of the Great Depression in the United States.  Government-financed capital spending accounted for only 5% of the annual U.S. investment in industrial capital in 1940 by 1943, the government accounted for 67% of U.S. capital investment. 
The crash followed a speculative boom that had taken hold in the late 1920s. During the latter half of the 1920s, steel production, building construction, retail turnover, automobiles registered, and even railway receipts advanced from record to record. The combined net profits of 536 manufacturing and trading companies showed an increase, in the first six months of 1929, of 36.6% over 1928, itself a record half-year. Iron and steel led the way with doubled gains.  Such figures set up a crescendo of stock-exchange speculation that led hundreds of thousands of Americans to invest heavily in the stock market. A significant number of them were borrowing money to buy more stocks. By August 1929, brokers were routinely lending small investors more than two-thirds of the face value of the stocks they were buying. Over $8.5 billion was out on loan,  more than the entire amount of currency circulating in the United States at the time.  
The rising share prices encouraged more people to invest, hoping the share prices would rise further. Speculation thus fueled further rises and created an economic bubble. Because of margin buying, investors stood to lose large sums of money if the market turned down – or even failed to advance quickly enough. The average price to earnings ratio of S&P Composite stocks was 32.6 in September 1929,  clearly above historical norms.  According to economist John Kenneth Galbraith, this exuberance also resulted in a large number of people placing their savings and money in leverage investment products like Goldman Sachs's "Blue Ridge trust" and "Shenandoah trust". These too crashed in 1929, resulting in losses to banks of $475 billion in 2010 dollars ($563.72 billion in 2020). 
Good harvests had built up a mass of 250 million bushels of wheat to be "carried over" when 1929 opened. By May there was also a winter-wheat crop of 560 million bushels ready for harvest in the Mississippi Valley. This oversupply caused a drop in wheat prices so heavy that the net incomes of the farming population from wheat were threatened with extinction. Stock markets are always sensitive to the future state of commodity markets, [ citation needed ] and the slump in Wall Street predicted for May by Sir George Paish arrived on time. In June 1929, the position was saved by a severe drought in the Dakotas and the Canadian West, plus unfavorable seed times in Argentina and eastern Australia. The oversupply was now wanted to fill the gaps in the 1929 world wheat production. From 97¢ per bushel in May, the price of wheat rose to $1.49 in July. When it was seen that at this figure American farmers would get more for their crop than for that of 1928, stocks went up again. 
In August, the wheat price fell when France and Italy were bragging about a magnificent harvest, and the situation in Australia improved. That sent a shiver through Wall Street and stock prices quickly dropped, but word of cheap stocks brought a fresh rush of "stags", amateur speculators, and investors. Congress voted for a $100 million relief package for the farmers, hoping to stabilize wheat prices. By October though, the price had fallen to $1.31 per bushel. 
Other important economic barometers were also slowing or even falling by mid-1929, including car sales, house sales, and steel production. The falling commodity and industrial production may have dented even American self-confidence, and the stock market peaked on September 3 at 381.17 just after Labor Day, then started to falter after Roger Babson issued his prescient "market crash" forecast. By the end of September, the market was down 10% from the peak (the "Babson Break"). Selling intensified in early and mid-October, with sharp down days punctuated by a few up days. Panic selling of massive proportion started the week of October 21 and intensified and culminated on October 24, October 28, and especially October 29 ("Black Tuesday"). 
The president of the Chase National Bank, Albert H. Wiggin, said at the time:
We are reaping the natural fruit of the orgy of speculation in which millions of people have indulged. It was inevitable, because of the tremendous increase in the number of stockholders in recent years, that the number of sellers would be greater than ever when the boom ended and selling took the place of buying.  
United States Edit
Together, the 1929 stock market crash and the Great Depression formed the largest financial crisis of the 20th century.  The panic of October 1929 has come to serve as a symbol of the economic contraction that gripped the world during the next decade.  The falls in share prices on October 24 and 29, 1929 were practically instantaneous in all financial markets, except Japan. 
The Wall Street Crash had a major impact on the U.S. and world economy, and it has been the source of intense academic historical, economic, and political debate from its aftermath until the present day. Some people believed that abuses by utility holding companies contributed to the Wall Street Crash of 1929 and the Great Depression that followed.  Many people blamed the crash on commercial banks that were too eager to put deposits at risk on the stock market. 
In 1930, 1,352 banks held more than $853 million in deposits in 1931, one year later, 2,294 banks failed with nearly $1.7 billion in deposits. Many businesses failed (28,285 failures and a daily rate of 133 in 1931). [ citation needed ]
The 1929 crash brought the Roaring Twenties to a halt.  As tentatively expressed by economic historian Charles P. Kindleberger, in 1929, there was no lender of last resort effectively present, which, if it had existed and been properly exercised, would have been key in shortening the business slowdown that normally follows financial crises.  The crash instigated widespread and long-lasting consequences for the United States. Historians still debate whether the 1929 crash sparked the Great Depression  or if it merely coincided with the bursting of a loose credit-inspired economic bubble. Only 16% of American households were invested in the stock market within the United States during the period leading up to this depression, suggesting that the crash carried somewhat less of a weight in causing it. [ citation needed ]
However, the psychological effects of the crash reverberated across the nation as businesses became aware of the difficulties in securing capital market investments for new projects and expansions. Business uncertainty naturally affects job security for employees, and as the American worker (the consumer) faced uncertainty with regards to income, naturally the propensity to consume declined. The decline in stock prices caused bankruptcies and severe macroeconomic difficulties, including contraction of credit, business closures, firing of workers, bank failures, decline of the money supply, and other economically depressing events. 
The resultant rise of mass unemployment is seen as a result of the crash, although the crash is by no means the sole event that contributed to the depression. The Wall Street Crash is usually seen as having the greatest impact on the events that followed and therefore is widely regarded as signaling the downward economic slide that initiated the Great Depression. True or not, the consequences were dire for almost everybody. Most academic experts agree on one aspect of the crash: It wiped out billions of dollars of wealth in one day, and this immediately depressed consumer buying. 
The failure set off a worldwide run on US gold deposits (i.e. the dollar) and forced the Federal Reserve to raise interest rates into the slump. Some 4,000 banks and other lenders ultimately failed. Also, the uptick rule,  which allowed short selling only when the last tick in a stock's price was positive, was implemented after the 1929 market crash to prevent short sellers from driving the price of a stock down in a bear raid. 
The stock market crash of October 1929 led directly to the Great Depression in Europe. When stocks plummeted on the New York Stock Exchange, the world noticed immediately. Although financial leaders in the United Kingdom, as in the United States, vastly underestimated the extent of the crisis that ensued, it soon became clear that the world's economies were more interconnected than ever. The effects of the disruption to the global system of financing, trade, and production and the subsequent meltdown of the American economy were soon felt throughout Europe. 
In 1930 and 1931, in particular, unemployed workers went on strike, demonstrated in public, and otherwise took direct action to call public attention to their plight. Within the UK, protests often focused on the so-called means test, which the government had instituted in 1931 to limit the amount of unemployment payments made to individuals and families. For working people, the Means Test seemed an intrusive and insensitive way to deal with the chronic and relentless deprivation caused by the economic crisis. The strikes were met forcefully, with police breaking up protests, arresting demonstrators, and charging them with crimes related to the violation of public order. 
There is a constant debate among economists and historians as to what role the crash played in subsequent economic, social, and political events. The Economist argued in a 1998 article that the Depression did not start with the stock market crash,  nor was it clear at the time of the crash that a depression was starting. They asked, "Can a very serious Stock Exchange collapse produce a serious setback to industry when industrial production is for the most part in a healthy and balanced condition?" They argued that there must be some setback, but there was not yet sufficient evidence to prove that it would be long or would necessarily produce a general industrial depression. 
However, The Economist also cautioned that some bank failures were also to be expected and some banks may not have had any reserves left for financing commercial and industrial enterprises. It concluded that the position of the banks was the key to the situation, but what was going to happen could not have been foreseen. 
Milton Friedman's A Monetary History of the United States, co-written with Anna Schwartz, argues that what made the "great contraction" so severe was not the downturn in the business cycle, protectionism, or the 1929 stock market crash in themselves but the collapse of the banking system during three waves of panics from 1930 to 1933.