The History of Wall Street

December 15, 2017   /    Fun Facts About NYC   /    Comments Off on The History of Wall Street

New York City is considered one of the most financially powerful cities in the world, and Wall Street is a major reason for this. Located in the Financial District, Wall Street is home to the most prominent stock exchanges in the United States, including the New York Stock Exchange. In addition to being New York City’s business center, FiDi also has a rich history that doesn’t match any other NYC neighborhood. Did you ever wonder how Wall Street rose to become the financial center of the United States? Continue reading to learn how this street in the Financial District became one of the biggest financial powerhouses in the world.

The Financial Center of the United States

Origins of Wall Street

17th Century Photo of New Amsterdam

Source: Wikimedia Commons

In the 17th century there was a Dutch settlement located near the tip of Manhattan Island that went by the name of New Amsterdam. The settlement developed over a period of time, and in 1664 it was captured by the British. New Amsterdam was renamed New York in honor of the Duke of York, who would later be known as James II.

In the northern area of the settlement a wall was built to protect it from pirate attacks and Native American tribes. The area near this wall would eventually developed into Wall Street. The name of the street stuck around, even though the wall was eventually taken down in 1699.

Wall Street as a Trading Outpost

Even in its early days Wall Street was one of the most popular trading areas in New York, and its location was one of the main reasons for this. Since Wall Street was located in Lower Manhattan it was between the East River and the Hudson River. This made it a popular destination for merchants coming from overseas, especially ones from Europe.

Many famous events took place on Wall Street during this time, including the official presidential inauguration of George Washington and the signing of the Bill of Rights. Even during its humble beginnings in the 18th century, Wall Street was gaining prominence around the world.

Founding the New York Stock Exchange

NYSE Exterior Shot

Source: Wikimedia Commons

Wall Street’s foray into the world of finance officially began on May 17th, 1792. On this day, 24 stock brokers signed the Buttonwood Agreement, which led to the creation of New York’s first official stock exchange. In 1817, brokers under the agreement put a number of reforms into place that led to the creation of the New York Stock and Exchange Board, which would develop into the New York Stock Exchange we know today.

At the time, Philadelphia was a major financial player in the United States, thanks to the founding of the Bank of Pennsylvania that would eventually become the Bank of North America. The founding of the New York Stock and Exchange Board was a direct response to the financial success Philadelphia found with its stock exchange.

Wall Street Entices Investors

NYC Skyline

Source: Wikimedia Commons

After the New York Stock and Exchange Board was founded investors were quickly drawn away from Philadelphia. These investors were drawn to New York primarily because of its good location and abundance of banks. Wall Street garnered more popularity overseas, mainly because the Hudson River was easier for traders to navigate. The Hudson River did not freeze over as often as the Delaware River, which had to be used to get to Philadelphia.

As Wall Street got more popular, it got to a point where there were way more businesses on the street than there were residences. It was clear that businesses of all kinds wanted to set up shop in New York. Overall, Wall Street’s new stock exchange ultimately helped make New York City the new financial center of the United States.

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