WALL STREET

Wall Street, in the broadest sense, refers to the financial epicenter of all business and banking in the United States. Not only is Wall Street synonymous with U.S. financial interests, but also is an international symbol of financial power. Wall Street is an umbrella term encompassing the New York Stock Exchange (NYSE), the American Stock Exchange (Amex), the over-the-counter market called the National Association of Securities Dealers (NASD) and its automated quotation system (NASDAQ). It also includes bond markets, commodity futures markets, and various markets throughout the United States such as those in Chicago, Philadelphia, and Kansas City. In its physical sense, Wall Street, a street on the south tip of Manhattan Island in New York City, forms a triangular block with Broad and New streets, location of the nation's exchanges plus many commercial banks and business offices.

The name Wall Street derived from an early road located alongside a wall or stockade built across lower Manhattan in 1653 to protect a small Dutch colony. Local merchants and traders gathered on street corners and coffeehouses around Wall Street to buy and sell shares and loans (bonds), collectively known as securities. Although crude, this early trading set precedents which underlie American market practice for the next two hundred years.

In 1792, meeting under the famous buttonwood tree at 68 Wall Street, traders agreed to a formal organization or exchange for buying and selling shares and loans. In 1817 many of the same dealers agreed to organize into the New York Stock and Exchange Board. Early securities listed on the Exchange were U.S. government bonds and a few stocks of banks and insurance companies. Stocks and bonds not traded on the new Exchange were traded by curbstone brokers congregated outside the Exchange. These curbstone brokers were the predecessors of the American Stock Exchange and over-the-counter market. Industrial issues and railroad stocks and bonds appeared on the Exchange in the 1830s and 1840s. By the 1840s foreign capital became a major factor influencing American business expansion. Foreign bankers maintained offices on Wall Street as did domestic commercial banks, business corporations, insurance companies, and commodity exchanges for coffee, agricultural products, and metals.

Wall Street traders operated entirely free of regulation leading to unscrupulous practices by robber barons such as Jay Gould, Cornelius "Commodore" Vanderbilt, Andrew Carnegie, John D. Rockefeller, and J.P. Morgan. Consolidation of U.S. industry into immense trusts between 1880 and 1910 provided Wall Street's largest listed firms. Following the stock market crash of 1929, the Securities Exchange Act of 1934 established the Securities and Exchange Commission to protect people investing money in securities and to enforce federal laws governing trading practices. The modern era of Wall Street finance began in the 1950's. Individual investors began entering the market and all purpose securities firms serving all types of clients changed the face of Wall Street.