Dutch colonists construct a wooden stockade across lower Manhattan to protect the north side of their settlement against attacks by the British and Indians. By the turn of the 18th century, the British have taken over the colony and dismantled the barrier, turning it into a paved lane called Wall Street.
A devastating fire, probably the work of colonial arsonists trying to disrupt the British occupation of the city during the American Revolution, destroys hundreds of structures in the vicinity of Wall Street.
In his landmark Report on the Public Credit, the young nation’s first treasury secretary, Alexander Hamilton, proposes a method for the U.S. to handle federal and state debt by issuing government bonds, and establishes the principle of free trade for securities in the marketplace.
Brokers meet in Philadelphia, where they buy and sell the first major issues of publicly-traded securities: $80 million in bonds issued by the federal government to pay off debt from the Revolutionary War.
At the Merchants’ Coffee House at the corner of Wall and Water Streets, two dozen New York City stockbrokers and merchants sign the “Buttonwood Agreement,” named after a buttonwood tree under which business has been transacted in the past. The agreement lists rules for securities transactions.
The locus for securities transactions in New York moves to the Tontine Coffee House, across the street from the Merchants’ Coffee House. Business is also transacted on the street.
A group of New York brokers formally establish the New York Stock and Exchange Board, an organization that later will be renamed the New York Stock Exchange (N.Y.S.E.).
The stock market reaches a trading volume of 5,000 shares a day.
On a bitterly cold night, a fire starts in lower Manhattan. Raging for two days, it will destroy 700 buildings, including the Merchants’ Exchange.
The N.Y.S.E. bars its members from conducting business in the streets.
The N.Y.S.E. starts paying its president a salary. The first paid president, David Clarkson, earns $2000 a year ($31,960 in 2003 dollars).
Samuel F. B. Morse transmits the first viable telegraph message. Securities brokers quickly adopt the technology to send market quotations. The telegraph helps expand the stock market by making trades accessible to brokers and investors outside of New York.
In response to the outbreak of the Civil War, trading of Confederate securities is banned.
Cyrus Field completes a transatlantic cable, connecting telegraph operators across the Atlantic Ocean. For the first time, London and New York markets can communicate instantaneously.
Edward Callahan invents the stock ticker, a device that shows current market prices and represents each company on the stock market with symbols based on Morse code.
Black Friday. A group of speculators led by Jay Gould and Jim Fiske try to corner the gold market, setting off a U.S. financial panic.
The N.Y.S.E. installs the first telephones on its trading floor.
Charles Dow and Edward Jones form Dow Jones & Company and design the first index to measure the activity of the N.Y.S.E.
The Wall Street brokerage firm of Grand and Ward fails, leading to a panic and the failure of 15 other stock exchange firms. Grant and Ward is co-owned by Buck Grant, the son of former Union general and president Ulysses S. Grant, and the failure plunges the ex-president into bankruptcy. Desperate for money, he will begin writing his wartime memoirs soon afterward.
The N.Y.S.E.'s trading volume reaches one million shares a day for the first time.
Junius S. Morgan, the head of the Morgan banking family, dies. His son, John Pierpont Morgan, will turn the family financial empire into one of the most powerful banking houses in the world.
Charles Dow reveals his industrial stock average in the first publication of his daily paper — the Wall Street Journal. Dow Jones creates four averages to measure market performance, including the Dow Jones Industrial Average.
The Dow Jones Industrial Average closes the day at over 100 for the first time.
Rumors of financial problems at a leading New York bank trigger investors to run on banks throughout the city, beginning the Panic of 1907. J. P. Morgan devises a plan to return cash to banks, saving the country from its most severe financial crisis to date.
The Pujo Committee, appointed by Congress to investigate practices of the banking and securities industry, issues a report which leads Congress to create the Federal Reserve System. The Fed is designed to stabilize the nation’s banking structure.
World War I begins in Europe, leading to sharp declines in world stock prices. The N.Y.S.E. and exchanges throughout the world temporarily suspend trading in order to stop prices from dropping further.
A liberty loan rally is held on the trading floor of the N.Y.S.E., where former president William H. Taft encourages Americans to purchase war bonds.
The United States emerges from World War I as a creditor nation and a rising global force.
A bull market begins. It will continue growing for nearly six years.
The N.Y.S.E. introduces new and improved high-speed tickers. The devices can print 500 characters per minute, almost twice as fast as the earlier models.
Newspapers quote Treasury Secretary Andrew Mellon saying there are bargains to be found in the bond market. Wall Street is in the midst of a buying frenzy. As the market rises, some begin to fear it will soon collapse. The Federal Reserve Board meets, but does not make any public statements.
President Herbert Hoover is inaugurated. Nicknamed “The Great Engineer,” the former geologist and mining engineer takes office amid booming prosperity. During the campaign, he has promised: “We shall soon, with the help of God, be in sight of the day when poverty will be banished from this nation.”
Michael J. Meehan begins one of the most successful brokerage pools in Wall Street history. Over the next ten days, he drives the value of R.C.A. stock up almost 50%. In today’s money, his pool will make the colluding investors $100 million.
A mini-crash begins as investors start to sell, revealing the market’s shaky foundations. For the many people playing the market with borrowed money, the day is a disaster, as margin calls wipe out their holdings. While the investors seek to borrow more money, interest rates soar to 20 percent. The New York Daily News calls it a “selling avalanche.”
Banker Charles Mitchell announces that the national city bank will provide $25 million in credit to stop the market’s slide. His move stops the panic, and call money declines from 20 to eight percent. Senator and former Treasury Secretary Carter Glass calls for Mitchell to resign from his post on the Federal Reserve Board because of his intervention in the market.
The American economy shows ominous signs of trouble. Steel production is declining, construction is sluggish, car sales are down, and consumers are building up high debts because of easy credit. Yet the stock market continues its upward momentum, heedless of real economic indicators.
The N.Y.S.E. opens a new bond room, adding 6,000 feet to the trading floor.
The market continues to rebound, and stocks hit record levels month after month.
Michael Meehan’s brokerage firm launches a new service: an office aboard ocean liners, including the Berengaria. This convenience allows transatlantic passengers to buy or sell shares during the weeklong passage between the U.S. and Europe.
After a surge of optimism, the bull market reaches its peak — the Dow Jones Industrial Average closes at 381.17. A newspaper headline trumpets, “Public Demand for Stock Appears Insatiable.”
Bearish economist Roger Babson gives a speech, saying, “Sooner or later, a crash is coming, and it may be terrific.” He has been delivering this message for two years, but for the first time, investors listen. The market takes a severe dip, which will be called the “Babson Break.” The next day, prices will stabilize, but the collapse has begun.
The market fluctuates wildly up and down.
“Black Thursday.” The economic bubble finally bursts. Stock prices fall sharply on a day of heavy liquidation. Ticker tape runs four hours later than normal at a volume of 12.9 million shares. Headlines will report the market’s paper loss at $5 billion. A pool of bankers acts to stem the drop by putting more money into the market, and President Hoover reassures Americans that U.S. business is sound. Within a few days, a headline will read, “Brokers Believe Worst is Over and Recommend Buying of Real Bargains.”
“Black Monday.” The stock market falls 22.6%, the highest one-day decline in U.S. history. The crash triggers similar declines in markets around the world.
“Black Tuesday.” Panic sets in as investors all try to sell their stocks at once. Over 16 million shares of stock are sold, setting a record — and the market records over $14 billion in paper losses. Stock tickers cannot keep up with the heavy trading volume. At the end of the day, the market is down 33 points, more than 12.8%. Some of the nation’s financial elite, including General Motors’ William C. Durant and the Rockefeller family, show confidence by buying stocks, but their efforts fail to stem the tide.
After weeks in freefall, the market hits its bottom and stabilizes. The New York Times reports, “Regular Schedule to be Resumed, but Trading Will Be Suspended Last Half of Week; Business Nearly Normal.” The market’s daily volume is at 3 million shares with “orderly although irregular” prices.
A report released by the Committee for Unemployment Relief states that over four million Americans are unemployed.
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