There are some things that have become so part and parcel of the world we live in that

they almost seem boundless and eternal. It's difficult to imagine them ever having

been created in the first place. They always just kind of were.

Now one of these things are the financial markets which we obviously talk about every

day on this channel and most of you watching this I'm sure interact with on a daily basis as well.

So although it's not always necessary to know the history of the things you're involved in,

it's definitely very interesting and it can be eye opening.

So in this series of videos, we're going to start to give you the history

of the very same financial markets, institutions and events

that we all take for granted these days. And we're going to kick things off in this

video with something that's become such an icon and such a complex entity that it's really

difficult to imagine how it could have ever come into being in the first place.

We will of course be talking about Wall Street. The early history of this famous location

and how it all started.

Whether you know it from the movies, the financial services industry, the US stock market or

even just the location itself, the name Wall Street is definitely something

that's very familiar to all of us. But have you ever wondered how it actually

got its name and why this location in particular was chosen to be a centre of business and finance?

Well although there are speculations about how the street got its name, it's widely believed

to date back to the Dutch settlers in the 17th century back when New York was

actually called New Amsterdam and it was a Dutch Colony.

It was at this time that Governor Petrus Stuyvesant, whose name I am clearly pronouncing incorrectly,

ordered a wall to be built on the Northern boundary to predominantly keep out the Native Americans

but also to keep out other threats including

the British. You could almost say it was like a reverse

Brexit, let's keep the British out this time.

Now this wall was about 10 feet high and it was made of big wooden planks.

It was so big in fact that it even featured in the 17th century maps.

They built a huge wall! But unlike more recent conversations about

constructing walls, I don't think the Mexicans were being asked

to pay for it on this occasion.

Now surprisingly, the wall only protected the Northern border and not the Southern border,

which was a big mistake to make as you can imagine and the British actually capitalised

on this in 1664. They sailed right into the harbour from the

South and they seized the colony. So it was at this point that it was renamed

from New Amsterdam to New York.

Later that century in 1699 the British Colonial Government removed the wall,

however, there was a path that ran alongside the wall before its removal

and despite the wall no longer being there, the path kept its name,

which, you guessed it, was called Wall Street.

Wall Street became a bustling commercial area and one of the busiest trading

areas in the city thanks to it’s ideal location. It ran the width of Manhattan between the

East River and the Hudson. The New York City hall was built in the area

between 1699 and 1703 and it was the seat of government for the

British Colony of New York which was later then the location of the current Federal Hall

on Wall Street. This was where George Washington was inaugurated

as the first president, on the balcony of the building in April 1789.

Unfortunately the early history of Wall Street as a commercial hot-spot has its dark moments

as well. Enslaved African people were first brought

over when it was a Dutch colony in the 1600s. The enslaved people were used for labour under

the Dutch West India Company, and it was actually these people that constructed

the wall which Wall Street is named after, as well as doing much of the other work to

help build the area to what it was at that time.

So when the British came and took over the colony and turned it into New York, they continued

the slavery system although this time it was through The Royal African Company.

In fact, in 1665 a law was passed that legalised

slavery and in 1682 slave masters were given the power of life and death over their slaves.

A brutish and disgraceful law.

This then led to New York adopting its first full slave code and ultimately the establishment

of a slave market for the sale and rental of enslaved

African people in New York City. This was a huge trade at the time and the

forming of a market helped to organise it all a lot better.

In 1711 the law was passed by the New York City Common Council that made Wall Street

the city's official slave market. The law stated

that slaves must be hired at the Market House at Wall Street.

This would mean that everyone knew where to go to hire slaves.

It was located at the end of Wall Street by the East River and was also where grains were sold,

which led to it being known as the meal market.

This continued until 1762 when the market finally came to an end.

The earliest organisation of securities trading in New York was recorded in 1792, 30 years

after the meal market was taken down. This was under the Buttonwood agreement which

The name in fact came from the Buttonwood tree that was at the end of Wall Street, which

is where the traders and the speculators would trade amongst each other.

So at that point in time 24 of the top merchants in the city, they met to discuss ways to organise

the securities business and to gain more control, this would effectively get rid of the power

of the auctioneers and allow them to control their trading fees.

Essentially, they would be controlling what goes on by only allowing the securities to

be traded amongst themselves. They also introduced a commission structure

which stated that the 24 of them would be charged a fixed fee,

while anyone else that wanted to trade would be charged more.

However, although this started in 1792 in New York. The first Stock Exchange in the

US actually started in Philadelphia in 1790. Now the New York based brokers who were working

under the Buttonwood agreement, they started being like nosy neighbours, doing a bit of

curtain twitching and looking over at Philadelphia and what they realised is that while their

stock exchange was not doing so well, due to the war of 1812, the one in Philadelphia

was flourishing. So the New York brokers sent an observer to

the Philadelphia exchange to investigate and this resulted in the creation of the

New York Stock and Exchange Board.

What they did then, they rented a room on Wall Street specifically for securities trading

and they set up the organisation. This exchange was an exclusive members only

group, which needed members to be voted in under strict conditions.

3 negative votes and it's a no go. And the president of the exchange, Anthony Stockholm,

had the duty each morning to read the stocks that would be traded on that day.

Things were a lot more limited back then,

as there were obviously not the same huge numbers of securities that we can trade now.

However, this trading volume did start to pick up in 1869,

after the New York Stock Exchange merged with the Open Board of Stock Brokers,

which was set up in 1864 as a competitor. So this merger of the stock exchanges increased

the trading volume and the number of members as part of the exchange.

Although this was nothing near the numbers that you get these days when there's a merger

between the exchanges, you can obviously see how the organisations

had slowly moved from their primitive beginnings, to a much more structured market for securities trading,

with a common approach for rules and a common approach for access.

So this now leads us nicely onto the next stages of the history of trading in the US.

And we'll be covering these stages throughout this series, as well as taking a look at what

took place in other countries, because as you can probably tell from the

history of Wall Street a lot of the origins came from Europe because obviously we're talking

about the colonisation of New York. However, these topics are all going to come

in future videos.

For now, if you liked this video please do leave a thumbs up.

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you to learn the foundations of our approach. As always, I really appreciate you watching.

Thanks a lot for your time, and I'll see you in the next video very soon! Bye-bye!