Wall Street

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For other uses, see Wall Street (disambiguation).

View up Wall Street from Pearl Street

NYSE and Broad Street view from Wall Street

Wall Street is the name of a narrow thoroughfare in lower Manhattan running east from Broadway downhill to the East River. Considered to be the historical heart of the Financial District, it was the first permanent home of the New York Stock Exchange. .

The phrase "Wall Street" is also used to refer to financial markets as a whole. Interestingly, most New York financial firms are no longer headquartered on Wall Street (JPMorgan Chase, the last major holdout, sold its headquarters tower at 60 Wall Street to Deutsche Bank in November 2001), but elsewhere in lower and midtown Manhattan.

As a figure of speech contrasted to "Main Street," the term can refer to big business interests as against those of small business. It is sometimes used more specifically to refer to research analysts, shareholders, or investment banks.

1 History
2 Decline and Revitalization
3 Wall Street Today
4 Personalities
5 Cultural Influence
6 Similar Institutions
7 Buildings
8 See also
- 8.1 Financials
9 External links

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History

View in Wall Street from Corner of Broadway, 1867. The building on the left was the U.S. Customs House at the time but is today the Federal Hall National Memorial.

The name of the street derives from the fact that during the 17th century, it formed the northern boundary of the New Amsterdam settlement where the Dutch had constructed a crude wall of timber and earthwork in 1652. The wall was ostensibly meant as a defense against attack from Lenape Indians, New England colonists, and the British, but it was never tested in battle. The wall was dismantled by the British in 1699.

The Wall Street Journal, named in reference to the actual street, is an influential international daily business newspaper published in New York City. For many years, it had the widest circulation of any newspaper in the United States, although it is currently second to USA Today. It is owned by Dow Jones & Company.

In the late 18th century, there was a buttonwood tree at the foot of Wall Street under which traders and speculators would gather to trade informally. This was the origin of the New York Stock Exchange.

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Decline and Revitalization

The Manhattan Financial District is one of the largest business districts in the United States, and second in New York City only to Midtown. In the late 19th and early 20th centuries, the corporate culture of New York was ground zero for the construction of skyscrapers (rivaled only by Chicago). The Financial District, even today, actually makes up a distinct skyline of its own, separate from but and not soaring to quite the same heights as its counterpart a few miles to the north (New York City actually has three distinct skylines, the third being Brooklyn Heights).

By the Great Depression, new development of the Financial District had stagnated. The construction of the World Trade Center was one of the few major projects undertaken during the last three quarters of the 20th Century. Financially, it was never terribly successful. Some point to the fact that it was actually a government-funded project, constructed by the Port Authority of New York and New Jersey with the intention of spurring economic development in downtown (some argue the intent was to raise property values). It was an attempt to created an induced demand for financial services. All the tools necessary to international trade were to be housed in the complex. However, in the long run, much of the space remained vacant.

Nonetheless, some large and powerful firms did purchase space in the World Trade Center. Further, it arguably attracted other powerful businesses to the immediate neighborhood. In some ways, it could be argued that the World Trade Center changed the nexus of the Financial District from Wall Street to the Trade Center complex. When the World Trade Center was destroyed in the September 11, 2001, terrorist attacks, it left somewhat of an architectural void as new developments since the 1970s had played off the complex aesthetically.

Wall Street itself and the Financial District as a whole are crowded with highrises by any standard of measure. Further, the loss of the World Trade Center has actually spurred development in the Financial District on a scale that hasn't been seen in decades. This is largely due to tax writeoffs provided by the federal, state and local governments to encourage development. A new World Trade Center complex, centered on Daniel Liebeskind's Memory Foundations plan, is in the early stages of development and one building has already been replaced. The centerpiece to this plan is the 1,776-foot tall Freedom Tower. New residential buildings are already sprouting up, and buildings that were previously office space are being converted to residential units, also benefiting from the tax incentives. Better access to the Financial District is planned in the form of a new commuter rail station and a new downtown transportation center centered on Fulton Street.

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Wall Street Today

To say that a corporation is a "Wall Street company" today often doesn't mean that the company is physically located on Wall Street. It more likely means that the firm deals with financial services; such a firm could be headquartered in many places across the globe. Today, much of Wall Street's workforce tends to be made up of professionals working in the fields of law or finance who work for medium- to large-sized corporations. Many of the nearby businesses are local companies and chain stores that cater to the tastes of professionals and to the needs of the workforce. Most people who work in the Financial District don't live there, and commute in from elsewhere in the city, or even as far away as Pennsylvania or the northern Hudson Valley.

In the morning, restaurants, bodegas, and delis serve coffee and an American-style breakfast as crowds stream by commuter rail or by train. Newspaper stands and convenience stands, as well as workers on foot, hock newspapers to the morning crowd. In the busy lunch hour, professionals, blue-color workers (often employed repairing streets or maintaining the aging buildings), middle class service sector workers, and those filling positions in the many layers of government that have a presence in downtown Manhattan rub shoulders at bodegas, cafes, delis, and restaurants that often emphasize a quick meal. Nonetheless, the area is largely on bankers' hours. Many of the stores are closed by six o'clock in the evening, leaving a few bars and classier restaurants open until later in the evening.

Wall Street's culture is often critized as being rigid. This is, to say the least, a decades-old stereotype stemming from the natural tendancy of Wall Street's establishment to protect their interests and, more abstractly, the obvious connection with Wall Street originally being dominated by an establishment originally made up of (and some argue still made up of) a powerful Anglo Protestant establishment. More recently, however, criticism has centered on structural problems and lack of a desire to change well-established habits. Wall Street's establishment resists government oversight and regulation. At the same time, New York City has a reputation as a very bureaucratic city, which makes entry into the neighborhood difficult or even impossible for middle class entrepeneurs. Finally, the New York Stock Exchange itself remains the last great holdout where trading is done entirely on the floor rather than electronically. There is, ironically, no longer really any need for Wall Street the institution to be located on Wall Street the street, except perhaps for prestige. Stocks could easily be traded almost anywhere.

Since the founding of the Federal Reserve banking system, the Federal Reserve Bank of New York in the Financial District has been the point where monetary policy in the United States is implemented (although it's decided in Washington, D.C. by the Federal Reserve Bank's Board of Governors). As such, New York State is today unique in that it's the only state that constitutes its own district of the Federal Reserve Banking system. This is perhaps partly owed to population distribution in the United States of the time, however. Until the 1960s, New York was the most populated state in the U.S.; now it's third behind California and Texas. The NY Fed's president is the only regional Bank president with a permanent vote and is traditionally selected as its vice chairman. The bank has a gold vault 80 feet (25 m) beneath the street. This depository is the largest in the world, larger even than Fort Knox.

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Personalities

Over the years, certain persons associated with Wall Street have become famous, even legendary. Although their reputation is usually limited to members of the brokerage/banking community, several have gained national and international fame. Some earned their fame for their investment strategies, financing, reporting, legal or regulatory skills, while others are remembered for their greed. They include:

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Cultural Influence

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Wall Street vs. Main Street

As a figure of speech contrasted to "Main Street," the term Wall Street can refer to big business interests against those of small business and the working or middle class. It is sometimes used more specifically to refer to research analysts, shareholders, or investment banks. The idea of "Main Street" conjures images up small town and suburban single-family homes and small businesses.

Wall Street vs. Main Street is a theme in popular culture, politics, and literature. Another way to describe the theme is big business vs. small business. As a political issue, the conflict is most often seen at the local level. Because of how commerce is regulated in market economics (particularly the United States due to the commerce clause of the United States Constitution), local governments often don't have much power to keep large companies with large political connections out of their jurisdictions. As a result, local governments at times feel disempowered when local jobs are taken away from the "Main Street" shops and replaced with (sometimes lower-paying) jobs from a massive chain store or other such franchase. Often, the only way a local government can regulate the types of businesses that enter their jurisdiction is through zoning laws and environmental impact studies (if a chain store moves in, a local government might have the right to say that it can't handle the additional traffic).

The conflict between big business and local industry often depends on the industry in question. If a Wal-Mart moves into an area, it can often offer products at a lower cost than a local store. The Wal-Mart could underprice items until the local store shuts down and then raise prices when it locks up a retail local market.

On the other hand, due to monopolistic competition, chain restaurants aren't as likely to be controversial. If a McDonald's franchise moves into a local community, it's usually not a very big deal. If it is controversial for a McDonald's to move into a neighorhood, it's usually not so much a big deal for economic reasons; it's controversial because some people perceive McDonald's as an eye sore or perhaps in bad taste. However, unlike a Wal-mart store, McDonald's offers a unique product and isn't likely to drive out local restaurants. In a sense, the McDonald's isn't even really competing with local restaurants; the McDonald's and the local Main Street restaurant are probably not competing (very few fast food restaurants are locally owned).

In the case of a Wal-mart, a product is likely to be much cheaper than at a local store. There is also a convenience factor; if somebody needs to go grocery shopping, they can often go to a Wal-mart Supercenter and buy whatever groceries they need. If they go grocery shopping while at the same time needing to cash a check, they can often just use Wal-mart's internal check-cashing service. If they need to pick up another product not likely found at even a local supermarket, such as a television, Wal-mart is likely to have what they need. The local store often can't match Wal-mart's economy of scale. On the other hand, the McDonald's is producing a service that is unlikely to be provided at the local level; when somebody decides they want to eat in a restaurant, they are likely to have a certain set of preferences in mind; those preferences might be something along the lines of fast food, pizza, a theme, vegetarian, vegan, four star, five star, a certain type of ethnic food, something that fits the occasion, something at a certain price level, and many other factors. If somebody has a preference for gourmet French food when they decide to go eat, they aren't going to pay attention to a McDonald's.

Although Wal-mart is just one example, there have been many throughout history. Woolworth's, which ironically was probably driven out of business largely by Wal-mart, was a pioneer in the chain store business. Companies like H&R Block provide services that were provided by local accountants (arguably, however, the widespread need for accountants among the middle class is probably a recent phenomenon). The banking industry, too, is something that was once much more localized than it is in modern times.

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Perceptions

The Gilded Age architecture and culture of the time gave rise to many modern stereotypes about corporate culture that exist to this day, at least in the United States. Some of these stereotypes can perhaps be said to have existed well beyond their time. Mentioning Wall Street conjures up images of White Anglo-Saxon Protestant businessmen seated around mahogany boardroom tables smoking cigars and discussing their holdings and making backroom deals. To labor unions, small businesses all over the country and the world, and even to the middle class, Wall Street culturally could easily serve as a symbol of aloofness to the concerns of every day people.

The older skyscrapers often were built with elaborate facades; such attention to aesthetics likely hasn't been paid in decades concerning corporate architecture. The World Trade Center, built in the 1970s, was very plain and utilitarian in comparison (the Twin Towers were often criticized as looking like two big boxes, despite their impressive height). The sheer height of the district's skyscrapers, while impressive even today, continues to represent a certain aloofness and corporate elitism in the minds of many people.

Social and spiritual ramifications cannot be overlooked when examining Wall Street's aesthetic. Great buildings in past centuries, and throughout human history, often were centers of worship in the form of temples, or at least served primarily a cultural or political role. Museums, opera houses, cathedrals, fortifications, and seats of government were at times elaborate, but almost always built at the expense of the public for popular consumption, or at least to provide a service for a particular class of people (fine arts were once considered the province of the wealthy). This is true even in New York—one only needs to look at the elaborate insitutions like the Metropolitan Museum of Art, the Metropolitan Opera, or Saint Patrick's Cathedral, or even New York's relatively elaborate City Hall and neighboring municipal buildings. The architecture of the Financial District, by and large, was privately constructed and for the most part probably meant to convey a feeling of grandeur for the companies and executives that occupied the skyscrapers (the elaborate Woolworth Building, a few blocks north of Wall Street, serves as a good example of this).

Wall Street, more than anything, represents financial and economic power. This representation is probably nearly universal, at least to literate people, and can inspire feelings ranging from pride to envy to awe to anger. To Americans, Wall Street often represents elitism and power politics and cut-throat capitalism, but also stirs feelings of pride about the market economy. Wall Street, despite the inevitable corruption (embodied in the likes of Jay Gould, links to Tammany Hall, and even today in the firms that New York State Attorney-General Elliot Spitzer levels charges against), became the symbol of a country and economic system that many Americans see as having developed not through colonialism and plunder, but through trade, capitalism, and innovation.

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In Literature and Popular Culture

The United States is a country that prides itself on entrepreneurship. The "David vs. Goliath" motif of a giant corporation threatening a small business owner or hapless citizen only to be outwitted comes up time and again in American popular culture. A similar theme is one of redemption, where a jaded businessman, in the tradition of Ebenezer Scrooge, comes about to do the right thing.

In William Faulkner's novel The Sound and the Fury, Jason Compson hits on other perceptions of Wall Street: after finding some of his stocks are doing poorly, he blames the Jews.

Wall Street was the subject of a 1970s pop song, "Wall Street Shuffle" by 10cc.

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Similar Institutions

The financial clout of Wall Street is rivaled in few places. Tokyo's financial institutions and London's "Square Mile" are probably the only rivals on the international stage. Germany's Frankfurt is nicknamed "Mainhattan" due to its importance to German finance and its highrise buildings. Sand Hill Road in Menlo Park, California, is the heart of the venture capital industry. The closest rival to the markets of Wall Street in the United States is probably the commodity exchanges of Chicago, Illinois. Bay Street in Toronto, Ontario, Canada, is another major center of finance in North America.