Wall Street's First Panic (A)

Description

In the early 1790's, a flood of newly issued public and private securities sparked an investment boom in the nascent United States. In New York, the bustling commercial district along Wall Street emerged as the center of the city's securities trade. One of the many Americans drawn into the frenetic and largely unregulated securities market was William Duer, who ultimately became a major player on the Street. As it turned out, however, Duer's financial dealings proved unsustainable, and his financial collapse helped to bring the securities boom to a halt. Shocked by the widespread devastation wrought by Wall Street's first panic, the New York legislature acted quickly to ban outdoor securities auctions and a popular class of financial instruments known as "time bargains," both of which were thought to have contributed to the boom and bust on Wall Street. Facing public outrage along with the new legal restrictions, New York's top brokers had to decide whether a new system for securities trading was needed and, if so, what it should look like.

Keywords

Business & government relations Business history Securities markets Stock exchanges