Museum of American Finance takes trip through Wall Street's trading past

Photo credit: Urbanite

Kerbstone brokers engaged in a frenzied and disorganized form of trading

on the street in the 19th century. (Museum of American Finance)

By Garett Sloane

A retrospective on the history of trading on Wall Street — the latest exhibit at the Museum of American Finance — is supposed to give visitors a look at how much has changed, but just as striking is how much has stayed the same.

The exhibit “Trading on the Street,” which opens today, shows how trading has evolved from chaotic curbside auctions of the late 18th century through the time of ticker tape and telegraph until today’s digital age. It also offers a glimpse into past panics that are eerily reminiscent of today’s current troubles.One could imagine that the disreputable “stock-jobbers” of the 18th century, who were outlawed by the New York State Legislature in 1792, were no less despised than some elements within the trading world today. One could also imagine that the media of the mid-19th century would just as easily lampooned former Lehman Brothers CEO Richard Fuld as they did Jay Gould, who was dubbed the “Mephistopheles of Wall Street” and incited a panic by trying to corner the gold market in 1869.

The term “stock-jobbers,” which can be read in the original text of regulations from 1792, referred to the men publicly trading shares on Wall Street. The practice was banned as a result of a panic: A well-known investor, William Duer, a secretary to Alexander Hamilton, was heavily leveraged and his collapse shook the market.

“He was making a lot of trades with borrowed money,” said Leena Akhtar, curator of the temporary exhibit.

After the regulations banning public trading, a group of 24 investors banded together to trade privately, creating the precursor to the New York Stock Exchange. They signed the “Buttonwood Agreement,” which is the centerpiece of the exhibit and is on loan from the New York Stock Exchange.

The exhibit is most valuable in showing how the techniques of trading have changed, and covers a lot of ground in a small space. There are original 18th century stocks and bonds, one issued to Patrick Henry, on display. Also, etchings and engravings show the commotion of early trading.

“Everybody knows that iconic image of chaos on the trading floor,” Akhtar said.

The exhibit takes visitors through the official founding of the New York Stock and Exchange Board in 1817, and shows scenes of the less-organized Curb Market dating back to the early 1840s, which became the American Stock Exchange in about 1930. A fascinating bit of history was an engraving of Gallagher’s Evening Exchange, one of the first organized after-hours markets in the Civil War period for traders to continue after the closing bell.

Also, worth viewing is the model of a 1939 trading post, the horseshoe-shaped structures on the floor of the exchange, which have evolved from hubs receiving information via pneumatic tube to the electronic-monitor posts of today.

The exhibit ends with a look at the modern Bloomberg terminal, which feeds traders today with up-to-the-second data and allows for instantaneous transactions. It’s a long way from when stock quotes and other information were transmitted by messenger boy and sometimes even by carrier pigeon.

‘Trading on the Street’ opens

When: Nov. 20 to March 20

Hours: 10 a.m. to 4 p.m. Monday to Friday

Where: Museum of

American Finance,

48 Wall St.

Cost: Adults, $8; students and seniors, $5; children 6 and under, free

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