Page 49 - THE MARKET WHISPERER

THE MARKET WHISPERER 47

Leonard Bleecker at 16 Wall Street, and Sutton & Harry at 20 Wall Street,
began holding supplies of bonds and stocks.

Stock trading began to develop. Investors assisted in setting up and

developing companies by investing their money in return for a Deed of

Shares confirming their investment in writing and providing them with a

holding in part of the company. These deeds served as security and proof

of ownership, and assured the investor’s stock in the company. This led

to several synonyms that would come into use over time, among them

Securities (signifying they were securely held by their owner) and Equities

(indicating entitlement to part of the capital).
In March of 1792, a New York trader named William Duer, who also

served as the US Assistant Secretary of the Treasury at the time, was
investing in a scheme to buy up the US debt to France at a discount. The
plan failed and Duer lost his entire wealth and more, but the ramifications
of his failed investments contributed to the Panic of 1792, where he fell
into bankruptcy. The term “crash” was applied to these events. It was one
of many that would take their place in Wall Street’s history. Following this
crash, traders decided to institutionalize their activities and establish one

place where it would be possible to control and document all transactions.
In May of 1792, the traders and market makers signed the “Buttonwood
Agreement,” named such because it took place beneath the sycamore
(buttonwood) tree that stood outside 68 Wall Street. The agreement saw
the formal establishment of the New York Stock Exchange and the setting

of standardized trade commissions.
The famous NYSE (New York Stock Exchange) edifice was built in 1827

on the corner of Wall Street and Hannover Street. In 1842, a competing
stock exchange was established known as AMEX, the American Stock

Exchange. Simultaneous to the worldwide economic prosperity, Wall Street

developed its role as the most important international financial center.
In the late 1890s and early 1900s, a new phenomenon began to pick up

steam. Throughout the United States, “stock shops,” also known as “bucket
shops,” sprouted up. The term was imported from Britain, where it had
clear connotations of illegal activities. Clients of these shops traded in
stocks for speculative purposes without actually making a stock exchange

transaction: in actuality, gambling. A trader “played” on the stock price

without actually buying the stock. When the trader profited, the shop lost,

and vice versa: a casino for all intents and purposes. The stock rates were

continually telegraphed in from New York throughout the entire trading

day. They were called out by one clerk and simultaneously written down