Wall Street and the Architecture of American Finance

There is a street in lower Manhattan, eight blocks long, named for a wall the Dutch built in sixteen fifty-three to protect New Amsterdam from an expected English attack. The attack never came from the north. It came by sea, eleven years later.

The wall was torn down. The street remained. Today Wall Street is not a physical place so much as a metonym for the entire apparatus of American financial capitalism, the stock exchanges, the investment banks, the bond markets, the insurance underwriters, the commodity traders.

The fact that all of it concentrates in lower Manhattan, on an island bought for sixty guilders, is not an accident of geography. It is a consequence of the Erie Canal. Before the canal, Philadelphia was America's financial center.

The Bank of the United States was there. The largest merchants were there. Then the Erie Canal opened in eighteen twenty-five and redirected the trade of an entire continent through New York Harbor, and the money followed the goods.

By the eighteen forties, New York merchants were underwriting more of the nation's business than all other cities combined. By the eighteen eighties, the New York Stock Exchange, founded under a buttonwood tree on Wall Street in seventeen ninety-two by two dozen brokers, was the dominant market for American corporate securities. J.

P. Morgan reorganized the country's railroads from an office on Wall Street in the eighteen nineties. The panic of nineteen-oh-seven was resolved not by the federal government, which barely existed as a financial force, but by Morgan himself summoning the city's bank presidents and keeping them in a room until they agreed to pool their reserves.

That concentration of private financial power was what convinced Congress to create the Federal Reserve in nineteen thirteen, a public counterweight to a private system that had proved it could run the country's finances without asking permission. For better and considerably worse, the structure of American economic life was built and rebuilt and periodically blown up on that eight-block street. New York's economy is not just banking.

It is pharmaceuticals, fashion, media, shipping, law, real estate, technology. But the financial spine of the country still runs through lower Manhattan, through a street named for a wall that never stopped anyone.