- Historic Sites
A knowledgeable and passionate guide takes us for a walk down Wall Street, and we find the buildings there eloquent of the whole history of American finance
November 1987 | Volume 38, Issue 7
James Stillman ran the National City Bank from 1891 on, and he was no male milliner or ribbon clerk. He had started in the rugged cotton trade as a merchant and somewhere along the line made the friendship of the unknown and mysterious Rockefeller, John’s brother William, the brother who had the magical talent with money and investment, otherwise known as the “Wall Street Brother.” Stillman, called “Sunny Jim” because of his dour ways, did not bridle when his bank was called the “Standard Oil Bank,” just as few men complained when they were accused of wearing J. P. Morgan’s collar. The company you keep can do wonders for a credit rating. In important underwritings Stillman and William Rockefeller were joined by Henry H. Rogers, the most gifted of all the Standard executives and the man who rescued Mark Twain from his many follies in money matters.
In the twenties another powerful figure emerged. Charles Mitchell became president of the National City Bank, a director of the Federal Reserve Bank of New York, and, as Edmund Wilson described him, “the banker of bankers, the salesman of salesmen, the genius of the new economic era.” His genius consisted in creating and selling the new securities of investment trusts (companies started solely to invest in the stock of other companies), rigging the prices of his own shares, and being generally sportive in the fields of finance. Mitchell’s great insight came when he foresaw that the Liberty Loan drives to finance the First World War would create an entirely new population of securities buyers.
The dome of the old exchange was lost when National City Bank (now Citibank) added its four new stories, but the banking room is so impressive that I ask my friends in, though the sign to the right of the entrance is not at all inviting. By now they are a bit impatient and footsore; after all, we have navigated only three and a half short old city blocks. So they miss the rundown on the wall of the bank’s directors in 1908: Schiff, Vanderlip, Dodge—a veritable hall of fame of turn-of-the-century finance.
On another day, with more time, we would now go a few steps east to duck into Hanover Street and follow it past the site of what was once Delmonico’s wonderful restaurant and Captain Kidd’s city home and talk fondly of that much misunderstood and maligned merchant captain of the colony, so public-spirited a man that he lent his block and tackle for the raising of the first Trinity Church.
Instead, we press on to 59 Wall, Brown Brothers Harriman, one of the older private banking firms on the street. It began in Philadelphia in 1818, and that year is still embedded in its telephone number. Directly across the street is 60 Wall, a place of particularly potent association. Near here, on May 17, 1792, twenty-one individuals and the representatives of three firms gathered under a buttonwood tree to put their names to what turned out to be a momentous agreement.
Two years earlier Hamilton and Jefferson had been leading factions at loggerheads over two great issues: where the capital city should be and what Congress should do to establish sound credit for the new nation. Hamilton was pushing Congress to take up the debts incurred by the states during the Revolution, but states such as Virginia that had already paid their debts were fighting the proposal so bitterly that the Union itself seemed imperiled. Then, during an affable half-hour’s stroll up and down Broadway, Hamilton and Jefferson struck a deal: The capital could be in the South (which Jefferson wanted) if the government assumed the states’ debts (which Hamilton wanted).
So the South got the capital, and Hamilton got the Assumption Act passed. The act meant that Congress issued eighty million dollars in bonds—called “stock” in those days—and soon these securities were being traded in New York. The business was lucrative enough to spawn a group of men who specialized in it—the first stockbrokers. For a while they bid against each other, which gave rise to certain inconveniences that brought them to the buttonwood tree.
The agreement those brokers signed said that from that day forth none of them would buy at public auction, none would trade at a rate of less than ¼ percent commission, and they would give one another preference in their dealings. Thus joined, they proceeded to sell each other government bonds, to trade in shares of cotton and pimientos, and to take wagers on an infinity of subjects; one member recorded, for instance, “Mr. Walton bet me fifty dollars to twenty that if Barriere was delivered to the Revolutionary Tribunal by the French Convention on or before the 22nd of March last, that he’d be Guillotined on or before the 3d April last.” This brokers’ fraternity grew up to be the New York Stock Exchange.