The History of Wall Street – once a Market for Slaves!

Wall Street slave marketIn the early 1600’s Wall Street were two walls that protected Dutch residents from marauding Indians. It seems the Dutch governor (Kieft) had approved the massacre of a big part of the local Indian population. African and Indian slaves were used to build the walls that eventually became the northern limit of the Dutch city.

According to Wikipedia, “The space between the former walls is now called Wall Street and its spirit is still that of a bulwark against the people.”

On December 13, 1711, New York City’s Common Council made Wall Street the city’s first official market for the sale and rental of enslaved Africans and Indians. Later in that century people began gathering under a buttonwood tree on Wall Street to buy and sell securities.

The traders of securities created an association in 1792 that formalized their activities under the Buttonwood Agreement, which eventually became the New York Stock Exchange. The agreement created a structure for trading securities and a standard commission compensation system.

Fast forward to 2014. Wall Street, synonymous with the financial service industry, is one of the most powerful institutions in America. And, it is still a “bulwark against the people”. The people inside the wall make billions of dollars per year preying on people outside the wall.

A lot has been written about the insiders who run these firms. They send hundreds of millions of dollars per year to Washington to buy protection for their questionable business practices. They control FINRA, the regulatory agency that is supposed to protect investors from their most predatory business practices. And, Wall Street firms are allowed to pay fines for illegal activities so executives stay out of jail.

Wall Street started as an auction market for slaves and evolved over hundreds of years into a powerful institution that is protected by a bulwark of money, lawyers, and political influence. The American public has allowed the institution to perpetuate itself because they need their services and they are powerless to stop the business practices that damage them. The reality is no one is going to tear down the wall that protects Wall Street. Hundreds of years ago the wall protected residents from Indians. Today, the wall protects the executives who run Wall Street companies.

Astute investors will have to find ways to use Wall Street services and protect their financial interests at the same time. This solution exists, but their marketing machine can overwhelm it. The solution is independent Registered Investment Advisory firms that work outside the wall.

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