Under the Buttonwood Tree[More excerpts from this hard to find history of the NYSE]. Heavy speculation in stocks and bonds, in merchandise and real estate were entered into on the floor of the old [i.e. pre-December 16, 1835] Mercantile Exchange, and between the hours of half past one and half past two o clock in the afternoon, when the merchants congregated in the rotunda, it presented a scene of the liveliest interest. On every face was depicted the excitement that reigned within, and as the busy groups, closely crowding each other in this early temple of commerce exchanged their views, and effected transactions, the magnificent vault above them reverberated to the hum of the voices of a by gone generation of New York business men.

Though the NYSE had proved the centre for the vast speculations of the two good years of 1835 and 1836 yet it had so little connection with the panic of 1837 that the members suffered but slightly. It was a commercial panic pure and simple, and by far the most disastrous that ever visited America. It sucked down into its dread vortex of ruin upward of sixty banks, with liabilities of 500 milion. Almost every merchant and trader failed, and it was the standing but grim joke of after days that the average basis of settlement for the grand total of 440 million of indebteness was one cent on the dollar. Everbody was alike. Debtor and creditor were suing and being sued and collectors fees, assignees shares, and costs of courts, lawyers, and sheriffs swallowed up almost the entire fabulous sum.

The return of confidence and of business was only slowly brought about and with the assistance of millions of dollars worth of state bonds, which could only be emitted at heavy rates of discount. As a sequel, Pennsylvania, Maryland, Florida, Louisiana, Mississippi, Illinois, Indiana, Michigan and Arkansas either openly repudiated or were delinquent in meeting a large portion of their indebtedness, and the securities had fallen so low on change that even reckless speculators hesitated to touch them and Wall Street operators preferred the poorest of railroad stocks to the state "fancies".

The first serious flurry in the market occurred in the years 1853-1854. The year 1852 was one of the most remarkable. Prosperity and confidence was inspired on every hand, call loans increased greatly in amount, and at one time the weekly average of loans ranged from 95 to 100 hundred miilons. The year in fact had never been equalled in wide spread prosperity since the formation of the Federal Union. Investments were made in all descriptions of bonds and stocks, and the banks accumulated correspondingly excessive amounts of deposits.

This state of things reached a crisis in September, 1853 and stocks fell rapidly. Panama Railway fell from 140 to 96. Harlem from 65 to 53 and the bubble of Parker Wein Coal from 65 to 7 1/2. Governments alone holding their own. The market however recovered rapidly and speculations began afresh in 1855. Daniel Drew and Vanderbilt with George Law, Ben Richmond, J. Little, Nelson Robinson and a host of lesser lights were active and up went the railway stocks and bonds again. All the trunk roads were paying good dividends, and by August 1857, the banks daily credits amount to 120 million. On August 24th, the great Ohio Life Insurance and Trust company suspended owing three milions and the results were disastrous.

The greatest excitement prevailed upon the board as the prices of the securities and stocks fell lower and lower. Erie declined 20% and The New York Central 25%. The Bank of Pennsylvania and other prominent financial institutions failed, and by the middle of October the New York banks suspended specie payments. The trouble was all occasioned by the banks suddenly contracting their loans, precipitating the very results they sought to avoid. At this time the Chicago St. Paul and Fond Du Lac railroad company became bankrupt, and in 1859 the famous Chicago and Northwestern Railroad Company was formed to take its place. Business picked up during 1859, the only serious setback being the first placing of Erie in the hands of a receiver. But in 1860 and prior to the war a general rise was observable, and those who bought to hold at this time made fortunes. And from this time up to Black Friday the stock market continued on the most active and prosperous conditions.

The extraordinary range of prices during this period enabled the conservative capitalist to make money with greater rapidity and certainty than by any of the ordinary forms of investment, and many large fortunes were made by investors at this time. The war boomed every species of stock, and on the floor of the exchange intensely exciting scenes were witnessed as unexpected news of victory or defeat would raise or depress the values of securities several points in a few minutes. Bold operators made or lost money, and when the Gold Board was established, the two kindred exchanges did enormous and continously prosperous business in unison with the inordinate activity of all branches of trade and commerce.


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