The New York Stock Exchange and the Federal Reserve Bank of New York are located near the Fulton Street/Nassau Street transfer point. These two institutions had a large role in the Great Depression.
New York City was the financial center of the country in the 1920s. It was only fitting that the largest stock exchange, the New York Stock Exchange, was located in the heart of the financial center of the country. Many companies traded their stock on the New York Stock Exchange. While the New York Stock Exchange has had many memorable dates, the date October 29, 1929 is a day that will forever live in NYSE infamy.
Lower Manhattan - Wall and Broad Streets. Federal Writers' Project. 1935-1941.
October 29, 1929 is known as Black Tuesday. This was the day that the stock market crashed due to people buying stocks on margin, as well as other factors. On this single day, the stock market lost between $8 and $9 billion in value. The Dow Jones Industrial Average fell almost 23%. This day would start the trend that would eventually end in stock prices falling about 89%. 1
Another financial institution in this area that was involved in the Great Depression is the Federal Reserve Bank of NY, which is a branch of the Federal Reserve Bank. According to Adolph C. Miller (1866-1947), a member of the Federal Reserve Board appointed in 1914 who served 22 years in this position 2, the policy to give out credit easily was the idea of Benjamin Strong (1872-1928), governor of the Federal Reserve Bank of New York from 1914 to 1928.3 After this policy was put in place, the Federal Reserve Bank was in a period of inaction in 1928, which some people blame for the stock market crash.Miller also stated that the Reserve Banks wanted to take action but they were waiting for the New York Branch to make the first move and it never did. Miller said that the leadership of the New York Branch was “unequal to the situation.” 4 The bank had a rediscount rate of 3% in the mid 1920s during the speculative boom and was criticized for raising the rate too late to prevent the speculative bust. 5
Federal Reserve Warehouse. Underhill, Irving. 1923. http://www.loc.gov/pictures/item/00650114/
The stock market crash wreaked havoc on the U.S. economy. After the crash, people started to lose their jobs, got their homes foreclosed, and their goods repossessed. Unfortunately two of New York’s biggest and most well known institutions were at the heart of the worst time periods in America.
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- Taylor, Nick . “Great Depression (1930’s) News – The New York Times.” The New York Times. N.p., n.d. Web. 1 May 2012. <http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html>. ↩
- “About The Miller Institute – Miller Institute.” Miller Institute. N.p., n.d. Web. 13 May 2012. <http://millerinstitute.berkeley.edu/page.php?nav=35>. ↩
- “Benjamin Strong Jr. – Federal Reserve Bank of New York .” FEDERAL RESERVE BANK of NEW YORK. N.p., n.d. Web. 13 May 2012. <http://www.newyorkfed.org/aboutthefed/BStrongbio.html>. ↩
- “DEFENDS ’29 POLICY OF RESERVE BOARD – A.C. Miller Says Majority of 5 Overrode Mellon to Put ‘Direct Pressure’ on Banks. – Front Page – NYTimes.com.” The New York Times. N.p., 24 June 1935. Web. 2 May 2012. <http://select.nytimes.com/gst/abstract.html?res=FA071FFC3F5B177A93C6AB178DD85F418385F9> ↩
- Bell, E.V.. “RESERVE BANKS END 20 YEARS’ SERVICE – Opened as World War Began and Have Passed Through Many Difficult Periods. DEPOSITS $1,654,624,000 New Machinery Developed for Handling Transactions and Credit Policy Formed. RESERVE BANKS NOW 20 YEARS OLD – Article – NYTimes.com.” The New York Times. N.p., 18 Nov. 1934. Web. 1 May 2012. <http://select.nytimes.com/gst/abstract.html?res=F2071FF93459167A93CAA8178AD95F408385F9> ↩
