Before Wall Street there was Chestnut Street.
It may surprise many to learn that the first Wall Street was not in New York. Wall Street—both the physical location in downtown Manhattan and the world-famous metaphor for a nerve center of capitalism—seems permanently carved into the American psyche. But it wasn't always so, says Robert E. Wright, a professor of economics at New York University. As this serious book explains, the first "Wall Street" was a broad thoroughfare in Philadelphia with the unassuming name of Chestnut Street. From colonial days until 1836, Chestnut Street paved the way for the American financial system's transition to modernity.
The First Wall Street shows how and why competitive financial markets and institutions came to cluster in the city of brotherly love, and how Manhattan eventually won the day. We learn about colonial precedents, Alexander Hamilton's innovations including the creation of the dollar as the national unit of account, and how Philadelphia could uniquely enable its working class citizens to purchase their own homes. "Chestnut Street's rise and fall forms the narrative core of this book. But in its broadest terms, The First Wall Street is about economic growth, increased real per capita aggregate output. In simpler terms, it is about wealth creation and the reasons why a few nations produce much more wealth per person than most other countries manage to do," writes the author in the opening chapter.
Changes in geography altered the fortunes of Chestnut Street, however. The completion of the Delaware and Raritan Canal in 1834 made it faster and cheaper for wholesalers to import their wares via New York instead of Philadelphia further inland. Philadelphia lost as a financial capital, but gained new life as an arbiter of industrialization and domestic agriculture. "In short, Philadelphia's legendary freedom and finance were still abundant," pens Wright.
Scholarly though it is overall, The First Wall Street will likely interest business managers of all nationalities who are curious about a largely unknown story in U.S. financial history and who wonder, too, whether their own major avenue could ever rival the real Wall Street.
- Martha Lagace