The History of the Stock Market
In March, 1792, twenty-four of New York City’s leading merchants met secretly at Corre’s Hotel to discuss ways to bring order to the securities business and to wrest it from their competitors, the auctioneers. Two months later, on May 17, 1792, these merchants signed a document named the Buttonwood Agreement, named after their traditional meeting place, a buttonwood tree. The agreement called for the signers to trade securities only among themselves, to set trading fees, and not to participate in other auctions of securities. These twenty-four men had founded what was to become the New York Stock Exchange. The Exchange would later be located at 11 Wall Street.
A century before, Dutch settlers had built a wall to protect themselves from Indians, priates, and other dangers. The path had become a bustling commercial thoroughfare because it joined the banks of the East River with those of the Hudson River on the west. The path was named Wall Street. Early merchants built their warehouses and shops on this path, along with a city hall and a church. New York was the U.S. national capitol from 1785 until 1790 and Federal Hall was built on Wall Street. George Washington was inaugurated on the steps of this building.
The first stock exchange in America was actually founded in Philadelphia in 1790. The New York merchant group, realizing that their stock exchange was now in decline after the early tumult of revolutionary war bonds and stock in the Bank of the United States, sent an observer to Philadelphia in early 1817. Upon his return, bearing news of the thriving Philadelphia exchange, the New York Stock and Exchange Board was formally organized on March 8, 1817.
The exchange rented a room at 40 Wall street and every morning the president, Anthony Stockholm, read the stocks to be traded. The exchange was an exclusive organization, new members were required to be voted in, and a candidate could be black-balled by three negative votes. In 1817 a seat on the exchange cost $25, in 1827 it increased to $100, and in 1848 the price was $400. Members wore top hats and swallowtail coats.
The early 1900s saw the rise of huge fortunes made on Wall Street. In 1901 J.P. Morgan astounded Wall Street by creating a billion dollar merger resulting in the U.S. Steel Corporation. In 1907 a wave of panic hit Wall Street. Eight hundred million dollars in securities were unloaded within a few months. Stock prices plummeted and runs on banks became a daily occurence. When the Knickerbocker Trust Company was forced to close its doors a panic swept banks throughout the country. Morgan pressured the leading New York bankers to forestall a total financial collapse of the country. They set up a single banking trust, with most large banks across the U.S. contributing to its financing. Morgan’s own group, as you might imagine, had controlling interest.
the panic of 1929
The first of the two largest Wall Street panics occurred in 1929. The Wall Street con game, already working full tilt, had convinced millions of Americans that the country was riding on an upward spiraling wave of financial glory. Both rich and poor put their money into stocks and bonds. The Wall Street myth, broadcast by the Insiders’ newspapers and magazines, spotlighted stories of shopkeepers and workers making fortunes in the stock market overnight.
Stock prices were pushed up beyond any relationship with the actual worth of the companies. In 1929 stock prices were 400% higher than they had been in 1924. The Insiders had made their fortunes and could no longer sustain the con, so on October 23, 1929, the market fell 31 points. Stock prices fell an additional 49 points on October 28 and on the 29th the entire market fell apart. Some brokers and investors jumped out of their office windows. The 1929 crash hit the U.S. even harder than the one that was to come in 1987. The fallout from the ’29 crash devastated the country, leading to a long-time economic collapse and depression that was to continue until the start of the Second World War in 1941.
The Wall Street crash of 1987 – “Black Monday” – occurred on October 19th. The Dow Jones fell an astounding 508 points, largest one-day loss in the stock market’s history. The Insiders running the con game landed on their feet and quickly misdirected the public’s attention, laying the blame on computerized (program) trading. Though the cascade of sell orders from large institutions had clogged the system, leaving many individual investors stranded while prices fell, the ’87 crash was created by the same Insider specialist group who control every facet of the stock market for their own profit.
As with so many elements of our American way of life, such as the federal and state governments, the stock market is an essential, positive ingredient in its essence, and has become deleterious only because certain rapacious people have taken control of it and twisted it to their purpose. The latest chapter in the Wall Street scam is the attempt by these same wealth-crazed people to try to convince American workers that they should put their retirement savings in the stock market. The pressure for this insanity is coming from the White House, Congress, the “Federal” Reserve, and anyone else for sale by these monetary rulers.
The Scam
By understanding how the Wall Street con game operates, you can at least avoid being taken to the cleaners and perhaps go on to study enough to profit from this knowledge.
The unwary investor is made to believe – by a press owned by the very people who are part of the Wall Street scam – that they can make a killing in the stock market if they get lucky. Over the years outsider, small-time investors have lost billions of dollars to the insiders who control and manipulate the stock market to take money from the ignorant.
The brainwashed investor believes that the stock market goes up and down according to what he reads in the Wall Street Journal or hears about on his evening TV program: interest rates, inflation rates, wholesale prices, gross national product, public fears about foreign and domestic events, and the rantings of the head of the “Federal” Reserve Board. This is all a con game to make the hapless investor believe that the rise and fall in stock prices is not being manipulated by the specialists. The astounding fact is that specialists, working at the behest of their investment banker cronies, are creating the ups and downs of the market to bring them obscene profits!
This is how the specialists pull off the scam:
- The specialists must first buy stocks at the lowest possible price, using one of the magic tricks of the market called short selling (selling stocks you don’t yet own):
Since they control the stock prices, they simply begin lowering the prices
They “borrow” the stock from their or another brokerage firm’s pool, with the understanding that at a later date they will return the shares
The Wall Street Con Game News will announce that stock prices dropped sharply on light trading, which is a cover for the specialists’ actual manipulation of the decrease in stock prices. The specialists don’t want heavy trading and straight-line lowering of stock prices, else they might have to buy a lot of stock at a higher price than desired. So they usually lower prices through a series of ups and downs of the market, dealing with small investors’ shares as they go.
The SEC rules prohibit NYSE members from “demoralizing the market by effecting short sales at or below a price lower than that of the last sale.” But specialists have an insider loophole allowing them to sell short on downticks (drops in stock prices) without having to report these transactions as short sales. Those same SEC rules force the hapless, small-time investor to sell short only on upticks – when stock prices are higher than the last preceding price. A very neat scam indeed.
- When the specialists have purchased their inventories of stocks at the lowest possible price (let’s say a million shares at an average of $20 a share: $20,000,000 investment), they then begin increasing stock prices.
They will wait until the stock prices reach a top price where they can realize windfall profits – let’s say the stock reaches the price of $40 a share.
At this point the specialists sell their million shares at $40 a share and receive $40,000,000. A profit of $20 million is easy if the con game is fixed in your favor.
- When the specialists want to buy stocks, they lower prices – and wait till the stocks are at the lowest price possible before buying. The investors have been herded into “panic buying” as the prices drop. When the specialists want to sell stocks, they raise prices and sell at the highest price. The uninformed investor is told that he or she must get in on the skyrocketing market boom. The roller-coaster of the stock market is not a natural phenomenon at all, as the Wall Street con game would have it, it’s simply the Insiders doing their thing to take billions of dollars from hapless investors.
But meantime the unwary investor has purchased the stocks at their highest price, being conned by their stockbrokers to believe that they must get into the “rising market.” Then when the stock prices plummet, the brokers tell the witless investors they should “cut their losses” and sell. That $20 million has to come from somewhere – from the small investors who didn’t have a clue about what was going on.