The Banking Act of 1933, also known as the Glass-Steagall Act, established the Federal Deposit Insurance Corporation (FDIC), which guaranteed banking deposits up to a specified amount, and joined two Congressional projects sponsored by Representative Henry B. Steagall. That is, the Act combined both the creation of a federal system of bank deposit insurance and the regulation of mingling commercial, investment banking and other “speculative” banking activities.
Though synonymous to one another, the Glass-Steagall Act today usually refers to the four provisions that separated commercial banking from investment banking. Of these provisions, section 16 prohibits Federal Reserve Member banks from acquiring securities on their own account. Sections 16 and 21 further prohibit member banks from accepting deposits for the buying or selling of securities. Section 20 disallows these banks from having any association with companies that deal with securities, including employee relationships with (i.e. sharing employees with) as stated under section 32. Moreover, Regulation Q forbade banks from paying interest on demand deposits and capped interest rates on other deposit goods.
Jas. H. Oliphant & Co. Inc. was a securities broker and a member firm of the New York Stock Exchange specializing in providing research and execution services to institutional clients. The firm went public in 1972 after acquiring the business of Jas. H. Oliphant & Co., a New York limited partnership founded in 1898. The board made its decision to dissolve the 77-year-old firm in December 1975.
The reason: May Day—May 1, 1975. Fixed commissions had been the norm for the past 183 years, since the signing of the Buttonwood Agreement on May 17, 1792. But on May Day, the US Securities & Exchange Commission mandated the deregulation of the brokerage industry. The securities industry lobby had battled very hard to keep Congress from passing HR 5050, mandating the end of the fixed commission system. They had argued that Congress should allow the industry to fix the problem, and also argued that without Congressional approval, the SEC should not act administratively on this issue. However, Congress did adopt the legislation ending fixed commissions. The New York Stock Exchange announced within days that it would accept the SEC ruling.
On August 24, we lost a true pioneer in Wall Street’s history with the passing of Muriel “Mickie” Siebert, the first woman to own a seat on the New York Stock Exchange. In her honor, we’re reposting this article we wrote for Bloomberg on the history of Wall Street’s women.
On Dec. 28, 1967, Muriel “Mickie” Siebert became the first woman to own a seat on the New York Stock Exchange — a full 175 years after the exchange was founded. According to Siebert, her NYSE member badge was the most expensive piece of jewelry she ever bought (at $445,000), and it was also the hardest earned. She had been turned down by nine prospective sponsors before finding the two she needed to endorse her application.
As the lone woman among 1,365 men at the exchange, Siebert wasn’t universally welcomed. Headlines such as “Skirt Invades Exchange” and “Powder Puff on Wall Street” conveyed a reluctance on “the Street” to accept a sea change that had been making its way through many other professions for years. In fact, when Siebert purchased her seat, she wasn’t issued the standard scroll all new members received, and which she was required to display. She didn’t receive it until the following year, when the exchange had a new president.
A few days ago, New York’s Metropolitan Transportation Authority (MTA) announced it is selling a “catastrophe” bond worth $125 million, in order to cover the damage from future natural disasters.
The New York City transportation system has a 109-year-old history, but it has “never faced a disaster as devastating” as Hurricane Sandy, the chairman of the MTA, Joseph J. Lhota, said in a statement. After Sandy smashed the city in October 2012, the “Metro-North Railroad lost power from 59th Street to Croton-Harmon on the Hudson Line and to New Haven on the New Haven Line. The Long Island Rail Road evacuated its West Side Yards and suffered flooding in one East River tunnel. The Hugh L. Carey Tunnel is flooded from end to end, and the Queens Midtown Tunnel also took on water and was closed.”
Technology has strongly changed the way stocks are traded from a decade ago to today. Historically, stock markets like the NYSE are a physical location for buyers and sellers to meet and negotiate trades. However, in the 20th Century technological improvements in stock trading have made the physical location to meet irrelevant, giving rise to electronic trading.
Before the telegraph arrived in the 1950s, brokers would place agents on top of hills and buildings between Philadelphia and New York City with signal flags and telescopes to rely stock prices between cities in about half-an-hour. Homing pigeons were also used to transmit information.
Later on, “runners” in the 1860s would carry stock prices handwritten on large chalkboards from the exchange to brokerage offices, so that the brokerages would be aware of a stock’s price. The NYSE was referred to as the “Big Board” supposedly because of these large chalkboards.