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.
The Federal Deposit Insurance Corporation (FDIC) has been the government agency responsible for providing deposit insurance to banks since its creation in the Glass-Steagall Act of 1933. While the establishment of the FDIC was an important event in the history of government regulation of the economy, it was not the first instance of deposit insurance in the United States. Several states had previously had state level institutions of deposit insurance in the 1800s and early 1900s.
At various times before the Civil War, Vermont, Michigan, Indiana, and New York insured both banknotes and deposits, while Iowa and Ohio insured only banknotes. Most of these systems operated successfully up to the Civil War, with the notable exception of Michigan’s which had been established immediately before the Panic of 1837 and had failed rather quickly. These state deposit insurance systems generally required participating banks (and participation was voluntary) to pay for insurance to pay off deposit returns from failed banks.
Such systems did not survive the Civil War and nationalization of the banking system. However, interest in state level deposit insurance systems was increasing again by the end of the 1800s, though it was not until 1907 that Oklahoma became the first state since the Civil War to establish a state deposit insurance system. Seven more states followed suit in the following ten years. The deposit insurance systems of the early 20th century had less positive results and unintended consequences. A common observation of banks insured by state deposit insurance in the 1920s was that in spite of nominal regulations against risky behavior by banks, the state deposit insurance actually encouraged risky behavior by banks, increasing the proportion of bank failures and thus insurance burden. By the end of the 1920s the state deposit insurance schemes had largely failed. In some states voluntary participation left banks the option to simply opt out, and most did, while in other states high insurance costs led to deposit insurance being repealed. Yet while state level deposit insurance appeared to be a failure, it was a model that would pave the way for the establishment of the FDIC, deposit insurance on the federal level and subject to stricter regulation.
Vaughn Rennie is a summer museum intern at the Museum of American Finance.
The Museum of American Finance has humble beginnings. In 1988, founder John Herzog set up an experimental, freestanding exhibit in the historic New York City Customs House (now the Museum of the American Indian). He was inspired to teach economic and financial history after experiencing firsthand the chaos and confusion of the 1987 stock market crash. The trial museum was a success; over 6,000 visitors visited the display of historic financial documents.
It was only after 1989 that MoAF became a tax-exempt organization. In 1992, the Museum moved into its first home at 24 Broadway. The city noticed the new kid on the block and famous New Yorker cartoonist W. Miller honored MoAF with a cartoon on August 3, 1992. The picture is drawn in the signature style of Miller, who was a famous New Yorker mainstay and published his first piece in the magazine in 1961. In the cartoon, a humorless butler announces to his financier boss, “A field anthropologist from the new Museum of American Financial History, sir.”
The Museum has the original cartoon by Miller in its collection. The picture shown above is a direct scan of the cartoon’s print, signed by Miller. The Museum has grown by leaps and bounds since 1992 and financial history is proving to be just as important as ever. It’s only a matter of time until another cartoonist has a go at portraying our beloved MoAF.
Lily Goodspeed is a summer museum intern at the Museum of American Finance and a History major at Brown University. Her twitter handle is @lilygoodspeed. Julia Yeung is also a summer museum intern and attends Pace University studying Business Economics. Her twitter handle is @YeungJulia.