Regulation.

In October 1929, a celebrated Yale economist named Irving Fisher reassured worried investors that their "money was safe" on Wall Street.^[31] A few days later, stock values plummeted. The stock market crash of 1929 ushered in the Great Depression in which a quarter of working people were unemployed, with soup kitchens, mass foreclosures of farms, and falling prices.^[31] During this era, development of the financial district stagnated, and Wall Street "paid a heavy price" and "became something of a backwater in American life."^[31] During the New Deal years as well as the forties, there was much less focus on Wall Street and finance. The government clamped down on the practice of buying equities based only on credit, but these policies began to ease. From 1946-1947, stocks could not be purchased "on margin", meaning that an investor had to pay 100% of a stock's cost without taking on any loans.^[32] But this margin requirement was reduced four times before 1960, each time stimulating a mini-rally and boosting volume, and when the Federal Reserve reduced the margin requirements from 90% to 70%.^[32] These changes made it somewhat easier for investors to buy stocks on credit.^[32] The growing national economy and prosperity led to a recovery during the sixties, with some down years during the early seventies in the aftermath of the Vietnam War. Trading volumes climbed; in 1967, according to Time Magazine, volume hit 7.5 million shares a day which caused a "traffic jam" of paper with "batteries of clerks" working overtime to "clear transactions and update customer accounts."^[33]

In 1973, the financial community posted a collective loss of $245 million and needed help, and got it with the form of temporary help from the goverrnment.^[34] Reforms happened; the SEC eliminated fixed commissions which forced "brokers to compete freely with one another for investors' business."^[35] In 1975, the Securities & Exchange Commission threw out the NYSE's "Rule 394" which had required that "most stock transactions take place on the Big Board's floor", in effect freeing up trading for electronic methods.^[36] In 1976, banks were allowed to buy and sell stocks, which provided more competition for stockbrokers.^[36] Reforms had the effect of lowering prices overall, making it easier for more people to participate in the stock market.^[36] Broker commissions for each stock sale lessened, but volume increased.^[34]

The Reagan years were marked by a renewed push for capitalism, business, with national efforts to de-regulate industries such as telecommunications and aviation. The economy resumed upward growth after a period in the early eighties of languishing. A report in the New York Times described that the flushness of money and growth during these years had spawned a drug culture of sorts, with a rampant acceptance of cocaine use although the overall percent of actual users was most likely small. A reporter wrote:

“

The Wall Street drug dealer looked like many other successful young female executives. Stylishly dressed and wearing designer sunglasses, she sat in her 1983 Chevrolet Camaro in a no-parking zone across the street from the Marine Midland Bank branch on lower Broadway. The customer in the passenger seat looked like a successful young businessman. But as the dealer slipped him a heat-sealed plastic envelope of cocaine and he passed her cash, the transaction was being watched through the sunroof of her car by Federal drug agents in a nearby building. And the customer - an undercover agent himself -was learning the ways, the wiles and the conventions of Wall Street's drug subculture. -- Peter Kerr in the New York Times, 1987.[37]

”

In 1987, the stock market plunged^[17] and, in the relatively brief recession following, lower Manhattan lost 100,000 jobs according to one estimate.^[38] Since telecommunications costs were coming down, banks and brokerage firms could move away from Wall Street to more affordable locations.^[38] The recession of 1990–1991 were marked by office vacancy rates downtown which were "persistently high" and with some buildings "standing empty."^[20] The day of the drop, October 20, was marked by "stony-faced traders whose sense of humor had abandoned them and in the exhaustion of stock exchange employees struggling to maintain orderly trading."^[39] Ironically, it was the same year that Oliver Stone's movie Wall Street appeared. In 1995, city authorities offered the Lower Manhattan Revitalization Plan which offered incentives to convert commercial properties to residential use.^[20]

Construction of the World Trade Center began in 1966 but had trouble attracting tenants when completed. Nonetheless, some substantial firms purchased space there. It's impressive height helped make it a visual landmark for drivers and pedestrians. In some respects, the nexus of the financial district moved from the street of Wall Street to Trade Center complex. Real estate growth during the latter part of the 1990s was significant, with deals and new projects happening in the financial district and elsewhere in Manhattan; one firm invested more than $24 billion in various projects, many in the Wall Street area.^[40] In 1998, the NYSE and the city struck a $900 million deal which kept the NYSE from moving across the river to Jersey City; the deal was described as the "largest in city history to prevent a corporation from leaving town".^[41] A competitor to the NYSE, NASDAQ, moved its headquarters from Washington to New York.^[42]