On the afternoon of December 30, 1899, the members of the New York Stock Exchange assembled on the trading

floor to revel in their notoriety. Amidst yuletide greenery, incandescent lights, and showers of confetti, the Seventh Regiment band struck a lively tune. Two colored pugilists disguised as a bull and a bear traded blows in a makeshift ring. When the bull scored a knockout, NYSE members boisterously debated whether the bear had thrown the fight. Frenzy erupted as confetti, bonbons, and red rubber balls rained down from the gallery. Brokers lobbed the balls at the heads of bald brethren. Hapless traders found themselves hooded, hands seized from behind, as colleagues buffeted them about the floor. The bedlam only abated when former Rough Rider Charles Knoblauch auctioned a bull, a bear, and a lamb, and as is usually the case when they are dealt with by brokers, the lamb was turned away as worthless. Some prankster had already removed his tail. (His fate could have been worse. In the next years Christmas festivities, balloons fashioned from bladders and labeled The Fatted Calf were snatched by members who proceeded to kill them in the most approved style). The bear fetched $100, the bull, $200. Carousing then concluded with a cakewalk. As those who owned seats on the nations leading securities exchange fell in line for their grotesque march, they scarcely could have imagined that the lambsoutsider investors of modest meanssoon would have their day. Like most Americans at centurys turn, the assembled traders and brokers understood the stock market as suitable only for those persons with substantial means. Cherishing independent producers and production, most Americans believed that bond- or stockholders warranted little consideration in economic theory or policy. Between 1900 and 1934, however, first economic theorists and reformers, next policy makers and the war time state, then corporations, and finally financial institutions identified the small investor as an object of serious concern. Whereas less than 1 percent of the population owned stocks or bonds at the time of the brokers bash, approximately one-third of the population (34 million Americans) purchased some form of federal bond during World War I. Roughly one- quarter of U.S. households (an estimated 8 million) owned shares in a publicly traded corporation by 1929. In the three decades following the frolic on the floor, securities investment traveled from the margin to the mainstream of economic and political life in the United Stateswhere it would remain. At the close of the next century, the majority of U.S. households owned corporate stock. Excerpted from WHEN WALL STREET MET MAIN STREET: THE QUEST FOR AN INVESTORS DEMOCRACY by Julia C. Ott, published by Harvard University Press. Copyright 2011 The President and Fellows of Harvard College. Used by permission. All rights reserved.