Avarice `behind the Wall`

Wall Street was a narrow back street in New York. What made this place the center of world finance? The goal of this book is to find out the answer to this question. This book is a complete history of Wall Street that reveals the 350 years history of the U.S. stock market which has never been introduced to Korea.

Wall Street was originally the wall the Dutch constructed to protect against Indians or the British when gold, silver, shell, or beads were used as money. Capital gathered here and business was getting brisk, and then share brokers gathered under the fig tree and set the rules of the game (Bretton woods Agreement) to manage their wealth efficiently. Since then, tremendous capital has moved into the area with the construction of a canal, railroads, and wars.

But Wall Street was not an advanced capital market from the start. In fact, U.S. was a troublesome country in early 20th century. It often defaulted on foreign loans, and companies` deep-rooted window dressings and unreliable management made British investors not to put their trust in U.S. companies. The stock market was not an exception. Manipulation, fraud, and trickery were a matter of course, and a company, which was established at the cost of 3 dollars, sold its shares and got 1.5 million dollars` interest.

There were two historical cases of market manipulation.

The first was the battle to take over Erie Railroad. The second was the gold speculation that enticed even the nation`s president. The hero of the case was Jay Gould.

What made Wall Street a center of world finances in spite of such disorder was the presence of prominent figures who loved the market and its self-purifying power. The exemplary figure here is J.P. Morgan. It was Morgan who issued national bonds for the first time to Europeans in order to substitute for the reduced gold from the economic crises, and from whom the U.S. president requested advice on its policies by asking `What should I do?` Morgan enabled Wall Street to escape from occasional panics when the central bank was not even founded.

This book makes us see that Wall Street also has a history of fraud and corruption till the transparency of company accounts and the protection of investors were securely established. Paradoxically one may comfort oneself by saying `So was Wall Street ---` when reminded of last year`s scandal-ridden stock market.

But is there no end to human avarice? Wall Street fell in to crisis once again because of Enron. The author, who is a columnist of USA Today and The Wall Street Journal, analyzed that Wall Street is back in `the era when avarice is beautiful` under the name of relaxing restrictions, liberalization, and marketing in the 1980s. He says that the 1990`s Internet bubble was `the height of avarice` and Enron affairs came to a head at the end of `the era of avarice` during which it had ripened.

It is shocking that the profit summed up excessively by Enron reached 591 million dollars, and most of the `big 5` account agencies including Arthur Anderson are involved in the window dressings. A certified public accountant (CPA) was first introduced in Wall Street in 1880. CPA was born from the thought that companies` accountants are on the side of managers causing their account books untruthful, but it couldn`t prevent the absurdity like Enron after 120 years from the birth. Wall Street, which extraordinarily emphasized `transparency`, lost its face.

The author indicates the globalization of financial funds since 1980s for the reason of disgraces of Wall Street being revealed. Wall Street has lead `the game of avarice` without judges for these two decades, but the world insists that it needs a global finance supervising agency according to the logic that `the game without judges would be broken off`. Everyone watches Enron how it solves this affair.

Original title of the book is "The Great Game (1999)"

Translated by Gang Nam-Gyu and Lee Jong-Woo(Daewoo Security invest strategy team)

Wall Street Empire

Written by John Steel Gordon

Published by Chamsol