Tuesday, September 17, 2013

The Buildings of the Financial Crisis: History in the Details

Federal Reserve Bank: note bricks of varying colors
It has been five years since the start of the most recent financial crisis.  Recently, there has been an intense media focus on the crisis: what caused it, what has happened since the crisis, and various projections for the future.  

Many of the buildings where the 2008 financial crisis played out also stood witness to previous stock market crashes and panics, and today we are going to highlight a few of those.  

The Federal Reserve Bank was created after the Panic of 1907, when the government realized they could no longer function without a central bank.  The Federal Reserve was signed into law by Congress in 1913.  It was the eve of the First World War and they decided to delay the construction of the Federal Reserve building in New York until after the war.  After the war, they also decided to construct the Federal Reserve as cheaply as possible. When you look at the Federal Reserve, all the stones are different colors (see photo above).  The construction would have been much more costly if they had used stone of a uniform color.
70 Pine Street was the AIG building.  That building was under construction at the time of the crash of 1929.  70 Pine is one of the beautiful examples of the early implementation of the setback law.  The law read (at the time) that only 25% of the building can rise to an unlimited height.  The rest of the building would have to be set back so that the sky would be more visible and the neighborhood would feel more open. The engineers at the time calculated if they put in regular elevators, there would not be enough floor space to make a commercially viable building, and thus they installed double decker elevators to maximize the floor space.  

It was also very important for buildings before and during the 1930s to have a Wall Street address. 70 Pine therefore has a sky bridge connecting it to Wall Street. 

During the 1930s and the Great Depression, not many people were looking for office space on Wall Street, so the management hired beautiful young women to be the elevator operators, and eventually they were able to rent out the entire building.  
Yellow bricks outline footprint of 1st skyscraper

Another key player in the financial crisis was Goldman Sachs, and in 2008 they were located at 85 Broad Street. Prior to the construction of that office tower in the 1970s and '80s, they did an archaeological dig to try to find the remains of the old New Amsterdam of the 1600s. When you walk alongside Goldman Sachs, have a look at the yellow bricks.  That yellow rectangle inlaid into the brick sidewalks outlines the first “skyscraper” ever built in Manhattan. It was 5 stories high, and constructed in 1642 by the Dutch.

When you walk onto Williams Street, across from Delmonico’s is an Italian bank. That building was the head office of Lehman Brothers for almost 50 years. Lehman moved in there during 1920s, and left in 1979, moving to the recently-constructed World Trade Center.

For more information about Wall Street and New York's Financial District, join a Wall Street Walks guided walking tour!