Wall Street Paperwork Crisis (1968-1970)
eventMoney & Finance
A traffic jam of paper stock certificates in the 1960s became the excuse to quietly change who legally owns your shares.
Who they are
A late-1960s breakdown on Wall Street when trading grew faster than the system for physically delivering paper stock certificates.
What they do
So much trading swamped the couriers hauling certificates around Lower Manhattan that the whole delivery system collapsed, and the industry used the mess to get rid of paper ownership entirely.
How it works
160 NYSE member firms failed or were absorbed, $400M in securities went lost or stolen (about $2.8B in today's money), the SEC even shortened trading days, and instead of fixing delivery the industry created the Depository Trust Company (DTC) in 1973 to hold shares centrally.
Why it matters
The desc calls this the start of the modern system where a central body, not you, is the legal holder of record — described as the biggest transfer of legal ownership in financial history.
The engine's record — word for word
Report #72. The mechanical failure that birthed the modern custody architecture. Trading volumes overwhelmed physical certificate delivery. 160 NYSE member firms failed, were absorbed, or disbanded. $400M in lost/stolen securities ($2.8B today). Couriers hauling steamer trunks of certificates across Lower Manhattan. SEC shortened trading days. The industry chose not to modernize delivery but to eliminate it entirely — creating the DTC in 1973. A logistical crisis became the pretext for the greatest transfer of legal ownership in financial history.
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