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TGIF, everyone. It's Friday, October 23rd, 2026. This week's topic, Washington and Wall Street. Before we start, here's a word from our attorneys.

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The information and opinions presented in this podcast, including the views of guests not affiliated with the Blue Spring Wealth, are for general informational and educational purposes only and should not be considered investment in tax or legal advice. Any references to specific securities of sectors, industries, products, or services, do not constitute a recommendation or endorsement. All investments involve risk, including the possible loss of principle. Past performance or market behavior is not indicative of future results. Listeners should consult their own financial professionals before making any financial decisions.

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I was in New York City this week for an investment conference. I always find it valuable to visit Lower Manhattan and embrace the place where it happened. When you study the history, you realize that as our nation and financial system has evolved, some things remain the same. On May 17th, 1792, the seeds of the New York Stock Exchange were planted. It is famously known as the Buttonwood Agreement. It all started when two dozen brokers congregated under a tree in Lower Manhattan. The group agreed to self-regulate what they called fair stock trading in order to prevent fraud and cutthroat competition. The exchange later moved indoors to a much larger space at the corner of Wall and Broad. That's where it still lives today. Our nation's finances had a rough start. Independence did not come cheap. The Revolutionary War racked up substantial debt, much of it in the name of war bonds. America's first formed federal government under the Articles of Confederation lacked the power to collect taxes. There was very little income to the Treasury. Most citizens believed the government would default and never pay its debts. As a result, the value of those war bonds sunk. They traded as low as ten cents on the dollar. Confidence in the financial system prior was next to zero. The young nation, just three years old, was facing a financial crisis from the get-go. But Hamilton had a plan. Treasury Secretary Alexander Hamilton consolidated the $80 million of state and federal revolutionary war debts into federal bonds, backed by the U.S. government. These became America's first major publicly traded securities. It created a massive new market for brokers to buy and sell stocks and bonds, which primarily took place in New York City, officially becoming America's financial capital. But scammers and fraudsters tried to get in on the action too. Insider trading was rampant. That led to the Panic of 1792. The Buttonwood Agreement centralized trading and created a body to enforce the rules. The agreement brought order to the volatile trading of revolutionary war bonds and bank stocks issued under Alexander Hamilton's financial program. Before Hamilton's funding plan was made public, multiple members of Congress secretly bought up the near worthless Revolutionary War bonds from unsuspecting veterans and farmers for pennies on the dollar. They knew the federal government was about to bail them out at full value. That was insider trading at its worst. You can see how the American people have had a great distrust for Congress from the very beginning. Alexander Hamilton famously wrote that a strict line needed to be drawn between, quote, honest men and knaves, between respectable stockholders and mere unprincipled gamblers. End quote. Back then, insider trading was completely legal. In fact, would you believe the U.S. did not officially outlaw or enforce restrictions on nonpublic information until 1909? I still can't believe it. Trust needs to be the foundation for the free markets and investing. It doesn't work without it. Most of the early trading activity was in those revolutionary war bonds. The first stock traded on the New York Stock Exchange was the Bank of New York. Only five securities were actively traded initially, three bonds and two bank stocks. By the turn of the 19th century, there were hundreds of stocks trading on the NYSE. They ranged from banks and bridge companies to insurance, water, and textiles. Names like Aaron Burr and Philip Schiler formed companies that established the Erie Canal and connected the Great Lakes. You likely recognize those names tied to Hamilton. Big business was born. There are no documented records of President George Washington taking an official stance on the Buttonwood Agreement. However, Washington did firmly support Hamilton's vision to consolidate national debt and establish public credit. He sought financial stability. That said, our nation's first president was deeply concerned about potential speculation and stock jobbing. Washington often expressed skepticism about financial gamesmanship, asserting unchecked market speculation as harmful to the nation's economy and civic stability. Unfortunately, insider trading and congressional stock positions are as old as our nation. It's still an issue today. Congressional representatives, presidents, and their family members have transacted in individual stocks, oftentimes in companies that have government contracts and privileged insight. The American people are outraged and support restrictions. Government leaders should be able to invest in American companies, just not directly. Mutual funds and index funds are appropriate vehicles for that. Investing sends a message that they are all in on America and their money is indeed where the mouth is. But owning individual companies seems a clear crossing of the Hamilton line. A bill was passed in the House this summer titled Stop Insider Trading Act, but it failed to get the 60 votes in the Senate. No surprise, partisan politics were at play. With the goal of generating more federal revenue, Treasury Secretary Hamilton established the excise tax of 1791. You probably remember it as the whiskey tax. It was the first federal tax on a domestic product. It was not popular. In fact, it triggered a major test for the young nation in the form of the Whiskey Rebellion. Whiskey was experiencing massive economic growth in the 1790s and had effectively become the economic backbone of the American frontier. Its popularity stemmed beyond local consumption. It was much easier to transport over the Appalachians and wouldn't spoil like raw grains. The spirit transitioned from a minor regional craft into a dominant national commodity. It was also a coveted currency. Because gold, silver, and paper currency were virtually nonexistent in frontier territories like Western Pennsylvania, Kentucky, and Tennessee, whiskey was used as money. Storekeepers, blacksmiths, and mills routinely accepted gallons of whiskey as payment for goods and services. So the frontier people saw the tax as a threat to their livelihood. They rebelled. President Washington had to saddle up and bring his army out to Western Pennsylvania to quash the rebellion before it did permanent damage to the young Union. Washington personally defused the situation and proved the power of the federal government. However, the tax proved difficult to enforce, in many ways costing more than it received. The whiskey tax was repealed. Alexander Hamilton believed it was the federal government's opportunity and responsibility to foster economic activity. He promoted technology, infrastructure, and industrial development. Hamilton was a big proponent of building roads, bridges, and waterways to enhance productivity, wealth, and quality of life. I decided to reread the Federalist papers on the airplane out here. I know, I'm weird like that. I was struck by Federalist number twelve, penned by Hamilton in November of 1787. He wrote, quote, The prosperity of commerce is now perceived and acknowledged by all enlightened statesmen to be the most useful as well as the most productive source of national wealth. End quote. Hamilton understood self-interest, incentive, and free markets. He was a big believer in private enterprise and being rewarded for successfully taking risks. Hamilton embraced the stock market. All this had me wondering how the founding father would think about the creation and advancement of artificial intelligence. On one hand, he would likely encourage and support the innovative technologies considering it cutting edge progress, much like he viewed the creation of early infrastructure like canals and bridges in the spirit of growth. On the other hand, he would likely be concerned about the threat towards human jobs. Hamilton lived before the Industrial Revolution in America, which brought heavy machinery and factories. Those replaced many jobs while creating new ones. Innovation has always threatened old ways. The Founding Fathers intentionally created a system that was flexible, adaptable, and capable of navigating issues that were unforeseen. They likely could not fathom the notion of robots and machine learning. Artificial intelligence was not part of their vision. I'm pretty sure Hamilton wouldn't like the possibility that AI could eliminate humanity by the end of the decade, though. The Fourth of July, 1776 gave birth to our nation. The ratification of the Constitution in 1788 is when our nation came of age. The Constitution created our unified system of government with checks and balances. It's the very system we still use today, although it has evolved, been amended, and certainly tested along the way. And the Buttonwood Agreement in 1792 launched the infrastructure for the most dominant financial system in global history. It created the New York Stock Exchange. By stabilizing public credit and creating a platform where businesses could raise massive amounts of capital from everyday investors. This system encouraged innovation and powered the rapid industrialization of America. From the railroads to electricity, automobiles, and the internet, private investment has fueled America's growth and innovation. The stock market has been the greatest wealth creator in human history. We are just over a week away from the midterm elections. The American people are in sour moods. Partisan politics continue to be the driver. Confidence in our government has evaporated. Favorability polls for both parties are at historic lows. Market volatility has returned. Recipe for change starts at the ballot box. So many races are super tight. Our nation is sorely divided. We are much better when united. Visiting Hamilton's grave at Trinity Church is a reminder of how novel an idea America was and still is. On the steps of Independence Hall, Ben Franklin wisely described our young nation, the great American experiment as, quote, a republic, if you can keep it, end quote. It has been tested time and again. And it's still standing. The ragged old flag has been in the fire before. She can take a whole lot more. The responsibility falls on we the people to make sure our imperfect system, as designed by our founding fathers, survives as we constantly strive to be more perfect. It's up to us to recognize opportunities and threats, for ours is a government of the people, by the people, for the people. Have a nice weekend. We'll be back, dark and early on Monday. I'm Mike Frazier.