Major earthquakes are always followed by a long series of aftershocks, some nearly as severe as the first one. September 11th certainly qualifies as a major earthquake. In two ghastly hours more office space than Kansas City and Cincinnati have together vanished from the Wall Street area. Will it ever come back as the center of the American financial system? Well, yes, it will, but it will never be the same.

Actually the American financial market has been dispersing away from Wall Street for a generation. Back offices are now in low-rent Alabama and South Dakota, not high-rent Manhattan. Most major banks have moved into mid-town, which is an easier commute for the senior executives. This trend will only accelerate, now that many companies have to find new office space anyway.

But what about Wall Street's premier institution, the New York Stock Exchange, which has been at its present location for a century and a half?

There is no doubt it will remain in the Wall Street area, even if it moves from its old building on Broad Street. New York City will see to that. But will September 11th accelerate the trend towards electronic trading and away from open outcry on a trading floor? NASDAQ, after all, doesn't have a trading floor, just a network of computer terminals and market-makers. And NASDAQ's volume, in number of shares, not dollars, now exceeds that of the Big Board.

Will the Big Board just fade away? The answer, I think, is no. Open outcry has its advantages, besides the obvious one of setting prices with consummate efficiency. One became clear in the crash of 19987, when many NASDAQ market makers just did not answer the phone, and sellers of NASDAQ stocks were out of luck. Stocks listed on the NYSE continued to trade.

This is not the first time the dominance of the NYSE has been threatened. In the Civil War, the Big Board didn't move fast enough, enlarging to meet the demand for securities trading in the booming economy. Other exchanges opened up to handle the overflow. By the end of the war, the largest of these new exchanges, the Open Board of Brokers was doing more business than the NYSE.

So what happened? Easy, the two exchanges merged under the more prestigious name in 1869 and became the only important exchange in the country. It utterly dominated stock trading in the United States for more than a hundred years. The same thing could happen again. After September 11th, anything is possible.

—John Steele Gordon is a market historian and author of several books.