The First Wall Street examines the role that Chestnut Street, the financial district of Philadelphia, played in promoting economic growth and development in the early United States from the American Revolution until the Civil War. The monograph builds on a large theoretical and empirical literature in economics and finance that analyzes the relationship between the financial sector and economic growth, the so called finance-growth nexus. This literature suggests that financial institutions and innovations reduce frictions and channel savings to their most highly valued use. A large number of empirical studies find that countries with larger financial sectors and better financial institutions have faster economic growth and greater economic development.

Unlike most studies, Robert Wright employs the historical approach—as opposed to a statistical one—to examine the importance of the financial sector in the early United States. The author examines how financiers and the development of financial institutions and innovations in Philadelphia promoted economic development in early America. The book is divided into 11 chapters that examine various aspects of the financial sector and their importance for stimulating economic activity in the late eighteenth century and antebellum period.

In chapter 1, Wright introduces his hypothesis that a well-developed financial sector is a necessary component of modern economic growth. Chapter 2 notes that Philadelphia was America's most important financial center in the colonial and antebellum periods. Philadelphia had a well-developed securities market, in addition to banks and insurance companies, even in the colonial period. The City of Brotherly Love therefore played an important role in financing early American economic growth. In chapter 3, Wright discusses the financial legacy of the American Revolution and how the Constitution laid the foundation for a “financial revolution” in the United States.

The next several chapters discuss various aspects of the American financial revolution. Chapter 4 reviews the establishment of a stable monetary system with the U.S. dollar as a unit of account. Wright also discusses at some length the construction and establishment of a Federal mint in Philadelphia. In the following chapter, he reviews some of Hamilton's innovative financial plans including the establishment of the Bank of the United States. Chapter 6 details the rise of the insurance business and how families hedged against costly economic events. Chapters 7 and 8 show how early credit markets financed the building of homes in Philadelphia and the construction of roads, canals, and railroads in the first half of the nineteenth century. Chapters 8 through 11 discuss the decline of Chestnut Street and the rise of New York as America's premier financial center. Wright argues that Philadelphia became overshadowed by New York for several reasons, including the demise of the Second Bank of the United States and the death of important businessmen from Philadelphia.

The First Wall Street is an interesting and informative account of the role of the financial sector in promoting economic growth in early America. Arguably, the most important contribution of this monograph is the use of the historical approach that provides the reader with a series of stories about financiers and financial innovations in early America. The historical accounts directly show how a financial sector can promote economic development and growth. The historical approach can be more stimulating and convincing than empirical studies of the finance-growth nexus that suffer from two serious identification problems: does finance cause growth or does growth cause the financial sector to expand?; and what is the appropriate metric to measure the size and growth of the financial sector? Economists typically address the chicken and egg problem by using instrumental variables or arguing that the financial sector leads economic growth in a time-series regression. As for the second question, empirical studies of the finance-growth nexus often employ the inverse of monetary velocity or the ratio of liquid assets to the size of the economy as proxies for financial development. Although these statistical remedies and proxies have some validity, it is probably the case that the financial sector causes growth and vice-versa and that there is not a really good way to quantitatively measure the depth and quality of the financial sector. The novelty of The First Wall Street is that Wright uses history to identify the linkages between finance and growth over a long period of time. This is probably a more credible identification strategy.

There are some minor shortcomings in the monograph. The author could have placed greater emphasis on the idea that the historical approach is a very important tool to study the finance-growth nexus given the endogeneity problems in modern studies. The finance-growth nexus is a good example where economic historians and historians can make a significant contribution to a larger audience. Articulating this point in a concise manner could have potentially widened the interest and contribution of the monograph. The book could have benefited from some tables on the growth and size of the Philadelphia stock market. The author could have compared these figures with data from the New York Stock Exchange and maybe some of the other regional markets. The inclusion of a table and discussion that show the rise and decline of Chestnut Street along with the ascendancy of New York as the nation's premier financial center would have strengthened the historical approach.

Overall, The First Wall Street is a well-written and researched monograph. Wright provides a detailed overview of the importance of early financial institutions and financiers in Philadelphia that promoted economic development in early America. The author's use of the historical narrative sidesteps the endogeneity issues that plague many of the recent empirical studies on the finance-growth nexus. This book is likely to be of interest to economic and financial historians with an interest in the role that the financial sector played in promoting economic development in early America. Mainstream economists who have an interest in the chicken and egg problem would probably also find the book an interesting read.