Wall Street Journal Quiz Highlights Historical Financial Jargon "Milking the Street" and "Wildcat Money"

The Wall Street Journal recently challenged its audience with a quiz on historical financial jargon, featuring terms like "milking the street" and "wildcat money." This initiative by the prominent financial publication aims to educate and engage readers on the rich and often colorful history of market terminology, revealing insights into past financial practices and market dynamics.

The term "milking the street" refers to a historical market manipulation tactic. As described in John Hinkling's 1875 work, "Men and Idioms of Wall Street," this process involves a "clique" deliberately driving down stock prices to induce other investors to sell. Once prices are low, the manipulators acquire the stock, then artificially inflate its value before selling at a profit. This cyclical operation was aimed at extracting maximum gains from the market.

"Wildcat money," on the other hand, harks back to the 19th-century American banking era characterized by a lack of federal regulation. This term describes paper currency issued by state-chartered banks, often established in remote or inaccessible locations to complicate redemption. These "wildcat banks" frequently issued notes with insufficient specie backing, leading to widespread currency instability, bank failures, and significant financial disruptions for the public.

The Wall Street Journal's quiz serves as a reminder of the evolving language of finance and the historical context behind many modern market regulations. Understanding these historical terms offers valuable perspective on the continuous efforts to ensure market integrity and protect investors from manipulative practices and unstable financial systems.