Lessons From the Recovery of 2001

Wall Street, or what remains of it, has dealt a catastrophic blow to its reputation in the past eight months of bonuses, bailouts and bankruptcies. What its current leaders, and the young who are lucky enough to be entering business, have to do now is begin rescuing and restoring that reputation.

This will, in fact, be the great work of a generation of American business leaders.

More is at stake than their standing. At stake is the standing of a free-market system that has flourished since America’s founding and made it the wealthiest nation in the history of man.

In his classic “The Spirit of Democratic Capitalism,” the philosopher Michael Novak noted that capitalism is good because, of all the economic systems devised by man, it is the one that lifts the greatest numbers out of poverty. Capitalism is itself not selfish, exploitative, unequal; it wants to grow and produce, bringing more services, more creativity, more opportunity, more ferment and movement—more life. It is not just an economic system, it is a public good.

To Mr. Novak, business is a vocation, a deeply serious one. But it cannot exist in a void. It requires an underlying moral edifice, a knowledge of right and wrong, “a sense of sin.” Greed is not good. Wall Street is a stage, a platform on which men and women can each day take actions that are ethical or not, constructive or not. When their actions are marked by high moral principle, they heighten their calling—they are not just “in business” but part of a noble endeavor that adds to the sum total of human happiness. The work they do strengthens the ground on which democracy and economic freedom stand. “The calling of business is to support the reality and reputation of capitalism.”

Noble. Constructive. Admirable.

When was the last time anyone thought of Wall Street like that?

There was a moment, a very public one well within memory, that was all of those things. And it might help the coming generation of business leaders to keep its lessons in mind.

It had to do with the last time Wall Street was in ashes—literally. It had to do with how they brought it back.

“There was this huge, thunderous bang, and the entire building shook. The skies darkened, there was nothing but ash and smoke.” That’s how Arthur Cashin remembers it. He was on the floor of the New York Stock Exchange as a broker for UBS PaineWebber.

“The floor turned dark,” said Rich Adamonis, a vice president at the exchange. “It was worse than night.”

They were remembering the morning of Sept. 11, 2001, when the towers came down. You know what it looked like—the smoke and debris, the demonic cloud that chased people down the streets.

The exchange never opened that morning, and by the end of the day no one knew when it would. Downtown New York looked like a battlefield, the World Trade Center still burning. There was heavy debris on the roof of the exchange. The entire building was coated in ash. Catherine Kinney, a vice president at the NYSE, thought the facade looked “like nuclear winter.”

On Sept. 12, the heads of the NYSE member firms met uptown at Bear Stearns. All the giants were there—Goldman Sachs, Merrill Lynch, UBS PaineWebber, Salomon Smith Barney, Lehman Brothers, JP Morgan Chase—and representatives from all levels of government, including the Treasury and the mayor’s office. Dick Grasso, chairman of the NYSE, convened and addressed the damage. How many dead in the firms? Who lost their offices? Morgan Stanley, Bank of America and Lehman had offices at the Trade Center—all gone. Firms offered to house other firms. Ms. Kinney: “There was an incredible esprit de corps among all the CEOs. They all sat side by side. They gave each other space on their trading desks and phones.”

To stock exchange staff, it didn’t look as if they could get back up and operating quickly. But they had to. Wall Street was a symbol of America, the exchange an icon of freedom. For Mr. Grasso it was about the bell: when that thing rang, freedom rang. Reopening “was a way for the entire financial community to clasp hands and say, ‘We’re gonna bring a message to the terrorists.’” That message? “You lose.”

They would do the impossible and open the following Monday, five days away. Herculean labors lay ahead. They had to clean up a huge debris field, get generators, reroute and throw in new phone and data lines. Verizon had lost its central switching station, and part of its central office. Public transportation was down, so they’d have to create a shuttle-bus system and get up to 5,000 people downtown, past police cordons and military checkpoints. Tunnels into the city and subway stations had to be tested, support services and food brought into lower Manhattan.

Verizon rerouted circuits, and when they had to, they laid lines in the streets and covered them with rubber. They put huge electrical and phone cables on Broad Street, Exchange Place, New Street.

They exchange knew there would be a huge wave of selling when trading resumed, so they had to be ready for massive volume. If there were any glitches, it would be demoralizing. It all had to work. The world was watching. And this was America.

People slept in their offices, on cots in the medical area, on the floor of the chairman’s office, on the couches of a restaurant called the Luncheon Club. They worked overnight and all day.

And all the time they were doing this, they were hearing about friends and relatives who’d died. “The only smiles on Wall Street were in the posters of the missing that the families put up,” said Mr. Cashin.

They tested all the new systems on Sunday the 16th. One after another the big firms reported in from wherever they’d set up shop: Their lines were working.

And so the next morning, Monday, Sept. 17, 2001, the New York Stock Exchange opened with a podium full of firemen, cops, emergency medical workers and elected officials. A Marine Corps major sang “God Bless America.” There was silence. Then a Port Authority police officer, one of the last guys to come out of the pile, began to ring the bell. The others on the podium joined in. And as the bell rang out in triumph, the traders on the floor began to cry and cheer and shout themselves hoarse. Catherine Kinney was below the podium. “Was there a cheer—oh my God, you wouldn’t believe. I cried, I did. And prices start to go across the tape . . .”

America was open for business again.

It was a great moment in Wall Street history.

We all know what followed. A bubble grew, and then burst, and Wall Street was forever altered. In fact it’s not there anymore; it exists merely as a metaphor for “business” and “investing.” Many of the firms that helped Dick Grasso are gone, their CEOs humiliated, as was Mr. Grasso himself, in a salary scandal.

In the years after 2001, they took care of themselves. But that bright shining week, Sept. 11 through 17, they took care of tradition, the exchange and their country.

So maybe wisdom begins there for them, and for those entering and living out lives in business in America: Look only to yourself and wind up with ashes. Know it’s bigger than you and wind up a hero.

But then it begins there for everyone.