Dispersion of American foreign-exchange market

Unlike England, where the foreign-exchange market always centered in London, in the United States the market developed in a dispersed fashion among the major port cities. These were Baltimore, Boston, New York, and Philadelphia – the four largest cities in the country – with New Orleans of lesser importance. It is a good hypothesis that the foreign-exchange market had greatest volume and influence in the port city that was most developed economically, especially in the foreign-trade sector. Then the earliest foreign-exchange market probably was Boston, the most populous and economically developed town in early colonial America.

Some time after 1725 Boston was overtaken by Philadelphia in economic activity, and in the 1780s Philadelphia clearly became the leading financial center of the United States. Almost certainly it already was the dominant market for foreign exchange. Baltimore's foreign-trade sector began to grow rapidly in that decade, and it could be that around the turn of the century that city was at least temporarily preeminent in foreign exchange, before Philadelphia again asserted itself.

It took a long time for New York to overtake Philadelphia as the dominant city – probably by about 1800 in foreign trade, 1825 in domestic economic activity, and 1835 in finance.