What does the phrase “lame duck” mean and Where does it come from?

In the United States we know a “lame duck” as a congressman who, having run for re-election in November and having been defeated at the polls, still has several months of his term to serve before he bows out more or less gracefully to his successful rival.

But why “lame” and why “duck”? We must go to London for the answer, to a street known as Exchange Alley which, prior to 1773, was the place where London stockbrokers conducted their business.

It was the old-time Wall Street of London, and just as we now refer to “the Street,” meaning Wall Street, so “the Alley” then meant Exchange Alley.

This alley was the scene of the wildest stock speculation of all time, the noted South Sea Bubble of 1720, stock of the South Sea Company which, in that year, opened at 128.5 a share in January, rose to 330 in March, to 550 in May, to 890 in June, and finally touched 1000 a share in July when the directors of the company sold out and the bubble exploded.

Exchange Alley was the place where stockbrokers were first divided into two classes, bears and bulls. And it was also the place which saw, all too frequently, a third class, those who were cleaned out; those who could not meet their financial obligations.

These latter came to be known as “lame ducks.” Why? Because, to the amused spectator, they “waddled out of the Alley!”