After selling their police powers, their wireless networks, and their underground Market Street trading floor to the Nasdaq Stock Market, leaders of the Philadelphia Stock Exchange met for the last time last week at Old City Tavern, where the nation's first stock exchange organized in 1790.

"It's a bittersweet night," said former chairman John Egan Jr., who once compared the job of leading the traders to "running the Gladiators' Union in Imperial Rome."

What's remarkable isn't just that the Philadelphia survived as long as it did, an incubator of financial enterprise in the shadow of the larger New York Stock Exchange and the Chicago options markets.

It's that the Philadelphia, once the smallest and most fragile U.S. exchange, was able to rise above endemic factional fights, financial disputes, scandals, competition, and technological and regulatory pressure to boost market share, turn a profit, and fetch a respectable $652 million sale price - far more than the rival American, Pacific and Boston markets collected in this final phase of consolidation as trading moves online.

To be sure, traders still had to wage what a judge called a fierce legal battle to boost their share of sale proceeds to $151 million, from a proposed $69 million, with Wall Street investors and managers splitting the rest.

The ferocity was typical. "You know how Philadelphia is divided politically into 68 wards? We used to say the Exchange was the 69th Ward. The Fighting 69th," said Nicholas Giordano, who ran the exchange in the 1980s and 1990s until Securities and Exchange Commission chairman Arthur Levitt forced it to accept a board dominated by Wall Street and Washington appointees.

In 1998, Levitt recruited Meyer "Sandy" Frucher, a New York political fixer with no trading experience, to run the works. Frucher arrived in Philadelphia like the Angel of Death to close a plan that would have sold the market to the rival American exchange, shut its trading floor, and move hundreds of skilled staff and well-paid traders to Wall Street.

The deal fell apart, and Frucher was forced to do what the best of his predecessors did: help members push new products without breaking the law, while making friends with state and federal officials, big New York and Chicago customers, and others in a position to help.

One afternoon early in Frucher's tenure, he got the kind of sucker-punch that had become too familiar at the exchange in previous years. U.S. Sen. Charles Schumer (D., N.Y.), whose constituents included the big New York markets, put out a news release damning the Philadelphia exchange as a skeevy haven for illegal day-traders, and demanding that the SEC do something about it, quick.

I called Frucher's aides for comment, expecting that process would take weeks for a measured, Philadelphia-lawyer-vetted response, while the noose closed.

Instead, the chairman got on the phone and shouted, "He can't do that to me!" Noting he'd given money to Schumer's election campaign, he suggested I wait an hour. Quicker than that, a Schumer aide was on the phone retracting, apologizing, and praising Philadelphia as a paragon of reform. News release to follow.

So maybe a well-connected New York Democrat was the best choice, in that lethal climate, for skipper of one of Philadelphia's key institutions. At the Tavern, Egan and Giordano gave Frucher high praise.

In his talk that night, Frucher said the exchange deserved equal recognition with its old neighbor, Independence Hall. The Declaration made personal freedom a national goal, and the Constitution "brought that definition to more and more people," giving them "access to power, economic opportunity, and upward social mobility" - which, Frucher said, is "exactly what capital markets do."

The Philadelphia exchange won't go away completely. Nasdaq plans to keep it as an options-trading center. "As long as they're profitable, they'll be here," said Giordano. "The business will make that decision. It won't be emotional."

Nasdaq's markets executive Chris Concannon sounded humble on that point: "When you look at all the history - we're just simple stewards."