History of the Stock Market Essay
Posted by admin as Example papers
History of the Stock Market Essay Example
Many people visualize the appearance of Stock market with construction of Wall Street. As a matter of fact this view is not far from truth the on a Wall Street there was started the biggest financial market which upon its development successfully sprang a new industry with its own language and terms. When people buy stocks on the stock market they hardly know to what this place refers. It is not an abstract idea or some virtual computer terminal through which the stocks and bonds are sold and bought but it is a physical place with houses and addresses, a place where one can go to visit.
Not long after building of defensive wall on the end of Manhattan which served as a protection against British attacks (1644) it had been destroyed and the street alongside its road got a name of Wall Street. The future financial center of the world started to enhance its business. Te challenge to making the Wall Street an official place for conducting a business served the absence of such status in Boston financial center which at those times was the main financial center of America.
Other countries had such “exchanges” established since 1531 when European country Belgium started to actively conduct the business operations with stocks and bonds. The first transfer of money to America received from financial operations on official stock market took place at 1602 when the shares of the East India Company were bought and under the Amstel Bridge.
Meanwhile, Paris led its financial business on Rue de Quincampoix. In the early 1600’s, Berlin’s traders and merchants made the business at the Grotte in Schlossgarten.
London’s stock exchange started its activity as an outdoor market situated on Exchange Alley. By 1725, notable quantity of London brokers launched their business at Jonathon’s Coffee House where under the cup of coffee proclaimed the appearance of new assets on a stock market. The phrases were similar to the one expressed by John Taylor: “Buyeth and selleth new lottery tickets, Navy victualling bills, East India bonds, and other publick securities”. In 1773 the Coffee House was officially granted with the status of Stock Exchange.
It was just a matter of time before the United the United States of America, a new country on the world map, would start formal stock and bond trades. In the year of 1792 it had happened. The New York City’s population at that time was about 34,000, not containing Brooklyn and Queens Cities which were still separated from one another. Much of Manhattan areas had just been reconstructed with brick buildings after the demoralizing Great Fire of 1776.
Wall Street became New York’s center of commerce with warehouses for furs, tea and coffee, and other goods from all around the world. On the east River not far from Broadway, where the main part of the street was situated the roads were paved with cobblestones; to the south, streets were overwhelmed with slaughter buildings and tanneries. Wealthy businessmen together with their common trade sold lottery tickets, bonds, and shares of stocks in new bank institutions that were organizing. The best trades and speculations took place in treasury bonds released by the new Bank of the United States. Until 1792, a person eager to buy or sell an investment had either to advertise, or spread the information among associated people. First successful merchants that sustainable kept a supply of stock shares on hand were Leonard Bleeker at 16 Wall Street and Sutton & Harry at 20 Wall. One day in 1791, the quantity of 100 shares were actually passed through hands.
The first official stock exchange was created in 1792 under the buttonwood tree in Castle Garden (now called Battery Park). The agreement of rules, regulations and fees was signed between 22 financial leaders, John Sutton, and Benjamin Jaynt. From then on every day beginning at noon at the 22 building of Wall Street, was imposed to auctions to the highest bidder. The seller paid the exchange a charge on every stock or bond sold. This organization was originally called The Stock Exchange Office and it initially it allowed only the elite of New York’s financial community to join. And surely the women were not let to join financial group of Stock market. In 1817, the building was renamed to the New York Stock and Exchange Board. In 1850 the stock exchange was situated at it s fifth address – Wall and Hanover. Then the Board’s annually expenditures including rent and salaries were less than $5,000.
Finally in 1863, the Board go its definitive name of New York Stock Exchange, and moved to the grandiose building at the corner of Wall and Broad. The NYSE was a decent competitor to smaller exchanges of New York and other cities’ as well as it conducted business in along with stock exchange strong participant, with a group of securities dealers who made their business outside, whether it was raining or shining. They were known as the Curbstone Brokers. After over 100 years of existence the Curbstone Brokers made a decision to move inside. So they bought a lot at 86 Trinity Place at the west end of Wall Street, and constructed a tall modern building with a lot of lot. In 1928, they recalled themselves to the New York Curb Exchange and moved into their new office. This name existed until 1953 when it was turned to American Stock Exchange.
The process of early exchange trading does not differ much from the modern system unless today we have more developed technological and organizational basis. First the trades took place at the Bank of New York. The bank calculated 295 corporations, of which around 20 traded publicly. In 1835, the list on the NYSE increased to 121 and the bubble famous as The Panic occurred at 1836. In 1869, there existed 145 companies of insurance, steel, farm equipment, tobacco, and other manufacturers.
In 1900, the largest stock was U.S. Steel, AT&T, Westinghouse, Kodak, Procter and Gamble, Pillsbury, Sears, Kellogg, and Nabisco Crackers.
However the safety to work on Wall Street turned to the danger. As it is known the bombing of the World Trade Center in 1993 and its terrific destruction happened on September 11, 2001.
Since then strong measure were put in order to cut or entirely eliminate the possibility of such big-scale crushes. As long as today stock markets are an integral part of the world economy the proper safeguards should be undertaken to reduce the possibilities of another catastrophic crashes.
1.Arms, R.W., Jr. Volume Cycles in the Stock Market (Dow Jones-Irwin, 1983).
2.Flumiani, C.M. Young People’s Introduction to the World of Wall Street (Inst. for Econ. and Fin. Research, 1987).
3.Teweles, R.J. 1987. and Bradley, E.S. The Stock Market, 5th ed.
4.A short history of Wall Street. Stocks and Investing – real Life Investing Guide. Stocks & Investing Home Page: