Stock Exchange Information Prior to 1901 (1)

An institution where sales and purchases may be made of securities of corporations and municipalities, and in some cases of certificates representing commodities of trade, such as silver bullion, petroleum, etc. In their origin stock exchanges appear to have been free to the use of any one who wished to buy or sell, and it was probably with this function in view that some of the older exchanges, notably the Paris Bourse, were located in buildings erected at the public expense. It was very quickly discovered, however, that in order to enforce bargains some formal organization was necessary. Membership in stock exchanges therefore came to be limited on the general basis used by clubs or other associations. As the profits of the use of the exchange became large possession of a membership became a valuable privilege.

The London Stock Exchange has for many generations occupied the most conspicuous place in the history of finance, for the reason that transactions on its floor were conducted by the great aggregation of capital, home and international, which made its abiding place in that city. Originally confining its dealings to British Government stock, the London Exchange became active, at the opening of the 19th century, in securities of other nations which applied to London Capitalists for the placing of their public loans. To this class of securities were later added railway shares. After 1888 stocks of incorporated industrial enterprises, and more recently of mining and exploration companies, grew into high favor, the Stock Exchange merely acting at the medium for the transfer of such shares from the hands of the capitalists behind the enterprise to those of the general public.

The New York Stock Exchange

The New York Stock Exchange devoted itself during most of its history almost exclusively to securities of railway enterprises, even the dealing in United States Government bonds and in other American public securities being chiefly conducted outside the Exchange. In recent years, however, along with the development of the London movement of industrial incorporation, the New York Stock Exchange has been largely utilized for the exploiting of shares of American companies of this nature. This movement, which flagged during the hard times of the early nineties, was renewed in enormous volume during the great "boom" in trade which followed 1897. In the course of this time listing of industrial securities on the New York Exchange attracted an immense business to that branch of its activities. The New York Stock Exchange has never dealt to any noteworthy extent in foreign securities, thereby reflecting the general tendency of American investors. Even the large purchases of British consols by American bankers during the Exchequer's loan issues of 1900, 1901, and 1902 were disposed of privately, and were never allowed a place in the formal trading of the Stock Exchange.

To be continued: Stock Exchange Information Prior to 1901 (2)

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