Stock market history. Part 2

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The West India Company became the second joint stock company, whose shares began to be traded on the Amsterdam Stock Exchange.

In the 18th century. the British East India Company appeared among the issuers. South Seas Company, Bank of England, European governments. In 1747, 44 types of securities were quoted on the Amsterdam Stock Exchange.

The second largest stock market in the world is the UK market. It was on the territory of England that the first specialized stock exchange appeared, when in 1773 London brokers, who carried out transactions with various financial instruments in Jonathan’s coffee shop in the City, in the area of ​​the Royal Exchange and Threadneedle Street, rented a special room for their meetings, for the first time called the Stock Exchange – Stock Exchange. Membership on the exchange, like in Amsterdam, was not limited at first – anyone could take part in the auction, paying 6 pence a day for it.
Stock exchanges also arose in Liverpool (specializing in shares of insurance companies and American issuers), Manchester (railways and textiles), Glasgow (shipbuilding and metallurgy), Cardiff (mining industry), but London was central to the stock market, and in early 19th century the world financial center was no longer considered Amsterdam, but London.

Until the middle of the 19th century, government bonds were the main types of securities on the London Stock Exchange, since in England for a long time (from 1720 to the middle of the 19th century) there was a legislative restriction on the creation of joint-stock companies. It was connected with the following circumstances.
The advantages of joint-stock ownership demonstrated by the East India Companies contributed to the joint-stock craze in the early 18th century. The “founding fever” reached its climax in the second decade, when the English Company of the South Seas (1711) and the French Company “Mississippi” (1717) appeared, which soon collapsed.
After the collapse of the South Seas Company in England in 1720, a law (Bubble Act) was passed, according to which the status of “limited liability” (limited liability) could be obtained only on the basis of a special act of parliament.

The history of the South Seas Company has long become a textbook. All textbooks that touch on legal issues related to the activities of companies include such a concept as the South Sea Bubble – an example of issuing unsecured shares or creating a financial pyramid.
From 1708 to 1826, only the Bank of England had the privilege of being a joint stock company, all other banks could operate as individual enterprises or partnerships. These prohibitions, naturally, preventing the appearance of shares on the securities market, were finally canceled only at the beginning of the second half of the 19th century, after which the joint-stock company became the predominant form of organizing large business and at the same time the role of the stock exchange as a specialized stock market increased immeasurably.
In France, the forerunners of modern securities specialists were medieval money changers. Back in 1304, King Philip IV the Handsome introduced the profession of moneychanger by special decree (Courratier de Change; later this name was shortened to Courtier). Since 1639, these specialists have been called agents de change.

In 1724, a building was built specifically for transactions between merchants to conduct transactions and exchange agents. However, their activities did not correspond to modern principles of exchange trading: there was no mechanism for publicly declaring prices and the exchange trading procedure. It was only in 1777 that a special platform for trading securities was allocated for exchange agents and the rule of open price announcement was introduced.
In 1801, Napoleon issued a decree on the construction of a special building for the Paris Stock Exchange, which was completed in 1826.

The main securities that exchange agents worked with in the 18th century were promissory notes, not stocks or bonds. However, by 1840, about 130 debt and equity securities were quoted on the Paris Stock Exchange.

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