The history of origin and development of stock exchange

 

Many millions of people have a personal interest in what happens at a stock exchange. Some are directly concerned because they are part owners of companies through stock, others are holders of government and other listed securities and yet another group are holders of insurance policies, since insurance companies invest much of their assets in listed securities. A stock exchange is a market for the purchase and sale of securities such as shares,bonds and commodities. Such markets have existed for many decades. They had their beginnings in the regular meetings , usually in a coffeehouse or restaurant, of a few men who acted as intermediates between buyers and sellers. They did this for a commission. In London , for example, the stockbrokers used to meet at Jonathans coffeehouse in Change Alley. In 1773 they moved to a room in Sweeting's Alley to which they gave the name Stock Exchange. In the United States , to pay for the cost of the Revolutionary War and to finance other activities, stocks and bonds had to be sold to the public. But the people did not want to invest in securities unless they could easily resell them. So a market place for securities was needed. Brokers of those days decided to meet every day under the branches of an old buttonwood tree on the Wall Street. These men were the 24 original members of the New York stock Exchange. Their trading floor was a small ground protected by the branches of a tree-but that was the first stock exchange in the United States. Wall Street owes its name to Peter Stuyvesant, who in 1652, as Government of the Little Dutch Settlement of New Amsterdam, ordered a wall built there to protect the town from attack by the English. Today 'Wall Street' indicates the whole financial district. It has the headquarters of banks, insurance companies, corporate business houses, beside the New York Stock Exchange. In other parts of the world , Stock Exchanges sprang up even earlier. The origin of Paris Bourse, which means market, has been traced back to the money - changers market in the year 1138. In Amsterdam the first exchange was founded in 1611.