BMA Gyaan- Stock Market History, An Overview

As any scripophile (someone who collects antique securities certificates) will tell you, the oldest existing stock certificate was issued in 1606 for a Dutch company (Vereinigte Oostindische Compaignie) seeking to profit from the spice trade to India and Far East. Though very profitable in its day, when the company was dissolved in 1799, it was some 10 million Dutch guilders in debt.

Today that share certificate is worth well more than the stake in the company it originally represented. While antique stock shares have become a collectible, millions of people around the world invest in companies and own their stock for a very different reasons – the possibility of financial return on investing in well-run, profitable companies that deliver needed goods and services.

Old to New World

Much of the business of stocks and securities in the Old World revolved around shipping and the spice trade in the early days. First, it was the maritime empires of the Netherlands and Portugal, then later Spain, France, and England. With the emergence of the British Royal Navy as the supreme force on the seas during and following the Napoleonic Wars at the end of the 18th and beginning of the 19th centuries, the seat of trading commerce moved to England.

It is natural then that the idea of trading stocks came to America with English colonists. With the birth of the United States came the need to develop economic power in addition to military might. Alexander Hamilton, the first U.S. Secretary of the Treasury, had studied the stock exchanges in Britain and believed they were essential to building and maintaining a vital and robust economy. During his term from 1789 to 1795, he promoted the development of American stock exchanges. It is no wonder then that visitors to Wall Street, the heart of the New York (and American) financial district, will find a statue of Hamilton in a place of honor amongst its massive buildings.

Exchange Established

It was Hamilton who encouraged the trading of government debt securities on the corner of Wall Street and Broad Street in New York, then the nation's capital. The trading expanded to include stocks and the street corner got quite crowded. In 1817, traders in New York organized the New York Stock & Exchange Board (which later became the New York Stock Exchange) and moved off the street into a building at 40 Wall Street.

From there the stock market grew. So did the building. The structure at 40 Wall Street now is a 71-story edifice known as the Trump Building, after financial mogul Donald Trump who bought it and undertook a renovation of the structure in 1996. The rival New York Curb Exchange was founded in 1842 and later changed its name to the American Stock Exchange (AMEX) as stock trading expanded. Government regulation of the markets was instituted by Congress in 1934 after the Great Crash.