Little Bits of History

Buy Low; Sell High

Posted in History by patriciahysell on May 17, 2012

New York Stock Exchange (Photo by Arnoldius)

May 17, 1792: The New York Stock Exchange (NYSE) is formed. Wall Street was laid out in 1685, running along a stockade line which was built in 1653 to protect the Dutch settlers from British and Indian raids. In 1790, at the end of the Revolutionary War, the federal government needed to refinance its debt. The US investment market was created by the government issuance of $80 million ($3.7 billion in 2009 USD) in bonds. By 1792 there were five securities traded in New York City – three government bonds and two bank stocks.

On this day, the Buttonwood Agreement was signed by 24 prominent brokers and merchants. They met outside 68 Wall Street under a buttonwood tree. The agreement held two major provisions. First, the brokers would deal only with each other, eliminating auctioneers, and there would be a commission of 0.25% charged for trades. By the next year, they were conducting business at the Tontine Coffee House, owned by signatory Hugh Smith. At the end of the War of 1812, the market for securities began to grow. Along with government bonds, bank and insurance stocks were also traded.

In 1817, a constitution with rules of conduct was written and adopted. Stocks were sold in a “call market” where the president would list the stocks for sale and brokers were able to call out for a purchase. There were two sessions held daily. The first president of the NYSE was Anthony Stockholm who held the office from 1817-18. The trading moved to rented rooms at 40 Wall Street where the New York Stock & Exchange Board met. Like today, stocks peaked and then declined. In 1824 shares peaked at 380,000 shares and then dropped by 15% by 1829 and stayed lower until 1831.

Some noted events as the exchange grew up include: the first stock ticker (1867), Dow Jones Industrial Average first published in The Wall Street Journal (1896), moving into a new building at 18 Broad Street (1903), the Dow first breaking 100 (January 12, 1906), collapse of 1929, Dow first closed above 1,000 (November 14, 1972), and Dow first broke the 10,000 mark (March 29, 1999). Today, the NYSE is owned by NYSE Euronext and Duncan L. Niederaurer is the CEO. There are 2,317 listings on the market with a volume of $1.439 trillion traded (November 2010). The trading floor is located at 11 Wall Street and holds four rooms for trading. A fifth trading room was located at 30 Broad Street, but it was closed in February 2007. The main building located at 18 Broad Street as well as the building at 11 Wall Street are both designated as National Historic Landmarks.

It doesn’t make sense that Wall Street applauds us because we do things well at the macro level. The objective is that that healthy economic growth is reflected in the reduction of extreme poverty. – Alejandro Toledo

We never know what Wall Street will love and what Wall Street won’t love, … We have to do the things that make the most sense. – Jeff Smulyan

Speculators on Wall Street are responsible for prices going through the roof and now they have nothing more to be afraid of. – Jim Smith

The most valuable things in life are not measured in monetary terms. The really important things are not houses and lands, stocks and bonds, automobiles and real state, but friendships, trust, confidence, empathy, mercy, love and faith. – Bertrand Russell

Also on this day:

“And They’re Off” – In 1875 the first Kentucky Derby is run.
That was Quick – In 1963, a fight ended after 48 seconds.
Computational Device – In 1902 the Antikythera mechanism was discovered.

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