Since we were studying the stock market crash of 1929, I decided to do a bit of history on the stock exchanges, which was quite interesting.
From various sources I learned that businesses liked to be located as close to Wall Street as possible, so they could get the latest stock values as possible via runners that ran between the business and Wall Street, a concept common to earlier exchanges.
14th CENTURY HISTORY
The first I found of this concept would be the 1300’s when Venetian merchants carried slates between point of sales and clients.
16TH CENTURY HISTORY
Eventually the first stock exchange organized in 1531 Antwerp, Belgium.
However, there were no stocks involved.
During these years, ship owners and even ship captains needed investors to finance individual trips.
Christopher Columbus sought financing from various monarchs for his novel adventure to sail west to the Indies, which he finally found in Queen Isabella of Spain.
Of course, investors sought to diversify, since the sinking of a ship was a certain fate, sooner or later.
They invested in many to hopefully cover their costs.
17TH CENTURY HISTORY
By 1600, Imperialism ruled the Far East through the Dutch East India Company, the British East India Company and the French East India Company.
Now the government got involved more directly, by granting charters to companies, who in turn financed ships for all of their voyages, instead of single trips.
In return the investors received dividends for all the trips.
This was the first modern joint stock company.
Because the government granted the charters, there was no competition, creating a monopoly which grew into mercantilism.
Under one of these modern joint stock companies, the ship to Jamestown and subsequent voyages were financed.
During these years there was no physical building for the investors to meet, like Wall Street today.
BIRTH OF COFFEEHOUSES
Meanwhile in 17th century London (and other major cities of Europe, but mostly London) coffee houses were springing up all over the place.
In 1663 there were 82 coffeehouses throughout London which grew to 500, and exceedingly more by other accounts in the 18th century.
In these establishments men would congregate to discuss matters of importance (politics, business, literature, religion, etc), read the latest news and pamphlets, and even conduct business.
Coffeehouses attracted various types of clientele, based on whether they were located near the religious center, collegiate center, or business center of the city.
Businessmen spent so much time at the coffeehouses, that they frequently used the address of their coffeehouse of choice as their point of contact.
Many wives complained because their husbands were never home.
King Charles II also fumed, trying to close the coffeehouses due to suspected government espionage, but to no avail.
Eventually a compromise was reached in that coffeehouses gave their word for loyalty.
In fact, coffeehouses had a greater reputation than taverns, were nicely decorated, comparatively speaking, and were rather even keel in demeanor.
Coffeehouses thrived. Business was conducted.
Runners frequently ran from coffeehouse to coffeehouse to exchange information and news, to keep the clientele up on the latest information.
18TH CENTURY HISTORY
The first official stock exchange was the London Stock Exchange, opening in 1773, or 1801, depending on the source you read.
The most powerful stock exchange opened in 1792, the New York Stock Exchange.
19TH CENTURY HISTORY
In 1889, the Wall Street Journal was first published by Dow Jones and Company.
This only barely skims the surface.
COFFEEHOUSE IN COLONIAL WILLIAMSBURG
All of this reminds me of the 18th century Charlton’s Coffeehouse across the street from the Capitol in Colonial Williamsburg.
While there we learn how the local gents arrived to discuss politics as they enjoyed their coffee.
In time, coffeehouses also began providing tea, chocolate, and tobacco, three other benefits of England’s growing global sway. But the most important innovation of the coffeehouse may have been news. The latest advices and circular letters with news of London and the world passed from hand to hand, were read aloud, and sometimes posted on a notice board…The coffeehouse had become the new court, an egalitarian and yet somewhat elite space, where men of all classes could mix and exchange ideas. Merchants and intellectuals who had no voice at court were heard out here. -Colonial Williamsburg Spring Journal 2001
After the tour, we are seated to choose our choice of hot drink (tea, coffee, or hot chocolate) while we discussed 18th century politics with the interpreter.
For more photos, check my Flickr set.
RESOURCES
The Lost World of the London Coffeehouse – period ads, renderings, details on various clientele in various coffeehouses, comparisons to today, etc
The Internet in a Cup – most of my info above came from here, additionally covers decor of coffeehouses v tavern, various clientele, comparisons to today
The Evolution of Stock Exchanges – lots of my blog info from here
Wall Street and the Stock Exchanges – from the Library of Congress
