Stock market history

The US has a long history of trading. In fact, it started more than 200 years back. The colonial government financed the war by selling bonds, government notes promising to pay out a profit at a later date. Around the same time private banks also began to raise money by issuing stocks to raise their own money. In 1792, 24 big merchants met and this resulted into the creation of a market that was later referred to as the New York Stock Exchange or NYSE, which today is probably the most important stock exchange in the world. In this historic meeting, the merchants agreed to meet daily on Wall Street to trade in stocks and bonds.

The first shares in the stock market came from the first 3 banks in North America. They are the Bank of North America (1781), Bank of New York (1784) and the First Bank of the United States (1791). These stocks were issued to pay off war debts of the Continental Congress under the first Secretary of Treasury, Alexander Hamilton.

The next boost came in the mid-1800s when companies needed extra funds to support their rapid growth plans to meet the increase in demand. Investors were also interested in taking up stake in these growing enterprises.

This popularity kept on increasing and by 1900, millions of dollars worth of stocks were traded on the market. In 1921, after 20 years of street trading, the stock market moved indoors for the first time.

And then it happened – the Black Tuesday of October 29, 1929. Popularly referred to as the ‘stock market crash of 1929, it shook the world and had major economic implications worldwide. However it also showed something – how important the stock market had become.

NASDAQ or National Association of Securities Dealers Automated Quotation was the world’s first electronic stock market. It was founded in 1971. Its purpose was to popularize the OTC or over-the-counter securities market which, up to that point, had been relatively unknown and unused by many stock players.

The stock market continues to be an extremely important indicator of the economic conditions.