The Origins of the New York Stock Exchange

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to fund these projects. These new companies who built these transportation methods formed corporations in order to finance themselves, and not one sole person incurs the liabilities of the business. Chandler states, “The great increase in railroad securities brought trading and speculation on the New York stock exchange in its modern form,” (Chandler, Pg.92). The stock exchange would take time to develop but modern transportation, and new innovative techniques drove the American finance industry and new managerial tactics.

Roadways where profitable but not for a good while due to the fact that boat shipping at the time was most common to traders and merchants. This gave birth to the Erie Canal that was about 350 miles long. The downside of this was that this was such a big venture to take on that it would take help from the states to fund this new structure. As the progression of the canal started to flourish it would attract the attention of foreign investors. “By 1829, more than half of the Erie’s debt was held by foreign investors, again mostly British and Dutch,” (Geist, Pg.29). This is good for the United states of America, because having investors add capital to things that benefit the American economy will generate profits for us without having to incur so much of liability. The issue that was apparent to America was to decrease some of the debt that has already been incurred so foreign capital to fund projects that benefited us would be very beneficial.

The growth of all this business and new ventures taking off the government could not regulate the trading that would take place, the impact on the financial world. Political power had a big impact on how people invested due to the actions of Senator Kimble. When the Harlem railroad company began to trade publicly to expand the senator opposed it. As he noticed the expansion of the railroad he began to buy stock, and then he gave false information to investors selling it for more value than what it would be really worth. He cornered the stock which means he had the most power considering the amount of stocks he owned. He sold his Harlem stock to other investors, and then pushed a bill through congress to force the rail road to expand. This diluted shares of the stocks being sold, and at the time it was all legal.

Eventually, the gentleman of the stock market would start to adopt the idea that proper stock trading could help facilitate business growth, and more commerce. Stock traders would have to develop techniques to properly satisfy the needs of business, as well the economic impact it would have over all sectors of America. Foreign investors and proper trading ultimately gave business in America the high regard that it is known for today.

Citations

Chandler, Alfed D. The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Belknap, 1977. Print.

“McCulloch v. Maryland – Case Brief Summary.” Lawnix Free Case Briefs RSS. N.p., n.d. Web. 24 Sept. 2015

Geisst, Charles R. Wall Steet: A History. New York: Oxford UP, 1997. Print.

Uknown, Unknown. "The Buttonwood Agreement." Buttonwood Partners, Inc. Web. 24 Sept. 2015.