The History Of The NYSE

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While there are a number of stock exchanges in operation, there is no doubt that the NYSE is dominant. About 3,400 common stocks are listed and traded there, including such giants as AT&T, General Electric, General Motors, Ford Motors, Standard Oil of New Jersey, Woolworth, du Pont, Sears-Roebuck, U. S. Steel, and today, Internet giants such as Google, Yahoo and Amazon. It's come a long way since the early days.

On May 17, 1792, a group of merchants and auctioneers decided to meet daily at regular hours to buy and sell securities under an old buttonwood tree on Wall Street only a few blocks from the present site of the Stock Exchange. These men were the original members of the New York Stock Exchange. They handled the public's buy and sell orders in the new government stock, as well as in shares of insurance companies, Alexander Hamilton's First United States Bank, the Bank of North America in Philadelphia, and the Bank of New York.

In 1793 the Tontine Coffee House was completed at the northwest corner of Wall and William Streets and the brokers moved indoors. Soon after the turn of the century, it was evident that the Tontine Coffee House was too small to accommodate the volume of trading in securities and the stockbrokers moved to a meeting room at what is now 40 Wall Street. Greater activity brought the need for a more formal organization than that created by the simple 1792 agreement. On March 8, 1817, the first formal constitution of the New York Stock and Exchange Board, as it was then known, was adopted.

From 1817 to 1827 the Board met in various offices. After that, it moved a dozen times or so before settling at 18 Broad Street, which contains most of today's trading floor. The office building at 11 Wall Street was added in 1922. Other historic dates are: 1863, when the name "New York Stock Exchange" was adopted; when the first stock tickers were installed: when memberships were made saleable; 1871, when the call market gave way to a continuous market; 1879, when the first telephones were installed in the Exchange; 1886, the first time that a day's volume topped 1,000,000 shares; 1910, when the Exchange discontinued unlisted trading (previously unlisted stock could be traded, but the unlisted company had no responsibility to comply with Exchange standards) ; 1915, when the basis of quoting and trading in stocks changed from per cent of par value to dollars; 1922, when the questionnaire system for regular examination of the financial condition of member firms was inaugurated; 1933, when independent audits of financial statements were required of listed companies; and 1938, when a sweeping reorganization of the Exchange called for a paid president for the first time.

A member of the NYSE may be a partner or holder of voting stock in one of the brokerage concerns, which, by virtue of his Exchange membership, is known as a member firm or member corporation. There are 651 such firms. From the founding of the Exchange in 1792 until May, 1953, member organizations were limited to partnerships. Then the Exchange's Constitution was amended to permit corporations to become member organizations, provided they are engaged primarily in the securities business as dealers or brokers. Membership now totals 1366, although the Constitution makes pro–vision for 1375 members. About half the members are partners or officers in firms doing business with the public—so-called commission houses. These members execute customers' orders to buy and sell on the Exchange and their firms receive the commissions on those trans–actions. Many firms have more than one member.

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