STOCK EXCHANGE. An institution where sales and purchases may be made of securities of corporations and municipalities, and in some eases of certificates representing commodities of trade, such as silver bullion, petroleum. etc. In their origin stock exchanges appear to have been free to the use of any one who wished to buy or sell, and it was probably with this function in view that some of the older exchanges, notably the Paris Bourse, were located in buildings erected at the public expense. It was very quickly dis covered. however, that in order to enforce bar gains some formal organization was necessary. Membership in stock exchanges therefore came to be limited on the general basis used by clubs or other associations. As the profits of the use of the exchange became large possession of a membership became a valuable privilege.
The London Stock Exchange has for many generations occupied the most conspicuous place in the history of finance. for the reason that transactions on its floor were conducted by the great aggregation of capital. home and interna tional, which made its abiding place in that city. Originally confining its dealings to British Gov ernment stock, the London Exchange became active, at the opening of the nineteenth century, in securities of other nations which applied to London capitalists for the placing of their public loans. To this class of securities were later added railway shares. After 1888 stocks of incorporated industrial enterprises, and more recently of mining and exploration companies, grew into high favor, the Stock Exchange merely acting as the medium for the transfer of such shares from the hands of the capitalists behind the enterprise to those of the general public.
The New York Stock Exchange devoted itself during most of its history almost exclusively to securities of railway enterprises, even the dealing in United States Government bonds and in other American public securities being chiefly conducted outside of the Exchange. In recent years, how ever, along with the development of the London movement of industrial incorporation, the New York Stock Exchange has been largely utilized for the exploiting of shares of American companies of this nature. This movement, which flagged
during the hard times of the early nineties, was renewed in enormous volume during the great 'boom' in trade which followed 1897. In the course of this t hue listing of industrial se curities on the New York Exchange attracted an immense business to that branch of its activi ties. The New York Stock Exchange has never dealt to any noteworthy extent in foreign securi ties, thereby reflecting the general tendency of American investors. Even the large purchases of British consols by American bankers during the Exchequer's loan issues of 1900, 1901, and 1902 were disposed of privately, and were never allowed a place in the formal trading of the Stock Exchange.
There has been some rather notable diversity in the business of the New York Exchange and other American exchanges. For example, the Philadelphia Stock Exchange has long been noted as the market for various street-railway securities. This was because Philadelphia cap italists had interested themselves particularly in that form of investment. For similar reasons the Boston Stock Exchange. though not an or ganization which commanded the resources and capital of New York. monopolized for many years, and largely controls now, the trading in shares of copper-mining companies.
Stock exchanges of Continental Europe have in general devoted themselves to transportation enterprises of their own countries, to their own Government's securities, and to securities of other European governments which came to those markets to raise capital. Vlore recently the stock exchanges of Paris, Berlin, and Vienna have followed London's example in taking up on a large scale shares of incorporated indus trial enterprises. This has been particularly true of Berlin, whore the iron industry has been extensively exploited in this form.