The USA Stock Exchange

In the 1700s groups of brokers in Philadelphia, Pennsylvania, and New York City began to meet in parks and coffeehouses to buy and sell securities. In open auctions, traders called out names of companies and numbers of shares available. Shares went to the highest bidders. After the American Revolution (1775-1783) the number of securities traded increased dramatically. Brokers decided to organize in order to handle the growing volume. In 1800 the Philadelphia Board of Brokers drew up regulations and a constitution and set up central offices where trading could take place. The organization they created, the Philadelphia Stock Exchange, is the oldest exchange in the United States. In 1817 brokers in New York formed the New York Stock and Exchange Board (renamed the New York Stock Exchange [NYSE] in 1863).

As the United States grew and prospered during the 19th century, many more companies began to issue stocks and bonds. More people began to invest, and dozens of exchanges were formed across the country. Some of these are still in existence, but many others were short-lived. For example, the California gold rush of 1849 gave birth to a number of small exchanges where the public could buy shares in the new mining companies. As the gold rush subsided, these companies went out of business and the exchanges closed.

During the second half of the 19th century, New York City emerged as the primary financial center of the United States. The NYSE became the most successful exchange. Its members concentrated on trading the securities of the largest corporations. At that time, stocks of smaller companies were traded by brokers on the streets of downtown New York. In 1908 these brokers formed an organization called the New York Curb Agency, which became known as the American Stock Exchange in 1953.