When the Titanic went down, a fund of $25,000 was raised in a day, and a committee of members of the Exchange was on the pier when the survivors arrived to do what could be done. The Mississippi floods met with a similar response; indeed, every great calamity that spells suffering and sorrow and need finds an instant expression of sympathy and practical assistance from the floor. In times of national gravity, such as an outbreak of war, the Exchange will always be heard from with its volunteers and its funds for equipping a regiment; hospitals, churches, and all worthy charities well know that appeals are responded to with a zeal that is alike nonsectarian and generous.

Never in my experience on the floor have I heard a complaint from a deserving employee of the Stock Exchange. Salaries are wisely increased with length of service, pensions are given by the governors to aged servants; hospitals, medical treatment, nurses, and sanitariums are provided for the sick, and funds are supplied to families of deceased employees. A spirit of helpfulness, sympathy, and generosity is in the very air of the Stock Exchange, an absolutely fine spirit that takes pride, too, in caring for its own members who have been unfortunate.

Finally, let it be said that the Stock Exchange man is human. He knows the “rub of the green,” he suffers as all men suffer, but he does not complain, nor solicit odds. All he asks is fair play; a little patient study of what the Exchange stands for; a little better understanding of its usefulness in our commercial life; a little recognition of each man’s effort to uphold a high standard of business honor; a little of the cordial support which he himself, with stout optimism, extends to every worthy thing.

CHAPTER IX
THE LONDON STOCK EXCHANGE, AND COMPARISONS WITH ITS NEW YORK PROTOTYPE

There were Exchanges in London in the sixteenth century. Merchants from Lombardy had given their name to a street, and had flourished so well that they had branched out in the business of money-changing—that is, of exchanging worn, abrased and clipped coins, foreign and domestic, for those of standard weight and fineness. As trade increased and the first faint signs of progress in the matter of wealth began to develop, it was seen that this business of exchanging money was sufficiently important to warrant royal recognition; accordingly there was created the office of Royal Exchanger, and the person entrusted with this office was given the privilege of exchanging coins in the manner described. Smaller offices for the purpose were farmed out in other English towns, and each place where the business was carried on thus came to be known as “The Exchange,” a name that was ultimately applied to any covered place where merchants met to buy and sell commodities.

After the money-changers came the money-lenders—Jews, more Lombards, and finally the Guild of Goldsmiths. The last named, having long practised the business of money-lending, finally became money-borrowers, issuing receipts for these borrowings known as Goldsmiths’ Notes—the earliest form of English bank-notes—and the first step in the convenient process of translating capital, and debt, and credit, into bits of interest-bearing paper.[102] This was the state of English finance until 1694, when the Bank of England was founded, and stocks and shares came into being since the bank was a joint-stock affair. That the invention of stock certificates was a popular one, and that the authorities and the public seized upon it as a convenient means of directing capital into new and hitherto untried forms of enterprise is seen by the rapidity with which fresh undertakings were put forth. In 1698 the New East India Company loaned its capital to the government; by 1711 there was a funded debt of £11,750,000 in the shape of bank stock, East India stock, and annuities. There was also the famous South Sea Company, to be followed ten years later by a reorganization of the company with its first subscription of a million in £100 stock at £300, and a second and third subscription of larger magnitude, each accompanied by prodigious promises, and each snapped up with avidity by a public saturated with the new and hazardous pastime of speculation.

“All distinction of party, religion, sex, character, and circumstance,” writes Smollett, the historian of the time, “were swallowed up in this universal concern. Exchange Alley was filled with a strange concourse of statesmen and clergymen, churchmen and dissenters, Whigs and Tories, physicians, lawyers, tradesmen, and even with multitudes of females. All other professions and employments were utterly neglected; and the people’s attention wholly engrossed by this and other chimerical schemes, which were known by the denomination of bubbles. New companies started up every day, under the countenance of the prime nobility. The Prince of Wales was constituted governor of the Welsh Copper Company; the Duke of Chandos appeared at the head of the York Buildings Company; the Duke of Bridgewater formed a third, for building houses in London and Westminster. About a hundred such schemes were projected and put in execution, to the ruin of many thousands. The sums proposed to be raised by these expedients amounted to three hundred millions sterling, which exceeded the value of all the lands in England. The nation was so intoxicated with the spirit of adventure that people became a prey to the grossest delusion. An obscure projector pretending to have formed a very advantageous scheme, which, however, he did not explain, published proposals for a subscription in which he promised that in one month the particulars of his project should be disclosed. In the meantime he declared that every person paying two guineas should be entitled to a subscription for £100, which would produce that sum yearly. In the forenoon this adventurer received a thousand of these subscriptions; and in the evening set out for another kingdom.”

No sooner were there bits of paper to deal in than jobbers or brokers sprang up to handle them, and by natural gregarious processes these dealers gathered in one spot. Thus competition was stimulated and active markets created. The rotunda of the bank and the Royal Exchange were their first haunts, indeed until Archbishop Laud drove them out they were to be found bargaining on the wide floors of St. Paul’s Cathedral. As the business expanded they took to the neighboring streets and coffee houses, and so Change Alley, Jonathan’s Coffee House, Cornhill, Lombard Street and Sweeting’s Alley became their familiar retreats. Old Jonathan’s burned down in 1748 and New Jonathan’s in Threadneedle Street succeeded it. Here, in July, 1773, “the brokers and others at New Jonathan’s came to a resolution that, instead of its being called New Jonathan’s, it should be called ‘The Stock Exchange,’ which is to be wrote over the door.” Thus while business in the public funds was still conducted on a large scale at the bank, and dealings in foreign securities still centred at the Royal Exchange, London may be said to have had a Stock Exchange in the modern sense from that day in 1773 when the name was “wrote over the door” at New Jonathan’s.[103]

We have authority for the early history of the London Stock Exchange in a report made in 1877 by the officials of the institution to the Royal Commission. From this report it appears that the Stock Exchange at New Jonathan’s in 1773 “afforded a ready market for the operations of the bankers, merchants, and capitalists connected with the floating of the numerous loans raised at that period for the service of the State.” The members or frequenters paid a subscription of sixpence to defray expenses, drew up rules, and placed its control in the hands of a “Committee for General Purposes.” The functions of this committee were then, as now, “judicial as regards the settlement of disputed bargains, and administrative as regards rules for the general conduct of business and for the liquidation of defaulter’s accounts.” The earliest minutes on record are dated December, 1798.