ROMANCE OF LONDON STOCK EXCHANGE

Hokitika Guardian, 16 August 1930, Page 6

ROMANCE OF LONDON STOCK EXCHANGE

STOCK-JOBBING THROEGH THE CENTURIES.

( By LEONARD F. GREGORY.)

The London Stock Exchange, it is being whispered in the City, should be re-housed in a building worthy of its dignity and importance. When the rebuilding of the Bank of England, the head offices of the joint stock banks, the insurance companies and the like at present proceeding is completed, the London Stock Exchange, it is pointed out;;'will be the only important Cityinstitution to be content with an old and admittedly imperfect building. If re-building is undertaken it will add yet another to the homes which stockbrokers have had in the course of the centuries.

Their homes, in fact, have been various in upwards of two hundred years. The word stock-jobber, it is said, was first heard in 1668. At any rate, by the end of the seventeenth century, stock-jobbing was beginning to assume public importance: It was the stock-jobbers’ general custom to frequent the Royal Exchange, the first in a series of .which the present is fli'e third. Though the principal business-: of the Royal Exchange was merchandise, an old print shows that a special “Walk,” as it was called, wVn s' reserved for the use of “Broker, etc., of Stocks 1 ' In 1695, we are told, they made its walls resound “with the din of new projects.” B<ut their voices were only part of a larger chorus for in the Royal Exchange the “representatives of firms from every civilised nation—the French man with his vivacious tones, the Spaniard with his dignified bearing, the Italian with his melodious tongue, ;—might be seen in all the variety ot national costume.”

The Royal Exchange, however, soon objected to the stock-jobbers’ calling noise and numbers. Consegu^ntfy|;in

1698 they voluntarily withdrew,; and, despite the'entreaties, ajid the City authorities, stutiboriily to. return. " Their main place of refugee was the jidjaCeht f -'.Exchange Alfey|?-aj considerable .unoccupied space with'coiit venient coffee-houses. > • lts..tapog;raphy; is familiarly descri bed‘ by Dfefo'e thus':' “The centre of the jobbing is in the Kingdom of Exchange Alley, and its Adjacencies; the Limits are easily surrounded in about a minute and a half (viz.) stepping out of Jonathan’s into the Alley, you turn your face full South, moving on a few paces, and then turning Due East, you advance to Garroway’s.” Jonathan’s and Garroway’s were famous coffee-houses, which (especially the former) became the re-, sort of the more respectable jobbers. And in the Alley the jobbers were the centre of a swann of humanity hardly less numerous and various than that which surrounded - them in the Royal Exchange.

It was after rather more than twentyyears’ tenancy of the Alley that the memorable South Sea Boom . occurred. Stock-jobbers ran from coffee,--houses to coffee-house inviting subscriptions to companies of all descriptions. “Exchange Alley,” says Smollett, “was filled with a strange concourse of states men and clergymen, churchmen and dissenters, Whigs and Tories, physicians, lawyers, tradesmen, and even with multitudes of females.” A balladmonger of the time records how the stars and garters vied with the meaner rabble—

“To buy and sell, to see and hear, ; The Jews and Gentiles squabble,” and how “the great ladies” “Piled in chariot daily, Or pawned their jewels for a sum, To venture in the Alley.”

When the bubble collapsed stock-job-bing suffered a severe set-back in public esteem. In financial matters at least, however, “hope springs eternal” and business quickly revived. A further, if less serious set-back was shortly sustained, for on Lady Day, 1748, a great fire devastated the Alley. It destroyed scores of dwell-ing-houses and a number of shops and offices, including Jonathan’s and Garroway’s But the coffee-houses were rebuilt, and the stock-jobbers rapidly resumed business. Thirteen years later the first of the vast library of ..Stock Exchange books was published. It was entitled: “Every Man His Own Broker, or a Guide to Exchange Alley.” and was written by J. Mortimer, at one time British Consul in Holland. It is said that about this time there were “one hundred and fifty gentlemen brokers and a horde of' hangerson.”

In 1762, perhaps owing to the “horde of hangers-on,” the jobbers in the took a momentous step. Indeed, it may be said that the modern era of stock-jobbing was, however, tentatively then inaugurated. The principal dealers, recognising the need for some organisation, formed a club at Jonathan’s. The members numbered about one hundred and fifty and agreed to pay the master of the coffee-house £8 each per year, thereby being’ entitled to its exclusive use for three hours daily. Jonathan’s, then, can claim to be practically the first Stock Exchange ; and the result of a lawsuit decided in the year in which the club was formed does, in fact, entitle it to be. thus known. A broker who had been (forcibly expelled brought an action for assault and to assert his right tp enter. The finding was in his

favour, for it was held that Jonathan’s bad long been - a place of resort lor stock-jobbers and that it had become a recognised mart.

But two years later a notable rival entered the field, In 1764 the Rotunda of the Bank of England was built and was tlhe officially recognised market for dealing in Government securities. Describing the scene in the Rotunda, a contemporary writes: “The jostling and crowding, of the jobbers to catch a bargain frequently exceed, in disorder, the scramble for places of the rudest crowd that assembles at the doors of our theatres; find so loud and clamourous at time are the mingled voices of buyers and sellers that all distinction of sound is lost, in a general uproar.” No unnaturally, this arrangement at last gravely obstructed the work of the Bank, with the result that in 1838 the Governor “ somewhat unceremoniously ” expelled most of the jobbers. When, later, bis bankruptcy was announced, the members of the Stock Exchange gave three cheers. Meanwhile, the organised jobbers of Jonathan’s had not ceased to ply their trade, though they had more than once changed their centre of operations, Jonathan’s, for one reason, having become too small. In 1773 they bad decided to remove into a building of their own. ’ It was situated at the corner of Threadneedle Street and Sweeting’s Alley, and “still partook,,;of the character of a coffee-house.” But it was authorjtvely named “The Stock Exchange,” since it was decided at a meeting of the jobbers and others,, 'held on .. July, loth. 1773, to inscribe these words above the door. That the importance of the meeting was not unrecognised by those present is shown by the fact that a silver! collection was taken, so that “ a baptismal libation of punch might be offered to .the new institution.” The member’s subscription was sixpence per day, and this payment also entitled the public to the use of the room for a whole day. Anyone could enter a star as the bar, from which the entire room could be seen.

At the end of the century the jobbers became intolerant of the public gaze. “The proprietary of the Sweeting’s Alley institution,” says the modern historian of the Stock Exchange, “had become extremely limited, and it was the desire of the few proprietors to organise a small,, select and exclusive membership from the great, mass of irresponsible dealers, many of them ol poor repute, who gained all the privi-. (leges of tlie market by the payment of ‘sixpence a day. Moreover, it had become apparent that the indiscriminate, gadniissioh of the public was calculated to expose the dealers to the loss of valuable property.” And the accommodation had become inadequate as the result of greatly increased business. Accordingly a group of Stock Exchange men acquired “ a centrical situation,” or site, in Capel Street, raised the necessary capital, and founded; a new institution, which, declares the deed of settlement, “is called the Stock Exchange and is intended to go under that. , appellation.” The first stone was laid in May, 180.1,. and it was opened In March, 1802, with a list of about 500 subscribers. Some straggling branches of the Stock Exchange profession remained outside for a time, but in the course of years .they have practically alt been gathered in.

10-day the Stock Exchange still stands in Capet Court, though' the central structure Inis been entirely rebuilt and great extensions have been made; similarly,' the orginal constitution remains almost unchanged in principle, despite the enormous growth of business. Will the present generation of stockbrokers maintain this tradition of continuity, or will they demand —in tlie shape of a new building—an outward and visible sign of modernity ?