What Early Stock Exchanges Looked Like

By Phineas Upham

The movies used to portray the stock exchange as a frantic place where people were tossing papers and yelling at each other while snaking around computer screens ticking off numbers. It looked like an adrenaline rush, not too far off from the real thing, but still a bit far fetched. Certainly not how the original stock exchanges were done.


Merchants of Venice

Larger banks were able to lend substantial sums to the crown or to important officials, but they weren’t in the business of financing operations. Like the big banks of today, they lacked the agility. Merchants stepped in to handle some of that smaller money lending by trading debts. The merchants made a trade out of it, which soon grew into a business of holding debts. They were the ones who opened this practice up to the public during the 1300s, when the Venetian merchants would meet with clients carrying slates of information on various debts they held.

There was evidence of a stock exchange in Belgium as far back as the early 1500s, where brokers would meet to deal in government and business debts. These exchanges might seem odd to us today because they dealt almost exclusively in promissory notes and bonds, so there wasn’t money changing hands officially and there were no real stocks.

Stocks changed entirely during the 1600s, when the East India Trading Company formalized the process of courting investors to finance an expedition. That was the start of what we think of today as “Limited Liability Companies.”

Phineas Upham is an investor from NYC and SF. You may contact Phin on his Phineas Upham website or Twitter page.