NEW YORK -- The New York Stock Exchange, which traces its history back to an agreement among two dozen traders on May 17, 1792, kicked off its bicentennial celebration Monday with New York Mayor David Dinkins ringing the opening bell.
The Big Board was founded by a small group of investors equipped with ledgers and quill pens who met under a Buttonwood tree in lower Manhattan.
'That meeting set in motion a securities market that 200 years later would be recognized worldwide as the single most important symbol of the American free enterprise system,' New York Gov. Mario Cuomo said in a proclamation statement.
The so-called 'Buttonwood Agreement' provided the first structure for what later would become the New York Stock Exchange.
'For centuries New York City has been this country's trade and financial center,' Dinkins said in a speech from the balcony above the trading floor.
'In 1792 New York City was still the state capital and 4 million Americans lived in 13 East Coast states,' the mayor said.
'As the country expanded, the exchange kept pace, and the fact that this multibillion-dollar center of trading and investment continues to thrive, proves that tough times have not tarnished our greatest assets,' Dinkins said.
New York Stock Exchange Chairman William H. Donaldson said, 'The existence of this exchange has made possible the mobilization of capital to finance America's great burst of economic expansion:
'First in building canals, then in building railroads, and finally in building our awesomely productive manufacturing and industrial enterprises -- themselves, models of democratic capitalism whose ideals have taken root around the world.'
The exchange model -- a competitive agency-auction market where buyers and sellers interact to determine price -- has inspired newly emerging stock exchanges in the developing countries of Asia, Eastern Europe and Latin America.
As global securities trading evolves over the next 100 years, Donaldson said the NYSE is determined to enhance its position as the centerpiece of the market, combining the most technologically advanced systems and tools to ensure the fairest and most continuous method of pricing public securities worldwide.
Like many institutions, the NYSE was born in crisis -- the financial and fiscal malaise that gripped the United States in 1789.
Impoverished by the American Revolution, federal and state governments were all but paralyzed. To restore creditors' confidence, Alexander Hamilton suggested the federal government should assume the large debt burden the states had incurred during the Revolution.
To refinance the debt, Hamilton proposed the sale of $80 million in federal government bonds, or 'public stock'as they were called at the time.
The new government bonds plus shares in a few banks and insurance companies encouraged the growth of trading on lower Manhattan's streets.
By the end of the War of 1812-14, the nation's economy had begun to boom. On Wall Street, the securities market grew with it, and by 1817 the successors of the Buttonwood signers incorporated the New York Stock & Exchange Board, which changed its name to the New York Stock Exchange in 1863.
Trading on the exchange took place in a rented room at 40 Wall Street.
Between 1860 and 1875, the Civil War and America's industrial revolution remade the exchange.
The call system of trading, in which each listed stock was called for bids and offers only at scheduled times during the day, gave way to continuing auctions.
The first stock tickers appeared in 1867 with only 15 industrial companies listed. By 1913, the number of listed companies had grown to 191.
There currently are 1,885 companies listed on the Big Board.
Although the opening bell is not likely to sound before 9:30 a.m. EST any time soon, Donaldson said the exchange has not abandoned its effort to start trading 30 minutes earlier.
The Big Board withdrew a proposal last year to begin trading at 9 a. m. EST after many of its members, particularly those on the West coast, complained that an earlier start would disrupt their lives without helping business.
Donaldson said the demand for more access to stock markets in the global investing community continues to expand. He said the exchange is exploring how to adapt its hours and services to meet the demand.
