The New York Stock Exchange started out as a private club, a refuge for securities traders vulnerable to popular suspicion of their profession. A long history of economic troubles seemingly fueled by speculation, from the South Sea Bubble in 1720 to Wall Street's first great crash in 1792, left Anglo-Americans deeply skeptical of the financial industry.
After the crash, both Pennsylvania and New York passed legislation restricting securities trading. New York even forbade the enforcement of "time contracts," a promise to sell a particular security at a particular time at a particular price. The state also outlawed open air "public outcry" markets, so New York City brokers went indoors and the seeds of the New York Stock Exchange were planted.1
(1.) Stuart Banner, Anglo-American Securities Regulation: Cultural and Political Roots, 1690-1860 (Cambridge, UK, 1998), 14-22, 128-30, 172-73.
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