A Recount of the Early Joint Stock Companies and Securities Trading in the United States (1620s-1850s)

Abstract

The study covers the very early examples of joint stock companies and sporadic trading of their shares in the financial centers of the U.S. The foreign capital inflows, thus the trading of the American company shares in London, Paris, Amsterdam or elsewhere is not detailed, though such cases involve significant volumes and implications on the U.S. economy for some periods. The trading on company stocks is our main focus as far as the period that we cover avails. For this, the existence of joint stock companies at a fair level emerges as a condition. Historically, the supply of the shares of such organizations eventually created a matching demand wherever excess funds exist, be it in Europe or in a financial center of an American city. As the expectations evolved, so did the speculation. Where the speculation evolved, the booms and busts began to be the realities of American financial markets. Markets learned from them and responded with prudence. Markets learned from this learning-by-living process and evolved.

Keywords: early U.S. joint stock companies, early U.S. financial markets

JEL Classification: N21