The Global Securities Market: A History

T H E G LO B A L S E C U R I T I E S M A R K E T This page intentionally left blank The Global Securities Market A History R A NAL D C . M I C H I E 1 3 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With oYces in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc., New York ß Ranald C. Michie 2006 The moral rights of the author have been asserted Database right Oxford University Press (maker) First published 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloguing-in-Publication Data Typeset by SPi Publisher Services, Pondicherry, India Printed in Great Britain on acid-free paper by Biddles Ltd., King’s Lynn, Norfolk ISBN 0-19-928061-4 978-0-19-928061-2 (Hbk) 1 3 5 7 9 10 8 6 4 2 Contents Preface List of Tables vi xi Introduction 1 1. Origins, Trends, and Reversals: 1100–1720 17 2. Advances and Setbacks: 1720–1815 38 3. New Beginnings and New Developments: 1815–50 60 4. Exchanges and Networks: 1850–1900 83 5. The Triumph of the Market: 1900–14 119 6. Crisis, Crash, and Control: 1914–39 155 7. Suppression, Regulation, and Evasion: 1939–70 205 8. A Transatlantic Revolution: 1970–90 253 9. A Worldwide Revolution: Securities Markets from 1990 297 Conclusion 333 Notes Bibliography Index 341 376 389 Preface This book is the culmination of reading, writing, and researching Wnancial history for over thirty years. This process started at Aberdeen University in 1971 when I began a Ph.D. on the Scottish stock exchanges in the nineteenth century. It then continued at Durham University from 1974 when I began to teach a course on International Economic History. This Wrst taught me the practical importance of securities markets within Wnancial systems whilst the second made me aware of the forces of globalization. Instead of looking at the Scottish stock exchanges in isolation, taking a particularly institutional and national approach, I started to employ the analytical tools of comparative economic history and to search for interactions between markets and Wnancial systems, between institutions and marke