History of the United States and Chinese Stock Exchanges

by : Steve Cancel

The American and Chinese stock exchanges have a rich history. Both have had a phenomenal history with both having great ups and very bad downs.

The New York Stock Exchange or NYSE was formed on May 17, 1792. 24 stock brokers signed an agreement called the Buttonwood Agreement under of course but what else, a buttonwood tree. This was the start of the New York Stock & Exchange Board in its infancy. By March 8, 1817 the name became official and later in 1863 to what we all know now as the New York Stock Exchange. The NYSE location started off in a small room rented for $200 a month in 1817 located at 40 Wall Street. From then on it grew and grew out growing that little room in to the building that we know today.

The first share traded at the Shanghai Stock Exchange was in 1866. In 1891 during the mining shares boom, foreign businessmen founded the "Shanghai Sharebrokers Association" headquartered in Shanghai as China's first official stock exchange. In 1904, the association applied for application in Hong Kong under the provision of the Companies ordinance and was renamed as "Shanghai Stock Exchange" which we know of by that same name today.

By the 1930's, the Shanghai Stock Exchange has become the financial center for the far east, with people from China and from other countries could trade stocks, government bonds, debentures, and futures. The Stock Exchange was halted for a number of years between December 8, 1941 and sometime in 1946 when invading Japanese forces occupied the Shanghai International Settlement. By 1949 the Shanghai Stock Exchange was closed due to the rise of Communism.

In 1978 after the cultural revolution, Deng Xiaoping re-opened China to the world. By 1990 the Shanghai Stock Exchange was back in action after it was suspended of operation since 1949.

Each stock exchange has endured many hardships over the years. On October 24, 1929, The Wall Street Crash of 1929, also known as the Crash of '29 and Black Thursday, was one of the most devastating stock market crashes in American history. Share prices on the NYSE collapsed. Stock prices fell on that day and they continued to fall, at an unprecedented rate, for a full month. This caused the whole country to nearly melt down. This financial rift was felt all over the world, even in the Shanghai Stock Exchange.

As mentioned before, The Shanghai Stock Exchange endured two major blows; one being the Japanese occupation in 1946 and the suspension of operations for over 40 years in 1950.

Both of these Stock Exchanges went through years of what experts would probably call tough life but as of the present they are both flourishing. On July 19th, 2007, Dow Jones Industrial Average at the NYSE, closed above 14,000 for the first time in its history. In 2007 "a stock market frenzy" as speculative traders rush into the marketPsychology Articles, making China's stock exchange temporarily the world's second largest in terms of turnover.