Stock Exchanges

The expression Bourse first is mentioned in sources from Brugge, Flanders, in the 14th century. When her port silted up, the city lost her function as the dominant European trading hub on the Atlantic coast to nearby Antwerp in Brabant.
When, in the course of the later half of the 16th century, the Netherlands experienced political upheaval (Antwerp was sacked twice), in London the Royal Exchange was founded in order for London to succeed Antwerp as the dominant trading hub on Europe's Atlantic coast (1566), followed in 1571 by the Lyon Bourse.
Many Antwerp merchants, however, moved eventually to Amsterdam, hitherto a city of secondary importance, and the Amsterdam Beurs (Stock Exchange) would assume the position as the world's leading trading hub.
Both the experience and capital of the immigrant merchants from Antwerp, and the fact that the Dutch in the early years of the 17th century monopolized transoceanic trade in commodities such as pepper, tea, chinaware, sugar contributed to this development. The stock exchange in Amsterdam, established during a rebellion which resulted in Dutch independence, also was able to free itself from certain regulations the Antwerp Stock Exchange still had to follow.
As many goods traded at the Amsterdam Bourse were brought into the country by transoceanic trade, and this was a risky business, at the Bourse, INSURANCE POLICIES were traded. Also banks emerged; Amsterdam emerged as Europe's leading banking center (the Italian competition had been ruined by repeated Spanish state bankrupcy).
The second Dutch expedition returning from the East Indies was a great commercial success, selling pepper and other spices at high prices and gaining consideranle profit. Many wanted to enter the lucrative market; in order to prevent ruinous competition, Pensionary of Holland, Johan van Oldenbarneveldt formed the V.O.C. (Dutch United East India Company) which was granted a monopoly for the East India trade.
In 1634-1637, the Amsterdam Bourse saw the TULIPOMANIA or Tulip Bulb Craze; at the height of the bubble, up to 6,000 Guilders were paid for a single tulip bulb of a rare type. The trade was ultimately forbidden by the local city council, and many lost their investments when prices suddenly collapsed. The Dutch called it a Wind Trade.
Paris and London experienced their wind trades, the MISSISSIPPI BUBBLE (1718-1720, France, John Law) and the SOUTH SEA BUBBLE (England 1720-1721) almost simultaneously.

In the sixteenth century, bourses emerged at the major economic centers of western and central Europe - that is, where they did not exist before. With the overseas trade growing in importance, an area where, due to the monopolistic structure of the companies, national economies competed with each other, and so there was a need for national stock exchanges. Around the stock exchanges, insurance and banking industries grew.

Histoire de la Bourse Française, by Michel Laugier
The Amsterdam Insurance Exchange
History of the London Stock Exchange
London Stock Exchange, from Spartacus Schoolnet
The Royal Exchange, from Victorian Web, from Spartacus Schoolnet
John Law and the Mississippi Bubble 1718-1720, ny Jan Moen
Mississippi Bubble, from D.J.C. Smant
The South Sea Bubble: A Short Sketch of Events, from Bubble Project
Article Tulipomania, from Wikipedia

This page is part of World History at KMLA
First posted on September 14th 2003, last revised on November 14th 2004

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