The Boston Stock Exchange (now NASDAQ BX, formerly ''BSE'') was a regional
stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...
formerly located in
Boston, Massachusetts
Boston is the capital and most populous city in the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States. The city serves as the cultural and Financial centre, financial center of New England, a region of the Northeas ...
. It was founded in 1834, making it the third-oldest stock exchange in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. On October 2, 2007,
NASDAQ
The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
agreed to acquire BSE for $61 million.
History
Creation
Originally known as the Boston Brokers' Board, the Boston Stock Exchange was founded on October 13, 1834, when thirteen brokers agreed to meet for a half-hour daily to compare their offerings.
P.P.F. Degrand was described by
Clarence W. Barron and Joseph G. Martin as "the man to whose indomitable energy and foresight the existence of the Boston Stock Exchange is largely due".
The other founding members were:
*Henry Andrews
*Matthew Bolles
*Benjamin Brown Jr.
*J. W. Clark
*Samuel Gilbert Jr.
*Enoch Martin
*Edmund Munroe
*Thomas R. Sewell
*John E. Thayer
*George M. Thatcher
*Samuel G. Williams
The first officers of the exchange were
Samuel Dana (president), George W. Pratt (vice president), and Thomas R. Sewell (secretary and treasurer).
19th century
When it first opened the only available securities on the exchange were stocks in banks, insurance companies, local mills, canal projects, small mining operations, and various public debts.
As the exchange grew it dealt in iron, coal, and copper stocks.
The exchange was used by the
Lake Superior
Lake Superior is the largest freshwater lake in the world by surface areaThe Caspian Sea is the largest lake, but is saline, not freshwater. Lake Michigan–Huron has a larger combined surface area than Superior, but is normally considered tw ...
copper mines during the United States' first copper boom. The textile mills of
Lowell,
Lawrence,
Manchester
Manchester () is a city and the metropolitan borough of Greater Manchester, England. It had an estimated population of in . Greater Manchester is the third-most populous metropolitan area in the United Kingdom, with a population of 2.92&nbs ...
, and
Lewiston that were a part of the exchange in its early years were almost totally absent by 1893, as the business was mostly held by auctioneers.
The Boston Stock Exchange played an important role in the development of railroads in New England by providing a market for their securities. Railroads that used the exchange included the
Boston and Providence Railroad
The Boston and Providence Railroad was a railroad company in the states of Massachusetts and Rhode Island which connected its namesake cities. It opened in two sections in 1834 and 1835 - one of the Rail transportation in the United States, fir ...
,
Boston and Lowell Railroad, and
Boston and Worcester Railroad.
The BSE also provided early capital for the
American American Bell Telephone Company,
United Shoe Machinery Corporation,
United Fruit Company
The United Fruit Company (later the United Brands Company) was an American multinational corporation that traded in tropical fruit (primarily bananas) grown on Latin American plantations and sold in the United States and Europe. The company was ...
,
Union Pacific Railroad
The Union Pacific Railroad is a Railroad classes, Class I freight-hauling railroad that operates 8,300 locomotives over routes in 23 U.S. states west of Chicago and New Orleans. Union Pacific is the second largest railroad in the United Stat ...
, and
Calumet and Hecla Mining Company.
By 1844 the number of members had grown from 13 to 36. In 1855 it had grown to 75 members.
An economic boom in 1879 resulted in a high demand for membership so the BSE voted to cap its membership at 150, where it stood for many years.
On November 9, 1885, the Boston Stock Exchange held its first continuous session. Prior to this there was a morning board and afternoon board. The morning board would start at 10:30 AM and the afternoon board would begin at 2 PM. Both would adjourn whenever brokers had completed their orders, which could take anywhere between one and three hours.
20th century
The Boston Stock Exchange closed from June 30 to December 10, 1914, due to chaos created by the start of
World War I
World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...
. It was the first time the exchange had ever suspended operations.
During
World War II
World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
, women were permitted to work on the BSE floor due to the lack of young men available to work as pages.
In 1965, the BSE switched from having an unsalaried president elected from the exchange's membership to having a full-time salaried president as part of a modernization plan.
The BSE grew in the mid-1960s when institutions began utilizing regional exchanges for "give-ups" or the sharing of commissions between brokers.
In 1967, a record 67 million shares were traded and the cost of a seat on the exchange had grown to $14,000 (up from $2,000 three years earlier).
On December 5, 1968, the
U.S. Securities and Exchange Commission outlawed "give-ups", which cut the number of trades on the BSE down to 24.6 million shares in 1970.
In 1981, the BSE hired Charles J. Mohr, a 34-year-old vice president of the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
, to serve as its first full-time paid chairman and CEO.
Increased computer trading in the early 1990s resulted in the BSE losing business to
NASDAQ
The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
and similar exchanges. At the same time, the BSE and other regionals were harmed by rise of large
institutional investor
An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked ...
s, who preferred the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
to regionals. By 1992, the BSE and
Philadelphia Stock Exchange
Philadelphia Stock Exchange (PHLX), now known as Nasdaq PHLX, is the first stock exchange established in the United States and the oldest stock exchange in the nation. The exchange is owned by Nasdaq, which acquired it in 2007 for $652 million, ...
were tied as the nation's smallest regional.
In 1998, a proposed merger with the
Cincinnati Stock Exchange fell through when the two sides could not come to an agreement.
21st century
In its later years, the BSE served as an alternative to the New York Stock Exchange for the area's mutual fund companies. In 2001, the BSE reached its peak of 100 million shares a day.
In 2002, the BSE co-founded the
Boston Options Exchange (BOX), an automated
equity options exchange, with partners the
Montreal Exchange
The Montreal Exchange (MX; ), formerly the Montreal Stock Exchange (MSE), is a derivatives exchange, located in Montreal, Quebec, Canada that trades futures contracts and option (finance), options on equities, indices, currencies, ETFs, energy and ...
(MX), a
derivatives exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or ...
, and
Interactive Brokers, a
discount brokerage. By 2005 the BOX controlled 6% of the market.
As a result of BOX's success,
Fidelity Investments
Fidelity Investments, formerly known as Fidelity Management & Research (FMR), owned by FMR LLC and headquartered in Boston, Massachusetts, provides financial services. Established in 1946, the company is one of the largest asset managers in the ...
and several Wall Street brokerage houses invested $20 million to help develop an electronic stock trading platform for the BSE.
The electronic system handled less than half a percent of the daily US stock transactions and it was shut down in September 2007.
In 2007,
NASDAQ
The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
acquired the Boston Stock Exchange for $61 million ($38 million cash and $23 million in debt). The deal gave NASDAQ BSE's clearing license, which allowed it to settle trades made on its exchange rather than pay a third party to clear its transactions. It also allowed NASDAQ to offer companies symbols with one to three letters, which would allow companies to move from the New York Stock Exchange to NASDAQ without changing their symbols.
The sale did not include the Boston Options Exchange, which was sold later that year to the Montreal Exchange.
Locations
The Boston Stock Exchange's original headquarters was on the third floor of the Washington Bank Building at 47
State Street. In 1844, the BSE moved to the fourth floor of the
Merchants Exchange. On March 28, 1853, the exchange moved to the Union Bank Building at 40 State Street. The exchange moved again ten years later, this time to the Howe Building at 13 Exchange Street. On November 9, 1885, the BSE moved back to the Merchants Exchange building, this time to the hall known as the Reading Room. The exchange temporarily moved back to the Howe Building in 1890 when the Merchants Exchange building was demolished. The exchange moved to the new Merchants Exchange building on April 20, 1891.
In April 1911, the exchange moved to a two-story domed building at 53 Congress Street. In 1980 it moved to the 38th floor of
One Boston Place
One Boston Place, also known as the Boston Company Building, is a 41-story office tower located in the Financial District of Boston, Massachusetts. With a height of , One Boston Place is the 7th-tallest building in the city. Despite its simple ...
. In 1999 the BSE moved to the old Boston Safe Deposit and Trust building at 100 Franklin Street.
When the BSE was sold to NASDAQ the Boston office was closed and operations were consolidated in New York.
File:1852 MerchantsExchange Boston McIntyre map detail.png, First Merchants Exchange Building, used by the Boston Stock Exchange from 1844 to 1853 and again from 1885 to 1890
File:40StateStreet Boston 19thc.png, Union Bank Building, home to the Boston Stock Exchange from 1853 to 1863
File:1863 HoweBuilding ExchangeSt Boston.png, Boston Brokers' Board Room inside the Howe Building, used by the exchange from 1863 to 1885 and 1890 to 1891
File:1893 BostonStockExchange .png, Second Merchants Exchange Building, used by the BSE from 1891 to 1911
File:One Boston Place 2017.jpg, One Boston Place housed the Boston Stock Exchange from 1980 to 1999
Leadership
Presidents
*
Samuel Dana (1834–35)
*S. E. Green (1835–36)
*George W. Pratt (1836–37)
*
P.P.F. Degrand (1837–38)
*Enoch Martin (1838–45)
*Charles Dudley Head (1845–46, 1852–55)
*John J. Solely (1846–47)
*
Henry White Pickering (1847–52, 1857–60, 1864–70)
*Ossian D. Ashley (1855–57)
*Aaron W. Spencer (1860–62, 1888–91)
*Gilbert Attwood (1862–63)
*James Murray Howe (1863–64)
*
Murray R. Ballou (1870–88)
*E. Rollins Morse (1891–93)
*Charles Head (1893–96)
*Lyman B. Greenleaf (1896–98, 1906–11)
*Elisha D. Bangs (1898–1900)
*John Parkinson (1900–03, 1905–06)
*Charles C. Jackson (1903–05)
*
Henry Hornblower (1911–14)
*Walter Jackson (1914–17)
*Philip W. Wrenn (1917–19)
*Frank W. Remick (1919–24)
*William N. Goodnow (1924–26)
*Jere A. Downs (1926–30)
*James S. Dean (1930–33)
*Charles A. Collins (1933–35)
*William B. Long (1936–39)
*
John Yerxa (1939–42)
*
Archibald R. Giroux (1942–43)
*Stearns Poor (1943–46)
*Harry W. Besse (1946–62)
*
Weston Adams (1962–64)
*R. Willis Leith Jr. (1964–65)
*Frederick Moss (1965–69)
*James E. Dowd (1969–82)
Chairmen/CEOs
*Charles J. Mohr (1981–85)
*William G. Morton Jr. (1985–2001)
*
Kenneth R. Leibler (2001–04)
*Michael J. Curran (2004–07)
See also
*
List of former stock exchanges in the Americas
*
List of stock exchange mergers in the Americas
*
References
External links
Official website
{{Coord, 42, 21, 20.10, N, 71, 3, 27.54, W, display=title
Financial services companies established in 1834
1834 establishments in Massachusetts
Companies based in Boston
Economy of Boston
Nasdaq exchanges
Stock exchanges in the United States
2007 mergers and acquisitions