Back to the Future

The Rebirth of the Local Stock Exchange

Can the solution to local investing be found in our past?

It’s hard to imagine now, but less than a century ago, the United States was teeming with stock exchanges. Starting in the 1790s, when groups of brokers gathered at the Merchants Coffee House in Philadelphia and under a buttonwood tree on Wall Street, the young nation began piecing together a financial market system that would fuel its breathtaking growth. For several decades, the Philadelphia and New York exchanges served as national markets. As the country grew, so did the number of exchanges. Boston, Baltimore, Milwaukee, and San Francisco established stock exchanges starting in the 1830s. But it wasn’t until after the Civil War that regional exchanges really took off. From 1862 to 1930, as America industrialized and expanded westward, at least 24 exchanges debuted, from Wheeling, West Virginia, to Salt Lake City and Honolulu.1

The exchanges were important institutions in their communities, both socially and commercially. To purchase shares listed on a regional exchange, investors would have to buy from one of its member-brokers, who were often prominent citizens in the community. Each exchange reflected the unique character and industry of its region. On the Seattle exchange, for example, investors could find hometown favorites such as Olympia Brewing, Alaska Pacific Salmon, and Carnation (acquired by Nestlé in 1985). In Richmond, Virginia, listings ...

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