stock market's history
Once there was a time when "shares in business corporations were rarely bought and sold because few companies were considered promising financial profits" (Blume 21). That is hard to believe considering almost everybody has invested in some stock today. The stock market went through some distinct changes since its inception, and has evolved into a shaping force in the world today. There is one idea that sparked the fire which produced the stock market: capitalism. Everything the stock market is, and was, rooted in the basic idea of capitalism. Without that idea, stocks and bonds would never have come to be. Capitalism is an "economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market" (Peterson). When a person buys a stock, which means they own a part of the company in which they invested. The average person can thereby invest in a public company and receive a piece of that company's success, or failure. This process helps not only the smart investors, but the companies as well. The investors' money must go somewhere, and that place is the treasury of the company they endorsed (Sim
Harrimen decided to buy his way to majority share holder of the company, thereby allowing him to run the business. This notion helped lead the way for the prosperity that was to come. They decided to allow their investors to pay for only ten percent of the actual amount of stock they bought. Real estate and fixed income became the prominent assets. There were many similar struggles between men like Morgan and Carnegie for control of the steel business (Sharp 168). There were big rivalries between other giants as well, showing how the market could be swayed so severely simply to fit ones needs. From the 80's on, the market has enjoyed many years of prosperity, with the 90's being the decade of largest market growth. That office space later went on to be called the New York Stock Exchange. A few brokerage firms had an idea that would change the market, but not for the better. Morgan then bought all the outstanding stock available. The government tried to stop monopolies from forming by passing the Sherman Anti-Trust Act of 1890 (Blume 270). The slow grinding misery of the longest depression in the nation's history worked the market ninety percent below its 1929 highs by 1932" (Sharp 210). That problem is exactly what caused the major market failure of 1929. However, none of it would have been possible if it weren't for the lessons learned in the 1920's (Brown 90-107).
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