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“INNOVATIONS IN COMMUNICATIONS TECHNOLOGY AND THE STRUCTURE OF SECURITIES MARKETS; A CASE STUDY OF THE TELEGRAPH AND THE RISE OF THE NYSE TO PREEMINENCE. 1830-1860.’
DISSERTATION
Presented in Partial Fulfillment of the Requirement for the Degree of Doctor of Philosophy in the Graduate School of The Ohio State University By
Sonali Garg, M.A.
The Ohio State University
2000
Dissertation Committee: Approved by
Prof. Richard H. Steckel, Advisor
Prof. Lucia Dunn Advisor
Prof. Huston McCulloch Department of Economics UMI Number 9982563
Copyright 2000 by Garg, Sonali
All rights reserved.
UMI
UMI Mlcroform9982563 Copyright 2000 by Bell & Howell Information and Leaming Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code.
Bell & Howell Information and Leaming Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 © by Sonali Garg, 2000 ABSTRACT
Although the NYSE has enthralled the capitalist world for over a century, little is known about its early origins and its rise from a regional exchange to the colossus it is today. Competition among the exchanges in Philadelphia, Boston and New York was vigorous from 1830-1860 and any one of them could have emerged as the national leader. Innovations in communication technology during the 1840s and early 1850s transformed the structure of securities markets, adding leverage to New
York’s slight advantage. Once the telegraph became a reliable means of communications, markets that were earlier insulated from each other began to compete for the first time. An exchange could serve a larger geographic area and trade in cross-listed securities increasingly became concentrated at one exchange.
Prior to the advent of the telegraph, the NYSE was the most efficient of the three exchanges studied. Using contemporary data on bid-ask spreads, price and volume of securities traded, I show that this advantage helped it become the national exchange, while the others reverted to being regional exchanges. The impact o f the telegraph is similar to that of the Internet today, brining into competition markets that were earlier relatively insulated from each other. Just as regional investors, securities, and markets transformed into national ones due to the telegraph, so today national investors, securities and markets are being transformed into international ones. National exchanges are competing to become the international exchange.
Ill To My Parents and all My Other Teachers
tv ACKNOWLEDGMENTS
I could not have completed this dissertation without the help and support of my friends and family. I would like to thank my dissertation committee; Professor
Richard Steckel, Professor Lucia Dunn and Professor Huston McCulloch. I cannot imagine a better group of individuals to supervise my research. I received very helpful comments from Tim Opler, Richard Sylla, Larry Neal, Jeremy Atack, Paul
Evans, Charles Calomiris, Lance Davis, Margaret Levenstein, Eugene White, Rene
Stulz, Paul Shultz, James Angel, and Bennett Baack. I received helpful comments from fellow graduate students, in particular Shinichi Nishiyama, Kiyoshi Matsubara,
Kiyoshi Taniguchi, Glenson France, Robert Dietz, Rosin O’Sullivan and Sougata
Kerr. I received helpful feedback from friends in particular Shomik Raj
Mehndiratta, Ranjit Nayak, Ravi Shankar, and Sanjay Reddy. The librarians at the
Boston Public Library, the Free Library of Philadelphia, the New York Public
Library, the Ohio State University Library, the Baker Library at Harvard University, the NYSE archives, and the library archives at the Smithsonian in Washington D C.
IV were very knowledgeable and helpful. I thank everyone that helped me search for data and other information at each of these institutions. This research was supported by a Dissertation Improvement Grant (Grant # SBR -9806872) from the National
Science Foundation. I thank the Dice Fellowship Committee (Department of
Economics, The Ohio State University) for their Fall 1998 grant. I thank the office staff at the Department of Economics for all their help. 1 thank my friends: Monica,
Pushkin, Mukul, Kathleen, Troy, Anusuya, Ashish, Deepa, Mathangi, Priya, Ajay,
Patti, Renu, Sharon, Tom, Sum, Garima, Rashmi, Sapna, and the Bantra, Sharma and Gupta families for their support during the course o f this dissertation. I would like to thank my brother Vishu, my sister Priti and my brother in law Deepankar.
Finally, I thank my advisor Professor Richard Steckel without whose support and encouragement this dissertation would not have been possible. VITA
January 1,1968 Bom , Delhi, India
1986-1989 B.A. Economics, Delhi University, India
1989-1991 M.A. Economics, Jawaharlal Nehru University, India
1994 M.A. Economics, The Ohio State University
1995-1999 Graduate Teaching Associate, The Ohio State University
FIELDS OF STUDY
Major Field; Economics
vu TABLE OF CONTENTS
Page
Dedication ...... iv
Acknowledgements ...... v
Vita...... vii
List of Tables ...... ix
List of Graphs...... x
Chapters:
1. Introduction ...... I
2. Chapter I : Suggested Explanations ...... 14
3. Chapter 2: Data...... 22
4. Chapter 3: Evaluating the Hypotheses...... 49
5. Chapter 4: Implications for the Evolution of Financial Markets ...... 72
List of References ...... 91
Data Appendices ...... 93
viii LIST OF TABLES
Table Page
1 Table 1 : Population of City ...... 6
2 Table 2: Value of Imports of Merchandize, Coin, and Bullion at the ports.. ..6
3 Table 3 : Value of Exports of Domestic Merchandize, Coin, and Bullion at the ports ...... 6
4 Table 4: US Securities Markets, Sales in 1910 ...... 7
5 Table 5: Chow Test: New York ...... 42
6 Table 6: Results of regressions on New York using Exim and Population.. ..44
7 Table 7: Results of regressions on New York using proportionate data ...... 45
8 Table 8: Results of regressions using pooled proportionate data ...... 46
IX LIST OF GRAPHS
Graph Page
1. Graph # 1: Value of Shares and Bonds Traded 1835-1854 ...... 37
2. Graph # 2: Value of Shares and Bonds Traded. 1835-1863 ...... 38
3. Graph #3:60 Month Moving Average 1832-1862 Value of Securities Traded...39
4. Graph # 4: Actual Vs. Predicted Value of Securities Traded on the NYSE 48
5. Graph # 5: City Population 1820-1870 ...... 51
6. Graph # 6: Exports + Imports 1821-1863 ...... 52
7. Graph # 7: Average Bid-Ask Spreads 1832-1856 ...... 55
8. Graph # 8 A: Large Trades. Number of Trades of Size (500 +) Shares,
1846-1857 ...... 62
9. Graph # 8 B: Medium Trades. Number of Trades of Size (100-500) Shares,
1846-1857 ...... 63
10. Graph # 8 C: Small Trades. Number of Trades of Size (1-100)
Shares, 1846-1857 ...... 64 11. Graph # 8 D: Small Trades. Proportion of Trades of Size (I-lOO) Shares,
1846-1857 ...... 65
12. Graph # 8 E :Medium Trades. Proportion of Trades of Size (100-500)
Shares, 1846-1857 ...... 66
13. Graph # 8 F : Large Trades. Proportion of Trades of Size (500+)
Shares, 1846-1857 ...... 67
14. Graph # 9: Number of Trades (Adjusted) Reading Railroad. Annual ...... 69
15. Graph # 10 : Reading Railroad Value of Shares Traded. Monthly ...... 70
XI INTRODUCTION
The New York Stock Exchange (NYSE)' has held the fascination of the US and the world for over a century. Its name is synonymous with free enterprise, and the best of capitalism. It invokes memories of fortunes being made and fortunes being lost. Its origins are however shrouded in mystery. Until recently, little was known about its early history. This dissertation sheds light on its early history, and what turns out to be a very exciting part of its past, one that saw it face the kind of competition it did not face again for over 140 years.
The NYSE is the preeminent venue for trading securities in the US today, having the largest volume of shares traded of any stock exchange in the US in 1998.
In 1998 the NYSE traded 169.7 billion shares^ as compared to 2.6 billion shares^ on the Boston stock exchange and 1.4 billion shares'* on the Philadelphia stock exchange. The global market value of NYSE listed domestic operating companies was SI0.3 trillion in 1998 compared to $2.5 trillion for the National Association of
‘ The term NYSE is used throughout this dissertation to refer to the New York Stock Exchange. The NYSE acquired this name only in 1863. Prior to that it was called the New York Stock and Exchange Board. ^ Source; The New York Stock Exchange web site, http://www.nvse.com. January, 2000 ^ Source: The Boston Stock Exchange web site. httoV/www.bostonstock com January, 2000 * Source: The Philadelphia Stock Exchange web site, http://www.phlx.com January, 2000 1 Securities Dealers Automated Quotations (NASDAQ)^. When and why did the
NYSE become the preeminent stock exchange in the US? This dissertation answers these questions.
Was the NYSE always the preeminent exchange in the U.S.? Was there a time when other exchanges in the U.S. were larger than the NYSE? Was there ever a time when the NYSE competed with other exchanges to be the preeminent stock exchange in the U.S.? If the NYSE did compete with other exchanges, what caused the competition to occur and what was the nature of this competition? Answers to these questions are crucial to our understanding the evolution of stock exchanges in the U.S.
These questions are also of topical interest, given the competition among stock exchanges today. Just as companies that in the 1830s were regional in nature began to become national in nature by the 1840s, companies that are national today are becoming international in nature. Companies from one country are merging with companies from other countries at an unprecedented rate. This is became as the costs of communications are declining, it is feasible to have larger and larger companies, and to have companies that are spread out over a wider geographic area.
In the mid-1800s the NYSE faced fierce competition from other exchanges such as Philadelphia and Boston. Similarly today, although the NYSE is the preeminent place to trade securities, this position is under siege. At the time each of the exchanges was struggling to be the preeminent place to trade national securities.
Similarly today the NYSE is faced with competition to be the preeminent place to
* Source; The New York Stock Exchange web site. httt>://www.nvse.coin. January, 2000 2 trade securities that are national in nature. In addition it is also fighting hard to be the preeminent place to trade securities that are national in nature. As investors securities and markets become increasingly international, national securities markets of several countries will increasingly compete with each other to be the preeminent venue to trade international securities.
The competition in the international arena today is similar to the competition that took place at a national level in the US in the 1800s.
Electronic Communications Networks are emerging as viable alternatives to the NYSE. These networks allow investors to place buy and sell orders on-line instead of on the phone through a conventional broker. At present most of these are simply venues to place orders on-line. They allow investors to reduce brokerage costs. Since April 1999 the SEC has allowed Electronic Communications Networks to apply to become stock exchanges themselves. With this change, ECNs have become more effective challengers to the NYSE and the NASDAQ.®
On-line trading is fast taking an increasing share of all stock transactions in the U.S. According to one estimate, trades placed over the Internet account for more than 20% of all individual investor stock transactions.^ The average number of online stocks placed per day has grown from close to 90,000 per day in the second quarter of 1997 to over 210,000 per day in the second quarter of 1998.* Thus ECNs and on-line trading are already posing a major challenge to the established venues for trading securities. E*Trade, Ameritrade, and Datek are some of the frontrunners
* Source; The Wall Street Journal. Thursday, June 10* 1999, pages Cl and C12. ^ Source: The Wall Street Journal. Thursday, October 22“*, 1998, pages Cl and CIS. among the ECNs. Some established firms such as the Charles Schwab Corporation are some of the pioneers in on-line trading. According to the Wall Street Journal,
“....those franchises (of big Wall Street firms) now are under attack by discount brokers and electronic trading systems called ECNs that execute trades for $9.95 or
so, in a matter of seconds - cheaper and faster than going through the Big Board.
So Merrill, Goldman, Morgan Stanley and Salomon Smith Barney - exchange
members that alone account for a third of its volume - have banded together to push
for a rapid move toward automated trading.” ^ Changes in technology and
regulations have resulted in the existing players being challenged and responding in
turn.
As we shall see in this dissertation, changes in communications technology
in the mid-1800s unleashed forces similar to those that are being experienced today.
This dissertation analyses changes that occurred in securities markets as a result of
innovations in communications technology and discusses the future of stock
markets, given their response to previous challenges.
Was the NYSE always the preeminent exchange in the U.S.? Until now, no
information had been collected on absolute and relative sizes of exchanges in the
U.S. before 1860. This dissertation assembles and examines this information for the
first time, using contemporary newspapers as the basic source. The price and
volume of securities traded on stock exchanges in Philadelphia, Boston and New
York are compared and analyzed.
* Source: The Wall Street Journal. Thursday, October 22"*, 1998, pages Cl and C15. Chart by Credit Suisse First Boston. There is some mention in contemporary literature of the Baltimore exchange. In 1910 as shown in the table by R.C. Michie below, the Baltimore exchange was not among the prominent exchanges in the US. It is possible that during the period that 1 am studying, the Baltimore exchange was important. Due to
lack o f time and resources, I did not search for or collect the data on the Baltimore
exchange. Contemporary sources from other exchanges such as the three discussed
here do not mention the Baltimore exchange. Contemporary documents from the
exchanges at Philadelphia, Boston and New York, all mention and discuss the other
two exchanges at considerable length. Thus at present I am leaving out the
Baltimore exchange.
As regards the exchange at Chicago, once again contemporary documents at
the exchanges of Philadelphia, Boston and New York make no mention of the
exchange at Chicago as a competitor. This could in part be because in terms of
effective distance at that time, Chicago was very far away. As my research shows
the initial impact of the telegraph was to transform geographically close markets
into one effective markets. As the cost of transmitting information and goods
reduced further, geographically distant markets came closer together. However for
the period of my study the Chicago exchange did not provide competition to the
three exchanges under review, and was itself not threatened by them. As the table by
R.C. Michie shows, in 1910, the Chicago exchange was a miniscule part of the US
market. It is possible that during the period under review it was an important player.
However for reasons mentioned above, I did not search for or record the data for the
’ Source: The Wall Street Journal. Monday, November IS"*, 1999, pages A1 and C14. 5 Chicago exchange. The major action on the eastern seaboard was among the three exchanges under review. Tables 1,2, and 3, show that though Baltimore and
Chicago may have been comparable in size as regards population, economic indicators show that for the period under review the two cities were not serious contenders. Chicago is not mentioned in the economic data (in the Statistical
Abstract of the United States, published in 1879) right upto 1878.
Year New York Philadelphia Boston Baltimore Chicago
1840 312,710 220,423 101,383 102,313 4,853
1845 371,223 114,366
1850 515,547 340,045 136,881 169,054 29,963
TABLE 1: Population of City
Source; U.S. Census I860
Year New York Philadelphia Boston Baltimore Chicago
1856 195,645,515 16,585,685 41,661,068 9,119,907
TABLE 2: Value of Imports of Merchandize, Coin, and Bullion at the ports
Source: Statistical Abstract of the United States, published in 1879
Year New York Philadelphia Boston Baltimore Chicago
1856 98,763,197 6,955,324 24,673,575 10,856,637
TABLE 3: Value of Exports of Domestic Merchandize, Coin, & Bullion at the ports
Source: Statistical Abstract of the United States, published in 1879 Work by R.C. Michie shows that by 1910 the NYSE was the preeminent stock exchange in the US, being several times the size of the next largest exchange.
Stocks Stocks Bonds Bonds
Market Number Proportion Par Value Proportion
NYSE 164,150,061 68.5% $635 million 90.6 %
Consolidated 32,238,773 13.4 %
Stock Exchange
New York Curb 18,671,438 7.8 % $10.8 million 1.5%
Market
Boston Stock 15,503,336 6.5% $32.7 million 4.7 %
Exchange
Philadelphia 8,341,599 3.5% $14.6 million 2.1 %
Stock Exchange
Chicago Stock 894,362 0.4% $7.4 million 1.1%
Exchange
Total 239,799,569 100.1% $700.5 million 100 %
TABLE 4: US Securities Markets, Sales in 1910
Source: Table 62 U.S. Securities Markets, Sales in 1910. R.C. Michie, The London and New York Exchanges 1850-1914. Page 170.
We see that in 1910 the NYSE was the largest stock exchange in the US, being more than five times the size of its nearest rival and trading more than twice as many shares as all the other exchanges combined.
7 The picture is similar for trading in bonds. The NYSE was the preeminent exchange in 1910, trading more than 19 times the par value of bonds as the next largest exchange, and trading more than 9 times the par value of bonds of all the other exchanges combined. As the NYSE was the preeminent stock exchange in the
US in 1910, it must have risen to this position of preeminence sometime before
1910.
The period prior to 1910 witnessed technological changes in transport and communications, including the invention and adoption of the telegraph (1844-1852) and the telephone ( 1878). Canals and railroad networks expanded in the three decades before the Civil War. As cost of travel and communication fell, the geographical boundaries of what constituted a market expanded. Local and regional markets began to give way to a national market. The hinterlands of firms expanded.
Security markets experienced similar transformations. In the mid-1830's
Boston, Philadelphia and New York had exchanges that were regional in nature.
Firms listed with the exchange that was nearest to them. Investors in these securities were local in nature too, being from areas in close geographic proximity to the exchange. Very few securities from other regions or those that were national in nature were either listed or traded. R.C. Michie:" The London and New York Stock
Exchanges 1850-1914”
As innovations and investments in transport and communications occurred both companies and investors became progressively more national in nature.
Information was available on other regions in a manner that was quicker, cheaper and more reliable than before. Trading in securities enjoys economies of scale. As more shares of a particular security are traded at a venue the cost per share of executing the trade fails, i.e. there are falling average costs in the trading of securities over the relevant range of the market. This is explained in more detail in Chapter 2. For the newly emerging national market of the 19'*' century we would expect to see a single exchange emerge as the preeminent place to trade a particular national security. We observe that by the end of our period of analysis the NYSE emerges as this exchange.
Why did the exchange located in New York eclipse rival exchanges in
Philadelphia and Boston? In order to answer this question, this dissertation analyzes price, volume and bid ask spread data of securities traded on the three stock exchanges for the period 1835-1860. In order to establish the reason for the rise, the dissertation establishes when the NYSE rose to its preeminent position. Establishing the timing is crucial for understanding the causes.
Using data from contemporary newspapers, a comparison is made of the absolute and relative sizes of the exchanges in Boston, Philadelphia and New York.
For nearly two decades after 1835 none of these exchanges was the undisputed leader, but the NYSE began its rise to preeminence in 1852. Though the NYSE was often larger than the other two prior to 1852, there were instances when the NYSE was smaller. From 1852 onwards the NYSE was always larger by a substantial margin.
This dissertation tests several theories such as the opening of the Erie Canal, the population of each city and economic activity in and around each city, and the
9 introduction of the ticker tape. Economic theory and logic suggests these along with the adoption of the telegraph as probable explanations for the rise of the NYSE to preeminence.
This dissertation shows that the shift in favour of the NYSE occurred in
1852. The year 1852 is significant because the telegraph became a reliable means of communication around that year. The telegraph was invented in 1844 and by 1846
Philadelphia, Boston and New York were linked by the telegraph, though it was only by 1852 that the telegraph became a reliable means of communication. This fact is established in “Law, Emerging Technology, and Market Structure: The
Development of the Telegraph Industry, 1838-1868”, by Tomas Nonnenmacher
(Ph.D. Dissertation, 1995). The telegraph allowed for nearly instantaneous transmission of information, which allowed investors a choice among venues in which to execute their orders to buy and sell securities, thereby bringing the three exchanges into competition with each other.
Prior to the advent of the telegraph, developments in transport allowed some companies to expand their scope of operations so that they encompassed two or more of the cities whose exchanges are analyzed in this dissertation. There were already some securities that were listed and traded on more than one exchange. US government bonds that paid an annual interest of 5%, and the shares of Reading
Railroad were two such securities. Further developments in transport and the development of the telegraph allowed several more companies to expand their geographical scope of operations.
10 There exists proof that some securities interested investors in more than one market. In “ The London and New York Stock Exchanges 1850-1914” R.C. Michie refers to a system of transmitting stock market information through a number of relay stations between Philadelphia and New York. This system existed prior to the advent of the telegraph. People with mirrors were posted at the relay stations and they transmitted information relating to the stock markets from one city to another, in an attempt to arbitrage away price differentials. Contemporary newspapers mention a system that used flags to transmit Information between Philadelphia and
New York. Both systems were unreliable, expensive to operate, and would have only been viable for very large price differentials.
Though securities invoked interest in investors over a geographically dispersed area, investors usually bought and sold on the geographically closest exchange. Though national securities existed, the creation of a national investor was constrained by communications technology. An investor interested in buying or selling a security could in theory choose among several exchanges. However, because the telegraph was not present, the transmission of information of the state of the markets, and the transmission of buy and sell orders between geographically distant places was slow. It took one day to travel between Philadelphia and New
York at the time the telegraph made its first appearance in the U.S. It made no sense for an investor in Philadelphia to trade in New York, even if the security o f interest was listed on both exchanges. In practice the investor did not have a choice among the different exchanges. What existed, then, were several regional markets, shielded from competition by high communication costs.
II The telegraph drastically reduced communication costs. Once the communications technology was available there was competition among the exchanges for trades in the cross-listed securities.
New York benefited more than Boston or Philadelphia from this competition. At the time the telegraph was introduced, the NYSE was the most efficient exchange, having the lowest average bid ask spreads, and the lowest absolute spreads on cross-listed securities. In addition it was often larger than the other two in terms of volume and value of shares traded. The larger volume and value of trade was an advantage for New York as investors could find a matching buy or sell order faster on the NYSE than on any other exchange. Given the relative sizes of the exchanges, the price movement against an investor initiating a trade would be smallest on the NYSE. Thus given a choice among several exchanges, investors in cross-listed securities, subject to the costs of transmitting information through the telegraph, would choose the NYSE over the other two exchanges.
As further developments in transport and communication took place, and more securities were cross-listed, the movement in favour of New York continued.
Data on at least one cross-listed security show a significant shift in large trades towards New York.
National securities (such as U.S. Government S% bonds) existed prior to the advent of the telegraph, but a national investor choosing among several exchanges had to wait until the advent of the telegraph. The telegraph brought the regional exchanges, previously shielded from competition, into competition with each other.
1 2 The most efficient among them became the national exchange and the others reverted to being regional exchanges.
This dissertation is laid out as follows. Chapter 1 looks at explanations offered to explain the rise of the NYSE to preeminence. Chapter 2 discusses the data collected and analyzed. Chapter 3 evaluates the different explanations discussed in
Chapter 1 in light of the data. Chapter 4 includes the conclusion and a discussion of the implications of the findings of this dissertation on the future structure of securities markets.
13 CHAPTER 1:
SUGGESTED EXPLANATIONS
A topic as interesting as the history of the biggest market place to trade securities has interested historians, economists and social commentators. Most books examine the beginning of the NYSE, and skip or skim over the period from then until the end of the Civil War. As recently as two years ago no one had quantitatively studied the stock market for the period prior to 1860 in part because these data were believed not to exist.
There is a collection of literature covering the period 1835-1860, but it concentrates on matters other than competition across exchanges. The minutes of the NYSE discuss matters such as frnes imposed on members, or the voting on admission of new members. Strange as it may seem to our generation, minutes from the era of the introduction of the telegraph do not discuss the telegraph or the impact that it may have on the NYSE, which suggests that the full effect of the innovation was not anticipated. I could not find any discussion o f the telegraph in the minutes o f the NYSE, though the telegraph was to change the entire structure of markets.
14 Similarly, other technological changes later known to be important, such as automobiles, airplanes, and computers, were also vastly underestimated by contemporaries. Unfortunately, the NYSE does not have very good records of its own history. Their archives contain a record of the dates of a few landmarks in its early history, but no contemporary commentary that sheds light on the changes
occurring. This makes sense for two reasons. Firstly in its early years the NYSE was
not of such a large size as to engage its members on a full time basis. It met once or
twice a day to discuss business and trade shares. Thus, it may not have seemed
important to them to record the history of the exchange. Secondly at the time of the
rise of the NYSE to preeminence, few people, if any, realized how big it would
become. They had no idea that a record of the rise, and causes for the rise to
preeminence would be of interest to historians. Thus there is little that 1 can quote
from these sources, as they do not address the questions that I am studying. Sources
relating to the Boston and Philadelphia exchanges are similarly lacking. Modem
parallels no doubt exist in start-up companies that will become industrial giants in
one or two generations.
Historically, exchanges have emerged and thrived at centers of economic
activity. They emerged where there was a need for them, and they grew as the need
for them increased. Their fortunes fluctuated with the fortunes of the region they
served.
Exchanges emerged in medieval Europe in Venice and Genoa, when these
cities were large centers of trade. The 17*** century saw a thriving exchange in
Amsterdam. Similarly exchanges in London and Tokyo grew in importance as the
15 region they served saw economic prosperity. Prior to the electronics revolution, if
the region an exchange served declined in economic importance, the exchange also
declined in importance. The exchanges in Amsterdam and London lost economic
importance soon after their respective regions.
Until now, concentration of economic activity within a particular region, was
a necessary condition for that region to have an exchange. To date an exchange has
not emerged and thrived in a region of low economic activity. O f course,
concentration of economic activity is not sufficient. There have been several regions
in the past that had high and concentrated economic activity, but where an exchange
never emerged.
This dissertation tests whether the size of the NYSE can be explained
simply by the level of economic activity the region.
Invariably, centers of economic activity were also areas where there was a
concentration of population. It is necessary to test whether the size of the NYSE can
be explained simply by the population of the region.
The Erie Canal substantially increased the economic importance of New
York City. It is likely then that it may have led to an increase in the size of the
NYSE. This dissertation investigates if this was the case.
Prior to this dissertation, no one had analyzed the data on the size of exchanges in the US for the period 1830 to 1860. Only analysis after 1900 was available. By this time the NYSE was already the preeminent exchange in the US.
As no analysis based on data was available, we only had likely explanations based on economic theory and logic.
16 The telegraph and the ticker tape were introduced before 1900. Both inventions made it cheaper and quicker to transmit stock market information. As both affected stock markets, it is necessary to analyze their impact.
Charles P. Kindleberger puts the date of the rise of the NYSE around the
first quarter of the nineteenth century. “ The rise of New York as the financial center of the United States, winning out initially over Boston, Philadelphia, and
Baltimore in the first quarter of the nineteenth century, and beating back, so to
speak, later challenges from Chicago and St. Louis, is sufficiently familiar that it
need not occupy us for long”'°
Stock Ticker: It has been suggested that it was the introduction of the Stock
Ticker in 1867 that caused New York’s rise to preeminence. Proponents of this
view say that by reducing the cost of disseminating stock market information, the
ticker tape made available more widely information relating to the NYSE, and this
caused trading to move to the NYSE.
Telegraph: It has been suggested that by linking distant markets together,
and allowing people the option of trading on several different exchanges regardless
of where they lived, the telegraph led to the creation of a centralized market for
national securities, and led to the rise of the NYSE to preeminence. Two papers
analyze the impact of communications technology on stock markets. These are
papers by Garbade and Silber (1978) and DuBoff (1983).
Garbade and Silber (1978) discuss the impact that changes in
communications technology had on security exchanges. They study the period
17 1840-1975, and analyze the impact of the domestic telegraph, the trans-Atlantic cable, and the consolidated tape. They hypothesize that these innovations led to greater market integration, an idea they test by examining whether inter-market price differentials for cross-listed securities narrowed significantly after the introduction of each of these innovations. They conclude that the introduction of the domestic telegraph and the transatlantic cable both led to a significant and rapid narrowing of inter-market price differentials, and that the introduction of the consolidated tape contributed little to the reduction in price differentials.
DuBoff (1983) discusses the impact of the telegraph on economic development and market structures. According to DuBoff, the telegraph improved the functioning of markets and led to increased competition. At the same time it facilitated the formation of large-scale business entities. The changes that took place in the industrial structure of the U.S. from 1870-1900 were a result of changes taking place between 1840 and 1860, such as the growth of markets, the expansion of railroads and breakthrough in communications. The telegraph was crucial for the above three changes.
In his book “ The London and New York Stock Exchanges 1850-1914” R.C.
Michie discusses the impact changes in communications technology had on securities markets. He provides a discussion of the telegraph, telephone and ticker tape and discusses them all together as transforming securities markets in the US.
He provides the intuition that these changes in communications created an integrated market for securities. He takes the preeminent position of New York, and
Charles P. Kindleberger; “ The Formation of Financial Centers: A Study in 18 especially its position as the hub of all this activity as given, and does not discuss
why it was New York and not the other markets that were this hub. He does mention
that prior to the telegraph the NYSE was large without being important.
“ For much of the first half of the nineteenth century the US stock exchanges that existed were little more than local markets, whose level and nature of business reflected the size, wealth and interest of the local population. The New York Stock Exchange, for instance, was largely engaged in providing markets for the issues of New York-based companies or public bodies. In 1820, of the 30 different securities trading there, 28 were local, belonging to 16 insurance companies, 9 banks, and 3 authorities. Only two were non-local, namely federal government bonds and the stock of the Bank of United States. By 1835 the list of securities had quadrupled, largely through an expansion in the number of banks and insurance companies and the addition of local railroads and utilities. The non-local proportion had grown, especially among the banks and railroads, but still remained a minority, contributing only 35 out of the 124 securities quoted. The consequence was that the stock exchanges in the main eastern cities of New York, Philadelphia, Boston and Baltimore remained on par, with New York having only a slight if noticeable lead. I3«ll
According to R.C. Michie, the exchanges did not trade in isolation, as there
were some cross-listed securities. Arbitrage did occur but required substantial price
differentials to make it worth the cost and risk involved. Thus, large price
differentials could exist.
"However, all this was to change with the introduction of the telegraph in
the mid-1840s, which provided for almost instantaneous communication between
the different exchanges, and removed the barriers of distance that had preserved
local markets.’®”'^
Comparative Economic History." " R.C. Michie: “ The London and New York Stock Exchanges 1850-1914” pages 171-172
R.C. Michie: “ The London and New York Stock Exchanges 1850-1914” pages 171-172 19 R.C. Michie has the right intuition, that local markets were transformed into a national market, but he does not fix a date for the rise of the NYSE to
preeminence, lacking the information on the size of exchanges. My research
provides this information. R.C. Michie takes all the changes in communications technology together, i.e. the telegraph, the ticker tape, and the telephone combined and argues that prior to their invention, the U.S. securities market was one where
there were several local exchanges, isolated from competition from each other. The changes in communications technology led to the formation of a national market.
Though he does not prove that the telegraph caused the rise of the NYSE to
preeminence, my work shows that he does have the right intuition; that changes in
communications technology led to a transformation in securities markets. A nation of largely local exchanges, isolated from each other due to lack of instantaneous communications were transformed by changes in communications technology into
several well linked exchanges trading securities with New York as the preeminent exchange. However R.C. Michie leaves unanswered the question of why it was
New York and not the other two cities that was home to this exchange.
Economic theory and logic and work by several authors suggests the
following as plausible causes for the rise of the NYSE to preeminence; Level of economic activity, and following from that the opening of the Erie Canal,
population, the telegraph and the stock ticker.
Stock market data are required to decide which of the many explanations that economic logic and theory suggested is the right one.
20 This dissertation collects and analyzes the data required to choose among these plausible causes. As this dissertation works with data for the period, it is able to pinpoint exactly which of the changes in communications made the NYSE the preeminent exchange in the US, i.e. the telegraph. Further changes such as the ticker tape and the telephone continued this process. In fact the process continues today with enhancements in communications technology such as the Internet affecting the structure of securities markets.
21 CHAPTER 2:
DATA
What data are collected and analyzed and why?
This dissertation analyzes, for the first time, data regarding the price, quantity, and bid ask spreads, for securities on the Philadelphia, New York and
Boston exchanges for the period 1835-1860. These data help us reconstruct what
happened to market size and market efficiency during this period of structural change in securities markets.
What was available prior to this dissertation
This research project began with a desire to learn more about the history of
stock exchanges during the period 1835-1860. There is no prior work on this period
that uses comprehensive stock market data.
Most historical work on US stock exchanges that uses comprehensive data
effectively begins its analysis from either 1865 or 1880. Mistakenly, economists
and historians believed that they only had access to raw data resources that began in
1865.
22 Types of data collected and analyzed
In order to figure out what really happened, two sets of data are studied. The
first is the price and volume data for securities traded on each o f the exchanges.
These data will enable us to determine the relative size of each of the exchanges, and to figure out movements in favour of or movements against particular exchanges.
The second is the bid and ask spread data for securities traded. One of the
measures for efficiency of a stock transaction is the bid-ask spread. Thus bid ask
spread data will help us compare the efficiency of exchanges, and figure out if the
most efficient exchange became the preeminent exchange.
An explanation of bid ask spreads
The bid price is the price the dealer or market maker will buy a share from
an investor. The ask price is the price at which the dealer or market maker will sell
the share to an investor. The difference between the two is the spread. The ask
price is generally higher than the bid price The spread is a payment to the dealer or
market maker for standing ready to buy when the investor wishes sell, and standing
ready to sell when the investor wishes to buy. In addition, the investor may have to
incur costs such as commissions. Ceteris paribus, the lower the bid-ask spread for a
particular share or bond transaction, the lower the cost of doing business, and the
more efficient the exchange. Another way of looking at the bid ask spread is to
23 think of it as the cost of a round trip transaction, where you buy a security and sell it right back. Ignoring commissions for the moment, the cost of buying a security and selling it right back is the bid ask spread. For example assume that for a security the bid price Is S 100.00 and the ask price is $ 100.25. You buy one share of the security and sell it right back. In this case you pay $100.25 to buy the security, and you receive $ 100.00 when you sell it right back. The cost to you of doing this is
$100.25-$ 100.00 = $0.25, the bid ask spread. For a single transaction such as a buy or a sell, half the bid ask spread is the cost. Ceteris paribus the lower the bid ask spread for a security the lower the cost to an investor of trading in that security.
Why are we Interested in bid ask spreads?
As the bid ask spread is a cost of doing business on an exchange, it is crucial to our understanding of competition among exchanges.
A stock exchange has economies of scale. This is so because a stock market has declining average costs over the relevant range of production. The costs of providing the service of trading stocks declines as more stocks are traded. Among the costs of trading a security are the following; the time needed to execute a trade, the extent of price movement against the entity initiating the trade (in the event that the trade is executed), the bid-ask spread, and the fîxed commission. The first three typically go down as the number of shares of a particular security being traded increases.
Liquidity could be described as the depth, breadth, and resiliency of a market for a particular asset. As the number of shares traded of a particular stock rise, the
24 liquidity rises. As liquidity rises, we should expect the costs of transacting in that share to decline. For any given trade that you wish to execute, the time that you need to And someone with a matching trade reduces as liquidity increases, so that your search time is reduced. In addition, the market impact that your order has, i.e. how much you move the market price against yourself also decreases as liquidity increases, as your individual trade is now a much smaller part of all stocks being traded.
The more buyers and sellers that get together to trade at a point, the more likely it is that a buyer or seller will find a matching trade. This reduces the time needed to execute a trade.
The thicker the market i.e. the more shares that are being traded of a particular security, the less likely it is that a trade executed will move the market price against the entity executing the trade. In case the price does move against the entity initiating the trade this movement will tend to be smaller the thicker the market.
The bid ask spread tends to decline as the number o f securities traded at a particular venue increases. Buy and sell orders need not arrive at the same time.
"The defining characteristic of a securities dealer is an affirmative obligation to trade with anyone who meets his price."Thus, when you as an investor arrive at the market, wishing to execute a trade, you can either wait for someone with a
Treynor L. Jack, "dealers in securities "The New Palgrave Dictionary of Money and Finance. Edited by, Peter Newman, Murray Millgate, and John Eatwell. 1992. Vol.(l)
25 matching trade, or you can trade with the dealer of that security. Securities dealers charge you for this service of standing willing to trade. One of the costs of trading with a dealer in securities, is the bid-ask spread. A dealer in securities will buy at a lower price (bid) and sell (ask) at a higher price. The difference is a payment for the provision of immediacy in executing your trade.
"Market makers play a central role in many equity markets by buying and selling shares to service the public's demand to trade immediately Buyers and sellers arrive sporadically at the market, and it is not a simple matter for them to find each other in time. The market maker provides a solution by continuously standing ready to trade from his or her own inventory of shares. The service is not free; the dealer sells to buyers at higher ask prices, and buys from sellers at lower bid prices. The bid-ask spread is the market maker's compensation (sometimes referred to as the dealer's tum')."‘‘*
Thus the bid-ask spread is compensation to the dealer in securities for providing an investor with immediacy, and it is a cost to the investor of transacting on the market. There are two costs the dealer incurs in order to provide investors with this service.
(a) He holds unwanted inventory. As the dealer trades at the time of others choosing, he will be holding inventory he may not want for his investment purposes.
Shwartz, A. Robert, "market makers " The New Palgrave Dictionary o f Money and Finance. Edited by, Peter Newman, Murray Millgate, and John Eatwell. 1992. Vol. (2)
26 Thus he is investing his capital, and must be compensated for this. In addition, he could have a long or a short position, which exposes him to risk.
(b) Trading with people more informed than himself. The securities dealer trades with two different types of people who wish to trade. There are those who only have at best knowledge that is not private. They do not know more than the specialist knows. Among these are those that demand immediacy of execution, and are willing to pay a price penalty, and those who are willing to wait till someone matches their price. The first kind are the ones that the dealer can charge a bid-ask spread and make money from. There are also those who wish to trade for investment purposes, but are willing to wait till someone matches their price. Such people might have evaluated the value of the share, and wish to trade at that price.
The second kind of person is those that are more informed than the specialist. They are trading on information that the specialist does not have at the moment. The specialist cannot make money off such people, and generally loses money when he trades with them. The dealer faces the risk that when trading with these people, he may be buying into a market that is falling, or selling into a market that is rising.
The dealer must be compensated for the costs and risks that he undertakes. The bid ask spread is one such compensation.
As the costs and risks mentioned above reduce when the niunber of securities being traded at a particular venue rises, we would expect the bid ask spread to decline too.
The cost of doing business for the dealer in securities should decline, as the market becomes thicker. As more and more buy and sell orders arrive, the average
27 time that a dealer has to hold an unwanted position declines. And so, if we are in a competitive environment, we would expect prices in this case the bid-ask spreads to decline. Two papers, one by Demsetz (1968) and the other by Copeland and Galai
(1983), both find that for the sample of stocks and the period studied, bid-ask spreads decline as volume traded increases.
As stock exchanges have declining average costs over the relevant range of output, 1 argue that stock exchanges have economies of scale. This implies that trading in a particular security will concentrate at one exchange. In case that does happen, there is the possibility that monopoly prices will be charged, i.e. well above costs.
There are several factors that will prevent non-competitive prices being charged. Though a stock exchange has the characteristics of a natural monopoly, the dealer in a security, for example in the case of New York Stock Exchange, the specialist, is not a monopolist. He faces competition from several sources.
According to Harold Demsetz, "Even though scale economies are present in the specialist's trading activities, there is little likelihood of his maintaining spread much above the cost of waiting. Competition of several types will keep the observed spread close to cost. The main types of competition emanate from (1) rivalry for the specialist's job, (2) competing markets, (3) outsiders who submit limit orders, (4) floor traders who may bypass the floor specialist by crossing buy and sell orders themselves, and (5) other specialists."
" Demsetz, Harold, "The Cost of Transacting" Quarterly Journal of Economics, 1968 28 We would expect price to be close to average costs. Thus, bid-ask spreads should decline as volume increases.
Description of data sources
This dissertation uses contemporary newspapers to recover the pertinent data, but this took several months with various false leads. One of the first places
searched was the Hunt’s Merchant Magazine, as it was considered the primary
source for historical data on securities. Hunt’s Merchant Magazine reported only the
highest and the lowest security prices for the period under review.
The next source investigated was the archives of the NYSE. The archives had
incomplete records.
The New York Public Library was the next stop. Here a search of several
contemporary newspapers led to bid ask spread data. The bid ask spread data were
reported weekly or bimonthly, and the price and volume data were reported daily.
In order to get the data for Boston, a search was made of newspapers at the
Boston Public Library. The data was spread over several journals, changing titles
often. However even though the data changed newspapers and journals often, it was
continuous and consistent. In several instances, when the data moved newspapers,
the same template was used in the new newspaper. Usually, not more than one
newspaper reported the data at a time. The reporting was transferred from one
newspaper to another. The only time two newspapers reported the data at the same
time, the data were identical.
Copeland, E. Thomas and Galai, Dan, Information Effects on the Bid- Ask Spread, " Journal of Finance 38 (December 1983)
29 For Philadelphia a search was conducted at the Free Library of Philadelphia.
The data were all on microfilm. After the data were located, they were entered onto a computer. Appendix A contains a brief description of data sources.
Description and samples of raw data
For bonds traded, the following are recorded:
The total dollar value of the transaction at maturity is in the left-hand or first column. The name and description of the bond is recorded in the middle or second column. The price per unit at which the trade took place is recorded in the right hand or third column. For bonds the total face value at maturity of a particular transaction, and the price at which this trade took place is recorded, for example $
1,000 of Illinois 6 per cents at $ 51.50 on February 27*, 1841 in New York.
For shares traded the following are recorded:
The number of shares traded is recorded in the left-hand or first column. The name of the security recorded in the middle or second column. The price per share at which the trade took place is recorded in the right hand or third column. For shares traded, the number of shares and the price at which the transaction took place is recorded. Thus for example 35 shares of the Bank of Commerce were recorded as being traded at a price o f $ 94.75 per share on February 27*, 1841, in New York.
The newspapers reported each transaction that took place on a particular day, i.e. the individual transactions that took place are recorded. No aggregate figure for
30 the day’s transactions exists. The record provides a wealth of detail such as the total number of transactions, the total number of securities traded, the total number of transactions in each security, the size of each transaction, and the price at which each transaction occurred. This wealth of detail is used later in the dissertation for analyzing the movement of larger trades in Reading Railroad from the Philadelphia exchange to the NYSE. However this wealth of detail led to the first order of business when it came to comparing the size of each exchange, to wit that of aggregation. This is dealt with in the next section.
For each of the exchanges, the data are available on a daily frequency and are reported for each individual day (except for Philadelphia during the periods
August 1832-March 1833, June 1835-September 1835, February 1841-August 1842,
November 1842- March 1843, and August 1843-September 1843, when they are reported as aggregated by week). Data are available for Monday through Saturday.
For the bid and ask data the following are recorded:
The names of all securities that could be traded on that exchange are listed.
This is unlike the price and voliune data, where the only securities mentioned on a particular day are the ones that were traded on that day. For bid ask spreads a template is used by the newspapers.
For the NYSE the name of the security is recorded in the left-hand or first column. The bid (what the dealer in the security is bidding for the security) or the price at which an investor could sell the security is recorded in the middle or second
31 column. The ask (what the dealer in the security is asking for the security) or the price at which an investor could buy the security is recorded in the right hand or third column. There are numerous instances when either a bid, an ask or both are not reported for a particular security.
For several of the years under consideration, for Philadelphia and Boston, there are five things recorded. The name of the security is recorded in the first column. The par value of the security is recorded in the second column. The bid or offered price is recorded in the third column. The ask price is recorded in the fourth column, and remarks relating to dividends are recorded in the fifth column. For several of the years under consideration the par value is not reported for
Philadelphia and Boston.
An example of the bid ask spread; For the Philadelphia exchange, on
January 24'*', 1853, for the Bank of the United States an offer or bid price o f $3.50 is and an asking price of $4.00 are recorded.
For each of the exchanges, the data are available at least on a bimonthly frequency, and in most cases are available on a weekly basis. For many of the years under review, Philadelphia and New York had a biweekly frequency of reporting.
Methodology for calculating size of each exchange
In order to aggregate for the volume or number of shares and bonds traded each day, the number of bonds traded must be extracted from the total face value at maturity figure for bonds. Given available information, this is not possible, as we do not know the dollar denomination of each individual bond. For bonds we have
32 only the face value at maturity of each transaction from which we cannot extract the total number of bonds traded. We have the total number of shares traded. However as we do not know the total number of bonds traded, we caimot calculate the aggregate volume of trade, i.e. calculate the total number of shares and bonds traded on a particular day.
In addition, comparing just the total number of shares traded presents
another problem. At the time the possible range of par value was very large, as the
par value of securities was not standardized. To aggregate volume for shares with
different par values presents a problem. For example we could have one exchange
where 500 shares of par value $100 each, and price $80 were traded on a particular
day, and another exchange where 500 shares of par value $1000 each, and price
$800 were traded. Comparing volume would give us a figure of 500 shares for each
exchange, although the second exchange is larger than the first. Consequently the
volume of trade is not calculated.
The dissertation calculates the value of trade. The value of trade on a
particular day is calculated in the following way.
For shares, the number of shares traded is multiplied by the price, to give the
value of the transaction. For bonds, the face value at maturity of each transaction is
taken as the value of the transaction. The values of all share and bond transactions
for a particular day are added to give the aggregate value of trade for that particular
day.
33 Methodology for calculating the average bid ask spread for an exchange
In order to calculate the average bid ask spreads for an exchange the following is done: For each day, securities for which both the bid and the ask price are recorded are considered. Average bid-ask spreads are calculated as follows. For an individual security the difference between bid and ask price is taken. This constitutes the numerator. The average of the bid and ask price is the denominator.
The result of this fraction is recorded for an individual security. The results for all the securities for that day are then averaged to get the average spread on a particular day, for an exchange.
Sampling procedure
For each month in the period 1830-1860 that data were available, the last reported day of the month is used. The aggregate value of trade for this day is taken as a proxy for the month. Taking the last reported day’s data as a proxy for the month is standard procedure in finance literature. Three experts in the field, Prof.
Richard Sylla at the Stem School of Management at New York University, Dr. Tim
Opler at the WR Hambrecht + Co. in New York, and Prof. Charles Calomiris at
Columbia University in New York, were consulted and all three agreed on the appropriateness of the sampling procedure.
This sampling procedure helped saved considerable time, as it took on average S man-hours to calculate the aggregate value of trade for one day. The extent of data that was converted into electronic format by entering onto a computer for purposes of analysis for this dissertation is as follows: 391 months for New York
34 i.e. 32 years and 7 months (original data considered for New York ran from 1830-
1865), 298 months for Philadelphia i.e. 24 years and 10 months, and 241 months for
Boston, i.e. 20 years and 1 month. Price and volume data are reported for all days except Sunday, i.e. for each year for (365-52) days.
For New York data for 391 days was collected and converted to electronic
format. Had this sampling not been done, data for (365-52) x 32 + [(7 x 30)-30] days i.e. 10196 days would have had to be collected and converted. As this was done for only 391 days of data, instead of for 10196 days of data, the time required
to record data for 10196- 391 days = 9805 days was saved. As each day took 5
man-hours to record, my sampling procedure saved me 49025 man-hours. Similarly
for Philadelphia without the sampling procedure, there would have been a need to convert data for (365-52) x 24 + [(10x30)-43] = 7769 days. Using the sampling data
for only 298 days was converted, thus saving the time required to convert data for
7769-298 = 7471 days, which translates into 37355 man-hours. For Boston without
the sampling procedure data there would have been a need to convert data for (365-
52)x20 + [(lx30)-4] = 6286 days. Using the sampling procedure data for only 241 days was converted, saving the time required to convert data for 6286-241 = 6045 days. That translates into 30225 man-hours. Thus the sampling procedure allowed conversion to be done in only 4650 man-hours instead of instead of 121,255 man-
hours, saving 116,605 man-hours. Bid ask spread data were also recorded just once a month for similar reasons.
35 Explanation of graphs depicting size of each exchange
The graphs are constructed as follows. The X-axis records time. For each month of a particular year, the year itself is recorded. Thus there are 12 entries for each year, corresponding to the 12 months. The Y-axis has the value of trade. There are three series, corresponding to the three exchanges. Graph 1 is from 1835 to
1854. Graph 2 is from 1835 to 1863. There are two graphs for the following reasons; Graph 1 shows what happened between 1835 and 1854 in greater detail than does Graph 2. Graph 1 is constructed to show the period 1835-1854 in detail.
Graph 2 depicts very forcefully the phenomenal rise of the NYSE after 1852. It shows quite clearly that though the NYSE was often larger than the other two exchanges prior to 1852, this was trifling compared to its absolute and relative size after 1852. Thus, Graph 1 gives a detailed view of part of the period in question, and
Graph 2 gives an overall view of the entire period. Each helps illustrate a point.
Graph 1 illustrates the competition among the three exchanges prior to 1852, and
Graph 2 illustrates the absolute lack of it after 1852. Graph 3 depicts five month moving averages for data shown in Graph 2.
Results from analyzing the graphs on size of exchanges
The results are as follows: Of the three exchanges analyzed, i.e. the NYSE, the Philadelphia exchange and the Boston exchange, up till 1852 sometimes one and sometimes the other exchange was the largest. It was not until 1852 that the NYSE became the unequivocal leader. Several times before 1852 the NYSE was substantially larger, but then it came down to being close in size to the other two
36 1400000
1200000
■o 1000000 I 800000 I NYSE I BOSTON w J 600000 « % 1 400000
200000
g§iig§gss§§issisiiiisiiisggggi Time (Monthly Frequency)
Graph # 1: Value of Shares and Bonds Traded 1835*1854 8000000
7000000
^ 6000000
5000000
g NYSE 00UJ m c 4000000 PHIL. BOSTON g « 3000000 *8
2000000
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in
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month in 1832, several months in 1834,4 months in 1835 (this particular time it was
the trading in just four types of railway bonds that contributed the majority of the
value), and several months in 1844 and 1849. After 1852 the NYSE was never
smaller than the other two. The difference between the NYSE and the other two
exchanges increased substantially after 1852.
Graphs 1 and 2 reveal that the NYSE became preeminent after 1852.
Testing to see whether there was a structural break in 1852
Graphs 1 and 2 show that there was a break in 1852. In order to investigate
this a Chow test is conducted to see if there was any significant difference between
the period before and after 1852. The following regression equation is estimated in
order to conduct the Chow test. Historically, major financial centers have been
located in large cities that were also centers of trade (for example. London, Paris
and Amsterdam). This dissertation investigates how significant the economic
activity and population of each city were in explaining the size of each exchange.
Yt = a t + PtExim + A,t Population + Et (1)
Where
Yt = Value of shares and bonds traded on the NYSE
ttt = constant term
Pt = coefficient of sum of exports and imports
40 Exim = sum of exports and imports
Xt = coefficient o f population
Population = population
Et = error term
Equation (I) states that the value of shares and bonds traded on the NYSE,
depended on the sum of exports and imports of the city, and the population of the
city. The sources for these data are discussed in Chapter 3.
The data used for this regression are annual. The export and import data are
available on an annual frequency. The population data are census data, and are
available with a ten year frequency, which I convert to annual using linear
interpolation. The value of trade data used in Graphs 1 and 2 are recorded on a
monthly frequency. In order to make all the data annual in frequency, the value of
securities traded is aggregated to give annual figures. Thus all data used in equation
(1) are annual in frequency. The data under consideration are for 1836-1860. The
data are partitioned in two. The first partition is from 1836 to 1851. The second is
from 1852 to 1860. The idea is to see if there is any significant difference between
the two periods.
Ho: Bl= B2
H,:Bl?tB2
Bl is a vector of an , p n , and kn where tl refers to partition 1 i.e. the
period 1836-1851. B2 is a vectorofa^, P a , and Xa where t2 refers to partition 2
i.e. the period 1852-1860. The Chow test is testing whether there is any significant 41 difference between the two time periods, 1836 to 1851, and 1852 to 1860. If no significant difference is found 1 accept the hypothesis and conclude that the two periods were the same. If I reject the hypothesis then I come to the conclusion that there was a structural break in 1852. If equation (1) is well specified and I reject the null hypothesis then 1 come to the conclusion that there was something different happening regarding trading on securities markets after 1852.
Results of the Chow test are reported below:
Ho: 81= 82
Hi:Bl9tB2
Years: 1836-1860 Pooled B -261361.32 0.003 Exim 0.38 Population Partition 1: 1836-1851 Bl 19539.36 0.002 Exim -0.100 Population Partition 2: 1852- 1860 B2 -372319.32 0.02 Exim 1.280 Population # of restrictions 2 # of regressors 2 F statistic 3.551 Critical Value at the 95 % level of significance 3.13 TABLE 5: Chow Test: New York
42 A critical value of 3.13 is enough to reject the null. Thus we see that there was a significant break in 1852.
In order to ensure that there is no pre-test bias a Chow test was conducted for 1846, the year the three exchanges under consideration were first linked together by the telegraph. As I am putting forth the argument that it was the telegraph that caused the transformation of securities markets, it is crucial to test if the introduction of the telegraph itself caused a transformation. Thus a Chow test is conducted to test for a significant break in the data in 1846. The Chow test reveals that there was no significant break in the data in 1846.
Regressions are run using the following equation to see the impact of exports and imports and the population of each city on the value of securities traded.
Y, = a t + P t Exim + X, Population + e t (1)
For New York the following methodology is used.
First the regression is run for the 1835 to 1860. This is in order to investigate if
Exim and Population were significant explanatory variables.
43 Years Exim Exim Population Population
coefficient t-statistic coefficient t-statistic
1835-1860 0.004 3.67 -0.41 -.055
1835-1851 0.003 2.54 -1.00 -1.70
1852-1860 0.001 0.63 1.28 0.78
Table 6: Results of regressions on New Yor c using Exim and Population
The results of the regressions reveal for 1835-1860, Exim was significant in
explaining the value of trading on the NYSE. This is in keeping with economic
intuition as stock exchanges have historically emerged and thrived in major
financial centers. Controlling for economic activity, population has a negative
coefficient. As only census data were available for population I interpolated the data
for the intervening years. However as value of trading on the exchange shows great
variance, the coefficient on population in this and subsequent regressions is often
negative.
The data are then split into time periods, 1835 to 1851, and 1852 to
1860. The results are reported in Table 6. The results of the regressions reveal.that
prior to 1852 Exim was significant in explaining the value of trade on exchanges.
However during the period 1852-1860 it loses its explanatory power. Hence,
something other than the factors studied here was operating during this period.
Next, the data from 1835-1860 for each city are used,(for Philadelphia 1
interpolated for the years 1858-60) to determine the share of value of securities
44 traded on each exchange, the share of each city’s exports and imports, and the share of each city’s population, taking the total as the sum of all three cities.
A regression is run using Equation (1). This time Exim refers to New York’s Exim as a proportion of the total for all three cities. Similarly, Population refers to New
York’s share of the population, and Y, to New York’s share of the value of shares and bonds traded on all three exchanges.
Years Proportion of Proportion of Proportion of Proportion of
Exim Exim Population Population
coefficient t-statistic coefficient t-statistic
1835-1851 0.14 0.23 2.07 -2.62
1852-1860 -1.26 -2.69 -2.66 -5.35
Table 7: Results of Regressions on New York using proportionate data
We see from Table 7 that the proportion of New York’s Exim could not explain the proportion of New York’s share of trading on its stock exchange prior to
1851.
45 Next the proportional data for the three cities is pooled. Dummy variables are used for the cities.
Year Inter Inter Bost. Bost. Phila Phila Exim Exim Pop. Pop. s cept cept coeff t-stat coeff t-stat coeff t-stat. coeff t-stat.
coeff t-stat
1835 0.63 3.7. -0.60 -4.74 -0.47 -3.34 0.61 3.5 -0.43 -3.57
-60
1835 1.61 4.9 -1.28 -5.47 -1.21 -4.87 0.31 1.30 -1.65 -3.53
-51
1852 0.90 2.30 -0.84 -2.73 0.60 1.88 0.55 1.37 -0.81 -3.39
-60
Table i : Results of Regressions using Pooled Proportionate Data
The above table tells us that for the period as a whole, the proportion of
Exim of a city was significant in explaining the proportion of trade that took place on its exchange. This is in keeping with economic logic, as historically the fortunes of stock exchanges fluctuated with the economic fortunes of the region they were located in.
For New York data the following is done: The value of trade on the exchange post 1852 is calculated, assuming that the coefficients on Exim and
Population were the same pre and post 1852. The coefficients from the regressions on Equation (I) pre 1851 are used to predict the value o f trade post 1852. A dummy
46 variable is used for 1835. The results from this are plotted. Next the actual trade on the NYSE post 1852 is plotted. Then a 95% confidence interval is taken, and an effective band in which we could expect the predicted value of securities traded to
lie is created. The results are presented in Graph 4. We see that for the years 1855,
1856, 1857, 1858, 1859 and 1860 the actual value of trade lies outside the band. In addition for the years 1852 and 1853 it is very close to the upper boundary. Except
for the year 1854, the actual value of trade lies outside or very close to the upper
boundary of the 95% confidence interval of predicted values. Thus our case that
something other than Exim and population was operating after 1852 is strengthened.
Thus we see that after 1852 something other than Exim and population was
also operating. 1852 is the year the telegraph becomes a reliable means of
communication. It is interesting to note that this is also the year we observe a
significant break in the data. A Chow test for the year of the introduction of the
telegraph, the year 1846, shows no significant break. Given economic intuition this
is one of the years one should teat to study if there is was break. This part of the
dissertation thus establishes the year 1852 as one in which there was a break. The
next part of the dissertation uses this fact along with evidence on the use of the
telegraph and the migration of large trades in cross-listed securities to the NYSE to
analyze what transformed the structure of securities markets in the US and led to the
rise of the NYSE to preeminence.
47 1600000
1200000
i 1000000
■♦—Actual Trade on the NYSE ■#— Predicted T 800000 C.I.+ C.I.-
200000
1852 1853 1854 1855 1858 1857 1858 1859 1880
Graph • 4: Actual Vs. Predicted Value of Securitiee Traded on the NYSE CHAPTERS:
EVALUATING THE HYPOTHESES
Eliminating hypotheses that fail.
Erie Canal: The Erie Canal opened up in 1825. Graphs I and 2 show that several times after 1825 the other two exchanges were larger than the NYSE. The
NYSE was not the preeminent exchange until after 1851, more than a quarter of a century after the opening of the Erie Canal. Thus the Erie Canal was not the immediate cause of the rise of the NYSE to preeminence. As an analysis of bid ask spreads will show, the fact that the NYSE was often larger than the other two prior to 1852 may have given it an advantage when the exchanges began competing directly with each other because of the telegraph. The larger size of the NYSE prior to 1852 could be attributed in part to the increased economic activity in New York because o f the Erie Canal. As this larger size relative to other exchanges gave the
NYSE an edge when the exchanges began competing with each other, the Erie
Canal probably contributed to the rise of the NYSE to preeminence.
49 Population: Graph S has population data. The data are the on population of each city. These are reported by decade. Census data are used. As census data are reported every ten years, these data have been interpolated over the intervening years, taking an equal rise in population in each year for which data is not reported.
Graph S shows that New York had the largest population among the three cities long before 1852. Thus population was not the reason the NYSE rose to preeminence. If the population of the city was the reason the NYSE should have been the preeminent exchange long before 1852.
Imports and Exports: Graph6 has import and export data. Data on imports and exports are used in lieu of data on wealth, and as an indicator of the level of economic activity for each city, in part because I was unable to get comparable data for the wealth of each city for the entire period under study. Annual data on wealth are available for New York, and data on Boston are available only by decade, but no comparable data exist for Philadelphia. Annual data on imports and exports for each city are available for all years except 1854 and 1855. There is a high correlation
(0.86) between the wealth and the sum of exports and imports for New York City.
Thus the sum of exports and imports is used in lieu of wealth data. There are two different sources for data on exports and imports of the three cities. For data up to
1853 the source is the compendium to the 1850 U.S. Census, published in 1856. For data from 1856 onwards the source is the Statistical Abstract of the United States, published in 1879. This is under the First session of the 46‘*' Congress of the House of Representatives meeting in 1878, and is included in the report on “Finance,
Coinage, Commerce, Immigration, Shipping, The Postal
50 1000000 sasi* "lisS'
700000
600000 I •New York City I 500000 ■Boston Ptiiladelptiia - t
300000
200000
1820 1830 1840 1850 1860 1870 Tim* (Decadal)
Graph # 5: City Population 1820*1870 450000000
400000000
350000000
300000000
250000000 1 ♦ New York Lw a 200000000 Penns, NI a 150000000
100000000
50000000
CO lO 0 > T~ CO
Tim* (Annual Fraquancy)
Graph # 6: Exports * Imports. 1821-1863 Service, Population, Railroads, Agriculture, Coal and Iron.” There are three series, corresponding to the three cities. The theory that we are discussing here is that it was the exports and imports of New York that helped it to rise to preeminence. A glance at Graph 5 shows that this theory is the wTong one, as New
York had the highest exports and imports among the three cities long before 1852.
If the exports and imports of the city were the reason that the NYSE rose to preeminence, it should have been the preeminent exchange long before 1852.
Stock Ticker: The stock ticker was introduced in 1867, long after our data show that the NYSE emerged as the preeminent exchange. Thus the stock ticker was not the reason the NYSE rose to preeminence, as it was introduced a decade and a half after the NYSE rose to preeminence. Though the stock ticker was not the cause of the rise of the NYSE to preeminence, it may have continued the trend started by the telegraph by further reducing the cost of both disseminating information, and placing buy and sell orders at a geographically distant exchange. The stock ticker was one in a line of innovations in communications technology that started with the introduction of the telegraph, and its use led to even more trade being conducted through the NYSE, and to the further decline of Boston and Philadelphia.
The most probable hypothesis
M arket Efficiency: To test the hypothesis that the most efficient exchange was the winner bid ask spreads are analyzed. Average spreads for each exchange are
53 compared. In addition, spreads for the same day across New York and Philadelphia are compared for Reading Railroad, one of the cross-listed securities.
A. Average spreads: To compare average spreads the data used are as follows: For each of the exchanges bid and ask price for shares traded on a particular day are reported. For this dissertation, data for the last recorded day of each month is taken as a proxy for the month. For each day, for which both the bid and the ask price are reported are considered. Average bid-ask spreads are calculated as follows. For an individual security the difference between bid and ask price is taken. This constitutes the numerator. The average of the bid and ask price is the denominator. The result of this fraction is recorded for an individual security.
The results for all the securities for that day are then averaged to get the average spread on a particular day, for an exchange.
The average bid-ask spread thus computed for each of the three exchanges is reported in Graph 7. For each month of a particular year, the year itself is recorded.
There are 12 entries for each, corresponding to the 12 months. There are three series, corresponding to the three exchanges.
Graph 6 shows us that the NYSE had the lowest average spreads for most of the period. In particular the NYSE had lower spreads from 1837 to 1839, and again from 1843 to 1844. For period 1846- 1850, which was one of intense competition among the three exchanges, there was no clear winner it terms of average spreads.
54 0.45 m a m
-NEW YORK ■PHILADELPHIA BOSTON
< 0.15
ilinijlinliunriillllM m iiiiiiiuirairm im iin lililtli
0 0 C O O)O
cOooSeoeococoeoooeoSSSSS 3 3 3 i Time (Monthly Frequency)
Graph f 7: Average BM-Ash Spreads 1832*1856. After 1852 average spreads for each of the exchanges decreased, and these spreads moved closer to each other. This supports the idea that the telegraph led to increased competition among the exchanges.
B. Individual spreads: Spreads on the New York and Philadelphia exchange for Reading Railroad shares are compared for the same day on each exchange.
Contemporary newspapers quote the telegraph being used to send buy and sell orders as early as 1846. Philadelphia and New York were linked by the telegraph in
1846. Prior to the advent of the telegraph, extensive arbitrage opportunities existed between the different exchanges. Individuals were always looking for ways to take advantage of these arbitrage opportunities. The introduction to this dissertation mentions two methods one using flags and the other mirrors to transmit stock market information between Philadelphia and New York prior to the advent of the telegraph. The telegraph was a definite improvement over these two methods, and individuals would have begun to use it as soon as it was available. In case we want to study differences in bid ask spreads between Philadelphia and New York for the
Reading Railroad to study if the NYSE had lower spreads we should do this for the period prior to the advent of the telegraph. Once the telegraph was available to arbitrage away the differences we probably would not find any differences in spreads, as they would have been traded away by arbitrageurs. As mentioned above, even before the telegraph, there were individuals arbitraging on securities traded on more than one exchange. The telegraph, even in its earlier years, was a vast
56 improvement over the methods used earlier. Thus we may not any observe any instances o f differences in bid ask spreads after the advent of the telegraph.
Data on bid ask spreads for Reading Railroad from July 1846 to December
1846 are analyzed. The data are presented in Appendix C.
The methodology used is as follows; The simple bid ask spread is computed, i.e. the ask price - the bid price. As the par value of the security on the Philadelphia
Stock Exchange is half of what the par value of the security is on the NYSE for purposes of comparison the spread on the Philadelphia Stock Exchange is doubled.
During this period both exchanges reported data for Monday. The results are as follows. The NYSE generally had the lower spread. December 28* is the only exception. On this day both the NYSE and the Philadelphia Stock Exchange had the same spread. The difference in the spreads varied from 25 cents per share to over six dollars a share. It was more common for the difference in the spread to be 25 cents or 50 cents. The raw data and results are reported in Appendix C.
This period covers the introduction of the telegraph between Philadelphia and New York. Appendix C reveals hat prior to the introduction of the telegraph there were differences in the spread on the two exchanges, and that when that occurred, the NYSE had the lower spread. Once the telegraph was introduced, for reasons mentioned in the previous paragraph, it is reasonable to expect that at least in recorded data we would find no differences in spreads.
The NYSE had lower spreads prior to the commercial use of the telegraph.
As the bid ask spread is a cost of doing business, and a measure of efficiency, we note that (a) the exchange with the lower costs prior to competition eventually
57 became the preeminent exchange and (b) the more efficient exchange prior to competition eventually became the preeminent exchange.
The NYSE was the most efficient exchange prior to competition and it eventually became the national exchange, with others becoming regional exchanges.
However this is just part of the story. We need to look at the event that caused the exchanges to come into competition with each other, i.e. the adoption of the telegraph. The NYSE had lower spreads and as we have seen, generally larger volume of trade than the other two exchanges prior to the telegraph. This means that in addition to lower bid ask spreads, trades were quicker and adverse price movements against the initiator of a trade lower on the NYSE as compared to the other two exchanges. There definitely existed arbitrage opportunities between the exchanges, and investors who traded on the Philadelphia and Boston exchanges could have benefitted by trading on the NYSE. However as the requisite communications technology was not there, the NYSE was large without being preeminent. These investors had to wait till the advent of the telegraph to reap the benefits of a more efficient exchange. Had the telegraph not been invented and adopted when it did, securities markets would have continued as they were, with the size of an exchange reflecting the wealth of denizens of the region in which it was located.
Telegraph: The telegraph became a reliable means of commimication in
1852 and is a likely explanatory factor in the rise of the NYSE to preeminence.
58 The telegraph was invented and effectively demonstrated in 1844. Two years later telegraph lines were being installed between major cities. Initially, the telegraph was not a reliable means of communication. Messages were often garbled and lines were
improperly insulated. There were gradual improvements in telegraph technology. In addition, it took time to train telegraph operators. Several other matters relating to the telegraph took time to perfect, such as the property rights relating to the
messages sent, priority ranking when it came to sending messages, and methods for
assigning responsibility and pimishments when messages were sent or delivered
incorrectly. Thus, though telegraph lines between major cities were operational by
1846, it took a few years for the lines to become reliable.
By 1852 the telegraph was a reliable means of communication. This is
established in “Law, Emerging Technology, and Market Structure: The
Development of the Telegraph Industry, 1838-1868”, by Tomas Nonnenmacher
(Ph.D. Dissertation). Appendix D reproduces Table 2.1 from this dissertation, and
shows the dissemination of the telegraph by listing the number of telegraph lines
installed and the capital invested in each of the lines from 1846-1860. This table
gives us a feel for the spread and dissemination of the telegraph, and lets us know
when each of the major cities was linked by the telegraph. New York City emerged
as the most widely connected city early in the development of the system.
Use of the telegraph for trading securities at geographically distant locations
Contemporary newspapers quote the telegraph being used to send buy and sell
orders as early as 1846.
59 This dissertation presents a survey conducted for 1850-51 and submitted in
1852. This survey was conducted among the managers of four major telegraph lines.
Questions relating to the reliability of the telegraph, the longest distance over which messages were sent, the revenue of various lines, and the different purposes for which the telegraph was used were asked. This survey reveals that by 1850, the telegraph was being extensively used to trade shares, especially for arbitrage purposes when the markets were very volatile. It also reveals that there were still some problems with the reliability of the telegraph in 1850- 1851. This survey, along with Tomas Nonnenmacher’s dissertation establish that:
(a) by 1852 the telegraph was being widely used to send buy and sell orders for
securities being traded at geographically distant markets
(b) the telegraph was widespread by 1852, and that major cities in northeastern US
were linked by the telegraph
(c) it was only by 1852 that the telegraph became a reliable means of
communication.
Graphs 1 and 2 show that 1852 is the year that the NYSE begins its rise to preeminence. Thus we are likely to believe that the telegraph is the reason for the rise of the NYSE to preeminence.
The telegraph provided for almost instantaneous communication between geographically distant points. Prior to the commercial use of the telegraph, arbitrage opportunities existed between New York and Philadelphia. The telegraph reduced the cost of communication between cities. It is natural to expect that once the
60 telegraph became a reliable means of communication, some of these arbitrage opportunities would be traded away. New York had the lower spreads, before the telegraph became a reliable means of communication. Thus once the telegraph was a viable means of communication, one would expect some orders for securities that were traded on the NYSE and also on the Philadelphia exchange or Boston exchange to flow from either Philadelphia or Boston to the NYSE.
Trading in cross-listed securities
A security is called a cross-listed security if it is listed on more than one exchange. In this case data are analyzed for a security that was both listed and traded on more than one exchange. Reading Railroad was a security that was listed and traded on both the NYSE and the Philadelphia stock exchange. Data relating to trading in this security are analyzed to see if there was any movement in trades from the Philadelphia Stock Exchange to the NYSE after 1852, the year the telegraph became a reliable means of communication.
Graphs 8a, 8b, and 8c, show the number of different trades of different sizes for Reading Railroad on the NYSE and the Philadelphia Stock Exchange. Graphs
8d, 8e, and 8f, show the proportion of trades of different sizes for Reading Railroad on the NYSE and the Philadelphia Stock Exchange. They reveal that after 1852-53 larger trades moved progressively to the NYSE, with Philadelphia trading in smaller lots. This makes sense as given the lower costs o f trading shares on the NYSE, it was worthwhile for investors of large lots of shares
6 1 NY. 500 + PHIL 500 +
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 Time (Annual Frequency)
Graph #8 A: Large Trades. Number of Trades of Size (500+) Shares. 1846-1857. •NY. 100-500 w 60 -PHIL. 100-500
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 Time (Annual Frequency)
Graph # 8 B: Medium Trades. Number of Trades of Size (100-500) Stiares. 1846-1857. 140
NY. 1-100 PHIL. 1-100
1846 1847 1848 1849 1851 1852 1853 1854 1855 18561850 1857 Tim* (Annual Fraquancy) Graph # 8 C: Small Trade*. Number of Trades of Six* (1-100) Shares. 1846-1857. + 0.8
-NY. 1-100 ■PHIL. 1-100
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 Time (Annual Frequency)
G raphfS D: Small Trades. Proportion of Trades of Size (1-100) Shares. 1846-1857. ■NY. 100-500 •PHIL. 100-500
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 Tim* (Annual Frequency)
Graph # 8 E :Medium Trades. Proportion of Trades of Size (100*500) Shares. 1846-1857. »
■NY. 500 + PHIL. 500 +
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 Time (Annual Frequency)
Graph #8 F : Large Trades Proportion of Trade# of Size (500+) Shares. 1846-1857. who earlier traded on the Philadelphia Stock Exchange, to send their orders to be executed on the floor of the NYSE. There was the cost of sending or receiving information and orders via the telegraph, and other costs related with conducting business at a geographically distant location. Thus, for smaller trades it was not a financially viable proposition to trade at a geographically distant location. By 1852 a ten-word telegram between Philadelphia and New York cost 25 cents.
Graph 9 shows the number of trades for Reading Railroad at both the NYSE and the
Philadelphia Stock Exchange.
Graph 10 shows the value of trade in Reading railroad at both the NYSE and the
Philadelphia Stock Exchange.
Graphs 8a, 8b, 8c, 8d, 8e, 8f, 9 and 10 reveal that after 1852, trade in a cross listed security moved from the Philadelphia Stock Exchange to the NYSE.
A stock exchange has economies of scale. Innovations in transport and communication technology that lead to expanding the geographical scope of the market, will initiate changes in the industrial organization of securities markets, leading first to increased competition and eventually to a single exchange emerging as the primary exchange for cross-listed securities.
Analysis in previous sections has already revealed that the NYSE had the lowest costs of trading among the three exchanges under consideration. The telegraph allowed investors to choose among exchanges. We note that (a) aggregate trading on the NYSE increased after 1852 and (b) trading of larger lots in securities
6 8 rr^nre « a # Biî#ü^Ë-!*gÿ^?s Siîw w m ifM'
£ 120
-New York •Philadelphia
1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 Time (Annual Frequency)
Graph # 9: Number of Trades (Adjusted) Reading Railroad. Annual. 1846 1855 700000
600000
500000
î * 400000 o ■New YorK -Philadelphia ^ "S 300000 E g s 200000
100000
çp(p
Graph # 10: Reading Railroad Value of Shares Traded. Monthly. 1846-1855. traded on more than one exchange moved from the Philadelphia Stock
Exchange to the NYSE.
Prior to the advent of the telegraph the NYSE was more efficient than either
Boston or Philadelphia, providing a lower cost for trading securities. The telegraph by allowing investors a choice among exchanges facilitated the rise of the NYSE to preeminence.
The adoption of the telegraph began the process of trading of larger lots of cross-listed shares moving to New York.. The NYSE was moving toward becoming the preeminent place to trade securities that were national in nature, and other two
exchanges were becoming the place to trade securities that were regional in nature.
Innovations in communications technology over the next few decades continued and
accelerated this trend.
1 reach the following conclusions:
(a) The NYSE began its rise to preeminence in 1852.
(b) This began a process of transformation of the structure of securities
markets. A market structure with several local or regional exchanges was
transformed into one where there was one national exchange and several
regional exchanges.
(c) The telegraph is the most probable reason for this transformation.
71 CHAPTER 4:
CONCLUSIONS AND IMPLICATIONS FOR THE EVOLUTION OF
FINANCIAL MARKETS.
This dissertation began by collecting and analyzing price, volume and bid ask spread of securities traded, in order to discover what happened to securities markets in the US from 1830 to 1860. This dissertation is the first quantitative analysis of stock markets for this period.
Analyzing price and volume data revealed that it was in the early 1850s that the NYSE began its rise to preeminence. The dissertation looks at probable causes for this shift in favour of the NYSE. Historically exchanges have emerged and thrived in places that have the most economic activity, and those that are major centers of population. This dissertation verifies whether the size of the NYSE in the
1850s and after can be simply explained by the fact that it happened to be located in the city with the most economic activity and population. This dissertation finds that this was not the case. Level of economic activity and population could not explain the size of the NYSE after 1852.
The opening of the Erie Canal has been offered as a probable cause for the rise of the NYSE to preeminence. This line of argument is a subset of the level of
72 economic activity argument. The argument is as follows: by making New York the major economic center of north-eastern US, the Erie Canal led to the rise of the
NYSE. This dissertation examines whether this was true, and finds that the NYSE became the preeminent exchange around 1852, almost three decades after the opening of the Erie Canal. Thus the opening of the Erie Canal could not have been the reason the NYSE rose to preeminence.
The use of the stock ticker, an event that made nearly instantaneous transmission o f stock trading information available more widely and cheaply is another probable cause. This dissertation finds that the NYSE became preeminent
long before the stock ticker made its appearance. Thus the introduction of the stock ticker could not have been the reason the NYSE rose to preeminence.
The telegraph was invented and effectively demonstrated by 1844, and
major cities in northeastern US were linked by it by 1846. At this time the NYSE
was the most efficient among the exchanges under consideration, having the lowest
average bid ask spread, and the lowest spreads on Reading Railroad a cross-listed
security. The telegraph by providing for the first time, almost instantaneous
communication among geographically distant points, allowed investors the option of
trading at geographically distant locations. Investors could if they wished trade on
the exchange with the lower spreads. As the NYSE was the venue with the lowest
spreads, it is logical to expect that subject to the constraint of the cost of trading via
telegraph, investors in cross-listed securities would move their trades to the NYSE.
The data however do not show a shift in favour of the NYSE in the late 1840s. This
is because it took some years for the telegraph to become a reliable means of
73 communication. In the early years of the telegraph messages were often garbled due to improperly insulated wires. In addition property rights relating to the content of the messages transmitted had to be established. Laws had to be developed to establish blame and assign punishment for incorrectly transmitted messages. All these developments took several years. Research by Tomas Nonnenemacher reveals that it took till 1852 for the telegraph to become a reliable means of communication.
A survey published in 1852 reveals that by this year the telegraph was being used to trade securities.
Thus in practice, extensive use of the telegraph to trade securities on a regular basis, should have started around 1852. Price and volume data reveal that it was only after 1852 that the NYSE became preeminent. Data on Reading Railroad, a cross- listed security reveals that larger trades, i.e. those of at least a 100 shares or more moved progressively to the NYSE after 1852.
As developments in transport and communications continued, more and more companies became national, and more and more companies were cross-listed.
We assume that trade in these moved progressively to the NYSE too, further enhancing its position. The ticker tape, the transatlantic cable, and the telephone must have enhanced the position of the NYSE. The process continues today, with companies becoming international or multinational in nature, with more and more of them being listed on exchanges in more than one country. What is needed today is an international exchange, much in the same vein that the NYSE became the national exchange in the 19‘*' century. What is needed is a single venue that trades securities of interest to investors of more than one country. Today, several
74 exchanges list securities from other countries or economic regions. As of now the
NYSE, by dint of its size, and the economic size of the U.S. is prominent among them, though there are contenders such as London. In addition electronic exchanges are emerging, and these are structured to be internationally accessible. Established national exchanges from Europe or Asia, or some of the newly emerging electronic exchanges could be this place. The need for an international exchange will grow with developments in communications and transport, in the same way that a need for a national exchange developed in 19“* century US due to developments in transport and communications. The NYSE is at present a strong contender, though by no means the only contender to become this international exchange. Even its position as the preeminent national exchange of the US is under threat. We are in the year 2000 right in the middle of the development of an international market for securities. That such a venue will emerge, either in cyberspace or at some specific geographic location is an historical inevitability. Trading in a particular security will converge to a single venue. The only unknown at present is the nature and location of this venue.
Historical Impiications: The 19* century saw rapid changes in transport and communications. Among these changes, the telegraph, by providing almost instantaneous communication between geographically distant exchanges, gave the first boost to the NYSE, by causing trade in cross-listed securities to move to the
NYSE. Prior to the advent of the telegraph, the NYSE was larger and more efficient than the other two exchanges. However, investors that were geographically distant from the NYSE could not take advantage of the lower prices. Thus Philadelphia and
75 Boston were also important places to trade cross listed securities, with trading on each exchange being determined by the interest of investors in close geographical proximity to the exchange. There was some arbitrage among exchanges using predecessors to the telegraph, however this type of arbitrage was very risky, and differences in bid ask spreads continued to persist.
The telegraph, by allowing investors the choice among several exchanges, led to the trade in cross listed securities moving to the NYSE. This started the process of the NYSE’s rise to preeminence. The introduction of the telegraph by no means completed the process of the NYSE’s rise to preeminence. Subsequent innovations in transport and communications over the next few decades continued this process. The NYSE became larger and larger relative to other exchanges. At the same time, newer exchanges emerged both within New York City, and in cities outside the north-eastern US. Several of these did not last long. The exchanges that did survive traded securities that were either non-national in nature, or financial instruments which did not trade on the NYSE such as grain futures. Within New
York City itself several exchanges survived and did well. For most of the time, these complemented the NYSE rather than competed with it. The Curb Exchange, that later became the American Stock Exchange, traded newer, less established securities that did not interest the NYSE. As these securities became more reliable, and the companies they represented became large enough, they moved to the NYSE, with the Curb Exchange taking on newer less established securities. Other exchanges that competed with the NYSE were either eventually absorbed by it, or competed out of existence.
76 A question that comes to mind when one reads this dissertation is the following; If a stock exchange has economies of scale, and the NYSE was the most efficient exchange when the telegraph began to be used by stock exchanges, and the
NYSE gained business at the expense of other exchanges after 1852, then how do we explain the emergence of newer regional exchanges after 1852? There is a simple explanation. There are monetary and other costs associated with sending and receiving messages via the telegraph. These costs depended in part on the physical distance over which the messages were sent. Ceteris Paribus, places that were farther apart, had to pay higher prices for sending and receiving messages than places that were closer to each other. Thus as new regions developed, they had their own exchanges. Eventually, though, as costs of communications fell, these exchanges increasingly became places to find the best execution in trading of securities not traded on the NYSE. They either became regional exchanges, or became the primary place to trade instruments that were different in nature to those being traded on the NYSE, such as options and futures.
The second type of exchanges that emerged after 1852, were those that emerged in New York City itself. One of these, the Curb Exchange complemented the NYSE. Others were either absorbed by the NYSE, or eliminated due to competition.
New exchanges will always continue to emerge. However the fact that stock exchanges face falling average costs leads us to expect the following. Given the constraints of commimications technology there shall be a single venue where buyers and sellers o f a particular security will naturally converge.
77 Modem Implications: Innovations in communications today are continuing the process that began with the telegraph. Financial markets continue to be transformed by changes in communications technology. The telegraph provided almost instantaneous communication for the first time in recorded history. Once the telegraph became reliable, and widely accepted, a period of around 7 years, financial markets were transformed. A similar process is occurring today and the innovation in communications technology is the Internet. Trades via the Internet are taking an increasing share of business away from established exchanges. As with the telegraph, the new technology is taking time to be accepted. Several technical problems need to be worked out, such as how best to send financially sensitive information securely over the Internet. The legal system has to catch up with the new technology. Property rights have to be established over information transmitted, and methods worked out for assigning blame and punishment for incorrectly transmitted information. These changes are occurring at the present moment much like they did for the telegraph in the 1840s and early 1850s.
As with the telegraph, once financial markets absorb the full impact of this new technology, there will be advantages to a single venue where buyers and sellers of a particular security can converge. This venue shall be the place for price discovery. Other venues will continue to trade much smaller amounts of the security, but shall do it within the price boundaries set by the main venue. At present for several prominent nationally listed securities, the NYSE is this venue.
This position is being challenged, as described in the introduction. However there is still time for the NYSE to respond to these challenges. Given its preeminent position
78 today, it is in the best position to do so. However its internal voting structure where votes are divided between the specialists, the floor traders and the financial brokerage houses so that any one group can veto a proposed change leads to a problem. Moving to a system like the ones adopted by ECNs reduces the earnings of floor traders and specialists. Thus they are resisting such change. Meanwhile, the brokerage houses are seeing their business moving to ECNs. In case the NYSE does not do anything soon, in a few years most business will move to ECNs and the
NYSE will die out.
The other change that the Internet will bring about is the creation of an international market for trading securities, just like the telegraph created a national market. The NYSE is in the most advantageous position to be this international marketplace as it is home to the most multinationals whose securities attract the international investor. At present the NYSE because of its current size, its established reputation, the relationships built over a long time, and the economic well being of the US, is the most likely contender. The NYSE has however been dragging its feet over several changes that would allow it to meet the challenges posed by the newly emerging ECNs. It is maintaining the status quo as regards its own organization and method of doing business. It is possible that the NYSE will be able to meet the challenges it currently faces. The advantage that it enjoys as the incumbent may be too large for others to overcome. However at present there is a credible threat from others, brought on by the innovations in communications technology. These innovations are transforming the structure of securities markets.
By the time this present wave of innovations is absorbed by the financial markets,
79 their structure will be radically transformed, in much the same way that the telegraph and subsequent innovations in communication technology transformed the structure of securities markets in the 19* century. Given the improvement in efficiency afforded by online market places for the placement and execution of orders it is logical to expect that all securities markets in the future shall be in cyberspace with an increasing proportion of trades being placed and executed online. It is likely that the NYSE will be the only international market place for securities in the future. It is also likely that the present wave of innovations in communication technology will further consolidate the position of the NYSE, continuing the process begun by the telegraph. Certainly the NYSE is at present in the best position to enhance its share of the US securities market, and to become the international market place for trading securities. The best way for the NYSE to do this is to move into cyberspace. Given the NYSE’s reluctance to move into cyberspace, it will face increasing competition from those who have adopted the new technology. It is possible that the size of the NYSE will allow it to withstand the pressures brought on by the new technology, so that the NYSE’s trading floor may still be located in New York. However it is also possible that if the NYSE refuses to embrace and adopt the new technology, some other exchange will take over the position of the preeminent exchange of the US. In addition, if the NYSE does not embrace and adopt the new technology it will definitely lose the chance to be the international exchange of the future, as an international exchange requires communications over larger distances, and would therefore benefit even more than a
80 national exchange from an innovation such as the Internet, that drastically cuts communication costs.
The lesson we learn firom history is that the preeminent position of an exchange can be challenged. What Philadelphia was in the 1850s could well be the
NYSE today. The undisputed leader of its region, facing an innovation in communication technology which expands the geographical scope of the market and transforms hitherto non-challengers into competitors. The NYSE could lose US business to the NASDAQ, some of the newly merged entities or the newer electronic exchanges in the same way that Philadelphia lost business to the NYSE.
The NYSE should treat the threat as real.
The telegraph allowed geographically distant points to become part of a single market. The Internet furthers this process by drastically reducing cost of communication once more. The telegraph redefined what a market was, and allowed investors the choice to participate in the market in a way that they had not been able to prior to the advent of the telegraph. With the telegraph investors must have felt that they were right there at the market place. It allowed them almost instantaneous access to the market, so that they could observe and influence the market in a more significant way. The Internet is having a similar impact. Investors can check real time quotes at their desk at work or at home, any time the market is open. They can send in a buy or sell order with the click of a mouse, and get a confirmation in a matter of minutes without having to go a broker. Investors feel more connected to the market and can observe and influence the market in a more significant way than before the Internet. With the adoption of the telegraph investors in Philadelphia
81 could receive information as quickly as some one in New York City (who was not physically at the exchange). Similarly with the Internet, investors in Tanzania can receive information on the state of the market as quickly as some one in New York
City (who is not physically at the exchange).
The Internet and the increased use of computers, besides reducing the cost of transmitting information over geographical distances, has also reduced the cost of setting up and operating an exchange. The challengers to the NYSE are thus of two kinds, the first are established exchanges in the US and around the world, and the second are new exchanges that have emerged as the cost of setting up and operating an exchange has reduced. Just as the telegraph led to competition among exchanges in the 19"* century, the Internet has led to competition among exchanges today. Ever since exchanges first came about, they have always faced competition. However the present wave of competition is larger than any experienced since the telegraph, and one that has the potential to drastically alter the structure of securities markets.
Given the lower cost of setting up and establishing an exchange, many more exchanges will come up. The question is how many and which ones will survive and thrive. It is possible that in the future securities markets will contain several electronic exchanges. The one thing that economics tells us is that it is efficient for trading in a single security to concentrate at a single venue. This is because of the economies of scale in the trading of securities. Thus we should expect the trading in a particular security to concentrate at a single venue. Trading in securities may also enjoy economies of scope, in that it may be more efficient to trade a security where other securities are being traded. This will depend on the type o f security, and its
8 2 relation to other securities being traded at that venue. It is possible that for securities
that are similar in nature, such as all mining securities, it may be more efficient to
trade at a single venue. The idea is that it is more efficient for trading in a particular
security to be concentrated at one venue, and economic efficiency gains in
concentrating trading in groups of securities at a particular venue depends on the
relationship between the constituents of the group.
It is technically feasible, given the current wave of innovations for all
trading to be concentrated at a single venue. The next question is whether this is
efficient or not. There are limits to the economies of scope. In the pre-computer era
several exchanges thrived in New York City (and do so today too). Similarly in the
future, if the market place of the future is a web-site in cyberspace, it may not be
efficient for an investor to spend the time to navigate to get to the security or group
of securities they wish to trade. Thus we may have several venues, each trading a
particular group of securities, with trading in a particular security being traded at a
single venue.
There exists the possibility of trading in a particular security being split
among several venues if each enjoys relatively similar volume of trade. In that case,
though there would be overall gains to investors if all trading were at one venue,
trading may continue to be split among several venues if none of the venues wish to
lose their investors, and merging is either not desired or is prevented by law.
The formation on an international market has the added factor of time zones
to consider. As o f today most major exchanges in the world operate during the day.
An international market must be open 24 hours. The era when investors could go 83 borne at the end of a conventional work-day, and not worry about the market moving unless there was some unexpected occurrence regarding their investment, is ending. Certain markets by their very nature, such as foreign exchange markets have always been 24 hour markets, but as the present trend towards internationalization continues, more and more markets will become 24 hour markets. The Internet is open 24 hours. We should observe investors and their representatives adjusting to the 24 hour securities markets. In this 24 hour investment environment would any currently established exchange, or a particular geographic region have an advantage over others? Our societies are still largely set up to concentrate work around daylight hours. Though some investors and their representatives may adjust their daily schedules, so that someone or the other is awake all 24 hours, most investors will still tend to concentrate their financial transactions to the traditional work-day.
Given this there will be some advantage to an investor physically located in London or England as opposed to an investor located in Ohio. This is because investable wealth is concentrated in Europe and North America. A participant in the financial market who is physically located in London can more conveniently participate in the market during the conventional work-day in both Europe and North America, than an investor physically located in Ohio.
84 Implications for deveioping countries such as Tanzania, and Vietnam:
Today, these two countries do not have formal stock exchanges of their own. There is talk in each of these countries of setting up such an exchange. My research leads to the following suggestions: a. The stock exchange should be located in the financial capital of each country, especially in Tanzania and Vietnam. Even though several parts of the world are moving towards exchanges in cyber space, the technology and infrastructure that supports such technology is lacking in both these countries. Hence, at least at present, the exchanges should be located at a specific geographic venue. The financial capital of each country is the natural choice for each such exchange. As my research shows the economic activity is an important determinant of the value of securities traded on an exchange. Even today, relations of trust developed over several years of transacting and communicating with each other are essential in order to trade securities. Thus people living close to each other have a better chance of developing such bonds. A person in Columbus, Ohio, wishing to trade on the
NYSE today has to go through a chain of such bonds where the people finally executing the trade trust each other. For ECNs too trust is a major requirement. The
SEC and the other laws of this country make it easier to transact on such networks, however trust and belief in all entities executing the trade, and in those with whom the money is invested are essential.
Barring major technological innovations in communications, the financial center of a region will be the place where the dominant exchange for that region will develop. Thus for example in Tanzania Dar e Salaam would be the natural place for
85 such an exchange to arise. Thus if exchanges are to be set up in these countries they should be located at the financial capitals of each country. b. The second is the issue of property rights and of trust in the legal system of the country. If property rights are not well established or protected, the only way to effectively own something is to physically posses it or to posses the key to the lock which secures such property. In such a setting it would be difficult for someone to
part with money they own, and invest it in a venture that has an element of risk in it.
To begin with once the money is invested, it would be difficult to establish ownership of the investor. Secondly, in case the entity with whom the money is
invested, decides to swindle it, there would be little recourse if the legal system is
ineffective. Thus even if the government of the country or some international entity
such as the World Bank or IMF decides to establish an exchange in such a country,
it would either not have investors, or would be perpetually plagued by scandal, and
would eventually have no investors. A prerequisite to establishing exchanges in a
country is to ensure that property rights are well established and that there is an
effective legal system. In the case of Tanzania for example, neither are property
rights well established, nor is there an effective legal system in case of financial
matters. Thus even if an exchange were established in Dar e Salaam it would soon
fail.
c. One of the ways a stock market evolves is when people need to invest in projects
that require more money than they are willing or able to raise through personal
sources or through family and friends. A stock market fulfills the need for
connecting investors and entrepreneurs that are not aquainted personally. In case
8 6 there is no need for funding such large and risky projects, one of the main reasons for the existence of a stock market is missing. Thus even if an exchange were set up, it may not have securities put up for trading. Tanzania at present does not have many such projects. Vietnam on the other hand does have such projects, and there exists an informal stock market there, which could well be the precursor of a thriving national market.
Thus for developing coimtries that do not have a national exchange at present, if one is established it should be at the financial capital, there should be a need for one, and property rights and the legal system should be well established.
Implications for countries or regions that have more than one exchange such as
India and the European Union:
India at present has two exchanges of national prominence. The Bombay
Stock Exchange which has traditionally been the national exchange of the country, and a newer automated exchange, the National Stock Exchange. These are in fierce competition to become the preeminent exchange for the country. Eventually as my research shows, a particular security will be traded primarily at one venue, whether
it is at a physical location like in the case of the Bombay Stock Exchange, or in cyber space such as is the case of the National Stock Exchange. Given the level of
infrastructure in terms of telephone connections, Internet connections and the reliable and continuos supply of electricity, it is unlikely that all trading in India will move to cyber space anytime in the near futture. Though property rights are well established and there is a legal system to which one has recourse, the legal system
87 works very slowly and often ineffectively, hence personal relationships of trust are still crucial for transacting securities. Thus the ECNs that have entered India will not gain too many customers in the near future. One to one bonds with one’s broker are still crucial, whether the broker transacts on the Bombay Stock Exchange or in cyber space as in the case of the National Stock Exchange. In the case of the
National Stock Exchange only brokers and sub brokers have access to the trading floor, and they or their direct representatives are the only ones that can enter trades onto the system.
Thus in the case of India, given the present state of infrastructure in terms of communication technology, and the legal system it is feasible that the National
Stock Exchange will become the primary venue for trading securities that are national in nature, with the Bombay Stock Exchange becoming a regional exchange.
It is also possible that both the Bombay Stock Exchange and the National Stock
Exchange could specialize in different types of securities. For example the National
Stock Exchange could become the preeminent venue in India to trade technology stocks that are national in nature, and the Bombay Stock Exchange could be the venue for more traditional brick and mortar companies, in much the same way that the NASDAQ is home to technology stocks and the NYSE to the so called “Old
Economy” stocks.
Ultimately though the economies of scale in trading securities will lead to a particular security being traded at a particular venue. How many such venues will exist in the future, and what kinds of securities they will trade will depend on the economies of scale and scope.
88 In regard to Europe the formation of the European Union, and the more recent boom in innovations in communication technology has led to a situation similar to the situation in the US in the mid-1800s. The effective geographic scope of the market that can be effectively served by a single stock market has expanded.
Each security that is European in nature should eventually trade at a single venue.
At present (May 2000). there is intense discussion about a proposed merger between the London Stock Exchange and its counterpart in Germany. Cultural differences, differences in financial systems and methods of listing and trading securities, and the recent historical mistrust between England and Germany is holding up the final merger. In addition there is the usual jockeying for power which must accompany any merger. There is concern on both sides that the major trading and profits might go over to the other side.
According to my research, eventually these differences will be worked out.
Cost savings will lead to trading in a particular security being concentrated at a single exchange that is European in nature. The technology is in place. Differences in economic systems and culture will be worked out. Brokers from New York and
Columbus, Ohio, in the 1800s must have had the same magnitude of trepidation on first deciding to establish long term trading relations with each other, that two brokers from Germany and England are feeling today. Eventually, as transport and communication develop, people who seemed “alien” earlier, become more familiar.
As we meet more often with them, we establish long term bonds of trust, just as we had with our “neighbors". Cultural differences disappear or cease to matter, and financial systems become more homogeneous.
89 Regarding the question of which venue will benefit more from the merger of exchanges in England and Germany, I feel that is a moot question. Given the level of technology, infrastructure, property rights and the legal systems in Europe, any exchange that deals in securities that are European in nature will soon be effectively located in cyber space, and it will matter little if the majority of people conducting trades are logging in from Germany, England, or elsewhere in the European Union.
National exchanges of other countries in the European Union will follow suit, wanting to Join up with each other. England and Germany being major economic powers, it is natural that their exchanges should be the first to attempt to merge. As securities of other European Union countries increasingly interest investors from other European countries, more of these countries will try to serve a European market. Given the economies of scale in trading securities, eventually a European security will trade primarily at one venue, though at first it may be listed on more than one European Union country’s exchange. As before the economies of scope will determine the number and character of exchanges serving the European Union that will emerge and survive.
The structure of securities markets is currently undergoing a transformation, brought on by innovations in communication technology. This transformation is in many ways similar to and a continuation of changes brought about by the adoption of the telegraph. This dissertation analyzes the impact of the telegraph on securities markets, and uses this knowledge to analyze current changes, and to comment on possible future scenarios for the structure of financial markets.
90 LIST OF REFERENCES
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91 Kliedson, W. Allan and Werner, M. Ingrid “Round the Clock Trading; Evidence from U.K. Cross - Listed Securities” Research Paper No. 1234R. Institute for International Economic Studies and National Bureau of Economic Research.
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92 CHARACTERISTICS OF THE DATA
Number of Cities 3 Names of Cities Boston Philadephia New York Years for which data available 1834-1863 1830-1863 1830-1863
Frequency of data available Price data Daily Number of shares traded Daily Bid ask spread weekly-bimonthly
Frequency of data used in computations Price data Monthly Last reported day of the month Number of shares traded Monthly Last reported day of the month Bid ask spread Monthly Last reported day of the month
Names of Journals
New York Journal of Commerce and Commercial, New York New York Journal of Commerce Weekly Joumal of Commerce
Boston The Boston Atlas Evening Mercantile Joumal Columbian Cenitel The Daily Atlas Boston Shipping List The Daily Bee The Boston Daily Bee The Daily Evening Bee Boston Altas and Bee Boston The Commercial Bulletin Boston Atlas and Bee Daily Evening Traveller Boston Daily Traveller Boston Daily Evening Traveller
Philadelphia Bicknell's Reporter, Counterfei Detector and Prices Current Bicknell's Reporter, Counterfeit Detector and Philadelph a Prices Current Philadelphia Commercial List and Price Current Sunday Dispatch Philadelphia Press APPENDIX A: Data Sources DATA APPENDDC B
The data used in this dissertation are derived from microfilm copies of contemporary newspaper sources for the period l830-I860.Two types of data are used. Price and volume data, and bid ask spread data. For both sets of data the data for the last recorded day are used.
After making photocopies of the newspapers, these data were entered manually onto a computer. In electronic form these data are recorded in files that were named as follows:
The first two letters in the name of the file identify the city, (BO for Boston,
PH for Philadelphia, and NY for New York). The second set of letters identifies the data that are contained in the file, (PV for price and volume, and BA for bid ask spread). The next for digits in the name of the file identify the year for which data are recorded.
Thus the file named BOPV183S, contains price and volume data for the year
1835 for the Boston Stock Exchange. The following files are used for price and volume data for Boston: BOPV1835, BOPV1836, BOPV1839, BOPV1840,
BOPV1843-BOPV1862. Within each file the data for all trading on a particular day are reported. For Boston there was often trading on a second board. Data for this are recorded right below the data for the first board. The total for the day include all trading on a particular day.
94 The file named PHPV1832 contains price and volume data for the year 1832 for the Philadelphia Stock Exchange. The following files are used for price and volume data for Philadelphia: PHPV1832-PHPV1851. For Philadelphia there was often trading on a second board. Data for this are recorded right below the data for the first board. The total for the day include all trading on a particular day.
The file named NYPV1830 contains price and volume data for the year 1830 for the New York Stock Exchange. The following files are used for price and volume data for New York: NYPV1830-NYPV1832, NYPV1834-NYPV1865. For
New York there was often trading on a second board. Data for this are recorded right below the data for the first board. The total for the day include all trading on a particular day.
The file named BOBA1835, contains bid ask spread data for the year 1835 for the Boston Stock Exchange. The following files are used for bid ask spread data for Boston: BOBAI835, BOBA1836, BOB A1844-BOB A1862. The first column reports the name of the security, the second column the par value when available, the third the offered price and the fourth the asked price. The securities are reported divided into categories, such as Government Securities, City Securities, Railroad
Bonds, Banks, Insurance Companies, Railroad, Manufactories, Copper Mining
Companies, and Miscellaneous.
The file named PHBA1832, contains bid ask spread data for the year 1832 for the Philadelphia Stock Exchange. The following files are used for bid ask spread data for Philadelphia: PHBA1832-PHBA1835, PHBA1838-PHBA1856,
PHBA1860.
95 The first column reports the name of the security, the second column the par value when available, the third the offered price and the fourth the asked price. The securities are reported divided into categories, such as Loans, Bank Stocks,
Insurance Stocks, Canal Stocks, Railroad Stocks, and Miscellaneous Stocks.
The file named NYBA1830, contains bid ask spread data for the year 1830 for the
New York Stock Exchange. The following files are used for bid ask spread data for
New York: NYBA1830-NYBA1832, NYBA1834-NYBA1851. The first column reports the name of the security, the second column the par value when available, the third the offered price and the fourth the asked price. The securities are reported divided into categories, such as Public Securities, Banks, Marine Insurance, Fire
Insurance, Joint Stock Companies, Exchange (this referred to other exchanges such those in Amsterdam and France), and Gold and Silver (These were the categories in
1830). The categories in 1841 were. Stocks, Banks, Banking Associations, Trust
Companies, Foreign Institutions (these were institutions from other parts of the country such as United States Bank, Illinois State Bank, Louisiana Bank and Bank of Kentucky), Marine Insurance, Fire Insurance, Miscellaneous, Railroads, and
Specie. The categories in 1851 were. Government Securities, State Securities, City and Co., Banks, Trust Companies, Foreign Institutions (United States Bank,
Louisiana Bank and Illinois State Bank,), Marine Insurance, Fire Insurance
Companies, Miscellaneous, Railroads, and Bonds
96 In this table actual bid and ask prices as reported in the newspapers are recorded. The par value of the security traded was $50 in Philadelphia and $1DO in New York.
For New York the bid and ask price as recorded as reported. The spread is then calculated by subtracting the bid price from the ask price.
For Philadelphia the bid and ask price are recorded as reported. The bid and the ask price are then doubled to make the numbers comparab 8 to N.Y. The spread is then calculated by subtracting the bid price from the ask price.
All numbers used in the calculations are presented.
July 6,1846 Monday Bid Asked Spread Philadelphia 38.125 34.75 76.25 68.75
New York 68 68.5 0.5
July 13,1846 Monday Philadelphia 33 66
New York 66 67 1
July 20,1846, Monday Philadelphia 34.25 34.5 68.5 69 0.5
New York 68.75 69 0.25
Augusts, Monday, 1846 Philadelphia 30.875 34 61.75 68 6.25
New York 67.5 67.5 0
August 24,1846, Monday 33.375 Philadelphia 66.75
67 • New York
DATA APPENDIX C Bid Ask Spread a Reading Railroad Data Appendix C Continued Appendix C Continued Bid Ask Spreads Fleading Railroad Bid Asked Spread September 14,1846, Monday Philadelphia 31.75 32.125 63.5 64.25 0.75
New York 63.25 63.25 0
September 21,1846, Monday Philadelphia 32 32.25 64 64.5 0.5
New York 64
September 28,1846, Monday Philadelphia 32? 32?
New York 65 65.25 0.25
October 5,1846, Monday Philadelphia 32 32? 64
New York 65.25 65.75 0.5
October 12,1846, Monday Philadelphia 32? 32?
New York 64.5 64.75 0.25
October 12,1846, Monday Philadelphia 32 32.125 64 64.25 0.25
New York 63 63.5 0.5
Appendix C Continued Appendix C Continued Bid Ask Spreads Fleading Railroad Bid Asked Spread November 2,1846, Monday Philadelphia 31.125 32 62.25 64 1.75
Philadelphia 31.75 32 63.5 64 0.5
New York 63 63.25 0.25
New York 63 63.25 0.25
November 16,1846, Monday Philadelphia 31? 31?
New York 62.5 62.875 0.375
November 23,1846, Monday Philadelphia 31.375 31.5 62.75 62.5
New York 63
November 23,1846, Monday Philadelphia 31.5 31.625 6363.25 0.25
31.125 31.625 62.25 63.25 1
New York 63 63 0
New York 63 63 0
December 7,1846, Monday Phiiadelphia 31 317/8 62
New York 62.625 62.625 0
Appendix 0 Continued Appendix C Continued Bid Ask Spreads Rtsading Railroad
Bid Asked Spread December 14,1846, Monday Philadelphia 31.75 31? 63.5
New York 62.75 62.75 0
December 21,1846, Monday Philadelphia 31 31.125 62 62.25 0.25
New York 61.5
December 28,1846, Monday Philadelphia 31 31.125 62 62.25 0.25
New York 61.25 61.5 0.25
September 13,1852 Philadelphia 47.125 47.25 94.25 94.5 0.25
September 14,1852 New York 94.25 94.5 0.25
Key ?= The fraction following the price was illegible Date Name Location Original State of Original Patent Promoter Incorp. Capital 1/27/46 Magnetic New York, Morse Maryland $60,000 Morse Telegraph Philadelphia Corporation and Washington 6/27/46 New York and New York Smith Mass. & $160,000 Morse Boston and Boston Conn. Magnetic Telegraph Company 11/2/46 Washington New York Morse Alabama. $561,700 Morse and New and New North Orleans Orleans Carolina Telegraph Co. 1846 New York, New York Morse New York $200,000 Morse Albany and and Buffalo Buffalo Telegraph Company 12/26/46 Atlantic and Philadelphia O’Rielly Penn. $300,000 Morse/ Ohio and Pirate Telegraph Pittsburgh Company 8/20/47 Pittsburgh, Pittsburgh O’Rielly Indiana $138,000 Morse/ Cincinnati and and Pirate/ Louisville Louisville Bain Telegraph Company 12/10/47 Ohio and Louisville O’Rielly Indiana $200,000 Morse/ Mississippi and St. Pirate/ Telegraph Louis Bain Company 11/20/47- Lake Erie Buffalo, O’Rielly New York Morse/ 5/48 Telegraph Detroit, and Pirate/ Company Milwaukee Bain 2/28/48 New York and New York Smith New York Estimated at Morse Erie Telegraph and Buffalo $34,880 Company 1848 New Jersey Philadelphia Downing New Jersey $100,000 House Telegraph and New Company York 4/20/49 Boston and Boston and Downing Mass $120,000 House New York New York Telegraph Company DATA APPENDIX D: Entry and Exit of Major Telegraph Lines Source: Law, Emerging Technology, and Market Structure: The Development of the Telegraph Industry, 1838-1868. Table 2.1. Tomas W. Nonnenmacher, Phd. Dissertation. 1995. DATA APPENDDC D: Continued
lOI DATA APPENDIX D Continued 11/10/48 Western Baltimore, Morse Maryland Morse Telegraph Wheeling Company and Pittsburgh 1848-49 Erie and Buffalo and Smith New York $203,000 Morse Michigan Milwaukee Telegraph Company 1/49 People’s Cincinnati O’Rielly Barnes Telegraph and New &Zook/ Company Orleans Bain 1/49 Maine Portland and Alden Maine Morse Telegraph Calais Company 1849 Ohio, Indiana Dayton, O’Rielly Illinois $240,050 Morse and Illinois Toledo, Telegraph Indianapolis Company and Chicago 1849 North Washington Pennsylvani $125,000 Bain American and New a Telegraph York Company 4/11/49 Illinois and St. Louis, O’Rielly Illinois $500,000 Morse/ Mississippi Chicago, Pirate/ Telegraph Iowa, and Bain Company Indiana 4/19/49 New York and Boston and O’Rielly $42,300 Bain New England New York Telegraph Company 1850 New York New York O’Rielly New York Unknown Bain State and Buffalo Telegraph Company 1850 New York New York Selden New York $200,000 House State Printing and Buffalo Telegraph Company 1/51 New Orleans New Morse Kentucky, Morse and Ohio Orleans and Tenn., Miss. Telegraph Pittsburgh Company 4/1/51 N.Y. and Buffalo and Selden New York $360,000 House Mississippi St. Louis Valley Telegraph Company DATA APPENDIX D Continued
1 0 2 DATA APPENDIX D Continued 10/1/55 American East Coast New York $200,000 Telegraph switched to $740,000 Company NJ.in 1859 1/60 Southwestern Pittsburgh Green Kentucky, $600,000 Telegraph and New Tenn., Miss, Company Orleans and Louisiana 8/3/64 United States National New York $6 million Telegraph Company
103 Value of securities traded on each of the exchanges July NYSE Philadelphia Boston August 1832 37602.5 914.416667 September 1832 52533.75 2165.125 October 1832 119760 3213.83333 November 1832 547661 3287.125 December 1832 104954.25 3256.58333 January 1833 1833 3870.54167 February 1833 3969.25 March 1833 22475.3125 April 1833 15411.5 May 1833 9725 June 1833 36192.75 July 1833 13287 August 1833 78449 September 1833 70370.25 October 1833 4327.25 November 1833 35213 December 1833 10220 January 1834 1834 307611 7806 February 1834 159776 9538.5 March 1834 80541.25 12808.5 April 1834 232851.5 19438.125 May 1834 213782.5 9205.875 June 1834 282442 10863.25 July 1834 400164.25 2782.25 August 1834 376899.75 27323.75 September 1834 400192.75 35671.5 October 1834 38969.5 November 1834 34115.75 December 1834 13501.5 January 1835 1835 29368.25 February 1835 926204 62580.5 March 1835 696819 117777 April 1835 1285734.75 183473.125 May 1835 1070456.75 278943.375 June 1835 20484.25 July 1835 29620.6667 31554 August 1835 17937.3333 37026.375 September 1835 8598.25 5872.75 October 1835 112170.5 28454.5 November 1835 135200.375 December 1835 121188.5 January 1836 1836 142914 11548.25 February 1836 239484.75 29681.5 March 1836 117398 27191.5
Value of eecuritles traded on each of the exchangee DATA APPENDIX E: VALUE OF SECURITIES TRADED ON EACH EXCHANGE Data Appendix E: Value of Securftiea Traded on Each Exchange Continued 104 Data Appendix E: Value of Securit es Traded on Each Exchange Continued NYSE Philadelphia Boston April 1836 131867.5 9255.875 May 1836 527441.25 124888 16253.75 June 1836 545789 88992.5 94259 July 1836 308479 96477 August 1836 581964.5 133034.5 September 1836 460990.25 110788.5 October 1836 428597.75 62625 November 1836 459723 94702 December 1836 297381.25 42635 January 1837 1837 556455.5 153875.75 February 1837 426795.5 109678.25 March 1837 297174 99109.5 April 1837 137359 10055 May 1837 75103 4485.5 June 1837 63220.125 5084 July 1837 76023.5 11244 August 1837 177769.5 1148 September 1837 104535.125 5763 October 1837 129572.875 18404.2 November 1837 116846.25 71131 December 1837 150352.5 8449.5 January 1838 1838 97985.375 29354 February 1838 112161.875 18465 March 1838 74279.5 2861.5 April 1838 129706.5 30476.25 May 1838 388590.25 54488.25 June 1838 408477.75 55634.5 July 1838 282771.25 16314.5 August 1838 289916 12635 September 1838 449257.75 20224.25 October 1838 400363.5 24599.5 November 1838 285465.75 48470.5 December 1838 168037.375 6621.75 January 1839 1839 396742 21834.25 24932.25 February 1839 1839 695492.25 18094.25 38765 March 1839 334775 36773 April 1839 459067 25581.75 May 1839 181493 30512.5 June 1839 164348 19254 3688.25 July 1839 173692 25552 7942 August 1839 280748 39272.75 5822 September 1839 212796 24718.125 20296 October 1839 169019 54654.5 3553 November 1839 165687 15843 5555 December 1839 386453 9380 1455 January 1840 1840 212241 14728.5 10630.5 February 1840 240304 42940 23623
Data Appendix E: Value of SecuritIlee Traded on Each Exchange Continued 105 Data Appendix E: Value of Securit ea Traded on Each Exchange Continued NYSE Philadelphia Boston March 1840 204110 24393.5 26509.25 April 1840 137250 23555.25 15449 May 1840 158209 5624.75 13886.875 June 1840 149418 22227.25 39356 July 1840 293085 10355.25 12464.125 August 1840 97917 21259.5 September 1840 203762 30769.25 19129.75 October 1840 341840 7190.25 18011.25 November 1840 252481 43470 21891.75 December 1840 288337 206438 14842 January 1841 1841 299942.875 11281.625 February 1841 170492.5 16533 7795 March 1841 74172.5 10763.3333 17494.25 April 1841 54650.25 15518.6429 19695.25 May 1841 167765 12688.4722 9346.3 June 1841 119027.5 7293.85714 2857.5 July 1841 58009.875 5380.52083 8363.95 August 1841 95733.5 9206.41667 6044.875 September 1841 123272.5 13488.5417 18065.75 October 1841 68278.75 6686.25 6619 November 1841 189281 14593.875 7159 December 1841 149113.125 11691.8 12253.5 January 1842 1842 183129 10727.2 15024.25 February 1842 92340 7681.33333 4496.75 March 1842 123375 1426.85714 8479.25 April 1842 113548 4540 16238 May 1842 100133 4540.16667 17859 June 1842 55700 4696.66667 20214.63 July 1842 53816.25 2848.2 7799.7 August 1842 59387.75 1209.33333 8218.25 September 1842 61565 3161.75 31993.45 October 1842 18827 7615 5882.5 November 1842 38135 3548.625 7025 December 1842 75885 2183.7 8922 January 1843 1843 96448.5 4991.95 February 1843 77447.5 7811.79167 March 1843 74948 5537.75 April 1843 106738 17661 May 1843 402098.5 92252 June 1843 166756 27061 July 1843 55383.75 13317.75 August 1843 66713 27250.7083 September 1843 201230.5 59875.75 October 1843 131943.75 71811.75 18268.625 November 1843 331090.5 58293 December 1843 460121 53620.25 23962.375 January 1844 1844 228206.5 43729.25 36790.25
Data Appendix E: Value of Securit ee Traded on Each Exchange Continued Data Appendix E: Value of Securit ea Traded on Each Exchange Continued NYSE Philadelphia Boston February 1844 539537.75 43860 30668.625 March 1844 313543.75 96034.875 13558.5 April 1844 392763.5 48231.75 11984.875 May 1844 418688.25 86047 46041.75 June 1844 231000.5 23173 33263.75 July 1844 190248.75 23953 29699.5 August 1844 363173 25868.75 123224.875 September 1844 189626.375 46179 57173.125 October 1844 194587.5 27815 48280.75 November 1844 340675 55687.5 11406.75 December 1844 192403.75 53870.75 9403.125 January 1845 1845 202599.5 152632.5 16486.125 February 1845 389481 54975 24929.5 March 1845 198970.625 132123.875 25911.125 April 1845 297176.5 108988.25 29855.75 May 1845 204596.875 37550 19491.75 June 1845 173872.75 50164.25 119046.5 July 1845 160600 70777.125 49282.375 August 1845 225155.875 22144 131861.75 September 1845 301993.75 78481 181560.375 October 1845 230739.75 40925.75 96617.75 November 1845 471065.875 41310 103814.5 December 1845 297270.5 141244.75 112116.125 January 1846 1846 213375 87506 63997.875 February 1846 241779.25 75279.375 57957.5 March 1846 207873 31940.625 38471.25 April 1846 359006 28803 16880.75 May 1846 163048 55130.25 33860 June 1846 191367 27397 11293.75 July 1846 136028 56896 33856 August 1846 276050 19478.5 592.5 September 1846 212487 6642 22212.51 October 1846 231819 8465 25389.625 November 1846 172319 8546.75 14182.5 December 1846 191405 21475.25 8211.75 January 1847 1847 429947 52014.75 20420.625 February 1847 291663 90833 21642.125 March 1847 148423 28984 45660.25 April 1847 323568 103895.75 2595.625 May 1847 240917.5 78521 28193.75 June 1847 203368 163097.75 57819.5 July 1847 371585 33882.5 36603.625 August 1847 354375.625 57495 46814.5 September 1847 199296.25 33804.75 14182.875 October 1847 391490.625 72930 79628 November 1847 351836.875 75185 12638.125 December 1847 290795 42370 123513.25
Data Appendix E: Value of SecuritIlee Traded on Each Exchange Continued Data Appendix E; Value of Securit ee Traded on Each Exchange Continued NYSE Philadelphia Boston January 1848 1848 329811.625 58728 26692.375 February 1848 205159.175 59871.75 52821.5 March 1848 357288.625 51940 28147.75 April 1848 378080.625 12528 24942.75 May 1848 162406.375 37005.25 207153.625 June 1848 176518.75 54456 22585 July 1848 92159.375 36400 6967.375 August 1848 146950.25 18760 7031.25 September 1848 185801.125 19270 10970.25 October 1848 18607 6017 November 1848 215861.125 22833.25 62190.875 December 1848 376169.625 37944.5 7648.75 January 1849 1849 388090.75 44548 24865 February 1849 412763.5 137456 40840.375 March 1849 266543.75 44837 22585.25 April 1849 451911.125 132323 11638.75 May 1849 258622.625 48530 22759.625 June 1849 260020 33868 15295.25 July 1849 269249.25 44758 17538.5 August 1849 113563.25 33755 14378 September 1849 150495.625 67946 59273.75 October 1849 15129 66108.875 November 1849 419440.25 70503 December 1849 331223.625 72260 14444.25 January 1850 1850 274557.75 78905 26590.875 February 1850 263554 148634.75 38426.375 March 1850 460778.125 103659 31611.375 April 1850 389354.625 91144.5 22677.375 May 1850 339299.375 111792 58480.5 June 1850 198677.25 72463.625 29094.25 July 1850 294801.875 79217 41486.125 August 1850 205087.5 119886 20152 September 1850 540201.5 258124 58974 October 1850 691468.125 168143.25 104698.125 November 1850 695097.25 117989 65851.5 December 1850 626940 67724.5 89150.75 January 1851 1851 625476 210958.5 78494.5 February 1851 440195 99272 68911.75 March 1851 410294 191422 57058.375 April 1851 406447 65412 88116.2 May 1851 801675 128264 108566.875 June 1851 463018 71158.5 52599.75 July 1851 830057 44954.625 65903.625 August 1851 667392 79592.25 155303.125 September 1851 468145 73580 74038 October 1851 365995 43455 62701.25 November 1851 461873 111358 36718.125
Data Appendix E: Value of Securit ee Traded on Each Exchange Continuée Data Appendix E: Value of Securit!as Traded on Each Exchange Continued NYSE Philadelphia Boston December 1851 433000 57212.5 26977.5 January 1852 1852 551391 184571 49538.375 February 1852 601166 206787.875 72488.75 March 1852 547442 174356.25 78734.625 April 1852 971398 137197.5 118684.625 May 1852 507225 115267.5 107517.875 June 1852 819594 102971.5 88588.625 July 1852 598058 93426.5 48220.5 August 1852 518198 108109.75 53907.875 September 1852 558233 158170.75 46520.25 October 1852 910760 232244.625 73161.25 November 1852 886369 318476.25 114131.75 December 1852 889084 151013 108043.375 January 1853 1853 834953 249592.75 73439.5 February 1853 815233 213169.625 150297.625 March 1853 715677 157621.25 103419.875 April 1853 729880 221018.375 109803.875 May 1853 735102 137713.625 65770.25 June 1853 621969 116071.125 42913.375 July 1853 662234 26275 54363.5 August 1853 722710 162605.75 78707 September 1853 888220 89862.25 75787.5 October 1853 524136 43823.75 49700.625 November 1853 865641 46486.5 137963.875 December 1853 894498 58570.25 37580.25 January 1854 1854 520490.5 99588.375 101122.75 February 1854 922375.4 150082.125 46933.25 March 1854 783920 35341.25 35906.5 April 1854 529591 86782 29532.25 May 1854 1098964 58779.375 43181.25 June 1854 997862 43900.25 102781.375 July 1854 497910 48381.375 11052.75 August 1854 397918 65067.25 September 1854 622979 60915.5 13962.75 October 1854 479569 47939 November 1854 622800 74781.375 December 1854 612959 59417.75 January 1855 1855 678301.9 57486.125 February 1855 675357 117056.875 March 1855 759321.1 59842.375 April 1855 823205.8 93252.5 23876.625 May 1855 1112821 96437 43906.125 June 1855 1131329 82830.375 22816.625 July 1855 1206921 98431.125 8957.75 August 1855 1496274 124172.875 12626.75 September 1855 1577634 124438.125 39868.875 October 1855 1513988 76525.25 101580
Data Appendix E: Value of SecuritI ee Traded on Each Exchange Continued 109 Data Appendix E: Value of Securit es Traded on Each Exchange Continued NYSE Philadelphia Boston November 1855 821796.8 58054 17978.375 December 1855 1260370 31431.125 January 1856 1856 705062.8 91581.75 February 1856 1027448 121480.875 March 1856 848679.3 52946.5 April 1856 1734651 52598.5 May 1856 1097597 104411.5 June 1856 1725944 45127.5 6211.25 July 1856 1024233 37561.25 August 1856 961936.8 27619.5 September 1856 1807580 55717.75 6655.125 October 1856 2454518 70676.75 132275.125 November 1856 1969934 60271.25 103844 5/8 December 1856 1202490.75 58273.25 January 1857 1857 1495497 42219.75 February 1857 1544047 62182.875 March 1857 1495147.38 116796.125 19863.875 April 1857 1372871.25 79685.75 16400.5 May 1857 1533383.75 104727.125 7208.875 June 1857 1708941.5 72093.5 July 1857 1245958.5 8097.5 August 1857 821538.375 2818.75 September 1857 502672 6481 October 1857 523757.75 14985.25 November 1857 595817.5 5767 December 1857 595990.625 13835 January 1858 1858 1090855.88 60329.125 February 1858 1512525 59822.625 March 1858 941621.75 6234.875 April 1858 925531.5 33184.375 May 1858 891938.25 June 1858 466003.875 12928 July 1858 684042 58359 August 1858 778831.375 10571.875 September 1858 1183020.13 25481 October 1858 1203016.25 November 1858 920626.375 December 1858 905967.5 January 1859 1859 1475807.63 26013.625 February 1859 1451264.88 March 1859 1461110.5 April 1859 1028379.63 May 1859 625355 June 1859 825209.375 19809.5 July 1859 405710 139959.1875 August 1859 1705792.13 30305.125 September 1859 814147.625 17930.25
Data Appendix E: Value of Securitlee Traded on Each Exchange Continued 110 Data Appendix E: Value of Securit es Traded on Each Exchange Condnued NYSE Philadelphia Boston October 1859 887252.5 6739.25 November 1859 1335270 55 43342.25 December 1859 650043.625 69071.625 January 1860 1860 1293266.63 35148 February 1860 1056399.5 49237.375 March 1860 1464031 April 1860 1254512.88 May 1860 1025819 June 1860 691776 July 1860 1626479.38 August 1860 1699672.25 September 1860 2259831.38 October 1860 1559985 November 1860 731783.25 December 1860 681336.125 45072 January 1861 1861 596949.5 32636.25 February 1861 1721655.63 30371.125 March 1861 699290.625 135921 April 1861 629574.25 18352.875 May 1861 646513.625 11941.875 June 1861 572394 29704 July 1861 416251.25 August 1861 406832.25 September 1861 472651.25 October 1861 955071 November 1861 743188.25 December 1861 881891 January 1862 1862 1441188.75 February 1862 1205508.75 March 1862 783650 178454.125 April 1862 2019496.75 170340.875 May 1862 1034167.88 324211.625 June 1862 999574.5 142463 July 1862 1073869.25 166674.875 August 1862 1041026.13 156309.5 September 1862 3316137.13 258660 October 1862 2476122.63 379276 November 1862 2236807.75 309397.875 December 1862 3708067.25 363988.875 January 1863 1863 3805337.5 February 1863 4111580.5 March 1863 2737780.13 April 1863 7326733.75 May 1863 6356955.5 June 1863 4146739.5 July 1863 5091655.25 August 1863 5230159.75
Data Appendix E: Value of SecuritIlee Traded on Each Exchange Continued Ill Data Appendix E: Value of Securlti a t Traded on Each Exchange Continued NYSE Philadelphia Boston September 1863 5258341.5 October 1863 7493166.5 November 1863 5487706.25 December 1863 4739938.13 January 1864 1864 February 1864 Marct^ 1864 April 1864 May 1864 June 1864 3287157.75 July 1864 3752084.5 August 1864 3774670.5 September 1864 6598423.75 October 1864 3184327.25 November 1864 3232762.5 December 1864 3969405 January 1865 1865 3152980.63 February 1865 3477645.5 March 1865 3604660 April 1865 2155200.25 May 1865 2587040 June 1865 1752466.25 July 1865 2569057.5 August 1865 1257347 September 1865 October 1865 November 1865 1855076.5
112 Commerce of Princ pal States Imports Imports Imports Exports Exports Exports Massuchu! New York Pennsylvania Massuchu; New York Pennsylva 1821 14826732 23629246 8158922 12484691 13162917 7391767 1822 18337320 35445628 11874170 12598525 17100482 9047802 1823 17607160 29421349 13696770 13683239 19038990 9617192 1824 15378758 36113723 11865531 10434328 22897134 9364893 1825 15848141 49639174 15041797 11432987 35259261 11269981 1826 17063482 38115630 13551779 10098862 21947791 8331722 1827 13370564 38719644 11212935 10424383 23834137 7575833 1828 15070444 41927792 12884408 9025785 22777649 6051480 1829 12520744 34743307 10100152 8254937 20119011 4089935 1830 10453544 35624070 8702122 7213194 19697983 4291793 1831 14269056 57077417 12124083 7733763 25535144 5513713 1832 18118900 53214402 10678358 11993768 26000945 3516066 1833 19940911 55918449 10451250 9683122 25395117 4078951 1834 17672129 73188594 10479268 10148820 25512014 3989746 1835 19800373 88191305 12389937 10043790 30345264 3739275 1836 25681462 118253416 15068233 10384346 28920438 3971555 1837 19975667 79301722 11680111 9728190 27338419 3841599 1838 13300925 68453206 9360371 9104862 23008471 3477151 1839 19385223 99882438 15050715 9276085 33268099 5255415 1840 16513858 60440750 8469882 10186261 34264080 6820145 1841 20318003 75713426 10346698 11487343 33139833 5152501 1842 17986433 55875604 7385758 9807116 27576778 3776727 1843 16789452 31356540 2760630 4431681 13443234 2071945 1844 20296087 65079510 7217267 9096286 32861540 3535256 1845 22781024 70909085 8159227 10351030 36175298 3574363 1846 24190963 74254283 7989396 10313118 36935413 4751005 1847 34477008 84167352 9587516 11248462 49844368 8544391 1848 28647707 94525141 12147584 13419699 53351157 5732333 1849 24745917 92567369 10645500 10264862 45963100 5343421 1850 30374684 111123524 12066154 10681763 52712789 4501606 1851 32715327 141546538 14168761 12352682 86007019 5356036 1852 33504789 132329306 14785917 16546499 87484456 5828571 1853 41367956 178270999 18834410 16895304 66030355 6255229 1854 40326711 189379211 16054464 23700313 88804705.7 6050479 1855 34620709 162583119 13782848 23551284 88246295.5 6012434 1856 41661068 195645515 16585685 27985651 104861799 7144488 1857 44840083 222550307 17850630 28326918 124389467 7135156 1858 40432710 170280887 12890369 20979853 100702661 5987251
DATA APPENDIX F: VALUED F EXPORT!lAND II«PORTS Source:Fordata upto 1853. The Compendium to the 1850 U.S. Census. Published 1856. Source: For data from 1856 onwards. The Statistical Abstract of the United States. Published in 1879. First session of the 46th Congress of the House of Representatives meeting in 1878. The report on "Finance, Coinage, Commerce, Immigration, Shipping, The Postal Service, Population, DATA APPENDIX F: Continued 1 113 DATA APPENDIX F: Continued
Imports Imports Imports Exports Exports Exports Massuchu; New York Pennsylvania Massuchu; New York Pennsylva 1859 41174670 218231093 14517542 16172120 106478429 5345105 1860 39366560 233692941 14626801 15168015 138145644 5598267 1861 44014151 222966274 12625448 15448464 150691451 9975078 1862 23957621 142215636 5817190 13871135 162780045 11082119 1863 27083272 177254415 7392785 21354061 239287331 12268675 1864 30263853 229506499 9141672 16625110 223972862 10212700 1865 24540494 154139409 7319520 21428641 242006891 11053465
114 Population City City City New York 4 Boston Philadelphia 1820 123706 43298 63802 1830 202589 61392 80462 1840 312710 93385 93665 1850 515547 136881 121376 1860 813669 177840 565529 1870 942292 250526 674022
DATA APPENDIX G: 1CITYPOPl LATION Source; U.S. Census. 1820-1880.1
115 Bid Ask Spread NYSE Boston Philadelphia March 1830 0.021333 April 1830 0.023372 May 1830 0.01852 June 1830 0.051538 July 1830 0.011891 August 1830 0.016848 September 1830 0.01966 October 1830 0.017613 November 1830 0.021731 December 1830 0.027225 January 1831 1831 0.028769 February 1831 0.029937 March 1831 0.022461 April 1831 0.021472 May 1831 0.016931 June 1831 0.018714 July 1831 August 1831 0.016317 September 1831 October 1831 0.017321 November 1831 0.021061 December 1831 January 1832 1832 February 1832 0.022107 March 1832 April 1832 May 1832 0.021494 June 1832 0.025549 July 1832 0.050102 August 1832 0.02579 0.059638 September 1832 0.023644 0.056646 October 1832 0.023212 0.056955 November 1832 0.022623 0.074583 December 1832 0.021052 0.071228 January 1833 1833 0.056277 February 1833 0.074565 March 1833 0.071294 April 1833 0.06738 May 1833 0.071293 June 1833 0.084014 July 1833 0.077306 August 1833 0.068236 September 1833 0.060321 October 1833 0.060577 November 1833 0.078265
Bid Ask Spreads DATA APPENDIX H: BID ASH[SPREADS Data Appendix H: Continued 116 Data Appendix H: Bid Aak Spraada conitinued NYSE Boston Philadelphia December 1833 0.110246 January 1834 1834 0.025585 0.097128 February 1834 0.031911 0.099114 March 1834 0.02102 0.090169 April 1834 0.019612 0.090107 May 1834 0.019916 0.069143 June 1834 0.017915 0.102362 July 1834 0.018302 0.124543 August 1834 0.112591 September 1834 0.016446 0.097959 October 1834 0.068351 November 1834 0.080903 December 1834 0.085596 January 1835 1835 0.105997 February 1835 0.02481 0.089368 March 1835 0.015298 0.07744 April 1835 0.013346 0.043804 May 1835 0.031954 0.058595 June 1835 0.057595 July 1835 0.018347 0.071569 August 1835 0.017691 0.1152 September 1835 0.015627 0.100789 October 1835 0.018694 0.068162 November 1835 0.019779 0.095222 December 1835 0.020548 0.082579 January 1836 1836 0.02147 February 1836 0.019338 March 1836 0.018451 April 1836 0.017755 May 1836 0.031824 0.023149 June 1836 0.031999 0.019541 July 1836 0.03093 0.017088 August 1836 0.076236 0.01538 September 1836 0.046021 0.015036 October 1836 0.029152 November 1836 0.027287 December 1836 0.024188 January 1837 1837 0.028429 February 1837 0.034629 March 1837 0.044193 April 1837 0.075305 May 1837 0.061661 June 1837 0.059446 July 1837 0.048488 August 1837 0.049088 September 1837 0.042598 October 1837 0.053191
Data Appendix H: Continued 117 Data Appendix H: Bid Ask Spreads conillnued NYSE Boston Phlladelpha November 1837 0.042288 December 1837 0.049693 January 1838 1838 0.053913 0.130625 February 1838 0.055627 0.10849 March 1838 0.050447 0.120872 April 1838 0.043621 0.108727 May 1838 0.040709 0.100284 June 1838 0.034661 0.099383 July 1838 0.027224 0.099214 August 1838 0.032457 0.096815 September 1838 0.034967 0.087977 October 1838 0.048355 0.075106 November 1838 0.058144 0.084102 December 1838 0.031648 January 1839 1839 0.036155 February 1839 1839 0.042288 March 1839 0.038707 April 1839 0.041255 0.12544 May 1839 0.025704 0.126454 June 1839 0.037683 0.152091 July 1839 0.032721 0.136054 August 1839 0.041541 0.142312 September 1839 0.057162 0.116444 October 1839 0.060596 0.109146 November 1839 0.054588 0.117466 December 1839 0.076765 0.142175 January 1840 0.097439 0.114624 February 0.12746 0.138128 March 1840 0.08093 0.167137 April 1840 0.076105 0.125103 May 1840 0.070911 0.116199 June 1840 0.099421 0.101308 July 1840 0.123163 0.134707 August 1840 0.061957 0.07793 September 1840 0.061543 0.11626 October 1840 0.063746 0.158685 November 1840 0.053909 0.084453 December 1840 0.067434 0.073494 January 1841 1840 0.068498 0.108847 February 1840 0.032981 0.083227 March 1841 0.057751 0.104776 April 1841 0.078322 0.096636 May 1841 0.065249 0.17454 June 1841 0.062117 0.184521 July 1841 0.178128 August 1841 0.131313 September 1841 0.0816 0.140487
Data Appendix H: Continued 118 Data Appendix H: Bid Aak Spraada conitinued 1 NYSE Boston Philadelphia October 1841 0.096114 0.114772 November 1841 0.119004 0.119854 December 1841 0.125664 0.138442 January 1842 1841 0.174317 0.200621 February 1841 0.163563 0.193674 March 1842 0.168929 0.118497 April 1842 0.211883 0.179556 May 1842 0.135211 0.201599 June 1842 0.111809 0.124187 July 1842 0.193532 0.313292 August 1842 0.354236 September 1842 0.298516 October 1842 0.331213 November 1842 0.285942 December 1842 0.328828 January 1843 1842 0.059959 0.336463 February 1842 0.057381 0.285457 March 1843 0.053055 0.27776 April 1843 0.020617 0.407989 May 1843 0.027839 0.110823 June 1843 0.055522 0.197571 July 1843 0.041344 0.144998 August 1843 0.051244 0.140391 September 1843 0.071143 October 1843 0.143342 November 1843 0.136575 December 1843 0.131401 January 1844 1843 0.031091 0.064347 February 1843 0.017694 0.093526 March 1844 0.028796 0.048964 April 1844 0.019039 0.064566 May 1844 0.060443 June 1844 0.080562 July 1844 0.062074 August 1844 0.027109 0.049912 September 1844 0.018986 0.078294 October 1844 0.019393 0.045555 November 1844 0.026283 0.059676 December 1844 0.074912 0.020949 0.113734 January 1845 1844 0.020743 0.036501 February 1844 0.04691 March 1845 0.018698 0.046105 April 1845 0.020108 0.045913 May 1845 0.021962 0.04069 June 1845 0.015399 0.037154 July 1845 0.074701 0.020779 0.051143 August 1845 0.035587 0.021137 0.065703
Data Appendix H: Continued 119 Data Appendix H: Bid Ask Spreads conitinued NYSE Boston Philadelphia September 1845 0.031093 0.01809 0.06186 October 1845 0.038349 0.018597 0.058774 November 1845 0.023514 0.032037 0.050985 December 1845 0.041595 0.100455 January 1846 1845 0.041572 February 1845 0.035941 March 1846 0.032827 0.039247 April 1846 0.060454 May 1846 0.048182 June 1846 0.016178 0.033949 0.041791 July 1846 0.043648 0.115031 August 1846 0.030983 0.040731 September 1846 0.037158 0.105996 October 1846 0.053002 0.077366 November 1846 0.067189 0.071718 December 1846 0.074612 0.078001 January 1847 1846 0.053088 0.071277 February 1846 0.042721 0.085336 March 1847 0.035272 0.075829 April 1847 0.036286 0.080367 May 1847 0.036841 0.070981 June 1847 0.058008 0.052694 July 1847 0.02462 0.043979 August 1847 0.02552 0.080717 September 1847 0.032121 0.034564 0.065989 October 1847 0.034007 0.03201 0.10082 November 1847 0.053575 0.053882 December 1847 0.03803 0.047693 January 1848 1847 0.03115 0.036254 0.043762 February 1847 0.057576 0.041296 March 1848 0.030163 0.040966 0.038367 April 1848 0.047804 0.040361 May 1848 0.044982 0.047413 June 1848 0.055738 0.054037 July 1848 0.057164 0.054184 August 1848 0.056504 0.042785 September 1848 0.05886 0.03715 October 1848 0.067386 0.039538 November 1848 0.069548 0.064433 0.027546 December 1848 0.03117 0.070535 0.03577 January 1849 1848 0.048228 0.082212 February 1848 0.025706 0.060172 0.027033 March 1849 0.01989 0.051959 0.032239 April 1849 0.039855 0.052593 0.032931 May 1849 0.020114 0.054645 0.028896 June 1849 0.043058 0.041354 0.027756 July 1849 0.053104 0.028227 0.033558
Data Appendix H: Continued 120 Data Appendix H: Bid Ask Spraada com tinued NYSE Boston Phlladelph a August 1849 0.022316 0.029789 0.023599 September 1849 0.030086 0.032908 0.025935 October 1849 0.042643 0.032497 0.051189 November 1849 0.043874 0.031118 0.060198 December 1849 0.014877 0.026924 0.04997 January 1850 1850 0.025307 0.0352 0.054424 February 1850 0.025448 0.036119 0.113095 March 1850 0.025753 0.031648 0.122349 April 1850 0.010845 0.042566 0.090372 May 1850 0.019149 0.036424 0.115113 June 1850 0.011383 0.052186 0.08872 July 1850 0.01678 0.038188 0.02181 August 1850 0.010121 0.034339 0.029225 September 1850 0.014958 0.042794 0.030198 October 1850 0.021469 0.049156 0.030491 November 1850 0.016074 0.054516 0.025084 December 1850 0.020345 0.047631 0.017566 January 1851 1851 0.019612 0.043679 0.024728 February 1851 0.033751 0.071542 0.018339 March 1851 0.02286 0.053585 0.017161 April 1851 0.004689 0.057561 0.013036 May 1851 0.015006 0.063322 0.013562 June 1851 0.038523 0.040886 0.016748 July 1851 0.01709 0.043326 0.018982 August 1851 0.03823 0.040711 0.019673 September 1851 0.032318 0.048983 0.026203 October 1851 0.024727 0.053216 0.058556 November 1851 0.025872 0.043899 0.032808 December 1851 0.051383 0.022685 January 1852 1852 0.016514 0.02936 February 1852 0.029989 March 1852 0.019814 0.027349 April 1852 0.016796 0.028066 May 1852 0.008553 0.009105 June 1852 0.017511 July 1852 0.021884 August 1852 0.028039 September 1852 0.013945 0.023273 October 1852 0.029089 November 1852 0.028157 December 1852 0.029791 January 1853 1853 0.032727 February 1853 0.029232 March 1853 0.026221 April 1853 0.025884 May 1853 0.036027 June 1853 0.03737
Data Appendix H: Continued 121 Data Appendix H: Bid Aak Spraada coni Inwed NYSE Boston Phlladelph a July 1853 0.027798 August 1853 0.031087 September 1853 0.017982 October 1853 0.015804 November 1853 0.017993 December 1853 0.016796 January 1854 1854 0.018151 February 1854 0.018722 March 1854 0.018282 April 1854 0.016417 May 1854 0.009277 June 1854 0.02122 July 1854 0.029098 August 1854 0.044266 September 1854 0.041804 October 1854 0.033056 November 1854 0.041529 December 1854 0.028917 January 1655 1855 0.032764 February 1855 0.025539 March 1855 0.025317 April 1855 0.024821 May 1855 0.017634 June 1855 0.026917 July 1855 0.029022 August 1855 0.028508 September 1855 0.034423 October 1855 0.031144 November 1855 0.030035 December 1855 0.055526 January 1856 1856 0.022922 February 1856 0.025165 March 1856 0.027581 April 1856 0.02719 May 1856 0.027255 June 1856 0.021965 July 1856 0.027643 August 1856 0.024671 September 1856 0.02369 October 1856 0.021799 November 1856 0.046153 December 1856 0.045391 January 1857 1857 0.03343 February 1857 0.064855 March 1857 0.061149 0.017701 April 1857 0.040155 0.019605 May 1857 0.055836 0.03433
Data Appendix H: Continued Data Appendix H: Bid Ask Spreads conitinued NYSE Boston Philadelphia June 1857 0.033533 July 1857 0.099038 0.042397 August 1857 0.064134 0.028381 September 1857 0.143836 0.134968 October 1857 0.18679 0.112943 November 1857 0.105238 December 1857 0.141125 January 1858 1858 0.089518 February 1858 0.103451 March 1858 0.103294 April 1858 0.063815 May 1858 0.098589 June 1858 0.080066 July 1858 0.046444 0.100588 August 1858 0.097757 0.078347 September 1858 0.197654 0.061277 October 1858 0.041958 November 1858 0.027315 December 1858 January 1859 1859 February 1859 0.0435 March 1859 0.044628 April 1859 May 1859 0.038274 June 1859 0.062867 July 1859 0.092938 August 1859 September 1859 October 1859 November 1859 December 1859 January 1860 I860 February 1860 March 1860 April 1860 May 1860 June 1860 July 1860 August 1860 September 1860 0.021409 October 1860 0.070208 November 1860 0.098087 December 1860 0.158952 January 1861 1861 0.045789 February 1861 0.061217 March 1861 0.058218 April 1861 0.150608
Data Appendix H: Continued 123 Data Appendix H: Bid Aak Spraada coni tinued NYSE Boston Philadelphia May 1861 0.159203 June 1861 July 1861 August 1861 September 1861 October 1861 November 1861 December 1861 January 1862 1862 February 1862 March 1862 0.022522 April 1862 0.022001 May 1862 0.013255 June 1862 0.019431 July 1862 0.014322 August 1862 0.017188 September 1862 0.02171 October 1862 0.019597 November 1862 0.015952 December 1862 0.016694
124 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type Indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1846 New York Volume Price PXV Philadelphia Volume Price PXV Jan.31 1846 100 59 5900 Jan.31 1846 100 29 2900 S 50 59 2950 50 29 1450 50 29 1450 » 50 29 1450 100 29 2900 100 29 2900 50 29 1450 50 29 1450 100 29 2900 50 29 1450
Feb.28,1846 250 70 17500 Feb. 28,1846 150 34.25 5137.5 S 100 68 6800 50 34.25 1712.5 50 68 3400 50 34.25 1712.5 100 69.5 6950 50 34.25 1712.5
March 31,1846 100 72.75 7275 March 31,1846 T
April 28,1846 250 69 17250 April 28,1846 100 34.75 3475 T 50 69 3450 ICO 69 6900 100 70 7000 50 71.25 3562.5
May, 30,1846 250 64 16000 May. 30,1846 S 50 64 3200 100 64 6400
DATAAPPENCNX 1: Reading Railroad data for 1846. Data Appendix 1: Continuad. 125 Data Appandix 1: Read ng Railroad dalj for 1846 Continuad.
New York Volume Price PX V Philadelphia Volume Price PX V June, 29,1846 100 68 6800 June, 29,1846 50 34 1700 M 250 69 17250 100 68 6800
July, 30,1846 150 67 10050 July, 30,1846 50 33 1650 R 150 67 10050 50 33 1650 100 71 7100 50 33 1650 50 67.125 3356.3 50 33 1650 100 67.125 6712.5 50 33 1650 100 33.875 3387.5
Aug. 28,1846 300 65.25 19575 Aug. 31,1846 F 250 65.75 16438 150 66 9900 50 66 3300
Sept. 30,1846 75 64.625 4846.9 Sept 30,1846 W 25 64 1600 50 64.375 3218.8 50 64.375 3218.8 100 64.5 6450 100 65 6500 50 65 3250
Oct. 31,1846 225 63.5 14288 Oct. 31,1846 S 100 63.375 6337.5 50 63.375 3168.8
Nov. 30,1846 50 63 3150 Nov. 30,1846 M 20 63.5 1270 50 63 3150
Dec. 30,1846 50 62 3100 Dec. 30.1846 50 30J5 1537.5 W 25 62.5 1562.5
126 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1847 New York Volume Price PX V Philadelphia Volume Price PX V Jan. 30,1847 170 63 10710 Jan. 30.1847 15 32 480 S 25 63.75 1593.8 50 32 1600 50 64 3200 50 32.751637.5 100 64.125 6412.5 50 32.75 1637.5 50 32.751637.5 21916 6992.5
Feb. 27.1847 30 59 1770 Feb. 27. 1847 50 29 1450 S 250 59 14750 50 29 1450 250 59.5 14875 50 29 1450 250 60 15000 50 29 1450 50 60 3000 50 29 1450 50 59.375 2968.8 150 59.375 8906.3 7250 100 59 5900 50 59.1252956.3 100 59.6255962.5 100 60.25 6025
82114
March. 30.184" 50 59 2950 March. 27.184 SO 29 1450 T 50 58.875 2943.8 50 58.75 2937.5 100 59 5900
14731
DATA APPENDIX J: Reading Rtailroad data for 1847. Data Appendix J: Continued. 127 Data Appendix J: Read Ing Rairoad da la tor 1647 Continuad.
New York Volume Price PX V Philadelphia Volume Price PX V April. 30.1847 100 59 5900 April. 30.1847 100 30 3000 F? 50 59 2950 100 30 3000 200 60 12000 50 30 1500 100 59.75 5975 150 30 4500 5059.752987.5 15 30 450 100 59.25 5925 50 29.88 1493.8 50 29 1450 35738 15394
May. 31.1847 200 58 11600 May. 31.1847 50 28.75 1437.5 M 10057.8755787.5 100 28.75 2875 150 58.25 8737.5 50 58 2900 4312.5 50 58.125 2906.3 50 58 2900 100 58.375 5837.5 150 57.758662.5
49331
June. 28.1847 June.30.1847 50 33 1650 M 50 33 1650 50 33 1650 50 33 1650 500 33 16500 100 33.75 3375 100 33.75 3375 ISO 33.75 5062.5 350 33.75 11813
46725
July. 30.1847 50 66.75 3337.5 July. 30.1847 50 33.125 1656.3 F 50 66.75 3337.5 50 33.38 1668.8 50 66.5 3325 100 66.5 6650 3325 100 66.5 6650 100 66.75 6675 100 66.5 6650
36625
Data Appandix J: Conidnuad. 128 Data Appandix J: Reading Rai road data for 18 147 Continuad.
New York Volume Price PXV Philadelphia Volume Price PXV Aug. 31.1847 150 66 9900 Aug. 31,1847 50 33.38 1668.8 T 50 66.75 3337.5 40 33.375 1335 50 67 3350 3003.8 16588
Sept. 30.1847 200 63.75 12750 Sept. 30.1847 100 31.88 3187.5 R
Oct. 29.1847 50 54.75 2737.5 Oct. 29.1847 100 27 2700 F 150 54.625 8193.8 100 27 2700 100 54.5 5450 100 27 2700 50 54.5 2725 100 27 2700 50 54.25 2712.5 50 27 1350 100 54.25 5425 50 27 1350 500 54.25 27125 500 54.375 27188 13500 200 54.75 10950 100 54.25 5425
97931
Nov. 30.1847 500 59.875 29938 Nov. 30.1847 50 30.25 1512.5 T 450 60 27000 100 60.25 6025 325 60.5 19663 25 60.25 1506.3
84131
Dec. 30.1847 150 59 8850 Dec. 30.1847 50 29 1450 T 150 59 8850 250 29 7250 75 59.25 4443.8 100 29.25 2925 50 59.375 2968.8 100 29.25 2925 100 59.5 5950 100 29.25 2925 50 58.752937.5 50 29.25 1462.5 200 59 11800 150 58.5 8775 18938
54575
129 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Vaiues in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular board The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1848 New York Volume Price PX V Philadelphia Volume Price PXV Jan. 27,1848 100 50.5 5050 Jan.31,1848 100 24 2400 R 100 49.75 4975 100 51.5 5150 200 50 10000 200 50 10000 250 50 12500 200 50 10000 150 50.125 7518.8
65194
Feb.29.1848 50 42.75 2137.5 Feb. 28 ??, 184100 21 2100 T 150 42.5 6375 50 21.625 1081.3
8512.5 3181.3
March, 3 1 ,184(Ï March, 31,1841 100 18.38 1837.5 F 50 18.13 906.25
2743.8
April, 29,1848 100 32.75 3275 Aprii, 29,1848 S 100 33 3300 50 33 1650 100 33.5 3350
11575
DATAAPPENtNXK: Reading;tailroad data for 1848. Data Appandix K: Continuad. 130 Data Appandix K: Reading Railroad data for 18 148 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV May, 31.1848 100 36.25 3625 May, 31,1848 W 150 36.5 5475 25 37 925 500 36.5 18250
28275
June 27,1848 June 27,1848 T
July, 31,1848 July, 31,1848 M
Aug.30,1848 200 32 6400 Aug.30,1848 50 16 800 W 30 16 480
1280
Sept. 30,1848 100 31.375 3137.5 Sept. 30,1848 50 15.75 787.5 S 50 32 1600 50 15.63781.25 300 31.5 9450 1568.8 14188
Oct. Oct. 31
Nov. 30,1848 50 28.25 1412.5 Nov. 30,1848 100 14.25 1425 R 100 28.5 2850 100 14.25 1425 25 28.75 718.75 24 28.875 693 2850 50 28.25 1412.5 100 28.375 2837.5
9924.3
Dec. 29.1848 1100 28 30800 Dec.29.1848 2 t4 28 F 100 28.5 2850 23 14.25 327.75 50 27.5 1375 100 28.75 2875 355.75 100 28.25 2825
40725 131 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and irice. The par value of the security is $100 In New York and $50 in Philadelphia Values In bold type Indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1849 New York Volume Price PXV Philadelphia Volume Price PXV Jan. 30,1849 100 25 2500 Jan. 30,1849 50 12.75 637.5 T 100 25 2500 50 25.25 1262.5 100 26 2600 100 25.25 2525 50 25 1250 100 25 2500 300 26 7800 100 25 2500
25438
Feb. 27.1849 50 28.25 1412.5 Feb.27,1849 100 14 1400 T 150 28.5 4275 100 14 1400 150 28.5 4275 SO 14 700 250 29.5 7375 100 14 1400 100 30 3000 100 14.131412.5 100 14.25 1425 20338 7737.5
March 31,1849 150 32.5 4875 March 31,1849 50 16.5 825 S 100 33.75 3375 50 16.5 825 50 16.5 825 8250 50 16.5 825 50 16.5 825
April 30,1849 300 32 9600 April 30,1849 4125 M
DATA APPENDIX L: Reading Ftailroad data for 1849. Data Appendix L: Continued. 132 Data Appandix L: Raad Ing Railroad data for Ifl 149 Continuad.
New York Volume Price PX V Philadelphia Volume Price PXV May 31,1849 May 31,1849 50 15.63781.25 R 100 15.75 1575 50 15.75 787.5 50 15.75 787.5 50 16 800 100 16 1600 50 15.625 781.25 15 15.75 236.25
7348.8
June 29,1849 200 34.75 6950 June 29,1849 100 17.25 1725 F 100 34.75 3475 100 17.25 1725 50 34.75 1737.5 50 17 850 50 17 850 12163 100 17 1700 200 17 3400
10250
July 30,1849 300 36.25 10875 July 30.1849 M 3000 36.25 108750 200 36.5 7300
126925
Aug. 31,1849 100 33.875 3387.5 Aug.31,1849 50 17 850 F 200 34 6800 50 17 850 50 17 850 10188 50 17 850 50 17 850 100 17 1700
5950
Sept. 29,1849 100 32.875 3287.5 Sept. 29,1849 50 16 800 S 50 33.875 1693.8 100 16 1600
4981.3 2400
Data Appandix L: Continuad. 133 Data Appendix L: Reading Railroad data for 1C 149 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Oct. Oct. 31
Nov. 30.1849 100 32.5 3250 Nov. 30.1849 50 16.25 812.5 F 200 32.375 6475 30 16.25 487.5 850 32.25 27413 50 16.25 812.5 100 32.375 3237.5 50 16.25 812.5 100 32.25 3225 100 16.25 1625 300 32.375 9712.5 50 16.38 818.75 200 32.5 6500 50 16 800 100 32.125 3212.5 700 32.25 22575 6168.8 500 32.125 16063 50 32 1600 750 32.5 24375
127638
Dec. 29,1849 500 31 15500 Dec. 29.1849 100 16 1600 S 1000 31 31000 100 16 1600 200 31 6200 100 16 1600 100 31 3100 50 16 800 200 31 6200 100 31 3100 5600 500 31 15500 100 31 3100
83700
134 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date Indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1850 New York Volume Price PXV Philadelphia Volume Price PXV Jan.31,1850 50 31.75 1587.5 Jan. 31,1850 50 15.875 793.75 350 31.75 11113 50 16 800 50 32 1600 550 16 8800 400 32.25 12900 50 15.875793.75 100 32.25 3225 100 15.8751587.5 200 32 6400 100 15.8751587.5 200 32.25 6450 50 15.875793.75 100 32.125 3212.5 200 15.875 3175 100 32 3200 100 31.875 3187.5 18331
52875
Feb. Feb. 28 250 18.25 4562.5 150 18.25 2737.5 100 18.25 1825 100 18.25 1825 600 18.25 10950 100 18 1800
23700
30 Mar. 50 41 2050 30 Mar. S 100 41 4100 200 40.75 8150
14300
DATA APPENDIX M: Reading Railroad data for 1850. Data Appendix M: Continued. 135 Data Appendix M: Reading Railroad data for 1850 Continued.
New York Volume Price PX V Philadelphia Volume Price PX V 30 Apr., 1850 100 47 4700 30 Apr.. 1850 50 23.751187.5 T 50 47 2350 50 23.751187.5 100 47 4700 50 23.751187.5 100 47.5 4750 250 23.755937.5 50 23.75 1187.5 16500 100 23.75 2375 200 23.875 4775 100 23.875 2387.5 100 23.75 2375 50 23.875 1193.8
23794
31 May. 550 48.25 26538 31 May. 100 24 2400 F 200 48.25 9650 100 24.132412.5 450 48.38 21769 100 24.132412.5 100 24.132412.5 57956 100 24.132412.5 50 24.13 1206.3 250 24.136031.3 200 24.13 4825 250 24 6000 100 24 2400 100 24 2400 500 24.125 12063
46975
29 Jun. 100 43.75 4375 29 Jun. 150 21.75 3262.5 S 500 43.63 21813 300 22 6600 100 44 4400 300 38.75 11625 9862.5 200 39.75 7950
50163
31 July. 100 23.875 2387.5 50 24 1200 50 24.125 1206.3 300 24.25 7275
12069
Data Appendix IN: Continued. Data Appendix M: Reading Ra iroad data for 11 ISO Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Aug.31,1850 100 50.875 5087.5 Aug. 31.1850 50 25 1250 S 100 51.125 5112.5 50 25.5 1275 200 51 10200 100 25 2500 200 51.125 10225 50 25 1250 450 51 22950 100 25 2500 100 51.125 5112.5 100 25 2500 250 51.375 12844 50 25 1250 250 51 12750 150 25.625 3843.8 150 25.625 3843.8 84281 350 25 8750 25 25 625 100 25 2500
32088
Sept. 30 100 64.75 6475 Sept. 30 50 32 1600 M 350 64 22400 200 32.25 6450 200 64.75 12950 100 32 3200 55 64 3520 400 31.875 12750 150 64 9600 300 31.75 9525 200 64.5 12900 50 31 1550 300 65 19500 500 31.75 15875 300 65 19500 100 64.875 6487.5 50950 50 64.25 3212.5 100 64 6400
122945
Oct. 31 500 66.25 33125 Oct. 31 100 33 3300 R 100 66.5 6650 150 33 4950 500 66.5 33250 350 33.5 11725 200 66.75 13350 200 66.875 13375 19975
99750
Data Appendix M: Continued. Data Appendix M: Reading Raiiroad data for 11 150 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV Nov. 30,1850 225 72.5 16313 Nov. 30.1850 800 36.25 29000 S 600 72.25 43350 350 36.13 12644 300 72 21600 600 36.25 21750 500 72 36000 400 36.13 14450 500 72.5 36250 1 100 72.5 7250 77844 215 72.375 15561 200 72.5 14500 100 72.5 7250 100 72.25 7225 500 72.375 36188 500 72.5 36250 200 72.25 14450
292186
Dec. 30 100 73.75 7375 Dec. 30 100 36.875 3687.5 M 135 73.625 9939.4 100 36.875 3687.5 750 73.5 55125 50 36.875 1843.8 100 73.625 7362.5 100 36.75 3675 50 73.625 3681.3 50 36.631831.3 150 73 10950 250 36.875 9218.8 50 72.75 3637.5 100 36.875 3687.5 50 73.5 3675 300 36.75 11025 200 73.5 14700 100 36.75 3675 50 74 3700 100 36 3600 400 74 29600 50 36.25 1812.5 100 36.875 3687.5 149746 200 36.875 7375 300 37 11100
138 These are the volume of shares and price data for Reading Railroad. I The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week M= Monday T*Tuesday W=Wednesday R=Thursday F=Friday S-Saturday
1851 New York Volume Price PXV Philadelphia Volume Price PXV 31 Jan.. 1851 100 60 6000 31 Jan., 1851 150 31.754762.5 20 60 1200 100 30.5 3050 400 59.5 23800 100 30.5 3050 1150 58.5 67275 50 30.5 1525 150 58 8700 100 30 3000 200 58.25 11650 100 30 3000 50 58.75 2937.5 50 30 1500 350 59 20650 50 29.875 1493.8 350 62.5 21875 100 30 3000 300 62.5 18750 50 30.25 1512.5 150 62.759412.5 1000 31 31000 50 63 3150 1000 31 31000 100 31 3100 195400 50 31 1550 150 31 4650 500 31 15500 350 29 10150 250 29 7250 100 31.75 3175 850 31.75 26988
Feb. 28 200 61 12200 Feb. 28 100 30.5 3050 300 60.75 18225 100 30.5 3050 150 61.25 9187.5 350 30.75 10763 100 61.375 6137.5 16863 45750
DATA APPENDIX N: Reading Railroad data for 1851. Data Appendix N: Continued. Data Appendix N: Reading Railroad data for 11151 Continued.
New York Volume Price PX V Philadelphia Volume Price PX V 31 Mar.. 1851 150 54.25 8137.5 31 Mar.. 1851 50 27 1350 850 54 45900 100 27 2700 400 54 21600 50 27 1350 50 54 2700 50 27 1350 100 54 5400 50 27 1350 10 54.5 545 100 27 2700 100 54 5400 50 27 1350 100 54 5400 50 27 1350 200 53.75 10750 10 27 270 100 26 2600 105833 250 27 6750 ZSQ 27 20250 100 27 2700
46070
30 Apr. 100 58 5800 30 Apr. 300 28.75 8625 150 57.75 8662.5 200 28.75 5750 500 57.625 28813 100 28.625 2862.5 100 57.375 5737.5 100 28 2800 1000 57.5 57500 200 28.63 5725 200 51.25 10250 300 28.63 8587.5 100 28.75 2875 116763 37225
Data Appendix N: Continued. Data Appendix N: Reading Ra iroad data for 11151 Continued.
New York Volume Price PX V Philadelphia Volume Price PX V 31 May., 1851 450 58 26100 31 May., 1851 100 29 2900 200 58.125 11625 100 28.75 2875 100 58.25 5825 100 28 2800 350 58.25 20388 50 28.75 1437.5 430 58.38 25101 300 28.75 8625 100 58 5800 100 29 2900 100 58 5800 100 29 2900 150 58.125 8718.8 300 29.25 8775 1100 58 63800 1200 29.25 35100 200 58 11600 200 29.25 5850 100 58.25 5825 100 29.25 2925 400 58.375 23350 200 58 11600 77088 200 58 11600 600 58 34800 100 58.3755837.5 300 58 17400 200 58.7511750 100 57.6255762.5 100 58 5800 100 58 5800 100 58.3755837.5 100 58.25 5825
335945
30 Jun. 150 57.125 8568.8 30 Jun. 200 29 5800 315 57 17955 300 28.63 8587.5 100 57.75 5775 ISA 28.75 4312.5 200 57 11400 100 28.875 2887.5 100 57.8755787.5 150 29 4350 100 58 5800 100 29.13 2912.5 50 58 2900 150 29 4350 50 58.5 2925 50 29 1450 200 29 5800 61111 100 29 2900 100 29.13 2912.5 50 29.13 1456.3 50 29.13 1456.3
49175
Data Appendix N: ConItinued. 141 Data Appendix N: Reading Railroad data for If 151 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV 31 Jul.. 1851 300 53.75 16125 31 Jul.. 1851 50 26.75 1337.5 200 53.25 10650 50 26.75 1337.5 200 53 10600 100 26.75 2675 400 53 21200 100 26.75 2675 300 53 15900 50 26.75 1337.5 200 54 10800 50 26.75 1337.5 200 52.875 10575 100 26.75 2675 300 53.25 15975 200 26.75 5350 350 53 18550 100 26.75 2675 500 54 27000 10 27 270 900 52.75 47475 10 26.75 267.5 5 26.38 131.88 204850 50 26.75 1337.5 150 26.633993.8 50 26.631331.3 100 26.63 2662.5 50 26.63 1331.3 50 26.63 1331.3
34057
Aug. 30 175 55.75 9756.3 Aug. 30 50 27.751387.5 100 55.5 5550 100 27 2700 950 56 53200 50 27 1350 900 55.5 49950 50 27 1350 200 55.625 11125 200 27 5400 200 55.5 11100 100 27 2700 200 55.5 11100 100 27.88 2787.5 100 56.25 5625 100 28 2800 100 56 5600 100 28 2800 50 27.88 1393.8 163006 100 27.8752787.5 50 27.8751393.8 100 27.63 2762.5 100 27.63 2762.5 50 27.13 1356.3 10 27.63 276.25 50 27.75 1387.5 100 27.875 2787.5
40183
Data Appendix N: ConIMnued. 142 Data Appendix N: Reading Rai road data for 1C 51 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV Sept. 30,1851 250 52.5 13125 S ept 30,1851 100 26 2600 200 54 10800 100 26 2600 100 52.75 5275 100 26.25 2625 100 52 5200 100 26.25 2625 500 52.75 26375 100 26.25 2625 100 26.25 2625 60775 200 26.38 5275 50 26.38 1318.8 100 26.38 2637.5 100 26.38 2637.5 50 26.25 1312.5 100 26.5 2650 50 26.38 1318.8 50 26.38 1318.8 100 26.38 2637.5 ICO 26 2600
39406
Oct. 31 50 56.25 2812.5 O ct 31 100 27.88 2787.5 200 55.875 11175 50 27 1350 50 55.75 2787.5 30 28 840 100 55.75 5575 100 27.875 2787.5 750 55.875 41906 100 27 2700 100 56.125 5612.5 50 28 1400 200 55.63 11125 250 28 7000 200 55.75 11150 18865 92144
Data Appendix N: Continued. Data Appendix N: Reading Raiiroad data for If151 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV Nov. 29.1851 300 58 17400 Nov. 29.1851 50 29 1450 1000 58 58000 50 29 1450 50 58 2900 100 29 2900 200 58 11600 100 29 2900 200 58 11600 100 29 2900 500 58 29000 50 29 1450 100 58 5800 50 29 1450 100 58 5800 50 29 1450 200 58 11600 50 29 1450 50 29 1450 153700 100 29 2900 100 29 2900 100 29 2900 100 29 2900 100 29 2900 150 29 4350 100 29 2900 50 29 1450 50 29 1450 100 29 2900 100 29 2900 100 29 2900 100 29 2900 100 29 2900 100 29 2900
60900
Dec. 30 400 59 23600 Dec. 30 100 29.375 2937.5 300 59 17700 50 29.375 1468.8 100 59 5900 200 29.375 5875 350 59 20650 200 29.13 5825 100 59 5900 200 60 12000 16106 200 59 11800 300 59 17700
115250
144 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1852 New York Volume Price PXV Philadelphia Volume Price PXV Jan. 30,1852 600 63.5 38100 Jan .30,1852 100 31.875 3187.5 F 50 63.5 3175 100 32 3200 500 63 31500 200 32 6400 300 63.125 18938 300 32 9600 300 63.375 19013 100 31 3100 200 63.25 12650 50 32 1600 300 63.5 19050 50 32 1600 100 63.75 6375 50 32 1600 1000 63.875 63875 100 32 3200 200 32 6400 212675 100 32 3200 50 32 1600 50 32 1600 50 32 1600 100 32 3200 50 32 1600
52688
DATAAPPENCNX 0: Reading Raiiroad data for 1852. Data Appendix 0: Continued. Data Appendix 0: Reading Ra iroad data for 11152 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Feb.28 300 67.25 20175 Feb.28 100 33.75 3375 S 50 67 3350 100 33.75 3375 500 67 33500 100 33.75 3375 100 67 6700 100 33.75 3375 700 67 46900 100 33.75 3375 300 68 20400 100 33.75 3375 200 67 13400 100 33.75 3375 300 68 20400 100 33.75 3375 700 68 47600 50 33.75 1687.5 2000 68 136000 300 33.75 10125 500 67 33500 50 33.875 1693.8 200 67.87513575 200 33.875 6775 300 68 20400 100 34 3400 200 34 6800 415900 100 34 3400 100 34 3400 50 33.75 1687.5 50 33.875 1693.8 50 33.63 1681.3 50 33.63 1681.3 100 33.875 3387.5 50 33.875 1693.8 50 33.875 1693.8 100 33.875 3387.5 100 33.875 3387.5 200 33.875 6775 100 33.875 3387.5 50 33.875 1693.8 100 33.875 3387.5 100 33.875 3387.5 350 34 11900 200 34 6800 50 34 1700 200 34.38 6875 100 34.25 3425
133906
Data Appendix 0: Con Mnued. Data Appendix 0: Reading Rai road data for 11 152 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV 30 March. 100 73.75 7375 30 March. 100 35.63 3562.5 T 300 73 21900 50 35.63 1781.3 100 73.25 7325 100 35.63 3562.5 150 72.875 10931 100 35.75 3575 150 73.25 10986 100 36 3600 500 72.75 36375 100 36 3600 100 72.25 7225 100 36 3600 100 72.125 7212.5 200 36.13 7225 50 72 3600 100 36.75 3675 300 71.875 21563 500 36.25 18125 300 71.75 21525 100 36.25 3625 200 71.75 14350 55931 170369
30 Apr. 800 78 62400 30 Apr. 100 39 3900 F 400 78.25 31300 100 39 3900 700 78 54600 100 39 3900 100 78.25 7825 100 39 3900 100 78 7800 100 39 3900 300 78 23400 100 39 3900 300 78.25 23475 100 39.25 3925 100 78 7800 100 39 3900 150 78.25 11738 100 39.25 3925 100 39 3900 230338 39050
31 May. 100 78.75 7875 31 May. 100 39.25 3925 M 150 78.25 11738 100 39.25 3925 50 77 3850 100 78 7800 7850 50 77 3850 100 78 7800
42913
Data Appendix 0: Continued. Data Appendix 0 : Reading Raiiroad data for If152 Continued.
New York Volume Price PXV Philadelphia Volume Price PX V 28 June. 100 86 8600 29 June. 100 44 4400 M 600 86.75 52050 50 44 2200 100 87 8700 100 44 4400 100 86 8600 50 45 2250 100 86 8600 100 45 4500 100 86.75 8675 200 45 9000 100 86.75 8675 100 45 4500 50 86.625 4331.3 50 45 2250 250 87.5 21875 50 44 2200 200 87.5 17500 100 44 4400 200 87.375 17475 100 44.13 4412.5 200 87.375 17475 100 44.13 4412.5 100 44 4400 182556 100 44.875 4487.5
57813
30 July. 100 89.5 8950 30 July. 100 44.63 4462.5 F 100 89 8900 700 89.25 62475 100 89 8900 200 89.5 17900 100 89.6258962.5
116088
Aug.31 200 94 18800 Aug. 28 100 47 4700 T 100 47 4700 100 47 4700
14100
Sept. 30 100 98.25 9825 S ept 30 R
Oct. 30 200 97.5 19500 Oct. 30 S 50 97.254862.5
24363
Data Appendix 0: Continued. 148 Data Appendix 0; Reading Ra Iroad data for 11 152 Continued.
New York Volume Price PXV Philadelphia Volume Price PX V Nov. 30 Nov. 30 T
Dec. 29 100 98 9800 Dec. 31 50 49 2450 W 50 49 2450
4900
149 These are the volume of shares and price data for Reading Railroad. The value of securities traded Is calculated by multiplying the volume and price. The par value of the security Is $100 In New York and $50 In Philadelphia Values In bold type indicate trading on the second board Values that are right aligned Indicate trading during boards Values that are left aligned Indicate trading after a particular boarc The letter below the date Indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1853 New York Volume Price PX V Philadelphia Volume Price PXV J a n .31 100 85.5 8550 Jan. 31 M 50 85 4250
12800
Feb. 26 150 89.25 13388 Feb.28 S
31 March. 120 89 10680 31 March. R
30 Apr. 32 91 2912 30 Apr. 100 45 4500 S 200 91.25 18250 200 45.75 9150 100 91.25 9125 200 45 9000 50 45 2250 30287 50 45 2250 100 45 4500
31650
29 May. 50 88.25 4412.5 31 May. 50 44.38 2218.8 S 100 88.75 8875
13288
DATAAPPENCNX P: Reading Ftaiiroad data for 1853. Data Appendix P: Continuad. ISO Data Appendix P: Reading Rai road data for 18 153 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV 28 June. 500 93 46500 30 June. T 50 93.75 4687.5
51188
30 July. 200 88 17600 30 July. S 100 88 8800 200 88 17600
44000
Aug.31 200 85 17000 Aug. 31 74 42 3108 W 300 84 25200 60 42 2520
42200 5628
Sept. 30 200 84 16800 Sept. 30 200 42 8400 F 100 84.5 8450 100 42 4200 200 83.25 16650 200 83.375 16675 12600
58575
Oct. 29 250 75 18750 Oct. 31 50 36.375 1818.8 3 100 72.5 7250 50 36.5 1825
26000 3643.8
Nov. 30 200 79.75 15950 Nov. 30 W 200 79 15800 200 79 15800 100 79 7900 200 80 16000 100 79 7900 100 78.6257862.5 100 78.3757837.5 100 79.5 7950
103000
Data Appendix P: Continued. 151 Data Appendix P: Reading Railroad data for 11153 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV Dec. 31 40 79 3160 Dec. 31 100 39.75 3975 S 200 80 16000 100 39.75 3975 200 79.75 15950 50 39.75 1987.5 100 79.75 7975 300 39.63 11888 50 40 2000 43085 23825
152 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1854 New York Volume Price PXV Philadelphia Volume Price PXV Jan. 31 300 72 21600 Jan .31 25 36.25 906.25 T 200 72.25 14450 50 36.25 1812.5 100 72.625 7262.5 50 36.25 1812.5 200 72 14400 100 36.25 3625 200 71.875 14375 15 36.25 543.75 50 71.753587.5 100 36 3600 50 36 1800 75675 50 36 1800 50 36 1800 100 36 3600 15 36.13 541.88 50 36.13 1806.3
23648
Feb. 28 35 79 2765 Feb. 28 100 39.36 3937.5 T 10 79 790 100 39.75 3975 400 80 32000 7 39.38 275.63 200 79.5 15900 25 39.75 993.75 200 79.25 15850 100 39.675 3987.5 200 79.375 15875 100 79.375 7937.5 13169 100 79.5 7950 200 79.625 15925
114993
DATAAPPENCMX Q: Reading Railroad data for 1854. Data Appendix Q: Continuad. Data Appendix Q: Reading Rai road data for 11154 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV 31 March. 300 77.25 23175 31 March. 35 38.25 1338.8 F 1000 77 77000 11 38.13 419.38 100 77.25 7725 50 38.25 1912.5 200 77 15400 50 38.375 1918.8 200 77 15400 50 3&3Z5 1518.8 100 77.25 7725 400 78 31200 7108.1 SO 76.753837.5 600 76.625 45975 50 77.25 3862.5 150 76.625 11494 100 76.6257662.5 250 76.75 19188 32 77 2464
272108
29 April. 100 75.125 7512.5 22 April. 120 37.13 4455 S 200 75.125 15025 250 37.5 9375 50 37.13 1856.3 22538 300 37.75 11325 200 37.5 7500 100 37.625 3762.5
38274
31 May. 150 79 11850 31 May. 100 39.125 3912.5 W 500 78.5 39250 100 39.125 3912.5 150 78.375 11756 100 39.25 3925 100 78.375 7837.5 11 39.25 431.75 300 78.25 23475 100 39.25 3925 200 78.25 15650 50 39.25 1962.5 100 79 7900 50 39.25 1962.5 200 78.7515750 100 39.375 3937.5 500 79 39500 200 39.5 7900 50 Zfl 3500 15 39.375 590.63
176469 32460
Data Appendix Q: ConMnued. 154 Data Appendix Q: Reading Rai road data for 1854 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV 30 June. 900 78.25 70425 30 June. 100 39 3900 F 200 77.875 15575 100 38.8753887.5 300 77.75 23325 100 38.8753887.5 200 78.375 15675 200 78.25 15650 11675 600 77.75 46650 400 77.7531100 100 77.8757787.5 200 77.87515575
241763
29 July. 600 65.25 39150 31 July. 50 31.625 1581.3 S 100 65.375 6537.5 100 31.5 3150 100 65.25 6525 3 31.75 95.25 100 65.5 6550 50 31.5 1575 50 65.125 3256.3 50 31.5 1575 100 65.75 6575 20 31.5 630 200 83.5 12700 100 31.5 3150 100 83.5 6350 50 31.5 1575 100 31.5 3150 87644 100 31.5 3150 100 31.625 3162.5 100 32 3200
25994
Aug. 31 100 68.625 6862.5 Aug. 31 100 34.5 3450 R 200 68.75 13750 100 34.5 3450 100 68.5 6850 100 34.5 3450 200 68.5 13700 200 34.5 6900 300 68.75 20625 100 34.5 3450 100 88.5 6850 50 34.375 1718.8 100 88 6800 50 34.375 1718.8 200 87.5 13500 100 U.13 3412.5 50 34.5 1725 88938 50 34 1700
30975
Data Appendix Q: Continued. 155 Data Appendix Q: Reading Rai road data for If154 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Sept. 30 100 75.75 7575 Sept 30 100 38 3800 S 100 75.5 7550 200 38 7600 SO 75.5 3775 100 37.875 3787.5 1500 75.75 113625 50 37.625 1881.3 500 75.75 37875 650 76 49400 17069 550 75.75 41663 15 76 1140 100 75.625 7562.5 150 75.5 11325 200 75.5 15100 200 76 15200 200 75.75 15150 200 76 15200
342140
Oct.31 20 71 1420 Oct.31 50 35.375 1768.8 T 200 71 14200 100 35 3500 100 70.875 7087.5 100 35 3500 400 70.375 28150 20 35 700 100 70.75 7075 400 70.75 28300 9468.8 100 70.75 7075 100 70.5 7050 150 70.25 10538 100 71 7100 200 70.25 14050 100 70.375 7037.5
139083
Data Appendix Q: Continuad. 156 Data Appendix Q: Reading RaiIroad data for 11 S54 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Nov. 28 650 65.75 42738 Nov. 25 100 32.375 3237.5 T 100 66 6600 200 33 6600 24 66 1584 100 33.125 3312.5 750 65.75 49313 50 33.125 1656.3 200 65.75 13150 20 32.875 657.5 100 65.75 6575 200 65.75 13150 15464 350 66 23100 200 66 13200 200 76.125 15225 500 66.25 33125
217759
Dec. 30 300 71 21300 Dec. 30 100 35.875 3587.5 S 300 71 21300 100 35.75 3575 600 71 42600 100 35.75 3575 1000 71.75 71750 5 35.75 178.75 800 72.25 57800 25 35.875 896.88 200 72.25 14450 100 72 7200 11813
157 These are the volume of shares and price data for Reading Railroad. The value of securities traded is calculated by multiplying the volume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Values that are right aligned indicate trading during boards Values that are left aligned indicate trading after a particular boarc The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1855 New York Volume Price PX V Philadelphia Volume Price PXV Jan. 31 100 71.75 7175 Jan. 31 W 100 71.5 7150 200 72 14400 100 71.625 7162.5 100 71.625 7162.5 100 71.5 7150 200 71.75 14350 300 71.625 21488 100 72.5 7250
93288
Feb. 28 20 76.25 1525 Feb. 28 50 38.63 1931.3 W 200 76.375 15275 100 38.25 3825 100 76.5 7650 50 38.75 1937.5 200 76.5 15300 50 38.25 1912.5 100 76.5 7650 100 77.25 7725 9606.3 100 76.75 7675 700 77.25 54075 400 76.625 30650 100 76 7600 200 76.75 15350 50 76 3800
174275
DATAAPPENCMX R: Reading Ptaiiroad data for 1655. Data Appendix R: Continued. 158 Data Appendix R: Reading Rai road data for 1855 Continued.
New York Volume Price PXV Philadelphia Volume Price PX V 28 March. 600 84 50400 31 March. 34 42.25 1436.5 W 400 84 33600 10 42.25 422.5 200 84.25 16850 3 42.25 126.75 100 84 8400 30 42.25 1267.5 100 84 8400 10 42 420 100 84 8400 50 42.752137.5 200 84 16800 20 42.25 845 125 84.125 10516 100 84.125 8412.5 6655.8 100 84.25 8425
170203
30 April. 1200 85.875 103050 30 April. 3 43 129 M 1400 86.25 120750 5 43 215 500 86 43000 100 43 4300 500 86 43000 100 43 4300 100 86 8600 200 43 8600 300 85.875 25763 170 43.125 7331.3 100 86 8600 1100 86 94600 24875 100 86 8600 100 86.125 8612.5 100 86.625 8662.5 200 87 17400 100 86.75 8675 100 85 8500 250 86.125 21531 200 86 17200
546544
Data Appendix R: Continued. 159 Data Appendix R: Reading Rai road data for 1C 155 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV 31 May. 900 88 79200 31 May. 100 44.125 4412.5 R 1750 88.25 154438 100 44.125 4412.5 100 88.375 8837.5 200 44 8800 100 88.25 8825 100 44 4400 200 88.25 17650 50 44 2200 400 88 35200 50 44 2200 200 88.125 17625 100 88.125 8812.5 26425 200 88.375 17675 150 88 13200 100 88 8800 100 88.3758837.5 200 88 17600 100 87.75 8775 200 88 17600 2100 88184800
607875
29 June. 500 93.5 46750 30 June. 100 46.625 4662.5 F 450 93.375 42019 100 46.625 4662.5 400 93.375 37350 12 46.625 559.5 200 93.75 18750 100 46.625 4662.5 300 93.5 28050 100 46.625 4662.5 100 46.625 4662.5 172919 23872
31 July. 1800 90.25 162450 31 July. 20 45.125 902.5 T 100 90.375 9037.5 50 45.375 2268.8 100 90.375 9037.5 50 45.375 2268.8 600 90.5 54300 50 45.375 2268.8 200 90.75 18150 100 90.625 9062.5 7708.8 SO 90.5 4525 1000 90.75 90750 650 90.75 58988 200 91 18200 100 90.75 9075
443575
Data Appendix R: Continued. 160 Data Appendix R: Reading Rai road data for 11 55 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Aug.31 100 94 9400 Aug. 31 6 47.125 282.75 F 700 94 65800 100 47.125 4712.5 350 94.125 32944 50 47.125 2356.3 550 94.25 51838 50 47.125 2356.3 100 94.25 9425 50 47.125 2356.3 400 94.25 37700 100 47.25 4725 400 94.5 37800 50 48.25 2412.5 10094.6259462.5 50 47.25 2362.5 1400 94.75 132650 50 47.25 2362.5 500 94.25 47125 50 47.25 2362.5 150 94.5 14175 16 47.25 756 400 94.5 37800 50 47.25 2362.5 100 95.5 9550 50 47.25 2362.5 800 95.75 76600 50 47.625 2381.3 600 95.625 57375 100 47.625 4762.5 50 95.5 4775 100 47.75 4775 500 47.87523938 634419 100 47.8754787.5
72414
Sept. 29 100 93.75 9375 Sept. 29 5 47 235 S 850 93.875 79794 100 47 4700 700 94.75 66325 100 47.125 4712.5 500 94 47000 100 47.125 4712.5 350 94 32900 100 47.125 4712.5 150 94 14100 100 47.125 4712.5 100 94.25 9425 100 47.125 4712.5 100 94.25 9425 100 47.125 4712.5 423 94 39762 100 47.125 4712.5 500 95 47500 100 47.125 4712.5 300 95 28500 100 47.25 4725 600 94.25 56550 50 47.25 2362.5 600 94.25 56550 200 47.25 9450 100 94.25 9425 50 47.25 2362.5 250 94J5 23563 100 47.375 4737.5 500 94.375 47188 100 47.375 4737.5 150 94.375 14156 100 47.375 4737.5
591537 75748
Data Appendix R: ConHnued. 161 Data Appendix R: Reading Re iroaddatafdrit 155 Continued.
New York Volume Price PX V Philadelphia Volume Price PXV Oct. 31 250 86.25 21563 Oct. 31 50 43 2150 W 100 86.25 8625 50 43 2150 100 8625 8625 100 43 4300 300 86.25 25875 3 43.125 129.38 100 86.25 8625 100 43 4300 1100 86 94600 50 42.875 2143.8 800 86 68800 50 42.875 2143.8 100 86 8600 50 42.875 2143.8 100 86.5 8650 21 42.875 900.38 50 86 4300 20 42.875 857.5 700 86 60200 50 42.875 2143.8 200 86.75 17350 50 42.875 2143.8 200 85.25 17050 50 42.875 2143.8 200 85 17000 100 42.875 4287.5 200 85 17000 100 43 4300 600 85 51000 23 43 989 100 84.8758487.5 50 42.875 2143.8 200 84.5 16900 50 42.875 2143.8 100 84.75 8475 50 42.63 2131.3
471725 43645
Nov. 30 100 90 9000 Nov. 30 100 44.875 4487.5 F 450 89.25 40163 50 44.875 2243.8 400 89.5 35800 10 44.875 448.75 220 89.625 19718 100 45 4500 350 89.875 31456 50 44.875 2243.8 700 89.5 62650 100 89.75 8975 13924 400 90 36000 100 89.5 8950 100 89.5 8950 200 89.5 17900 100 89.5 8950 100 89.5 8950 200 90 18000
315461
Data Appendix R: ConIHnued. Data Appendix R: Reading Railroad data for It155 Continued.
New York Volume Price PXV Philadelphia Volume Price PXV Dec. 31 1700 91 154700 Dec. 31 10 46.125 461.25 M 200 91 18200 6 46 276 1010 91.75 92668 23 45.875 1055.1 300 91.875 27563 100 46 4600 200 92 18400 20 46 920 200 92 18400 50 46.25 2312.5 10 92 920 50 46.5 2325 600 91.875 55125 50 46.252312.5 200 92 18400 14262 404375
163 These are the volume of shares and price data for Reading Railroad. The value of securities traded is caiculated by multiplying the voiume and price. The par value of the security is $100 in New York and $50 in Philadelphia Values in bold type indicate trading on the second board Vaiues that are right aiigned indicate trading during boards Values that are left aligned indicate trading after a particular boaro The letter below the date indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1856 New York Volume Price Philadelphia Volume Price Jan.31 11 85 Jan .31 50 42.375 R 400 84.75 100 42.375 500 84.75 50 42.25 100 84.75 50 42.25 400 84.75 300 42.5 200 84.75 10042.5 100 42.5
Feb.29 200 93 Feb. 29 100 46.75 F 500 92.375 5046.75 200 92.375 100 46.5 900 92.25 2 46.5 200 92.875 1 46.625 100 92.875 60 46.625 100 46.375 50 46.375 50 46.375 100 46.5 100 46.5 4 46.5 1 46.5 100 46.5 100 46.5 100 46.5 100 46.5 100 46.5 20 46.5 100 46.5
DATAAPPENCNX S: Reading Flaiiroad data for 1856. Data Appendix S: Continued. 164 Data Appendix S: Reading Railroad data for It 156 Continued.
New York Volume Price Philadelphia Volume Price March. 31 200 92.625 March. 31 M 300 92.38 300 92.5 100 92.5 300 92.25 100 92.25 400 92.125 100 92.5 100 92.25 h "
April.
May. 31 1800 89.25 May. 31 100 44.75 S 100 89.25 100 44.75 100 89.25 100 44.75 200 89.25 100 44.75 300 90 30 44.75 250 89.5 100 44.75 100 89.25 100 44.75 100 89.25 50 44.75 200 89.25 100 44.75 350 89.75 200 44.75 300 89.625 50 44.75 100 89.625 17 44.875 100 89.5 100 44.75
June
July. 31 900 88 July. 31 50 43.875 R 200 87.5 200 87.75 100 87.875 200 87.5 100 87.5 200 87.75 200 87.75 300 87.025
Data Appendix S: ConItlnued. 165 Data Appendix S; Reading Rai road data for It158 Continued.
New York Volume Price Ptiiladelphia Volume Price August
Sept. 30 350 82 Sept. 30 50 40.875 T 800 82 50 40.875 100 82.25 50 40.875 100 82.13 25 40.875 100 82.375 50 40.875 300 82 100 40.875 100 81.75 100 40.75 100 82.25 50 40.875 300 81.75 50 40.875 250 82 100 81.875 620 81.75 150 81.75
Oct. 31 700 75.5 Oct. 31 100 37.5 F 100 74.75 100 37.5 400 74.5 100 37.5 200 74.5 100 37.5 300 74.25 50 37.5 400 74.125 16 37.5 100 74 100 37.5 100 74.25 100 37.5 900 74 12 37.5 100 74 15 37 300 73.875 5 37 300 74.125 50 37 200 74.25 20 37 400 74.25
Nov. 29 2300 82 Nov. 29 50 41.375 S 500 82.5 100 41.5 650 82.625 1300 82 800 83 200 83.125 100 82.825
Data Appendix 8: Conttlnued. IData Appendix S: Reading Railroad data for 11156 Continued.
New York Volume Price Philadelphia Volume Price Dec.31 2100 87.25 Dec.31 100 43.75 W 300 87.375 100 300 88 8 100 87.25 50 100 87.25 100 87.38 150 87.375 1400 87.25 900 87.25
167 These are the volume of shares and price data for Reading Railroad. The par value of the security is $100 in New York and $50 in Philadelphia Values in tx)ld type indicate trading on the second tx)ard Values that are right aligned indicate trading during tioards lvalues that are left aligned indicate trading after a particular tward iThe letter below the date Indicates the day of the week M= Monday T=Tuesday W=Wednesday R=Thursday F=Friday S=Saturday
1857 New York Volume Price Philadelphia Volume Price Jan. 31 500 81.25 Jan. 31 14 40.5 800 81.25 30 40.625 2050 81.125 10 2450 81 100 700 81.125 100 81.125 300 81.375 200 81.25 200 81.5
Feb. 28 230 81 Feb.28 200 40.5 400 80.875 100 40.5 200 81.25 100 40.5 100 80.875 100 40.5 200 80.75 10 40.125 100 81 3 40.375 100 81.25 4 40.375 500 81.25 ! 200 81.125 100 81 100 81.125 100 81 1200 80.875 200 81.25
DATAAPPENCNX T: Reading Rlaiiroad data for 1857. iData Appendix T: Continued. 168 Data Appandix T: Reading Rai road data for 11 157 Continued.
New York Volume Price Philadelphia Volume Price March 31. 200 79.375 March 31. 100 39.75 T 1100 79.25 50 39.75 700 79.5 100 39.75 400 80.25 200 79.5 200 79.25 100 79.75 100 79.5 100 79.375
April
May. 30 100 80.5 May. 30 100 40.375 100 80.75 100 40.375 100 80.75 100 40.375 2500 81 100 40.375 200 80 2 40.25 300 80.5 11 40.25 500 81.25 100 40.38 300 81.5 100 40.375 200 81 200 40.63 300 81.75 100 40.125 100 40.5 100 40.625 100 40.625
169