The London Stock Exchange: A History

By Ranald C. Michie | Go to book overview
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From Domestic to International, 1850-1914


In 1850 the London Stock Exchange was the biggest and most important of its kind in the world. This was mainly a reflection of the strength and vitality of the British economy at that time. Though international influences and connections did exist they were completely overshadowed by the needs of domestic investors and borrowers. On the eve of the First World War the London Stock Exchange remained the most important in the world despite the challenge to Britain's economic position from the United States and Germany. An American economist who was very familiar with the securities business, C. A. Conant, noted in 1904 that, ' Great Britain easily leads the world in the volume of her Stock Exchange business'. Another well-informed American, S. F. Streit of the New York Stock Exchange, was of the opinion after a tour of Europe, that turnover on the London Stock Exchange was ten times greater than on his own in 1914.1 Whatever measure is applied there was no sign that London's dominant position among the hierarchy of stock exchanges was under threat by the beginning of the twentieth century. Behind this success lay a fundamental shift in orientation for the London Stock Exchange. Increasingly it was not domestic but international opportunities that underlay its growth. Though activity in domestic securities continued to provide a large, expanding, and even dynamic business for its members, that was increasingly overshadowed by the rapid expansion of both foreign securities and foreign clients. The interests of European investors and trading in American securities, in particular, became significant areas of activity for the London Stock Exchange over the 1850-1914 period, attracting the attention of numerous members. Yet another American observer, R. M. Bauer of New York, was of the opinion in 1911 that 'The London Stock Exchange is the only really international market of the world. Its interests branch over all parts of our globe.'2 By the First World War the London Stock Exchange was not simply

C. A. Conant, Wall Street and the Country: A Study of Recent Financial Tendencies ( New York 1904), 147; S. F. Streit, Report on European Stock Exchanges ( New York 1914), 16-17.
LSE: General Purposes, minutes, 15 May 1911.


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