merchants at Stock Research

History of the Frankfurt stock exchange begins with the occurrence of medieval fairs. In the middle of 9 centuries king the Louis has given the preferable right to Frankfurt to spend annual autumn fairs. With 1330 when king the Louis IV Bavarian has expanded advantage and has resolved annual spring fairs, the city became the major center of trading and monetary operations.
Already in the beginning of 16 century, owing to the well-known fairs, Frankfurt becomes so prospering, that German monk Martin Luther names city “a silver and gold chink” of German empire.
As a result of flight to Frankfurt of Dutch and French dealers hided from prosecution because of their Protestant belief, in 16 century mass trade and bank sector are established in Frankfurt. Merchants from all parts of the Europe came to Frankfurt to borrow in trade.
Because of that neither in the Europe, nor in the German empire there was no uniform currency, the various countries have been shattered into numerous small economic regions, in each of which there was a monetary unit, realization of payments was the extremely difficult. Abundance of means of the payment, the unregulated exchange rate promoted development of swindle and usury. In 1585 the Frankfurt merchants have agreed about use of the fixed exchange rates of various monetary units. This date is considered the moment of a birth of the Frankfurt stock exchange. With 1585 during each fair the group of merchants periodically gathered for updating uniform and obligatory exchange rates of various monetary units. The first official list of exchange rates has appeared in 1625 the oldest list of exchange rates of the Frankfurt stock exchange, kept up to now, concerns to 1721.
First meetings of merchants were spent on the area in front of the Frankfurt town hall. And only in 1694/1695 there was a first building of a stock exchange in Frankfurt (Großer Braunfels) - the most significant and spacious building of city.
In 1682 have been put into operation the first necessary rules and norms of a stock exchange, the organizational structure of the Frankfurt stock exchange has been generated.
Down to the end of 18 centuries at a stock exchange traded exclusively in coins and bills. Only in the end 18 century begin periodic trade in bonds.
In 1707 at the next assembly the management of a stock exchange has officially approved trading agents - representatives of merchants. In 1808 the Chamber of commerce has been organized. The Frankfurt stock exchange created approximately 223 years ago as private association of businessmen, has turned to public establishment, already in first half of 19 centuries having passed in submission of the Chamber of commerce.
In the middle of 19 centuries the new prestigious building of a stock exchange under the project of the known architect in Frankfurt Friedrich Peiper, located near church St Paul’s Church has been constructed, it was opened in 1843.
Industrial revolution in Germany favored to development of financing of expensive projects through issue of stocks. The first quotation of the stocks is dated 1820 though as a whole the basic place of trade in 19 century was borrowed exclusively with bonds. In comparison with the largest European stock exchanges, the Frankfurt stock exchange treated coldly enough trade in stocks of numerous known corporations. In 1850 the Frankfurt stock exchange was generated as the center of trade mainly by the state bonds and the state interest bearing securities.
The new building of the Frankfurt stock exchange has been arisen in 1879. Construction has been carried out under projects of known architects of Frankfurt - Heinrich Burnitz and Oskar Sommer. Perhaps, this construction was the most successful - functionality of a stock exchange was perfectly combined with its prestige. Besides a new building of the Frankfurt stock exchange.
After unification of Germany in 1871 the Berlin stock exchange began to play the central role in the share market. It became the center of trade of the period when only in Prussia for the period with 1870 on 1974 there were 857 joint-stock companies. And by the end of a century in the country already 29 stock exchanges operated. Despite of it Frankfurt had an opportunity to defend the rights as the center of exchange trade.
In the end of 19 centuries for Frankfurt there was an absolute necessity of adaptation to a general economic situation in the country. With the purpose to keep the prestige of economic capital Frankfurt has changed the policy and has increased trade in stocks. This aspiration of Frankfurt to creation of the present stock exchange has collided with prevalence of the Berlin stock exchange.
The First World War and its consequences have delivered the hardest blow on the Frankfurt stock exchange. Foreign stocks and bonds were sold out to German investors because of fear of aggression from the oppositional states, free money resources were put only in the state bonds. By the end of war all foreign securities have disappeared from German quoted lists, as a result of it Frankfurt has lost the status of the international stock exchange. By the end of war all the international contacts of the Frankfurt stock exchange have been broken off and began to be restored only in 20th years. The short period of stability and well-being was replaced in 1929 by crisis. Economic crisis was and earlier. Same it has appeared unique on depth of falling of manufacture, on scales of scope of economic and on duration. The reason for that is in frustration of economic after the First World War. Fragile was a German economy. In 1931 German stock exchanges have been compelled to stop the functioning temporarily.
Fascist movement has arisen in Germany after the First World War. The German fascism differed extreme nationalism and racism. Fast growth of fascism fell to years of an economic crisis. The economy has been transformed. The state began to adjust it to accelerate an output from crisis and to create a powerful war industry. It has established the control over the prices, wages, has subordinated businessmen to the state bodies. Fascists aspired to establish the control over stock exchanges of some the states. The Frankfurt stock exchange in 1935 has merged with Mannheim Stock Exchange, then having absorbed Rhine - Main Stock Exchange. Frankfurt stock exchange, functioning as “an internal stock exchange”, in essence was not of great importance and did not carry out the major functions. The Nazi economic policy braked development of the free share market.
In 1944 has begun the final stage of the Second World War. The building of the Frankfurt stock exchange has been strongly damaged during an air strike. Meetings of stockbrokers now could be spent only in cellars of a building. After crash of a fascist mode in 1945 the Frankfurt stock exchange remained closed. However in September, 1945 the Frankfurt stock exchange, first of the German stock exchanges, has opened again.
As a result of currency reform 1948 and growing strengthening of the German economy the Frankfurt stock exchange gradually has found the former importance and played the leading part in Germany. After lead in 1992 the Frankfurt stock exchange became connected by reorganization directly not with Commercial and industrial chamber, and with joint-stock company the German stock exchange.
The German stock exchange represents joint-stock company, 81 % of actions belong to banks, 10 % - to regional stock exchanges, 9 % - to brokers. The German stock exchange runs the Frankfurt stock exchange and the German stock exchange of urgent contracts - Eurex. To this joint-stock company belong and are its branches the depositary-clearing system, information system and the Society of assistance to development of stock exchanges in Central and the East Europe.
In May 2000 there was a sensational merge of the London stock exchange to German stock exchange, to formation of a new interethnic stock exchange iX. A trading platform of a new stock exchange became German computer system XETRA. Incorporated stock exchange International Exchanges, or iX, becomes the largest share market in the Europe and serious counterbalance to Wall-Street.

System and Controls of the Stock Exchange.
The Principal organ of management of the Stock exchange was the Exchange committee - the elective body of Exchange merchant class. It was formed initially for supervision over safety of a new building of the Stock Exchange. With the course of time move to it all function of management, the solution of disputes, communication of businessmen and the governments.
Regulations of 1831 have approved behind Exchange committee the functions of commercial court, management of exchange affairs. At first the committee became an operating agency of the general Exchange assemblies. And since 1875 it was replaced by assembly of member of the city duma (80-150 elected persons).
The structure of Exchange committee (it was approved by above mentioned regulations) included 3 merchants and 3 brokers, was presided by “Mayor”, which headed the Municipal duma. The modern control system is much more complex. It has a great number of committees and departments where a plenty of people is working. Specialization in the decision of separate questions is useful, but on the other hand to the persons bearing the responsibility for activity of the Stock exchange as a whole, can be hard, follow actions of each part of the complex administrative mechanism. Collective nature of departments allows considering in more detail problems and questions, than if departments consisted of one person since people have an opportunity to unite the knowledge, experience, to offer some various decisions of any questions. However, there can be disagreements, and the majority is not always right, and the chief can be mistaken, choosing the correct decision.
In all control systems, beginning with Exchange committee, the basic controls were kept: GENERAL ASSEMBLY which selects EXCHANGE ADVISORY COUNCIL (ASSEMBLY of TOWN-COUNCILLOR). It in turn chooses representatives of BOARD (EXCHANGE COMMITTEE). The truth the PRESIDENT, unlike CHAIRMAN, is the person chosen by board, but the post from it has not changed.
We shall consider functions of the above-named controls:
General meeting of members of Stock exchange is the supreme body of management of the Stock exchange. The decision of following questions concerns to its exclusive competence:
- the statement and change of the charter, balance and other documents;
- an establishment of the sizes of all necessary monetary gathering, sizes of tariffs, payments for exchange services, the sizes of penalties;
- election of members of controls of Stock exchange;
- consideration of complaints to the decision of advisory council of the Stock exchange and boards of directors;
- the statement of the order of a payment and official salaries of the personnel of the Stock exchange.
The functions of Exchange Advisory Council of the Saint-Petersburg Stock exchange:
- an establishment of dates and time for Exchange assemblies;
- drawing up and the edition of rules about the order of carrying out of operations with securities, instructions for brokers on conducting books;
- definitions of the form of bulletin of the Stock exchange;
- an establishment of the size, the order and terms of deductions from a commission of brokers and regular customers of the Stock exchange, payments from visitors;
- the sanction of an assumption of securities and the quotation on the Stock exchange;
- the resolution of disputes, operations arising at carrying out with securities;
- reception and exception of members of the Stock exchange;
- estimating of incomes and charges of the Stock exchange and reports on their execution;
- granting to bodies of local authorities and the government of data and the analytical conclusions concerning development of the financial market.
Also some functions of a higher body can be assigned to Exchange Advisory Council of the Saint-Petersburg Stock exchange.
Board of directors is the executing agency of the Stock exchange. To its competence concern:
- the organization and a management of activity of the Stock exchange and its subdivisions;
- development, change and entering on the statement of General meeting of members of the Stock exchange and Exchange Advisory Council the documents regulating its activity;
- a suspension for the period of exchange trade, in case of if the prices of current transactions on the stock exchange deviate quotations more than on certain Stock exchange size;
- the order of property of the Stock exchange;
- the statement and change of the size deposited in a settlement payment of the mortgage and the liquidating credit;
- hiring and dismissal of personnel of the Stock exchange;
- imposing of penal sanctions.
Functions of Board of directors are carried out by executive committee. It is necessary to mention and the Revision committee. It carries out the current control for financial and economic activities of the stock exchange. Its functions are:
- check of a condition of money resources and property, and also office-work of the Stock exchange;
- drawing up of the report to General meeting about results of audit.

Stockjobbing.
In stockjobbing everyone played their own role. “Aces” set mood of day, giving orders to brokers. Their intentions defined actions of others.
If “the weak mood” (the offer exceeded demand), the “side scene” operating at own expense prevailed, hastened to sell the securities then to redeem them, still, more cheaply, but, bankers, waited, the further downturn that forced the speculators who have bought securities in hope for increase, urgently to sell out them. Brokers started to buy the necessary securities; they were followed with “side scene”, buying papers to sell them when the prices will rise.
In a return case “bulls” started to operate. They added the price and bought up securities, selling them after under higher price. But in parallel with them bankers operated also, the prices grew, but by the end of day of the price were usually stabilized.
Platform. Here played on a difference of rates. Some times for Exchange day intermediaries left on platform and informed on movement of the prices. Intermediaries used that their data cannot be checked up, well and clients could refuse the given assignments at any moment.
“American” is a stock exchange on which it was possible at any moment “to liquidate all unprofitable obligations and to disappear in unknown direction”. In the beginning similar assemblies passed furtively on the Neva prospectus - in the street or in money-change shops (for example, Nikitin’s office). Later all took place in extensive convenient premises.
Data about game on modern Stock exchange are not present, but I do not think, that the little changes took place. Always there are those who speculates on downturn/increase and always to own advantage.

Systems of trade.
The System of the trade by securities, since time of separation of stock exchange from commodity one, constantly changed.
Initially all transactions consist brokers at personal presence of people. Large Stockbrokers, appearing, gave orders to brokers, divided operations among themselves and started to operate. But a plenty present, noise and confusion, false movements, demonstrations, sometimes led to some misunderstanding. For example, on the different ends of hall transactions on the same security under the different price consist.
After the conclusion of significant transactions public gathered in some dense circles where there was a trade on running securities. The form of carrying out reminded auction - the prices were specified. Finally established they were considered after the first call. The second closed an official stock exchange.
Full members of the Stock exchange submitted a note about arranged deals which each broker has been obliged to bring in the books and bulletins, but this rule was quite often broken. Operations proceeded on platform where within day intermediaries informed data on the prices, mood, etc., quite often deceiving gathered there, in own purposes.
As there was one more kind of an informal Stock exchange - “American”. Behind the frauds occurred there to follow it was impossible, there were no legal guarantees.
After creation of an official share department not only system of the trade has changed, but also public of an institution. Its valid members - plenipotentiaries of commercial banks, bank buildings and offices - possessed exclusive rights: to operate without brokers, by proxy (no more than one) and improvised (no more than two). Advisory council of a share department consisted of these people and brokers; they informed given quoted commissions for drawing up of bulletins. The right to conclude transactions through brokers had regular customers, persons of 1-st trade guild of Saint-Petersburg. Visitors of a department could be only observers.
(to be continued…)

Imagine… The Northern capital of the Russian Federation… The city of drawbridges and white nights… And this city has its own stock exchange… And this stock exchange has its own history…
 Yes, to my mind it would be more interesting to learn the history of such little known stock exchange, than different well-known ones. Because the information about international stock exchanges like New-York, London, Tokyo stock exchange, AMEX, etc. you can find anywhere, and about Saint-Petersburg stock exchange not…
 So, the first commodity exchange in Saint-Petersburg appeared in 18 century. A little bit later (in 19 century) appeared the first Saint-Petersburg stock exchange. And in a short space of time took on special significance. It gave fantastic profits to lucky beggars or swingeing damages to losers. It has been revived in our time and makes profits to a great number of people. Who knows, would be these people so rich if they didn’t earn their money in the stock exchange?
 The Saint-Petersburg stock exchange was revived not so long ago (about 15 years ago), that’s why it would be more interesting to investigate its history starting with its foundation…

The history of Saint-Petersburg stock exchange since 18 till 20 century.

 The Saint-Petersburg stock exchange appeared in 1703. Initially it was the meeting of merchants near shopping streets at Troitskaya square. Then since 1713 it was situated at Gostiny Dvor at the same square. By order of Peter I the special building for stock exchange was built opposite of Gostiny Dvor in 1724 (the architect was Trezini). In 1730 the stock exchange was architected to Vasilyevsky Islandto the new building of Gostiny Dvor. Since 1783 at the Spit of Vasilyevsky Island were erecting the special building for stock exchange (the architect was Kwarengi). Unfinished edifice was demolished in1804. In 1805-10 at the Spit of Vasilyevsky Island (Birjevaya square, 4) were constructed new building of stock exchange (the architect was Toma de Tomon). At the same time the quay was rigged. Symbolism of statues, which the stock exchange were decorated, was very interesting. It was the statue of Neptune (the god of seas and oceans) and also the statues of Activity, Hope and Justice. The subsequent sources name a little bit others statues: the statues of Neptune, aged man (symbol of Volga) and woman (the symbol of Neva). On the other side of building were situated woman with the crown and two female figures (rivers) on each side. It was the imagery of navigation. This side of the stock exchange was festooning by the statue of Mercury (the god of trade). And in more subsequent books authors name two statuaries: “Neptune with two rivers” and “Navigation with Mercury and two rivers”.
 Primordially it was just commodity exchange. With the advent of interest-bearing securities in Russia at the Saint-Petersburg stock exchange put into practice stock transactions. Indeed from the beginning securities were one of the commodities. Since 1830 at the stock exchange began to take place operations with securities of private institutions. Since 1860-1870 they were traded actively. In 1900 commodity exchange and stock exchange were divided but continued to work in the same building.
 After Great October Socialist Revolution (1917) stopped to operate all exchanges and they were revived only in 1990. 
 Revival of exchange began on 24th of August of 1990, when was made a decision to found it. It was registered in 1992 and in 1997 the stock exchange was separated from the commodity exchange. According to the regulations of 1992 the Saint-Petersburg stock exchange is juridical person with all its indications (trade mark, its own appellation, State seal, etc.) Since 30 of April of 1992 the exchange “Saint-Petersburg” was registered as closed corporation. And since 18 of March of 1997 it became the nonprofit partnership upon request of Federal Commission on the Securities Market.
(to be continued…)

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