Julia C. Ott

You have not been recognized as a subscriber to JAH online. About 655 words from this article are provided below; about 15140 words remain.

If you are a individual member of the Organization of American Historians, you may:: • login here if you have already registered for online access.; • Or if you're already logged in register your subscription.
• Set up your online account for the first time.
If you are not a member of the Organization of American Historians, you can:: • Join the OAH and receive many member benefits including print and electronic issues of the Journal of American History.
• Purchase this article in PDF form for $10.00.
• Purchase a research pass to gain two-hour access to the entire History Cooperative web site. You will have full access to current issues of the Journal of American History (86.1-present). Note: the Research Pass does not provide access to JSTOR's holdings of the Journal of American History.
Instititutions can:: • Subscribe to this journal and receive print and electronic issues.
• Activate your existing subscription so that we recognize your IP number ranges.

Julia C. Ott | "The Free and Open People's Market": Political Ideology and Retail Brokerage at the New York Stock Exchange, 1913–1933 | The Journal of American History, 96.1 | The History Cooperative

"The Free and Open People's Market": Political Ideology and Retail Brokerage at the New York Stock Exchange, 1913–1933

Ever since its establishment in 1792, the New York Stock Exchange (NYSE) had endured antipathy. But in 1913 it faced political onslaught. Muckrakers had fingered the NYSE as the minion of monopoly capitalism. With the exchange caught in the cross hairs of Progressive reform, its future as a self-governing institution seemed in doubt. Would privately administered markets continue to value and circulate financial capital, free from any regulatory constraint?	1
Beginning in 1913, the stock exchange harnessed populist and Progressive rhetoric to sustain itself against an expanding state. This private association of stockbrokers and traders asserted that its structure of self-governing experts served only the investing public. Regulation, it alleged, would compromise access to its "free and open market." Beginning in 1922, the exchange endeavored to enlarge the shareholding class, but only after its leaders grew convinced that new shareholders would become political allies. In the 1920s, to promote universal stock ownership, the self-styled "people's market" promulgated an ideology of shareholder democracy.¹ It recast the corporation as a democracy of shareholders, the United States as a nation of stock owners, and the stock market as both an analogue and an instrument of political democracy and economic justice. Yet even as the NYSE portrayed the stock market as a means to achieve key social goals—the preservation of political liberty, the assurance of economic security, the democratization and stabilization of capitalism—it rejected any suggestion that citizen shareholders might benefit from a modicum of regulation. Instead, exchange envoys urged everyman to renounce the state as an agent for managing economic risk.	2
As exchange emissaries encouraged an increase in the number of American stock owners—from a few hundred thousand before World War I (about 3 percent of U.S. households) to an estimated 8 million by 1929 (roughly a quarter of households)—they established basic economic precepts of modern political conservatism. They advanced the notion that laissez-faire financial markets facilitate individual opportunity, prosperity, and security while optimally allocating capital and economic risk. The NYSE identified the maximization of investors' returns as the paramount goal of state and corporate policy. Stock exchange public relations ranged far beyond the issue of self-governance. Also at stake were fundamental debates about the nature of liberalism, the fate of democracy, and the distribution of economic power under corporate capitalism.²	3
On the afternoon of December 30, 1899, the members of the New York Stock Exchange assembled. Yuletide greenery gaily festooned the trading floor. An "arch of incandescent lights" blazed "Welcome, 1900." Suddenly, the Seventh Regiment Band "burst forth in a lively tune" amidst a "highly colored snowstorm" of confetti. In a makeshift ring, bull battled bear (actually, "two colored pugilists" in disguise). When the bull scored a knockout, NYSE members boisterously debated whether the bear had thrown the fight. Frenzy erupted as confetti, bonbons, and "red rubber balls" were released from the gallery above. Members lobbed the balls at the heads of bald brethren. Hapless traders found themselves hooded, "hands seized from behind," as colleagues "buffeted" them about the floor. The bedlam abated only when the former Rough Rider Charles E. Knoblauch auctioned a "bull, a bear, and a lamb, and as is usually the case when they are dealt with by brokers, the lamb was turned away as worthless." (See cover.) Some prankster had removed his tail. Consequently, "no bid was made." The bear fetched $100; the bull, $200. Carousing then concluded with "a cakewalk."³	4
As exchange members fell in line to revel in their notoriety, they could scarcely have imagined that in the new century the lamb would have his day. By 1913 the protection of outsider investors of modest means would move to the center of economic reform agendas. NYSE brokerages would embrace everyman's entrance into the stock market after World War I.	. . .

There are about 15140 more words in this article. Please log in (or, if you are not yet an authorized user, please go to the User Setup page) to gain full access rights. Or if you're already logged in register your subscription.