When was the Stock market established?

Let’s rollin’ bud,

Most people still think that New York City or London has the first stock exchange, but there’s a catch here. This money pool game was officially established in the year 1602 in the city of Amsterdam, “the Venice of the North”.

This turning point in the global financial history was marked by the Dutch East India Company (VOC), to fund their huge trade payments with Asia, which was far more than any single merchant or bank was able to provide. So, to deal with this problem Dutch East India Company (VOC) issued shares to the public, which was happening for the first time in history, so that now an ordinary citizen can also have ownership in big companies and can have profits or suffer losses through these shares, which are also known as Stocks. This whole new idea got so much attention that it needed to be centralized in a place where people could buy or sell their stocks.

This is how the world got its first ever officially established stock exchange, “The Amsterdam Stock Exchange”.

Why Amsterdam Became the Birthplace of the Stock Exchange?

Selecting Amsterdam for the official establishment of the stock market wasn’t just a random pick. In the 17th century, the Dutch Republic had explosive growth, which is also known as the “Dutch Golden Age”. There are plenty of reasons behind this surge in growth, but the main reasons behind it were:-

• Dominance in global trade & shipping
• Financial innovation & capital accumulation
• Efficient & practical government
• Technical & scientific advancement
• Religious tolerance & immigration
• Financial innovation & capital accumulation.

These factors made Amsterdam a perfect place for financial experiments and innovation. Due to these facts, it earned the title “The Venice of the North.” This is how it became the birthplace of the very first stock exchange, which also gave an average wage earner the opportunity to invest and build wealth, which is something only elites
had access to. This huge shift in the financial sector, where anyone can dream of having a Fortune now, and set the stage for the first publicly traded company.

What Was the Dutch East India Company and What Did It Do? (The birth of the Modern stock market)

So, now we know everything about how, when & why the Stock Market was established. Now, let’s take a dip into the company that initiated this great, remarkable idea for the first time in global financial history, the “Dutch East India Company”. It was also known as the Vereenigde Oostindische Compagnie and shortened as VOC, founded in 1602.

It was a trading company formed through the government by uniting small rival companies as they were snatching each other’s profits to create a strong & reliable entity that could withstand rival European powers.

“Johan van Oldenbarnevelt” had the vision & was the primary architect behind this tremendous idea. VOC wasn’t just an entity, it was considered the world’s first multinational company & as we know, the first one to issue publicly traded shares.

When and Why Was the VOC Created? [For beginners 2025]

Back in the 1600s, during the days before this idea existed, the Dutch government suffered from strong competition from other European powers such as Portugal and Spain in the spice trade between Europe and Asia. Rivals heavily dominated the routes of this trade while the Dutch struggled to compete with them.

So, in order to overcome this issue, the DUTCH GOVERNMENT established the VOC as a global enterprise with their unmatched strength of its NAVY, trade networks, and public funding. As a result, the VOC gradually turned the tables by dominating rival trade routes and revolutionized finance, becoming the first true multinational company and giving birth to the first modern Stock Market.

How did the stock market spread across the world? (From Amsterdam to Wall Street) 

London {1698}

After Amsterdam, this financial experiment boomed and gradually started to spread like a virus all over the world.

First, this got hyped in London. But the start of London wasn’t like having a centralized place. This stock thingy started to take shape from the coffee houses in the late 1600s by a man named “John Castaing”. This Stock Market idea thrived in London when the British Empire’s Colonial

Expansion required financing. Merchants, aristocrats, and adventurers sought a method to arrange funds for ships, goods, and colonies. Thus, they chose to fund them all. They began pooling money through joint-stock companies, a concept reminiscent of the idea already tested in AMSTERDAM.

New York City {1792}

After the American Revolution, America emerged as a nation freed from British rule. Consequently, the new American republic began to industrialize rapidly. Investors were eager to fund railroads, steel, oil, and banks. With its strategic port in NYC, it became a centre of trade, commerce, and migration. In 1972, 24 stock brokers and merchants gathered and signed the “Buttonwood Agreement,” which was a simple decision to trade securities among themselves and establish a commission rate.

After Amsterdam & London, other European cities also took part in this and began launching exchanges.

• Paris Bourse {1724}
• Frankfurt Stock Exchange {1585} modernised in {1800s}
• Milan Stock Exchange {1808}

Around the late 19th and 20th centuries, Asia also entered.

• Tokyo Stock Exchange {1878}
• Hong Kong Stock Exchange {1891}
• Shanghai Stock Exchange {1990} 

Why did the Stock Market Spread Globally?  

Every other country was under development at that time, and after the stock market idea boomed, it became the best platform through which they could cope with the need for money for war, expansion & industrialisation. The stock market also became a better way to stabilise local economies, build global dominance, and attract foreign investors.

Final Thoughts

The stock market demonstrates that human nature is always hungry for evolution, innovation, and growth. From the streets of Amsterdam to the skyscrapers of NYC, this has been proven. It started as an idea accessible only to powerful personalities, but now it’s open to anyone who wants to make a fortune from it.

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