New York, 1896
In 1889, two American journalists, Charles Dow and Edward Jones, started the Wall Street Journal, a newspaper listing the prices and statistics of shares, bonds and commodities. In 1896, they conceived an index listing, for the first time, only the shares of industrial companies: the Dow Jones Industrial, soon to be known as THE Dow Jones. Though it initially only contained 12 companies listed on the New York Stock Exchange (Wall Street), these companies had one thing in common: to grow, they were dependent on the development of mass consumption. A winning bet, thanks to new technologies revolutionising production processes and consumer habits.
Engraving depicting the signing of the Buttonwood Agreement
Museum of the City of New York, Courtesy of the Library of Congress, LC-5a12096u
The Agreement, signed in 1792 by traders on what is now Wall Street, is considered the founding deed of the American Stock Exchange, although the New York Stock Exchange (NYSE) was only officially established on 8 March 1817.
In the document, the signatories agreed to only trade with one another and to limit their commission to 0.25%.
Facsimile of the “Buttonwood agreement”, signed on 17 May 1792 on Wall Street
Courtesy of New York Stock Exchange Archives / NYSE Group, Inc
The first to be informed
The New York Stock Exchange (Wall Street) dates back to the agreement signed in 1792 by 24 brokers beneath a plane tree on Wall Street. It quickly developed various means of communicating events as quickly as possible: Pony Express riders, the interception of US bound ships from Europe by fast schooners, and at a later date the use of the telegraph. In 1867, Thomas Edison, who worked on the Associated Press telegraph, constructed a machine for printing stock prices remotely on paper tapes. As the machine made a noise resembling a “tick”, the code (often three- or four-letter) used for designating a share became known as a “ticker”.
Edison universal stock ticker circa 1897, which was used through the crash of 1929
Museum of American Finance, New York
The history of the Dow Jones is no long, slow-flowing river!
In this picture, the artist Luke Jerram depicts the development of the Dow Jones index between 1980 and 2012. The 1987 crash is clearly visible (the index fell 22.6% on 19 October), as is the 1990s “technology bubble” which burst in 2002! The index then boomed, only to plummet during the 2008/2009 “sub-prime” crisis – on 9 March 2009 it dropped to the same level as in 1997!
But looking at how it has developed since it was created, the trend is clearly upwards, despite the successive crashes which have blighted its history.
Luke Jerram, Crash ! Dow Jones 1980-2012, glass