Once Upon A Time You Could See the Stock Market.
Listener: 19-26? April, 1997.

Keywords: Business & Finance; Globalisation & Trade;

While economists talk about “markets”, and business commentators personify them, it is rare to be able to see one as they are described in the textbooks. The stock market, which buys and sells company shares once had such a visible presence. David Grant’s book Bulls, Bears, and Elephants: A History of the New Zealand Stock Exchange is rich with stories of share market dealing – not all of which were honourable. It also pictures the stock market through time.

Picture 1 (page 64) shows the 46 members of the Dunedin stock exchange in August 1900 at a “callover”. Just to the right of the picture were three men who announced each share in turn and the members would call out the price they wanted to buy or sell.

This lasted until the 1960s. The book has a pair of pictures of the very small Invercargill stock exchange in 1920 and 1960. You can hardly tell the difference except by the clothing the brokers wore. Picture 2 (page 214) shows the last callover in Auckland in September 1963, with three men up front recording the sales.

Shortly after, the regional exchanges switched to “post trading”, with a blackboard at one end, on which the brokers’ offers and sales were chalked up. This is the public’s most common view of the stock exchange, because most of the floors had public viewing galleries. Note the collective telephones in Picture 3 (page 217) of the Wellington trading floor in 1972. In the callover era telephones were discouraged because they were thought unfair. Note also the mini-skirt of the “chalkie”. There is a myth that the height of the fashionable skirt correlates with the price of shares.

By 1990 dresses lengthened, and there were individual phones for seated brokers. Picture 4 (page 270) It is almost as if the upfront three of the callover had been replaced by a chalkie. The phones meant that the regional stock exchanges were integrated, since a broker could find out what was happening elsewhere and adjust his (or after 1981, her) bids accordingly. In 1996 there were 6 female and 212 male brokers.

And so telecommunications steadily took over until in 1991 the trading was switched to computers, with no trading floor. Picture 5 (page 358) shows the beginning of the end, as Minister of Justice, Doug Graham, switches on the new system. Today the physical presence of the actual stock exchange is some chip in a national computer, with myriads of wires attaching it to computer screens, such as the one in the back of the picture, often miles (and hundreds of miles) away from the chip which replaces the chalkies. One chief executive calls his screen room, “Star Wars”.

Today teachers can no longer take their students to the local exchange to show what a textbook market looks like. There are still a few such markets, but increasingly telecommunications and globalization are eliminating them, replacing a place where it happened with the flickering of a screen.

(I seem to have lost the original of this photo-essay, so I am not sure when it was published.)