The following historical note is taken from what appears to be a 1951 publication of the Detroit Stock Exchange. It was prefaced by this statement: "The material in this booklet has been reprinted from a special issue of INVESTMENT DEALERS' DIGEST. We believe it has been carefully compiled but cannot guarantee the accuracy of all data."
The early history of the Detroit Stock Exchange dates back to the debut of the "horseless carriage." Interest and activity in the Exchange paralled the phenomenal growth of the automobile industry to the point where today its influence extends far beyond the geographical limits of the Detroit area.
Starting operations in 1907, the Detroit Stock Exchange sponsored trading in local infant industries, some of which are now giant corporations of national or world-wide impact. In its early years, the Exchange was the public market for many companies whose ownership barely extended beyond the state of Michigan. Six corporations originally listed on the Detroit Stock Exchange in its first year still find their principal markets in that city.
Included among the nationally known companies first dealt in on the exchange are Parke Davis, Scotten-Dillon, Detroit Edison, Michigan Sugar, Detroit & Cleveland Navigation and Detroit Michigan Stove-all listed in 1907; Burroughs Adding Machine, Reo Motors and General Motors were listed in 1909, 1910, and 1911, respectively. In 1950 these nine stocks traded 825,256 shares, which is indicative of the sustained interest in Detroit listings.
Other companies which were first traded on the Detroit Stock Exchange in the early years of its existence include such well-known names as Packard, Maxwell (now Chrysler), Briggs, Murray, Motor Wheel, Timken-Detroit, Houdaille-Hershey and Pfeiffer Brewing.
The Exchange kept pace with the amazing growth of Detroit whose nickname "Motor Capital" tells only part of the story of the widely diversified commerce and industry located in that city. In addition to its well-known leadership in motor cars, bodies and motor parts, Detroit is today the metal working center of the world. It also ranks at or near the top of the entire country in pharmaceuticals, adding machines, foundary products, machine tool accessories, stoves, paint and heavy chemicals. In fact, there are more workers in Detroit's non-automotive factories than there are in all the factories in Texas. Moreover, there are only 12 states in the U.S. wherein total manufacturing equals or exceeds Detroit's non-automotive figure.
The city's favorable location on the Detroit River has been an economic factor in locating many steel plants in the area. Not only is there low-cost transportation on the Great Lakes, but Detroit's steel industry is at the door of a large source of scrap(metal)-the motor industry itself. As steel plants go, so go many allied industries.
While Detroit grew to be the industrial capital of the world, financial progress-as indicated by the Detroit Stock Exchange-did not quite keep pace with manufacturing progress in the 1940-1950 decade. It was in May, 1950, that a step was taken to put the Detroit Stock Exchange on the national financial map. The (exchange)governors voted to extend the Detroit market for stocks to every security dealer who was a member of the National Association of Securities Dealers or another stock exchange. Commissions on transactions by these out-of-town dealers was divided on a 40/60 basis with non-Exchange members. (In other words, 60% of the stock exchange commission was received by the executing Detroit Stock Exchange member firm and 40 % to the order-originating non-member firm).
With this preferential rate to security dealers throughout the United States, Detroit became, in essence, a national exchange. Activity from cities near and far has steadily increased in round lots, and even more so in odd lots.
No longer is the Detroit Stock Exchange a reflection of one area or one industry. The securities dealt in represent wide diversification of industry. Furthermore, many nationally known securities traded can be transferred in Michigan or other midwestern states. This eliminates payment to certain states that exact tribute on transfers of stock.
Thus, with its facilities open to the entire country-investor, dealers, institutions- the Detroit Stock Exchange has come to be a national as well as Michigan's marketplace.
THE EDITORS
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