A brief history of the New York Stock Exchange, the world's largest equities market, reveals how the modern stock market first emerged to help a new government-the United States of America-pay off its debts. It then grew and developed to meet the needs of both public corporations seeking capital and investors seeking profits.

In 1790, there were only two types of securities to trade: Revolutionary War bonds that the newly formed American government sold to pay off an $80 million war debt, and shares of stock in the first national bank, called the Bank of the United States.

Stock brokers, merchants and auctioneers bought and sold

these stocks and bonds in offices, coffee houses, marketplaces and other locations on and around Wall Street. Without a set location and time for trading, sellers and buyers had to search for each other all over town. In technical terms, this stock market was not very liquid, meaning sales and purchases of stocks were not quick and easy.

Domestic listing requirements call for minimum distribution of a company's shares within the United States. Distribution of shares can be attained through U.S. public offerings, acquisitions made in the U.S., or by other similar means. Note that there are alternatives to the round lot-holder and pre-tax earnings standards.

Prior to going public, a company contacts an investment bank to advise them about how many shares to offer and the price of the shares. The investment bank plays the role of underwriter. The underwriter is responsible for the legalities of the deal as well as selling shares to public investors.

A company faced with growing pains may choose one of several ways to raise needed capital.

When a corporation's stock is issued for the first time it is called an initial public offering (IPO) and it is traded in the primary market. Later, when the stock is resold to other investors, it is sold on the secondary market, such as the New York Stock Exchange (NYSE). By going public, the company is transformed from a private business owned by a few people to a public corporation owned collectively by a large pool of investors, or stockholders. Here's what makes that process so enticing to investors.

One alternative for investors is to invest their money in corporate bonds, long-term loans to growing companies. Companies sell bonds at a specific rate of interest. So the investor knows exactly how much will be earned - called rate of return - and how long the money will be tied up.

On May 17, 1792, 24 Wall Street brokers solved the problem of liquidity at the stroke of a pen. They agreed, in writing, to trade only with each other. Thus, the world's largest stock exchange began humbly with a simple two-sentence document called the Buttonwood Agreement. The agreement was named after the brokers' informal meeting place-under a Buttonwood tree at 68 Wall Street

Buying shares of stock in a company is another way to invest your money. Stocks, or equities, come in several forms. Some have enormous growth potential in the short term; others grow steadily in value over a long period of time. Many stocks pay a cash dividend to shareholders. All stocks carry a degree of risk. As with all investments, a higher amount of risk generally means a greater potential return.

(D) Pre-tax income is adjusted for various items as defined in the NYSE Listed Company Manual.

If you've worked hard to save up some extra cash, you'd probably like a safe place to store it. For some people, the inside of a mattress seems like the perfect spot. But hiding your money doesn't necessarily make it safe. It could get lost, stolen or damaged. Just as important, it would not be "working" to make you more money. In fact, when you consider factors such as the increasing cost of living - inflation - the money hidden in your mattress would be worth less in the future.

Corporate bonds usually pay higher interest than government bonds, but they are somewhat riskier. They are not as risky as stocks, however. If a corporation goes bankrupt, bondholders, as creditors, are paid their money before stockholders. Corporate bonds are either secured or unsecured. A secured bond means that the corporation backs the loan with specified assets or collateral. If the company fails to make interest payments or repay the principal, then those assets (such as airplanes, stock or equipment) are sold to meet the company's obligations. An unsecured bond, or debenture, is backed only by the faith and credit of the corporation.

In order to choose the best investment for you, you have to evaluate your personal investment goals

Some common words found in the essay are:
Chapter VII, AT&T Sears, Bills Municipal, Inc NYSE, Capital Succeed, United Distribution, Stock Watch, Exchange Exchange, Putting Money, Buttonwood Tree, shares stock, preferred stock, stocks bonds, common stock, stock exchange, stock owners, preferred stock owners, stock split, stocks issued, municipal bonds, outstanding shares, defined nyse listed, items defined nyse, listed company manual, nyse listed company,
Approximate Word count = 3491
Approximate Pages = 14 (250 words per page double spaced)