Exchange Alley, London

Exchange Alley or Change Alley is a narrow alleyway connecting shops and coffeehouses in an old neighborhood of the City of London, England, bounded by Lombard Street, Cornhill and Birchin Lane [ [http://books.google.com/books?id=_OwaAAAAMAAJ&pg=PA179&dq=%22change+alley%22#PPA180,M1 John Biddulph Martin, "The Grasshopper" in Lombard Street," New York, Scribner & Welford (1892).] ] . It served as a convenient shortcut from the Royal Exchange to the Post Office. The shops included ship chandlers, makers of instruments for navigation such as telescopes, and goldsmiths from Lombardy.

The coffee houses [J. Pelzer and L. Pelzer, "Coffee Houses of Augustan London," "History Today," (October, 1982), pp. 40-47.] of Exchange Alley, especially Jonathan's and Garraway's, became an early venue for the lively trading of stocks and commodities. These activities were the progenitor of the London Stock Exchange. Similarly, Edward Lloyd's coffee house, at 16, Lombard Street [ [http://waeshael.home.att.net/coffee.htm “The English Coffee Houses”, "Waes Hael Poetry & Tobacco Club." On Line.] ] but originally on Tower Street, was the forerunner of Lloyd's of London, Lloyd's Register and Lloyd's List.

History

Lombard Street and Change Alley had been the open-air meeting place of London's mercantile community before Sir Thomas Gresham founded the Royal Exchange in 1565 [ [http://books.google.com/books?id=_OwaAAAAMAAJ&pg=PA179&dq=%22change+alley%22#PPA180,M1 John Biddulph Martin, "The Grasshopper" in Lombard Street," New York, Scribner & Welford (1892), p. 207.] ] . In 1698, John Castaing began publishing the prices of stocks and commodities in Jonathan's Coffee House, providing the first evidence of systematic exchange of securities in London, England. Many stock jobbers, who had been expelled from the Royal Exchange for their rude manners, also migrated to Jonathan's and Garraway's.

Change Alley was the site of some noteworthy events in England's financial history, including the South Sea Bubble from 1711 to 1720 and the panic of 1745. "Change Alley in the South Sea Bubble", Edward Matthew Ward's painting now in the Tate Gallery, skewers stock jobbers' opportunism and the foolishness of investors. Contemporary songs and sarcastic decks of cards are described in Charles Mackay's "Memorial of Extraordinary Popular Delusions and the Madness of Crowds." Although lampooning the collapse of the South Sea Company has been a popular pastime, others have considered that "the basic outlines of the Anglo-American structure of finance were set by 1723 -– a complementary set of private commercial and merchant banks all enjoying continuous access to an active, liquid secondary market for financial assets, especially government debt. The South Sea Bubble proved to be the "big bang" for financial capitalism in England." [ [http://www.business.uiuc.edu/lneal/Econ238/howitall.htm Larry Neal. "How It All Began: The Monetary and Financial Architecture of Europe during the First Global Capital Markets: 1648-1815."] ]

Jonathan's, destroyed by fire in 1748, was rebuilt. In 1761 a club of 150 brokers and jobbers was formed to trade stocks. The club built its own building in Sweeting's Alley in 1773, dubbed the "New Jonathan's", later renamed the Stock Exchange [ [http://www.londonstockexchange.com/en-gb/about/cooverview/history.htm "Our History", London Stock Exchange] ] .

See also

* City of London
* Lombard Street, London
* Cornhill, London
* Joint Stock Company
* South Sea Bubble
* London Stock Exchange

References

Literature

* [http://books.google.com/books?id=_OwaAAAAMAAJ&pg=PA179&dq=%22change+alley%22#PPA180,M1 John Biddulph Martin, "The Grasshopper" in Lombard Street," New York, Scribner & Welford (1892).]
* Dianne Dugaw, "High Change in 'Change Alley': Popular Ballads and Emergent Capitalism in the Eighteenth Century", "Eighteenth-Century Life," Vol. 22, Number 2 (May, 1998), pp. 43-58.
* [http://www.pepysdiary.com/archive/1663/05/28/index.php The Diary of Samuel Pepys, May 28, 1663.]
* [http://waeshael.home.att.net/coffee.htm “The English Coffee Houses”, "Waes Hael Poetry & Tobacco Club." On Line.]