This week in history: Toronto sets up stock exchange

After the War of 1812 confirmed British (rather than American) control of Canada, the colony became popular with emigrants. By 1845, well over half a million people had moved there, creating investment opportunities in everything from fur trading to mining.

At first, these enterprises raised funds on the London Stock Exchange. But as Canada's economy grew, brokers began selling bonds and shares to locals. Soon it became clear a secondary market was needed to allow investors to trade easily.

In 1832 the Montreal Stock Exchange was established. But by 1852 growing demand had prompted a dozen businesspeople in Toronto to set up their own association of brokers. Nine years later, in October 1861, this became the Toronto Stock Exchange (TSE).

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Initially, there were 18 listed firms and 14 brokerages, with trading limited to half an hour each day. But the TSE grew rapidly. Between 1871 and 1901 the price of a seat on the exchange rose nearly 50-fold to C$12,000.

The TSE even weathered the 1929 Wall Street Crash well, with all member firms remaining solvent (2,000 American brokerages went bankrupt).

By 1934 it had surpassed its rival in Montreal, and after World War II it gradually absorbed the smaller regional Canadian exchanges. It is now the seventh-largest stock exchange in the world.