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A Note on the Origin of the Averaging and Indexing of Stock Prices

Published online by Cambridge University Press:  24 July 2012

George W. Bishop Jr.
George W. Bishop Jr.
Affiliation:
Professor of Finance, Northern Illinois University
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Abstract

In the manner of the Creole tradesmen of Louisiana, whose lagniappe to their patrons is legendary, the Editors offer a similar bonus to readers of the Review. Instead of trifling presents added to a purchase, however, our lagniappe will be documents illustrative of the evolution of business enterprise. It is hoped thus to provide a wider availability of the raw materials of business history to teachers and researchers.

Type
Lagniappe
Information
Business History Review , Volume 39 , Issue 3 , Autumn 1965 , pp. 403 - 405
Copyright
Copyright © The President and Fellows of Harvard College 1965

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References

1 Wall Street Journal, September 24, 1889.

2 The Dow, Jones Averages & The Barron's Averages (3rd ed., New York, 1931)Google Scholar, no page numbers.

3 Dice, Charles Amos, The Stock Market (Chicago and New York, 1928), p. 454.Google Scholar

4 Van Strum, Kenneth S., Forecasting Stock Market Trends (New York, 1927), p. 263.Google Scholar

5 That an earlier date might be established appears possible since Dow in an editorial in Wall Street Journal, dated February 27, 1902, writes: “Our record of average prices does not go back to 1860, but with the war and the inflation of the currency, quotations of stocks between 1860 and 1865 could not be considered fairly representative. The starting point of modem compilations of stock prices was in 1868, when the reaction after the inflation immediately following the war was felt.”

6 Mitchell, Wesley C., “The Prices of American Stocks: 1890–1909,” Journal of Political Economy, vol. 18 (May, 1910), p. 345.CrossRefGoogle Scholar

7 Ibid.

8 The forgotten Bureau of Economic Research was located at 35 Lafayette Place, New York City, and had an ephemeral existence. It published the two quarterly bulletins re ferred to above. Commons was associated with Professor E. W. Bemis, N. I. Stone, and George H. Shibley in the enterprise. The bulletins described the objectives of the organization as follows: “The Bureau of Economic Research is organized for the investigation of practical subjects in Economics, Statistics, and Politics, from a non-partisan but progres sive standpoint. It will undertake on application an inquiry upon any point or subject in these fields, requiring access to the greater libraries of the United States, or requiring expert field work. These services are expected to be of value expecially to public officials, legisla tors, congressmen, journalists, students, writers and economists.” See, Commons, John R., Myself (New York, 1934), pp. 63–67Google Scholar on this interesting development. This organization should not be confused with the National Bureau of Economic Research which was not founded until 1920.