By William Emerson

Since the 1790s, groups of brokers have gathered to piece together a financial market. And after the Civil War, regional exchanges really took off. The history of the early exchanges has been largely forgotten, “but they were engines of regional growth, facilitating the flow of capital into area business ventures and stoking their local economies,” stated Amy Cortese, author of Locavesting: The Revolution in Local Investing and How To Profit From It.


According to a research study on the role of regional exchanges, the areas that saw the most manufacturing growth (175% on average) were those with an exchange.

Thus, regional stock exchanges were strongly associated with regional economic growth. Through securities regulations, business was bled away from the regional exchanges in favor of the bigger exchanges like the New York Stock Exchange. With the advent of technology, further consolidation occurred and the nature of the markets themselves changed from a not-for-profit status to being publicly traded entities as well. The focus shifted to larger companies with higher trading volumes and profits. Cortese pointed, “Wall Street is less a place than a metaphor for a vast, pulsing financial network that, in its pursuit of profits around the globe, has lost its sense of purpose and connection with the communities and regions it once served.”  Of the trillions of dollars flowing through today’s exchanges, 99% is trading and speculation with the remaining 1% funding innovation and expansion. The purpose of the market was to raise capital, now the trend is of a speculative nature.


New community focused stock exchanges would handle all of the functions of a stock market, listing company shares, providing price information, and facilitating trading, but for a specific region. As the major stock exchanges continue their global consolidation, community focused exchanges would offer an alternative for a region’s companies and investors, much like the small exchanges that once flourished across the United States and other countries.


At a time when many communities are promoting buy-local campaigns, new local exchanges could serve as a focal point for local economic activity, as well as a branding tool for the region and its unique local enterprises. “Activity may be slow, and there won’t be the kind of volatility that allows traders to make a quick killing, but then, that’s exactly the point,” explained Cortese.

Local stock exchanges, like the kind that once dotted the land and served their regional economies, are staging a cautious comeback. They are seen by their proponents as an alternative to the frenzied speculation of modern markets and a way to reinvigorate capital investment in small, innovative firms and regional economies.


The biggest benefit of local exchanges is liquidity. Investors would be able to sell shares if they needed to, rather than having to hold them indefinitely, making many types of local investments more attractive. Regional exchanges could lead to a greater volume and diversity of publicly traded companies and help offset the decline in listings at major exchanges. Investors would gain access to a diverse pool of qualified companies in their region to invest in.

Local exchanges would be free of casino-like speculation and high-frequency trading; traders won’t be attracted to markets where there is not a lot of action. Communities can take back control and promote their own economies.


Great change always comes with some risk. Any new exchanges will likely take some time to get established.

While the markets would provide liquidity, trading is likely to be light and even intermittent. Small companies of the type that may list on a local exchange may carry more risk than large, well-capitalized ones. The availability and quality of company research may not be the same as for large caps that trade on the major exchanges. A community focused stock exchange is a compelling idea that could, if well executed, provide a safe, alternative marketplace and important source of liquidity for small, locally based companies and investors.




A Christian and patriot, William Emerson is a small town boy who enjoys football and everything American. “Do nothing out of selfish ambition or vain conceit. Rather, in humility value others above yourselves.” - Philippians 2:3