Mention the "Cincinnati Stock Exchange" to your average Cincinista on the street, and chances are you will get a blank stare and/or indifferent shrug in return. To a group of dedicated journalism students at UC however, the Cincinnati Stock Exchange represents a labor of love which began in the fall of '09, recently culminating in the Cincinnati Stock Exchange Project
website. While relatively unknown in recent memory, the CSE, which operated in the formal sense from 1885 until 1995, was at the leading edge of the technological transformation of the global securities markets in the mid-1980's.
But first, a little back story.
This past Sunday, the
Cincinnati Preservation Association held its annual meeting at the Carnegie Center in Columbia Tusculum. In discussing the ongoing kerfuffle over the historic Gamble House in Westwood, CPA executive director Paul Muller observed that "the history of James Gamble was sort of buried, yet historic buildings can act as bookmarks to past stories and events." As a result, the debate over preserving the Gamble House (which absolutely must be preserved), has unearthed the amazing story surrounding the history of James Gamble.
In a similar vein, the absolutely stunning Dixie Terminal Building at the corner of 4th and Walnut downtown acts as something of a partial bookmark to our city's fabled streetcar past. Although no longer functioning, the wall above the descending stairs on the lower level reveals a faded lettering of "To Trains," as the building once functioned as the major gateway to the South for the streetcar (and, post-1936, the bus). The Terminal even had its own direct access ramp to the Roebling Suspension Bridge, later dismantled in the reconfiguration of Ft. Washington Way.
While the Dixie Terminal acts as a bookmark to the streetcar past (and, presumably, a bright future), it is also a bookmark to an even more longstanding past - that of the Cincinnati Stock Exchange ("CSE"). While the CSE operated in a number of locations, for much of its history it toiled away on the second floor of the 1921-era Dixie Terminal. The magnificent lobby, with its Rookwood-tiled entrance and 325 foot marble and glass-lined arcade, featuring a Roman barrel-vaulted ceiling, is a space unmatched by any other lobby downtown. The medallions on the ceiling murals are worth a climb to the second floor balcony, with your standard issue cherub (or "putto") riding grasshoppers, spearing fish, harnessing rabbits to chariots, and in one particularly odd scene, what appears to be a precocious cherub hammering a stake into an elder's heart (I'm told it's intended to replicate a boy hammering away at a bust of an unknown individual, possibly the architect or one of the owners). As a side note, why folks in this city don't take greater advantage of such an amazing, piece-of-art space is a mystery to me. Peripatetic fundraisers take heed…yet I digress.
The Dixie Terminal was something of an incongruous and serene locale for the seemingly chaotic and cacophonous business of a stock exchange, but the CSE, as history shows, was no ordinary stock exchange. At the prodding of UC Trustee Buck Niehoff, and under the tutelage of Assistant Director of UC's Journalism Program, Elissa Sonnenberg, a group of UC students toiled away in a laborious year-long project which set about unearthing and reconstructing the long and colorful history of the CSE. Sifting through over 170 boxes at the
Cincinnati Historical Library, set deep within the bowels of Cincinnati Museum Terminal, the students were able to painstakingly unearth an elaborate and detailed story of the CSE, all of which is laid out in great detail on the website. As UC senior Corey Gibson commented, the research was "very difficult - you can't just go on Google…we had to dig through boxes and manuscripts for an entire quarter."
While not looking to steal the thunder (not to mention, hard work) of the UC students, a few highlights from the website need to be noted. For much of its history, the CSE was one of seven disconnected stock exchanges, along with Boston, Chicago, Philadelphia, San Francisco/Los Angeles, the New York Stock Exchange and the American Stock Exchange. These individual exchanges were independent and without communications connectivity, and all operated within the very large and dominating shadow of the uber-exchange NYSE.
In the mid-1970's the Securities and Exchange Commission sought to deregulate the U.S. securities markets using modern telecommunications and computerization tools. In so doing, the exchanges would essentially move from floor-based models to screen-based models, in the process allowing small brokers and clients to compete on a more equalized playing field with Wall Street. The CSE, under the leadership of then President Nick Niehoff (brother of the aforementioned Buck), spearheaded efforts in developing the first automated and interconnected national securities exchange, dubbed the National Securities Trading System (NSTS)."
As noted in "
The Birth of the Modern Stock Market," by now-UC graduate Megan Groves: "The NSTS, in one form or another adaptation, remains pervasive throughout securities markets today. While software packages have evolved, the system is still based on the best execution model, where investors never want to pay more or sell for less money than they could have obtained in another market…The NSTS's greatest success was, and still is, its ability to maintain best-order execution as the lowest cost provider in a very rapid trading environment."
The technology framework developed for the CSE is now used worldwide, and laid the groundwork for future innovations including airline reservations and ATM machines. By 1986, the system had gone global, being adopted by other regional exchanges as well as NASDAQ, while the lone holdout NYSE remains in "semi-manual mode." While the CSE was absorbed by the Chicago Board Options Exchange in 1995, pulling up its stakes and relocating to Chicago, its legacy continues to endure in securities markets across the globe.
The Cincinnati Stock Exchange website, while going to great lengths to illustrate the lengthy and illustrious history of the CSE and its innovators, is not simply a static project. It is also intended to be a dynamic and evolving repository for those who worked for or with the CSE, so if you know anyone with a story to share, or are just plain curious, be sure and check it out.
For the UC students, it provided an invaluable opportunity for an old world research-type project on a somewhat forgotten subject, and it was not without its rewards. As Gibson noted, "I realized I could do this. I could interview the Vice President of Kroger, and it really showed me I could be a journalist." In a city with a rich and storied history of bold innovation, the CSE is just one more notable chapter. Many thanks to Nick and Buck Niehoff, Elissa Sonnenberg and her dedicated UC students for shedding some well-researched light on this fabled past.
Photography by Scott Beseler.
Cincinnati Stock Exchange, December 30, 1899 (provided)
Photos of Dixie Terminal on 4th Street, Downtown, Cincinnati