Monopoly and Inequality in the Early London Stock Market: State Lottery Tickets and the Decline of the ‘Small-Cap’ Market, 1689-1702

Jackson Tait

In his pioneering publication, A Collection for Improvement of Husbandry and Trade, broker and financial journalist, John Houghton published the first quotation for Million Adventure Lottery tickets on the London market on May 18th, 1694 for 7 pounds-per-ticket. The introduction of English state securities into the secondary trading market, during a wartime stock boom, would severely effect the existing nascent ‘small-cap’ market of private unincorporated paper, linen, glass, and mining companies. In December 1695 there were 38 unincorporated companies listed in Houghton’s publication that traded under 20 pounds-per-share. By December 1696 there was only one listed, and by January 1698 there were none. Following the end of the Nine Years’ War, Million Lottery tickets would exclusively share the under twenty-pound trading market with the chartered Royal African company until 1702. An analysis of the under twenty-pound market in the financial press from 1694-1702 reveals the decline of the small unincorporated company from the moment that government stocks entered the secondary trading market in the spring of 1694. State sponsored enterprises would monopolize the London trading market for the majority of the eighteenth-century.