Known and unknown

INDEPENDENCE SPECIAL/ STOCK MARKETS

Punching in quotes from over 11,000 terminals is a far cry from the early days of trading. The preferred places for tips and trades in the early 1870s were bank precincts, the nerve centres of financial activity.

With rising numbers and banks driving them away from their premises, members of the Native Share and Stock Brokers Association, the precursor to the BSE, occupied the Brokers' Hall in 1899 and, finally, the Phiroze Jeejeebhoy Tower.

Nick Leeson of India
Dalal Street had its Nick Leeson in Chunilal D Saraiya, a manager at the India Specie Bank. His one and a quarter million rupee gamble on silver brought the bank to its knees. Chuni's kamikaze streak was the result of the returns the bets fetched "" a rather high Rs 200 per day in 1865.

I will speculate
Speculation was so rife during the American Civil War and the subsequent boom in cotton trade that the number of brokers rose from two digits to over a thousand in 1865. Even the babus could not resist.

A top bureaucrat, James M MacLean, reportedly said that he would not give up such a lucrative source as it made him more money than savings in his entire career.

What goes up...
During 1864-65, share mania saw the prices of Colaba Land Company rise from Rs 10,000 at par to Rs 1,20,000, and Backbay Shares touched Rs 54,000 from Rs 2,000.

What about crashes? Bank of Bombay grabbed the top spot. After touching a high of Rs 2,850, the share plummeted to Rs 87. The bust did not deter clairvoyant die hards. They were back in full force to take advantage of the boom in jute (1870), tea (1880 and 1890s) and coal (1904, 1908).

First traded security
The first security to be traded in the country was loan securities of the East India Company in Kolkata. In the 1890s, companies like Port Canning and Back Bay Reclamation were traded. Then came Ahmedabad Textiles, Arvind Mills and so on.

For a long time, in the late forties and early fifties, Tata Deferred (now Tata Steel) was the leader on the exchange, quoting at 2,700 per share for Rs 10 paid up. Thereafter, Century Mills took over as market leader and then came Bombay Dyeing and Bosh, followed by Reliance in the 1970s.

First operator
Premchand Roychand, one of the big operators when stock trading began in the 1860s, made a lot of money during the cotton boom and came to be called the cotton and bullion king.

A big operator in companies like Port Canning and Back Bay Reclamation, he pushed up these stocks to dizzy heights. For example, the Back Bay Reclamation stock with a face value of Rs 5,000 traded at Rs 50,000 per share.

First scam
Calcutta-based industrialist Haridas Mundhra became notorious for the first big financial scandal of free India. LIC circumvented rules and regulations to invest in shares of companies owned by Mundhra and lost money as these turned out to be worthless companies.

The crime was brought to light by Feroze Gandhi (Indira Gandhi's husband) and created a lot of political furore in Parliament and press, following which Finance Minister T T Krishanamachari had to resign.