The rest of the story is more familiar. The securities market grew much larger later in the nineteenth century, as stock first in railroads and then industrial corporations came to dominate trading. The states and the federal government began to threaten regulation more and more frequently, until early in the twentieth century many states enacted the so-called “blue sky” laws, requiring issuers of stock to disclose financial information and empowering state officials to reject proposed issues. After the crash of 1929 and the election of Roosevelt, Congress enacted the scheme of federal regulation that, with some modification, remains in effect today.

The patterns of belief underlying that regulation, however, had been present in the United States, and in England before that, for more than two centuries. The belief that the sellers of securities were more likely to be deceitful than the sellers of other kinds of property, and that the sale of securities accordingly needed to be more closely supervised by government than the sale of other things, was widely held as early as the 1690s, and had never disappeared. The associated opinion that the securities market was unusually susceptible to domination by insiders, who could control prices by controlling the flow of information, was equally old. The belief that too much speculation was harmful to the economy because it diverted resources into unproductive channels, and that speculation needed to be dampened by regulation, had been around as long.