In the year 1733 an attempt was made to abolish speculative stock transactions altogether by the passing of Sir John Barnard's Act. It rendered it illegal to buy stock for which one did not pay, or to sell stock which one did not deliver. It outlawed mere speculative transactions for differences. That Act was not repealed until 127 years afterwards, in 1860, but at no time was it seriously operative. It spread dismay throughout the ranks of the stockbrokers at first, because a great deal of their business naturally consisted in time bargains, enabling the payment of differences instead of cash or stock down; but the proverbial coach and four was soon at hand and the Act proved a dead letter.
In the course of the evolution of the profession of stockdealing, the more respectable of the brokers found themselves using Jonathan's, and by the year 1762 that coffee-house was almost regarded as the Stock Exchange, the other frequenters of Change Alley being looked upon more or less as outsiders. The aristocracy of the profession, who assembled at Jonathan's, was really the nucleus of the present Stock Exchange organisation. Amid the jealous sneers of some of their less reputable brethren, who charged them with an attempt to form an exclusive ring, they eventually, in 1773, raised a subscription, and obtained the control of a coffee-house at the north end of what are now called Royal Exchange Buildings--opposite the north-east corner of the Royal Exchange, where the Peabody statue stands. Over the door of this building was placed the inscription "The Stock Exchange." It was the first building to bear the title. But even to this building, the first Stock Exchange, admission could be obtained by the outsider at the cost of sixpence for a day ticket.
It was but a stepping-stone, however. At the beginning of the nineteenth century another subscription was raised amongst the evolutionists, this time to a capital of as much as £20,000; and the Stock Exchange was established with an exclusive membership, and with much the same constitution as exists to-day. The foundation-stone was laid in Capel Court on May 18th, 1801, and under a deed of settlement which had been drawn up, the Stock Exchange, almost as we now know it--although the deed of settlement was subject to modification in 1876 and again in 1882--was soon in full swing. At the commencement there was no definitely formulated code of rules, although the unwritten laws were generally well understood and recognised by the members; it was not until 1812 that a code of rules was actually printed.