ABSTRACT Dissecting the Anatomy of Exchange Alley: The Dealings of Stockjobbers during

We demonstrate that a network of active stockjobbers existed in London’s Exchange Alley before the South Sea Bubble and that the network operated effectively during the bubble to intermediate exchanges among a wide variety of customers. Moreover, the existence of a new financial asset after the collapse of the bubble, the 5 % perpetual annuities issued by the government to the South Sea’s stockholders in 1723, allowed the resumption of profitable market-making activity by a new group of stock jobbers specializing in the new asset. We argue that the resiliency of the existing network of stockjobbers to the shock of the bubble and its collapse laid the basis for an effective microstructure in the London capital market, and therefore to the continued rise of a secondary market for the British national debt. Dickson’s classic study on the financial revolution in Britain (Dickson, 1967) has spawned a large and growing literature on the sources of that revolution, its development over time, and its ultimate effects on the British economy. Dickson focused on the increasing use of funded long-term debt that could be credibly backed by Parliament, a perpetual and self-renewing institution, and dated its start with the implementation of Dutch financial techniques under William III after the Glorious Revolution (or the Dutch coup d’état according to recidivist Jacobites). Not until 1750 and the completion of plans to consolidate the government’s accumulated long-term debt into the Three Per Cent Consols, however, did Dickson consider the revolution to be complete and its effects on public finance irreversible. Other elements that contributed to Britain’s success in public finance have been studied since. D. W. Jones (Jones, 1988) showed how the short-term financing of immediate war needs was developed over the course of William III’s firs