What impact did the process of creating trading companies, large banks and stock exchanges

What impact did the process of creating trading companies, large banks and stock exchanges have on the development of trade?

As such, trading emerged very early. The first human civilizations arose in the valleys of large rivers, as well as near the seas. People have long sought to know the world around them, built boats and exchanged goods that were grown and produced on their land. With the advent of money, trade began to develop even faster.

Trading has always been a risky business. A ship with a valuable cargo could get caught in a storm and drown. He could have been attacked by pirates and robbed. If you cite the example of land traders, for example, the caravans of merchants that went through the deserts, then they too were often attacked and robbed. Also, sometimes it was difficult for merchants to independently conduct trade with foreign countries. This was due to the fact that foreign states began to impose all kinds of fees and duties on foreign merchants. These fees were too high for a lone trader. Then gradually various organizations began to appear that contributed to the formation and development of trade. These are:

insurance organizations;
banks;
trade organizations and merchants’ unions;
trading exchanges.

Insurance made it possible to compensate the merchant for losses in the event of damage or destruction of the goods. This was achieved due to the fact that all merchants paid insurance premiums. And in the event of an insured event with one of the merchants, the insurance company paid him an amount equal to the price of the lost or damaged goods. Banks began to accept funds for safekeeping, as well as lend money. With this money, the merchant could buy goods for sale. Trading companies allowed small traders to associate and enter the international market with their wares. The trading company was not afraid of customs duties from foreign countries. And, of course, trade exchanges gave a powerful impetus to the development of trade. On them, entrepreneurs were able to bargain, make the most advantageous offers for the purchase and sale of goods to each other, and learned to conclude profitable contracts.



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