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History of Stock |
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The history of stock traces its source to the Roman times. The Roman empire allowed many private groups to carry out many of the services of the Government. These public groups of Rome were known as publicani. Publicanis are basically public contractors. They gave various services to the Roman empire. The main services include assistance to Roman military and supervised public building projects. These publicanis also managed the different works of the ports. One of the vital job at the ports accumulation of port duties. They also served as tax collectors and collected different types of tax.
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The shares in publicani were known as “socii” and “particulae.” Socci are the shares which are issued by the large cooperatives. “Particulae” are the shares or stocks which are issued by small groups. The particulae have similarity with the modern age over the counter shares of small organizations. It has to be kept in mind that the records and details of the age is not complete. However, Edward Chancellor's book Devil Take the Hindmost gives a fair idea about the stocks of that age. He states in that book that speculation about stocks have increased during that time. It was assumed that possibly the first ever high-risk bubble in stocks occurred during this time.
After the middle ages, the first company which issued shares of stocks to investors was the Dutch East India Company. The company issued shares for the first time in the year 1606. The introduction of shares helped in the development of the economy of Europe. This new type of joint ownership was new and immensely helped in the evolution of the economy of the continent of Europe. Netherlands increased their power in maritime activities by applying the technique of pooling money. By pooling money from the investors the shipping companies of Netherlands became powerful. Before acceptance of the joint-stock corp, a high budget venture such as the construction of a merchant vessel could be attempted only by governments or by individuals and families who are very wealthy.
Researches and economic historians find the Dutch Stock market very interesting. The researches have found clear documentation of the usage of stock options, stock futures, the use of credit to purchase shares, short selling. Evidence of risky bubble that crashed the share market in the year 1695 was also available. This brought a significant change in the history of stock. According, to Dr Edward Stringham, the stock market crashed because of short selling. The Government passed various laws and tried by several means to resist short selling. But is failed in its attempt and thus the share market crashed. This is strange because it depicts individual parties accomplishing contracts that were not lawfully enforceable and where the parties involved may obtain a loss. Stringham debates that this proves that undertakings and contracts can be produced and implemented without the help of the state or, in this case, in spite of polices made by the state or the Government.
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