Shares were changing hands in Roman Rome and medieval Toulouse long before Wall Street
A share sounds like a modern invention, yet Roman contractors sold small stakes that almost anyone could buy, and Cicero grumbled about prices running high. Medieval French millers and a Swedish bishop traded ownership too. The basic trick of slicing a business into pieces that strangers can own is remarkably ancient.
The Roman Republic farmed out many public services to private firms called publicani. These companies issued large stakes known as partes and smaller ones called particulae, which behaved rather like shares bought over the counter today. The historian Polybius claimed nearly every citizen had a hand in the government leases, and Cicero mentioned shares that were very expensive at one point, a hint that prices rose and fell.
Around 1250 in Toulouse, 100 shares in the Bazacle Milling Company traded at values tied to how profitable its mills were. A Swedish churchman, the Bishop of Västerås, bought a 12.5 percent stake in 1288 in the Great Copper Mountain, home of the Falun Mine, and the Swedish firm Stora still holds a record of the transfer, swapped for an estate. The first recognised joint-stock company of modern times came on 31 December 1600, when Elizabeth I chartered the East India Company with a 15-year monopoly on East Indies trade. In 1602 its Dutch rival issued the first shares tradeable on the Amsterdam exchange, and over the next two centuries it sent 4,785 ships to Asia.
The logic has stayed the same. Owning a share means owning a fraction of the company in proportion to all the shares issued, with a claim on a slice of earnings, of whatever is left after debts in a liquidation, and often of the votes. Because thousands of owners cannot run a firm day to day, they use those votes to elect a board of directors.
Not all shares are equal. Common stock usually votes; preferred stock usually does not but gets paid its dividend first and stands ahead in a wind-up. Some convertible preferred shares can later be swapped for a fixed number of common ones.
Source: Stock
