Dutch East India Company

• In 1602, the States-General of the Netherlands issued a royal charter to found the Dutch East India Company. The Dutch government guaranteed the company a 21-year monopoly on Asian goods and ownership of discovered territories. The Dutch East India Company issued paper stock to its investors in 1606. This is the first recorded instance of stock certificates issued to investors.
  
  

Mississippi Company

• In 1719, John Law, owner of the Mississippi Company and controller of the French National Bank, authorized that the number of stocks certificates issued to shareholders be more than doubled. This caused the first financial bubble to form. It burst in 1920, when the national bank was forced to refuse payment on stock certificates, and the company entered bankruptcy.
  
  

Stock Market

• By the late 18th century, trading stock certificates, as a way to improve investment, had become popular. By then there were three basic types of stock certificates in circulation: bonds, which were essentially stock certificates in governmental debt; bank stock; and company stock. In 1792 the New York Stock Exchange was created as a way for merchants to meet daily to trade certificates of investment.
  
  

Expansion

• As the United States expanded and industrialized, the stock certificates issued mirrored the national trends. Certificates of stock were issued for the railroad in the 1830s, mining in the 1850s and electricity in the 1870s. More recently, cell phone companies, aviation corporations, computer technologies, and the gaming industry have sold stock to fund their ventures.
  
  

Modern Stock Certificates

• Paper stock certificates are no longer issued for every purchase of stock, and they do not give the possessor controlling power of the stock as they once did. In the 1800s, if you possessed the paper certificate, you legally had possession of the investment. Today this is not so, because technology has made it easier and less expensive to electronically track stock purchases and sales.
  
  In the 1970s, interest in collecting old stock certificates led to its recognition as a hobby. Today paper stocks are considered valuable both historically and as collectibles, but in most cases they are no longer essential to investment.