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Age of Sail Stock Exchanges and their Traveller implications


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I know that a relatively complex capitalist economy has existed prior to the advent of inter-continental instant-communication systems (telegraph, telephone, radio/TV, and now computer communications). The basics of today's financial system - that is, shares, stocks, banks, stock exchanges, public (i.e. issuing stocks) companies and corporations - exist in our world, in one form or another, for more than three centuries. Traveller shares one key elements of these economies which have existed without instantaneous global communications - the key element of communications being limited to the speed of travel. So we might learn from these past societies about the ways in which the Traveller economy would adapt to the comm-lag.

So here are some of my questions on this subject:

1) How were the age-of-sail (and early industrial age) corporations organized? That is, how did the central board (if there was such a thing) handle affairs on the local branches, sometimes a world away?

2) I know that in the 19th century (atleast) you could buy stocks in a western stock exchange (say, in London) for enterprises in the colonial or semi-colonial world (say, railroads in India). So how would the brokers in the west know about the economical situations (especially profits) of their investments in the colonies? How often would updates come? How did this effect the rate of stock price changes?

3) How was money transfered internationally, that is from investers in one country to contractors or suppliers in another?

4) How was stock ownership registered? By hardcopy certificates? where could you buy or sell them (only at the exchange itself?)

5) Another point of interest is that, in a Traveller setting, local (i.e. on the same world) investments would give the invester on-demand information (given TL6+), while interstellar investments would be handeled over a comm lag... How would that effect the stock market?
The Wikipedia Securities thread may help with terminology. The various links can be looked up on the right.

First stock issued by Dutch East India company on the Amsterdam Stock Exchange in 1602.

History of the London Stock Exchange

Hope the links help
Back in the old days and well into the 20th century, securities where actually physical items consisting of two parts:

+ The security itself, written out to a certain value i.e 100 Dollar (unlike today)

+ A cover that contained a number of what in germany is called a "Genussschein". Each of this was stamped with a date and allowed you to claim that years interest rate in the paper.

Back in that days quite a few people bought securities not to speculate on their rise/fall but because of the interest rates they payed. Buying securities was more like engaging in a limited partnership(1) without the danger of loosing more money than your investment.

Securities where mostly registered to a name, the modern "nameless" securities are resonably new. Appearing at the yearly meeting either directly or by proxy and voting was quite common(1). Non-named stocks typically where not allowed to vote.

Most stocks where written out "locally" that is sold only through one exchange, i.e London Stock Exchange. The big investors had a trader there that acted as a proxy, buying papers in their name "by Voucher" and also voting in their name on the anual meeting. IPO's took up to a year and the number of stocks where equal to the number of requests since they sold at face value IIRC.(2)

The system worked since the travell times between the "interesting" exchanges of that time (London, Paris, later Berlin) was rather short and telegraph lines where laid as soon as the system allowed. The US was a seperat market and projects in the colonies where financed in Europe.

The value of securities drifted rather slowly in the 19th century but IF they drifted, the change often was huge. The "Initial Public Offering" stated "Monsieur Lesseps will build a channel from Suez to Port Said" and people judged the project. After that, as long as the project was on shedule the stock was mostly stabel. It was rising when sucess looked imminent and dropped rock bottom when failure looked close by. Updates came as often as the next mail from the building project and hiding problems was common. The system worked since the number of international Stocks in circulation was rather low, the exchanges mostly handling local/national securities.

Corporations worked with local factors and long term planing. I.e the East India companie had an office in Bombay that received orders about once or twice a year describing general directions and delivered reports on the same ship back. Within those, the local personal was free to act, often taking advantage of their position. Hard Times hints that Traveller uses a similar system.

(1) See "Secret of my success" for a small scale version of it. And tracking down the elusive owner of the critical 5 percent share has been a staple of many novels from the pre-1950s era

(2) Similar to a trader gathering partners for a trade rather than the modern "let's see how much money per paper we can make" style
Also remember that one of the main reasons for the "gold standard" backing currencies was so that they would be accepted as legal tender for foriegn exchange, and obviate many of the issues with having to cart around enormous piles of specie.

Remember that the limit for ocean-going vessels is a combination of mass and volume, so carting around a few cubic meters of gold leaves other holds conspiciously empty, not an issue with Traveller reactionless drives...

An interesting adventure hook: stop the hijack of the Bank of Regina's transfer payment!

Scott Martin
Doing some research a year or so ago, I found that SEVERAL major companies had several "Batches" of stocks up through the wartime years. For example, GE had one batch sold on the NYSE, another on the ASE, and a third sold direct. They each had to be traded on their "home exchange," or sold third party.

And the coupon-stocks Michael references are functionally identical to some 1960-1970 era Bearer Bonds. I often use 10 or 20 year issue bearer bonds IMTU. Bearer Stocks get reissued when the final coupon is turned in.

The coupon has to be brought in with the matching certificate... preferably still attached, IMTU. So, stealing someone's coupons won't get you their cash, but it will hold their cash hostage....
And is the reason that some annuities were referred to as "zero coupon" bonds, since they paid out their entire value on maturation, instead of monthly or annually.

Scott Martin