Modern Investment

Transactions that may be termed "investments" are comparatively recent in human history. They are a characteristic of modern business. In ancient and medieval times investments were infrequent because business men controlled the use of their own property and bartered it in business dealings, just as merchants nowadays do. The earliest forms of wealth were mainly land and precious metals, i.e., coins. Intangible forms of wealth, such as bonds, notes, bills of exchange, or paper money, were almost unknown until modern times.

Lord Macaulay relates that when the father of Alexander Pope, the poet, retired from business and moved from one town to another he carried with him a chest of coins which constituted his accumulated possessions. The art museums today contain examples of these old strong boxes which were the chief means of safeguarding and storing wealth before the advent of banks. Modern banking institutions did not come into existence until men had funds which they could not use profitably in their own private enterprises and which they were willing to turn over to the use or control of others. Thus the growth of modern investment is closely linked with the development of credit and banking.