Who comprised the nation of shareholders? Gender and investment in Great Britain, c. 1870–1935

Abstract

This article explores the widening ownership of stocks and shares in Great Britain between 1870 and 1935. It demonstrates the extent of that growth and the increasing number of small investors. Women became more important in terms of the number of shareholders and value of holdings. Factors that encouraged this trend included the issue of less risky types of investments, and legal changes relating to married women's property. We examine the 'deepening' importance of stocks and shares for wealth holders, arguing that the growing significance of these kinds of financial assets was as important as the growth in the investor population.e hr_539 157..187 B y 1870, as Jenks noted, England had become a 'stock-and-bondholding aristocracy, measuring income in dividends and wealth in the quotations of the Stock Exchange'. 2 In the remaining decades of the nineteenth century and early years of the twentieth, a striking change took place in the shareholding population. A growing number of individuals in Britain from a widening social spectrum, including the less affluent, began to own stocks and shares. Gentlemen, solicitors, and peers of the realm were joined by 'retailers, professional men, skilled workers and women'. 3 By the late nineteenth century, as Robb has remarked, 'middle and upper-class Britain truly had become a nation of shareholders'. 4 Buoyed by rising real wealth and enticed by the promise of higher returns and lower risk, individuals with relatively modest amounts of personal wealth began to invest in the stock market. In turn, the ability to tap into these swelling reservoirs of individual savings, eased by the development of the banking system and the spread of provincial stock exchanges, allowed British-registered firms, as well as the UK and foreign governments, to mobilize large amounts of capital from across the country. Indeed, the rise to prominence of these investors underpinned not just the expansion of industry at home but the march of British capital abroad.

Gender, risk and finance: why can't a woman be more like a man?

“…This association has been transposed onto notions of caution and risk avoidance as natural expressions of respectable femininity which in turn ensured women were deemed 'unsuited' to the public sphere of commercial activity or financial dealing. Accordingly, whilst some wealthy women remained active as powerful and influential equity investors throughout the nineteenth and early twentieth century, they became increasingly invisible, excluded and dependent upon male intermediaries [see Rutterford et al (2011) for an overview]. From this brief overview, we demonstrate that perceptions of gendered propensity for risk in the sphere of financial dealings have historically shifted over time; consequently, the contemporary assumption that women are natural risk avoiders is not supported; rather, it is a reflection of shifting socio-economic norms which have aligned femininity with caution and related weakness.…”

Financial diversification before modern portfolio theory: UK financial advice documents in the late nineteenth and the beginning of the twentieth century

“…A series of stylized facts have been highlighted in relevant discussions and debates, such as the developed character of UK stock exchanges, the rise of listed companies, the wide dispersion of shareholdings and the so-called gradual divorce of ownership from control (Cheffins 2010, Rutterford et al 2011. So, at least from 1870s, ordinary investors and minority holders were gradually confronted with the question of how to manage their investments in the face of uncertainty in the gradually globalized financial markets.…”

Media Coverage and Stock Returns on the London Stock Exchange, 1825–70*

“…This revolution resulted in a major increase in the number and value of companies listed, an increase in the number of stock exchanges operating outside London, and a substantial increase in the proportion of the UK's population investing in equities (Thomas, 1973;Michie, 1999, pp. 88-9;Grossman, 2002;Acheson et al, 2009;Rutterford, 2011). This expansion of the equity market was accompanied by an increase in the demand for corporate information, which was partially met by companies through annual shareholder meetings and annual reports.…”