Securities seem to have first appeared in Germany and Austria during the Napoleonic wars, issued by the state to raise finance to cover the cost of the wars. The instruments were actively traded in a liquid market. Securities were also used in Germany and Austria to raise finance for the construction of railways and for other large-scale projects.

Before we embark on a consideration of how Austrian and German law analysed securities when they first appeared, we need to remind ourselves that Germany did not exist as a unified nation throughout most of the nineteenth century. It consisted of a collection of smaller states, each of which constituted a jurisdiction of its own. This book will not provide an analysis of the law of all the states that now form part of the German state; it will focus on the law of the state of Prussia as well as analysing Austrian law.

Prussia adopted a Civil Code in 1794, referred to in English translation as the ‘Prussian Civil Code’. The German title is ‘Allgemeines Landrecht’, abbreviated to ‘ALR’. The Prussian ALR was replaced by the German Civil Code (BGB) in 1900. In 1811, Austria adopted a Civil Code which was influenced by the ALR, enacted under the name of ‘General Civil Code’ (Allgemeines Bürgerliches Gesetzbuch), abbreviated to ‘ABGB’. The Austrian ABGB is still in force.

It has already been pointed out that modern German and Austrian law classifies securities as tangibles.