Origin of the possessive with its apostrophe.
64. In Old English a large number of words had in the genitive case singular the ending -es; in Middle English still more words took this ending: for example, in Chaucer, "From every schires ende," "Full worthi was he in his lordes werre [war]," "at his beddes syde," "mannes herte [heart]," etc.
A false theory.
By the end of the seventeenth century the present way of indicating the possessive had become general. The use of the apostrophe, however, was not then regarded as standing for the omitted vowel of the genitive (as lord's for lordes): by a false theory the ending was thought to be a contraction of his, as schoolboys sometimes write, "George Jones his book."
Use of the apostrophe.
Though this opinion was untrue, the apostrophe has proved a great convenience, since otherwise words with a plural in -s would have three forms alike. To the eye all the forms are now distinct, but to the ear all may be alike, and the connection must tell us what form is intended.
The use of the apostrophe in the plural also began in the seventeenth century, from thinking that s was not a possessive sign, and from a desire to have distinct forms.
Sometimes s is left out in the possessive singular.
65. Occasionally the s is dropped in the possessive singular if the word ends in a hissing sound and another hissing sound follows, but the apostrophe remains to mark the possessive; as, for goodness' sake, Cervantes' satirical work.
In other cases the s is seldom omitted. Notice these three examples from Thackeray's writings: "Harry ran upstairs to his mistress's apartment;" "A postscript is added, as by the countess's command;" "I saw what the governess's views were of the matter."