The World First Stock Exchange, by Lodewijk Petram

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at just before ten in the evening of Saturday, August 31, 1602, the notary Jan Fransz Bruyningh closed the door of his house on Heintje Hoekssteeg behind him. He walked along the narrow alley toward Warmoesstraat and turned left. A few minutes’ walk brought him to his destination, the house of the merchant Dirck van Os on Nes, where two men were waiting for him.

Jacques de Pourcq and Anthony van Breen would be assisting him as witnesses.

Dirck van Os was one of the directors of the Dutch East India Company (Vereenigde Oost-Indische Compagnie, or VOC), which had been founded earlier that year. When the notary knocked on the door, van Os was sitting with some of the other directors—Isaac le Maire was there, as were Louis del Beecke, Reinier Pauw, and Pieter Dircksz Hasselaer. The bookkeeper of the Amsterdam chamber of the VOC, Barent Lampe, was seated behind an imposing volume with deckle-edged pages and a vellum cover, the Amsterdam chamber’s subscription share register.1

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It had been lying open in van Os’s house all month. The directors had taken turns to oversee the bookkeeper as he entered investors in the register. Saturday the thirty-first was the closing date for subscriptions, and there had scarcely been a quiet moment all day.

The recording of the capital had to be finished by midnight, so the men wasted no time in getting down to work to draw up the balance. Under the watchful eye of the notary, the bookkeeper checked each entry and added up the amounts.

When he was almost done, Neeltgen Cornelis entered the room. Dirck van Os’s maid had seen investors coming and going all month. Now, at the last moment, she had decided to invest a hundred guilders, for which she had had to work long and hard: her wages were less than fifty cents a day.2 She had been vacillating for days, but now that the book was about to be closed she could not shake off the feeling that something special was happening. Deciding that she would always regret it if she did not act now, she took a deep breath and committed her savings.

Lampe recorded her investment and suddenly thought of his own servant. She did not have a cent to her name, but Lampe decided—at just a few minutes to midnight—to pay her a bonus in the shape of an investment in the VOC. The very last entry in the book reads “Barent Lampe for Dignum Jans ____ 50 guilders.”

The two final entries were added to the total, and the notary, Bruyningh, embarked on his closing statement in the book. He wrote that he and his two witnesses had overseen how all the amounts in the register had been tallied, that on the stroke of midnight a total sum of 3,674,945 guilders had been subscribed, and that not a nickel or dime had been paid in after twelve o’clock.

The statement was signed at twelve-thirty by Bruyningh, his witnesses, and Lampe. The VOC’s share capital, later so actively traded, was in place.

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Tradable Shares Altogether, 1,143 investors subscribed to the initial capital of the Company’s Amsterdam chamber. They had been encouraged to invest by the charter that the States General, the highest administrative body in the Dutch Republic, had granted the VOC on March 20, 1602. This charter was the Company’s deed of incorporation, and it spelled out, among other things, the monopoly it had been granted.3 “All the residents of these lands,” stated article 10, “may buy shares in this Company.” Subscribers could decide for themselves how much to invest: there was no minimum or maximum. There was a note to the effect that very large subscriptions—over 30,000 guilders—would be reduced pro rata if the issue were to be oversubscribed, but that did not happen. There were, though, a few investments that far exceeded this sum. Isaac le Maire, one of the founders of the Company, invested 85,000 guilders. Pieter Lijntgens, a merchant and, like le Maire, originally from the Southern Netherlands, bettered this immense amount: he subscribed 60,000 guilders to the Amsterdam capital and added another 45,000 guilders in Middelburg.

Middelburg? Indeed—investors could decide which of the Company’s six chambers to put their money into. There were share registers in Enkhuizen, Hoorn, Delft, and Rotterdam, as well as in Amsterdam and Middelburg. The roots of this situation lay in the Company’s early history. Before it was established, there had been a few groups of merchants who set up temporary enterprises—referred to as the precompanies (voorcompagnieën)—to trade with the Far East. In 1595 the flotilla of the earliest precompany, the Long-Distance Company (Compagnie van Verre), set sail from Texel. The expedition was not particularly successful in commercial terms, but it did prove that it was possible to do business in the East Indies without being overpowered by the Portuguese, who dominated trade with the Orient, so others soon followed suit. Companies with names like the Old Long-Distance 9

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Company (Oude Compagnie van Verre) and the New Brabant Company (Nieuwe Brabantsche Compagnie) were set up in Amsterdam and elsewhere. Between 1595 and 1602 no fewer than seven flotillas totaling fifty vessels sailed from Amsterdam to the Far East. Another thirty ships set out from Hoorn, Enkhuizen, Rotterdam, Middelburg, and Veere. Not every vessel returned to the Republic of the United Provinces, but those that did were laden with highly profitable cargoes, and the costs of the expeditions were recovered several times over.4 There was fierce competition among these various undertakings, and those involved in them descended to all sorts of underhand tricks, trying to poach experienced ship captains and navigators from one another. The companies countered by making their employees sign contracts promising never to join a rival. The States General was not at all happy with this situation, reasoning that it would profit the Republic’s economy if the different companies stopped competing with one another and took on the Portuguese instead. Even more importantly, the Republic was at war with Portugal. Actually, it was at war with Spain, but because the king of Spain had also acquired the Portuguese crown in 1580, the Dutch were de facto at war with Portugal, too. The States General realized that a strong, united company would benefit Dutch trade with the Far East as a whole and could be deployed to real effect in the war with the Portuguese.

It was no easy task to persuade all the existing companies, with their individual interests, to buy into the idea, but in the end they came to an agreement. Prince Maurice, stadholder of Holland and Zeeland, and Johan van Oldenbarnevelt, the Advocate of Holland and the Republic’s top official, did everything they could to make a success of the negotiations, and the States General played on the conscience of the directors of the different companies by contending that they held the key “to destroying the enemy and protecting the nation.” The outcome was a united enterprise, the Dutch East India Company—the VOC—founded on the basis of a 10

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figure 2.1   First page of the share register of the Dutch East India Company’s Amsterdam chamber. The entries of the directors Gerrit Bicker, Reinier Pauw, Jan Jansz Kaerel, Jacques de Velaer, Jan Poppen, and Hendrick Buyck can be seen at the foot of the page. Source: Archives of the VOC, inv. no. 7064, fo. 1.

National Archives, The Hague.

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charter from the States General that gave it a monopoly on trade with all the areas to the east of the Cape of Good Hope and beyond the Straits of Magellan. No other body was permitted to conduct trade between the Republic and Asia for as long as the charter was in effect. The Company was divided into six branches, which in Company jargon were called “chambers.” These chambers, unsurprisingly, were located in the towns and cities where the precompanies had been established. All the directors of the precompanies that were still in business at that time also became directors of the VOC; that way everyone was kept happy.

It was obvious as soon as the Company was set up that the new enterprise’s center of gravity would be in Amsterdam, but the other chambers—particularly that of the Zeelanders, who were terrified that they would be completely dominated by the Hollanders—were fierce in the defense of their interests. The VOC was consequently organized such that Amsterdam would never be able to gain the upper hand. The governing board of the Company would be made up of directors from each of the different chambers, and their meetings would be held alternately in Amsterdam and Middelburg. This board would have seventeen members— known as the Heren XVII, or Lords Seventeen—and Amsterdam was not allowed to nominate more than eight of them, which meant that this chamber could never decide Company policy on its own.

When the subscribed capital was analyzed, however, the actual ratios between the chambers proved different. Amsterdam provided 57 percent of the total capital, followed by Middelburg with 20 percent and the remaining four chambers with considerably less: Enkhuizen contributed 8 percent, Hoorn 7 percent, Delft 4 percent, and Rotterdam 3 percent. It is quite possible that the prevalence of the Amsterdam chamber in the Company’s initial capital would have been even greater were it not for the fact that there had been a serious outbreak of the plague in the city during the summer of 1602, and consequently many people had fled the city.

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Altogether nearly six and a half million guilders was subscribed to the VOC’s initial capital. The purchasing power of this sum today is about a hundred million euros or around one hundred and thirty million dollars.5 This was a large sum for the world’s first public subscription to an enterprise’s share capital, a remarkably high figure, in fact, when we recall that in 1602 the profitability of the VOC was still very much in doubt. Some, but by no means all, of the precompanies had generated high returns, but this did not necessarily mean that an investment in the Company would make money. Added to that, although the share registers were open, no one really had any idea of precisely what the Company was going to do with the money. Obviously, ships would be built and fitted out. But how many? How soon would they put to sea? And what were the new Company’s objectives in the Far East? None of this was at all clear when the capital was subscribed.

Then there was the fact that nothing had yet been settled regarding the shareholders’ involvement in setting Company policy.

Shareholders in the precompanies had not been able to exert any influence on policy, but those organizations were based much more on personal contacts. The directors of the precompanies had always recruited investors personally, which meant that investors essentially entrusted their money to the individual who was the director, not to the enterprise. This automatically created close ties between shareholders and the business. There were personal dealings between the investors and the men who ran the company, and thus the directors could not avoid giving regular account to the shareholders whose investments they had personally solicited.

Things were different in the VOC. The fact that investors came to Dirck van Os’s home in Amsterdam to sign up shows that personal contacts between directors and investors were still the norm—but this time it was a public subscription. All the residents of the country were encouraged to invest. And a charter had been granted to the Company by the highest governing body in the Republic. There could be no doubt that this time the investments 13

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were being entrusted not to just a group of merchants but to a big business with several branches.

This might perhaps explain the investors’ enthusiasm. The VOC was not just a new firm that would send ships to the Orient to bring back spices. It was more than that—this was an enterprise founded by the States General. It had to represent the Republic’s interests in the Far East. To a certain extent it was the Republic.

And although the hope of getting a high return would have been many people’s most important motive for investing, the sense that an investment in the Company could help the young Republic would certainly have played a part—in 1602 it had been a mere twenty-one years since the States General had renounced Philip II as king, and foreign powers had still not recognized the Republic as a sovereign state.

What was known about the Company in 1602 was only what was set out in the forty-six articles of its charter. It specified, for instance, the administrative relationships among the different chambers and stipulated that the directors would receive a daily wage of four guilders plus a variable payment, 1 percent of the costs incurred in fitting out the ships and 1 percent of the proceeds of the return cargo. The directors were obliged to keep an investment of at least 6,000 guilders in the Company while they held their posts. This figure was 3,000 guilders for the directors from the Hoorn and Enkhuizen chambers. The charter also made it clear that the VOC was not just a commercial undertaking but an enterprise that could serve as an extension of the state. In the Orient the Company was authorized to negotiate with local rulers on behalf of the States General. The other side of the coin was that any captured vessels had to be handed over to the government.

There was no explicit description of what would happen to the money that was invested. Some of it would be used to build ships and pay personnel, but this was not all. The thirty-fifth article of the charter stipulated that the Company would use some of the money to construct forts. None of the precompanies had ever built 14

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a fort in the Far East—they simply bought merchandise and beat a hasty retreat. It was clear that the Company’s strategy was different from that of the earlier firms—it was seeking resilience and a permanent presence in the Orient.

This strategy was also evident in the twenty-one-year term for which the States General granted the charter. When Neeltgen Cornelis and Dignum Jans subscribed to the share register, it was assumed that the VOC would be wound up when the charter came to the end of its term in 1623. In the event, the Company existed for much longer—almost two centuries—but compared with the average lifetime of its predecessors, twenty-one years seemed like an eternity. The precompanies usually operated for three or four years. The cargoes were auctioned off when the flotilla returned, and if the ships were still in good condition they were sold to a new enterprise. The accounts were drawn up, and the investors were paid their share of the proceeds.

Even if it did take another year or so before everything was settled,6 this was still a good deal shorter than the twenty-one years planned for the Company. If we add to this the fact that personal contact with the directors was much less, it essentially meant that the investors were being asked to put their money into a black box from which it would not reappear for twenty-one years. The authors of the charter realized that this might deter some interested individuals from investing their money, so they included a provision for the interim liquidation of the VOC. After ten years—in 1612—a “general balance” would be drawn up. In other words, the Company would disclose how it was doing, and shareholders would have the option of asking for their money back.

At some point between the granting of the charter on March 20, 1602, and the opening of the share registers on August 1, the directors realized that ten years was also a long time. Investors might well be wary of committing their money for such an extended period. On the first page of the share register they therefore included an extra provision: “Conveyance or transfer 15

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[of shares] may be done through the bookkeeper of this chamber.”

The subscribed capital could be transferred to someone else! This had probably also been possible with the precompanies, but never before had it been stated so explicitly in an official document that shares could be traded. This provision meant that investors did not have to wait until 1612 before they could get their hands on the capital they had invested. If they wanted to, they could sell their shares before that. The procedure for doing this was set out on the very first page of the share register. Shareholders had to present themselves to the bookkeeper of the chamber where they had deposited their money, and two directors had to give their approval for the conveyance. The bookkeeper would make “accurate notes” of the transfers “in a special register.”7

The Start of Trading Jan Allertsz tot Londen was the first to dispose of his subscription.

On March 3, 1603, he sold a subscription with a value of 2,400 guilders to Maria van Egmont and on that same day a further one for 600 guilders to a Mrs. van Barssum in The Hague. Allertsz’s name suggests that he was a Londoner, but that was not the case.

He came from a family of bargemen that operated between Amsterdam and London; “tot Londen” was a sort of nickname.8 Why would he have wanted to sell his investment so quickly, even before the first Company ship put to sea? The explanation is simple: Allertsz did not have the money. During the subscription period in August 1602 the investors had not arrived at Dirck van Os’s home on Nes with bags full of gold and silver coins. All they had done was promise to make an investment. By signing their names, Neeltgen Cornelis, Jan Allertsz, and all the others had undertaken to produce the sum concerned in the future. The charter stipulated that this had to be done in three installments; this was later changed to four. The dates coincided more or less with peaks 16

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in the Company’s capital requirements. This meant that the Lords Seventeen called in part of the subscribed capital shortly before a new flotilla was to be fitted out. This happened for the first time on February 25, 1603, when the Lords Seventeen requested payment of 25 percent of the subscribed amount. Six days later, Allertsz disposed of his subscription. The bargeman evidently could not afford 750 guilders at the beginning of the sailing season.

Yet Allertsz did make a profit from his subscription to the Company’s initial capital in August because the price of the shares had risen in the interim. No price is known for March 1603, but the following month investments in the VOC were traded at a price of 106.5, expressed as an index figure where the value of investments in 1602 was set at 100. When the price in April 1603 stood at 106.5, the shares had risen in value by 6.5 percent. An index figure as a price might seem rather strange. Currently, the price of a share is always quoted in euros, dollars, yen, or another currency, but at that time this was the only way to quote the value of Company shares because a VOC share had no fixed size. Neeltgen Cornelis had a share of a hundred guilders, and Dignum Jans had one of fifty guilders. Isaac le Maire owned a share of 85,000 guilders, and Pieter Lijntgens had one of 60,000 guilders and another of 45,000 guilders in Middelburg. This meant that the value of a share could only be expressed relative to its original or nominal value, namely, the value when the share register was closed in August 1602.

At a price of 106.5, a share of 3,000 guilders in the initial capital of the Amsterdam chamber was now worth 3,195 guilders. But, of course, Allertsz did not get 3,195 guilders from these transactions because he had not yet paid a single cent. The price was primarily of importance in regard to shares that were already partially paid up. There were already a couple of these in March 1603 because investors could always pay their installments earlier.

This was even encouraged by the directors, who paid interest on the sum deposited to those who paid early.

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Allertsz would have received a payment of between nothing at all and 195 guilders; there is no record of any exact sum.

What Maria van Egmont and Mrs. van Barssum were paying him for was the right to be allowed to invest in the VOC. This is not as strange as it may seem. No ships belonging to the Company had left for the East Indies, and there was no prospect any time soon of flotillas returning with cargoes of spices and other exotic goods. But it is likely that some people did not develop an interest in an investment in the Company until after subscriptions closed. The share register of the Amsterdam chamber had only been open for the month of August and only in Dirck van Os’s home. The dates on which investors signed up reveal that that the process did not really gain momentum until the end of the month. It would appear that the enthusiasm of the first subscribers was infectious, and more and more people decided to invest money. It is possible that there were still plenty of people who wanted to subscribe after September 1, but they would have found the door of Dirck van Os’s residence on Nes closed. This also explains why the price of Company shares rose above 100 immediately after September 1. The demand for investments in the VOC exceeded the supply, and so the price went up.

East India House (Oost-Indisch Huis) There were a further eight transactions in March 1603. The bookkeeper recorded another three the following month, and after that it really took off, with forty-four transactions in May. The sellers were all subscribers who disposed of their investments now that the time to pay up was approaching. Meanwhile, Dirck van Os’s house had ceased to be the provisional Company office. Traders who wanted to transfer shares had to go to the Bushuis (the city arsenal) on Kloveniersburgwal. Such urban arms depots were 18

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common in the Netherlands in the sixteenth and seventeenth centuries. The Bushuis stored the city’s armaments until the VOC moved in. By then Amsterdam’s rapid expansion had flowed around it; it was no longer on the outskirts, as is clear from Pieter Bast’s map of 1597. A new residential neighborhood had been built immediately opposite the Bushuis, and the presence of a weapons and ammunition store in the middle of an urban district represented a major risk. There was still a fear of serious fires even though no timber buildings had been constructed for half a century. The arsenal was relocated.

Initially, the Company rented only a part of the Bushuis. Meanwhile, construction of a new armaments warehouse started, and when this building at 423 Singel (currently used by the university library) was completed, the Company took over all of the old Bushuis on Kloveniersburgwal. By then the directors had already foreseen that the Amsterdam chamber would need even more space. As well as offices, after all, the Company also had to have storage capacity for ships’ supplies and stocks of food for long sea voyages. And once the first flotillas returned from the Indies, there would also be cargoes of spices and other merchandise that had to be stored temporarily. Construction of new premises immediately behind the Bushuis was swiftly begun on land that had been the orchard of the former St. Paul’s Monastery (Paulusbroederklooster). The monastery had been the property of the city since 1578, when Amsterdam sided with the Protestant rebels, an event known as the Alteration of Amsterdam. The church building was assigned to French protestant refugees from the Southern Netherlands—even to this day it is known as the Walloon Church—and the orchard was sacrificed for the Company’s new premises: East India House. The building was completed in 1606 and had space for the offices of the Amsterdam chamber of the VOC. The directors met there, the bookkeeper had his office there, personnel were taken on, and in the years that it was Amsterdam’s turn, the Lords Seventeen met there.

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figure 2.2 East India House on Oude Hoogstraat. The Bushuis is on the left, parallel to Kloveniersburgwal. Source: Olfert Dapper, East India House, 1663.

Amsterdam City Archives, Amsterdam.

East India House still stands and has been used by the University of Amsterdam for some decades. It has no frontage on the street, so it is easy to walk past without knowing that it is there. From Oude Hoogstraat, it is hidden behind the façade of a later extension of East India House. There is a small gate in this wall, leading to a courtyard. The remarkable façade of East India House can be seen from the courtyard, which nowadays is only used by students to get to the bicycle sheds. It was designed by Hendrick de Keyser in Dutch Renaissance style, with many light-colored elements amid the red brickwork. De Keyser was both an architect and a sculptor, as the many sculpted male and female heads above the windows attest. Amsterdam was once full of buildings in Dutch Renaissance style, but most of them were remodeled at some point to keep up with fashion. East India House remains a magnificent, unspoiled example of this architectural style.

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There is still a building on Kloveniersburgwal called the Bushuis—also used by the university—but this is not the midsixteenth-century Bushuis where the first transactions in Company shares were registered. The current building replaced the old Bushuis at the end of the nineteenth century.

Administration When Jan Allertsz and the two ladies reported to the bookkeeper of the Company’s Amsterdam chamber to register officially the transfer of Allertsz’s shares, they had to go to the Bushuis. A rather laborious procedure had been established for such transfers: the buyer and the seller (or their authorized representatives) had to appear together before the bookkeeper, and two directors had to approve the transfer before it became official. These administrative steps were necessary because the VOC did not issue bearer shares. Shareholders themselves had no written proof that they owned a share in the Company. The so-called world’s oldest shares uncovered in Dutch archives from time to time, which always attract a great deal of national and international media interest, are in fact little more than receipts, or recepissen, as they were called in seventeenth-century Holland. The “share” in the Enkhuizen chamber that was found in 2010 in the Westfries Archief, for example, shows that Pieter Harmensz paid the last installment of his subscription amounting to 150 guilders. The Amsterdam share dated September 27, 1606, which was probably stolen from the Amsterdam City Archives during the 1980s and played a starring role in the movie Ocean’s Twelve, is the receipt for the last 400 guilders of a total investment of 4,800 guilders by Agneta Kocx. The share currently belongs to a group of German investors, who in 2004 announced that they were prepared to sell it for the astronomical sum of six million euros.9 The share shown here was the receipt dated December 8, 1606, for the remaining 21

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figure 2.3 Dirck Pietersz Straetmaker’s “Dutch East India Company share,” 1606. Source: Collection of the Capital Amsterdam Foundation, Amsterdam.

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fifty guilders for a share of 600 guilders in the Hoorn chamber, paid by Dirck Pietersz Straetmaker.

It was convenient for Pieter Harmensz, Agneta Kocx, and Dirck Pietersz Straetmaker that the folio numbers of their accounts in the VOC ledger were recorded on their receipts. It made it quick and easy to trace their accounts when they went to the Company’s office to transfer a share or collect a dividend payment. All three of them made notes for their own records on the dividend payment receipts. But they could not trade their receipts, which were certainly not valid proof that they owned shares in the VOC of 150, 4,800, and 600 guilders, respectively. The text of the receipt makes this plain. The recipients of such documents were recorded in the ledger as owners of shares. Only a positive balance in the ledger of the Company’s capital accounts was valid proof of ownership of a share.

It was also important for the Company to know precisely who owned what. This was because the original plan was that the shareholders would be able to ask for their investment to be returned after ten years, and of course the Company needed to know how much had to be paid out. It was the same story with dividend payments. Article 17 of the Company’s charter stated that it would pay a dividend each time goods with a value of 5 percent of the initial capital were brought to the Republic. This stipulation went by the board, however, as we shall see. The Lords Seventeen paid a dividend when they considered the time was ripe, and the first time that happened was in 1610, eight years after the initial subscription. The dividend to which shareholders were entitled was based on the nominal value of their investments, and it was therefore important that the bookkeeper, Barent Lampe, always had accurately updated information about the share ownership of all shareholders.

Lampe consequently kept two books—a journal and a ledger.

Only the journals for the first ten years of the Amsterdam chamber have been preserved; the ledgers from 1628 to the end of 23

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figure 2.4 Entries in the capital accounts of the Amsterdam chamber of the Dutch East India Company (VOC). These are the accounts of Jan Jansz Corver, Anthony van Surck, and Sacharias Roode. The share transfers can be seen on the left and the dividend payments on the right. Source: Archives of the VOC, inv. no. 7068, fo. 376. National Archives, The Hague.

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the Company in 1798 have survived. They are part of the VOC archive in the National Archives in The Hague. Lampe noted all transactions in the journal—one on each line—in the sequence in which the share traders appeared before him. He then transferred the information from the journal into the ledger. In the ledger every shareholder had his or her own account in the form of a balance. Lampe took the initial balance of these accounts from the share register. This was put on the credit (right-hand) side of the balance. If a shareholder sold a share, his or her account was debited by the amount concerned. And if he or she bought a share, the account was credited. This tells us that the ledger was kept from the perspective of the Company. If someone purchased a share, they received a claim on the Company, and the bookkeeper therefore recorded this transaction as a credit entry. This system is comparable to the way in which banks currently maintain statements for their account holders. The bookkeeper had to be paid sixty cents for each transaction. The buyer and seller paid half of this fee each. The purchaser also received a transcript from the transaction book, for which 1.20 guilders in stamp duty (a city tax) had to be paid. The stamp duty on the transfer of a share with a nominal value greater than 1,000 guilders was 2.40 guilders.10 If someone without an account in the ledger bought a share, Lampe opened a new account for them. There was no particular procedure in place in regard to shareholders who sold their entire holding in the Company, but an account was not recorded for them in a new ledger when the old one was full.

The share accounts were on the left-hand pages in the ledgers.

The bookkeeper recorded how much dividend had been paid out on the shares on the right-hand pages. When the Lords Seventeen decided in their 1625 annual meeting to pay a dividend of 20 percent of the share capital, for example, this meant that someone who owned a share of 1,000 guilders could then come to East India House and collect 200 guilders from the chamber where the money had been invested. They could do so whenever they 26

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wanted. No period was set within which dividends had to be collected, and shareholders could decide not to collect the dividend at all. It was consequently essential for the bookkeeper to keep very accurate records of how much dividend had been collected on each share. This was also important when it came to trading.

A share that still entitled the holder to the payment of a certain dividend was, needless to say, worth more than a share on which all payments had already been collected. Dealers who were in the bookkeeper’s office to receive a transferred share always consulted the right-hand page of the capital book to check how much dividend had already been paid out.

Warmoesstraat, New Bridge, St. Olaf’s Chapel The VOC’s capital accounting was the backbone of the trade in shares, but trading itself did not happen in East India House. It was always possible, of course, that dealers would encounter one another in East India House and reach an agreement about a transaction while there, but this was an exception rather than the rule.

Most share trading was done in places in the city where many merchants gathered. No one—the Company or anyone else—had designated these places; it was just a custom that had grown.

Amsterdam merchants already owned much of the capital in the Amsterdam chamber as a result of the subscriptions in 1602, and they were not deterred by the idea of trading their shares. After all, they were doing deals on commodities day in and day out, and these transactions often involved very substantial sums of money.

The commodities merchants gathered at the same place every day. Well into the sixteenth century it was Warmoesstraat, where many of the major players, including Lijntgens, lived. They had only to step out of their houses to meet other merchants and do business, and this in turn drew businessmen from other parts of the city. As Amsterdam became more important as a center of 27

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figure 2.5  The Bushuis (arsenal) on Kloveniersburgwal on what was then the edge of the city. Part of the city wall can still be seen in front of the Bushuis.

The first houses of a new district are shown opposite Kloveniersburgwal. On this map north is at the bottom. Source: Pieter Bast, Map of Amsterdam, 1597.

Amsterdam City Archives, Amsterdam.

commerce and more and more merchants settled there, the trading between dealers on the street became a problem. At this time Warmoesstraat was still an important transport artery, and the porters with their handcarts encountered the greatest difficulty in worming their way through the throng of wheelers and dealers.

The city council realized that things could not continue like this, and in 1561 it designated New Bridge as the place for trading.

New Bridge is the northernmost bridge over Damrak, where currently trams coming from Damrak enter the loop that 28

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figure 2.6 Map of Amsterdam dating from 1597. The details (figs. 2.5 and 2.7) show places important for share trading. Source: Pieter Bast, Map of Amsterdam, 1597. Amsterdam City Archives, Amsterdam.

brings them to Central Station. In the seventeenth century, one could see the IJ from New Bridge. Central Station stands on an island that was not constructed until the nineteenth century. The dock where ships landed their goods was some way away, but—and this was just as important to the merchants— the captains brought the international post to New Bridge.

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figure 2.7 The places where shares were traded in the early seventeenth century. The wide body of water in the center is the Damrak. The arrow on the right points to the New Bridge. On the right of the bridge is the Paelhuysgen.

Nieuwebrugsteeg is on the left of the bridge. The first side street is Warmoesstraat. St. Olaf’s Gate stands at the intersection, and St. Olaf’s Chapel can be seen a little way further along near the center arrow. By following Warmoesstraat to the south (at the top on this map) you would find the office of the notary Jan Fransz Bruyningh in Heintje Hoekssteeg, the third side street on the left. The large church building on the extreme left is the Oude Kerk. Source: Pieter Bast, Map of Amsterdam, 1597. Amsterdam City Archives, Amsterdam.

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Letters from the Baltic, England, and all the other areas that Amsterdam traded with were delivered to the Paelhuysgen, a small building on the western side of the bridge. A few dozen yards away, on the eastern side, the businessmen gathered to do their deals. There they had the latest news from overseas and could put the information to immediate good use in their trading.

The trouble was that all this went on in the open air. On fine summer days that would not have mattered, but when a cutting wind came off the IJ and chilled the traders to the bone, they sought shelter. They found it under the awnings of the shops on Warmoesstraat, so when it was cold and wet they still obstructed the traffic. In a bid to alleviate this problem, in 1586 the authorities allowed the merchants to use St. Olaf’s Chapel, a stone’s throw from New Bridge, when the weather was inclement. This chapel had also become city property at the time of the Alteration, and it was no longer used for religious purposes because Catholics were banned from practicing their faith in public. Thus the city council was free to allocate it to the commercial community.

St. Olaf’s Chapel, currently used by the Barbizon Palace Hotel as a conference center, thus became Amsterdam’s first stock exchange building—although it was not just shares that changed hands there. The great majority of the trade was in timber, salt, and grain. These goods had to be paid for, so the merchants also concluded their financial deals there. There were loans, of course, and to pay for transactions there were also bills of exchange and cashiers’ drafts—the early modern form of checks. The trade in VOC shares started in 1602. It was the concentration of businessmen that drew this new form of dealing to this spot. The best chance by far of finding someone who wanted to buy or sell a share was on New Bridge or in St. Olaf’s Chapel.

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Returns Jan Allertsz was not the only person who sold his investment in the Company as soon as the first installment had to be paid. There is a clear pattern in the share transfers shortly after the Company was set up, with marked peaks at moments when the directors called up capital. And it was not just small investors who could not come up with the installments and were obliged to sell their shares. Even Pieter Lijntgens, the man who signed up for 105,000 guilders, never paid for his investment in full. He was able to manage the first installment in 1603, but only because he came to an arrangement with the directors. When the second installment was called up in the spring of 1605, however, Lijntgens could not scrape the money together, and he sold half of his subscription. He was given little time to save up for the third installment because it was called up later that same year. This prompted him to sell his entire investment.

Was his subscription of 105,000 guilders somewhat too ambitious, even for a rich merchant like Lijntgens? With hindsight it obviously was, but when he signed up for the initial capital, the successes of the precompanies were still fresh in Lijntgens’s memory. These companies had usually paid the first dividend after only two years. And those dividends had been substantial. Lijntgens probably thought that he would be able to use the first dividend to pay most of the second installment, which was called up two years after the first. He wanted to finance his investment with the returns on that same asset. But his scheme failed. Despite the stipulation in its charter that the VOC had to pay a dividend if goods worth 5 percent of the initial capital were landed in the Republic, it took much longer before the first dividend was actually distributed.11 In 1602, Lijntgens and all the other subscribers who were unable to pay their installments had probably not understood the

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implications when the Company was set up for a much longer period than the precompanies. When the first flotilla returned, the directors did not pay part of the proceeds to the shareholders immediately. This was because the Company had a long future ahead of it. More vessels had to be sent to the East, and investments in trading posts were needed. All of these first profits were plowed back into the business.

Lijntgens’s sales transactions were recorded in the Company’s books, but unfortunately the bookkeeper never noted down the price at which the shares were traded. No other documents about these deals have survived, so we shall never know how much Lijntgens was able to get for his holding. Would he have made a profit? Nothing is known about the share price in the fall of 1605, but earlier in the year it had fluctuated around 105 to 106. The price was probably a bit lower after the summer as a result of the enforced sale of shares by people who were unable to find the money to respond to the call for capital. In view of the size of his sale, it is quite possible that Lijntgens had to accept less than the market price. If we assume that he was able to sell his shares at 104, the return on his investment (he had had to pay 25 percent of his subscription two and a half years before and a further 33.3 percent a year before the sale) would have been about 2.5 percent per year. That was very low, particularly if you consider that during this period merchants had to pay some 8 percent interest for credit.

In the meantime Neeltgen Cornelis, Dirck van Os’s maid, had also disposed of her holding. In October 1603 she sold her hundred-guilder subscription to a familiar name: Jacques de Pourcq, one of the notary’s witnesses on the evening the share register closed. Like most of the others who sold their share at this time, Cornelis probably did not have the money to pay the installments on her subscription.

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Dignum Jans’s subscription, on the other hand, was paid in full. She sold her fifty-guilder share to Nanning Claesz de Witt on October 5, 1610.12 What would her reason to sell have been? Did she need the money—de Witt probably paid her about sixty-five guilders—to make ends meet? Or was it perhaps that she did not know what to do with the consignment of mace she was entitled to collect from East India House?

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