the oldest Share / die älteste bekannte Aktie (Andeel) der Welt / Het oudste aandeel ter wereld

Verenigde Oost-Indische Compagnie (VOC) 1606

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Logo der VOC
Vereinigte Ostindische Companie (VOC) 1606
Die "Eendraght" vor Ijsselmonde, zweites Schiff der Le Maire-Expedition von 1615-1617 Ölgemälde von Aert Anthonisz (1618)

Figure 1)

Dutch Vereinigte Oostindische Compaignie (VOC) share certificate # 6, down-payment on a share; issued by the Camere Amsterdam 27th September 1606. Original signatures: Arent ten Grotenhuys and Dirck van Os, company founder van Verre and after 1602 Directors of VOC Kammer Amsterdam.
Source: Private collection

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Orign History Literature


The Oldest Share in the World

Origin:
The exhibit shown here has been proved to have been in the possession of a collector for several decades. When he purchased the share certificate shown here, the young collector (and subsequent author) could not know that his Nonvaleur would turn into something unique as he was interested in all shares that documented the start of publicly owned companies. Up until the early 1960's, nobody could have dreamed that old shares considered to be worthless, and thus called nonvaleurs in stockdealing jargon, would begin a new life. As a rule they were forgotten and destroyed during moves or to save space.
The first auction of historical securities in the world took place in Germany in the mid-1970's. In the first few years that scripophily took hold, there were the first few attempts to catalogue items - with no Internet or fax machines. Information was simply passed on from collector to collector at auctions or other meetings.
It was an age when individual items quickly became mass articles or remained rarities for a long time - anything was possible.
In the small community of collectors everybody knew everybody and every year new share certificates cropped up but there was little transparency and therefore prices fluctuated greatly.
Following two years of research and in the light of increasing transparency, the collector had his VOC share appraised by an expert in 1985.
After another two years he could safely assume that besides the second VOC share (held by the Amsterdam Stock Exchange) and other securities from the company, his piece was the oldest share certificate in the world.
In 1987, he proudly presented the finest item in his collection on a television programme on the new collector's field of scripophily. During this programme, examples from two collections of German, South American and Dutch securities were presented to the public along with their owners.
The collection was broken up in 1999 on account of old age. The VOC share changed hands. Prior to this, a copy of the exhibit was sent to the leading authority on the VOC, Dr. Lodewijk Wagenaar of the Amsterdam Historic Museum. The exhibit was previously unknown to him and he was willing to provide a translation from the old Dutch and to draw up a catalogue description if the exhibit were to be put up for auction.
A few weeks later, the item was sold directly. The item was now presented to the world for the first time over the Internet. In accorsance with property rights, Figure 1) shows only a part of the first of four pages.

Several endorsements are written on the inside as well as on the backside, including the number of the share certificate and the registration number.

The claim to the title of the "oldest share certicficate in the world" was previously held unchallenged by the exhibit in the possession of the Amsterdam Stock Exchange which was purchased from a second-hand bookshop in Duesseldorf. Reprints were sold by the the Amsterdam Stock Exchange along with a translation as of the early 1980's.

In various publications about the VOC, the item belonging to the Amsterdam Stock Exchange was constantly shown. An example is given by the highly recommendable book " EEN EEUW VOL EFFECTEN" by Prof. Joh. De Vries, which was published on the occasion of the 100th anniversary of the Amsterdam Stock Exchange in 1976, and which shows the VOC share certificate of 08 December 1606 on Page 16 and the first share price listing on Page.
In the first film on the development of scripophily, made by the Schweizer Bankgesellschaft, the item belonging to the Amsterdam Stock Exchange is specifically named and shown.


History:

The opening of the sea route to India - once the name given to India, Malaya and all of south-east Asia - by the mariner Dom Vasco da Gama 1499 established the colonial power of Portugal in the Indian Ocean. In the course of the following 100 years around 200 voyages were made around the Cape of Good Hope to the east. The chief motivation was initially the spice trade, but around 1600 other trading commodities were discovered in the Orient and these took a more prominent place than the spice trade. Only around half of all the ships that were sent out mainly by the Portuguese and the Dutch ever came back. Atlantic expeditions were hampered by the Ottoman Turks, who blocked access to the eastern Mediterranean area for Western Europeans. They were also the cause of subsequent alliances and East India Companies. In 1580 the two great sea-faring nations Spain and Portugal united. The pre-eminence of the Iberian powers ensured that the sea route to Asia remained closed to other European nations. Trade in Asian spices, and above all pepper, was subject to contracts set up by the crown with fixed prices that had to be followed by the traders (contradores). They then sold on the goods to retailers such as the Dutch trading house Cunertorf & Snel in Lisbon which in turn supplied the the north European market via trading agencies in Antwerp. However, it was no longer possible to make such a large profit as the price of spices fell.

Towards the end of the 16th century, Dutch traders from various towns decided to take charge of the import of spices from Asia. In order to finance the ships and equipment , companies were formed such as the Brabantse Compagnie, the Rotterdamse Compagnie, the Compagnie van Verre, which in turn merged with the Second Compagnie in Amsterdam and was called the Old (Oude) Compagnie. Within a few years these companies equipped 65 ships spread over 15 fleets of which around 50 came back fully laden with goods. They fought the Portuguese, the English and each other. Theresult was a dramatic fall in the price of spices. Thus it was largely economic motives that forced the Dutch merchants to co-operate. Reason demanded a national merger.


On 20 March 1602 the prime companies of Holland merged to form a large company called "Vereinigte Ostindische Compagnie (VOC) on the suggestion of the "landsadvocat" of the province of Holland Johan van Oldenbarnevelt (1547-1619) and the later General Governor Prinz Johann Moritz von Nassau (1606 - 1679). The new company received a state charter which granted it sovereign rights and this would be of great significance for its future development.
This company documents the breakthrough of the first and soon largest worldwide dominating trading company of its time. The VOC displayed the basic attributes of a modern joint-stock company and initiated future economic and financial history.

At the beginning the company was run by six chambers in signification trading centres: Amsterdam as the main focus, Seeland, Delft, Rotterdam, Hoorn and Enkhuizen.
Each chamber appointed its own directors to Board of Directors that was 75 strong. From these the actual executive board was elected and consisted of 17 members.

The original paid up share capital was 6,424,588 Guilders, a huge sum at that time.
The key to success in the raising of capital was the decision taken by the owners to to open up access to a wide public and to accept shareholders as part-owners.
Thus the shares were sold rapidly, mostly at a nominal value of 3000 Guilders, and they were tradable, as any Dutchman could buy and sell them. The share price was not set by the government of the country but by an independent joint-stock corporation interested in profit.
The company shareholders (the term came into use after about 1606) had to produce the subscribed capital in four part payments and they were called up by the VOC between 1603 and 1606.
The shareholder received a receipt (Part) for the payment to the nominal value of the share, just as was customary at the British East India Company over 100 years later. A share certificate documenting payment and ownership such as we know today was not issued but was instead entered in the companiy's share register.
Purchases and sales of shares were effected by a new entry in the VOC's share register in the presence of two directors, who needed to confirm the share transfer by signature. Thus the Amsterdam Kontor of the VOC became the "first stock exchange in the world" by trading in its own shares.
The VOC's start-up capital was never increased apart from a few small adjustments to 6,440,200 Guilders.
The company covered its short-term capital requirement by issuing bonds with a term of 3 to 12 months. Later, after 1655, capital was taken up for longer terms so that loan capital increased at times to 10-12 million Guilders.
The state privilege granted the company wide-ranging rights, such as exclusive trading rights east of the Cape of Good Hope, the right to negotiate on behalf of the General State, to conclude contracts and alliances, to build forts, to appoint governors and to raise its own army. In this way the company became a "state within the state" and disposed of an incredible commercial and political power, entirely above the state that granted privileges up to the minting of its own coins.

The East Indian quarters of the VOC were set up in Batavia on the island of Java, the Portuguese was driven out of Ceylon and Malacca und the first white colony was established in South Africa.
Hobhouse, Henry: "Finally, the VOC ruled over eight foreign governments in Amboyna, Banda, Ternate, Macassar, Malacca, Ceylon, Java and on the Cape of Good Hope. Factories stood in Bengal, on the Coromandel coast, in Surat, Thailand and on the Persian Gulf. In the end, the Dutch East Indies Company was the richest company in the world; it helped to finance the blossoming of Dutch civilisation: Rembrandt, Vermeer, Frans Hals, Vondel, Grotius, Spinoza, the largest publishing operation in the world in the 17th century with numerous authors and poets, some forgotten today, all the painters architects and above all the patrons.
Until its demise, the VOC was lord of over 150 trading vessels, 40 warships, 20,000 seamen, 10,000 soldiers and had nearly 50,000 civilians in its service; with all of this it still managed to pay out a dividend of 40%. It was the envy of its rivals.
Its trading routes connected Japan, China, India, the Persian Gulf, Africa and Europe with all its countries to Amsterdam.
In the Persian Gulf it traded spices for salt, in Zanzibar salt for cloves, in India cloves for gold, in China gold for tea and silk, in Japan silk for copper, and in the islands of south-east Asia copper for spices. The whole inner-Asian trade was nearly as profitable as the main trade between the Orient and Europe. The company flourished in spite of the losses caused by pirates - the hostages of the Chinese seas, the weather, European rivals, corruption, inefficiency, theft and disease. The VOC was unscrupulous: it created monopolies, destroyed local competitors and forced up prices for the most important spices by 180%.

Up to the middle of the 18th century, the VOC succeeded in reinforcing its economic and political pre-eminence. It prospered and became the largest monopoly company of its time and was also at this point the first European power in India. After 198 years of existence, the most significant company in the history of world trade was dissolved on 31 December 1799. As a result of mismanagement, debts of 110 million Guilders had been run up and these were taken on by the Dutch state.

Not only did the "Vereinigte Ostindische" make history as the mother of all joint-stock companies, but so did its shares.
Even before all shares had been placed, its price was 10% to 15% above par and as early as 1622 its price was 300% higher; in 1720 at the hight of speculation its price was 1200%. When the company's difficulties became public in 1781, the price slumped to to 25%. The dividend was on average 18% per year and the highest dividend was paid in 1606 at 75%. Shareholders did not receive their dividends regularly and were not always paid out in cash but partly also in spices, company bonds or state bonds. Soon the shareholders were popularly known as the "pepper sacks of Amsterdam", although they never got to see a proper balance sheet. The later popular Dutch nickname for the once most influential company of the world was V(ergann) O(nder) C(orruptie) which means "Ruined By Corruption".


Text Reinhild Tschöpe

We thank Mrs. Tschoepe for this information text

 

 

Literature:

Berdrow, Wilhelm: Buch berühmter Kaufleute/ Leipzig 1909

Hobhouse, Henry: Fünf Pflanzen verändern die Welt/Stuttgart 1987,

Moser, A.: Capitalanlage in Werthpapieren/ Stuttgart 1862

Schmitt, Eberhard, - Schleich, Thomas - Beck, Thomas: Kaufleute als Kolonialherren; Die Handelswelt der Niederländer vom Kap der Guten Hoffnung bis Nagasaki 1600-1800, Schriften der Universitätsbibliothek Bamberg 1988

Schmitz, Jakob: Historische Wertpapiere /Econ-Verlag Düsseldorf 1986

Spamer, Otto: Illustriertes Handelslexikon/Leipzig, 1876

De Vries, Joh.: Een Eeuw vol Effecten/Vereeniging voor de Effectenhandel 1976

Wagenaar, Lodewijk: In het Kielzog van de VOC /Koninglijke NederlandseToeristenbond ANWP Den Haag 1996

Wagenaar, Lodewijk: Galle VOC-vestiging in Ceylon/De Bataafsche Leeuw, Amsterdam 1994


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