De Vereenigde Oostindische Compagnie
Trading with Asia was a lucrative business but also a very risky one. It was a long journey to India and back and any number of things could happen on the way. In order to pool the risks, merchants would at first only invest in a portion of a ship. Their portions came to be known as “shares.” Later they invested not in individual ships but rather in the businesses which organized the shipping. This is how the first “joint stock companies” came to be established.
Another way to deal with risk was to ask for a monopoly on the trade with a particular part of the world. European rulers were happy to sell these monopolies as a way to raise revenue. This is how “East India companies” came to be established in one country after another — of which the English East India Company, 1600, and the Dutch Vereenigde Oostindische Compagni, VOC, 1602, were the most famous. The rulers were also quick to borrow money from the companies once they had made their profits. This is the origin of the Bank of England, 1694, which was a private company, not a public institution, until 1946.
Yet it was more than anything the VOC that ruled the waves. They were buying tea and porcelain in China, established trading ports all over Asia and a full-fledged colony in today’s Indonesia. At the Beurs, the stock exchange, in Amsterdam not only VOC shares could be bought but all kinds of other shares too. In fact the Beurs was a veritable one-stop-shop for financial services. You could buy maritime insurance, organize bank transfers, cash checks and trade currencies. “Dutch finance” is the origin of today’s financial service industry.
Dutch traders are also the ones who came up with many of the place names we today find on a world map. Zeeland is a Dutch province and that is why two islands west of Australia came to be known as “New Zealand.” Australia itself was for a long time known as “New Holland” and New York known as “New Amsterdam.” In fact, Harlem is a Dutch city — although the Dutch called it “Haarlem” — not only a part of Manhattan. In the nineteenth-century Chinese laborers came to work in “the Dutch West Indies” and that is why there to this day are people here who speak both Chinese and Dutch.
In Our Time, “The East India Company”
History of the World in 100 Objects: “The Mechanical Galleon”