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Dutch East India Company

The Dutch East India Company

The Dutch East India Company traces its origins back to 1602. As the Dutch like to call it for short, the VOC had its base of operations in Amsterdam. This company’s creation was in response to the English creating the English East India Company 2 years before. The big difference between the two companies is the transnational component. The British only traded with Asia. Meanwhile, the Dutch also traded with them, but at the same time, they were also perfecting their fleet in the region.

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Another inspiration for the VOC was that the Dutch were getting cut out of international trade over the last few decades. The underlying reason was their conflict with the Spanish and Portuguese. This increased the Dutch need for their own trade routes.

The existence of the VOC was a big deal for a variety of reasons. The Dutch government gave them a monopoly to conduct trade with Asia for two decades. In general, when trade was far less global, this meant access to goods that might not be otherwise possible. One of the key goods shipped were spices, and of these, the most demanded was pepper. The demand for it was steady, not dropping much to price increases. This is just one good of many that made big profits possible.

We can see many of the facets of a modern corporation in a nascent state in the company. They had the first widely recognized corporate logo. It was based on the Dutch name and was a large V, with an O through one of its lines and a C through the other. They are also the first transnational corporation in history. In practice, this means is that they could mint their own coins.

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The Dutch East India Company and the Amsterdam Stock Exchange

The Dutch East India Company was the first company on the Amsterdam Stock Exchange. The exchange also originates from 1602. It was essentially created just for them. There is evidence of earlier exchanges in the world, but this is the first one that most people at the time might have been familiar with. In fact, the oldest share in the world is for the VOC. They raised the enormous sum of 6.44 million guilders, enough for boats, sailors, foreign bases, and all the other military and political needs of making such trade. This marks the first Initial Public Offering in history and quite a successful one.

The Dutch East India Company was the biggest source of trade with the east during its 200 years of operation. They sent out an average of around 200 ships per decade of operation, with many staying to trade inside Asia to realize even more profits. They influenced much of the world and brought many new ideas to Asia, especially Japan. Best of all, those who invested in the stock received an annual dividend of 18% per year. This return was so high that it is a key reason the VOC eventually was shut down.

Other factors also led to the Dutch East India Company’s downfall in the late 1700s. A big one was problems with employees. Many of them were corrupt or unhappy, often due to poor treatment by the company. Even worse, many employees faced ill health and death. Other problems were geopolitical instability hurting their trade within Asia and relying on Batavia’s hub becoming a disadvantage as trading between continents became more common.

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