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The Dutch East India Company

The Dutch East India Company
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The Dutch East India Company was founded in 1602, with its base of operations in Amsterdam. The creation of this company — abbreviated to The VOC by the Dutch — was spurred on by the English creating the English East India Company 2 years before. The big difference in the two companies is the transnational component. The British traded with Asia, whereas the Dutch did that as well as perfecting their fleet trading within Asia.

Another inspiration for the VOC was that the last few decades had seen the Dutch cut out of international trade due to 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. They were given a monopoly by the Dutch government to conduct trade with Asia for two decades. At a time 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.

Many of the facets of a modern corporation can be seen 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. They were even allowed to strike their own coins.

They also were the first to be listed on the Amsterdam Stock Exchange when it was also created in 1602, essentially just for them. There is evidence of earlier exchanges in the world, but this is the first one that would have been known to most people who came across it.  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 doing such trade. This marks the first Initial Public Offering in history, and quite a successful one.

The Company was the biggest source of trade with the east during its 200 years of operation. They sent our an average of around 200 ships per decade of operation, with many staying to trade inside of 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.

There were other factors that led to it’s downfall in the late 1700s. A big one was problems with employees. Many of them were corrupt or dissatisfied, 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 their hub of Batavia becoming a disadvantage as trading between continents became more common.

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