This statue of Jan Pieterszoon Coen (1587-1629), the VOC (Dutch East India Company) governor-general for Asia, was erected in his native Dutch town of Hoorn in 1893. In 1621 Coen had organised the genocide of about 14,000 inhabitants of the Banda Islands, a group of small volcanic islands within the Moluccas archipelago, Eastern Indonesia. In past centuries the Bandas were called the Spice Islands in Europe and elsewhere. Nutmeg was native to the Banda Islands.
The statue had been knocked off its pedestal in 2011 when it was hit by a car. There was controversy about restoring it and the local council put brief notes in Dutch and English on a plaque affixed to the pedestal (see below) with an invitation to visit the nearby Westfries Museum covering the so-called Golden Age of 1600-1650 and Coen. Image source: Google Street
In 1602 the States-General of the Dutch Republic chartered the Vereenigde Oost-Indische Compagnie (VOC) — United East India Company in English, but commonly known as the Dutch East India Company — with a monopoly of trade with Asia. In 2012 it was claimed to be the most valuable company in history and in December 2017 multiple media outlets including Dutch ones, reported on a current-day valuation of $7.9 trillion, equivalent to a market value of 20 global corporations, headed by Apple Inc.The claim is fake news as it is not based on evidence from the extensive surviving VOC documentation. The company was dissolved in 1799.
This week researchers reported that false stories spread significantly more on Twitter than did true ones (see here). This isn’t exactly a new phenomenon and Jonathan Swift, the Irish writer, wrote in 1710:
“Besides, as the vilest Writer has his Readers, so the greatest Liar has his Believers; and it often happens, that if a Lie be believ’d only for an Hour, it has done its Work, and there is no farther occasion for it. Falsehood flies, and the Truth comes limping after it; so that when Men come to be undeceiv’d, it is too late; the Jest is over, and the Tale has had its Effect…”The Dutch East India Company (VOC) is regarded as the first modern multinational as on the renewal of its charter in 1623, its shares were not only traded on stock exchanges but it had a permanent capital while directors and shareholders had limited liability.
Following Apple’s milestone in 2012 in becoming the most valuable listed company, the false claims on VOC’s value began when Motley Fool, the US financial website, posted a report on the most valuable companies in history.
Last December a Canadian company Visual Capitalist of Vancouver, which produces digital media content for investors produced an infographic and content on ‘The Most Valuable Companies of All-Time.’
The company said: “Widely considered the world’s first financial bubble, the history of Tulip Mania is a fantastic story in itself. During this frothy time, the Dutch East India Company was worth ƒ78m Dutch guilders, which translates to a whopping $7.9 trillion in modern dollars.”
This gives a 1637 guilder conversion rate of about 100,000 to the current US dollar!!
The value of f78 million Dutch guilders is false. The true market capitalisation of ƒ19.3m in 1637 converts to ƒ489.75m or €222.24m in 2016 according to Dutch inflation data from 1450 provided by the Royal Netherlands Academy of Arts and Sciences (KNAW) — see the first article linked to below.
The issued capital of VOC was ƒ6,429,588 (remained fixed from 1602 to 1799) and in 1720, the peak year of the South Sea Company Bubble in London and the Compagnie du Mississippi/ Compagnie d’Occident Bubble in Paris (both companies were chartered to privatise the sovereign debt of Britain and France), VOC shares hit an all-time peak of over 1,200% of the IPO price.
If the market capitalisation of VOC of ƒ78 million related to 1720, the euro value would be €805 million or $807 million in 2016.
By 1721, the VOC share price was down about 50% from its peak.
The share price of the British East India Company (EIC) had an all-time peak of £420 in 1720 and was down to £150 in the summer of 1721.
The Golden Age for the VOC was the first half of the 17th century and for the EIC the second half of the 18th century when it ruled a big chunk of India and according to records, its standing army in 1803 was 233,000 men — greater than the British Army.
The EIC was the most powerful company in history.
It’s not clear where the 2012 value of $7.4 trillion came from and Jeff Desjardins, the founder and editor of Visual Capitalist, just updated that figure with 2013-2017 inflation.
Repeat something often enough and it can become a fact because it’s too much hassle to check the evidence.
The Dutch were better at keeping records and that’s why the EIC isn’t among the most valuable companies. Besides, how would its role as the world’s greatest illicit drugs cartel be quantified?
Karl Marx who had coined the term “religion is the opium of the people” in 1843, wrote in 1858 that the British Empire was “preaching free trade in poison”, and by the start of the 20th century China with a population of 400 million was in the grip of an opium addiction disaster on a scale that had never been seen before or since, in the history of humanity.
In summary, comparing values of modern listed companies with two of the first listed companies is ridiculous but it generates headlines.
The number of shareholders of the VOC and EIC was small while funding via bonds and loans was more important than equity. The VOC left debt outstanding of about ƒ120 million on its collapse and it was added to the Dutch national debt.
The EIC during its history either bailed-out the British government or the reverse.
Check here also:
First Modern Economy: Myths on tulips & most valuable firm in history
Measuring Worth Is a Complicated Question
Motley Fool, Zero Hedge, Business Insider, Visual Capitalist and the many other recyclers of this fake news, should delete their posts.
