The History Book

180

THERE IS NO

CORNER WHERE

ONE DOES NOT

TALK OF SHARES

THE OPENING OF THE AMSTERDAM

STOCK EXCHANGE (1602)

T

he Amsterdam Stock

Exchange—the world’s

first permanent market for

stocks and shares—opened in 1602

under the auspices of the Dutch

East India Company (known in the

Netherlands as VOC). The company

was a vast enterprise—in effect, the

first international corporation—and

it was created to facilitate trading

expeditions to Asia. Unusually, the

Dutch government had granted

the company the power not only to

trade, but also to build fortifications,

establish settlements, raise armies,

and enter into treaties with foreign

rulers. Since the organization had

a huge network of ships, ports, and

personnel, it required considerable

funding and many investors. The

Amsterdam Stock Exchange was

IN CONTEXT

FOCUS

The Dutch Golden Age

BEFORE

1585 The founding of the

Dutch Republic; Protestants

in the south move northward.

1595 Cornelis de Houtman

leads an expedition to Asia,

starting the Dutch spice trade.

AFTER

1609 The Bank of Amsterdam

is founded.

1610–1630 Land is reclaimed;

the Dutch Republic increases

in area by one-third and

agricultural output increases.

1637 A single tulip bulb sells

for up to 10 times the annual

income of a skilled craftsman.

1650 Half the Republic’s

population lives in urban areas;

the Netherlands is the most

urbanized region in Europe.

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181

See also: Christopher Columbus reaches America 142–47 ■ The Treaty of Tordesillas 148–51 ■ The Defenestration

of Prague 164–69 ■ Stephenson’s Rocket enters service 220–25 ■ The construction of the Suez Canal 230–35

originally set up to enable investors

to trade their shares in the Dutch

East India Company, but it then

developed to become a vibrant

market in financial assets and one

of the drivers of a growing capitalist

economy in the Dutch Republic.

An expanding economy

In the 17th century, the Netherlands

was growing economically despite

being involved in a long war with

Spain. The northern part of the

region (the Dutch Republic, which

was Protestant) had split from the

southern half (Flanders, which was

Catholic) in the late 16th century.

The Republic consisted of seven

separate northern provinces, each

with a great deal of independence

but under the umbrella of a federal

government called the States-

General. Protestant merchants who

had lived in Catholic cities, such

as Antwerp, moved north to escape

persecution, taking with them

their capital and trading links.

Also, many Flemish artisans who

were skilled in textile production

(primarily weaving wool, silk, and

linen) emigrated to the northern

cities of Haarlem, Leiden, and

Amsterdam, boosting the Dutch

Republic’s economy further.

As the 17th century progressed,

the Republic really began to prosper.

Various factors came together to

make this small region successful.

Most importantly, the nation had a

strong tradition of seafaring, giving

it a huge advantage over many other

countries. In addition, its citizens

had a strong work ethic—largely

due to the Protestant belief that

THE EARLY MODERN ERA

worldly work was a duty and a route

to salvation—so productivity was

high. There was also a growing

population (especially of the urban

middle classes) and an expanding

major city—Amsterdam—which

proved an ideal center for trade.

All of these contributing factors

resulted in the Dutch economy

moving increasingly toward

shipping, trading, and finance.

Exploration and trade

As a coastal nation, the Dutch

Republic produced notable sailors

and explorers, so long-distance

trading was a natural consequence

of the country’s maritime history.

In addition, advancements in ship-

building technology in the Republic

enabled the Dutch merchant fleet to

expand rapidly; by 1670, the Dutch

had more merchant ships than the

rest of Europe put together. ❯❯

The Dutch East India Company ran

its own shipyards, the largest being in

Amsterdam, shown here. Very powerful

in the 17th century, the company went

bankrupt and was dissolved in 1800.

Agricultural revolution

The expanding population of

the Dutch Republic in the 17th

century encouraged farmers

to make agriculture much more

productive. In large part, this

was achieved through continued

land reclamation—a process that

was already well underway by

the late Middle Ages. The Dutch

also changed the way they used

their land. Instead of growing

grain one year and letting the

land lie fallow the next, farmers

began planting certain nitrogen-

producing crops (such as peas,

turnips, and clover, which they

could use as animal feed), in

order to improve the soil ready

for the next corn crop. Growing

more fodder meant that farmers

could keep larger herds, thereby

increasing production of meat

and milk as well as manure,

which could be used as fertilizer.

This greater productivity helped

to sustain a growing population,

although some wheat still had

to be imported to make up the

shortfall. It also freed up larger

segments of the population to

work in trade or finance rather

than agriculture.

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