Экономические науки / 3.Финансовые отношения.

Студентка Максимович Юлия Ивановна

Научный руководитель: ассистент кафедры иностранных языков

Анисимова Светлана Анатольевна

Донецкий национальный университет экономики и торговли имени

Михаила Туган - Барановского, Украина

The Oldest Share in the World.

Old shares and bonds without an actual value and impossible to negotiate in a stock market are considered old stocks. They document mostly the circulating history of a company, from foundation to insolvency or acquisition. The first shares certificate issued in financial history took place in Amsterdam in 1606 by Vereenigde Oostindische Compagnie (VOC) - The Dutch East India Company.

When the young collector purchased the share certificate, he could not know that his Nonvaleur would turn into something unique as he was interested in all shares that documented the start of publicly owned companies. Up until the early 1960's, nobody could have dreamed that old shares would begin a new life. As a rule they were forgotten and destroyed during moves or to save space. The first auction of historical securities in the world took place in Germany in the middle of 1970’s. In the first few years that scripophily took hold information was simply passed on from collector to collector at auctions or other meetings. Following two years of research and in the light of increasing transparency, the collector had his VOC share appraised by an expert in 1985. After another two years he could safely assume that besides the second VOC share (held by the Amsterdam Stock Exchange) and other securities from the company, his piece was the oldest share certificate in the world. In 1987, he proudly presented the finest item in his collection on a television programmer on the new collector's field of scripophily. The collection was broken up in 1999 on account of old age. The VOC share changed hands. The claim to the title of the "oldest share certificate in the world" was previously held unchallenged by the exhibit in the possession of the Amsterdam Stock Exchange which was purchased from a second-hand bookshop in Duesseldorf. Reprints were sold by the Amsterdam Stock Exchange along with a translation as of the early 1980's.

The opening of the sea route to India - once the name given to India, Malaya and all of south-east Asia - by the mariner Dom Vasco da Gama 1499 established the colonial power of Portugal in the Indian Ocean. In the course of the following 100 years around 200 voyages were made around the Cape of Good Hope to the east. The chief motivation was initially the spice trade, but around 1600 other trading commodities were discovered in the Orient and these took a more prominent place than the spice trade. Only around half of all the ships that were sent out mainly by the Portuguese and the Dutch ever came back. Atlantic expeditions were hampered by the Ottoman Turks, who blocked access to the eastern Mediterranean area for Western Europeans. They were also the cause of subsequent alliances and East India Companies. In 1580 the two great sea-faring nations Spain and Portugal united. And the sea route to Asia remained closed to other European nations. Then the traders sold on the goods to retailers such as the Dutch trading house Cunertorf & Snel in Lisbon which in turn supplied the north European market via trading agencies in Antwerp. However, it was no longer possible to make such a large profit as the price of spices fell.

Towards the end of the 16th century, Dutch traders from various towns decided to take charge of the import of spices from Asia. In order to finance the ships and equipment, companies were formed such as the Brabantse Compagnie, the Rotterdamse Compagnie, and the Compagnie van Verre, which in turn merged with the Second Compagnie in Amsterdam and was called the Old (Oude) Compagnie. Within a few years these companies equipped 65 ships spread over 15 fleets of which around 50 came back fully laden with goods. They fought the Portuguese, the English and each other. The result was a dramatic fall in the price of spices. Thus it was largely economic motives that forced the Dutch merchants to co-operate. Reason demanded a national merger.

On 20 March 1602 the prime companies of Holland merged to form a large company called "Vereinigte Ostindische Compagnie (VOC) on the suggestion of the "landsadvocat" of the province of Holland Johan van Oldenbarnevelt (1547-1619) and the later General Governor Prinz Johann Moritz von Nassau (1606 - 1679). The new company received a state charter which granted it sovereign rights and this would be of great significance for its future development.

This company documents the breakthrough of the first and soon largest worldwide dominating trading company of its time. The VOC displayed the basic attributes of a modern joint-stock company and initiated future economic and financial history. At the beginning the company was run by six chambers in signification trading centres: Amsterdam as the main focus, Seeland, Delft, Rotterdam, Hoorn and Enkhuizen. Each chamber appointed its own directors to Board of Directors that was 75 strong. From these the actual executive board was elected and consisted of 17 members. The original paid up share capital was 6,424,588 Guilders, a huge sum at that time. The key to success in the raising of capital was the decision taken by the owners to open up access to a wide public and to accept shareholders as part-owners.

Thus the shares were sold rapidly, mostly at a nominal value of 3000 Guilders, and they were tradable, as any Dutchman could buy and sell them. The share price was not set by the government of the country. The company shareholders (the term came into use after about 1606) had to produce the subscribed capital in four part payments and they were called up by the VOC between 1603 and 1606.

Purchases and sales of shares were effected by a new entry in the VOC's share register in the presence of two directors, who needed to confirm the share transfer by signature. Thus the Amsterdam Kontor of the VOC became the "first stock exchange in the world" by trading in its own shares. The company covered its short-term capital requirement by issuing bonds with a term of 3 to 12 months. Later, after 1655, capital was taken up for longer terms so that loan capital increased at times to 10-12 million Guilders.

The state privilege granted the company wide-ranging rights, such as exclusive trading rights east of the Cape of Good Hope, the right to negotiate on behalf of the General State, to conclude contracts and alliances, to build forts, to appoint governors and to raise its own army. In this way the company became a "state within the state" and disposed of an incredible commercial and political power, entirely above the state that granted privileges up to the minting of its own coins. Until its demise, the VOC was lord of over 150 trading vessels, 40 warships, 20,000 seamen, 10,000 soldiers and had nearly 50,000 civilians in its service; with all of this it still managed to pay out a dividend of 40%. It was the envy of its rivals. In the Persian Gulf it traded spices for salt, in Zanzibar salt for cloves, in India cloves for gold, in China gold for tea and silk, in Japan silk for copper, and in the islands of south-east Asia copper for spices. The whole inner-Asian trade was nearly as profitable as the main trade between the Orient and Europe. The company flourished in spite of the losses caused by pirates - the hostages of the Chinese seas, the weather, European rivals, corruption, inefficiency, theft and disease. The VOC was unscrupulous: it created monopolies, destroyed local competitors and forced up prices for the most important spices by 180%. Up to the middle of the 18th century, the VOC succeeded in reinforcing its economic and political pre-eminence. It prospered and became the largest monopoly company of its time and was also at this point the first European power in India. After 198 years of existence, the most significant company in the history of world trade was dissolved on 31 December 1799. As a result of mismanagement, debts of 110 million Guilders had been run up and these were taken on by the Dutch state.

Even before all shares had been placed, its price was 10% to 15% above par and as early as 1622 its price was 300% higher; in 1720 at the height of speculation its price was 1200%. When the company's difficulties became public in 1781, the price slumped to 25%. Shareholders did not receive their dividends regularly and were not always paid out in cash but partly also in spices, company bonds or state bonds. Soon the shareholders were popularly known as the "pepper sacks of Amsterdam", although they never got to see a proper balance sheet.