On this day in economic and financial history…

O’er the glad waters of the dark blue sea,
Our thoughts as boundless, and our souls as free,
Far as the breeze can bear, the billows foam,
Survey our empire and behold our home!
These are our realms, no limits to their sway —
Our flag the sceptre all who meet obey.
Ours the wild life in tumult still to range
From toil to rest, and joy in every change.
—Lord Byron, The Corsair

In centuries past, those who mastered the sea were often the ones who ruled the world. This was never truer than during the Age of Sail that followed the expeditions of Columbus. For nearly a hundred years, Spain and Portugal fought wars of trade and conquest in the New World and throughout the Orient. Their glory would not last. At the dawn of the 16th century, one company — the first publicly traded company in the history of the world — rose to prominence in Amsterdam. It would eventually become the largest company the world has ever seen.

March 20, 1602 is typically recognized as the founding date of the Dutch East India Company. The company’s origins date to 1595, when the first four merchant ships sailed from Holland (the present-day Netherlands) on a journey of trade and adventure to the East. One vessel was lost, and two-thirds of the crew perished on that fateful trip before their return nearly two and a half years later, but the spirit of commerce had taken root in the remaining traders. It was Johan van Oldenbarnevelt who established the VOC — the Verenigde Oostindische Compagnie, or United East India Company — and acquired a monopoly on trade routes beyond the Cape of Good Hope.

The VOC held the first “public offering” of shares in history shortly after its founding, for much the same reason that companies offer their shares in IPOs today. Within six months, the Amsterdam bourse (stock exchange) was founded to handle trading in the company’s shares. This initial offering raised 6.5 million guilders for the VOC. In 1602, this was an astronomical sum — the equivalent to more than 32,000 years of wages for an unskilled laborer, corresponding to roughly $912 billion today. According to Clem Chambers:

The company’s IPO saw a pop of 15% to its issue price, the first opportunity for investors to snag an IPO in history. It is intriguing to imagine that somewhere in the record there may well be the name of the first stock flipper in history, though it is unlikely that many of the initial shareholders “stagged” the issue, as the actual concept of stock market trading wasn’t yet invented; buying and selling was a manual and laborious affair.

Long-term holders were on to a good investment, too, and 20 years later the …read more
Source: FULL ARTICLE at DailyFinance