Lodewijk Petram | PhD-thesis

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C.J. Visscher, Amsterdam Exchange of Hendrick de Keyser (detail), etching, Collection Stichting VvdE


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The world’s first stock exchange (New York: Columbia University Press, 2014) is a popular adaptation of Lodewijk Petram’s PhD-thesis. Both the book and the thesis are based on the same research, yet they differ in emphasis. The thesis argues that the Amsterdam market for VOC shares can be seen as a “modern” stock market—the first modern stock market in history—while the focus in the book is on the narrative of how the buying and selling of VOC shares developed. The book is consequently more anecdotal. The heart of the book consists of the stories of the men (and the occasional woman) who traded VOC shares.

While most readers would probably find the book more interesting, some details of the thesis can be found below.

More information about the book

Short summary of PhD-thesis

It is well-known that the Dutch East India Company (VOC) issued shares on its founding in 1602, that these shares were transferable and that there existed a secondary market for shares in seventeenth-century Amsterdam. The VOC was not the first company in history that issued shares, but what makes the history of VOC shares so special is that they were very actively traded. This PhD-thesis analyzes the quick development of the secondary market for VOC shares and argues that by 1650, this market could be called the world’s first modern securities market.

The main incentive for investors to start trading shares was the permanent character of the VOC. The States General of the Dutch Republic had initially granted a 21-year charter, which, at the end of this period, was prolonged for another 21 years without intermediate liquidation. Hence the capital stock became de facto fixed. In the end, the company would stay in business for almost two centuries. Investors generally do not want their money to be locked up for that a long period of time, so they used the secondary market to sell their shareholdings to a third party.

Forward contract, Dutch National Archives, The Hague

Standardization of the VOC shares by market makers further enhanced the development of the market. Moreover, the establishment of a clear legal framework for the share trade attracted new participants to the market and made the trading community more diverse. The various types of share traders had different risk profiles, which made it possible to start trading financial risks, using various types of derivatives: forwards, options and repos became very popular financial instruments. The seventeenth-century Dutch share traders were thus already familiar with the financial technique that played a key role in Lehman Brother’s demise.

Around 1650, the level of development of the market was such that it started to provide the functions of present-day securities market: liquidity and price discovery. As a result, investors could now, for the first time in history, invest their money at low cost and for short periods of time, without the need for endless negotiations about terms and conditions of a contract. They did not have to fear, moreover, that it would be difficult to sell off their investment if need arose and the price impact of average trades was negligible. This research uses original and partly hitherto unused sources such as lawsuits, merchants’ accounts, share traders’ correspondences and notarial deeds.


Graph of monthly VOC share price, September 1602 - February 1698

Average monthly price of VOC shares (1602-1698)

Sources: see PhD-thesis, p. 81.


Reinvestment index VOC, 1602-1698

VOC reinvestment index

This index shows the value over time of an investment in the VOC, assuming that all dividends received were immediately reinvested in shares. An investment of 100 guilders in 1602 was worth a little more than 3318 guilders in February 1698. Over the period 1602-1698, the average annual return on investments in the VOC amounted to around 3.75%.



Lodewijk Petram’s PhD-thesis can be downloaded from the digital repository of the University of Amsterdam (PDF, 6MB).

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