A Second Golden Age

In 1890 a small startup company went to the stock exchange: the Koninklijke Nederlandsche Maatschappij tot Exploitatie van Petroleumbronnen in Nederlandsch-Indië (Royal Dutch Company for the Exploitation of Petroleum Wells in the Dutch East Indies). Today, we know this company under the name of Royal Dutch/Shell, a global player and the largest fund on the Amsterdam stock exchange. The initial public offering of ‘Royal Oil’ did not stand on its own. In the final quarter of the 19th century, the Dutch economy was marked by a strong revival. And this had consequences on the stock market as ‘the engine of the economy.’ Between 1865 and 1900, the number of companies with a stock exchange listing grew from approximately 115 to over 1,000. Not only were there more domestic and colonial funds; the increase in foreign railroad companies was sensational. Mechanization of traffic (the internet of the 19th century, so to speak) was one of the incentives for the Second Golden Age, as this period is referred to.

Another important incentive was the abolition of the ‘cultuurstelsel’ in 1870. This system, which was introduced in 1830, entailed that the indigenous population of the Dutch East Indies had to use one fifth of their land to grow products for the European market. These products – primarily indigo, tea, sugar, and coffee – were sold by the Nederlandsche Handel-Maatschappij (NHM, a predecessor of ABN AMRO Bank). The disappearance of the monopoly position held by the NHM brought more room for private initiatives. Between 1870 and 1914, the number of exchange-listed Dutch-East-Indian companies rose from 11 to 165. The abovementioned Royal Dutch/Shell is one of those private initiatives.

The emergence of the Industrial Revolution in the Netherlands at the end of the 19th century also brought domestic industrial funds to the stock exchange. The Koninklijke Beiersche Bierbrouwerij, now known as Heineken, was the first in a line of many in 1889.