Page 23 - Dutch Asiatic Shipping Volume 1

LO
VOC was likewise to render account on two further occasions, in fact every ten years. In 1647 the directors were obliged to open their accounts every four years.35
The directors' victory in the matter of capital and dividend had far-reaching consequen- ces for the development of the enterprise. Directors now had a free hand to keep profits in the business and build up reserves. In this way it became possible to accumulate trading capital in Asia, a cause so fervently pleaded by governor-general Jan Pietersz. Coen. U p to about 1630 the directors used part of the profits at home to build up capital in Asia. After that the business in Asia was itself not only capable of increasing this 'Indian fund', but also of handing over to the chambers in the Netherlands some of the profits made in Asia.3 6
Characteristic of the hesitation in 1602 to consider the total of investment applications as permanent share capital,was also the rule of paying interest on the sums deposited by shareholders before the directors were to use them for financing the fleets.37 Likewise is to be explained the fact that later on the VOC's balance sheets, as for instance the Am- sterdam chamber's balance sheet of 1608, showed neither the total of deposits nor the costs of equipping the fleets. In this way the balance sheets acquired the character of interim liquidation balance sheets, as expounded by De Korte.3 8 Although later the rea- lization increased among directors that investment capital should be entered under debits, this was never done.3 9 Thus in the accounting system the old principles survived. Expenses were all very carefully specified and brought together under the heading of equipage - in 1603 the first equipage was entered, by 1794 the 187th had been reached. Opposite were entered the proceeds of the sale of goods imported. Neither the proceeds of goods or moneys exported, nor the purchase price of goods received were entered. The value of the ships was nowhere accounted for, the business in Asia did not appear on the balance sheets in the Netherlands. The fact that the directors never adapted the accounting system to changing circumstances is a charge that has sometimes been laid heavily against them in historical writing.4 0
Directors have also been criticized for the fact that in good years, as for instance in the first half of the eighteenth century, they omitted to increase share capital. Instead the VOC negotiated loans, long term but also short term for as little as six months. The fact that the Company had to resort to a 'paltry leftover of third rate liquidities', as the historian Mansvelt called it, was to have fatal consequences in the Fourth Anglo-Dutch W ar (1780- 1783).41 It is conceivable that the directors refrained from placing new shares because they did not know how to do this without prejudice to the existing shareholders, who of course would have to share dividendswith the new shareholders.42
At the end of February 1796 the directors rendered account for the last time. They then had to give way to the Committee set up in 1795. Finally the Staatsregeling (constitution) of 1798 laid down that all possessions and debts were to be taken over by the Batavian
35 For the way in which shareholders were subsequently involved in this statement of account, see p.13.Onthestatementofaccountin1623cf.DeKorte,Dejaarlijksefinanciële verantwoording,11.
36 Gaastra, 'The shifting balance', 58-65.
37 Steensgaard, 'The Dutch East India Company as institutional innovation', 242.
38 De Korte, De jaarlijkse financiële verantwoording, 12-13.
39 De Korte, De jaarlijkse financiële verantwoording, 35.
40 In particular by Mansvelt, Rechtsvorm en geldelijk beheer, and Steur, Herstel of ondergang.
41 Mansvelt, Rechtsvorm en geldelijk beheer, 101.
42 De Heer, Bijdrage tot de financiële geschiedenis.