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- Delft in Holland
Not long after the Dutch revolted against Spain, they developed a system for companies and the government to raise money from individuals. Individuals could invest money in, that is, loan money to, companies they did not know. Today, we are accustomed to banks and stock exchanges and to bonds that can be bought, sold, and bequeathed. Four hundred years ago, the Dutch were the first to develop this system and scale it to a national level. They did it in just a few decades.
The governments at the city, province, and national levels used the money raised primarily to equip the navy and army to keep fight the never-ending wars with their neighbors. Rather than trying to pay back the principal, they built the debt service (interest payments to bond holders) into the budget. The secondary market that developed let people raise cash without costing the government anything.
In addition, the VOC, Dutch East India Company, was a major issuer of bonds and Delft was one of the six cities with a VOC headquarters. An example of one -- not Leeuwenhoek's -- is on the right (click to enlarge).
When his daughter Maria died in 1745, notary Joris Geesteranus made an inventory of her estate. In addition to a large collection of gold, silver, and diamond jewelry, she had almost ten thousand guldens in cash in sacks in her upstairs front room and bedroom. She also had 70 financial instruments paying her over thirty-five hundred guilders per year.
Summary of the
financial instruments in the estate of
Maria Thonis van Leeuwenhoek
|type of instrument||issued by
|3-9||7 life annuities (lijfrenten)||republic, province, city||9,132||9%, 10%||843|
|10, 11||2 annuities (losrenten)||province||2,300||5%, 8.3%||125|
|12-16||5 bonds (obligatien)||republic||8,000||4%||320|
|17-20, 29-35||11 lottery bonds (prijsobligatien)||republic (4), province (7)||2,300||4%||92|
|21-28||8 bonds (obligatien)||province's den Haag office||17,900||4%, 5%||770|
||25 bonds (obligatien)||province's Delft office||27,382||4%, 5%||1,162|
|61||1 share (actie)||VOC (East India Company)||500||?||?|
||3 bonds (obligatien)||Weeshuijs (orphanage)||3,100||3%||93|
||8 bonds (obligatien ten lasten van particulieren)||private individuals||3,900||3%, 3.5%, 4%||119|
The life annuities were lost when the person died.
The other annuities ended up functioning like bonds, but at slightly higher interest.
The bonds were often made out in the name of the original purchaser, but it didn't matter. They were all bearer bonds. The consequent secondary market was one of the most important pieces of the Republic's overall financial sucess. It took capital out of the sacks in Maria's bedroom and put them in liquid form that could find its most profitable use.
Maria had a few bonds with her name on them, but most of them had either a third-party name, in which case Maria purchased them on the secondary market, or "in blanco", which she may have so purchased. We can also find some evidence that she and her father cashed in some bonds.
Note: In the Delft archives (OAD inv 666) is the Register van alle laste van de stad, met resoluties van burgemeesters betreffende obligaties en lijfrenten, 1696 (Register of all the bonds and annuities at the expense of the city, with the mayors' resolutions concerning bonds and annuities, 1696). Antony and his daughter Maria are noted as having bought bonds in 1695 and getting the cash returned in 1701. In addition, Maria got back the principal from an annuity that had been paying her first 8 and then increasing to 9 1/2 percent interest.
These bonds were issued by the following governmental entities; eight were personal i.o.u's.
|issued by||number of instuments|
|de unie in 't Hage||the republic||3|
|Geemeneland van Holland en Westvriesland, ten comptoire binnen Delft||the province, Delft office||28|
|stad Delft||the city||2|
|Geemeneland van Holland ende Westvriesland ten Comptoire Generaal in 's Hage||the province, den Haag office||16|
|Comptoire Generaal van de Unie||the republic||26|
|Oostindische Compagnie der Kamer binnen Delft||V.O.C., Delft office||1|
See the pages linked to the menu on the right sidebar for details about each of these instruments, grouped by type.
What financial instruments did other wealthy Delft residents own?
Achter de Gevels van Delft analyzed 20 estate inventories in Maria's tax bracket (the highest, those with wealth of more than 12,000 guilders) and time period (1738 - 1762), including hers.
- In total (see chapter 4 Omvang en samenstelling van vermogen), the 20 inventories included 994 government bonds and annuities worth 1.2 million guilders. That's an average of 50 instruments worth about 60,000 guilders. For 17 of them, they had more of their wealth in these bonds and annuities than in any other category of assets (Achter de Gevels, Bilage 26, p. 424). Maria pulled the average down slightly because she had 44 bonds (including the VOC share) and annuities worth about 59,182 guilders.
- Maria had 7 life annuities (lijfrenten) worth 9,132 guilders, more than her share of the 50 life annuities worth 63,590 guilders included in the 20 estate inventories in her tax bracket and time period. That's an average of 2.5 annuities worth 1,271 guilders. Maria's holdings raised that average significantly.
- She had 11 lottery bonds (prijsobligatien) worth 2,300 guilders, significantly less than the 4,000 average for the five in her class (including Maria) who owned an average of 4,000 guilders worth of lottery bonds.
- Finally, she had 8 personal's IOU's (obligatien ten lasten van particulieren) worth 3,900, significantly more than 2,278, the average for the half of the inventories in her tax bracket that included IOU's.
Maria van Leeuwenhoek died as one of the wealthiest women in Delft.