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Path Dependence in Ports: The Persistence of Cooperative Forms

Published online by Cambridge University Press:  13 December 2011

Hugo van Driel  and
Greta Devos
Hugo van Driel
Affiliation:
HUGO VAN DRIEL is assistant-professor at RSM Erasmus University in Rotterdam.
Greta Devos
Affiliation:
GRETA DEVOS is professor of contemporary history at the University of Antwerp.
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Abstract

The concept of path dependence is used to compare the evolution of the organizational forms of two groups of transportation and warehousing firms, the Dutch vemen and the Antwerp naties, that operated in seaports between c.1500 and 1900 and beyond. Their adoption of cooperative forms reflected the corporative guild creed that prevailed in early modern European cities. After 1815, when their businesses were no longer regulated by local governments, the vemen and naties remained locked into the cooperative form of governance that had prevailed for so long. This organizational form gradually adapted to changing circumstances, but its egalitarian structure remained intact until the late nineteenth century (vemen), and even into the twentieth century (naties). The two groups of firms’ organizational forms evolved differently under the impact of the legacy of the early modern period and the weight of their own later distinctive experiences.

Type
Articles
Information
Business History Review , Volume 81 , Issue 4 , Winter 2007 , pp. 681 - 708
Copyright
Copyright © The President and Fellows of Harvard College 2007

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References

1 Veem, the singular form of vemen, originally meant a “cooperative” or a “partnership.” It later came to mean both a warehouse company and the warehouse itself.

2 Some economists think path dependence implies that prevailing technologies, institutions, and other “solutions” are not efficient. However, their view does not affect the analytical value of the concept, so we will not explore it here. Two frequently cited articles highlighting the possible inefficiency of path-dependent outcomes are by Arthur, Brian W., “Competing Technologies, Increasing Returns, and Lock-in by Historical Events,” Economic Journal 99 (1989): 116–31CrossRefGoogle Scholar; and David, Paul A., “Clio and the Economics of QWERTY,” American Economic Review 75 (May 1985): 332–37.Google Scholar Opposing this view, S. J. Liebowitz and Stephen E. Margolis argue that avoidable inefficiency or market failure through path dependence is extremely rare, in part because they are convinced that entrepreneurial action will act as a remedy. See Liebowitz, S. J. and Margolis, Stephen E., “The Fable of the Keys,” Journal of Law and Economics 23 (1990): 1–25CrossRefGoogle Scholar; and “Path Dependence, Lock-in and History,” Journal of Law, Economics, and Organization 11 (1995): 205–26.Google Scholar In a reply, Paul David emphasizes that the usefulness of path dependence as an approach does not depend on the issue of efficiency. See David, Paul A., “Path Dependence, Its Critics and the Quest for ‘Historical Economics,’” in Evolution and Path Dependence in Economic Ideas: Past and Present, eds. Garrouste, Pierre and Ioannides, Stavros (Cheltenham, 2000), 15–39.Google Scholar

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8 The empirical part of this article is based on Hugo van Driel, “De ontwikkeling van de vemen in Nederland 1600-1967,” Management Report Series 194, Erasmus Universiteit Rotterdam, Faculteit Bedrijfskunde (Rotterdam, 1994) on the subject of the vemen; and Devos, Greta, Asaert, Gustaaf, and Suykens, Fernand, The “Naties” in the Port of Antwerp (Tielt, 2nd ed., 2004)Google Scholar; and Devos, Greta, Katoen Natie 150 Years, Part 1: A Story of J-hooks, “Pirrewitjes,” and Drayhorses (Tielt, 2002)Google Scholar, regarding the naties. The primary sources for these studies were contemporary general city descriptions, government regulations, veem contracts (retrieved from both source publications and notarial archives), guild archives for the early modern period, and firm archives and address books for the nineteenth century.

9 Only a few natie contracts explicitly stating that the members shared income have been saved. However, it is plausible that many naties functioned as cooperatives. In the case of the vemen, there is no doubt that all of them were cooperatives. Still, only a small minority of the veem contracts that have been traced literally stipulate that all income was put in one purse. However, many of these contracts prescribe that sick or otherwise temporarily disabled members should receive their full share of the income, normally for no less than one year and six weeks. See Boer, M. G. de, “Amsterdamsche veemcontracten,” Economisch-Historisch Jaarboek 4 (1918): 122–83CrossRefGoogle Scholar; and Dillen, J. G. van, Bronnen tot de geschiedenis van het bedrijfsleven en het gilde-wezen van Amsterdam, 3 vols. (‘s-Gravenhage, 1929-1974)Google Scholar.

10 For recent overviews of the guilds in the Low Countries, see Craft Guilds in the Early Modern Low Countries, eds. Prak, Maarten, Lis, Catharina, Lucassen, Jan, and Soly, Hugo (Aldershot, 2006)Google Scholar; Lucassen, Jan and Prak, Maarten, “Guilds and Society in the Dutch Republic (Sixteenth-Eighteenth Centuries),” in Guilds, Economy, and Society, eds. Epstein, S. R. et al. (Madrid, 1998), 63–77Google Scholar; and Bos, Sandra, Uyt liefde tot malcander. Onderlinge hulpverlening binnen de Noord-Nederlandse gilden in international perspectief (1570-1820) (Amsterdam, 1998), ch. 2.Google Scholar

11 See Lesger, Clé, The Rise of the Amsterdam Market and Information Exchange: Merchants, Commercial Expansion, and Change in the Spatial Economy of the Low Countries, c. 1550-1630 (Aldershot, 2006)Google Scholar.

12 Still there were some peat-porters’ vemen by 1608. However, as far as we know, these cooperatives did not survive the old regime. Moreover, unlike the weigh-house porters’ cooperatives, each peat-porters’ veem was headed by an outside person, who was appointed and paid by the buyer or the captain of the peat ship involved (Bos, Uyt liefde, 113).

13 Boer, M. G. de, Van waagdragersveem tot modern grootbedrijf (Groningen, 1917), 33Google Scholar.

14 Supervision of the weighing by the weigh-house porters was the main reason that they were officially appointed by the city and were sometimes referred to as “civil servants.”

15 De Boer, Waagdragersveem, 27, 31. The hourly wage seems rather high compared to the daily summer wage ranging from 90 cents to 1.5 guilders earned by Amsterdam masons and carpenters around 1650. See Nusteling, Hubert, Welvaart en werkgelegenheid in Amsterdam, 1540-1860 (Amsterdam, 1985), 252Google Scholar.

16 For instance, Withoedenveem raised its buying-in sum incrementally from 800 guilders to 2,400 guilders between 1693 and 1785.

17 For an overview of Amsterdam's economy during this period, see Jonker, Joost, Merchants, Bankers, Middlemen: The Amsterdam Money Market during the First Half of the Nineteenth Century (Amsterdam, 1996)Google Scholar.

18 Veraghtert, Karel, “From Inland Port to International Port, 1790-1914,” in Antwerp: A Port for All Seasons, eds. Suykens, F. et al. (Antwerp, 1986), 302Google Scholar. Ship tonnage is the best available measure for comparing the development of the nineteenth-century ports, since there are no consistent, complete, and reliable time series on the amounts of cargo actually handled.

19 See Jonker, Merchants, 67.

20 Westermann, J. C., Kamer van Koophandel en Fabrieken voor Amsterdam. Gedenkboek samengesteld ter gelegenheid van het 125 jarig bestaan. Eerste Deel. Het tijdvak 1811-1922 (Amsterdam, 1936)Google Scholar; Bijlage 7 (data from the annual reports of the Amsterdam chamber of commerce).

21 Uyttenboogaart, Daniel Louis, Het handelsgebruik betreffende ontvang-cedullen in Nederland (Amsterdam, 1905)Google Scholar; and Dam, H. H. van, Zes lezingen over het veembedrijf (Rotterdam, 1930)Google Scholar.

22 Borrowing money with goods as collateral in general and warehouse warrants in particular did not become important during the nineteenth century. See Jong, A. M. de, Geschiedenis van de Nederlandsche Bank, vols. 1 and 2 (Haarlem, 1930, 1960)Google Scholar; other sources for obtaining short-term credit were widely available. See Jonker, Merchants.

23 For this and other information on Blaauwhoedenveem's conversion into a partnership firm, see Vopak Archives, Rotterdam (hereafter VAR), minutes of the meetings of members of Blaauwhoedenveem from 11 Dec. 1855 to 22 Dec. 1857.

24 Dutch National Archives (hereafter DNA), NHM Archives (hereafter NHMA), inventory number (inv. no.) 10287, personal files J. J. Rochussen 1851-58; and inv. no. 2046, confidential minutes of the meetings of the NHM managing directors in 1856 and 1857.

25 It is not clear when this happened. M. G. de Boer, Naamlooze Vennootschap Blaauwhoedenveem-Vriesseveem (n.p., 1918), 44, based on oral history, mentions that the NHM granted the warehousing of sugar, tin, and other goods to a consortium led by Vriesseveem in 1858. A document in the NHM archives listing the goods and vemen involved, dated Dec. 1858/Jan. 1859, mentions several combinations of vemen that were working at that time for the NHM, whereas Blaauwhoedenveem and others are described as newcomers in this field, that is, for warehousing and processing coffee; DNA, NHMA, inv. no. 2033, Naamlijsten der waagdragers in dienst der NHM.

26 One member voted against making Blaauwhoedenveem's celen negotiable, that is, against the changeover to a partnership firm; VAR, minutes of the meeting of members of Blaauwhoedenveem, 27 Oct. 1856.

27 A trend toward inheritance of veem membership within particular families had started at an earlier date. The Klyn family was represented in Blaauwhoedenveem throughout the nineteenth century. The members of one family did not carry much weight, however, for, at the time of its conversion into a partnership firm, Blaauwhoedenveem still had ten partners.

28 This and the following two paragraphs are, unless indicated otherwise, based on Tijn, Theo van, Twintig jaren Amsterdam. De Maatschappelijke ontwikkeling van de hoofdstad, van de jaren ‘50 der vorige eeuw tot 1876 (Amsterdam, 1965)Google Scholar; and Boer, M. G. de, De haven van Amsterdam en haar verbinding met de zee (Amsterdam, 1926)Google Scholar.

29 These figures probably still overestimate Amsterdam port traffic, since some of the ships formally declared the cargo to the customs at Amsterdam but actually unloaded in Den Helder; see below, Tijn, Theo van, “Het Noordhollands zeehavengebied, vóór en na de openstelling van het Noordzeekanaal,” Tijdschrift voor Geschiedenis 69 (1966): 279, 289Google Scholar.

30 Calculated on the basis of Ministerie van Kolonien, Statistiek van Handel en Scheepvaart, 1864-1894.

31 Calculated on the basis of Mitchell, B. R., International Historical Statistics: Europe, 1750-1988 (Stockton, 1992), 699.CrossRefGoogle Scholar

32 See Noort, L. P. D. op ten, Exploitatie der Handelskade (Amsterdam, 1883)Google Scholar; Amsterdam Municipal Archives, Particular Archives no. 550, inv. no. 46. Circulaire o.d.t. Project eener op te richten Naamloze Vennootschap genaamd de Handelskade, Amsterdam, May 1883 (circular letter to promote N.V. Handelskade, see below).

33 “Voordracht van B. & W. aan de Gemeenteraad van Amsterdam d.d. 21 mei 1883,” in Gemeenteblad Amsterdam 1883, afd. 1, no. 473, 505-22, and Kamer van Koophandel en Fabrieken voor Amsterdam, Verslag over den toestand van handel, scheepvaart en nijverheid te Amsterdam in 1883 (Annual report Amsterdam Chamber of Commerce in 1883), 9.

34 Like the Antwerp Compagnie des Docks-entrepôts et Magasins d'Anvers discussed below, the Rotterdamsche Handelsvereeniging was inspired by the example of foreign dock companies. In May 1879, when the building of the complex was not yet finished, RHV's director, Lodewijk Pincoffs, fled to the United States because he could no longer hide the fraud he had committed to save his other business ventures. The municipality bought the Feijenoord-complex in 1882 and decided that, in order to prevent a private monopoly in the port, it would never again allow a company to buy quay terrains.

35 On the history of Insulinde, see Boer, M. G. de, Geschiedenis der Amsterdamsche Stoomvaart. Tweede deel, eerste stuk (Amsterdam, 1922), 34–42Google Scholar.

36 For this and the following discussion, see VAR, minutes of the meeting of the Blaauwhoedenveem partners between 22 Nov. 1883 and 29 Oct. 1885; and De Boer, Waagdragersueem, 54-57.

37 See Grooten, Jacob, Eenige opmerkingen over de vennootschap onder firma in het Nederlands recht (Wormerveer, 1929), 53, 72-73Google Scholar. Surprisingly, given the importance ascribed to this factor in the literature on changing legal forms of businesses during the nineteenth century, no mention was made of the fact that the Blaauwhoedenveem partners would no longer be fully liable for the company's debts. See, for instance, Moss, David A., When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, Mass., 2002)Google Scholar.

38 See Frentrop, Paul Marie Louis, Corporate Governance, 1602-2002 (Amsterdam, 2002), 224Google Scholar. As late as 1960, no less than 98 percent of all Dutch limited liability companies were “closed.” See Sluyterman, Keetie E., Dutch Enterprise in the Twentieth Century (London, 2005), 154.Google Scholar

39 VAR, minutes of the meetings of the Blaauwhoedenveem partners on 29 Mar. 1889 and of the managing directors on 12 Nov. 1891.

40 Calculated on the basis of Kamer van Koophandel en Fabrieken te Rotterdam, Jaarverslagen 1886-1913 (Rotterdam Chamber of Commerce, annual reports) The volume of raw tropical goods was estimated by adding the arrivals of gums, wool, cotton, raw sugar, oil-seeds, and other luxury foods and food preparations (which include coffee, cocoa, tea, spices, and tobacco). This underestimates the potential demand for the vemen's services, because beginning in 1904 they made use of cold stores, thereby extending their activities to the warehousing of (other) fruits, vegetables, and, in particular, meat.

41 VAR, file 33A, Blaauwhoedenveem, Jaarverslagen (annual reports) 1886-95 (handwritten), and Blaauwhoedenveem, Jaanerslagen 1902-1913.

42 Unlike the Dutch partnership firm, a VGN formally represented a separate legal entity—in practice, however, the partnership firm had a similar status in Dutch business.

43 Unlike the partnership firm, in the SM form, the natie partners could, if they so stipu-lated in their company's personal law, limit their liability for the firm's debt—again, as far as we know, this factor was not often considered by contemporaries.

44 This and the remainder of the paragraph are based on Devos, Greta, “Moderniseringen in de haven van Antwerpen. De Compagnie des Docks-entrepôts et Magasins d'Anvers,” in Een kompas met vele streken, ed. Maréchal, Griet (Antwerp, 1994), 83–90Google Scholar.

45 Devos, Greta and Damme, Ilja Van, In de ban van Mercurius. Twee eeuwen Kamer van Koophandel Nijverheid van Antwerpen-Waasland 1802-2002 (Tielt, 2002), 86, 102Google Scholar, and 118; and Devos, Greta, “Land-Use Policy in the Port of Antwerp (1870-1940),” in Struggling for Leadership: Antwerp-Rotterdam Port Competition between 1870-2000, eds. Loyen, Reginald, Buyst, Erik, and Devos, Greta (Heidelberg, 2003), 203–04Google Scholar.