Silver VOC bars, seen in an exhibition

Started by Pellinore, November 27, 2022, 10:36:40 AM

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I saw a collection of these silver bars in the PAN art fair in Amsterdam yesterday. I don't know anything about money like this, just thought you might like to see them "in the wild", so to say.

-- Paul

Silver VOC bars PAN 1.jpg

Silver VOC ingots PAN 2.jpg 


Attend next Sunday's Zoom event. My presentation will cover these. ;)

Hint: those fancy canal houses in Amsterdam and other Dutch cities were to a significant extent based on arbitrage, which has nothing to do with soccer but is a technical term that, in this case, means profiting from different relative prices for silver, expressed in gold.

For centuries, the gold price in Asia was determined in silver terms (sycee) by the civil services of the emperor of China and the Moghul, while in Europe, it was determined by market forces. Gold coins such as the Dutch gold rider and the British gold sovereign fluctuated against silver coins.

Suppose the emperor of China decided that the silver-gold ratio was 1:8, while in Amsterdam, gold traded at 1:10. Now, you pack 100 weight units of silver in a VOC ship. When it docks in Shanghai, the Chief Merchants buys 12.5 of the same weight units of gold with the silver. The ship eventually returns to Amsterdam, where the gold buys 125 weight units of silver. The two transactions yielded an instant gross profit of 25%. You can keep doing this as long as the emperor of China doesn't change his imperial mind on the price of silver. Even when he does, you just wait until the price in Amsterdam is favourable again.

The net effect of the transactions is that silver flows into China and gold flows back (unless the price difference reverses, which it did sometimes for a short period).

Now posit a couple of large silver finds that lower the price of silver in terms of gold to such an extent that the economic heavyweights that be (Britain, France, Germany, US) all at the same time decide to get off the bi-metallic standard and keep only the gold standard. Silver coins get debased, silver becomes even cheaper in terms of gold and gold becomes even more expensive.

The consequences are obvious, China suddenly finds itself much poorer and unable to dump silver for gold. Crafty merchants buy and sell in gold in the home country, but plantation owners pay their workers in silver. China is weakened to the point where the colonisers step in...

More or less the same thing happened in India and the Netherlands Indies (where the silver-gold ratio of China was followed.) This explains why Netherlands Indies plantation tokens are often denominated in dollars. They are Chinese silver dollars.

The link with your picture? This was the shape in which silver sailed to Asia. Note the A above the VOC bale mark. It stands for Amsterdam.

An unidentified coin is a piece of metal. An identified coin is a piece of history.