Post offices, payments and the central bank.. finding the crucial letter of De Nederlandsche Bank

Yesterday I blogged about the end of the era of Post Offices here in the Netherlands. And with that, both the Postal Office and the postal order as a payment instrument are officially gone in the Netherlands.

It's interesting to realize that about 100 years ago the situation was quite different. The economy required smooth payments and funds for the business community. And there was quite some debate on the possible introduction of a national giro-system. How that debate proceeded is a long story, but suffice to say that the central bank (De Nederlandsche Bank, DNB) was asked their opinion about starting a girosystem in the Netherlands.

DNB replied that it did not have the means and resources but suggested as an alternative to lower the fees for the postal order. Yet, the actual letter in which DNB wrote this to the Ministry of Finance, could for a long time not be found. The official historian of DNB couldn't get it, no one could and we were left with a footnote in the official historiography of DNB that the letter could not be found.

Well, that footnote triggered my curiosity and so I went searching in the national archives and used some lateral thinking. And there it was. In the archives of the Ministry of Economic Affairs. Before me, the letter of DNB of April 15, 1910, outlining that DNB themselves would not be able to set up a giro system. As such this kickstarted and paved the way for the further development and introduction of the PCGD.

Perhaps you can imagine the rush of sensation that came over me when I found this letter (already about 10 years ago). At that point in time I still thought I would quickly finish my PhD on the history of payments in the Netherlands. My plan has changed a bit however. While I may still sometime officially finalize that PhD-research-project I intend to publish bits and parts of my research on this blog.

So while I am busy writing a 'light-version' of the history of payments/banking in the Netherlands, it is with pride that I present the bit of Dutch financial history contained in this weblog: the letter of De Nederlandsche Bank NV on the introduction of girosystems in the Netherlands.


Last Post Office closes ....

This week the last independent Post Office in the Netherlands, in Utrecht, closes. It's a beautiful building as we can see from these old postcards:

Post Offices, by tradition and definition, also play a role in financial history. They would physically transfer cash when money was sent via the Post. Also, instruments such as the 'Postwissel' (postal order) would provide a means of sending money to other people, without the need for sending the money itself. This postal order worked either within the country or to people in other countries. 

But, as the Post Offices themselves are closing, with TNT Post and ING choosing their own locations for the delivery of their respective services, the postal order is by now a thing in the past. That is: here in the Netherlands; it is still available in other countries and one can of course always also use the US equivalent... Western Union.

Update as of Friday 28 October: There is a really smashing panorama foto available through ab-c media weblab and thanks to fotographer Frank van der Pol. It's a very nice example of the possibilities of panorama-photography with augmented reality touch.

I am placing a smaller embed here, but you would most certainly want to look fullscreen (right button) and check out the Dutch page of ab-c media weblab that explains all the features and the building.


Occupy Beursplein 5 (Occupy Kalverstraat 25)

Anger towards financial institutions, traders or bankers is not something of just today. These days we see initiatives like: Occupy Wallstreet:

But trade and greed is of all times. In the 18th century coffee houses (koffiehuizen) would be the spot to do some extra trading. Including trades with borrowed money. And the buying of equity of new companies (not all with a solid business model). So when the equity issuing went sour and the south sea bubble burst, Amsterdam saw a sort of Occupy Kalverstraat movement. A crowd gathered and focused its anger on the coffee house at Kalverstraat 25. See also the Dutch information in this page and the picture below (showing the old coffee house and its current owner: T-mobile).

Needless to say that I was very curious what would be happening at our Wall Street here in Amsterdam. Beursplein 5. Would any of the protestors know that the square that they would be on, would be the design of a socialist and idealistic architect (Berlage)? And what would they protest about?

So I went there this afternoon and indeed there was some action. A whole podium was built. So I figured: my, my, this is an organised movement indeed. And I was impressed with this Occupy-Beursplein 5.

Then I looked a bit better. And I noticed the text. It read in big red letters: 'Stop by to consider rheumatism'. Perhaps that is somewhat typical of our Dutch willingness to revolt. Rather than occupying Beursplein 5 with protests against bank bonuses or other elements of greed, we occupy it with a rally to collect funds for people with a disease.

Would that be the Dutch way?

Update 1805: just found out via Twitter that I was three days early. It seems we need to wait for the beginning of our autumn holiday (this Saturday, 12 o clock) to start #OccupyAmsterdam...  


Old pictures of first options exchange in Amsterdam

On the website of Andre van Eerden I found some foto's of the Optiebeurs. The First Amsterdam Options Exchange opened in 1978 here in Amsterdam and was the first in Europe to do so. It stands out as another nice example of Dutch adaptation of financial innovations.

And on the foto below we see the young Wim Duisenberg watching at trades and transactions:


Where was the former city hall of Amsterdam....?

As some of you may know, the big building on the Dam now known as the Palace, used to be the city hall of Amsterdam. but for many years, Amsterdam had a smaller city hall that looked like this:

In the book by Pieter Vlaardingerbroek we can read that a visit of Maria de Medici in combination with increased self-awareness led to the decision to build a new city hall. And this new city hall soon became known as the 8th world wonder, as it was so huge and full of grandeur. Quite a number of buildings were taken down to be able to build the new city hall, so that leaves us with the question: where was the old city hall?

Well, luckily the book answers that question as well. It contains a map that shows the proper location.

So we can see that the city hall was actually close to the kalverstraat (on the left). If you draw a line from the kalverstraat to nieuwendijk, you would find the city hall right on that line.