Path Dependence in Ports: The Persistence of Cooperative Forms

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.

The persistence of a cooperative approach among the Dutch vemen (cooperatives) and Antwerp naties (nations) from the early modern period into the twentieth century offers business historians an opportunity to apply the concept of path dependence and to assess its analytical value for their field.1 The naties were organized late in the fifteenth century, the vemen at the end of the sixteenth, both as cooperatives of porters and other types of auxiliary workers for merchants. They were protected and regulated by the city governments of Antwerp and Amsterdam. During the first half of the sixteenth century, Antwerp was the center of European commerce, but it was overtaken by Amsterdam in the seventeenth century-the Dutch Golden Age-after the Scheldt River, Antwerp's connection to the sea, was closed during the rebellion by the Dutch provinces against King Philip II of Spain. Despite losing their status as official monopolies, the vemen and naties survived the disappearance of the old regime. When the Scheldt was reopened, Antwerp regained its position as one of Europe's largest ports during the nineteenth century. While Amsterdam lost ground, its vemen extended their activities to Rotterdam, the other Dutch main port. Profiting from its unique location at the mouth of the Rhine, Rotterdam became Europe's largest continental port on the eve of the First World War. Although the vemen transformed themselves into partnership firms in order to accommodate their entry into warehousing activities after 1850, they maintained a cooperative approach. Finally, the transport revolution, which introduced the steamship and the train, triggered a sequence of events that ended their egalitarian system of ownership and their control over transport activities around 1900. The naties, which did not specialize in a particular port-related logistic activity, maintained their cooperative character long after the end of the second World War.

This remarkable continuity offers a unique opportunity to study the effects of path dependence on management and ownership structures over a long span of time. "Path dependence" implies that prior conditions and events constrain and shape later outcomes and policy options.2 More specifically, a process is normally considered path dependent only when the original form of a phenomenon is influenced by "initial conditions" in an indeterminate way, while the form's subsequent development is constrained by "lock-in" effects, such as sunk costs or the interrelatedness of certain elements.3 In studying the shaping of organizational forms, however, important historical relations between the effects of initial conditions and lock-in may be obscured when a sharp distinction is made between them. Views and practices that prevail as part of the early conditions are likely to have a characteristic, though not a predetermined, imprint on the initial organizational form that, once created, tends to form its own lock-in by maintaining its routine functions.4 The population-ecology approach explains that standardized routines make an organizational structure accountable and reliable, and thus give the organization legitimacy.5 Change would undermine the taken-for-granted aspect that fosters inertia within organizations.

However, inertia or lock-in is never complete, and the question then arises of how path dependency can account for change. James Mahoney answers this question by focusing on "critical junctures," which occur when different paths (chains of events or sequences) come together and the future direction of the newly formed path is assessed. He distinguishes between reinforcing and reactive sequences. Reinforcing sequences create lock-in. For instance, the limited form of the monarchy in England indirectly contributed to a liberalizing culture that was open to technological experimentation, thus facilitating the onset of the Industrial Revolution in the eighteenth century. A reactive sequence occurred, for example, when the mining companies were forced to dig deeper into the ground once the supply of surface coal was exhausted. Their efforts, in turn, caused groundwater to fill the mine shafts, resulting in the development of steam machines to clear the mines. In a reactive sequence, the path changes direction but does so in a highly predictable way.6 In contrast, Kathleen Thelen notices that institutions tend to evolve either by "layering," which entails renewing and extending some of their components while leaving other, more intractable components in place, or by "conversion," whereby existing institutions are redirected to new ends. For instance, during the Weimar Republic, large employers in the German machine industry launched large-scale internal vocational training programs, standardizing the apprenticeship system that handicraft firms had traditionally relied on to staff their workforces (layering). While the government had made the apprentice system compulsory for the handicraft sector in 1897 in order to weaken the power of the labor unions, the unions then used the system for their own purposes, and, in fact, gained a say in supervising vocational training after the second World War (conversion).7

The different views of Mahoney and Thelen reflect the range of opinions in the literature concerning the degree of determinism or predictability of path-dependent processes. We use the comparative method to investigate the sense in which the development of the vemen's and the naties' organizational forms was path dependent. The vemen form the backbone of our story, because they discarded their cooperative character considerably earlier than the naties. The section on the naties' activities during the nineteenth century, which serves as a counterpoint to our discussion of the vemen, is short, since data on the decisions made by the individual firms are scarce.8

Initial Conditions: Formation and Regulation of Cooperatives during the Old Regime

The vemen and naties were formed during the early modern period, when the main forces acting upon them were guild corporatism, local government policies regulating economic life, and local geography. In port and trading cities like Antwerp and Amsterdam, different occupational groups provided merchants with auxiliary services, such as transporting, weighing, and processing goods. Because the arrival of ships was unpredictable, resulting in an erratic supply of work, it made sense for workers to pool their resources. Thus, naties were formed in the fifteenth century, and vemen came into being in the late sixteenth century. The aspect that distinguished the vemen, and at least some of the naties, most sharply from regular guilds was that they functioned as cooperatives. The money earned by their members was put into one "purse" from which each was paid an equal amount periodically.9

The guild system, which had its origins in the handicrafts and was generally a mix of egalitarian and hierarchal elements, shaped the typical veem and natie form. Limiting entry to the business and offering mutual social insurance enabled the guilds to pursue their egalitarian goal of guaranteeing all members at least a subsistence income.10 The local government normally supported this end by granting monopolies to guilds, setting the fees for their services, and often regulating the number of guild members. At the same time, guilds were hierarchically structured and led by masters. The dual nature of the guilds' corporatism was reflected in the forms that were adopted by the vemen and the naties. On the one hand, the cooperatives represented the ultimate egalitarian form. Guilds might try to distribute their (monopolized) work evenly among their members, but only in the cooperatives did all members, by definition, receive an equal share of the common income. On the other hand, just as in the guilds, an internal hierarchy existed within the cooperatives. Several veem and natie contracts stipulated that junior members had to obey those who were more senior, and the deans were assigned the role of administering the naties and disciplining all the members.

While they were similar to the vemen, the naties' activities and organizational forms were more varied. Natie was a term used to denote the groups of specialized workers that emerged in almost all Antwerp auxiliary trades and obtained from the municipality a monopoly on handling specific goods and/or on the ability to operate in certain locations. Ships called at quays or jetties located on the Scheldt and at the canals inside the city walls, so naties came to specialize according to berths, which often corresponded to places of origin. Sometimes, a natie covered a complete ambacht (trade or guild) numbering tens of members, as in the case of the peat porters. However, the majority consisted of smaller specialized groups, comprising sometimes only a few men, many of whom came under the jurisdiction of the free barrowmen ambacht.

The naties demonstrated a high degree of persistence and managed to survive the port's downturn beginning in 1585. The first naties were formed before Antwerp reached its heyday as a European center of trade during the first part of the sixteenth century. By 1568, the city had grown from 33,000 inhabitants in 1480 to more than 100,000. By that time, however, Antwerp was already suffering from the loss of a mainstay of its economy, as the English cloth merchants had moved their "export staple" from the Scheldt port elsewhere. Antwerp's status as a major port was dealt an even more fundamental blow when a rebellion against King Philip II of Spain broke out in 1566 in the Low Countries, which had been unified since 1433 under Burgundian-Habsburg rale. In 1585, after Spanish troops reconquered Antwerp, which had been an early major foothold of the Reformation in the Low Countries and under the rebels' control since 1577, the remaining rebellious provinces in the northern Netherlands closed the approach from the sea to the river Scheldt. By 1589, the city's population had dropped from about 80,000 to 42,000 as tens of thousands of inhabitants-not only Protestantsleft the city. Among them were many traders who moved to other commercial centers, including Amsterdam, which profited enormously from the influx of entrepreneurial immigrants arriving from the southern Netherlands after 1590. The Scheldt blockade continued even after the Dutch United Provinces signed a peace treaty with Spain in 1648, ending the Eighty Years' War. The peace lasted until the end of the old regime in the South (the southern Netherlands came under Austrian rale in 1713). Nevertheless, Antwerp's population recovered somewhat, and enough goods were still shipped by inland waterways-including shipments arriving indirectly from the sea-or transported by road to the city to provide work for many naties. Probably because the helpers to the trade wished to secure themselves a place in a diminished market, several new naties were founded even after 1585. Their total number increased to around thirty in the port-related business.

The vemen emerged in the late sixteenth century, which was the period when Amsterdam was becoming the main European trading center. By 1650, their number had increased to about twenty. In the years between 1600 and 1620, the population of Amsterdam grew from about 40,000 to over 100,000 inhabitants, exceeding 200,000 by 1670, when the population stabilized. The number of inhabitants did not increase much more until the end of the eighteenth century. Amsterdam has traditionally been characterized as the main European staple market, or entrep�t, during the seventeenth-century Dutch Golden Age. The city's traders kept large stocks of irregularly arriving goods, thus acting as a buffer for a fragmented community of buyers in an extensive European hinterland. There is a tendency among historians, however, to downplay the role of stockpiling in Amsterdam's achievement of dominance, which was based on a special combination of intra-European and transatlantic trade and the "rich" trades in colonial goods coming in from the Dutch East Indies (now Indonesia) and other Asian areas that were monopolized by the Dutch East Indies Company, founded in 1602.11 The East Indies Company was the largest single customer of the vemen, whose scope of activities was smaller than that of the naties. Only one guild, the weigh-porters' guild, was divided into vemen and "free men," each representing approximately half of all guild members. The city government acted mainly in the interest of the large merchants, who were probably interested in being able to differentiate among particular suppliers in the heterogeneous field that was served by the approximately 250 weigh-house porters. These porters covered all goods except major bulk items, such as grain, salt, beer, wine, and peat, which were handled by the members of the grain, beer, and peatporters' guilds.12

The size of the vemen ranged from three to ten members and was less variable than the membership of the naties. The cooperatives did not specialize on the basis of geographic origin and/or type of product to the degree that occurred in Antwerp. In Amsterdam, on the IJ waterway, small ships unloaded the goods of the seagoing ships that could not enter the city at its central location, the Damrak canal. From there, the weigh-house porters carried the goods to the nearby weigh house and to the merchant warehouses. Still, some specialization occurred: several vemen were named after nearby regions and towns, suggesting specialization based on product origin and reflecting the fact that domestic trade represented an important part of their work. However, the books of the Amsterdam weigh house, which have been preserved for the years between 1808 and 1817, reveal that several vemen specialized in one or more commodities that had no obvious links to their names. Two examples were the Leydsche Veem (Leyden Cooperative), specializing in tobacco, and the Zeeuwsche Veem (Zeeland Cooperative), specializing in wool and sugar.13 In addition to carrying the goods, the weigh-house porters supervised the weighing at the weigh house and often stored and processed the goods in the merchant warehouses.14 To reinforce merchants' trust in the porters who worked in their warehouses, the vemen adopted distinctive names to represent them. Some refened to the hats they wore, such as Blaauwhoedenveem or Stroohoedenveem, meaning "blue-hat" and "straw-hat" cooperatives.

Economic entry barriers to the trade were not high: the vemen and naties used simple equipment, such as trolleys, pulleys, ropes, and hooks, and often owned small premises for storing it. Their continued existence thus depended on the monopolies granted by local governments, enabling them to exclude the remaining workers from employment opportunities. Outsiders were employed by the vemen and naties only when their partners were unable or unwilling to carry out all the work themselves. (In Amsterdam, the monopoly applied to the weighhouse porters' guild. Beginning in 1693, the city government intervened repeatedly to ensure that the vemen distributed the available work evenly among nonaffiliated weigh-house porters.) This protection was not self-evident. After the merchants vigorously complained that the naties were abusing their monopolies at certain locations, the Antwerp city government gave the traders more freedom in choosing their helpers in 1538. In 1544, as demand for auxiliary services grew, the city opened part of the auxiliary trades to all workers. After the Scheldt was closed in 1585, however, the Antwerp city government reverted to its early, more lenient policy of accepting new naties and granting them privileged positions. By contrast, in Amsterdam, the burgomasters virtually closed the vemen's business in 1654 by admitting only a few new vemen after that date. By 1766 the city had just twenty-two vemen. Furthermore, the vemen could appoint new members only with the city government's consent. In Antwerp, beginning in the sixteenth century, however, it became customary to sell natie memberships by auction, which drove up the entry fees considerably. The 1654 Amsterdam regulation also prescribed a buying-in sum for new veem members of four hundred guilders. Since the wage of a free man was fifteen cents per hour in the seventeenth century, this was no mean amount: the weigh-house porters' guild entry fee was only eight guilders at that time.15 Nevertheless, the vemen succeeded in raising their entry fees to a level well above four hundred guilders during the eighteenth century, despite the stagnation in Amsterdam trade that resulted from increased .competition with London and other ports and from more direct relations between areas of production and consumption.16

The corporative creed of the guilds shaped the mixed egalitarian and hierarchal nature of the vemen's and naties' initial cooperative form. While generally supporting, and thus locking in, corporatism, Antwerp and Amsterdam imposed different local regulations, and their geographies differed as well. These factors explain why the naties covered a broader field of activities and were more specialized, more varied in form and membership, and freer to recruit new members than the vemen. In the following analysis of the courses followed by the naties and the vemen during the nineteenth century when local governments no longer awarded them monopoly positions, we will take into account the possible long-term implications of the initial differences.

Continuity in the Organizational Forms

During the French Revolutionary and Napoleonic Wars, the French occupied both the Dutch Republic and the southern Netherlands from 1795 until 1813. This occupation forced the liberalization of economic life. In the Dutch Republic, the guilds were officially abolished in 1798, but the weigh-house porters and their vemen remained, because their roles in carrying out the auxiliary trades and overseeing tax payments continued to be valued. Not until 1827, ten years after the tax on weighing goods was abolished, did the use of weigh-house porters become truly voluntary for Amsterdam merchants. The municipal government continued to appoint the members of the porters' new association, Workers for the Trade, a practice that helped to sustain the legitimacy of the vemen. Their continued existence also reflected the Amsterdam merchants' attachment to the commercial practices of the golden age of the staple market, despite the fact that the city's reliance on all kinds of middlemen made Amsterdam an expensive port.17 During the short life of the United Kingdom of the former Dutch Republic and the southern Netherlands (1815-30), of which Amsterdam was the capital, the city's economy was generally depressed. Any features of Amsterdam's role as a central node of international cargo flows were gone as the city lost ground to the neighboring ports of Antwerp, Rotterdam (the secondlargest Dutch port and city), and even Dordrecht. Still, the vemen's survival rate was very high: the Amsterdam address book of 1853 mentions twenty out of a list of twenty-two names compiled in 1766.

In the former Austrian Netherlands, the naties had been formally abolished in 1795, although the city government tolerated their continued existence there. The city of Antwerp fared better than Amsterdam between 1815 and 1830. An approach to the Scheldt from the sea was assured, since Antwerp now belonged to the United Kingdom of the Netherlands. Two new docks, built in compliance with Napoleon's order, provided Antwerp with a port infrastructure that was superior to Amsterdam's. While incoming ship tonnage in Amsterdam decreased by 2.5 percent per year in the 1820s, in Antwerp it grew annually by 6.9 percent per year.18 In this relatively prosperous climate, many naties with time-honored names were listed in the city's address books. However, the names of several of the old naties did not reappear, although many new ones were listed. In 1847 the Antwerp address book mentioned a total of thirty-three naties, indicating that their industry was still more dynamic than the vemen's. However, the influence of the past continued to be strong: the majority of the restructured and new ventures reverted to tradition, calling themselves naties and adopting the cooperative form with its equal division of profits and joint decisionmaking (including yearly selection from among their number of one or more deans by the members).

Transformation of the Vemen from Cooperatives to Public Limited Companies

Beginning in the 1860s, both the vemen and the naties adopted the form of a partnership firm. However, whereas the vemen abandoned their cooperative approach at the end of the nineteenth century, transforming themselves into public limited companies, the naties did not make this change until well into the twentieth century. The single most important factor underlying this difference was that the vemen, unlike the naties, specialized in warehousing over the course of the nineteenth century.

This focus led to the path-dependent development of organizational forms. Particularly relevant was the early introduction of a kind of warehouse warrant, the ceel, in the Dutch trade. The issue of these warrants was pioneered by two separate warehouse companies, both named Pakhuismeesteren van de Thee, in Amsterdam and Rotterdam. They were established in January 1818 by four of the pakhuismeesteren (warehouse masters) previously employed by the Dutch East Indies Company, the Vereenigde Oost-Indische Companie, or VOC. The pakhuismeesteren concentrated on tea, because this product had long occupied a special position in their work. After the dissolution of the VOC in 1798, the pakhuismeesteren continued to store tea in the company's warehouses for the auctions that were held at the state's expense. The issue of warrants by the new tea-warehouse companies from 1818 on was a continuation of the VOC practice of issuing requisition forms for the buyers to use when collecting their goods. Recording the goods that were kept under warrants had a number of advantages. Producing the warrant provided proof to the warehouse companies that the consignment named was the property of the buyer and could be released for delivery. Furthermore, the use of warrants made it possible to trade goods without having to remove the consignment from the tea establishment. Finally, traders could borrow money based on their possession of a warrant.

The ceel thus laid the basis for an independent warehousing business, an important factor behind the vemen's entry into this field. Already, on some occasions in the eighteenth century, they had mediated for traders searching for storage places. At some time after 1818, the vemen started to hire warehouses for themselves so they could store goods for third parties. By that time, Amsterdam traders were probably more inclined to store goods outside their own premises. The declining volume of trade made them eager to cut costs, and they were able to profit from the surplus of storage space.19 Storing and processing raw tropical products became the core market for the warehousing business in the seaports, particularly after 1830. The founding of the Nederlandsche Handel-Maatschappij (Dutch Trading Company), or NHM, helped Amsterdam to regain its prominence in the trade in colonial goods. NHM was formed in 1824 by William I, the Dutch "merchant king," who undertook many initiatives to foster trade and industry during his reign from 1813 to 1840. NHM was given a privileged position in long-distance trade. NHM's decision to focus on the Dutch East Indies trade after a few years resulted in its having an even stronger resemblance to the VOC. After the Dutch colonial government introduced the forced cultivation of export crops in 1830, exports from the East Indies boomed. Since NHM distributed these cargo flows according to the proportions that had been set up in the VOC days, Amsterdam received more than half of the exports, while Rotterdam was a strong second. (Antwerp had been taken out of the picture when the Belgians revolted against King William I in 1830.) Between 1833 and 1847, coffee arrivals in Amsterdam grew by 363 percent, tea by 74 percent, tobacco by 67 to 120 percent, and raw sugar by 127 percent.20 Blaauwhoedenveem, which together with Vriesseveem (the Frisian cooperative) had become the leading veem in the nineteenth century, was already managing storage premises, and it began issuing warrants around 1850.

Later vemen directors considered the use of warrants for an increasing number of products as the basis for the vemen's ability to function as independent warehouse companies.21 First and foremost, the issue of warrants symbolized the vemen's integrity and reliability, a factor that formed the background of a change in their formal structure after the mid-century. Banks could borrow money from the Dutch central bank, the Nederlandsche Bank (DNB), based on the warrants they obtained as security from the traders, but the DNB only accepted warrants from warehouse companies that it accredited.22 In December 1855, the DNB was willing to recognize the warrants of Blaauwhoedenveem as security.23 It made two conditions for accreditation: First, Blaauwhoedenveem had to deposit securities worth at least fifty thousand guilders with the DNB as a guarantee against any damage the bank might unexpectedly suffer in taking custody of the warrants issued by the company. second, the DNB required the veem to appoint two supervisory directors. The accreditation by the DNB in 1856 led Blaauwhoedenveem to abandon its 250-year-old cooperative form and to replace it, on January 1,1857, with a vennootschap onder firma (vof), the Dutch legal form for a partnership firm. The main reason for this conversion was the recognition that a company name made a better impression on the outside world than a cooperative title. All the warrants were signed by three of the ten partners, Bernard Lusink, Hendrikus Klyn, and Casparas Klyn, who were mentioned by name in the circulars to the trade and who gave their names to the firm: Blaauwhoedenveem onder firma Lusink, Klyn & Co. The historical name of the veem was thus preserved as well.

The other vemen soon followed Blaauwhoedenveem's example. These conversions into partnerships were triggered by the NHM's decision in 1858 to outsource its warehousing work to several vemen acting together. NHM's business, like that of the VOC in the past, was large enough to allow it to operate it own warehouses. However, the NHM outsourced the warehousing of tea to Pakhuismeesteren van de Thee in Amsterdam and in Rotterdam from the start, since they represented continuity with the VOC. Providing work for all kinds of middlemen was one of the means used by the NHM to revive the Dutch Golden Age. The Amsterdam Pakhuismeesteren van de Thee also received orders in 1828 to warehouse coffee, which became the most important NHM product. In 1854, however, Jacobus Rochussen, the NHM supervisory director on behalf of the king, began to push for the coffee work to be transferred to the Amsterdam State-Bonded Warehouse, which he and William I founded in 1827. The reduction and abolition of import and transit duties in 1845 had resulted in a considerable decline in business at the State-Bonded Warehouse. Operating deficits put the warehouse's ability to fulfill its financial obligations at risk in 1854. Rochussen was keen to prevent its collapse, as the royal house had become the guarantor of the interest payments on one of the State-Bonded Warehouse loans. After many heated discussions between Rochussen and the NHM management, Pakhuismeesteren finally lost the coffee work in 1858not, however, to the Bonded Warehouse, but to a consortium of three vemen led by Blaauwhoedenveem.24

The NHM had entrusted the warehousing of all its goods other than tea and coffee to consortia of vemen shortly before 1858.25 Although they still operated on NHM premises during the first years, NHM's large-scale outsourcing propelled the vemen into warehousing, which became their main business. In the 1860s, they started to buy their own warehouses, and they continued on this path after the NHM's importance diminished owing to the liberalization of the Dutch East Indies trade that began around 1870. By then, outsourcing had already stimulated several conversions into partnership firms.

These conversions did not produce any substantial change in the management and ownership of the vemen. Before the changeover into partnership firms, decision-making within Blaauwhoedenveem had been collective, and, when necessary, it took place by vote.26 After 1857, partners still gathered for periodic meetings to decide upon major issues. An internal division of managerial tasks had already taken place: the oldest extant minute book, dating from December 1855, shows that Bernard Lusink led the meetings of his firm's membership and dealt with external organizations on behalf of the veem. Probably the hierarchical division into "managing partners" and "working partners" described in the new partnership firm's regulations already existed. Managing partners did the office work (including signing the warrants), attended the goods exchange, and recruited employees, while the other partners handled the work in the different warehouses. But although the managing partners had given their names to the firm, they did not acquire any more interest than the working partners. Each member bought ten of the one hundred 500-guilder shares that Blaauwhoedenveem had printed in order to submit the 50,000-guilder guarantee to the DNB. The veem managing partners arranged a loan for three members who were unable to provide the requisite 5,000 guilders. The cooperative ideal was still so strong that a substantial increase in the financial requirements of membership did not lead to resignations among whose who were less well off.

The cooperative creed survived the larger financial demands posed by a regulatory institution. The vemen's new partnership firms thus evolved along the path that had been established earlier in their history. Normally, a few partners from one or two families joined forces in a partnership firm, whereas the vemen counted up to ten partners, as a rale from different families.27 The fact that all partners by definition possessed equal shares was a trait of the vemen's partnership firms as well. The internal hierarchy of the vemen was also idiosyncratic, as, unlike other partnership firms, the members did not appoint deputy managers.

Partnership firms thus became the new default form. When Vriesseveem (1871) and Blaauwhoedenveem (1878) extended their activities to Rotterdam, their members joined with a local partner to found separate partnership firms in that port. In Rotterdam, the vemen hired sheds directly behind the quays where seagoing vessels berthed, an important change, since their storage activities up to that time had taken place exclusively in the city. Blaauwhoedenveem's interest in moving to the Amsterdam waterfront eventually caused a split between the vemen's ownership and management.

To clarify the transformation that took place, it is necessary to outline Amsterdam's development as a port during this time. Amsterdam's resurgence in the Dutch colonial trade after 1830 was based on NHM's captive cargo and had masked the poor functioning of its connection with both the sea and the German hinterland.28 Reaching Amsterdam through the old route via the Zuider Zee or through the North-Holland Canal (see the map), which opened in 1824, was a time-consuming and cumbersome affair and impossible for the largest ships. The inlandwaterway connection with the Rhine was equally problematic. Rotterdam's ideal location at the mouth of this primordial connection with the German hinterland allowed it steadily to outmatch Amsterdam, particularly in bulk trades. The amount of ship tonnage arriving in Amsterdam stagnated between 1850 and 1875. (see Figure 1).29

The advent of steam shipping was partly responsible for this trend, because large ships could not reach Amsterdam from the sea. Steam shipping was initially important only for traffic over short distances, but eventually steam made inroads in intercontinental shipping, including the colonial trades that were so vital to Amsterdam. For instance, in 1864, less than 14 percent of the raw coffee arrived by steamship in the Dutch ports; three decades later, the sailing ship was no longer used to transport this product.30 The rise of steam shipping led to a serious scaling up of ship size: in 1880 the average capacity of a British steamship was 519 net register tons (nrt), compared with 193 nrt for sailing ships, rendering unusable the existing approach to Amsterdam from the sea.31 It was an embarrassment to the port that, at the start of its operations in the Dutch East Indies trade in 1871, the steamships of the new Amsterdam liner company Stoomvaartmaatschappij Nederland (SMN) had to depart from Den Helder, which was located at the other end of the North-Holland Canal. The opening of the North Sea Canal in 1876 provided Amsterdam with the shortest possible approach from the sea (see the map) and lifted the barriers for large ships, and SMN was able to move its port of call to Amsterdam. The new canal enabled Amsterdam to share in the general rise of shipping, thereby enlarging the scope of the city's commerce, which had been limited to the colonial trade and the grain trade serving its regional hinterland. Incoming ship tonnage began to grow at an unprecedented rate after 1876. (see Figure 1.)

The new connection with the sea boosted port traffic. When this combined with the advent of steam shipping and with the other major transport innovation, the railroad, the city was forced to reconsider its port layout and cargo-handling facilities. The physical reshaping of the port eventually persuaded Blaauwhoedenveem to become a limited company. In 1864, the state proposed building a central railway station on the IJ waterway north of the city. Both the chamber of commerce and the majority of the city council vigorously opposed this plan, but as opponents were unable to come up with a mutually acceptable alternative, the city council finally agreed to the state proposal by a slim majority in 1869. Inconveniently, the new railway station cut off the city from the IJ, making it impossible for seagoing ships to reach the city docks and the adjacent warehouses. Therefore, in 1877 Amsterdam began to build the Handelskade, a trade wharf that could be reached directly from the North Sea Canal and had a direct rail connection with the hinterland. The Handelskade was later equipped with hydraulic cranes. Since steamships were much more expensive than sailing ships, their idle time in the ports had to be kept to a minimum, and their greater capacity required faster loading and unloading. The building and equipping of the Handelskade reflected the influence of the view that Amsterdam should improve its position as a "transit port," specializing in cheap, fast transfer of cargo between seagoing vessels and inland modes of transportation. This meant giving up the old ideal of having the city become a "staple port," where goods would be stored, sometimes for long periods, before being distributed to the hinterland. In a presentation in 1883, Laurens op ten Noort, an official of SMN, took issue with the established procedure of unloading most goods from oceangoing ships onto barges in midstream and transferring them to the city, where they were stored in warehouses and later returned along the same route to the oceangoing ship or railway wagon. Op ten Noort and another early lessee of a site at the Handelskade, N.V. Handelskade, pushed for direct connections between steamships and railways. They also proposed that the goods be unloaded directly from oceangoing ships and stored in the warehouses, which would have the effect of circumventing the vemen's services.32

Both the city government and the chamber of commerce eventually supported the plea for a transit-port approach in 1883.33 Nevertheless, although steam shipping caused cargo to arrive in larger batches than before, intensifying the need for intermediate storage and related warehousing activities in the ports, it did not dictate building large warehouses directly behind the deep-water quays. This became the practice in Amsterdam and Rotterdam, but not in the neighboring ports of Antwerp, Bremen, or Hamburg. Private parties obtained considerable leeway in exploiting warehousing and related activities directly behind the quays in both Dutch port cities, mainly because the municipalities were determined not to allow new port installations to burden the city budget. In 1872, four years ahead of Amsterdam, Rotterdam opened the New Waterway, a fast, lock-free connection to the sea that was financed by the state. However, the city council was unwilling to raise taxes to underwrite farther port development. Therefore, in December 1872, Rotterdam granted the rights for developing and exploiting a new port area at Feijenoord-including a new, large state-bonded warehouse-to the Rotterdamsche Handelsvereeniging, despite widespread resistance to a private firm being given the monopoly of the sole modern port facilities.34 In Amsterdam, the chamber of commerce expressed a similar fear that monopoly rights to the new Handelskade would be ceded to the HoUandsche IJzeren Spoorweg-Maatschappij (H.IJ.S.M.) railway company. The city responded by forcing H.IJ.S.M. to lower its tariffs and, unlike Rotterdam, it did not cede control of the new port complex to a private party. Given the initial lack of interest in renting sites at the new location, which was far removed from the city warehouses, however, the municipality welcomed any interested party and was willing to meet the latter's requirements. In this way, the city facilitated the building of waterfront warehouses at the Handelskade.

The city's pragmatic attitude had its price: the large warehouse built on behalf of one of the first lessees at the Handelskade, incorporated as N.V. Handelskade in 1883, was later considered a waste of precious quay space. The dimensions of the warehouse had become tremendous by the standards of the time. At 200 meters by 21.5 meters, its capacity equaled the combined space of dozens of premises operated by the vemen in the city. The launching customer was Stoomvaart Maatschappij Insulinde, founded in 1881 by a sailing-ship manager, who perceived a market niche for carrying low-value bulk goods between the Dutch East Indies and the Netherlands by steamship.35 Following the example of its competitor SMN, Insulinde moved to the Handelskade in 1883 and took out a fifteen-year lease on part of the new N.V. Handelskade premises.

N.V. Handelskade posed a considerable threat to the vemen. Not only was it built for the purpose of loading and discharging ships and storing goods; it was also equipped to act as a fall-fledged warehouse company, processing goods and issuing warrants. Alarmed, Blaauwhoedenveem invited Guillaume la Bastide, who had been deputy manager of a leading Amsterdam shipping agency for twenty-two years, to succeed a retiring partner in 1883; after agreeing to do so, and even before formally assuming the post, la Bastide urged the firm to take action.36 Blaauwhoedenveem asked the city for a site at the Handelskade; two other vemen made the same request. Meanwhile, however, N.V. Handelskade was encountering significant setbacks as a result of the sugar crisis, which caused a serious dip in the Dutch East Indies' trade in 1884. At the start of the following year, Insulinde was forced to take its fleet out of service. N.V. Handelskade, which had experienced the death of one of its directors, sought a partner to compensate for the loss of income, and Blaauwhoedenveem presented itself as an option. The veem, led by la Bastide, took over the management of the Handelskade business in 1885 and were given 75 percent of the profits. In 1891, the two companies merged completely.

The agreement with N.V. Handelskade played a cracial role in Blaauwhoedenveem's transformation from a partnership firm into a limitedliability company, called Naamloze Vennootschap (N.V.) in Dutch. The move to the waterfront did not in itself force the veem members to incorporate their business, as the members could have raised the 100,000 guilders they needed to purchase a stake in N.V. Handelskade on their own. At a meeting held on October 15, 1885, la Bastide, nevertheless, sketched the advantages of a limited company to his copartners: "Everyone in case of exit . . . will enjoy the real value of his business .... [Wjhen the business again would demand capital, it certainly would be very burdensome for everyone to provide it again ... [and a] better relation towards and with N.V. Handelskade would be achieved." This last advantage was probably the most pressing, since close cooperation between a limited company and a partnership firm was legally problematic: the exit of members from a partnership firm could create serious contractual difficulties.37

Therefore, on September 29, 1886, the former members of the Amsterdam and Rotterdam partnership firms, Lusink, Klyn & Co. and Sterba, Klyn & Co., founded N.V. Blaauwhoedenveem with a share capital of 750,000 guilders. As had occurred during its conversion to a partnership firm, Blaauwhoedenveem was imitated by other vemen. On September 18,1890, the Amsterdam and Rotterdam partnerships Paris, Middendorp & Co. and Van Overzee, Eilers & Co. incorporated as N.V. Vriesseveem. In their case as well, there was no pressing financial necessity to incorporate. Only after the establishment of the N.V., in December 1891, did Vriesseveem decide to set up a large, expensive establishment on the Handelskade. The formation of another N.V. in 1896, Het Nederlandsche Veem, from the merger of two older vemen was more directly a response to the construction of a large, modern warehouse. Before their changeover to limited companies, both Blaauwhoedenveem and Vriesseveem had acquired other vemen; by 1900 they dominated the scene, followed, in third place, by Nederlandsche Veem. By then, there were only about ten vemen left.

For the members of the remaining large vemen, the changeover to a limited company represented a much greater break with the past than had the formation of the partnership firms some decades earlier. In the case of Blaauwhoedenveem, and the other vemen too, all shares went into the hands of the former partners of the veem and the newly appointed supervisory directors of the limited company (in the early twentieth century, the majority of Dutch N.V.s were "closed").38 This created continuity in ownership, but at Blaauwhoedenveem, the nonmanaging members were now excluded from decision-making on major issues for the first time. When the N.V. was formed, four of the ten partners were appointed as managing directors. The other partners held positions as deputy managers or as heads of particular departments. The loss of the egalitarian structure also had financial consequences. The directors not only earned a higher salary, in the amount of 5,000 guilders; they also received a share of the profits on top of their shareholders' dividend, representing an abandonment of the tradition of equal division of profits. Five years after the founding of their N.V., in November 1891, three demoted partners in vain tried to prevent a proposed doubling of the share capital at a shareholders' meeting. They threatened to continue their opposition unless they received a salary increase of 1,000 guilders and a guarantee of job security for ten more years. In response, the management angrily threatened to fire them.39

This story reveals the strong emotions that the changeover to a limited company aroused among the veem partners. The decision to adopt this organizational form opened a split between management and ownership. This end of the cooperative approach was hastened by the fact that the vemen opted for the limited-company form when the storage business was experiencing a period of substantial growth. Incoming ship tonnage multiplied both in Amsterdam and particularly in Rotterdam between 1886 and 1913. (see Figure 2.) Rotterdam's expansion occurred mainly through its traffic in bulk cargoes, such as coal, ore, and grain, but the annual incoming flow of tropical commodities, which the vemen focused on, increased substantially as well, growing from about 250,000 tons to more than l million tons during these years.40 The insured value of the goods stored on warehouse warrants by Blaauwhoedenveem rose from about 5.5 million to 17 million guilders during this period.41 To accommodate this growing business, the vemen built several new large warehouses directly behind the quays, both in Rotterdam (beginning in 1889) and in Amsterdam (beginning in 1891). As a result of shares being issued to finance the growing business volume, the vemen's stock ownership expanded, intensifying the split between management and ownership. Thus, by 1900 the vemen had lost their cooperative nature.

Persistence of the Naties' Cooperative Nature

Unlike the vemen, the naties stuck to their cooperative approach well into the twentieth century. The Antwerp context in which they operated was critically different from the situation that existed in the Dutch port cities. There was no transfer of practices from an institution like the Dutch East Indies Company, nor was there large-scale outsourcing of warehousing by a trading company like the NHM, as that company had discontinued its activities in Antwerp after 1830. Warehouse warrants came into use in Belgium, too. They were officially recognized in 1862, but there are no indications that they influenced the naties' development. The naties became goods handlers in the true sense of the word. They were involved in transport within the port, delivering and receiving goods to and from the ships as well as warehousing and processing goods-a reflection of the traditional diversity of their tasks. Transport was at least as important as warehousing: the draught horse, not the warrant or warehouse, so much a part of the vemen's operations, was the visual sign of the naties' presence.

Nevertheless, the Antwerp naties also launched a large-scale investment in warehouses, particularly after the abolition of the Scheldt toll in 1863, which boosted port traffic. (see Figure 1.) The abolition of the toll, which had been a considerable drag on Antwerp's port traffic, completed the Belgian revolution against King William I in 1830. Under British pressure, the Dutch quickly ended a new blockade of the Scheldt, but they closed Antwerp's inland-waterway connection to the Rhine until 1839, when the Netherlands and Belgium finally reached an agreement. Antwerp needed only a few years to recover, however. The AntwerpCologne railway, completed in 1843, offered a successful alternative hinterland transport corridor, aptly nicknamed the "Iron Rhine." Furthermore, increasing traffic to Antwerp from the Americas made up for the loss of the Dutch colonial trade.

Around i860, incoming ship tonnage had grown to more than three times the amount arriving in 1829. As part of the 1839 agreement, Belgium had to pay a fee to the Netherlands for each ship that sailed along the Scheldt. Although the costs of this Scheldt toll were incurred by the Belgian state, in Antwerp the toll was considered a continuation of Dutch control of the Scheldt's connection with the open sea. Buying off the Scheldt toll, therefore, lifted the psychological barrier to port development. In 1863, port dues were drastically reduced. Incoming ship tonnage more than doubled over the following six years, subsequently increasing by another 43 percent between 1869 and 1871 during the boom created by the Franco-Prussian War in 1870. Several German traders transferred their businesses from French ports to Antwerp.

Although the naties did not erect large warehouses directly behind the quays as the vemen had done, choosing to build smaller ones in the city that often combined new offices and stables, the Antwerp port boom nevertheless pushed them to take on unprecedented financial obligations. This made the naties' legal status a pressing issue. In addition, growing traffic resulted in more transactions with customers and, inevitably, more legal disputes. Lacking the status of a separate legal entity was cumbersome, because the naties often quarreled with heirs about the exact value of deceased members' positions in the organization. In 1864, two verdicts of the Antwerp Court of Commerce that denied the existing naties the ability to act as legal entities prompted the naties to adopt the form of a Vereeniging onder Gemeenschappelijke Naam (VGN), the Belgian version of a partnership firm. On several occasions, the founding of a partnership firm was immediately followed by an investment in real property. As occurred in the vemen's case, this transformation did not involve meaningful changes in the naties' ownership and management structure. Profits were still divided equally each month, natie memberships could be traded directly between individuals (subject to the majority consent of existing members), and the members periodically elected deans and vice-deans, who were responsible for daily management. The naties thus opted for a new organizational form that closely resembled the one initiated by the vemen only a few years earlier.42

However, several naties that became partnership firms disliked having to change the names of their organization when a managing partner died or was succeeded by another, whereas veem members seemed to have no difficulty with this requirement. The naties thus were eager to adopt an ownership structure that did not carry this disadvantage, so they turned to the Samenwerkende Maatschappij (SM), or cooperative corporation, which was created by the Belgian government in 1873 in response to the growing popularity of agricultural cooperatives. Most naties adopted the new legal structure after the 1880s. As had occurred during the changeover to partnership firms, adoption of the SM was sometimes immediately followed by investments in warehouses or other buildings.43 However, profits were still paid out monthly to the members, a procedure that hampered the company's ability to accumulate capital, as only a small percentage of the profits, if any, was transferred into the company reserves. In general, the adoption of the SM form by the naties formalized their egalitarian nature: every natie member gained one share in the company and still had equal voting power in major decisions.

Unlike the vemen, the naties persisted in their cooperative approach during the structural transformation of the port business in the closing decades of the nineteenth century. They took the first step of founding closed, limited companies shortly after the second World War, but only in addition to the existing SMs, and they did not give up egalitarian ownership until later. How is the difference in the organization's developments to be explained? There was a degree of difference in the financial requirements flowing from investments in warehouses and other real property. More important was the reaction of the local elite in Antwerp to a major initiative in warehousing and related activities. The abolition of the Scheldt toll in 1863 encouraged a new, ambitious business venture. In 1864 and 1865, three related limited companies were founded: a bank, a trading company, and a dock and warehousing company.44 The latter company, the Compagnie des Docks-entrep�ts et Magasins d'Anvers, established in 1865, was inspired by the example of the English and French dock companies and aspired to take over the naties' tasks, such as issuing warrants on the goods stored in its own and other warehouses. To this end, the Compagnie acquired the three Antwerp warehouses considered to be the best in town, including the large Royal Bonded Warehouse Gike the one in Amsterdam sponsored by King William I) that was owned by the Belgian state, which wanted to divest itself of an establishment whose losses were mounting. In this way, the Compagnie took control of the existing modem warehouse capacity around the most important Antwerp dock, the William's dock, built in the 1820s during the reign of William I. A joint action by twenty naties to boycott the new company was supported by the traders, who feared-quite understandably-the creation of a monopoly and did not like the fact that the Compagnie had been established by outsiders. Pressed by the chamber of commerce, the Compagnie agreed that the naties could continue to work directly for their principals in the Royal Bonded Warehouse and promised that their members' positions would not be downgraded under the new venture.

Thus, whereas the creation of a large warehouse by a new limited company in Amsterdam eventually induced Blaauwhoedenveem to adopt its challenger's organizational form, in Antwerp a similar, more ambitious, plan that threatened to monopolize the best existing modern warehouse capacity resulted in a move by the local commercial elite to protect the naties. The naties in Antwerp, therefore, were under considerably less external pressure to change their existing business approach. The city of Antwerp maintained virtual control of the port superstructure, an arrangement that in practice stymied the emergence of large-scale private establishments. The city government was not willing to risk the existence of private monopolies, however tempted they might be by the financial advantages offered by these enterprises. For instance, in August 1872, a few months before Rotterdam permitted a private firm to build a new harbor complex, the Antwerp city council turned down a proposal by the Compagnie to take over all the local quay terrains and update them with modern equipment. The Antwerp port suffered from a chronic lack of capacity, and its expansion was slowed by the lingering process of streamlining the river Scheldt and by disagreements between the city and the state about this and related issues. This lack of capacity made the city reluctant to cede control over quay terrains to a select group of users for the long term, since this would farther limit the space that was available for general use. In 1892, for the first time a private company received a long-term concession near the waterfront, enabling it to build a specialized installation for grain storage. This extended concession was followed after 1900 by one for handling oil. Neither one fundamentally threatened the naties' status.45

Consequently, although the explosive growth of Antwerp port traffic between 1871 and 1912 strongly stimulated the expansion of their activities in general, the naties, unlike the vemen, were not pressed to adopt the form of a limited company. (see Figures 1 and 2.) Around 1900, approximately fifty naties were active in Antwerp. Inviting new members to join a natie was still a common way of dealing with business expansion. The old naties stuck to this tradition, and the new naties adopted the practice as well. For instance, the Katoen natie started with four members in 1854, but by 1913 its membership had increased to thirty-nine partners. In 1900, the leading naties still had from fifty to sixty members. Grain, the most important commodity handled in Antwerp, represented the most extreme case. The Antwerp Grain Work, the result of a merger of five naties in 1903, had no fewer than 150 members in 1912-13. Since the addition of members could bring in substantial amounts of money, the policy acted as an alternative to raising capital from external sources. Also, persuading so many people to relinquish the cooperative approach would have been difficult. However, it was an alternative that the naties did not even consider.

Conclusion

In conclusion, we will consider the usefulness of applying the concept of path dependence to the study of organizational forms. The corporative creed embodied by the guilds-consisting of a mix of egalitarian and hierarchical elements-consistently shaped the initial forms of the vemen and naties. The latter were also imprinted by local geographic circumstances. These findings do not comply with the prevailing definition of path dependence, which holds that the relation between initial conditions and initial forms is largely indeterminate. However, regulation by the local governments, which tried to shape the cooperatives to conform to the merchants' interests, was an important contingent element leading to the vemen and the naties assuming different forms.

Governmental regulation no longer created lock-in after the early nineteenth century, but by then the cooperative form had become routine for the vemen and naties. In particular, the vemen's high survival rate and the propensity of new ventures in the Antwerp port businesses to adopt the cooperative approach and take up the name "natie" indicate the importance of sustaining established organizational forms. Still, after 1815, major changes in the economic context-the reemergence of certain trade practices and large trading bodies, the advent of steam shipping and train transport, and the increase in demand for warehousing that accompanied the growth of international tradeinduced a transformation. However, neither the vemen nor the naties turned their cooperatives into partnerships or corporations primarily in response to pressing financial requirements. They did so mainly for legal reasons, with the result that there were differences between the two forms in the nature and the timing of the changes.

These changes can also be considered the outcomes of certain sequences of events as defined by Mahoney. The activities of the Dutch East Indies Company (VOC) constituted cracial reinforcing sequences in the Netherlands that did not occur in Belgium. First, two tea warehousing companies operating in former VOC premises were founded in Amsterdam and Rotterdam in 1818, which, by issuing warehouse warrants, continued a VOC practice in modernized form. The use of warrants proliferated to other trades and eventually set the vemen on the track of warehousing as well. second, the NHM resumed the VOCs policy of encouraging middlemen, but approached it in a different way: by outsourcing the warehousing and choosing not to hire only vemen as workers. By the 1860s, these reinforcing sequences had culminated in the transformation of the vemen into partnership firms. As the naties achieved roughly the same organizational form in this period, such an outcome was not path dependent. In interaction with the reinforcing sequences, however, a predominantly reactive sequence resulted in a major difference between the two groups of firms. The advent of steam shipping and a crisis in the Dutch East Indies' trade in 1884 eventually led to the vemen's becoming limited companies, a process in which the new N.V. Handelskade played a central role. However, a similar response by the naties had not occurred in Antwerp two decades earlier when the Compagnie des Dock-Entrepots et Magasins d'Anvers was founded, because the local elite protected the naties in order to prevent the creation of a monopoly.

Our case study also calls into question the analytical value of Mahoney's framework. We were not able to identify the reinforcing sequences that can account for the fact that most naties continued to host tens of members. This legacy of the past made the shift to a public limited company both less necessary and more difficult. Furthermore, a reactive sequence that leads to a deviation from the path is not necessarily predictable, as Mahoney asserts. In the light of these limitations, Thelen's concept of layering, whereby certain elements of an institution change while more recalcitrant aspects remain intact, is more appropriate. All changes in the vemen's and naties' organizational forms were partial. Their members continued to adhere to a cooperative creed, and they were able to adapt the forms to changing requirements several times while maintaining aspects of their egalitarian nature. This process indicates the importance of layering: the element most difficult to change was the egalitarian ownership structure and the decisionmaking power associated with it. Not until 1900 did the accumulated changes of a century lead to the split between ownership and management among the vemen. Such a transformation was not completed by the naties until the late twentieth century.

[Author Affiliation]

HUGO VAN DRIEL is assistant-professor at RSM Erasmus University in Rotterdam. GRETA DEVOS is professor of contemporary history at the University of Antwerp.

We thank Aad Michielsen (former archivist of Royal Pakhoed), Evert de Haan (archivist of Royal Vopak), and Jan Sirks for their help; Gustaaf Asaert for sharing with us his knowledge of the naties during the old regime; and Barbara Krug, Bart Nooteboom, L�szl� Polos, and two anonymous referees for their comments and suggestions. We claim full responsibility for the contents of this article.

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.

[Author Affiliation]

Greta Devos is professor of contemporary history and spokeswoman for the Centre for Business History at the University of Antwerp. She has examined shipping companies and logistical enterprises in her books and articles on nineteenth- and twentieth-century industrial, maritime, and port history.

Hugo van Driel is assistant professor at the RSM Erasmus University in Rotterdam. He has written historical books and articles on the transport business, with an emphasis on ports. He coauthored an article on the managerial revolution in Business History (July 2007) and a chapter on the changing backgrounds of top managers, which appeared in The European Enterprise, edited by Harm Schr�ter and scheduled for publication in 2008. Currently, he is conducting research on the development of the temporary agencies in the Netherlands and Sweden.