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CHAPTER 5 The Foundation of the Dutch East India Company 1602

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For a hundred and fifty years, from the end of the sixteenth century to the middle of the eighteenth, world trade was dominated by the Dutch Republic. This achievement was largely due to the creation of a unique institution, the Dutch East India Company.

William the Silent is one of the great heroes of European history. His proper name was William of Orange, a Dutch nobleman who resented the injustice of the Spanish occupation of the Netherlands at the end of the sixteenth century, rebelled against it and led the seven Dutch United Provinces to independence as a republic. He was called ‘the Silent’ because he was careful about what he said in public, sometimes avoiding saying what he thought. Under his leadership in 1581, the United Provinces signed the Oath of Abjuration in which they renounced Spanish rule. Although they were not formally granted independence until nearly seventy years later, in 1648, they operated from this moment on as a nation in their own right. The Spanish King, Philip II, proclaimed William an outlaw and he was assassinated three years after the Oath. ‘As long as he lived,’ wrote the American historian, J. L. Motley, ‘he was the guiding star of a whole great nation, and when he died the little children cried in the streets.’

At the time of his death the republic he had helped to create seemed an insignificant country compared to the magnificence of the Habsburg Empire from which it had seceded. Only the northern part of the Netherlands had secured its independence. The south was still firmly under Spanish control: its Catholic nobility did not want to be part of William’s little republic and remained allied to King Philip and his able commander in the Netherlands, the Duke of Parma. From these inauspicious beginnings the Dutch Republic grew with astonishing speed. At home, the work of its artists turned it one of the finest centres of painting Europe has ever seen, and the seventeenth century became known as the ‘Golden Age’ of Dutch art. Abroad it demonstrated rather more practical, and ruthless, skills as the commercial activities of the Dutch East India Company transformed it into a world power.

The Dutch East India Company changed the commercial history of the world.

The Dutch East India Company changed the commercial history of the world. It was created after a period when it seemed as though William the Silent’s dream of independence had died with him. Some of the Dutch provinces, disunited and unable to agree on a common ambition, were taken back into Spanish control by the Duke of Parma. But in 1590 he was despatched to France by Philip II to support Catholic opposition to the new French King, the Protestant Henry IV. With Parma out of the way, the Dutch rebels were at last able to consolidate their drive for independence and make the transition from a group of united provinces to a proper republic. But it was still a nation made up of separate entities. Although it was governed by a ‘States General’ that represented all the country’s different provinces, its constitution stated that this body ‘had no overlord but the deputies of the Provincial Estates themselves’.

The Dutch East India Company, the Verenigde Oost-Indische Compagnie, generally known then as the VOC, was the creation of rival merchants with one common interest – the pursuit of wealth. In 1598 all Spanish and Portuguese ports were closed to Dutch shipping, forcing the United Provinces to look beyond the Mediterranean for new trading opportunities. The obvious markets were South America, which was opening up steadily following the voyages of exploration of the sixteenth century, and Asia. South America was a difficult destination for the Dutch because the Spanish and Portuguese had established firm control there. Asia seemed a better bet, but here the problem was that so many Dutch ships were chasing after the same things that the spoils were in danger of becoming dissipated. By 1599, nine different Dutch companies were in the business of trying to get their hands on spices, tea, cotton and other goods from the East Indies. Many voyages ended in disaster. About a tenth of the ships that set sail never returned and many Dutch crews were lost without trace. The man who came up with a rescue plan was Johan van Oldenbarneveldt.

William the Silent

William the Silent (1533–84) was a curious product of Habsburg Europe: a sixteenth-century German prince, he inherited the French princedom of Orange, spoke French and liberated the Dutch, who have called him ever since the ‘Father of our Nation’.

William, whose full title was William I, Prince of Orange, Count of Nassau-Dillenburg, was introduced as a boy to the court of the Holy Roman Emperor, Charles V. Charles grew to trust William, charging him with important negotiations and military engagements in the Netherlands. But William, an important member of the Dutch political elite (he held the title of ‘Stadtholder’), was far less enamoured with Charles’s son, Philip II, who became King of Spain in 1556. William disliked Philip’s religious intolerance towards Protestants and his encroachments on the Dutch nobility’s tradition of autonomy.

William’s upbringing as a Lutheran and then a Catholic (he would finally settle on Calvinism in 1573) taught him the importance of freedom of religion. ‘I cannot approve of monarchs who want to rule over the conscience of the people,’ he once said, ‘and take away their freedom of choice and religion.’ William’s nickname ‘Silent’ is thought to have developed in this context. According to one story, while out hunting, the French king, Henry III, revealed a secret agreement to eradicate Protestant heretics, believing William, who was present but kept silent, to be a party to it.

William’s combination of political reality and idealism prompted him to rebel against the Habsburgs in 1567. He led the Dutch to several military successes culminating in the Union of Utrecht in 1579 and a formal declaration of independence by the renegade Dutch provinces in 1581. But he declined the crown, hoping instead that the French Duke of Anjou would become the monarch. His support of the Frenchman, who left the Netherlands after a short and unhappy stay, made William unpopular with many of his fellow countrymen although he remained the Stadtholder of the two important provinces of Holland and Zeeland. Meanwhile Philip II offered 25,000 crowns for William’s assassination. A French Catholic, Balthasar Gérard, took up the offer and, in a private audience with the prince, shot him in the chest. ‘My God have pity on my soul,’ he is supposed to have cried as he died. ‘My God have pity on this poor people.’

Many Dutch crews were lost without trace.

Van Oldenbarneveldt was the raadpensionaris – the Secretary of State – of the province of Holland. By all accounts a rather imperious character with a stiff and difficult manner, he had a fine legal mind, great vision and indomitable determination. In his view, war brought ‘little glory and great expense’. The provinces needed to be sure they could make money. The way to do that was to form their own company so that they could spread the cost of investment in ships and capital equipment. By pooling resources and sharing profits they would be able to build up the reserves necessary to fund the dangerous business of exploiting the East. They had not only the Spanish and Portuguese to contend with, but the English too. An English East India Company had been founded in 1600. Oldenbarneveldt set about trying to persuade the leaders of the different Dutch provinces to adopt his idea.

The desperate situation in which they found themselves speeded up their willingness to bury their differences and Oldenbarneveldt was able to devise a common plan for their commercial salvation. He then drew up the new company’s statutes and charter, and the Dutch East India Company came into being in Amsterdam in January 1602. It had six chambers, one each in the main ports of the United Provinces. Each of these chambers elected delegates who sat as the company’s directors. There were seventeen of them, the ‘Heeren XVII’ or Seventeen Gentlemen, who had the responsibility of guiding the fortunes of this semi-political, totally commercial and all-powerful corporation. Although the directors reported to the States General of the Dutch Republic, they were given enormous powers. In order to support their monopoly on trade in the Far East they were given the authority to raise armies, start wars, capture territory, build garrisons, negotiate with local chiefs and build their own ships. In the first instance their charter was to run for twenty-one years.

Nothing explains the success of the Dutch East India Company better than the exploits of Jan Pieterszoon Coen. An adventurer in the mould of Francis Drake or Robert Clive, Coen was harsh, clever and brave. Carefully controlled by the diligent burghers of the company for which he worked, he laid the foundations of the Dutch Empire in the East Indies and established its lucrative trading monopoly in Indonesia. He trained as a bookkeeper and sailed on his first voyage to Asia in 1607 where he experienced the rough and dangerous conditions in which the Dutch East India Company’s employees worked. The merchants had nothing but contempt for the sailors who risked their lives to make them rich. They called them ‘cats’ and ‘dogs’ and forced them to sign contracts in which they agreed to reimburse their employers for their food and equipment, amounts that could take as much as a year’s service to pay back. On his first journey, Coen’s commander was killed on the Banda Islands in the Indian Ocean. Coen came to realise that nothing less than conquest would give the Dutch ownership of the valuable territory they wanted and in 1614 sent the Seventeen Gentlemen of the Dutch East India Company a paper setting out his views about how this could be achieved. What was required, he told them, was ‘a grand resolution in our fatherland’ to send ships and men to subdue the area and bring it into the ownership of the company. It is extraordinary to think that a group of merchants sitting in the coastal towns of the Netherlands could simply set about conquering a large part of the world. But that is what they did, and Jan Pieterszoon Coen was their agent in this task.

He captured Jakarta from the British, which the Seventeen renamed ‘Batavia’. He subdued the Islands of Banda with great savagery – although he proposed the use of ‘justice backed up by force’, force tended to be the main method of achieving his aims – and established a thriving capitalist economy. This was to be the pattern of European colonial expansion for many years to come. Native peoples were coerced into conforming to the economic rules of their new masters. Coen called for higher quality settlers to emigrate to the East Indies rather than the ‘scum’ who normally travelled in Dutch ships. He encouraged Chinese workers to come and help the work of empire-building, and used slaves to swell their numbers. For all this he was rewarded with 23,000 guilders (a considerable amount, given that the daily wage for a skilled worker was about 1 guilder); each of his achievements was carefully itemised, valued and rewarded by the meticulous merchants for whom he worked. He died of dysentery in Batavia during his second tour of duty in 1629.

Native peoples were coerced into conforming to the economic rules of their new masters.

The Dutch East India Company provided much of the wealth of the Netherlands throughout the seventeenth century. At its height it had a presence in Persia, Bengal, Taiwan, Malaysia and Sri Lanka. It also expanded beyond Asia into South Africa when, in 1652, it sent a detachment of men to establish a base on the Cape. Its intention was to protect the passage of ships on their way east, rather than to colonise the area, but full settlement inevitably followed from this first expedition. By this time there were 1,700 Dutch ships involved in international trade, more than England and France combined. The accession of William of Orange to the English throne in 1688 began the long process of decline as, bit by bit, power and influence transferred from the Netherlands to Britain, and the Dutch became the junior partners in the alliance. The British East India Company became a serious competitor to the Dutch Company, as did the French Compagnie des Indes founded in 1664. The French were late entrants into the scramble for the riches of the Orient, but highly successful once they recognised the opportunity. Between 1780–84, the Anglo-Dutch alliance was over and the two countries went to war. The result was a disaster for the Netherlands which finally lost its monopoly over East Indies trade.

There is one other sad footnote to the history of the Dutch East India Company. The man who had been its chief architect, Johan van Oldenbarneveldt, became a victim of his country’s religious struggles. The majority of the Dutch people were Calvinist, believing in John Calvin’s stern form of Protestantism. This taught that God elected those he wanted to serve with him in heaven: man’s fate was predestined. By following God’s law he might hope to be elected, but there was no guarantee of this. We know from our own time how this sense of being entirely in God’s hands adds strength to a political cause: in seventeenth-century Europe it helped fuel the Dutch revolt against their Spanish masters. Oldenbarneveldt and his followers came to believe in a more moderate approach than that which Calvin decreed, arguing for a greater degree of religious liberty. This brought them into conflict with powerful elements in Dutch society, and when Oldenbarneveldt decided to raise a militia to help protect the peace in his home province of Holland, his enemies pounced. He was already unpopular for supporting a truce with Spain and the Dutch Stadtholder, William the Silent’s son, Prince Maurits, ordered his arrest. In a trial that was a mockery of justice he was found guilty, sentenced to death and executed at the age of seventy-one in 1619. ‘Is this the wages,’ he asked, ‘of the thirty-three years’ service I have given to the country?’

Today we can still look at him in the portrait by Michiel van Miereveld who, like his great contemporaries Rembrandt and Frans Hals, painted the men and women who led the Netherlands in its golden age. He looks towards us, serious, intelligent and sombrely dressed, a white ruff the only splash of brightness in a picture of unbending resolution. He showed his countrymen how the wealth of the world could be theirs for the taking. It was a lesson they learned with enthusiasm.

Fifty Things You Need to Know About World History

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