Dutch Empire Research Paper

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In 1602 the founding of the Dutch East India Company, which became the largest company in the world at the time, literally created an empire. The empire focused mostly on trade, however, and less on colonization; many Dutch colonial possessions fell to the British in the eighteenth and nineteenth centuries. Rebellion from Japanese-occupied Dutch East Indies during World War II ultimately brought the empire to its end.

Toward the end of the sixteenth century, Dutch ships started to explore the waters beyond Europe. Because of their rebellion against their Habsburg rulers, the Dutch no longer were able to operate as traders in the Portuguese and Spanish overseas empires or obtain non-European products in the Habsburg-controlled Iberian ports. In order to reduce the risks of conducting trade in Asia, the United East India Company (Vereenigde Oost-Indische Compagnie or VOC) was founded in 1602.

United East India Company (VOC)

The VOC was the first commercial venture in the world financed by anonymous shareholders with the aim of conducting business over a lengthy period of time, not just financing one trip or conducting business for one year. Within six months about 6 million guilders were collected. The company was made up of six local chambers, and according to its share in the capital outlay, each chamber was allowed to send representatives to the seventeen-member board of directors. The company received a monopoly from the government for trade and the right to declare war and conclude treaties with individuals and states in the whole of Asia.

During the first two decades of its existence, the VOC needed government subsidies to stay afloat, but after 1620 its activities were increasingly more profitable. Trading between the various regions in Asia accounted for most of these profits. In 1619 the city of Batavia (now Jakarta) was founded as the pivot in the trade between the Dutch Republic and its trading partners in Asia. The governor general in Batavia concluded treaties with local rulers for the exclusive delivery of spices such as pepper, nutmeg, cinnamon, and cloves. In addition the company traded in opium, Chinese porcelain, tea, silk, and Indian cotton cloths. In order to obtain these goods, the company sent large of amounts of cash to Asia.

Over time the VOC grew to become the largest company in the world, employing more than 40,000 persons at the height of its existence. Yearly, more than sixty East Indians left the Netherlands for a year-long journey to Batavia, using the Dutch colony at the Cape of Good Hope as a stopover. During the course of the eighteenth century, however, competition from the British East India Company, the French, and even the Danes took business away from the VOC. In order to keep its shareholders and bondholders happy, the company started to borrow money in order to pay dividends. In spite of regulations, most of the company’s employees in Asia conducted trade on their own behalf, which was also detrimental to the company’s well-being, forcing it into bankruptcy. In 1799 the Dutch state dissolved the VOC and assumed the sovereignty over the company’s possessions in Asia and at the Cape of Good Hope.

West India Company (WIC)

The early success of the Dutch East India Company was a strong stimulus to create a similar company for the trade and colonization in the Atlantic. In 1621 the West India Company (The West-Indische Compagnie or WIC) was founded. In contrast to the VOC, the WIC took a long time to collect sufficient operating capital. Most merchants did not invest as they felt that the company would be used by the Dutch state as an instrument of maritime warfare against Spain rather than as a profit-seeking venture. Like the VOC, the WIC was organized in chambers, but in the course of the company’s history, its policies became more and more fragmented. The Zeeland chamber began to administer some parts of Guiana exclusively, whereas the Amsterdam chamber concentrated on New Netherlands in North America and the Dutch Antilles. In 1628 all chambers were allotted exclusive trading rights in separate areas along the coast of West Africa. This process of fragmentation was strengthened by the issuing of private freehold estates, called patroonships, in New Netherlands and in the Caribbean. A consortium, in which the WIC participated as only one of the shareholders, owned the Caribbean plantation colony of Suriname, conquered in 1667. Private merchants who received land grants within the company’s territory were usually connected to, or even directors of, one specific WIC chamber.

At the beginning the WIC played an important role in the Dutch maritime trade. Around 1650, when the company still governed part of Brazil and New Netherlands, the total value of the imports into the Dutch Republic amounted to about 60 million guilders, of which nearly 18 million came from Brazil, Africa, the Caribbean, and North America. During the second half of the seventeenth century, the loss of Brazil and New Netherlands, the application of the Navigation Acts in the British colonies and similar protectionist legislation in the French colonies, and the declining opportunities for Dutch privateers reduced the volume and value of the Dutch Atlantic trade. Around 1650, estimates put the yearly number of Dutch ships operating in the Atlantic at around 250. During the eighteenth century that average had declined to about 140. In addition to the triangular slave trade from Europe to west Africa, then on to the New World and back again to Europe, the WIC ships traded in American and African produce such as Brazilian wood, hides, ivory, sugar, tobacco, and cacao.

The WIC concentrated on trade, not colonization. The total number of Europeans in the colonies and trading establishments of the company never surpassed 20,000 at any one time. That suggests that it must have been more profitable to send young men on a temporary basis to tropical Asia than to settle them as colonists in New Netherlands and the Cape colony. The Dutch West India Company was not interested in exporting the Dutch language or the official brand of Dutch Protestantism. The governors of the various Dutch colonies and trading forts were well aware of the fact that only religious and cultural tolerance could prevent internal strife among the many non-Dutch nationals.

After 1734 the WIC became a “body without a soul.” Private consortia governed the two most important Dutch plantation colonies, Suriname and Berbice (in present- day Guyana). The company was left with the administration of the Dutch possessions on the African coast, the Dutch Antilles, and two small plantation colonies on the South American mainland, Essequibo and Demerara. Its top-heavy apparatus at home did not change: the national and local directorships had become part of the job circuit within the Dutch oligarchy. Private Dutch traders did increase the volume of the trade in slaves and tropical cash crops, but the Dutch were unable to profit from the explosive growth of the Atlantic economy after the War of American Independence. In 1791 the second WIC was abolished, and the Dutch Republic itself became a colonial power.

The Netherlands as a Colonial Power

During the period 1795–1816, virtually all the Dutch colonial possessions fell into the hands of the British. Eventually, the Dutch East Indies, Suriname, and the Dutch Antilles were handed back, but not the Cape colony, Ceylon, Demerara, Essequibo, and Berbice. In 1870 Britain bought the Dutch forts on the Gold Coast.

In the East the Dutch colonial government could not generate sufficient income to pay for the administration and defense. In order to increase the colonial revenue, a system of forced cropping was introduced in 1830, by which the Indonesian villagers would cultivate a part of their lands with coffee and sugar to be delivered to the colonial government as a tax in kind. This system was a financial success, and soon the island of Java produced so much revenue that the major part of this income could be transferred to the treasury in the Netherlands. In 1860 both the cultivation system in the East as well as slavery in the West were abolished as the prevailing liberal ideology in the Netherlands had become opposed to forced or slave labor. After 1870 investment and private land ownership by European entrepreneurs increased, and Dutch control was extended to all of the islands of the Indonesian archipelago. In Aceh (North Sumatra) the Dutch met with fierce resistance, and it was not until 1913 that the region was brought fully under Dutch control.

In the Dutch Caribbean, slavery was not abolished until 1863. The belated emancipation of 40,000 colonial slaves was due to the fact that there was no strong abolitionist lobby in the Netherlands and that until 1860 the liberal ideology in economic matters did not have many adherents, nor was tax money readily available to compensate the slave owners. It was the revenue derived from the cultivation system in the Dutch East Indies that tipped the balance. After the ending of slavery, the Dutch instituted a ten-year period of apprenticeship (1863–1873) and then started to import 30,000 indentured laborers from British India (1873–1916) and a similar number from Java (1890–1939). As the Dutch Antilles housed no large-scale plantations, their freedmen were exempt from apprenticeship, and none of the islands imported indentured labor. At the beginning of the twentieth century, the economy of the islands received a strong boost from the construction of oil refineries. Similarly, Suriname experienced economic growth by allowing the American-owned SURALCO Company to mine its aluminum ore. During World War II, the aluminum production in Suriname and the oil refineries on the Dutch Antilles were of such importance to the allied war effort that the United States and the United Kingdom took over the defense of these colonies with the consent of the London-based Dutch government in exile.

End of the “Empire”

In 1942 the Japanese occupied the Dutch East Indies and collaborated with those Indonesian politicians who were in favor of independence. Its 40,000 Dutch colonists were put in camps. After the Japanese had surrendered in 1945, the Indonesians promulgated the independent Republic of Indonesia, while the Dutch tried to restore their prewar colonial rule. In spite of severe shortages at home caused by the ravages of the German occupation, the Dutch drafted a considerable army to fight the Indonesian Republic. However, the U.S. government was in favor of Indonesian independence and threatened to cut off Marshall Plan aid to the Netherlands. The Dutch gave up their efforts to restore colonial rule, and on 17 August 1949, the Republic of Indonesia, with the exception of the eastern part of New Guinea, which was not transferred to Indonesia until 1963, became a sovereign state.

In the wake of the achievement of independence by Indonesia, Suriname and Dutch Antilles were given self-government in 1948. In 1954 a Dutch Commonwealth Statute stipulated that the Netherlands, the six Dutch Antilles (Curacao, Aruba, Bonaire, Saint Martin, Saint Eustatius, and Saba), and Suriname would be equal partners, have internal self-government, and share their foreign relations and defense. Over time the disadvantages of this arrangement increased as about 30 percent of the population of the Dutch West Indies moved to the Netherlands, while at the same time the Dutch government spent large amounts in aid subsidizing the budget of these former colonies. In 1975 the Dutch succeeded in granting independence to Suriname by providing the 400,000 inhabitants of the former colony with 4 billion guilders in aid. The six Dutch Antillean islands refused a similar offer. The Dutch Antilles prefer to continue their membership in the Kingdom of the Netherlands, but some of the islands prefer to have a direct link with The Hague rather than an indirect one through the common inter-island council in Willemstad on Curacao. The Netherlands cannot change its relationship with the Dutch Antilles, such as instituting a barrier for immigrants, as the Commonwealth Statute demands that all constituent members of the Dutch Kingdom agree to its annulment.

Bibliography:

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