Dutch East India Co remembered 400 years on

Dutch East India Co remembered 400 years on

Melanie Cheary
Reuters
Amsterdam

Four hundred years ago today (Wednesday) the Dutch East India
Company was established by ambitious shipping merchants tired of
losing out on the booming Asian spice trade dominated by the
Portuguese since 1498.

But the proud memory of mercantile success and Dutch maritime
supremacy being celebrated in the Netherlands this year masks a
darker history of exploitation still haunting the East India
Company's Asian trading partners today.

Better known, or reviled, by its Dutch initials VOC, the
Company was set up on March 20, 1602 by small, independent
trading companies with a government charter to a virtual monopoly
on Dutch trade and navigation east of Cape Town.

It wasn't just business. With the right to sail and trade came
the power to occupy territories, seize land and wage war on
indigenous people -- the darkest moment being the massacre of
almost everyone on the Indonesian islands of Banda in 1622.

The Indonesian ambassador to the Netherlands is boycotting VOC
celebrations this year and will not be going to a remembrance
service attended by Dutch Queen Beatrix.

"To many people in Holland, the VOC represents the golden age
of Dutch commerce. For Indonesians, however, the VOC's arrival in
1602 marked the beginning of Dutch rule in Indonesia, a time of
oppression which brought great suffering and hardship to the
Indonesian people," the embassy said on its web site.

Although the VOC's demise began in the late 18th century --
brought to its knees by risky financial investments, wars with
the ballooning British Empire and a fall in spice demand -- the
Netherlands only recognized Indonesia's independence in 1949.

Indonesia declared its independence in 1945 after fighting a
four-year guerrilla war against the Dutch colonial troops.

But good relations are the foundation of good business and
more often than not the VOC sought to conclude friendly alliances
with Asian rulers who also profited, historians say.

"Mace and nutmeg cultivation on the tiny Banda islands were
the great exception in the Dutch trading network. The VOC both
brutally wiped out the Bandanese and dismantled the local
economy. European colonists ran nutmeg plantations worked by
Asian slaves," said VOC specialist Els Jacobs.

"Nowhere else in Asia did the Dutch organize the cultivation
of cash crops, as in general the VOC left matters to the
indigenous population," Jacobs said in a summary of her article
"Merchants in Asia".

In the 16th and 17th centuries, cloves, nutmeg, pepper and tea
were coveted luxuries in Europe and made importers fabulously
wealthy.

"Spices were like oil nowadays," says Dutch Maritime Museum
Coordinator Elisabeth Spits.

Portuguese explorer Vasco da Gama rounded the Cape of Good
Hope -- near modern day Cape Town -- in 1498 and opened a passage
to the East. He found a safe site on the coast of South Africa
where future sailing ships could drop anchor to pick up fresh
water and food.

But the journey from Europe to Asia -- which took almost a
year in treacherous seas -- was becoming more dangerous as
pirates started to prey on ships, snatching cargo and driving up
prices as spice stocks in Europe dwindled.

Dutch merchants, already rich from trade in the Baltics, had
the money to build and equip ships. They seized the opportunity
but competition between them hit profits and the government
convinced them to join forces for the greater national glory.

What started as the simple use of Portuguese trade routes grew
into commercial colonization -- stretching from Yemen and Persia
in the west to the Moluccas (Maluku) and Japan in the east.

"The only way to secure satisfactory long-term profits in the
spice trade was to control supplies in Europe -- by conquering
the production areas in Asia," Jacobs said.

"The Dutch won the European rush for spices and defeated all
competitors around 1670. The Company determined sales prices in
the Dutch Republic, controlled production in Asia and prevented
all spice trade by others," she said.

The VOC, historians say, was the world's first multinational
company. It was the first Dutch company to issue shares. These
shares were traded and the Amsterdam stock exchange developed
into the world's first stock market.

Before the VOC emerged it was normal for ship owners to sell
their ships and dismiss their crews after each journey, dividing
the spoils for immediate gain.

The VOC had durable assets. Its ships were maintained,
investors paid dividends and profits were used to finance further
expeditions. Low costs boosted its profitability and its sailors
were paid a pittance.

Some 1,772 ships sailed about 4,780 voyages between the
Netherlands and Eastern harbors. They carried gold and silver to
pay local rulers, as well as bricks to build settlements.

A network of trading stations and storage depots was built
across the East Indies with headquarters in Batavia, now
Indonesia's capital Jakarta.

All went well until the late 18th century when European hunger
for spices was replaced by a thirst for coffee and textiles,
making trade with the Caribbean more lucrative.

The fall in demand, increasing competition, war with the
British and risky loans combined with incompetent officials and
corruption to bring the commercial giant to its knees.