Merchant Kings

by Stephen R. Bown

  By the late seventeenth century the voc was the largest, richest and most powerful multinational company in the world. It traded from the Red Sea to Japan and had sent over a million Europeans to Asia, not incidentally contributing to a widespread exchange of ideas and culture. It directly employed tens of thousands of people at a time when the Dutch population was barely two million. Its navy dwarfed that of many nations; its private army approached ten thousand. Its shareholders and investors prospered. Yet, there were troubles. The company made dividend payments in most years, yet it was also servicing an increasing debt load. The government of much of the Dutch East Indies, responsible only to the Seventeen in Holland, the company grew fat, corrupt and inefficient.

  The following century of the voc’s history included many adventures—both advances and setbacks—that were tied into global political events. But, ultimately, maintaining the monopoly cost more than the spices were worth, particularly when the value of nutmeg and cloves declined in the mid-eighteenth century with a change in consumer tastes. The voc’s policy of restricting local trade, including the trade in necessary food supplies, resulted in smuggling and piracy. Suppressing these infractions required troops, ships and constant inspection and vigilance. The battle for monopoly could never be won: the voc would never be free of conflict, and maintaining fleets, forts and garrisons consumed its profits, as did the considerable corruption of its officials in Asia.

  Although the voc declared great dividends for over a century and a half and possessed enormously valuable stock, when the once-mighty company went bankrupt in 1799, during the Napoleonic Wars, it was twelve million guilders in debt.

  Despite paying huge dividends, it had been steadily losing money for over a century—the years it made profits decreased in number while losses grew as the decades passed. The voc’s enormous income stream allowed it to incrementally increase its debt, to raise capital by issuing bonds. The historian Willard Hanna writes in his book Indonesian Banda that “Retroactive bookkeeping traced the troubles right back to the days of the voc’s greatest glory . . . So the enormously wealthy and powerful voc may have been a losing proposition all along.” Most historians, however, point to the company’s vitality during the eighteenth century, and its inability to adapt to changing consumer demands in Europe and the financial repercussions of the Fourth Anglo-Dutch War, between 1782 and 1784 . “After the war,” writes Jurrien van Goor, “the voc’s directors in the Republic spent vain efforts trying to revive the Company in its former state rather than looking for new ways of operating, with the result that, like a rudderless ship, the voc sailed onto the financial rocks.” The Fourth Anglo-Dutch War was the final blow, revealing staggering debt that the company had been supporting for over a century. The debt was assumed by the government and taxpayers of the Netherlands when the nation took over the voc’s former empire as a colonial holding. The new colony, known as the Dutch East Indies, continued under Dutch national rule until 1949. For over 150 years the voc had been the effective government in much of Indonesia, governing not in the interests of local peoples or to maintain local traditions and culture, but simply to enrich shareholders and directors who lived tens of thousands of kilometres away and had in all likelihood never left Europe at any time in their lives.

  The company’s success and ultimate failure, the cycle of its life, was based on the logical but somewhat warped dream of its greatest merchant king. Coen strove to reduce all commercial activity in the East Indies to a few transactions over which he could exercise total control—reducing the collective decisions of thousands and bending them to his will, reordering them for the maximum profit. He was a brilliant strategist and logistician, but either through hyper-competitiveness or a sickness of the mind, he tended to view the world much like a game board, with pieces to move about, gambles and sacrifices to be made, without regard for the value of human life. For

  Coen, winning was everything; the lives of other people—even his own countrymen—were mere externalities to be dealt with quickly and efficiently. One tends to believe, or hope, that there must have been more to his character than what has survived in the historical record. Perhaps, if he had lived longer, this would have become apparent, or perhaps he would have mellowed as he aged. But although he was long considered to be a Dutch national hero for putting the voc on solid footing—he provided the gilded age of the Netherlands with not only a prime source of its wealth but also its worldly identity—his cruelty and violence, the corporate culture of the voc that he created, overshadow his reputation now.

  Coen’s vision for the voc coaxed great things from the company and from his little nation, but like an addict on a high, they eventually burned out from exhaustion. Despite the company’s monopoly status, the costs of controlling and governing the spiceries eventually outweighed the benefits. And, along with the company, the brief flash of the Dutch Golden Age petered out. Many generations enjoyed the voc’s profits until the final accounting revealed the company’s decayed inner workings. The rot had begun with its inception, along with Coen’s grand plan to use a private army to conquer and dominate the world’s most valuable commodities in the seventeenth century. The kingdom of the world’s first great merchant king eventually crumbled on its own faulty foundation.

  Chapter 2

  “We derive our authority from God and the West India Company, not from the pleasure of a few ignorant subjects.”

  PIETER STUYVESANT, C. 1647

  Divided Loyalties

  PIETER STUYVESANT AND THE DUTCH WEST INDIA COMPANY

  1

  ON MARCH 22, 1664, THE FLAMBOYANT KING CHARLES II of England, recently restored to the English throne after living in exile during a decade of parliamentary rule following the Civil War, made an epochal decision. To his ambitious brother James, Duke of York and Albany, he granted control over a vast tract of land in eastern North America: “all of Maine between the Croix and Kennebec rivers and from the coast to the Saint Lawrence, all islands between Cape Cod and the Narrows, and all land from the western boundary of Connecticut to the eastern shore of Delaware Bay.” The charter, which included the right to govern under the English Crown, specifically mentioned the “River called Hudsons River,” and it was this north-flowing river and the valuable entrepôt that had grown at its confluence—the only significant settlement south of Boston and north of the Caribbean—that was the central point of interest.

  In return for this magnanimous gift, James was to dutifully forward to the king an annual stipend of forty prime beaver skins. Perfectly normal sibling generosity, perhaps, apart from the fact that the land the king was graciously giving to his brother consisted essentially of the quasi-colonial holdings of the Dutch West India Company, all of the Dutch colony of New Netherland, including, presumably, all the native peoples as well. But giving this kingly gift was not a flippant or whimsical decision; it was a carefully calculated policy organized at the highest levels of the English government and undertaken with the full knowledge that force would be required to wrest control of New Netherland from the Dutch West India Company.

  If English troops could lay siege to and take the Dutch quasi-colony run by the West India Company, it would give England control over the entire eastern coast of North America and link the New England colonies in the north with the British settlements in the Chesapeake. Not only was New Amsterdam, on Manhattan Island, the centre of Dutch commercial activity in the western Atlantic, it had also emerged as the centre of trade for much of the commerce of the English colonies. As the critical port in eastern North America, New Netherland, particularly the Dutch settlement of New Amsterdam, had become a pawn in the epic commercial struggle between Holland and England. James and some of his cronies had incorporated several other companies aimed at challenging the Dutch commercially, such as the Royal African Company, with the objective of destroying the Dutch-controlled West African slave trade and taking over the transport of slaves to the plantation colonies of the Caribbean. In 1663 this company, head
ed by the duke, seized all the Dutch slave-trading posts in West Africa. Ousted from the Spice Islands and the East Indies, the English were not prepared to be dominated closer to home in the Atlantic, and as a result to have their expansionist ambitions thwarted. New Amsterdam, and all of New Netherland, had to be taken—and reports indicated that, against all probability, the Dutch company trusted with managing it had devoted little to the town’s defence.

  James moved swiftly. In 1665 four frigates under the command of Colonel Richard Nicolls left England on a secret mission to assault New Netherland. Nearly two thousand troops were prepared for the invasion. Separated on the voyage across the Atlantic, the small squadron regrouped and anchored in Gravesend Bay on August 26. It unloaded the infantry: 450 troops marched to commandeer the ferry at Breukelen (present-day Brooklyn), and others marched along the coast to drum up support from the many English settlers and towns in the Dutch colony. About 1,500 people lived in New Amsterdam, and about 10,000 populated the entire colony, in towns and on farms throughout the territory centred on the Hudson River. Despite entreaties from the citizens and from its governor, however, the West India Company had refused all requests for additional ammunition and soldiers, not wanting to shoulder the expense. The board of directors suggested optimistically in a letter to Pieter Stuyvesant, the governor of the colony, that he need not worry about an English invasion because “we are in hopes that as the English at the north have removed mostly from old England for the causes aforesaid [religious freedom], they will not give us henceforth so much trouble, but prefer to live free under us at peace with their consciences than to risk getting rid of our authority and then falling again under a government from which they had formerly fled.” The directors hoped that the company’s policy of religious toleration would galvanize its citizens to fight any invasion.

  The four English frigates cruised into the harbour of New Amsterdam and disembarked hundreds of troops. Although Fort Amsterdam was poorly manned for defence against such a strong force, Stuyvesant had received advance warning of the invasion fleet and had shored up the fort’s defences, organizing guard watches, digging defensive ditches and repairing the dilapidated walls. He dashed off a letter to the captain of the small English fleet. What was the reason for the ships, he inquired, stating that he hoped that since their nations were at peace, the commander was not “apt to entertaine any thing of prejudice intended against us.”

  A courier delivered Colonel Nicolls’s response to Stuyvesant in his office in Fort Amsterdam on September 4: “In his Majesties Name,” it read, “I do demand the towne, Scituate upon the Island commonly knowne by the Name of Manhatoes with all the Forts there unto belonging, to be rendered unto his Majesties obedience, and Protection into my hands.” Neither he nor the king wanted bloodshed or violence, the note calmly proclaimed, but if the terms were not met by the West India Company, Stuyvesant would bring on “the miserys of a War.”

  Courtly civility was the order of the day. When presented with the letter, Stuyvesant sniffed and declined to reply because the missive was not properly signed. He sent it back, and Nicolls, rising to the occasion, wrote a new note addressed to “the Honorable, the Governor of the Manhatoes,” wherein he reiterated his demands and beseeched Stuyvesant not to delay: “Your speedy Answer is necessary to prevent future inconveniences, and will very much oblige.” Nicolls signed it “Your affectionate humble Servant.”

  Stuyvesant considered the company’s position: Nicolls had nearly a thousand fighting men ready to attack, whereas the company had left New Amsterdam garrisoned with merely five hundred; Nicolls also had nearly a thousand more soldiers scattered throughout Long Island, in addition to having dozens of cannons on his ships. Stuyvesant had possession of the fort and its handful of cannons, and an intimate knowledge of the surrounding lands. He could hold out for a while but would lose eventually if reinforcements did not arrive. To surrender without a fight, however, was dishonourable, perhaps even cowardly to a man like Stuyvesant, and would likely end his career with the company. He loudly proclaimed that he “would rather be carried to my grave” than give up without a fight. Yet he stalled, suggesting to Nicolls that he was awaiting orders from his directors in Amsterdam.

  Stuyvesant then met with an English representative at a popular local tavern and, after quietly reading the terms of surrender presented to him, tore the paper to shreds. This outraged the gathered crowd—onlookers who demanded that Stuyvesant relay the English offer to them. But that would have been too undignified for the man who had been in a struggle with these very people for years over the government of the settlements and colony. He refused to show the generous terms of surrender either to his subordinates or to the leading citizens of the settlement, knowing they would argue for surrender if he did—many of the terms on offer were the very things the people of New Netherland had been seeking for years: freedom of religion, property rights, inheritance laws, continued trade with Holland, “every man in his Estate, life, and liberty.”

  Stuyvesant slowly collected the ripped pieces of the letter and offered the crumpled pieces to the mob. Many hands grabbed the pieces and glued them back together. Many eyes then squinted at the damaged handwriting, and some people read the words aloud.

  Stuyvesant stalked away on his stump leg, mounted the battlements of his fort and stared across the water at the ships that were waiting with their guns trained on the settlement. He let the wind ruffle his long hair and contemplated ordering one of his cannons to fire. The long-standing and accepted rules of war allowed that if a stronghold surrendered when presented with a formal demand, the civilians would be spared and the town too; but, if even a single shot were fired in aggression, the community would be open for plunder and destruction. One shot from Stuyvesant’s cannon, and the people would have to defend themselves— he could unleash a great torrent of violence that would surely result in the destruction of the town and the death of many people. Only a clergyman with the impressive name of Domine Megapolensis joined him and a gunner at the battlements. They talked. Time passed. Finally reaching an agreement, Stuyvesant descended from the battlements. The next morning, on September 5 , 1664 , ninety-three of the leading citizens of New Amsterdam presented Stuyvesant with a petition, signed by his own son, demanding that he surrender to prevent the inevitable “misery, sorrow, conflagration, the dishonour of women, murder of children in their cradles, and, in a word, the absolute ruin and destruction of about fifteen hundred innocent souls.” Stuyvesant knew he had lost their loyalty.

  The terms of surrender that Nicolls offered were shrewdly calculated to deflate any opposition to the foreign power. They were something the citizens had lacked under the West India Company’s administration and feared they would never gain. The hated foreigners—enemies of Holland through several recent wars—offered the people of New Amsterdam if not a better life, at least a life of greater freedom. Why the citizens of Holland’s premiere North American colony preferred conquest by a foreign nation, a nation with which they had been at war for decades, to fighting for their own country is an intriguing question. Answering that question requires some familiarity with the legacy of Pieter Stuyvesant and the Dutch West India Company.

  2

  HENRY HUDSON IS NOW R EMEMBER ED, WHEN HE IS remembered at all, for his tragic death at the hands of his mutinous crew in 1610 in the bay that bears his name. The famous portrayal of the event, painted several centuries later, depicts the forlorn mariner—bearded, dressed in rags with sad, soulful eyes—staring morosely from the seat of a small, crowded boat. Forbidding, snowy mountains dominate the background, and great icebergs loom ominously. The wizened mariner clutches the hand of his teenaged son, John, who stares beseechingly at his father. A vast expanse of inhospitable, frozen wilderness is apparent in all directions. Hudson, along with a handful of loyalists and all the sick and dying members of his ill-fated expedition, was cast adrift in the ice-choked waters and left to perish when he, tenaciously and with a deranged optimism, announ
ced his intention to continue his quest for a west-leading waterway from the bay to the clove. and nutmeg-scented climes of the Moluccas in the spring. All this despite a horrifying winter spent in a miserable, scurvy-ridden encampment on a nearby frozen island. The mutiny was a melancholy and dramatic event that for decades put a stop to English attempts to locate the elusive northern route to the spiceries.

  Many people lost a lot of money with Henry Hudson’s failure; Hudson was not commissioned or employed by the English government, but rather by a handful of merchants under the auspices of the Virginia Company, the Muscovy Company and the English East India Company. It was a private venture that did not pay off, just like Hudson’s three other voyages in search of the elusive waterway. While most Dutch and English merchant adventurers struggled to establish routes to the Moluccas around the Cape of Good Hope, battling Spaniards, Portuguese and Malaysians for a share of the spice trade, others sought an alternate northern route. It was potentially shorter, less infested with the agents of enemy nations and populated by northern people who were more likely to be interested in one of England’s chief exports: wool.

  Maps from the early seventeenth century show the fragmented vision of the world’s geography available to mariners. A vast, blank expanse filled these maps, a frightening terra incognita concealing unknown possibilities for commerce or plunder. The only viable trade route to the silks, spices and gems of the mysterious Eastern lands was precarious and long, circumnavigating the globe and passing through uncharted waters teeming with the ships of hostile Spanish and Portuguese competitors. One of the routes with the greatest potential ran through the frigid waters of northern Canada; another followed the northern coastline of Europe eastward. Whichever way it lay, the discovery of a navigable sea route was believed to be only a matter of time and persistence. English merchants, shut out of the spice trade after the English East India Company was founded in 1600, were in search of new markets. In 1607 a group of leading merchants in the city of London decided to take matters into their own hands. They would outfit and promote a voyage to discover a fabulous new route to the Orient.