The Dutch East India Company

VOC Logo of the Dutch East India Company

The Dutch East India Company, formally the United East India Company, or Vereenigde Oostindische Compagnie (“VOC”) in Dutch, headquartered in the United Provinces of the Netherlands during the 17th and 18th centuries, by some accounts of monetary-value conversion was deemed worth $7.9 trillion. The company began in 1602 A.D. when a private merchant company endeavored to capitalize on the wealth of trade to be had in and around the Indian Ocean. Eventually, the company grew a complex corporate structure.

The company was comprised of six Chambers, or Kamers, like teams from each of the Netherland’s six major port cities run by a board of members representing the companies shareholders from each respective township. Like venture capitalists, each Chamber operated relatively independently by funding and operating their own ships and generating their own profits. The largest of these were the Chambers of Amsterdam and Zeeland. Throughout a year, they would convene their delegates and govern the company’s broad business and overarching issues.

As opposed to the British East India Company, which involved itself in the geo-political affairs of Indo-China, the VOC’s focus was purely commercial. Military action was taken to secure these interests, but the business of the VOC was shipping. In fact, most of the money was made by serving the Asian countries as intra-Asian shippers rather than as merchants bringing goods back to Europe. The Dutch found that there was more profit to be had in setting up a base of operations in the region, do business for a year, and then at the end of the year bring back profits and wholesale goods back on giant ships called Retourschepen, or return-ships. The ship which enabled this mercantile revolution was the Dutch fluyt.

Fluyt
A Dutch Fluyt – Wenceslaus Hollar [Public domain]

The fluyt was a highly maneuverable medium-sized vessel that the Dutch had ingeniously manufactured to be of lightweight durability capable of sailing the rigorous course around Africa’s Cape of Good Hope and up to the tropic waters of the Indian Ocean. Its large interior volume allowed much cargo to be stored, perfect for maritime shipping. And it possessed a flexibility for refiture, which enabled some of the vessels to be converted into light warships equipped with military machines—an adaptation later necessary to fend off pirates, competing Europeans, and hostile Asian forces. And they would engage in some would-be piracy themselves by intercepting Spanish galleons carrying goods and silver. So, it was the invention of the fluyt that enabled the commercially-minded Dutch of the United Provinces to dominate Asian trade for two hundred years.

The Dutch began their endeavor by following the Portuguese. The Portuguese, a rather small nation driven by ambition and destiny, were the first European power to become able to easily navigate around Africa and establish a Christian European presence in the Indian Ocean. However, the size of their population was largely to blame for their short tenure as the masters of world trade. The Dutch had been trying to reach Asia by a northward route through the Arctic. Having failed this for decades, they eventually gave up and went the Portuguese way.

The fluyt was instrumental in the Dutch succession. It allowed the Dutch to operate with cheaper expenses, which in turned allowed them to offer cheaper rates for shipping and cheaper prices for the spices they imported. Then, by monopolizing intra-Asian trade and opening a series of trade ports throughout Indonesia, they were able to grow into a mercantile behemoth.

Batavia

Their trade network essentially covered the whole old world. Based out of the Netherlands with an overseas headquarters in Batavia (modern: Jakarta, Indonesia) and a colony in South Africa, they served as the shipping company for all the kingdoms littered around the Indian Ocean: from Arabia and Persia, down to India and Indonesia, China, Taiwan, and up to Japan. For example, they would trade opium from Surat, India for peppers in Malabar, India. They would trade sugar from Bengal to Persia for gold and silver, then buy horses from Persia and sell them down in India. They dealt with Japanese silver and copper, Chinese gold and porcelain, Indian linens, and many types of fabrics and clothes, and of course spices. Every Asian city, island, region, and state had particular preferences, specific importation needs and unique goods to be exported. The Dutch handled all this trading for them and in return, on their retourschippen, brought back to the Netherlands great amassed quantities of moneys and spices.

However, in 1800 A.D, after two centuries of commercial dominance, the VOC fell. Internal corruption, a dividend policy which paid out too much of the company’s profits to its shareholders, a rise of anti-European political sentiment in Asia, and costly wars with the English served to bankrupt the company whose fleeting presence left a vacuum that was filled by the British East India Company.

Apotheosis of the Dutch East India Company (Allegory of the Amsterdam Chamber of Commerce of the VOC)
Apotheosis of the Dutch East India Company (Allegory of the Amsterdam Chamber of Commerce of the VOC) by Nicolaas Verkolje, 1702-1746.

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