The Dutch and the English were concerned to break in on the trade pioneered by the Iberians.
49
Their attitude to trade was often as positive as that of the most rigid free-market economist of today. In 1711 Joseph Addison, in an essay called 'Trade as a Civilising Force', wrote in a strikingly benign way that
Nature seems to have taken a particular Care to disseminate her Blessings among the different Regions of the World with an Eye to this mutual Intercourse and Traffick among mankind, that the Natives of several Parts of the Globe might have a Dependence upon one another, and be united by their common Interest.
50
The wonder of the East, now focused on products rather than mysteries and the fabulous, was well expressed by Samuel Pepys:
My Lord Broucker and Sir Edmund Pooly carried me down into the hold of the India ship, and there did show me the greatest wealth lie in confusion that a man can see in the world. Pepper scattered through every chink, you trod upon it; and in cloves and nutmegs I walked above the knees; whole rooms full. And silk in bales... as noble a sight as ever I saw in my life.
51
In the following sketch I have taken to heart a powerful admonition from the late Denys Lombard. He wanted to
underline the importance of preventing the study of the companies from being separated from the Asian context in which they were formed and
developed. When seen from Europe, they doubtless appear to be autonomous institutions of wonderful effecacity, heralding the colonial empires of the nineteenth century. When seen from Asia, they seem first and foremost to be uncertain attempts on the part of newcomers to find their way as best they could into a system which had been in existence for centuries.
52
Thinking back to the typology we sketched earlier in this chapter, the Dutch and English, like the Portuguese, acquired some ports, and many trading posts (known as factories) in existing ports, and at times they moved to the second stage, where they participated in production in the interior. But their move to the third stage, where they controlled politically the interior, in most areas came later in the eighteenth century. Specifically, while Europeans established ports on the Coromandel coast, such as Chennai, this did not mean that they did well in local trade, and nor did they outcompete native ports. So also on the west coast of India. Mumbai was set up by the British in the 1660s, but it took seventy years for it to overtake the great port of Surat. The
coup de grâce
was military rather than commercial: in 1759 Surat was taken over by the British. And so also in Indonesia: Jakarta (Batavia) won only after the Dutch conquered Makassar.
The Dutch had some decades of maritime experience behind them, especially in the Baltic and North Sea, before they ventured to the Indian Ocean late in the sixteenth century. They had also done well in the distribution within Europe of spices brought to Lisbon by the Portuguese. When Spain conquered Portugal in 1580 their access was restricted, and this seems to have been the main motive for the decision of some Dutch seafarers to go direct to the source of the spices. Early returns were excellent, leading to an uncontrolled rush: in 1598 twenty-two ships owned by five different trading companies went to Asia. One of these companies ended up making a profit of 400 per cent. Economic and political elites (the two were intertwined) realised that intra-Dutch competition was inefficient. To solve this problem the state encouraged the merchants to combine, and in 1602 the VOC (Dutch East India Company) was formed. The state gave it a monopoly over trade to the Indian Ocean. We see here two important characteristics of the Dutch effort. Their Asian presence was located in a trading company, not in an arm of the state. Yet there was an indirect nexus between state and company, in that the state sold off to the company quasi state rights in Asia, and in return the state profited from the success of the company. So also in the Indian Ocean, where the company adroitly mixed skilful trade with the selective use of military force. In this they were much more focused, and hence more effective, than were the Portuguese.
The English experience was a rather muted copy of the Dutch. They also had maritime experience, including the activities of semi-pirates like Drake and Hawkins. In 1600 the EIC (English East India Company) was set up, but with much less capital, and apparently much less commercial expertise, than the Dutch had. The EIC much more than the VOC was modest about trying to be warlike. One official noted that the 'worst of peace is better than the best of war'.
Portugal resisted the intrusion of the northern Europeans, but in most places was unable to hold out. The English played a secondary role, while the Dutch conquered a string of Portuguese forts: Melaka in 1641, Colombo and all of Sri Lanka in 1658, and all the Malabar ports in the 1660s. They also established trading posts in existing ports on both sides of the Indian coast, and in 1619 took the minor Javanese port of Jakarta. Renamed Batavia, this was considered to be well located to act as their capital in the area.
Like the Portuguese, the Dutch aimed to control the spice trade. Ironically, they had considerable success, but finally failed for many of the same reasons as the Portuguese. Their capital, determination, ruthlessness and force gave them early success, which led to the end not only of the Portuguese trade via the Cape but also of the overland trade to the Levant. It was a sign of the times when as early as 1600 the Portuguese unloaded six carracks in Lisbon carrying a large pepper cargo. They found them hard to sell, for their traditional markets in northern Europe were already well supplied by large Dutch shipments.
53
On the face of it the Dutch achieved considerable success, but actually their achievement in controlling the pepper trade was less than that for the fine spices, where they finally achieved something close to a total monopoly. In large part this was because, unlike pepper, the fine spices grew in restricted areas. In Sri Lanka the Dutch obtained their first cargo of cinnamon in 1638, and the sale price in Amsterdam was nearly double the purchase price. After the Portuguese had been driven out of this island, by 1658, the Dutch, now having a complete monopoly, thought they could charge what they liked. They raised the price from 15 stuivers to 36 in 1658, and later to 50. Overall the profits were huge. Anthony Reid claims that by the mid seventeenth century the VOC could sell spices in Europe at about seventeen times, and in India about fourteen times, the price which they had paid in Maluku, and he notes that none of this profit went to any Asian.
54
Cinnamon, cloves, nutmeg and mace made up the VOC 'famous four' spices. As a Frenchman wrote in 1697, 'No lover is as jealous of his mistress as the Dutch are of their trade in spices.' In the Maluku islands, home of the last three fine spices, the Dutch behaved with great ruthlessness. Under governor Jan Pieterszoon Coen (1619–23, 1627–29), pursuing his 'policy of frightfulness', they deported much of the population of the Bandas, and then moved in Dutch settlers supported by a vast slave population drawn from such scattered areas as East Africa, Persia, Bengal and Japan.
55
In 1636 on one of these islands, as a result of Dutch severity, there were only 560 natives left, together with 539 Dutch and 834 free foreigners. To overcome the labour shortage they had to import 2,000 slaves from Arakan and Bengal. On other Banda islands all nutmeg trees were cut down so as to avoid the possibility of smuggling. Their policy in the clove producing areas was equally bloody, indeed was too successful, for so well did they limit production that in 1665 there was a shortage of cloves. Production was closely controlled. In 1710 the directors of the VOC noted 'with grief' that the most recent harvest of cloves on Amboyna was likely to be 1.85 million pounds. They did massive extirpations in order to get production down to an 'acceptable' level of about 500,000 pounds.
56
Competition from other Europeans was slowly overcome. The English held on in Bantam until 1682, and after this in Benkulen in southwest Sumatra, thereby retaining some access to pepper. The Spanish left Tidore only in 1663, while the end of the Portuguese was symbolised by their loss of Melaka in 1641. The end of any competition for cloves, nutmeg and mace was achieved in 1669 when Makassar was conquered, and from then on the Dutch made vast monopolistic profits from these spices: several hundred per cent, and even up to 4,000 per cent. Their control of the clove trade is shown by the way they were able to charge one fixed price for this product in Europe from 1677 to 1744. Better still, the Dutch were able to overcome the common problem faced by Europeans trading in Asia. Few European products found any market in the Indian Ocean area, yet in a bullionist age the export of precious metals was seen as undesirable. But the Dutch were lucky, for their sales of spices in Asia produced profits which then could be used to buy goods to send back to Europe.
Yet this rosy picture, for the Dutch, contained its own problems. There were difficulties both in Asia and Europe, and these combined to reduce profits in the eighteenth century, as most dramatically shown by the bankruptcy of the VOC in the 1790s. First, we need to remember that pepper was always the main product. In Europe demand for pepper in the seventeenth century was some 7 million lbs a year, while for the 'famous four' together it was only 1,000,000. But the Dutch never completely controlled pepper. The reason was that pepper was produced in several different areas, not all of them controlled by the Dutch. For example, in the very large producing area on India's southwest coast Dutch power was restricted to the seashore; much pepper escaped their control inland. A Dutch commander in 1664 set out the aim in a letter to his subordinates:
Considering that the pepper trade is the bride around which everything dances, we recommend Your Honours to bend your best efforts to bring great quantities of Malabar pepper into Company hands every year... while at the same time you should prevent the indigenes from transporting it elsewhere by sea or land in secret.
At least in Malabar the Dutch were faced with the same problem which had hindered Portuguese efforts in the region, namely that the production areas were inland, and European power was effective only on the coast and at sea.
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Even VOC control over the Malukus was achieved only at an ultimately too high price. One problem was that about one-third of the production of these fine spices was sold in Asia, as also was pepper, and so the VOC had to make delicate calculations of prices in Asian markets: if their prices were too high then Asian purchases declined, but if they were too low then other Europeans would buy in India and ship to Europe.
There was also the cost of enforcement, and of preventing new production areas. As early as 1663 a Dutch official noted ominously that 'Out of these [pepper trade], the heavy expenses which the Company has borne for such a long time, and which it is still forced to carry, have to be paid.' Smuggling was a particular problem and
even some of the VOC's own servants indulged in this, just as had the Portuguese a century earlier. Slaves on the Banda islands and their Dutch masters, the
perkeniers
(concessionaires licensed by VOC who had local mothers), were adroit smugglers, so the cost of enforcing the monopoly was huge, especially as slightly inferior long nutmeg grew on other islands and could be substituted. The VOC became a bloated and overly rigid body, with a vast and expensive military and civil establishment. The number of employees in the east rose geometrically: in 1625 there were 2,500, around 1700 the number had risen to 13,000, and by mid century there were 20,000 civil servants and troops.
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More generally, Dutch success, at its height from about 1680 to 1720, meant that they did not get into ultimately more profitable trades in cotton piece goods, tea and opium. Piece goods especially had a much wider market than spices, both in Asia and after mid century in Europe also.
There were also problems in Europe. We have noted that European consumption of spices was more or less static throughout the seventeenth century, or possibly even declined a little. The problem was that the huge increase, at least a doubling, in European consumption of spices in the sixteenth century meant that as they became cheaper and more available they were no longer a symbol of wealth and luxury. Their prestige declined and relatively they were less used. New luxuries and stimulants competed with or even replaced spices: coffee, chocolate, cocoa, alcohol and tobacco. New vegetables (asparagus, spinach, artichokes, tomatoes, pimentos, melons) varied the European diet, so spices were less needed to ginger things up. It seems that meat consumption in Europe declined, and also simpler cooking styles were more in vogue. In short, ironically, the VOC monopoly turned out to be a Trojan horse; they controlled products whose value was falling, and ignored humbler but ultimately more productive goods.
This Dutch impact on the spice trade was atypical. Recent work tends to emphasise that in most areas for most of the time we must still stress continuity, at least up to the mid eighteenth century, when the British began to acquire land in eastern India. From this time the whole equation changed and the Indian Ocean area was increasingly dominated by Europeans, and especially the English. Asian markets were undercut by port cities located in colonial areas; Asian merchants were displaced by Europeans backed up by armed force and by a state which ruled all of India and other areas around the Indian Ocean.
We can see some signs of these changes in the 150 years between the arrival of the northern Europeans and the mid eighteenth century. These apply more to the location of the major markets than to changes in merchant communities. Broadly speaking, over this period we see the rise of new port cities, major markets, which were ruled by Europeans. Often some coercion was employed to attract or force Asian traders to use these new markets. In Indonesia the best examples are Jakarta, the capital of the Dutch East India Company from the 1620s, and Melaka, conquered from the Portuguese in 1641. In India the most obvious examples are the three great port cities, each of them created more or less from scratch by the English East India Company: Chennai in the 1640s, Mumbai in the 1660s, and Kolkata in the 1690s. The rise of
these new ports, and the increasing volume of European trade around the Cape of Good Hope, left many traditional ports in the Arabian Sea bereft. Most of the Swahili ports sunk into stagnation. Aden and Hurmuz continued to decline. On the west coast of India the once great Surat was replaced by Mumbai by the 1730s, though here it is worth remembering that it took Mumbai seventy years as a British port before it could outrank Surat; the traditional port cities did not give up easily!