The VOC (1602-1800)
On March 20, 1602, the States-General of the Republic of the Seven United Provinces of the Netherlands took the momentous decision to delegate a part of its executive powers to an overseas trading company through the issuance of a special charter.
The members of the States-General were wise enough to place a time limitation (21 years) in the Company's charter to facilitate ongoing review. To this United East India Company—Verenigde Oost-Indische Compagnie (VOC)—they granted the sole right to trade beyond the Cape of Good Hope and, in addition, also gave it the plenipotentiary right to conclude treaties, administer justice, and conduct war in Asia if need be.[2106]The politician who compelled all the existing East India Companies to merge into one corporation, the minister of state (raadpensionaris) Johan van Oldebarneveldt, wondered aloud whether it was a wise decision to hand over these special powers to the new trading company. He is said to have muttered that under normal circumstances
a government never should extend such extraordinary privileges to merchant enterprises.
Van Oldebarneveld felt obliged to extend these extraordinary powers to this United East India Company because unity was needed in the life- and- death struggle in which the Dutch Republic already had been involved for more than 30 years. This conflict was largely fought out on the home territory of the Low Countries, but because of the expansion of Dutch overseas trade it washed over other continents. Since 1580 King Philip II of Spain simultaneously ruled Spain and Portugal, with large colonial interests in Asia and the Americas. By deciding to arm Dutch traders in Asia, the States-General enabled its subjects to defend themselves against or alternatively launch an offensive against the Portuguese Estado da India throughout Asia and against the Spanish vice-royalty in the Philippines.
In other words, the VOC was founded with the principal aim of safeguarding Dutch trade with Asia and of fighting the Spaniards and the Portuguese on their own turf. The Dutch East India Company was thus indeed a “company of the ledger and the sword.”At its founding the new trading firm was unique because, contrary to the usual regulated companies, it was provided with fixed-share capital. This unusual step was motivated by the high risks involved in the long-distance trade with Asia and the imperative of long-term planning required for such ventures. Usually a regulated shipping company would finance a trading voyage of a merchant vessel for one return trip, which meant at most a few months in European waters. Yet because it took at least six months to sail to Asia, VOC ships would be away for at least two years before the accounts could be cleared. By creating a joint stock company with fixed-share capital, a new type of business enterprise was created in international trade, which enabled the Dutch to create an infrastructural network of strongholds and footholds in Asia and to deal with their Asian trade as an ongoing concern. In other words, necessity gave birth to the juridical concept of the incorporated or Limited Liability Company. This is a normal form of business enterprise today, but in the early seventeenth century it was a new concept.
Economic historians sometimes call the VOC the world's first multinational. While the phrase is evocative, there are, of course, many differences between the VOC and today's global enterprises, the most important being that all of the shares remained solidly in Dutch hands.12 The extraordinary military and political power of the Company were direct products of the Dutch revolt. This struggle for independence, recorded in history as the Eighty Years' War, ran through 1648, when the Treaty of Westphalia was signed. The struggle between the Dutch and the Portuguese in Asia went on for at least another 20 years.
The first time the question was posed of whether the Company was living up to the expectations of its founders was at the end of the time limit of the first charter in 1623. A group of important shareholders, sometimes called “the doleful participants” on account of their lamentations, disagreed with the policies pursued by the management. They complained that too much money had been invested in building fortresses and in fighting the Spaniards and the Portuguese and their allies in the Moluccas, and that not enough money was being earned from trade. The then serving Governor-General Jan Pietersz Coen was recalled from Asia to give his views on these matters. The policy of the directors ultimately prevailed and the charter was renewed. An important consideration was that the Twelve Years' Truce (1609-1621) with Spain had expired and that the war in Europe had been resumed. Whenever the charter had to be renewed later during the seventeenth century, these issues never again played a role because by that time the Company was paying hefty dividends and had been turned into the milk cow of the Dutch economy.
12
Gaastra 2003.
In its heyday the VOC annually sent on average some 25 ships in three fleets to and from Asia and had another 40 ships sailing along the Asian monsoon trading routes at any one time. The number of voyages which were made between the Dutch Republic and the Indies and the number of voyages within the intra-Asian network in the 1595-1660 period varied considerably: while some 1,368 voyages were made around the Cape of Good Hope, no less than 11,507 voyages were undertaken in the Eastern Seas. It was not until the establishment of the transshipment port of Batavia in 1619 that the intra-Asian shipping routes were consolidated and finely tuned by the VOC. Between 1610 and 1620, about 1,000 shipping movements in Asia were recorded. By the 1650s, this number had stabilized at about 2,800 shipping movements per decade.[2107]
Batavia was served by a large number of trading establishments spread throughout Monsoon Asia from Mocha in the west to Deshima in Japan to the east.
As pointed out by K. N. Chaudhuri, the Dutch as well as the English discovered upon their arrival in Asian waters “that the whole of the Indian Ocean had a structural unity created by the periodic rhythm of the monsoon winds and by economic interdependence between one region and another.”[2108] The position of Batavia as the spider in a web of trading routes connecting the Indian Ocean with the Indonesian archipelago and the China Seas says it all: at the Batavian roadstead the most important intra-Asian shipping routes met in such a way that they dovetailed with each other. This in fact constituted a structural modification in the traditional Asian trade networks: already existing traditional patterns of trade were now for the first time integrated within the network of the overarching trading corporation.During the 200 years of its existence, the Dutch East India Company made a sizable contribution to the Dutch economy: the turnover of the VOC represented 10 to 15 percent of all Dutch foreign trade. Only the trade with the Baltic region was greater in volume than the trade with Asia. Yet the multiplier effect of the precious imports trade of the VOC that ended up in the hands of all kinds of retail business in the Dutch economy must have been much greater than from the sales of Baltic bulk goods.[2109]
Between 1602 and 1795 (the year in which the Company was essentially nationalized), one million people sailed from the Dutch Republic to Asia on VOC ships. Half of these Company servants—everyone who sailed on the East Indiamen was in the service of the Company as a sailor, merchant, or soldier—came from the Netherlands; the other half originated from other countries in Europe, mainly from the German kingdoms and principalities and Scandinavia. Only one-third returned; the rest either died in the Company's service, or decided to remain in Asia and set up a new living in the tropics. Apart from Cape Town, where a small horticultural and cattle-breeding colony of boer- settlers emerged, soon to be reinforced by an influx of Huguenot refugees after the Revocation of the Edit de Nantes of 1685, almost no Dutch overseas settler emigration took place.[2110]