Splendid Exchange, A

by Bernstein, William L

  The first to feel the force of those arms were the British. Even though the English captain Keeling had recently protected a VOC delegation at Ay from an attack by natives, the Dutch still suspected him, probably wrongly, of conspiring with the Bandanese. Outmanned and outgunned by the Dutch, Keeling filled his boat with spices and sailed away.

  By this point, Neira was already under Dutch control. Lonthor, starving under a blockade, submitted next. In 1610, Captain David Middleton of the EIC arrived at Neira. Stonewalled by the VOC, he did not load a single nutmeg. He then decamped a few miles west to Ay, where the locals happily loaded his holds with fine spices, a trick that was turned by subsequent EIC captains over the next few years.

  By 1615, the VOC had lost patience with both the English and Ay’s inhabitants. It invaded, only to be repulsed by the islanders. This time, its suspicions of British scheming were well-founded. English weapons were discovered on the island, and English boats had observed the action and perhaps even fired on VOC forces. The Dutch attacked the next year, with devastating results. They slaughtered hundreds, dispersed thousands, and enslaved the rest. On losing its trading post at Ay, the EIC simply moved its base of operations a few miles farther west to Run. At this point Coen, who had been appointed the local VOC commander in Bantam on Java a few years earlier, warned the English that he would consider any further support of the Bandanese an act of war.

  The escalation of hostilities between the VOC and EIC aroused concern not only at the companies’ headquarters in London and Amsterdam, but also at Windsor and in The Hague. Between 1613 and 1619, the two governments conducted trade negotiations as contentious as any WTO or GATT conference. It galled the English that the Dutch sent as their chief negotiator none other that Hugo Grotius, the era’s towering legal scholar and author of the principle of Mare Liberum—the concept that God had given all nations the right to navigate the seas and to trade freely.

  Although the English embarrassed him by quoting his own theories, Grotius was a brilliant rhetorician and had no difficulty arguing the opposite case—that the English, having contributed nothing to the establishment of trade with the Spice Islands, had no business there. Just as the fleets of the EIC and VOC were about to come to blows off Bantam in March 1620, the English vessel Bull arrived with a message for Coen from the Heeren XVII: nine months before, the companies had signed a treaty of cooperation.

  The agreement infuriated Coen, who wanted to destroy every last English trading post and merchant ship in the East Indies. Its terms gave the EIC one-third of the profits from the Moluccas, but also made EIC liable for one-third of the costs.

  The arrangement gave Coen the tools with which to eject the British, albeit more peacefully than he would have liked. Since the English could not compete financially with the Dutch, outsmarting them was child’s play, especially for an operator like Coen, as skilled at double-entry bookkeeping as with a cannon. Repeatedly he presented the EIC with enormous bills for spice purchases, ships’ provisions, and military expenses that the English could hardly hope to pay. When the English pleaded insufficient funds or declined to supply warships in support of Coen’s attacks on the islands, the Dutch refused to let them load spices.

  Later that year, the VOC, without English support, committed one of the bloodiest outrages of the colonial era when they assaulted the main island of Lonthor and slaughtered most of its approximately thirteen thousand inhabitants. The few survivors were sent off to forced labor in Java or enslaved to work the clove trees that had once been theirs. In the decades that followed, those who had been packed off to Java were sent back home when the Dutch found themselves in need of native expertise to salvage their mismanaged nutmeg groves.

  A number of islanders escaped westward, particularly to the Buginese port of Makassar (situated along the sea-lanes running from the Spice Islands to Java and Malacca), where they became an important part of this key trading community.29 Meanwhile, the English were left in nominal control of Run and a tiny neighboring island. Although the Dutch did not physically eject the British from Run, for fear of violating the 1619 treaty, they destroyed the island’s nutmeg trees.30

  While the VOC was consolidating its monopoly in the Spice Islands at the eastern end of the Indonesian archipelago, it also established a more important foothold at the western end in Java. In defiance of orders of the Heeren XVII, the brilliant and monomaniacal Coen, who had just been appointed governor-general, seized the small fishing village of Jakarta from the sultan of Bantam on May 30, 1619, and renamed it Batavia.

  In two decades, the Dutch had accomplished what the Portuguese had not been able to do in the preceding century—acquire a nearly complete monopoly on cloves, nutmeg, and mace. But like the Portuguese, they could not control the pepper trade, which was spread too diffusely between India and Indonesia.

  The conquest of the Spice Islands was part of a grander VOC strategy for seizing control of Asian trade from the Portuguese. In 1622, the Dutch got unwitting assistance from the Persians and English when their combined forces captured the island of Hormuz, the guardian of the narrow Persian Gulf entrance, from the Portuguese. The Persian emperor, Abbas I, had long wanted to regain the port’s commanding position over the gulf in order to open it up to silk exports, a royal monopoly. Previously, silk had to travel by caravan through the territory of the Persians’ archenemies, the Ottomans.

  Hormuz, once one of the world’s busiest and most cosmopolitan trading posts, became deserted, never to rise again, and its fall changed the face of Asian trade. First, the British received a base at Gombroon on the Persian mainland, later renamed Bandar Abbas (“Port of Abbas”) which has dominated the strait down to the present day. Second, the Gulf was now closed to the Portuguese, as well as to the Gujaratis and the Acehnese of western Sumatra. This in turn shut down the ancient caravan trade across the Syrian desert, which had for a thousand years brought spices from the Indian Ocean to the Levant and Venice.

  Strait of Hormuz

  Paradoxically, the real beneficiary of the Anglo-Persian seizure of Hormuz was the VOC.31 The nominal victors at Hormuz, the Persians and the English, derived little benefit from their newly won command of the Gulf, the former because they had no merchant fleet, and the latter because they no longer had Moluccan spices to ship to the caravans at Persian Gulf ports. The Dutch had almost totally frozen the English out of the spice trade, and not until the end of the seventeenth century would the EIC be able to exploit other commodities and once again challenge the VOC.

  The Dutch followed this stroke of good luck by taking Sri Lanka from the Portuguese in a long and bloody campaign lasting from 1638 until 1658 and added the hugely profitable cinnamon monopoly to their portfolio. Finally, they completely sealed off the last leakages from the Spice Islands by bringing the Buginese port of Makassar, an important spice market for Asian traders, under VOC domination in 1669 and by taking Bantam, the main English base in Indonesia, in 1682.

  With the fall of Hormuz and the virtual elimination of Portuguese power from the Indian Ocean, the only route open to Asian competitors was through the Red Sea. After 1630, the Turks lost control of its entrance at Bab el Mandeb to a local Yemenite imam, who reopened trade to all comers, including the Europeans, through the port of Mocha, near Aden. Although the Red Sea was theoretically open, Holland’s competitors had no spices to ship through it. The Acehnese, who had so successfully defied the Portuguese cartaz system in the sixteenth century, had disappeared from the western Indian Ocean. The exact reasons for their decline are not clear, but it seems likely that merchants from Aceh could not buy spices because of the increasing VOC presence on Sumatra.

  Dutch maritime technology had improved to the point where the route around the Cape of Good Hope at last became decisively cheaper and faster than “Sinbad’s Way” and the Red Sea route. So complete was the VOC’s control of the Spice Islands, so efficient was Dutch shipping, and so well financed and well managed were Company accounts, that by the early seventeenth
century it was intentionally glutting the Mediterranean with pepper and fine spices from the west via Gibraltar. While this decreased profits, the low prices rendered the overland spice routes uneconomical and thus doomed the age-old Venetian trade via the eastern shore of the Mediterranean.32 A century and a half later, Venice, its major source of revenue gone, would be easy pickings for Napoleon’s army.

  Dutch Empire in Asia at its Height in the Seventeenth Century

  In the end, Tomé Pires, the Portuguese apothecary, adventurer, and author we met in Chapter 4, had not quite gotten it right when he famously said, “Whoever is lord of Malacca has his hand on the throat of Venice.” In order to strangle it, one needed to be lord not only of Malacca, but also of Sunda, the Cape of Good Hope, and the Spice Islands. The Portuguese had not quite been up to it, but by the mid-seventeenth century, the Dutch had finally cornered the spice market and throttled Venice.

  The most profitable part of the VOC’s business took place entirely within Asia and thus avoided the long and treacherous Cape route altogether. When the Tokugawa shogunate threw out the Portuguese in 1638, the VOC acquired a Japanese trading post on the small island of Deshima in Nagasaki harbor. The Japanese created this artificial island from landfill for the express purpose of enforcing isolation from what the Tokugawas saw as the two most dangerous Western influences: Christianity and firearms. At Deshima, silver was loaded onto Dutch boats until the Tokugawas forbade its export in 1668, and the Dutch replaced it with gold and copper.

  The Dutch were a good fit with their isolationist hosts. Both enjoyed strong drink and carousing (which were eschewed by the abstemious Portuguese), and the Calvinists were far less obsessed with saving heathen souls than with making profits. (Charles X of Sweden, in reply to a diplomat from Holland who lectured him about freedom of religion, famously pulled a Dutch coin from his pocket with a sly, “Voilà votre religion.”33)

  During the more than two centuries that the Tokugawas locked Japan away from the outside world, Deshima served as its sole window to the West. Initially, the Dutch at Deshima received only the basics, “provisions and prostitutes,” but before long, curiosity got the better of the Japanese. The lure of Western culture and technological knowledge, or “Dutch learning,” would help open Japan long before the appearance of Perry’s black ships in 1854.34

  Whereas the Dutch got along tolerably well with the Japanese, they offended the Chinese by refusing to sell spices to China’s merchants in Sumatra and Java. Recall that the Chinese consumed spices, particularly pepper, on a larger scale than Europeans, and that the VOC now controlled the lion’s share of the trade. The Chinese responded by sending their silk directly to Japan and Spanish Manila (whence it sailed on Manila galleons to Mexico). Coen retaliated by seizing junks on the Canton-Manila route, further alienating the Chinese, and in 1622, he tried to take Macao. When this attempt failed, Coen forced the Chinese to knuckle under by sinking eighty junks along the south China coast. Their foreign trade at a standstill, the Chinese granted the VOC a permanent trading post on Taiwan—Fort Zeelandia—whose warehouses soon bulged with spices, silks, porcelain, and drugs.35

  The hub of Asian commerce remained western Java, easily reachable via the roaring forties route discovered by Brouwer. Had the Messiah returned to earth in 1650, he would almost certainly have changed ships in Batavia. Nearly all shipping to and from Holland went through that great port, and it also served as the nerve center of a complex intra-Asian trade network. Fine spices from Indonesia; gold, copper, and silver from Japan; and tea, porcelain, and silk from China transited its warehouses to the east and west coasts of India, where they were traded for cotton. The Indian fabric was in turn sent back to Batavia to pay for more spices, silks, and other goods. This internal Asian trade was as close to a perpetual-motion money machine as the world has ever seen.36 Only the most exquisite goods—the finest silks, the best-quality spices, gold, porcelain, and precious jewels—went back around the Cape to Amsterdam.

  A seventeenth-century English prisoner in Batavia estimated that at any one time, the VOC had up to two hundred ships and thirty thousand men throughout the Indies. Given the high mortality rate among employees—about one-fourth of the men were lost on the outbound journey alone—the VOC required a constant stream of enlistees, and not only from the streets of the United Provinces. So great were its manpower requirements that from the mid-seventeenth century on, most of its soldiers and sailors came from abroad, particularly Germany.

  This grisly recruitment effort was run by a specialized corps, composed mostly of women, the zielverkoopers (literally, “soul sellers”). Their marks were the young foreign men, mainly from Germany, who swarmed into Dutch cities seeking their fortune. In return for a cut of their signing advance and future pay from the Company, the women advertised room, board, and the sort of entertainments usually sought by unattached young men, during the weeks and months until they sailed for Asia.

  The reality fell far short of the promise. One contemporary report described three hundred men in a single attic,

  where they must stay day and night, where they perform their natural functions, and where they have no proper place to sleep, but must lie higgledy-piggledy on top of each other. . . . the death rate is so alarming that the owners, not daring to report the correct number of deaths, sometimes bury two bodies in one coffin.37

  Holland being Holland, this Faustian transaction yielded a financial instrument, in this case the transportbrief—a marketable security entitling the zielverkooper to a cut of the recruit’s wages, paid by the Company as they were earned. Other investors then bought these securities at a discount that reflected the high death rate of VOC personnel and assembled them into profitable, diversified pools of human capital. These magnates were called, naturally enough, zielkoopers—buyers of souls. When, in the eighteenth century, the mortality among the VOC’s soldiers and sailors soared because of lax Company procedures, many zielkoopers went bankrupt.

  Over half of the million or so men who embarked from Holland’s wharves for the East never returned. In the words of the economic historian Jan de Vries, “It is hardly an exaggeration to say that the Company swept the city streets of beggars and the unemployed.”38 The low quality of these recruits would eventually be the Achilles’ heel of the VOC. By contrast, the EIC realized that it needed men who could sail, handle cargo, and fight to serve on its relatively small and undermanned Indiamen. The English Company selected only the most qualified applicants and granted them exemption from the Royal Navy’s press gangs.39

  If hundreds of thousands left Holland’s wharves to meet a miserable and terrifying end at sea or in pestilential Asian ports, the return of cargoes from the East was something else again. The VOC posted lookout ships on constant patrol in home waters, and prize money went to the captain whose crew first espied the homebound East Indiamen.

  High-ranking Company representatives sailed out to the returning vessels on sloops. Their first destination was the flagship, where the expedition’s commander gave them a brief report. What goods were on board? How many men and vessels had been lost? Had any strange vessels come near the fleet on their approach to the harbor? The greeting party then split up among the returning vessels. Each ship’s master gave up the leather bag containing diamonds and jewels as well as the ship’s log, which was carried back on the delegates’ sloop. The delegates then inspected the crew’s personal trading accounts and bags. They questioned the officers and crew about the voyage. Did the officers and mates have anything to say about the crew? Did the crew have any complaints about the ship’s command? The delegates used specialized shallow-draft boats called lighters to collect cargoes and prisoners, as well as the crew’s equipment, clothes, and personal trade goods, and inspected the ships’ guns and ammunition.

  Specially bonded lightermen came to break down the bulkheads and chute the spice bales down to the waiting boats. This hot dusty work burned the throat; the lightermen relieved their discomfort with gin and sugared
pretzels. Finally, the delegates descended to the ship’s bottoms, where they supervised the unloading of the heavy ballast goods: Javanese rice, Japanese copper, and lesser-grade Chinese porcelain. (Higher-grade porcelain traveled on the upper decks.) The filled lighters now sailed into the inner harbor, where they dispersed among Holland’s complex network of inland canals to the warehouses of the kamers (the Company’s regional branches). Their shipboard duties done, the delegates departed in their sloops and reassembled at the company’s headquarters, where they presented the leather bags of gems to the Heeren XVII to be opened.

  Now came the hard part: distributing the vast amount of goods without depressing prices. The VOC used many different arrangements, but the most common involved selling the entire stock of a given commodity at a fixed price, with the promise that the Company would refrain from releasing any future stocks for a predetermined period—in Dutch, the stilstand—so as to protect the buyer. For example, in 1624 a syndicate of three spice merchants contracted to buy over two million pounds of pepper at a wholesale cost of four million guilders with a stilstand of twenty-four months. It would be more than a century before the trading companies and merchants of any other nation were able to regulate commerce on so grand a scale.40

  So complete was the VOC’s control of the spice markets that for more than five decades after 1690, it could fix nutmeg and clove prices at a nearly constant level. This ability did not come without effort, especially considering the wild fluctuation in crop yields. In 1714, 1.5 million pounds of cloves were harvested in the north Moluccas; in 1715, two hundred thousand pounds. In 1719, the harvests were so large, and European demand was so small that 4.5 million pounds of cloves and 1.5 million pounds of nutmeg had to be destroyed. One year, the Dutch would plant aggressively; the next, they would exterminate tens of thousands of trees.41