by Lisa Jardine
At the Royal Society in London it was believed that established patterns of trading and trafficking in Amsterdam explained the dramatic growth in knowledge there, and the corresponding growth in wealth:
The Hollanders exceed us in Riches and Trafic: They receive all Projects, and all People, and have few or no Poor: We have kept them out and suppress’d them, for the sake of the Poor, whom we thereby do certainly make the poorer.17
Admiration for Dutch financial and commercial institutions was widespread in England after the Restoration. In 1668, Sir William Temple, newly appointed English Resident Ambassador to the United Provinces, wrote:
In this city of Amsterdam is the famous Bank, which is the greatest Treasure either real or imaginary, that is known any where in the World. The security of the Bank lies not only in the effects that are in it, but in the Credit of the whole Town or State of Amsterdam, whose Stock and Revenue is equal to that of some Kingdoms.18
Seventeenth-century clavichord lid, decorated with an allegory of Amsterdam as the centre of world trade.
Temple was probably exaggerating, but his envy of the financial resources Amsterdam could muster, particularly in time of war, was sincere, and was shared by others in England looking to improve the position of the English crown and government in relation to the large amounts of wealth in private hands. The superior administrative arrangements in the Dutch Republic were appreciated even before 1660. In the late 1630s an observer in Holland, William Brereton, reported that:
The customs and excise here [Amsterdam] are very great, but I could never attain to an exact knowledge thereof, though I applied myself to enquire; but this I heard, that this town affords as great revenues, to maintain the wars to the States, as four provinces – Zeland, Utrech, OverIsell and Friseland.19
While a petition to Cromwell during the Commonwealth period expressed admiration for the commercial shrewdness of the Dutch, and complained that:
It is no wonder that these Dutchmen should thrive before us. Their statesmen are all merchants. They have travelled in foreign countries, they understand the course of trade, and they do everything to further its interests.20
The pivotal role that Amsterdam played on the world stage as a hub of exchange for goods and knowledge, down to the 1688 Dutch invasion of England (and some years beyond), is well represented symbolically by the Amsterdam Bourse, or stock exchange. The magnificent Bourse – an open central courtyard, surrounded by colonnaded neoclassical buildings – opened for business in 1611.
Apart from grain, for which there was a separate corn exchange, every other kind of commodity was traded at the Bourse. It was the place to charter ships, to insure their cargoes, to obtain credit, to make payments, to rent warehouse space and to hire labourers for loading and unloading vessels. One went there to learn what was going on politically, at home and abroad. ‘The concentration of functions made the Bourse the nerve centre of Amsterdam’s commerce. No one who was in any way involved in wholesale trade could afford not to appear on the Bourse.’21
The Bourse was also where information of all kinds, from all around the globe, was exchanged and discussed, and turned into knowledge of prices, markets and trading opportunities. Recently, historians of science have argued convincingly that it was the concentration of precise, highly specific information on an astoundingly wide range of topics, from all over the world, that provided the conditions for the growth of modern science and medicine.22
The Bourse opened for only one hour a day – from 11 a.m. till noon – further adding to the sense of an urgently concentrated occasion and location for the transaction of goods and knowledge. At noon, tourists were allowed in, to admire the building and the activities with which it would still be humming after the merchants and brokers had stopped trading. Outside trading hours too, some of the more exotic objects which had arrived for trading were taken away for scrutiny, to assess their value to learning and their potential for the learned professions.
Economic historians are broadly agreed that after the Restoration, England introduced financial systems and institutions in London modelled on the Dutch, though they differ somewhat in their accounts of how closely emulative the English arrangements were, and how successfully the organisational arrangements were transplanted. Such detail need not, though, concern us here. What matters for the present story is that by the 1680s there was a recognisable similarity between financiers and their organisation in London, and those in Amsterdam. What this produced was a mutual sense of understanding and compatibility which eased and facilitated financial transactions. Dutch bankers could do business with their counterparts in London, and vice versa. By contrast, French business with both nations declined over the same period.
The beginnings of those distinctive and much-emulated Dutch mechanisms governing trade and finance are to be found in arrangements put in place in the founding charter of the Dutch East India Company (VOC). ‘The origin of modern stock exchanges that specialise in creating and sustaining secondary markets in the securities issued by corporations goes back to the formation of the Dutch East India Company in the year 1602.’ So writes one of the foremost authorities on Anglo–Dutch economic history.23
The immediate motive for the formation of the VOC was twofold: to avoid the strain on financial resources caused by competition between commercial trading ventures operating independently, and to consolidate profit in order to finance the military objectives necessary to withstand the expansionist ambitions of France and Spain.24 The founders of the VOC took advantage of the fact that a willingness to pool resources against weighty outside odds was a deeply ingrained Dutch habit. Taxation on a per capita basis, to raise the money to repair dykes, or to secure vulnerable borders against foreign aggressors, was a standard Dutch practice – one for which successive English administrations expressed envy down to 1688, after which similar taxes were levied in England.
Bottle cabinet containing decorated Japanese porcelain bottles, decorated with tendril and plant motifs, each base marked with the initials of the Dutch East India Company.
Economic historians today on the whole agree that the activities of the VOC and its English competitor, the East India Company, in the seventeenth century established the conditions for and management of international trade which have endured to the present day. Fundamental to these were the innovative arrangements for distributing risk evenly among investors.
Under the charter of the VOC, the States General empowered the new company to build forts, maintain armies, and conclude treaties with the rulers of the Asian territories with which it traded. To this end, the charter of the Company provided for a venture which would continue for twenty-one years, with a financial accounting only at the end of each decade (instead of following each completed voyage). All investors would be responsible for the Company’s debts, in proportion to their investment. This made the VOC what we now call a limited liability company.
It was further decided that the capital invested at the beginning of the venture would be fixed, and that investors who wished to liquidate their interest in the VOC could sell their share to a buyer at the Bourse, as if it were a physical commodity. In the early years, a large number of small founding shareholders exercised this option.25
While the WIC had sole charge of the New Netherland colony, and administered it on behalf of the States General, until forced to relinquish some control to local residents, the VOC was enormously successful in trade in Indonesia, the Moluccas and around the coast of India, where it maintained virtual commercial monopolies against the English and Portuguese who also traded in the region. At the end of its first ten-year trading period, during which the original trading capital had been enlarged by more than 40 per cent, dividends were paid to shareholders in the form of a distribution of pepper and mace. By the Company’s calculation, the value of the distributed spices amounted to a 125 per cent dividend – though many shareholders doubted whether they could actually realise that return in cash. Later returns settled d
own, and after 1650 they ran at about 4 per cent per annum.
After the mid-seventeenth century the VOC’s importance to the Dutch economy resided chiefly in its enormous size. It paid dividends and interest averaging nearly two million guilders a year throughout the period 1660–1780. It employed thousands of men, injecting between three and five million guilders of wages into the otherwise flat Dutch economy, while between one and two million guilders more went into the economy in the form of orders for supplies.
Competition between the VOC and the English East India Company was intense, and was responsible to a large extent for Anglo–Dutch friction throughout the seventeenth century. Given the financial power of both Companies in their home nations, it is not surprising that each exerted pressure on its respective government at key moments – notably in 1650 and 1688 – when it appeared possible that a close alliance between the English and Dutch states might amalgamate the two trading companies as part of one joint endeavour. And competition between the two Companies ensured that the financial mechanisms developed by the Dutch quickly found their way into the English methods of dealing with import–export, customs and excise, taxation, record-keeping and accounting by emulation. By the time the two nations effectively came under one sovereign rule in 1688, it was a comparatively easy matter to integrate – or at least, harmoniously operate side by side – their administrative and business systems.
While the Dutch West India Company and the English King were at loggerheads over New Netherland and the island of Manhattan, and while the English East India Company was casting an increasingly envious eye on the trading activities of its Dutch VOC rival along the west coast of Africa, farther to the east the Dutch East India Company was developing a robust international trade in an area close to its gardening-nation heart: horticultural exotica and pharmaceuticals. Once again, its interest in the region came into collision on a regular basis with the English, who were also intent on securing exclusive rights to new, lucrative types of merchandise and accompanying forms of new knowledge in medicine and horticulture.
We saw in the context of gardens and gardening how global trade literally transformed the English and Dutch landscapes, introducing species of trees, shrubs and flowers previously entirely unknown in Europe. The biggest transformation, however, was in the realm of new knowledges – particularly medical knowledge. Here, as so often before, Sir Constantijn Huygens may serve as our witness.
In 1674 the elderly Sir Constantijn paid a visit to the English Resident Ambassador, Sir William Temple, at his home in The Hague. Temple was housebound with a bad attack of gout, an affliction that had troubled him for a number of years. He later published an account of the visit:
Talking of my illness, and approving of my obstinacy against all the common prescriptions; [Sir Constantijn] asked me whether I had never heard the Indian way of Curing the Gout by Moxa? I told him no, and asked him what it was?
He said it was a certain kind of Moss that grew in the East-Indies; that their way was, when ever any body fell into a Fit of the Gout, to take a small quantity of it, and form it into a figure, broad at bottom as a twopence, and pointed at top; To set the bottom exactly upon the place where the violence of the pain was fixed, then with a small round perfumed Match (made likewise in the Indies) to give fire to the top of the Moss; which burning down by degrees, came at length to the skin, and burnt it till the Moss was consumed to ashes.
That many times the first burning would remove the pain; if not, it was to be renewed a second, third and fourth time, till it went away, and till the person found he could set his foot boldly to the ground and walk.26
Temple asked Huygens how he had heard about this remedy, and he told him that he had read about it in a book recently published by a Dutch physician who had spent a lot of time in the East Indies and Japan. ‘Though he could not say whether experiment had been made of it here, yet the Book was worth reading; and for his part, He thought He should try it if ever he should fall into that Disease.’
The next day Huygens brought a copy of the book, which Temple, a fluent Dutch-speaker, read at one sitting. He was sufficiently impressed by its argument to agree to try the remedy himself. He placed the pellet of prepared moxa ‘just upon the place where the first violence of my pain began, which was the joint of the great toe’, and lit it, as instructed. The treatment was a considerable success:
Upon the first burning I found the skin shrink all round the place; and whether the greater pain of the fire had taken away the sense of a smaller or no, I could not tell; but I thought it less than it was: I burnt it the second time, and upon it observed the skin about it to shrink, and the swelling to flat yet more than at first. I began to move my toe, which I had not done before; but I found some remainders of pain.
I burnt it the third time, and observed still the same effects without, but a much greater within; for I stirred the joynt several times at ease; and growing bolder, I set my foot to the ground without any pain at all.27
The book Huygens had given Temple was by Hermann Busschoff, a Dutch minister of the Reformed Church who had served in Taiwan, where he had been persuaded by his wife to try moxa for his own painful gout, with considerable success. He published his short treatise on the subject in Utrecht in 1674, so it was hot off the press when Huygens passed this brand new medical knowledge from the Far East to his English friend.
Some time later, Huygens wrote to the secretary of the Royal Society in London, sending him a copy of Busschoff’s book, which the Society had translated into English. The Dutch miscroscopist Anton van Leeuwenhoek, who had also read it, proceeded to examine the moxa pellet under his microscope, and sent his observations to the Royal Society in 1677. So by this time the use of moxa to treat gout had passed by print and word of mouth from the VOC’s factories in the Far East to the Dutch Republic, and thence to Dutch and English individuals, who passed the information and Busschoff’s book to London. There the Royal Society took it up, and pursued it ‘scientifically’.28
In July 1681, Willem ten Rhijne, a physician and botanist who had served with the VOC in Java and Japan and had known Busschoff personally, wrote to the secretary of the Royal Society in London to say that he had various observations, collected during his time in the Far East, which he would be happy to communicate to the Society, and that he had a treatise of his own on the use of moxa and acupuncture, as well as on methods of diagnosis by taking the pulse, as practised by the Chinese, which he would like to send to be printed in England.
The letter was brought to a meeting of the Royal Society on 18 January 1682, and its contents were discussed at considerable length. A medical member thought that the virtue of the moxa lay in the burning and cauterising effect alone, but the acting secretary, Robert Hooke, believed that the plant must have some ‘peculiar virtue’ in its substance, perhaps in its ‘solid oil’. Ten Rhijne’s remarks about Chinese use of the pulse in diagnosis led the President, Sir Christopher Wren, to note that the Chinese ‘were extremely curious about feeling the pulse of the patient’, not only via the wrist, ‘but in divers other parts of the body, by which they pretended to make great discoveries about disease’. Hooke then suggested that in feeling the pulse one might discern the different states of the parts of the body.29
Such was the interest aroused by ten Rhijne’s communication that the Fellows requested that it be followed up immediately. A letter of reply was written, in which ten Rhijne was asked to supply any further observations he had about the medicine or natural history of Asia, and was given a list of subjects the Society was particularly interested in. At the end of March the manuscript of ten Rhijne’s treatise arrived. It was published in Latin, with some additional materials in the original Dutch, in 1683. The book contained not only ten Rhijne’s work on acupuncture, but also a general discussion of gout, and its treatment using moxibustion, including four Japanese diagrams showing the points to which the moxa and the acupuncture needles ought to be applied.30
There could, surely,
be no more eloquent an example of the enthusiastic exchanges, amounting to a fusion of knowledge and practice, between Dutch and English medical men and scientists. The fact that the understanding acquired from Asia of the application of moxa, and acupuncture therapeutically, soon receded within the European medical repertoire, not to re-emerge until the twentieth century, only adds piquancy to its enthusiastic seventeenth-century reception.
A number of those to whom I have spoken as I have been writing this book have been quick to raise the one area of Anglo–Dutch development of which they are already aware – the adoption of Dutch forms of banking after 1688, leading to the foundation of the Bank of England in 1694. So I close this chapter with a story, to suggest that like so much else I have talked about, Dutch influence on English banking methods predates by some years the landing of William III’s invading army at Torbay. Intriguingly, the person who greatly admired Dutch banking, and was responsible for the adoption of its methods in London, is better known for his alleged intense antipathy for all things Dutch.31
We met George Downing earlier in this chapter, as the man who used his upbringing in and understanding of the English and Dutch colonial settlements in the New World to mislead Peter Stuyvesant into not appreciating the gravity of the threat to New Netherland in 1664, thereby contributing to the end of the Dutch colonial venture in North America. As his contemporaries were quick to point out, Downing’s life fails to fit conventional accounts of the career of a prominent seventeenth-century politician. One called him ‘a sider [turncoat] with all times and changes, well skill’d in the common cant’, another ‘a crafty fawning man … ready to turn to every side that is uppermost, and to betray those who … thought they might depend on him’. In other words, he crossed boundaries, in the way this book has been highlighting, and therefore escapes classification as belonging to any single faction, allegiance, or even nation.