The Dutch East India Company

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“This day 14 August A.D. 1642, we set sail from the roads of Batavia with two ships, the Yacht Heemskerck and the Flute Zeehaen, the wind being north-east with good weather…”

These are the opening words of Abel Tasman’s journal.

On August the 14th 1642 two Dutch ships; the Heemskerck and the Zeehaen, well manned and well provisioned, slipped their moorings in Jakarta. The ships were searching for the great ‘Southern Land’ believed to exist somewhere in the Southern oceans. Abel Janszoon Tasman had command of this voyage of discovery for the Dutch East India Company.

Jakarta, then known as Batavia, was a Dutch colony, but the word ‘colony’ seems a rather inadequate description. Batavia was one of several similar ‘colonies’ that were established, and entirely managed by a private company… the Dutch East India company.

VOC coin.

A coin issued by the VOC in 1780.

The Dutch East India company, or more properly the VOC (Vereenigde Oost-Indische Compagnie) was an extraordinary enterprise. It had secured a 25 year monopoly from the Dutch government, to conduct trade in the East Indies. It had simultaneously acquired some very unusual terms; it had the right to establish colonies and to raise arms to defend them, it could conscript and imprison, and it could issue its own currency.

Externally the VOC appeared in many ways to operate like a Sovereign state rather that a business. It established ‘colonies’ wherever it traded, and built fortresses and held them by force. It warred without reservation on the local populations if they posed a threat to their commercial objectives.

The Dutch colonies established by the VOC were trading garrisons; secure points, strategically placed around the globe, through which their international trading business was conducted. And the VOC owned all points of that supply chain. Their business was trading goods between Asia and the Far East, and Europe; and it was enormously profitable.

The VOC was incredibly successful as a business. It was the first company to sell shares, and those shares yielded on average 18% p.a. for the next 200 years. The VOC was the world’s first global enterprise, and in today’s terms would be compared to Google, Sony, or Apple.

The Capital of its colony in Indonesia was Batavia, which we now know as Jakata. Batavia was the hub for all trade around the Malay Peninsula and beyond. There, the VOC installed a Governor General. The VOC was however, first and foremost a company. Its objective was not to conquer the globe for the glory of the Nation, it was for profit. So, unlike a sovereign state, the Governor General had thoroughly constrained power… he was a manager, not a ruler. The role ‘Governor General’ might be more usefully thought of as the Chairman of a management team. That team was called the ‘Council of the Indies’, and its sole purpose was to manage profit returns to the Head Office in the Netherlands.

The VOC fleet was huge, and its staff numbered in the thousands. Its ships sailed from Europe to their Colony at the Cape of Good Hope, and then outwards across the Indian Ocean, to Batavia and beyond. They sourced silver, gold, silks, and all manner of spices and other valuables, from countries across the Far East; Madagascar, India, China, Japan, Malaysia and Korea, and shipped these goods back to Europe. The scale of trade was enormous, and so was the profit. On one voyage, in command of four ships, Abel Tasman brought goods back to Amsterdam worth 3 million guilders.

The aim of the VOC was always profit, and to protect and grow that profit. They sought constantly to improve efficiency; by finding suitable goods to back-load to the ‘Indies’, and by improving the routes they sailed. But the benefits won from these efficiency gains were limited. For significant profit growth they needed to expand both the quantity and the range of valuables that they could carry to Europe. Thus, there was a constant quest for new goods, and new territories to trade with.

By 1642 the globe was pretty well discovered, but for centuries there had been rumours about the existence of a great ‘Southern Land’.

Typus Orbis Terrarum. 1564

This 1564 map of the world, ‘Typus Orbis Terrarum’, indicates a huge unknown Southern Land.

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