Episode 17 is now online, come and get it! Today we meet the third group of Europeans to explore and exploit Southeast Asia, the Dutch, and learn how they used a corporation, the Dutch East India Company (also called the V.O.C.), to get involved in Indonesia.
(Transcript, added 02/20/2020.)
Episode 17: The Dutch East India Company
Greetings, dear listeners! If you have listened to this podcast before, you know that for the past few episodes, we have been covering events in the early modern era, from 1500 to 1800. In real time, the podcast has been doing this since 2017 began. I promised that Southeast Asia would become a more complicated place with the arrival of the Europeans, and I have introduced two European powers, Portugal and Spain. How do you like the story so far? Well, now it is time to introduce a third group of Europeans, the Dutch, and tell how they got involved in Indonesia. We will also introduce the English in this episode, but they won’t become an important player in Southeast Asia until the nineteenth century.
Among the European nations of the late sixteenth century, the Netherlands was the newest kid on the block. In ancient times a Low German tribe called the Batavi lived in the Rhine River delta; because of them the Romans named the surrounding land Batavia. Remember the name Batavia; you’re going to hear it again soon. Another important tribe in the area were the Frisians, who lived on the shore of the North Sea. Today’s Dutch have a mixed ancestry, being descended from both the Batavi and the Frisians, plus some Franks and Saxons from France and Germany respectively. The culture and language of all these tribes was mostly German, with a few Latin elements thrown in. Throughout the Middle Ages, ownership of the Netherlands passed from the Frankish kingdom, to the Holy Roman Empire, to the Duchy of Burgundy, to the Hapsburg family, and finally in 1516, to Charles V, the new king of Spain.
During the Middle Ages, the Dutch also developed the business sense they would become famous for later on. It looks like several enterprises encouraged this skill. From the fifth to the eighth century, Frisian merchants managed commerce on the North Sea, between the British Isles and continental Europe. That ended when Charlemagne conquered the Frisians, and after his empire broke up, the Vikings moved in to fill the naval vacuum on the North Sea. Then by the year 1000, the weavers of Flanders were producing the best woolen cloth in Europe, and because the local farmers could not provide enough wool to meet the demand of the weavers, the local merchants began importing raw wool from England, forming an international textile industry. Then after 1200, because the Dutch were members of the Holy Roman Empire, their cities joined the Hanseatic League, the great trading cartel of the late Middle Ages. With the arrival of the modern era, the Dutch would become the first Europeans to practice capitalism as we know it; for example, Amsterdam had one of the first stock exchanges. Also, the Dutch learned how to build and run ships at a lower cost than anybody else. As a result, by 1600 Amsterdam was the busiest commercial center in northern Europe, and half of the larger ships used by Venice, the great merchant city of the Middle Ages, were Dutch built.
Previously, the Dutch did not have a national identity of their own; they did not see themselves as being different from their German neighbors. That changed in the sixteenth century, when a distinct Dutch language emerged, and with the arrival of the Protestant Refomation, the northern Netherlands converted to Calvinism. However, this conversion alienated them from the kings of Spain. Tempers remained cool while Charles V was in charge, because he was born in Flanders, so the Dutch saw him as one of them, but the next king, Philip II, wanted nothing to do with their Calvinism or capitalism, and tried to stamp both out. The Dutch of the northern Netherlands responded by revolting in 1568, beginning a war for independence that would last eighty years.
We won’t cover the revolt of the Netherlands here, because that is part of European history, not Southeast Asian history. However, I have a feeling that another podcast will be covering it soon. A few episodes back I called Ben Jacobs the most enthusiastic listener to this series, but I did not mention that he has his own podcast, so I will take care of that oversight and mention it now. Since 2014 Ben has been podcasting about the Wars of the Reformation; his podcast is called Wittenberg to Westphalia. At the time of this recording, he has not gotten to the Eighty Years War yet, but this conflict is too big to ignore, especially when the Spanish Armada appears, so it is only a matter of time before he covers the Dutch struggle for independence. If you are interested in the conflicts that transformed medieval Europe into modern Europe, I heartily recommend you check out the Wittenberg to Westphalia podcast; Ben leaves no stone unturned when it comes to giving you the background you need to understand what is happening in this important time period.
By the time the Netherlands revolted, the Dutch knew plenty about what Spain and Portugal were doing in the Far East. Dutch crewmen had been employed on Portuguese ships, and the Netherlands was under Spanish rule when Spain sent its first expeditions to the Philippines; moreover, some of the spices brought back from the Spice Islands found their way to the markets of Antwerp and Amsterdam. In addition, a Dutchman named Jan Huyghen van Linschoten spent nine years working for the Portuguese at their Indian base, Goa, and he wrote a book called Itinerario, which gave detailed descriptions of India and the Far East and included maps. Much of this information had been kept secret by the Portuguese, and now the Dutch had it in the form of a travel guide!
After the battle of the Spanish Armada in 1588, the Dutch still had to fight Spain, but their homeland in the northern Netherlands was secure enough for them to go on the offensive. Therefore, when they entered the field of international trade and colonization, they did so dramatically. Instead of building their own empire from scratch, the Dutch goal was to take over the two Iberian trading networks. From 1580 to 1640, as we noted previously, the king of Spain was also the king of Portugal, but he neglected the Portuguese half of his empire, so the Portuguese colonies became the most vulnerable targets, the “low-hanging fruit,” so to speak. We also saw that the Portuguese had not been very good businessmen, and their colonies barely generated enough money for them to pay their bills; now the Dutch, who always kept an eye on the bottom line, would show the world how to make an empire profitable.
The Dutch began their venture by sending traders to compete with the Portuguese in the Spice Islands. Their expeditions would be larger than the Spanish and Portuguese ones we saw previously, because the Dutch found a better way to finance their ships. The rulers of Spain and Portugal had paid out of their pockets for the ships used on their expeditions; not only did this take a bite out of the royal treasury, but it made the expeditions dependent on the mood of the king; at least one historian has suggested that a king might have refused to pay for the ships if he had a hangover on the day an expedition was proposed. However, the Dutch did not have a king; their government was a republic in which a figure called a Stadtholder was the head of state. Instead of relying on royal financing, the Dutch floated companies, where merchants got together to raise enough money for their voyages by selling stock in those companies. When talking about teamwork, the billionaire J. Paul Getty once said, “I would rather have one percent of the efforts of a hundred people than a hundred percent of my own efforts,” and now the same kind of thinking was applied to fundraising. In this way, it became possible for an ordinary citizen, rather than a king, to make a difference in the world.
The first expedition, however, was almost a total disaster. Cornelis Houtman had been a spy in Lisbon, and was picked to lead the expedition because he knew more about the spice trade than any other Dutchman. Unfortunately, spies are expected to work alone, or as members of a small team; they make poor leaders. Houtman set sail in 1595 with four ships, the Amsterdam, Mauritius, Hollandia, and Duyfken, crewed by 248 men, but by the time they reached the Indian Ocean, seventy-one had died of scurvy, dysentery and malaria. Originally the expedition had planned a brief stop at Madagascar, but when they got there, they had to stay long enough to bury their dead. Today the location of the graves is unknown, but the place on Madagascar where the Dutch first landed is still called Dutch Cemetery. As for those who survived, they constantly fought among themselves, because they had no other way to relieve months of boredom.
When they got to the port of Bantam, on the west end of Java, they found that the Portuguese knew the Dutch were coming, and had ordered the natives to raise the price of their spices ridiculously high. Even worse, Houtman made a bad impression on the local rulers, insulting them when they would not let him wait until the next crop of pepper was harvested, instead of buying what was available now. Before long, he was bombarding the town and sending his men ashore to do some pillaging; they only took a break long enough to decide whether they should stab their prisoners, shoot them with arrows, or blow them out of cannon! I couldn’t find anything on which sentence they carried out. Sorry.
The sultan of Bantam sent messages to the other rulers on Java, warning them not to do business with the Dutch. As a result, Houtman had to forget about Java, so he sailed on to the next island, Madura. Here the natives had not heard what happened at Bantam, giving Houtman a chance to start with a clean slate. Instead, a misunderstanding led to another fight, when the local prince came with a flotilla of boats, welcoming the Dutch with a boat parade in their honor.
We noted in the previous episode that cockfighting is a Southeast Asian tradition. So are boat parades. Back in the day, if you were a Southeast Asian king, rajah or sultan, and you had visitors you wanted to impress, you held a boat parade. The court of Siam had the grandest boat parades of all, and because modern Thailand is still a monarchy, even today the Thais keep some royal barges in Bangkok, and bring them out occasionally to stage this spectacle.
Unfortunately the Dutch did not see the boat parade this way; they thought it was an attacking fleet. Houtman agreed with his crew and opened fire, killing everyone in the welcoming party, including the prince. After the battle, Houtman managed to get a small cargo of spices, but far less than his ships could hold, since naturally few natives wanted to trade with him. At this point the ships were both unseaworthy and undermanned, so the sailors burned the Amsterdam and put the Amsterdam’s crew on the other three ships. Houtman also decided that they would not go to the Spice Islands, but turn around at this point. They made a rest stop at Bali. Today Bali is a famous island paradaise, and two men liked the local girls so much that they chose to spend the rest of their lives here. For them, if nobody else, the story had a happy ending. Aside from that, the return trip wasn’t very exciting, because more than half of the crew was dead. On the remote south Atlantic island of St. Helena, the crew tried to take on fresh water and other supplies, but the Portuguese had a base on the island, and drove them away. When they reached the Netherlands, 87 crewmen, about one third of those who had left, were still alive.
Before we continue, I want to digress to point out another accomplishment made by one of Houtman’s ships. This was the Duyfken, a name which means “Little Dove.” In 1605 the Duyfken was sent on another expedition, this time commanded by Willem Janszoon. The purpose of this expedition was to map the southern coast of New Guinea, but the ship also stumbled upon Australia, becoming the first European ship to visit that continent. Since one of my fellow podcasters, Anthony Frisina, is Australian, I’m sure he will also mention this, in the History of Indonesia Podcast.
Back to the narrative. The one positive accomplishment of Houtman’s voyage was that it proved the Portuguese couldn’t keep competitors out of the Indies. The Dutch response was enthusiastic; no less than 22 Dutch ships left Europe in 1598, to improve on what Houtman had done. Even Houtman himself led one of the follow-up expeditions, this time going to Aceh. If you listened to Episodes 11 and 12, you will remember that Aceh was a state in northwestern Sumatra, governed by religious extremists. Here Houtman pushed his luck too far; he insulted the sultan and then ordered an attack — not a smart move! Aceh’s forces were led by a female admiral, Malahayati, and after several clashes, Houtman was killed.
Anyway, when you have 22 vessels, you can try sailing more than one route to your destination, and because more than one company was involved, they did just that; some ships took the Portuguese route around Africa, while others took the Spanish route through the Straits of Magellan. Those that went by way of the straits fared no better than the Spanish ships, proving, in case anyone still wasn’t convinced, that the westbound passage across the Pacific took too great a toll in ships and lives to be competitive with the eastbound passage across the Indian Ocean.
The five ships in the first squadron to cross the Atlantic lost more than half their men to scurvy, starvation and fevers, before they reached the straits, and then they had to wait four months before entering, due to the wind constantly blowing the wrong way. One ship had such a rough time in the straits that it waited for the second squadron, and then gave up and returned to the Netherlands. Of the four that got through, one ship was captured by the Spaniards near Valparaiso, Chile, and one was sunk by a storm. The third ship, the Liefde, carried a cargo of woolen clothing; and the captain decided he wouldn’t be able to sell this in the tropics, so instead of heading for the Indies, he took a course that went straight to the north Pacific. Because of this, the Liefde became the first Dutch ship to visit Japan. The last ship made it to the Moluccas, only to be captured by the Portuguese.
Then came the second squadron, four ships and 248 men commanded by Olivier van Noort. Van Noort tried to imitate Sir Francis Drake by raiding Spanish ships as they went along, but instead his ships suffered almost as badly as the first squadron. Along the coasts of Brazil and Patagonia, they were attacked more than once by the local Indians. One ship was lost to a storm before it reached the straits, and one reached the Spice Islands only to run aground upon arrival. The other two made it to the Philippines, and engaged two Spanish ships in Manila Bay; because the Spaniards outnumbered the Dutch, one Dutch ship was captured. The last ship returned to the Netherlands by way of Indonesia and the Cape of Good Hope; van Noort and 45 of his men completed the journey. In terms of profits, van Noort’s expedition barely broke even; its main achievement was becoming the fourth expedition to circumnavigate the world, after the voyages of Magellan, Drake, and Cavendish.
It was the largest squadron going around Africa that found the best way to sail from Europe to the Far East. Eight ships, commanded by Jacob van Neck, cast off in May 1598. One hundred years earlier, Vasco da Gama had proven that if you sail into the middle of the south Atlantic, and turn east when you reach the same latitude as the Cape of Good Hope, you can cut travel time from Europe to the Cape in half, because the winds and currents closer to Africa tend to push ships back to Europe. By following the same course, the squadron got to the Cape in only three months. But right afterwards, a severe storm split the squadron into two groups. The group van Neck was in had three ships; it went to Madagascar, resupplied itself, and then it sailed straight across the Indian Ocean, making a beeline to Java. The other group could not land on Madagascar because of more bad weather, and landed on the nearby island of Mauritius instead.
Until now, most European ships in the Indian Ocean had followed the ocean’s rim, sailing close to East Africa, Arabia and India. While this kept land nearby, it also meant the ships would pass Portuguese forts in places like Goa, and that was only a good idea if you were Portuguese. Even better, because van Neck sailed in the middle of the ocean, his ships caught a strong tailwind. Below latitude 30° South, the prevailing winds blow from west to east, like those in the northern temperate latitudes, but because the southern hemisphere has less land getting in the way, the southern winds are stronger, and the farther south you go, the more powerful these winds get. Today’s sailors refer to these winds as the “Roaring Forties,” the “Furious Fifties,” and the “Shrieking Sixties.” After 1600, Dutch ships crossing the Indian Ocean would head due east from South Africa, in order to sail in the Roaring Forties for as long as possible, and only turn north at the last moment, before they came to Australia.
By catching the Roaring Forties, van Neck arrived at Bantam in November, six months and three weeks after leaving Europe. From Bantam he continued to the Spice Islands, so he could buy cloves and pepper at the wholesale price, and loaded the three ships with this cargo. On December 30 he returned to Bantam, and here he got to meet the missing five ships, which straggled into port on the same day. They celebrated their reunion with a big New Year’s party, and van Neck filled a fourth ship with spices. Then he sent the remaining four ships to load up in the Spice Islands, while he took the four loaded ships home. They reached Amsterdam in July 1599, and the rest of the ships returned by September 1600. The whole city was overjoyed by this news; not only did all the ships make it back, but the stockholders who paid for the expedition received a very nice return of 400 percent on their investment.
Now that they knew how to do it, there was no shortage of Dutchmen willing to go to Indonesia; 65 ships headed east in 1601. However, they weren’t alone; a fourth European power, England, had taken an interest in the wealth of the Far East. In 1594 an English privateer, James Lancaster, crossed the Indian Ocean, came to the island of Penang, off the west coast of Malaya, and stayed there for three months, attacking every ship he saw during that time. Then in 1601 the English followed the Dutch example and floated a company, the famous English East India Company, to support future expeditions in the Indian Ocean and beyond. Lancaster led the Company’s first expedition, which left England in 1601 and returned in 1603. In Indonesia he first secured an alliance between England and Aceh, and then at Bantam he set up England’s first trading post in Southeast Asia, to manage the spices brought there from the Moluccas.
For his success, Lancaster was knighted by the new king of England, James I, and the Dutch realized that if they wanted to take over the spice trade, they needed to act in unison. While the Dutch had more ships available, they were divided between several companies, and they competed with each other almost as fiercely as they had competed against foreigners. Therefore, in 1602 the Dutch companies involved united to form a single company with monopoly rights, the Vereenigde Ost-Indische Compagnie. That translates to Chartered East India Company in English, but most of the time it is called the Dutch East India Company, or simply the V.O.C. To finance the venture, £540,000 worth of V.O.C. shares, were issued on the Amsterdam stock market. This was an awesome amount in those days, worth more than $153 million in today’s American dollars. By contrast, the stock issued for the English East India Company’s Initial Public Offering was worth one eighth as much. Nevertheless, the shares were all sold in a month.
The V.O.C. was the first multinational corporation in history, and it was a complete success; by 1613 the Portuguese had been driven out of the spice trade. It was most aggressive during the years when Jan Pieterszoon Coen was the governor general, the highest-ranked Company official in Asia; he held that post from 1618 to 1623 and from 1627 to 1629. Coen quickly decided that the Company needed a better place to do business than Bantam, so in 1619 he seized the port of Jakarta, and renamed it Batavia (I told you we would hear that name again!). That became the Company headquarters. The sultan of Bantam told him he could keep Batavia on condition that it remain an unfortified trading post, but because it grew quickly after the Company moved in, Coen built walls for it anyway.
Outside of Indonesia, the Dutch goal was to evict the Portuguese and Spaniards from as many outposts as possible. They got off to a bad start, besieging Manila in 1609, 1616, and 1646, but each time the Spanish garrison was strong enough to keep the Dutch from taking the city. Likewise, when they tried to take Macao in 1622, Spain sent ships from Manila to successfully defend it. The Dutch also stationed three ships in the Philippines from 1640 to 1641, in an attempt to capture the galleon loaded with silver that was sent from Mexico every year, but the galleons escaped by taking a different route to Manila. However, the Dutch were more successful elsewhere; they took Taiwan in 1624, Malacca in 1641, and between 1638 and 1658 they conquered the coast of Sri Lanka, while an independent state remained in the interior. To the north, the Japanese expelled all foreigners from their country in 1641, except for the Dutch, who were allowed to keep an outpost on a small island in Nagasaki Harbor. Finally, in 1648 the Eighty Years War ended in Europe, and peace came to the overseas European colonies as well. The end result was that Spain remained in control of the Philippines and the Portuguese held onto Macao, Goa, and Timor, but now all commerce in the Far East was under V.O.C. control. Now that the war was over, the Dutch were pleased to fit the remaining Iberian outposts into their trading system; they could forgive any enemy who became a customer of theirs.
The V.O.C. brought the Netherlands an annual profit averaging $750 million in today’s US dollars. For the shareholders this worked out to a dividend of 18% during the Company’s best years. But only a fourth of its trade went between Asia and Europe. Instead of committing all their resources to one money-making scheme, the shrewd Dutch merchants used most of their ships in an intra-Asian trade network. Most of this trade involved shipping rice from places that grew rice to places that didn’t have enough of it. Other commodities were crops introduced to Java from elsewhere, like potatoes, yams, peanuts, corn, sugar and coffee. The coffee yielded fantastic profits until prices tumbled in 1727. So next time you have Sumatran coffee, you can thank the Dutch for introducing coffee to Indonesia.
Meanwhile, the V.O.C. faced challenges from native rulers, since it was Dutch policy to leave them in charge as long as they were willing to do business. In 1661 they lost Taiwan to a Chinese pirate named Zheng Chenggong, known to Europeans as Coxinga. The biggest threat came from Sultan Agung of Mataram, who dreamed of conquering all of Indonesia and restoring the old Majapahit empire. Agung spent the first fifteen years of his reign, from 1613 to 1628, defeating rivals in the small coastal states. When he got done he was master of most of Java, ruling all of it except Batavia, Bantam and the eastern tip of the island; he also ruled all of Madura. Then he attacked the Dutch by using a variant of the Trojan Horse trick; he sent a fleet of merchant ships to Batavia with cargo holds full of armed men, and the ruse very nearly succeeded. In the next year, 1629, he sent a huge army to take Batavia by land, but because he lacked a navy to accompany it, the Dutch destroyed his supply ships, leaving the Javanese too weak from hunger to attack the city when they arrived. After Sultan Agung’s death in 1645, the Dutch began to roll back the borders of Mataram from their doorstep.
It took most of the seventeenth century for the V.O.C. to gain a total monopoly over the spice trade. The biggest leak came from the Sultanate of Makassar, on nearby Sulawesi; this sultan was willing to sell spices to anybody, including the Portuguese, Spanish, English and natives, and provided a safe harbor for their ships. Cornelis Speelman, an admiral nicknamed the “Sword of the Company,” put an end to this by conquering the Sultanate of Tidore in 1667, and Makassar in 1669; the latter required two expeditions and a lengthy siege. From 1681 until his death in 1684, Speelman was also the Company governor-general; during that time he conquered Ternate and reduced Mataram and Bantam to vassalage. By 1705 about one third of Java was directly ruled by the V.O.C., and the rest was held by friendly sultans. The Moluccas were also under direct company control, but on other islands like Sumatra and Borneo, the Dutch limited their influence to small enclaves. The V.O.C. only liked military action when Coen and Speelman were in charge; the rest of the time it preferred to keep patrols to the minimum needed for security, because capital ships tie up capital.
Competition from the English East India Company had to be handled carefully. While the Dutch were fighting for independence from Spain they needed England’s military support, so the V.O.C.’s directors in Amsterdam were willing to let English ships grab a few cargoes of spices. However, the V.O.C. men in Indonesia did not see the need for restraint, and hostilities broke out as soon as they felt they could get away with it. The worst incident came in 1623, right after Jan Coen’s first term as governor-general ended; one of his subordinates massacred eight English workers at their factory on Amboina. After that the English East India Company scaled back its activities in Indonesia and concentrated on India instead. In that way England and the Netherlands reached an unwritten agreement; England would not interfere with the Dutch in Indonesia, in return for a free hand in India. In 1685 the English built a trading post at Bencoolen, on Sumatra’s southwest coast. Because Bencoolen was off the beaten path, and it failed to tap into the west Sumatran pepper trade, the Dutch left it alone.
It was a combination of bad business practices, corruption among Company employees, and a profitless war that brought down the Company in the late 18th century. The first mistake was in 1740, when the Dutch let fright take command of reason. The rapidly growing Chinese community in Batavia gave rise to fears that the Chinese and Javanese would join together in an anti-Dutch revolt; if Batavia was lost, the V.O.C. would be finished. Most alarming was the fact that many of the Chinese immigrants were unemployed. Why not send them to the Dutch colonies in Sri Lanka and South Africa, where skilled labor was in short supply? That seemed like a satisfactory solution; the Chinese would have jobs, the Dutch would feel safer, and everybody would be happy. Unfortunately nobody asked the Chinese what they thought about it before they were rounded up for deportation. Rumors said that the Dutch actually intended to throw their captives overboard once the ships went out to sea. Fearing a Chinese riot, the Dutch and Indonesians ran amok first, killing the Chinese they found and putting the rest to flight. The result was the same as when the Spaniards tried to get rid of their Chinese community in Manila. Without the Chinese, business stagnated, and eventually the feared immigrants had to be invited back to Batavia.
The Company’s fate was sealed in 1780 when the Netherlands declared its support for the American Revolution. From the Dutch viewpoint the American Revolution was a disaster; the Dutch got nothing when the American Patriots won, England sank more Dutch ships than could be replaced, and in the treaty ending the war, the Dutch were forced to give up all monopoly trading claims. Indonesian ports were opened to foreign shipping, and the V.O.C. found it could no longer compete with the other traders. During the final years, Dutchmen remarked that the V.O.C. acronym had a new meaning: Vergaan Onder Corruptie, or “Perished By Corruption.” The Company declared bankruptcy in 1791, and in 1799 its holdings were taken over by the Dutch government. It was the end of an era in Dutch-Indonesian relations, but the company’s influence lingered on; until the mid-twentieth century, Indonesians referred to any European authority over them as the kompeni.
Alright, that’s enough for this episode. We have reached the year 1800 with Indonesia, and in the next few episodes we will do the same thing with the mainland states. But first we need to take care of two states that will disappear before 1800 — Arakan and Lan Xang. The best years for Arakan fell between 1430 and 1666, so next time we will take a closer look at that coastal kingdom, and then head east to see the fall of Lan Xang, the first Laotian state. And we will also learn about another attempt by a meddlesome European to take control of a mainland kingdom, this time Siam.
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