Dutch East India Company
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Dutch East India Company / United East India Company / United East Indies Company
 |
|
Native name
|
Vereenigde Oost-Indische Compagnie (VOC) |
|
|
Publicly traded company |
| Industry |
Multi-industry[note 1] |
| Fate |
Dissolved |
| Predecessor |
Voorcompagnie (Compagnie van Verre, Brabantsche Compagnie, Magelhaensche Compagnie) |
| Founded |
20 March 1602[1] |
| Founder |
Johan van Oldenbarnevelt |
| Defunct |
31 December 1799 |
| Headquarters |
Amsterdam, Dutch Republic (main headquarters)
Batavia, Dutch East Indies (overseas administrative center) |
|
Area served
|
Europe-Asia (Eurasia)
Intra-Asia |
|
Key people
|
Heeren XVII/Gentlemen Seventeen (Dutch Republic, 1602–1799)
Governors-General of the Dutch East Indies (Batavia, 1610–1800) |
| Products |
Spice, silk, porcelain, metals, livestock, tea, grains (rice, soybeans), sugarcane industry, shipbuilding industry |
View of
Table Bay with ships of the Dutch East India Company, c. 1683. In the 1600s the size of the Dutch
merchant fleet probably exceeded the combined fleets of England, France, Spain, Portugal, and Germany.
The
United East India Company or the
United East Indian Company, also known as the
United East Indies Company (
Dutch:
Vereenigde Oost-Indische Compagnie; or
Verenigde Oostindische Compagnie in modern spelling;
VOC), referred to by the
British as the
Dutch East India Company,
[2] or sometimes known as the
Dutch East Indies Company, was originally established as a
chartered company in 1602, when the
Dutch government granted it a 21-year
monopoly on the Dutch
spice trade. A , it is also often considered to be the world's first truly
transnational corporation.
[note 2][3] In the early 1600s, the VOC became the first company in history to issue
bonds and
shares of
stock to the general public.
[note 3] In other words, the VOC was the world's first formally
listed public company,
[note 4] because it was the first
corporation to be ever actually listed on an official (formal)
stock exchange.
[note 5][6] As the first historical model of the quasi-fictional concept of the
megacorporation, the VOC possessed quasi-governmental powers, including the ability to wage war, imprison and execute convicts,
[7] negotiate treaties, strike
its own coins, and
establish colonies.
[8]
multinational company
The VOC played a crucial role in
business,
financial, socio-politico-economic, military-political, diplomatic, and maritime history of the world. In the
early modern period, the VOC was also the driving force behind the rise of
corporate-led globalization,
corporate identity,
corporate social responsibility,
corporate governance,
corporate finance, and
financial capitalism. As a transcontinental
employer, the company was an early pioneer of outward
foreign direct investment at the dawn of modern capitalism. With its pioneering institutional innovations and
powerful roles in world history, the company was considered by many to be the first major and the most influential corporation ever.
[note 6][9][10][11][12] In terms of military-political history, the VOC, along with the
Dutch West India Company (WIC/GWIC), was seen as the international arm of the
Dutch Republic and the symbolic power of the
Dutch Empire. The VOC was historically a military-political-economic complex rather than a pure
trading company (or
shipping company). In terms of maritime exploration history of the world, as a major force behind the
Golden Age of Dutch exploration and discovery (ca. 1590s–1720s), the VOC-funded exploratory voyages such as those led by
Willem Janszoon (
Duyfken),
Henry Hudson (
Halve Maen) and
Abel Tasman revealed largely unknown landmasses to the civilized world. In the
Golden Age of Netherlandish cartography,
the VOC navigators and cartographers helped shape geographical
knowledge of the modern world as we know them today. The commercial
networks of Dutch transnational companies, like the VOC and
GWIC, provided an infrastructure which was accessible to people with a scholarly interest in the exotic world.
The company was formed to profit from the
Malukan spice trade, and in 1619 it established a capital in the port city of
Jayakarta, changing the name to
Batavia (
modern-day Jakarta).
Over the next two centuries the Company acquired additional ports as
trading bases and safeguarded their interests by taking over surrounding
territory.
[13] It remained an important trading concern and paid an 18% annual
dividend for almost 200 years.
[14] Statistically, the VOC eclipsed all of its rivals in
international trade for almost 200 years of existence.
[15][16]
Between 1602 and 1796 the VOC sent almost a million Europeans to work
in the Asia trade on 4,785 ships, and netted for their efforts more than
2.5 million tons of Asian trade goods. By contrast, the rest of Europe
combined sent only 882,412 people from 1500 to 1795, and the fleet of
the
British East India Company (
EIC),
the VOC's nearest competitor, was a distant second to its total traffic
with 2,690 ships and a mere one-fifth the tonnage of goods carried by
the VOC. The VOC enjoyed huge profits from its spice monopoly through
most of the 17th century.
[17]
Due to structural changes, the
Fourth Anglo-Dutch War, and French invasion of the Netherlands, the company was nationalised in 1800,
[18] and its possessions and debt were taken over by the government of the
Batavian Republic (1795–1806). The VOC's territories became the
Dutch East Indies and were expanded over the course of the 19th
century to include the whole of the Indonesian archipelago, which would later become the modern Republic of Indonesia.
Company name, logo and flag
The logo of the Amsterdam Chamber of the VOC
Flag of the Dutch East India Company
Around the world and especially in English-speaking countries, the
VOC is widely known as the "Dutch East India Company". The name ‘Dutch
East India Company’ is used to make a distinction with the [British]
East India Company (EIC) and
other East Indian companies (such as the
Danish East India Company,
French East India Company,
Portuguese East India Company, and the
Swedish East India Company). The abbreviation "
VOC" stands for "
Vereenigde
Oost-Indische
Compagnie" or "
Verenigde
Oostindische
Compagnie" in
Dutch, literally meaning "United East-Indian Company", "United East-India Company", or "United East-Indies Company".
The VOC
monogram was possibly the first globally-recognized
corporate logo.
[9] The logo of the VOC consisted of a large
capital 'V' with an O on the left and a C on the right leg. It appeared on various corporate items, such as
cannon
and coins. The first letter of the hometown of the chamber conducting
the operation was placed on top (see figure for example of the Amsterdam
chamber logo). The adaptability, elegance, flexibility, simplicity,
symbolism, and symmetry were considered notable characteristics of the
VOC's well-designed monogram-logo, those ensured its success at a time
when the concept of the
corporate identity was virtually unknown.
[19] An Australian
vintner has used the VOC logo since the late 20th century, having re-registered the company's name for the purpose.
[20]
The flag of the company was orange, white, and blue (see
Dutch flag), with the company logo embroidered on it.
History
Origins
Before the
Dutch Revolt, Antwerp had played an important role as a distribution centre in
northern Europe. After 1591, however, the Portuguese used an international syndicate of the German
Fuggers and
Welsers,
and Spanish and Italian firms, that used Hamburg as the northern staple
port to distribute their goods, thereby cutting Dutch merchants out of
the trade. At the same time, the Portuguese trade system was unable to
increase supply to satisfy growing demand, in particular the demand for
pepper. Demand for spices was relatively
inelastic, and therefore each lag in the supply of pepper caused a sharp rise in pepper prices.
In 1580 the Portuguese crown was
united in a
personal union with the Spanish crown, with which the
Dutch Republic was at war. The
Portuguese Empire
therefore became an appropriate target for Dutch military incursions.
These factors motivated Dutch merchants to enter the intercontinental
spice trade themselves. Further, a number of Dutchmen like
Jan Huyghen van Linschoten and
Cornelis de Houtman obtained first hand knowledge of the "secret" Portuguese trade routes and practices, thereby providing opportunity.
[21]
The stage was thus set for the four-ship exploratory expedition by
Frederick de Houtman in 1595 to
Banten,
the main pepper port of West Java, where they clashed with both the
Portuguese and indigenous Indonesians. Houtman's expedition then sailed
east along the north coast of
Java, losing twelve crew to a Javanese attack at
Sidayu and killing a local ruler in
Madura.
Half the crew were lost before the expedition made it back to the
Netherlands the following year, but with enough spices to make a
considerable profit.
[22]
In 1598, an increasing number of fleets were sent out by competing
merchant groups from around the Netherlands. Some fleets were lost, but
most were successful, with some voyages producing high profits. In March
1599, a
fleet of eight ships under
Jacob van Neck
was the first Dutch fleet to reach the 'Spice Islands' of Maluku, the
source of pepper, cutting out the Javanese middlemen. The ships returned
to Europe in 1599 and 1600 and the expedition made a 400 percent
profit.
[22]
In 1600, the Dutch joined forces with the Muslim Hituese on
Ambon Island in an anti-Portuguese alliance, in return for which the Dutch were given the sole right to purchase spices from Hitu.
[23]
Dutch control of Ambon was achieved when the Portuguese surrendered
their fort in Ambon to the Dutch-Hituese alliance. In 1613, the Dutch
expelled the Portuguese from their
Solor
fort, but a subsequent Portuguese attack led to a second change of
hands; following this second reoccupation, the Dutch once again captured
Solor, in 1636.
[23]
East of Solor, on the island of Timor, Dutch advances were halted by
an autonomous and powerful group of Portuguese Eurasians called the
Topasses. They remained in control of the
Sandalwood trade and their resistance lasted throughout the 17th and 18th centuries, causing
Portuguese Timor to remain under the Portuguese sphere of control.
[24][25]
Formation, rise and fall
Formative years
Reproduction of a map of the city of Batavia c.
1627, collection
Tropenmuseum
At the time, it was customary for a company to be set up only for the
duration of a single voyage and to be liquidated upon the return of the
fleet. Investment in these expeditions was a very high-risk venture,
not only because of the usual dangers of piracy, disease and shipwreck,
but also because the interplay of inelastic demand and relatively
elastic supply
[26]
of spices could make prices tumble at just the wrong moment, thereby
ruining prospects of profitability. To manage such risk the forming of a
cartel
to control supply would seem logical. The English had been the first to
adopt this approach, by bundling their resources into a
monopoly enterprise, the
English East India Company in 1600, thereby threatening their Dutch competitors with ruin.
[27]
In 1602, the Dutch government followed suit, sponsoring the creation
of a single "United East Indies Company" that was also granted monopoly
over the Asian trade. With a capital of 6,440,200
guilders,
[28]
the charter of the new company empowered it to build forts, maintain
armies, and conclude treaties with Asian rulers. It provided for a
venture that would continue for 21 years, with a financial accounting
only at the end of each decade.
[27]
In February 1603, the Company seized the
Santa Catarina, a 1500-ton Portuguese merchant
carrack, off the coast of Singapore.
[29] She was such a rich prize that her sale proceeds increased the capital of the VOC by more than 50%.
[30]
Also in 1603 the first permanent Dutch trading post in Indonesia was established in
Banten,
West Java, and in 1611 another was established at
Jayakarta (later "Batavia" and then "Jakarta").
[31] In 1610, the VOC established the post of
Governor General to more firmly control their affairs in Asia. To advise and control the risk of
despotic Governors General, a Council of the Indies (
Raad van Indië) was created. The Governor General effectively became the main administrator of the VOC's activities in Asia, although the
Heeren XVII, a body of 17 shareholders representing different chambers, continued to officially have overall control.
[23]
The Isle of Amboina, a 17th-century print, probably English
VOC headquarters were located in
Ambon
during the tenures of the first three Governors General (1610–1619),
but it was not a satisfactory location. Although it was at the centre of
the spice production areas, it was far from the Asian trade routes and
other VOC areas of activity ranging from Africa to India to Japan.
[32][33]
A location in the west of the archipelago was thus sought. The Straits
of Malacca were strategic but had become dangerous following the
Portuguese conquest, and the first permanent VOC settlement in Banten
was controlled by a powerful local ruler and subject to stiff
competition from Chinese and English traders.
[23]
In 1604, a second English
East India Company voyage commanded by
Sir Henry Middleton reached the islands of
Ternate,
Tidore,
Ambon and
Banda. In Banda, they encountered severe VOC hostility, sparking Anglo-Dutch competition for access to spices.
[31] From 1611 to 1617, the English established trading posts at
Sukadana (southwest
Kalimantan),
Makassar,
Jayakarta and
Jepara in
Java, and Aceh,
Pariaman and
Jambi in
Sumatra, which threatened Dutch ambitions for a monopoly on East Indies trade.
[31]
Diplomatic agreements in Europe in 1620 ushered in a period of
co-operation between the Dutch and the English over the spice trade.
[31] This ended with a notorious but disputed incident known as the '
Amboyna massacre', where ten Englishmen were arrested, tried and beheaded for conspiracy against the Dutch government.
[34]
Although this caused outrage in Europe and a diplomatic crisis, the
English quietly withdrew from most of their Indonesian activities
(except trading in Banten) and focused on other Asian interests.
Growth
In 1619,
Jan Pieterszoon Coen
was appointed Governor-General of the VOC. He saw the possibility of
the VOC becoming an Asian power, both political and economic. On 30 May
1619, Coen, backed by a force of nineteen ships, stormed Jayakarta,
driving out the Banten forces; and from the ashes established
Batavia as the VOC headquarters. In the 1620s almost the entire native population of the
Banda Islands was driven away, starved to death, or killed in an attempt to replace them with Dutch plantations.
[35] These plantations were used to grow
cloves and
nutmeg
for export. Coen hoped to settle large numbers of Dutch colonists in
the East Indies, but implementation of this policy never materialised,
mainly because very few Dutch were willing to emigrate to Asia.
[36]
Another of Coen's ventures was more successful. A major problem in
the European trade with Asia at the time was that the Europeans could
offer few goods that Asian consumers wanted, except silver and gold.
European traders therefore had to pay for spices with the precious
metals, which were in short supply in Europe, except for Spain and
Portugal. The Dutch and English had to obtain it by creating a trade
surplus with other European countries. Coen discovered the obvious
solution for the problem: to start an intra-Asiatic trade system, whose
profits could be used to finance the spice trade with Europe. In the
long run this obviated the need for exports of precious metals from
Europe, though at first it required the formation of a large
trading-capital fund in the Indies. The VOC reinvested a large share of
its profits to this end in the period up to 1630.
[37]
The VOC traded throughout Asia. Ships coming into Batavia from the
Netherlands carried supplies for VOC settlements in Asia. Silver and
copper from Japan were used to trade with India and China for silk,
cotton, porcelain, and textiles. These products were either traded
within Asia for the coveted spices or brought back to Europe. The VOC
was also instrumental in introducing European ideas and technology to
Asia. The Company supported Christian missionaries and traded modern
technology with China and Japan. A more peaceful VOC trade post on
Dejima, an
artificial island off the coast of
Nagasaki, was for more than two hundred years the only place where Europeans were permitted to trade with Japan.
[38] When the VOC tried to use military force to make
Ming dynasty China open up to Dutch trade, the Chinese defeated the Dutch in
a war over the Penghu islands from 1623–24, forcing the VOC to abandon
Penghu for Taiwan. The Chinese defeated the VOC again at the
Battle of Liaoluo Bay in 1633.
The Vietnamese Nguyen Lords defeated the VOC in
a 1643 battle during the
Trịnh–Nguyễn War, blowing up a Dutch ship. The Cambodians defeated the VOC in the
Cambodian–Dutch War from 1643–44 on the Mekong River.
Dutch factory of Hugly–Chinsurah in Bengal
In 1640, the VOC obtained the port of
Galle,
Ceylon, from the Portuguese and broke the latter's monopoly of the
cinnamon trade. In 1658,
Gerard Pietersz. Hulft laid siege to
Colombo, which was captured with the help of King
Rajasinghe II of
Kandy.
By 1659, the Portuguese had been expelled from the coastal regions,
which were then occupied by the VOC, securing for it the monopoly over
cinnamon. To prevent the Portuguese or the English from ever recapturing
Sri Lanka, the VOC went on to conquer the entire
Malabar Coast
from the Portuguese, almost entirely driving them from the west coast
of India. When news of a peace agreement between Portugal and the
Netherlands reached Asia in 1663, Goa was the only remaining Portuguese
city on the west coast.
[39]
In 1652,
Jan van Riebeeck established an outpost at the
Cape of Good Hope (the southwestern tip of Africa, now
Cape Town, South Africa) to re-supply VOC ships on their journey to East Asia. This post later became a full-fledged colony, the
Cape Colony, when more Dutch and other Europeans started to settle there.
VOC trading posts were also established in
Persia,
Bengal,
Malacca,
Siam,
Canton[verification needed],
Formosa (now Taiwan), as well as the
Malabar and
Coromandel coasts in India. In 1662, however,
Koxinga expelled the Dutch from Taiwan
[40] (
see History of Taiwan).
In 1663, the VOC signed the "Painan Treaty" with several local lords in the
Painan area that were revolting against the
Aceh Sultanate. The treaty allowed the VOC to build a trading post in the area and eventually to monopolise the trade there, especially the
gold trade.
[41]
By 1669, the VOC was the richest private company the world had ever
seen, with over 150 merchant ships, 40 warships, 50,000 employees, a
private army of 10,000 soldiers, and a
dividend payment of 40% on the original investment.
[42]
Many of the VOC employees inter-mixed with the indigenous peoples and expanded the population of
Indos in pre-colonial history [43][44]
Reorientation
Trade area of the VOC around 1700
Sword of the East India Company, featuring the V.O.C. monogram of the guard. On display at the
Musée de l'Armée in Paris.
Around 1670, two events caused the growth of VOC trade to stall. In
the first place, the highly profitable trade with Japan started to
decline. The loss of the outpost on Formosa to
Koxinga in the 1662
Siege of Fort Zeelandia and related internal turmoil in China (where the
Ming dynasty was being replaced with the
Qing dynasty)
brought an end to the silk trade after 1666. Though the VOC substituted
Bengali for Chinese silk other forces affected the supply of Japanese
silver and gold. The
shogunate
enacted a number of measures to limit the export of these precious
metals, in the process limiting VOC opportunities for trade, and
severely worsening the terms of trade. Therefore, Japan ceased to
function as the lynchpin of the intra-Asiatic trade of the VOC by 1685.
[46]
Even more importantly, the
Third Anglo-Dutch War
temporarily interrupted VOC trade with Europe. This caused a spike in
the price of pepper, which enticed the English East India Company (EIC)
to enter this market aggressively in the years after 1672. Previously,
one of the tenets of the VOC pricing policy was to slightly over-supply
the pepper market, so as to depress prices below the level where
interlopers were encouraged to enter the market (instead of striving for
short-term profit maximisation). The wisdom of such a policy was
illustrated when a fierce price war with the EIC ensued, as that company
flooded the market with new supplies from India. In this struggle for
market share, the VOC (which had much larger financial resources) could
wait out the EIC. Indeed, by 1683, the latter came close to bankruptcy;
its share price plummeted from 600 to 250; and its president
Josiah Child was temporarily forced from office.
[47]
However, the writing was on the wall. Other companies, like the
French East India Company and the
Danish East India Company also started to make inroads on the Dutch system. The VOC therefore closed the heretofore flourishing open pepper emporium of
Bantam by a treaty of 1684 with the Sultan. Also, on the
Coromandel Coast, it moved its chief stronghold from
Pulicat to
Negapatnam, so as to secure a monopoly on the pepper trade at the detriment of the French and the Danes.
[48]
However, the importance of these traditional commodities in the
Asian-European trade was diminishing rapidly at the time. The military
outlays that the VOC needed to make to enhance its monopoly were not
justified by the increased profits of this declining trade.
[49]
Nevertheless, this lesson was slow to sink in and at first the VOC
made the strategic decision to improve its military position on the
Malabar Coast
(hoping thereby to curtail English influence in the area, and end the
drain on its resources from the cost of the Malabar garrisons) by using
force to compel the
Zamorin of
Calicut
to submit to Dutch domination. In 1710, the Zamorin was made to sign a
treaty with the VOC undertaking to trade exclusively with the VOC and
expel other European traders. For a brief time, this appeared to improve
the Company's prospects. However, in 1715, with EIC encouragement, the
Zamorin renounced the treaty. Though a Dutch army managed to suppress
this insurrection temporarily, the Zamorin continued to trade with the
English and the French, which led to an appreciable upsurge in English
and French traffic. The VOC decided in 1721 that it was no longer worth
the trouble to try to dominate the
Malabar pepper
and spice trade. A strategic decision was taken to scale down the Dutch
military presence and in effect yield the area to EIC influence.
[50]
City hall of Batavia in 1682
The 1741
Battle of Colachel by
Nair warriors of
Travancore under Raja
Marthanda Varma defeated the Dutch. The Dutch commander Captain
Eustachius De Lannoy
was captured. Marthanda Varma agreed to spare the Dutch captain's life
on condition that he joined his army and trained his soldiers on modern
lines. This defeat in the
Travancore-Dutch War
is considered the earliest example of an organised Asian power
overcoming European military technology and tactics; and it signalled
the decline of Dutch power in India.
[51]
Natives of
Arakan sell slaves to the Dutch East India Company, c.
1663
The attempt to continue as before as a low volume-high profit
business enterprise with its core business in the spice trade had
therefore failed. The Company had however already (reluctantly) followed
the example of its European competitors in diversifying into other
Asian commodities, like tea, coffee, cotton, textiles, and sugar. These
commodities provided a lower profit margin and therefore required a
larger sales volume to generate the same amount of revenue. This
structural change in the commodity composition of the VOC's trade
started in the early 1680s, after the temporary collapse of the EIC
around 1683 offered an excellent opportunity to enter these markets. The
actual cause for the change lies, however, in two structural features
of this new era.
In the first place, there was a revolutionary change in the tastes
affecting European demand for Asian textiles, coffee and tea, around the
turn of the 18th century. Secondly, a new era of an abundant supply of
capital at low interest rates suddenly opened around this time. The
second factor enabled the Company easily to finance its expansion in the
new areas of commerce.
[52]
Between the 1680s and 1720s, the VOC was therefore able to equip and
man an appreciable expansion of its fleet, and acquire a large amount of
precious metals to finance the purchase of large amounts of Asian
commodities, for shipment to Europe. The overall effect was
approximately to double the size of the company.
[53]
The tonnage of the returning ships rose by 125 percent in this
period. However, the Company's revenues from the sale of goods landed in
Europe rose by only 78 percent. This reflects the basic change in the
VOC's circumstances that had occurred: it now operated in new markets
for goods with an elastic demand, in which it had to compete on an equal
footing with other suppliers. This made for low profit margins.
[54]
Unfortunately, the business information systems of the time made this
difficult to discern for the managers of the company, which may partly
explain the mistakes they made from hindsight. This lack of information
might have been counteracted (as in earlier times in the VOC's history)
by the business acumen of the directors. Unfortunately by this time
these were almost exclusively recruited from the political
regent class, which had long since lost its close relationship with merchant circles.
[55]
Low profit margins in themselves do not explain the deterioration of
revenues. To a large extent the costs of the operation of the VOC had a
"fixed" character (military establishments; maintenance of the fleet and
such). Profit levels might therefore have been maintained if the
increase in the scale of trading operations that in fact took place had
resulted in
economies of scale.
However, though larger ships transported the growing volume of goods,
labour productivity did not go up sufficiently to realise these. In
general the Company's overhead rose in step with the growth in trade
volume; declining gross margins translated directly into a decline in
profitability of the invested capital. The era of expansion was one of
"profitless growth".
[56]
Specifically: "[t]he long-term average annual profit in the VOC's
1630–70 'Golden Age' was 2.1 million guilders, of which just under half
was distributed as dividends and the remainder reinvested. The long-term
average annual profit in the 'Expansion Age' (1680–1730) was 2.0
million guilders, of which three-quarters was distributed as dividend
and one-quarter reinvested. In the earlier period, profits averaged 18
percent of total revenues; in the latter period, 10 percent. The annual
return of invested capital in the earlier period stood at approximately 6
percent; in the latter period, 3.4 percent."
[56]
Nevertheless, in the eyes of investors the VOC did not do too badly.
The share price hovered consistently around the 400 mark from the
mid-1680s (excepting a hiccup around the
Glorious Revolution
in 1688), and they reached an all-time high of around 642 in the 1720s.
VOC shares then yielded a return of 3.5 percent, only slightly less
than the yield on Dutch government bonds.
[57]
Decline and fall
However, from there on the fortunes of the VOC started to decline.
Five major problems, not all of equal weight, can be used to explain its
decline in the next fifty years to 1780.
[58]
- There was a steady erosion of intra-Asiatic trade because of changes
in the Asiatic political and economic environment that the VOC could do
little about. These factors gradually squeezed the company out of
Persia, Suratte,
the Malabar Coast, and Bengal. The company had to confine its
operations to the belt it physically controlled, from Ceylon through the
Indonesian archipelago. The volume of this intra-Asiatic trade, and its
profitability, therefore had to shrink.
- The way the company was organised in Asia (centralised on its hub in
Batavia), that initially had offered advantages in gathering market
information, began to cause disadvantages in the 18th century because of
the inefficiency of first shipping everything to this central point.
This disadvantage was most keenly felt in the tea trade, where
competitors like the EIC and the Ostend Company shipped directly from China to Europe.
- The "venality" of the VOC's personnel (in the sense of corruption
and non-performance of duties), though a problem for all East-India
Companies at the time, seems to have plagued the VOC on a larger scale
than its competitors. To be sure, the company was not a "good employer".
Salaries were low, and "private-account trading" was officially not
allowed. Not surprisingly, it proliferated in the 18th century to the
detriment of the company's performance.[59] From about the 1790s onward, the phrase perished under corruption (vergaan onder corruptie, also abbreviated VOC in Dutch) came to summarise the company's future.
- A problem that the VOC shared with other companies was the high
mortality and morbidity rates among its employees. This decimated the
company's ranks and enervated many of the survivors.
- A self-inflicted wound was the VOC's dividend policy.
The dividends distributed by the company had exceeded the surplus it
garnered in Europe in every decade but one (1710–1720) from 1690 to
1760. However, in the period up to 1730 the directors shipped resources
to Asia to build up the trading capital there. Consolidated bookkeeping
therefore probably would have shown that total profits exceeded
dividends. In addition, between 1700 and 1740 the company retired 5.4
million guilders of long-term debt. The company therefore was still on a
secure financial footing in these years. This changed after 1730. While
profits plummeted the bewindhebbers only slightly decreased
dividends from the earlier level. Distributed dividends were therefore
in excess of earnings in every decade but one (1760–1770). To accomplish
this, the Asian capital stock had to be drawn down by 4 million
guilders between 1730 and 1780, and the liquid
capital available in Europe was reduced by 20 million guilders in the
same period. The directors were therefore constrained to replenish the
company's liquidity by resorting to short-term financing from
anticipatory loans, backed by expected revenues from home-bound fleets.
Despite of all this, the VOC in 1780 remained an enormous operation.
Its capital in the Republic, consisting of ships and goods in inventory,
totalled 28 million guilders; its capital in Asia, consisting of the
liquid trading fund and goods en route to Europe, totalled 46 million
guilders. Total capital, net of outstanding debt, stood at 62 million
guilders. The prospects of the company at this time therefore need not
have been hopeless, had one of the many plans to reform it been taken
successfully in hand. However, then the
Fourth Anglo-Dutch War
intervened. British attacks in Europe and Asia reduced the VOC fleet by
half; removed valuable cargo from its control; and devastated its
remaining power in Asia. The direct losses of the VOC can be calculated
at 43 million guilders. Loans to keep the company operating reduced its
net assets to zero.
[60]
From 1720 on, the market for sugar from Indonesia declined as the
competition from cheap sugar from Brazil increased. European markets
became saturated. Dozens of Chinese sugar traders went bankrupt which
led to massive unemployment, which in turn led to gangs of unemployed
coolies.
The Dutch government in Batavia did not adequately respond to these
problems. In 1740, rumours of deportation of the gangs from the Batavia
area led to widespread rioting. The Dutch military searched houses of
Chinese in Batavia for weapons. When a house accidentally burnt down,
military and impoverished citizens started slaughtering and pillaging
the Chinese community.
[61] This
massacre of the Chinese
was deemed sufficiently serious for the board of the VOC to start an
official investigation into the Government of the Dutch East Indies for
the first time in its history.
After the Fourth Anglo-Dutch War, the VOC was a financial wreck, and
after vain attempts by the provincial States of Holland and Zeeland to
reorganise it, was nationalised on 1 March 1796
[62] by the new
Batavian Republic. Its charter was renewed several times, but allowed to expire on 31 December 1799.
[62] Most of the possessions of the former VOC were subsequently occupied by Great Britain during the
Napoleonic wars, but after the new
United Kingdom of the Netherlands was created by the
Congress of Vienna, some of these were restored to this successor state of the old
Dutch Republic by the
Anglo-Dutch Treaty of 1814.
Organizational structure
A
bond from the Dutch East India Company (VOC), dating from 7 November 1623. The VOC was the first company in history to issue
bonds and
shares of
stock
to the general public. It was the VOC that invented the idea of
investing in the company rather than in a specific venture governed by
the company. The VOC was also the first company to use a fully-fledged
capital market (including the
bond market and the
stock market) as a crucial channel to raise medium-term and long-term funds.
The VOC is generally considered to be the world's first truly
transnational corporation and it was also the first
multinational enterprise to issue
shares of
stock to the public. Some historians such as
Timothy Brook and
Russell Shorto consider the VOC as the pioneering
corporation in the first wave of the
corporate globalization era.
[9][10] The VOC was the first multinational corporation to operate officially in different
continents such as
Europe,
Asia and
Africa. While the VOC mainly operated in what later became the
Dutch East Indies
(modern Indonesia), the company also had important operations
elsewhere. It employed people from different continents and origins in
the same functions and working environments. Although it was a Dutch
company its
employees
included not only people from the Netherlands, but also many from
Germany and from other countries as well. Besides the diverse north-west
European
workforce recruited by the VOC in the
Dutch Republic,
the VOC made extensive use of local Asian labour markets. As a result,
the personnel of the various VOC offices in Asia consisted of European
and Asian employees. Asian or
Eurasian workers might be employed as sailors, soldiers, writers, carpenters, smiths, or as simple unskilled workers.
[63] At the height of its existence the VOC had 25,000 employees who worked in Asia and 11,000 who were en route.
[64] Also, while most of its
shareholders
were Dutch, about a quarter of the initial shareholders were
Zuid-Nederlanders (people from an area that includes modern Belgium and
Luxembourg) and there were also a few dozen Germans.
[65]
The VOC had two types of shareholders: the
participanten, who could be seen as non-managing members, and the 76
bewindhebbers (later reduced to 60) who acted as managing directors. This was the usual set-up for Dutch
joint-stock companies at the time. The innovation in the case of the VOC was that the liability of not just the
participanten but also of the
bewindhebbers was limited to the paid-in capital (usually,
bewindhebbers had unlimited liability). The VOC therefore was a
limited liability company. Also, the capital would be
permanent
during the lifetime of the company. As a consequence, investors that
wished to liquidate their interest in the interim could only do this by
selling their share to others on the
Amsterdam Stock Exchange.
[66] Confusion of confusions, a 1688 dialogue by the Sephardi Jew
Joseph de la Vega analysed the workings of this one-stock exchange.
The VOC consisted of six Chambers (
Kamers) in port cities:
Amsterdam,
Delft,
Rotterdam,
Enkhuizen,
Middelburg and
Hoorn. Delegates of these chambers convened as the
Heeren XVII (the Lords Seventeen). They were selected from the
bewindhebber-class of shareholders.
[67]
Of the
Heeren XVII, eight delegates were from the Chamber of
Amsterdam (one short of a majority on its own), four from the Chamber of
Zeeland, and one from each of the smaller Chambers, while the
seventeenth seat was alternatively from the Chamber of
Middelburg-Zeeland or rotated among the five small Chambers. Amsterdam
had thereby the decisive voice. The Zeelanders in particular had
misgivings about this arrangement at the beginning. The fear was not
unfounded, because in practice it meant Amsterdam stipulated what
happened.
The six chambers raised the start-up capital of the Dutch East India Company:
| Chamber |
Capital (Guilders) |
| Amsterdam |
3,679,915 |
| Middelburg |
1,300,405 |
| Enkhuizen |
540,000 |
| Delft |
469,400 |
| Hoorn |
266,868 |
| Rotterdam |
173,000 |
| Total: |
6,424,588 |
The raising of capital in Rotterdam did not go so smoothly. A considerable part originated from inhabitants of
Dordrecht. Although it did not raise as much capital as Amsterdam or Middelburg-Zeeland, Enkhuizen had the largest input in the
share capital of the VOC. Under the first 358 shareholders, there were many small entrepreneurs, who dared to take the
risk. The minimum investment in the VOC was 3,000 guilders, which priced the Company's stock within the means of many merchants.
[68]
Various VOC soldier uniforms, c. 1783
Among the early shareholders of the VOC, immigrants played an important role. Under the 1,143 tenderers were 39
Germans and no fewer than 301 from the
Southern Netherlands (roughly present Belgium and Luxembourg, then under
Habsburg rule), of whom
Isaac le Maire was the largest subscriber with ƒ85,000. VOC's total
capitalisation was ten times that of its British rival.
The
Heeren XVII (Lords Seventeen) met alternately 6 years in
Amsterdam and 2 years in Middelburg-Zeeland. They defined the VOC's
general policy and divided the tasks among the Chambers. The Chambers
carried out all the necessary work, built their own ships and warehouses
and traded the merchandise. The
Heeren XVII sent the ships'
masters off with extensive instructions on the route to be navigated,
prevailing winds, currents, shoals and landmarks. The VOC also produced
its own
charts.
In the context of the
Dutch-Portuguese War the company established its headquarters in Batavia,
Java (now
Jakarta,
Indonesia). Other colonial outposts were also established in the
East Indies, such as on the
Maluku Islands, which include the
Banda Islands, where the VOC forcibly maintained a monopoly over
nutmeg and
mace. Methods used to maintain the monopoly involved
extortion and the violent suppression of the native population, including
mass murder.
[69]
In addition, VOC representatives sometimes used the tactic of burning
spice trees to force indigenous populations to grow other crops, thus
artificially cutting the supply of spices like nutmeg and cloves.
[70]
VOC outposts
Organization and leadership structures were varied as necessary in the various VOC outposts:
Opperhoofd is a Dutch word (pl.
Opperhoofden), which literally means 'supreme chief'. In this VOC context, the word is a
gubernatorial title, comparable to the English
Chief factor, for the chief executive officer of a Dutch
factory in the sense of trading post, as led by a
factor, i.e. agent.
-
-
- See more at VOC Opperhoofden in Japan
Council of Justice in Batavia
The Council of Justice in Batavia was the appellate court for all the other VOC Company posts in the VOC empire.
Shareholder activism at the VOC and the beginnings of modern corporate governance
The seventeenth-century Dutch businessmen, especially the VOC
investors, were possibly the history's first recorded investors to
consider the
corporate governance's problems.
[71][72] Isaac Le Maire, who is known as history's first recorded
short seller,
was also a sizeable shareholder of the VOC. In 1609, he complained of
the VOC's shoddy corporate governance. On 24 January 1609, Le Maire
filed a petition against the VOC, marking the first recorded expression
of
shareholder activism. In what is the first recorded corporate governance dispute, Le Maire formally charged that the VOC's
board of directors
(the Heeren XVII) sought to "retain another’s money for longer or use
it ways other than the latter wishes" and petitioned for the liquidation
of the VOC in accordance with standard business practice.
[73][74][75] Initially the largest single shareholder in the VOC and a
bewindhebber
sitting on the board of governors, Le Maire apparently attempted to
divert the firm's profits to himself by undertaking 14 expeditions under
his own accounts instead of those of the company. Since his large
shareholdings were not accompanied by greater voting power, Le Maire was
soon ousted by other governors in 1605 on charges of embezzlement, and
was forced to sign an agreement not to compete with the VOC. Having
retained stock in the company following this incident, in 1609 Le Maire
would become the author of what is celebrated as "first recorded
expression of shareholder advocacy at a publicly traded company".
[76][77][78]
In 1622, the history's first recorded
shareholder revolt
also happened among the VOC investors who complained that the company
account books had been "smeared with bacon" so that they might be "eaten
by dogs." The investors demanded a "reeckeninge," a proper financial
audit.
[79] The 1622 campaign by the
shareholders of the VOC is a testimony of genesis of
corporate social responsibility
(CSR) in which shareholders staged protests by distributing pamphlets
and complaining about management self enrichment and secrecy.
[80]
Main trading posts, settlements and colonies
Asia
Scale model of Dutch trading post on display in
Dejima,
Nagasaki (1995).
Indonesia
Indian subcontinent
Japan
Taiwan
Malaysia
Thailand
Vietnam
Africa
Mauritius
South Africa
Main competitors
Conflicts and wars involving the VOC
Historical roles and legacy
Founded in 1602, the VOC – the first company ever
listed on an official
stock exchange (the world's first
publicly traded company on the world's first official stock exchange) – started off as a
spice trader. In the same year, the VOC undertook the world's first recorded
IPO. "
Going public" enabled the company to raise the vast sum of 6.5 million
guilders quickly. The VOC's institutional innovations helped lay the foundations for modern corporations (especially large-scale
business enterprises or multinational corporations) and
capital markets that now dominate the world's economic system.
With regard to the VOC's importance in global corporate history, Australian journalist
Hugh Edwards
(1970) writes, "The Vereenigde Oost-Indische Compagnie was the most
powerful single commercial concern the world has ever known.
General Motors,
British Tobacco,
Ford,
The Shell Company,
Mitsubishi,
Standard Oil
– any of the other giant holdings of today are on the level of village
bootmakers compared with the might and power and influence once wielded
by the VOC."
[81][82] In his book
Amsterdam: A History of the World's Most Liberal City (2013),
Russell Shorto
summarizes the VOC's greatness: "Like the oceans it mastered, the VOC
had a scope that is hard to fathom. One could craft a defensible
argument that no company in history has had such an impact on the world.
Its surviving archives—in
Cape Town, Colombo,
Chennai,
Jakarta, and
The Hague—have
been measured (by a consortium applying for a UNESCO grant to preserve
them) in kilometers. In innumerable ways the VOC both expanded the world
and brought its far-flung regions together. It introduced Europe to
Asia and Africa, and vice versa (while its sister multinational, the
West India Company,
set New York City in motion and
colonized Brazil
and the Caribbean Islands). It pioneered globalization and invented
what might be the first modern bureaucracy. It advanced cartography and
shipbuilding. It fostered disease, slavery, and exploitation on a scale
never before imaged."
[10]
The company was arguably the first
megacorporation
the world has ever seen, possessing quasi-governmental powers,
including the ability to wage war, imprison and execute convicts,
negotiate treaties, coin money and establish colonies. Many economic and
political historians consider the VOC as the most valuable, powerful
and influential
corporation in world history.
[9][10][11]
The VOC existed for almost 200 years from its founding in 1602, when the
States-General of the Netherlands
granted it a 21-year monopoly over Dutch operations in Asia until its
demise in 1796. During those two centuries (between 1602 and 1796), the
VOC sent almost a million Europeans to work in the Asia trade on 4,785
ships, and netted for their efforts more than 2.5 million tons of Asian
trade goods. By contrast, the rest of Europe combined sent only 882,412
people from 1500 to 1795, and the fleet of the
English (later
British)
East India Company,
the VOC's nearest competitor, was a distant second to its total traffic
with 2,690 ships and a mere one-fifth the tonnage of goods carried by
the VOC. The VOC enjoyed huge profits from its spice monopoly through
most of the 17th century.
[83]
The company was also considered by many to be the very first major and the greatest corporation in history.
[note 7][85]
The VOC's territories were even larger than some countries. By 1669,
the VOC was the richest company the world had ever seen, with over 150
merchant ships, 40 warships, 50,000 employees, a private army of 10,000
soldiers, and a
dividend payment of 40% on the original investment.
[86][87][88]
Institutional innovations and contributions in business and financial history
The VOC played a crucial role in the rise of
corporate-led globalization,
[94] corporate governance,
corporate identity,
[95] corporate social responsibility,
corporate finance, modern
entrepreneurship, and
financial capitalism.
[96][97][11] During its golden age, the company made some fundamental institutional innovations in
economic and
financial history. These
financially revolutionary innovations allowed a single
company
(like the VOC) to mobilize financial resources from a large number of
investors and create ventures at a scale that had previously only been
possible for monarchs.
[98] In the words of Canadian historian and sinologist
Timothy Brook, "the Dutch East India Company—the VOC, as it is known—is to
corporate capitalism what
Benjamin Franklin's
kite is to
electronics: the beginning of something momentous that could not have been predicted at the time."
[9] The birth of the VOC is often considered to be the official beginning of the
corporate globalization
era with the rise of modern corporations as a powerful
socio-politico-economic system that significantly affect humans lives in
every corner of the world today.
[99][9][100] As the world's first
publicly traded company and first
listed company (the first company to be ever
listed on an official stock exchange), the VOC was the first company to issue
stock and
bonds to the general public. Considered by many experts to be the world's first truly (modern)
multinational corporation,
[101] the VOC was also the first permanently organized
limited-liability joint-stock company, with a permanent
capital base.
[note 8][103] The VOC shareholders were the pioneers in laying the basis for modern
corporate governance and
corporate finance. The VOC is often considered as the precursor of modern corporations, if not the first truly modern corporation.
[104]
It was the VOC that invented the idea of investing in the company
rather than in a specific venture governed by the company. With its
pioneering features such as
corporate identity (first globally-recognized
corporate logo), entrepreneurial spirit,
legal personhood, transnational (multinational) operational structure, high and stable profitability, permanent
capital (fixed capital stock),
[105][106] freely transferable
shares and
tradable securities, separation of
ownership and
management, and
limited liability for both
shareholders and managers, the VOC is generally considered a major institutional breakthrough
[107] and the model for the large-scale business enterprises that now dominate the
global economy.
[108]
The VOC was the driving force behind the rise of Amsterdam as the first modern model of (global) international
financial centres[note 9] that now dominate the
global financial system.
During the 17th century and most of the 18th century, Amsterdam had
been the most influential and powerful financial centre of the world.
[110][111][112][113][114] The VOC also played a major role in the creation of the world's first fully functioning
financial market,
[115] with the birth of a fully fledged
capital market.
[116] The Dutch were also the first who effectively used a fully-fledged capital market (including the
bond market and the stock market) to finance companies (such as the VOC and the
WIC). It was in the 17th-century Dutch Republic that the global
securities market
began to take on its modern form. And it was in Amsterdam that the
important institutional innovations such as publicly traded companies,
transnational corporations, capital markets (including bond markets and
stock markets),
central banking system,
investment banking system, and
investment funds (
mutual funds) were systematically operated for the first time in history. In 1602 the VOC established an
exchange in Amsterdam where VOC stock and bonds could be traded in a
secondary market. The VOC undertook the world's first recorded
IPO in the same year. The Amsterdam Stock Exchange (
Amsterdamsche Beurs or
Beurs van Hendrick de Keyser in Dutch) was also the world's first fully-fledged stock exchange. While the
Italian city-states
produced the first transferable government bonds, they didn't develop
the other ingredient necessary to produce a fully fledged capital
market: corporate shareholders. The Dutch East India Company (VOC)
became the first company to offer
shares of
stock. The dividend averaged around 18% of capital over the course of the company's 200-year existence. The launch of the
Amsterdam Stock Exchange
by the VOC in the early 1600s, has long been recognized as the origin
of 'modern' stock exchanges that specialize in creating and sustaining
secondary markets in the
securities (such as bonds and shares of stock) issued by corporations.
[117]
Dutch investors were the first to trade their shares at a regular stock
exchange. The process of buying and selling these shares of stock in
the VOC became the basis of the first official (formal)
stock market in history.
[118][89][119] It was in the Dutch Republic that the early techniques of
stock-market manipulation were developed. The Dutch pioneered
stock futures,
stock options,
short selling,
bear raids, debt-equity swaps, and other
speculative instruments.
[120] Amsterdam businessman
Joseph de la Vega's
Confusion of Confusions (1688) was the earliest book about
stock trading.
Impacts on economic and social history of the Netherlands
The
shipyard of the United East India Company (VOC) in Amsterdam (1726 engraving by
Joseph Mulder). The
shipbuilding district of
Zaan, near Amsterdam, became one of the world's earliest known
industrialized areas, with around 900 wind-powered
sawmills
at the end of the 17th century. By the early seventeenth century Dutch
shipyards were producing a large number of ships to a standard design,
allowing extensive
division of labour, a specialization which further reduced
unit costs.
[121]
The VOC was a major force behind the
financial revolution[note 10][123][124] and
economic miracle[125][126][127] of the Dutch Republic in the 17th-century. During their
Golden Age, the Dutch Republic (or the Northern Netherlands), as the resource-poor and obscure cousins of the more urbanized
Southern Netherlands, rose to become the world's leading economic and financial superpower.
[note 11][130][131][132][133][134] The VOC's shipyards also contributed greatly to the Dutch domination of global
shipbuilding and
shipping industries during the 1600s.
[note 12] "By seventeenth century standards," as
Richard Unger affirms, Dutch shipbuilding "was a massive industry and larger than any shipbuilding industry which had preceded it."
[137] By the 1670s the size of the Dutch
merchant fleet probably exceeded the combined fleets of England, France, Spain, Portugal, and Germany.
[138] Until the mid-1700s, the
economic system of the Dutch Republic (including its financial system) was the most advanced and sophisticated ever seen in history.
[139] However, in a typical
multicultural society of the Netherlands, the VOC's history (and especially its dark side) has always been a potential source of controversy. In 2006 when the
Dutch Prime Minister Jan Pieter Balkenende referred to the pioneering
entrepreneurial spirit and
work ethics of the
Dutch people and
Dutch Republic in
their Golden Age, he coined the term "VOC mentality" (
VOC-mentaliteit in Dutch).
[note 13]
It unleashed a wave of criticism, since such romantic views about the
Dutch Golden Age ignores the inherent historical associations with
colonialism, exploitation and violence. Balkenende later stressed that
"it had not been his intention to refer to that at all".
[141]
But in spite of criticisms, the "VOC-mentality", as a characteristic of
the selective historical perspective on the Dutch Golden Age, has been
considered a key feature of Dutch cultural policy for many years.
[141]
Influences on Dutch Golden Age art
From 1609 the VOC had a trading post in Japan (
Hirado, Nagasaki),
which used local paper for its own administration. However, the paper
was also traded to the VOC's other trading posts and even the Dutch
Republic. Many impressions of the
Dutch Golden Age artist Rembrandt's
prints were done on Japanese paper. From about 1647 Rembrandt sought
increasingly to introduce variation into his prints by using different
sorts of paper, and printed most of his plates regularly on Japanese
paper. He also used the paper for
his drawings.
The Japanese paper types – which was actually imported from Japan by
the VOC – attracted Rembrandt with its warm, yellowish colour.
[142] They are often smooth and shiny, whilst Western paper has a more rough and matt surface.
[143] Moreover, the VOC's imported
Chinese porcelain wares are
often depicted in many Dutch Golden Age
genre paintings, especially in
Jan Vermeer's paintings.
[9]
VOC world as a knowledge network in the Dutch maritime world-system
Further information:
Rangaku,
Science and technology in the Dutch Republic,
Cartography in the Dutch Republic,
Jan Jansz. Weltevree,
Hendrick Hamel,
Johan Nieuhof,
Cornelis de Bruijn,
Andries Beeckman,
Isaac Titsingh,
Dodo,
Hansken,
Black swan, and
Black swan theory
During the
Dutch Golden Age,
the Dutch – using their expertise in doing business, cartography,
shipbuilding, seafaring and navigation – traveled to the far corners of
the world,
leaving their language embedded in the
names of many places. Dutch exploratory voyages revealed largely unknown
landmasses to the civilized world and put their names on the
world map. The Dutch came to dominate the
map making and map printing industry by virtue of their own travels, trade ventures, and widespread commercial networks.
[144]
As Dutch ships reached into the unknown corners of the globe, Dutch
cartographers incorporated new geographical discoveries into their work.
Instead of using the information themselves secretly, they published
it, so the maps multiplied freely. For almost 200 years, the Dutch
dominated
world trade.
[145] Dutch ships carried goods, but they also opened up opportunities for the exchange of knowledge.
[146] The commercial networks of the Dutch transnational companies, i.e. the VOC and
West India Company (WIC/GWIC), provided an infrastructure which was accessible to people with a scholarly interest in the exotic world.
[147][148][149][150][151] The VOC's
bookkeeper Hendrick Hamel was the first known European/Westerner to experience first-hand and write about
Joseon-era
Korea.
[note 14] In his report (published in the Dutch Republic) in 1666 Hendrick Hamel described his adventures on the
Korean Peninsula and gave the first accurate description of daily life of
Koreans to the western world.
[152][153][154] The VOC trade post on
Dejima, an
artificial island off the coast of
Nagasaki, was for more than two hundred years the only place where Europeans were permitted to trade with Japan.
Rangaku (literally 'Dutch Learning', and by extension 'Western Learning') is a body of knowledge developed by
Japan through its contacts with the Dutch enclave of
Dejima, which allowed
Japan to keep abreast of
Western technology and
medicine in the period when the country was closed to foreigners, 1641–1853, because of the
Tokugawa shogunate's policy of national isolation (
sakoku).
Roles in the global economy and international relations
Considered by many political and economic historians as an
autonomous quasi-state within another state,
[note 15][157]
the VOC, for almost 200 years of its existence, was a key (non-state)
player in Asia-related trade and politics. More than just a pure
multinational trading company, the VOC – although privately financed –
was the international arm of the
Dutch Republic government. The company was much an unofficial representative of the
States General of the United Provinces in foreign relations of the Dutch Republic with many states, especially Dutch-Asian relations.
The VOC had seminal influences on the history of some countries and territories such as
New York (
New Netherland),
[158] Indonesia,
Australia,
New Zealand,
South Africa,
Taiwan and
Japan.
[159]
Contributions in the Age of Exploration
More information: Maritime history of the Dutch East India Company; Dutch Republic in the Age of Discovery;
Cartography in the Dutch Republic;
Golden Age of Dutch cartography / Golden Age of Netherlandish cartography
The Dutch East India Company (VOC) was also a major force behind the
Golden Age of Dutch exploration and discovery (ca. 1590s–1720s). The VOC-funded exploratory voyages such as those led by
Willem Janszoon (
Duyfken),
Henry Hudson (
Halve Maen) and
Abel Tasman revealed largely unknown landmasses to the civilized world. Also, in the
Golden Age of Netherlandish cartography[note 16] (ca. 1570s–1670s), the VOC's navigators and cartographers
[note 17] helped shape modern
geographical and
cartographic (like
world map) knowledge as we know them today.
Halve Maen's exploratory voyage and role in the formation of New Netherland
A replica of the VOC's
Halve Maen (captained by
Henry Hudson, an Englishman in the service of the Dutch Republic) passes modern-day lower
Manhattan, where the original ship would have sailed while investigating
New York harbor.
In 1609, English sea captain and
explorer Henry Hudson was hired by the VOC émigrés running the VOC located in
Amsterdam[160] to find a
north-east passage
to Asia, sailing around Scandinavia and Russia. He was turned back by
the ice of the Arctic in his second attempt, so he sailed west to seek a
north-west passage rather than return home. He ended up exploring the waters off the
east coast of
North America aboard the
vlieboot Halve Maen. His first landfall was at
Newfoundland and the second at
Cape Cod.
Hudson believed that the passage to the Pacific Ocean was between the
St. Lawrence River and
Chesapeake Bay,
so he sailed south to the Bay then turned northward, traveling close
along the shore. He first discovered Delaware Bay and began to sail
upriver looking for the passage. This effort was foiled by sandy shoals,
and the
Halve Maen continued north. After passing
Sandy Hook, Hudson and his crew entered the
narrows into the Upper New York Bay. (Unbeknownst to Hudson, the narrows had already been discovered in 1524 by explorer
Giovanni da Verrazzano; today, the bridge spanning them is named after him.
[161]) Hudson believed that he had found the continental water route, so he sailed up the major river which later bore his name: the
Hudson. He found the water too shallow to proceed several days later, at the site of present-day
Troy, New York.
[162]
Upon returning to the Netherlands, Hudson reported that he had found a
fertile land and an amicable people willing to engage his crew in
small-scale bartering of furs, trinkets, clothes, and small manufactured
goods. His report was first published in 1611 by
Emanuel Van Meteren, an Antwerp émigré and the Dutch Consul at London.
[160] This stimulated interest
[163] in exploiting this new trade resource, and it was the catalyst for Dutch merchant-traders to fund more expeditions.
In 1611–12, the
Admiralty of Amsterdam sent two covert expeditions to find a passage to
China with the yachts
Craen and
Vos,
captained by Jan Cornelisz Mey and Symon Willemsz Cat, respectively. In
four voyages made between 1611 and 1614, the area between present-day
Maryland and
Massachusetts was explored, surveyed, and charted by
Adriaen Block,
Hendrick Christiaensen, and
Cornelius Jacobsen Mey.
The results of these explorations, surveys, and charts made from 1609
through 1614 were consolidated in Block's map, which used the name
New Netherland for the first time.
Dutch exploration and mapping of Australia and Oceania
In terms of world history of geography and exploration, the VOC can
be credited with putting most of Australia's coast (then Hollandia Nova
and other names) on the world map, between 1606 and 1756.
[164] While Australia's territory (originally known as
New Holland) never became an actual Dutch settlement or colony,
[165]
Dutch navigators were the first to undisputedly explore and map
Australian coastline. In the 17th century, the VOC's navigators and
explorers charted almost three-quarters of Australia's coastline, except
its east coast. The Dutch ship,
Duyfken, led by
Willem Janszoon, made the first documented European landing in Australia in 1606.
[166] Although a
theory of Portuguese discovery in the 1520s exists, it lacks definitive evidence.
[167][168][169] Precedence of discovery has also been claimed for
China,
[170] France,
[171] Spain,
[172] India,
[173] and even
Phoenicia.
[174]
Hendrik Brouwer's discovery of the
Brouwer Route, that sailing east from the
Cape of Good Hope
until land was sighted and then sailing north along the west coast of
Australia was a much quicker route than around the coast of the Indian
Ocean, made Dutch landfalls on the west coast inevitable. The first such
landfall was in 1616, when
Dirk Hartog landed at Cape Inscription on what is now known as
Dirk Hartog Island, off the coast of Western Australia, and left behind an inscription on a
pewter plate. In 1697 the Dutch captain
Willem de Vlamingh landed on the island and discovered
Hartog's plate. He replaced it with one of his own, which included a copy of Hartog's inscription, and took the original plate home to
Amsterdam, where it is still kept in the
Rijksmuseum Amsterdam.
In 1627, the VOC's explorers
François Thijssen and
Pieter Nuyts discovered the south coast of Australia and charted about 1,800 kilometres (1,100 mi) of it between
Cape Leeuwin and the
Nuyts Archipelago.
[175][176] François Thijssen, captain of the ship
't Gulden Zeepaert (The Golden Seahorse), sailed to the east as far as
Ceduna in
South Australia. The first known ship to have visited the area is the
Leeuwin ("Lioness"), a Dutch vessel that charted some of the nearby coastline in 1622. The log of the
Leeuwin has been lost, so very little is known of the voyage. However, the land discovered by the
Leeuwin was recorded on a 1627 map by
Hessel Gerritsz:
Caert van't Landt van d'Eendracht ("Chart of the Land of Eendracht"), which appears to show the coast between present-day
Hamelin Bay
and Point D’Entrecasteaux. Part of Thijssen's map shows the islands St
Francis and St Peter, now known collectively with their respective
groups as the
Nuyts Archipelago. Thijssen's observations were included as soon as 1628 by the VOC cartographer
Hessel Gerritsz
in a chart of the Indies and New Holland. This voyage defined most of
the southern coast of Australia and discouraged the notion that "
New Holland" as it was then known, was linked to Antarctica.
In 1642,
Abel Tasman sailed from
Mauritius and on 24 November, sighted
Tasmania. He named Tasmania
Anthoonij van Diemenslandt (Anglicised as
Van Diemen's Land), after
Anthony van Diemen, the VOC's Governor General, who had commissioned his voyage.
[177][178][179] It was officially renamed
Tasmania in honour of its first European discoverer on 1 January 1856.
[180]
In 1642, during the same expedition, Tasman's crew discovered and charted
New Zealand's coastline. They were the first Europeans known to reach New Zealand. Tasman anchored at the northern end of the
South Island in
Golden Bay (he named it
Murderers' Bay) in December 1642 and sailed northward to
Tonga following a clash with local Māori. Tasman sketched sections of the two main islands' west coasts. Tasman called them
Staten Landt, after the
States General of the Netherlands, and that name appeared on his first maps of the country. In 1645 Dutch cartographers changed the name to
Nova Zeelandia in Latin, from
Nieuw Zeeland, after the
Dutch province of
Zeeland. It was subsequently Anglicised as
New Zealand by
James Cook. Various claims have been made that New Zealand was reached by other non-
Polynesian voyagers before Tasman, but these are not widely accepted.
Criticisms
The VOC's economic activity in
Mauritius largely contributed to the extinction of the
dodo, a flightless bird that was endemic to the island.
In spite of the VOC's historical successes and contributions, the
company has long been criticized for its quasi-absolute commercial
monopoly,
colonialism,
exploitation (including use of
slave labour),
slave trade, use of violence,
environmental destruction (including
deforestation), and overly
bureaucratic in organizational structure.
[10]
Cultural depictions of people and things associated with the VOC
- Batavia: a shipwreck on the Houtman Abrolhos in 1629, made famous by the subsequent mutiny and massacre that took place among the survivors. [see also Batavia (opera)]
- Flying Dutchman: a legendary ghost ship in several maritime myths, likely to have originated from the 17th-century golden age of the VOC.
- Hansken: a female Asian elephant from Dutch Ceylon. The young elephant Hansken was brought to Amsterdam in 1637, aboard a VOC ship. Dutch Golden Age artist Rembrandt made some historical drawings of Hansken.
- Batavia, Dutch East Indies: 1650s/1660s paintings of scenes from everyday life by Dutch Golden Age painter Andries Beeckman, one of the few painters who travelled to the Dutch East Indies in the 17th-century.
- Cosmos: A Personal Voyage: in the 6th episode Travellers' Tales of the popular documentary TV series Cosmos (1980), American astronomer Carl Sagan,
who also served as host, took a look at the voyage to Jupiter and
Saturn, and compared these events with the adventuring spirit of the Dutch Golden Age explorers (including the VOC's navigators).
- The Sino-Dutch War 1661: 2000 Chinese historical drama film. The film is loosely based on the life of Koxinga (Zheng Chenggong) and focuses on his battle with the VOC for control of Dutch Formosa at the Siege of Fort Zeelandia.
- Ocean's Twelve: a 2004 American comedy heist film inspired by the historical story from the VOC's IPO and the first shares of stock ever traded publicly in history. The VOC's stock certificate is the focused heist by the burglars in the movie.
- The Thousand Autumns of Jacob de Zoet, 2010 historical novel by British author David Mitchell.
- My Father's Islands: Abel Tasman's Heroic Voyages: a 2012 juvenile fiction by Christobel Mattingley, written from the perspective of Tasman's
young daughter, Claesgen. The fictional story was inspired by a 1637
painting of the Tasman family by the Dutch Golden Age painter Jacob Gerritsz. Cuyp, one of the treasures of the National Library of Australia.
- The Tsar-Carpenter: a cultural depiction of Tsar Peter the Great (Peter I of Russia) in his undercover visit to the Dutch Republic as part of the Grand Embassy mission (1697–1698). When Peter the Great wanted to learn more about the Dutch Republic's sea power,[181][182] he came to study seamanship, shipbuilding industry and carpentry in Amsterdam and Zaandam (Saardam).[note 18] Through the agency of Nicolaas Witsen, mayor of Amsterdam and an expert on Russia, Tsar Peter I worked as a ship's carpenter in the VOC's shipyards in Holland. [see also Zar und Zimmermann (opera) and The Czar and the Carpenter (film)]
- Megacorporation or mega-corporation: a quasi-fictional term/concept derived from the combination of the prefix mega- with the word corporation, possibly inspired by the VOC's history. It refers to a (quasi-fictional) corporation that is a massive conglomerate, possessing quasi-governmental powers and holding monopolistic control over markets.
- Black swan theory: a metaphor or metatheory of science popularized by Nassim Nicholas Taleb. It was possibly inspired by Willem de Vlamingh's 1697 discovery. De Vlamingh was the first known European/Western to observe and describe black swans and quokkas, in Western Australia.
Non-fiction works relating to the history of the VOC
Places and things named after the VOC and its people
For the full list of places explored, mapped, and named by people of the VOC, see List of place names of Dutch origin.
VOC's important heritage sites
Populated places established by people of the VOC
Populated places (including cities, towns and villages) established/founded
[note 21] by people of the Dutch East India Company (VOC).
- Batavia (Dutch East Indies), modern-day Jakarta
- Tainan, the oldest urban area in Taiwan
- Kaapstad (Cape Town), the oldest urban area in South Africa and one of the first permanent European settlements in Sub-Saharan Africa. Constantia (Cape Town's suburb) is considered one of the oldest wine-producing regions in the Southern Hemisphere.
- Stellenbosch, the second oldest urban area (town) in South Africa
- Swellendam, the third oldest urban area (town) in South Africa
- Graaff-Reinet, the fourth oldest urban area (town) in South Africa
- Franschhoek, a town in the Western Cape Province, South Africa
- Paarl, the third oldest European settlement in South Africa and the largest town in the Cape Winelands
- Simonstad (Simon's Town), a town near Cape Town, South Africa
- Dutch Mauritius, the first permanent human settlement ever in Mauritius[note 22]
VOC scholars
Some of the notable VOC scholars including
Charles Ralph Boxer,
Leonard Blussé, Warwick Funnell,
Femme Gaastra, Oscar Gelderblom, Joost Jonker,
Om Prakash, Jeffrey Robertson, and Günter Schilder.
VOC archives and records
The VOC's operations (trading posts and colonies) produced not only
warehouses packed with spices, coffee, tea, textiles, porcelain and
silk, but also shiploads of documents. Data on political, economic,
cultural, religious, and social conditions spread over an enormous area
circulated between the VOC establishments, the administrative centre of
the trade in
Batavia (modern-day
Jakarta), and the
board of directors (the Heeren XVII/Gentlemen Seventeen) in the Dutch Republic.
[183] The VOC records are included in
UNESCO's
Memory of the World Register.
[184]
VOC coins
Bronze
doit of the VOC, depicting the company's
monogram-
logo and its date of production.
Notable VOC ships
A replica of the VOC vessel "
Batavia" 1620–1629
-
- Replicas have been constructed of several VOC ships, marked with an (R)
VOC timeline and the firsts in history
- 1600s: The VOC's navigators became the first non-natives to undisputedly discover, explore and map coastlines of the Australian continent (including Mainland Australia, Tasmania, and their surrounding islands), New Zealand, Tonga, and Fiji.
- 1602: On March 20, the Dutch East India Company (VOC), the world's first true transnational corporation, was originally established as a chartered company. The VOC was the first joint-stock company to get a fixed capital stock and the first recorded (public) company ever to pay regular dividends.
- 1606: The first (undisputed) documented European sighting of and landing on the Australian continent (Nova Hollandia) by the VOC navigator Willem Janszoon aboard the Duyfken.
- 1609: The VOC ship Halve Maen's exploratory voyage, a milestone in the history of New York (including New York City) and North America.
- 1609: Dutch jurist Hugo Grotius wrote Mare Liberum, a foundational treatise on modern international law of the sea, while being a counsel to the Dutch East India Company (VOC) over the seizing of the Santa Catarina Portuguese carrack issue.
- 1609: The first recorded corporate governance dispute, took place on January 24 (1609) between the shareholders/investors (most notably Isaac Le Maire) and directors of the VOC.[187]
- 1609: The first recorded short seller in history, Isaac Le Maire, a sizeable shareholder of the VOC.
- 1610: An early mechanism of financial regulation practice was the first recorded ban on short selling, by the Dutch authorities.
- 1611: The world's first official (formal) stock exchange and stock market were launched by the VOC in Amsterdam.
- 1611: The VOC was the first corporation to be ever actually listed on an official (formal) stock exchange. In other words, the VOC was the world's first formally listed public company (or publicly listed company).
- 1611: Discovery of the Brouwer route by the VOC navigator Hendrik Brouwer.
- 1616: The VOC navigator Dirk Hartog made the first recorded European landing on the west coast of the Australian continent.
- 1616: Hartog Plate, the first known European artefact found on Australian soil (Dirk Hartog Island).
- 1621: Establishment of the Dutch West India Company (WIC/GWIC).
- 1622: On January 24, Amsterdam-based businessman Isaac Le Maire filed a petition against the VOC, marking the first recorded expression of shareholder activism or shareholder rebellion.
- 1624–1662: Tainan (Dutch Formosa), the first urban area to be established in Taiwan.
- 1627: The VOC explorers François Thijssen and Pieter Nuyts made the first recorded European landing on the south coast of the Australian continent and charted about 1,800 kilometres of it between Cape Leeuwin and the Nuyts Archipelago.
- 1629: Wiebbe Hayes Stone Fort (West Wallabi Island), the first known European structure to be built on the Australian continent.
- 1636–1637: Tulip Mania, generally considered to be the first recorded economic bubble (or speculative bubble) in history.
- 1638–1710: Dutch Mauritius, the first permanent human settlement to be established in Mauritius.
- 1641–1853: Beginnings of Rangaku (first phase: 1641–1720). After 1641, the VOC businessmen were the only Western allowed to trade with or to enter isolated Japan.
- 1642: The VOC explorer Abel Tasman discovered, explored, and charted Tasmania and its neighboring islands. He named Tasmania Anthoonij van Diemenslandt (Anglicised as Van Diemen's Land), after Anthony van Diemen, the Dutch East India Company's Governor General, who had commissioned his voyage.
- 1642: On December 13, Abel Tasman's VOC crew were the first non-natives known to discover, explore and chart New Zealand's coastline (Nova Zeelandia).
- 1652–1806: Kaapstad (Cape Town), the first urban area to be established in South Africa.
- 1653–1666: The VOC bookkeeper Hendrick Hamel was the first known non-Asian to experience first-hand and write about Joseon-era Korea (often referred to as the "Hermit Kingdom").
- 1659: Beginnings of the South African wine industry.
- 1688–1689: The first large-scale emigration of Huguenots to the Dutch Cape Colony (modern-day Western Cape, South Africa).
- 1697: European discovery of black swans for the first time in history, by the VOC navigator Willem de Vlamingh.
- 1697: In his undercover visit to the Dutch Republic as part of the Grand Embassy mission (1697–98), Tsar Peter I of Russia (Peter the Great) worked as a ship's carpenter in the VOC's shipyards in Amsterdam and Zaandam/Saardam.
- 1700s:
Gallery
-
-
-
-
Panorama of Ayutthaya in the
Bushuis, Amsterdam
-
-
-
The ship Vryburg on a platter, commissioned 1756
-
Anonymous painting with Table Mountain in the background, 1762
-
See also
Other trade companies of the age of the sail
- The British East India Company, founded in 1600
- The Danish East India Company, founded in 1616
- The Danish West India Company, founded in 1671
- The Dutch West India Company, founded in 1621
- The Portuguese East India Company, founded in 1628
- The French East India Company, founded in 1664
- The Swedish East India Company, founded in 1731
- The Emden Company, founded 1751
- The Swedish West India Company, founded in 1786
- The Austrian East India Company, founded in 1775
Governors General of the Dutch East India Company
