HIST363: Global Perspectives on Industrialization

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 right after the return of the fleet. As the competition between companies intensified, the profitability of the new trade was threatened, but consolidation was not possible as the merchants of different provinces were unwilling to cooperate.

In 1602, the Dutch government forced the issue, sponsoring the creation of a single "United East Indies Company" that was granted a monopoly over the Asian trade.

 

Dutch Batavia in the seventeenth century, built in what is now North Jakarta

In 1603, the first permanent Dutch trading post in Indonesia was established in Banten, West Java and in 1611, another was established at Jayakarta. In 1610, the VOC established the post of Governor General to enable firmer control of 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 continued to officially have overall control.

VOC headquarters were in Ambon for the tenures of the first three Governor Generals, but it was not a satisfactory location. Although it was at the center of the spice production areas, it was far from the Asian trade routes and other VOC areas of activity ranging from Africa to Japan. 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.

In 1604, a British 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, which saw the beginning of Anglo-Dutch competition for access to spices. 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. Diplomatic agreements in Europe in 1620 ushered in a period of cooperation between the Dutch and the English over the spice trade. This ended with a notorious, but disputed incident, known as the 'Amboyna massacre', where ten English and ten Japanese traders were arrested, tried and beheaded for conspiracy against the Dutch government. Although this caused outrage in Europe and a diplomatic crisis, the English quietly withdrew from most of their Indonesian activities (except trading in Bantam) and focused on other Asian interests.

In 1619, Jan Pieterszoon Coen was appointed Governor-General of the VOC. He was not afraid to use brute force to put the VOC on a firm footing. On May 30 that year, 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 Banda Islands, the source of nutmeg was deported, driven away, starved to death or killed in an attempt to replace them with Dutch colonial slave labor.

The VOC traded throughout Asia. Ships coming into Batavia from the Netherlands carried silver from Spanish mines in Peru and supplies for VOC settlements in Asia. Silver, combined with copper from Japan, was used to trade with India and China for textiles. These products, such as cotton, silk and ceramics, 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 a long time the only place where Europeans were permitted to trade with Japan.

In 1640, the VOC obtained the port of Galle, Sri Lanka, from the Portuguese and broke the latter's monopoly of the cinnamon trade. In 1658, Gerard 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.

In 1652, Jan van Riebeeck established an outpost at the Cape of Good Hope to re-supply VOC ships on their journey to East Asia. This post later became a fully-fledged colony, the Cape Colony, when more Dutch and other Europeans started to settle there. VOC outposts were also established in Persia (now Iran), Bengal (now Bangladesh, but then part of India), Malacca (Melaka, now in Malaysia), Siam (now Thailand), mainland China (Canton), Formosa (now Taiwan) and southern India. In 1662, Koxinga expelled the Dutch from Taiwan.

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 percent.