A history of commerce

by Clive Day

220. The East India Company.—The East India Company, founded in 1602, which secured from the Dutch government the monopoly of trade and rule from the Cape of Good Hope to the Straits of Magellan, enjoyed a longer existence. It established trading stations on various points of the Asiatic coast and in South Africa, but found the mainstay of its power in the rich islands of the Malay archipelago, especially in the small group of spice islands and in Java. Here it broke the power of the Portuguese, and gained for itself a partial or total monopoly of some of the products, which were among the most highly prized luxuries of Europe.

In 1677 a fleet consisting of one small vessel and six large ships, of which each carried a crew of about 100 sailors and 25 marines, brought a cargo booked at nearly two million gulden (or several million dollars). The cargo included immense quantities of pepper, nutmegs, mace, and cinnamon; raw silk, and silk and cotton textiles from Persia and India; indigo, borax, saltpeter, shellac, fine woods, etc. Neither tea nor coffee appears in this list, but in the next century, when the Dutch had developed their commerce with eastern Asia and had stimulated the cultivation of new products in Java, these and other wares became of the first importance. The cargo of a fleet of 1739 included the following wares, in the order of their value; tea, coffee, pepper, sugar, mace, nutmeg, camphor, indigo, cloves, etc.

Note that several powers had established themselves on the coast of India; the British did not win the position of unquestioned superiority until toward 1800.

221. Leading position of the Dutch in European commerce.—Historians often speak of this distant commerce of the Dutch as forming the basis for their great prosperity in the seventeenth century. Figures are lacking which would enable us to determine the exact proportion of this distant trade to the total, but the importance of this new branch of commerce was probably exaggerated by reason of the strong appeal it made to the imagination of men of the time. Certainly the Dutch were not dependent on the Indian trade for the position they took among commercial nations then. In the seventeenth century more than half of the Dutch ships sailed for some port on the North or Baltic seas. In 1640, 1,600 ships out of a total of 3,450 passing through the Sound to the Baltic were Dutch; and at this time a Dutch official declared that grass would grow in the Amsterdam exchange and ships would be sold for firewood if the Baltic trade were not kept free.

Thirty to forty Dutch ships went every year to Archangel, then the chief port of Russia, and carried the products in which the Hansa had formerly dealt to the Netherlands and to the west coasts of France and Spain; Dutch ships almost monopolized the trade between Spain and the northern countries after 1648, exporting 15,000 to 16,000 bales of wool a year from that country while French and English together exported but 3,000. Dutch exports reached a figure in the seventeenth century which was not attained by the English until 1740. Even the Dutch fisheries, which employed over 2,000 boats, were said to be more valuable than the manufactures of France and England combined. A Dutch contemporary asserts, indeed, that as many persons were occupied in the fisheries as in commerce.

222. Growth of business activity.—The prosperity of Dutch foreign commerce was reflected in business activity at home. The Netherlands rapidly outstripped the southern low countries (now Belgium), which suffered cruel repression under Spanish rule; and the great commerce of Antwerp passed to Amsterdam. Speculation and banking developed in their various forms and the Netherlands became the money center of Europe. Scholars find in the Dutch business life of this period many features which are strikingly modern; speculation in stocks, commercial crises, pools, and “trusts.” Manufactures felt the impulse of progress, and broke the bonds of the old gild system for more modern forms of enterprise. Large establishments grew up; new industries were introduced (hats, silk, tanning, etc.); the Huguenot refugees expelled from France were granted a welcome for which they gave a rich return.

223. Commercial decline of the Netherlands.—When and why did the Netherlands lose the commanding position in European commerce? What country took the lead away from it? Those are questions which the student of the history of commerce must face, and in the following paragraphs the answers will be given.

There is no doubt about the last point; Netherland lost the leadership to England. The time when this change occurred can be stated with almost equal brevity; it was during the one hundred years between 1650, roughly the date when Cromwell gathered up the scattered forces of England to use them for her commercial advancement, and 1750, when the commercial supremacy of England could no longer be questioned.

The reasons for the change are as usual the hardest as they are certainly the most valuable topics to be studied. One reason can be stated here as a fact, to be proved afterwards in detail, that England was growing stronger. On the Dutch side, was the Netherlands growing weaker, or did it simply fail to keep pace with the English advance?