224. Reasons for decline.—So far as the facts are known Dutch commerce increased in amount till about 1730 and maintained about the same figures afterwards; but world commerce was growing so rapidly that relatively the Netherlands fell behind. The very size of the Netherlands told against the country in a political contest with other powers. It implied, too, a lack of native resources to support commerce when the hold of the Dutch on foreign trade was weakening. Furthermore, the Netherlands was like the Hanseatic League in that it lacked a strong central power and policy, and gave great independence to the separate units of which it was composed. The important units, in the economic aspect, were cities, which were able to carry on a small-scale commerce very successfully, but which could not unite to bring their best people to the front in a big-scale organization which could compete with that of other countries. The Dutch did not pull together to make the most of what they had, and the inefficiency and corruption which had always characterized the local governments grew worse with time. Rule by family rings brought with it favoritism and inordinately high taxes, under which industries labored and dwindled. Manufactures which had formerly flourished now declined. Weak at home, and, in comparison with other European states of the eighteenth century, weak abroad, the Netherlands fell from the first rank of commercial states, retaining in its colonies and in its developed banking system only reminders of its former greatness.
225. Character of the Dutch East India Company.—In the eighteenth century, when the Netherlands was struggling to maintain its commercial position, it was hindered rather than helped by the East India Company. The company seemed to have the chance to make stupendous profits, for it sold its wares for very high prices in Europe, and it paid for them in Asia very little or even nothing. It used its power to force the natives to supply it with some of these wares at nominal prices or absolutely gratis. The very fact, however, that the company could get its wares in this way, as a state would get them by taxation, suggests that the company had expenses like those of a state and unlike those of an ordinary commercial corporation. This was the fact; the company had to support the civil and military establishment of a regular government. This government shared, to the full, the political evils of the time; both at home and in the East it was corrupt and inefficient. It was strong enough to hold its own against the Portuguese, or against the English when they began their expansion in the East; but it was no match for the English when their strength developed in the eighteenth century.
226. Decline of the Company after 1700.—After 1700 the Dutch East India Company fell behind rapidly. It enjoyed such a high reputation, and kept its condition secret so successfully, that its credit was unimpaired, and it continued to pay dividends by borrowing money. For nearly two hundred years it declared dividends at rates ranging from 121⁄2 per cent to 20, 40, or even 50 per cent; the average dividend from 1602 to 1796 was over 18 per cent. The crash was bound to come finally; the company paid its last dividend in 1782, and was dissolved in 1798, leaving debts of over fifty million dollars, which were assumed by the Dutch government.
QUESTIONS AND TOPICS
1. Commerce and industry of the Netherlands in the fifteenth century. [Blok, vol. 2, chap. 12.]
2. Commercial considerations involved in the revolt of the Netherlands. [Rogers, Holland, Cambridge Mod. Hist., or one of the older books like Motley.]
3. Beginnings of Dutch commerce with the Indies. [Blok, vol. 3, chap. 9.]
4. From what Dutch source were the names Tasmania, Van Diemens Land, New Zealand, derived; when and how were they attached to countries later bearing them? [Encyclopedia.]
5. The Dutch in North America; was their commerce with New Netherlands important, and did the loss of their possession affect seriously their carrying trade? [See manuals of U. S. history and the references given in them; note the effect of the English Navigation Acts.]
6. The Dutch in South America. [See Edmundson, Dutch trade on the Amazon, English Historical Review, 1903, 18: 642-663, and later.]