Merchant Kings: When Companies Ruled The World, 1600-1900

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9781844861149: Merchant Kings: When Companies Ruled The World, 1600-1900

An engaging blend of biography and economic/colonial history, Merchant Kings tells the story of the trading companies that monopolised vast territories all over the world during the first great period of globalisation. The leaders of these trading companies exercised dictatorial power over millions of people, and devoted their time and resources to the accumulation of wealth through hunting, trapping, trade and exploration. It was a harsh existence on the frontiers of the civilised world, and these kings of commerce were larger-than-life characters; adventurers as well as merchants. They included men like Peter Stuyvesant, the one-legged governor of the Dutch West India Company; Cecil Rhodes, founder of the De Beers company (and after whom Rhodesia was named); and George Simpson, the infamous 'Little Emperor' of the Hudson's Bay Company, who was chauffeured around his vast fur domain in a giant canoe, exhorting his oarsmen to paddle harder in order to set canoeing speed records. Merchant Kings examines their rise and fall in the centuries before colonialism and empire, analysing the political, social and cultural legacies of this fascinating, cut-throat age.

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About the Author :

Stephen R. Bown is the author of Madness, Betrayal and the Lash: The Epic Voyage of Captain George Vancouver (2008); Scurvy (2003), published in six territories, and A Most Damnable invention: Dynamite, Nitrates and the Making of the Modern World (2005). He lives in Canmore, Alberta.

Excerpt. © Reprinted by permission. All rights reserved. :

MERCHANT KINGS (Chapter one)First among Equals

Jan Pieterszoon Coen and the Dutch East India Company

·   1   ·

The thirteen heavily armed ships sailed towards the East Indies’ remote Banda Islands in the spring of 1609, after nearly a year’s voyage from Amsterdam. The heady, sweet scent of flowering nutmeg trees filled the humid air. The commander of the squadron, one of the largest corporate fleets yet to depart the Netherlands for “the spiceries,” was Admiral Pieter Verhoeven (Peter Verhoef), a veteran not of trade and exploration but of combat at sea. He was now employed by the Dutch East India Company, the VOC (Vereenigde Oost-Indische Compagnie), with the objective of securing for his employers the exotic cloves and nutmeg of the Moluccas, as the “Spice Islands” of Indonesia were then known. The admiral commanded more than a thousand fighting men, including a contingent of Japanese mercenaries, and his orders from the “Heeren XVII” (the Lords Seventeen), his powerful corporate directors in the Netherlands, were direct and clear: “We draw your special attention to the islands in which grow the cloves and nutmeg, and we instruct you to strive after winning them for the company either by treaty or by force.” Force was something Verhoef understood well, having earned distinction at the Battle of Gibraltar two years earlier, when Dutch ships virtually wiped out a mighty fleet of Holland’s bitter enemy, Imperial Spain.

As Verhoef and his fleet neared the principal harbour of Great Banda, the admiral was astonished and annoyed to spy an English ship in the sheltered port. For several years now, the Dutch East India Company had been engaged in a simmering conflict with the traders and merchants of the English East India Company. The two companies, vying for control of the lucrative spice trade in Indonesia, each sought to oust the Portuguese and dominate the trade. Captain William Keeling and his ship, Hector, had been cruising the Banda Islands, the world’s sole source of nutmeg and mace, trying to secure a cargo of spices for the past month. He had struck up a cordial relationship with Dutch traders stationed on the remote and tiny islands, enjoying dinners ashore and tours of the plantations. All the friendliness dissipated, however, with the arrival of Verhoef’s fleet. One of Verhoef’s first actions to frustrate Keeling’s business was to pay the Bandanese headmen, the orang kaya, to stop trading with the English. Keeling complained that Verhoef treated him and his men “most unkindlye, searching his boate disgracefullye and not suffering him to have any further trade, not to gather in his debts, but with a peremptory command, to be gone.” More ominously, an English sailor employed in the Dutch fleet deserted and informed his countrymen that Verhoef was planning a secret attack on them within weeks.

Keeling pondered his predicament. “Sixty-two men against a thousand or more could not perform much,” he wrote despondently. Weighing anchor, he took the Hector off to one of the more distant islands, Ai, and began to purchase and load his ship with nutmeg far from the interference of the Dutch. The largest island of the tiny archipelago was called Lonthor, or Great Banda, where several thousand Bandanese tended the largest and most valuable nutmeg plantations. The islands of Neira and Gunung Api were clustered within gunshot of Great Banda. Ai was a little distance to the west, and the smallest of the islands, Run, was farther west. On Great Banda, Verhoef wasted no time in menacing and overawing the islanders, and in enforcing a Dutch company monopoly that excluded all English, Portuguese, Malay and Chinese traders from acquiring a cargo of nutmeg.

On April 19, Verhoef ordered 250 heavily armed company troops to disembark from the ships and form up on the beach. He then summoned the orang kaya to hear his speech and petition. When they had gathered, under the shade of a great tree, he distributed gifts and ceremoniously unfurled a parchment. He proceeded to read his pronouncement, first in Portuguese and then in Malay. The islanders had broken their promise, Verhoef intoned, “to have trade only with them, who had now traded there six years.” Verhoef pointed across the narrow waterway that separated Lonthor from Neira, and informed them that “to defend themselves and the whole country from the Portugals,” his men would soon begin building a fort and permanent factory on Neira. The orang kaya were as dismayed as Verhoef was determined.

The trouble stemmed from an incident that had occurred several years earlier. On May 23, 1602, Dutch captain Wolfert Harmenszoon persuaded some of Neira’s chiefs to sign a contract, in Dutch—a language they couldn’t read—granting the Dutch East India Company a monopoly in the nutmeg trade. Some, but not all, of the orang kaya had signed the agreement, fearing to offend the merchants and invite violent reprisals if they refused. But since there was no real benefit in reserving all their spice for the Dutch, they had not abided by the agreement—if, indeed, they had ever considered doing so. Now it appeared that the Dutch were taking this document seriously and intending to apply it to all of the nutmeg trade on all the Banda Islands, not just to the region controlled by the signatories.

The Bandanese lived in a series of interrelated coastal villages on the islands but, unlike others in the Moluccas, had no overall king or chief. Verhoef did not understand the islands’ loose governing structure, nor did he know with whom to deal; he simply wanted to secure a veneer of legality for his conquest. The several hundred orang kaya of Great Banda were stunned and perplexed by Verhoef’s demands, and their response was evasive and guarded—Neira was a separate island with its own orangkaya. They delayed, requesting more time to deliberate the issue: the fact that they had little control over what Verhoef did across the waterway. But the prospect of a permanent stone fort within gunshot distance of their own harbour boded ill.

The Bandanese were reminded of a prophecy made a few years earlier by a Muslim holy man that foretold of white strangers from afar who would one day conquer their islands. English traders had mirthfully associated this prophecy with the Dutch. The islanders, however, did not want to be locked into dealing with the Dutch. They much preferred Chinese, Arab and Javanese traders, who were frequently in port, bringing goods the Bandanese valued, such as batiks, calicoes, rice, sago palm, porcelain and medicines. They shared cultures with these peoples, and sometimes religion. The Dutch traders, on the other hand, did not impress with their often useless trade goods, such as woollen and velvet cloth, their strange religion, their irregular visits, ignorance of local customs and inflexible prices. Particularly annoying was Verhoef’s demand that the islanders stop selling nutmeg and mace to anyone but the Dutch traders. Further unsettling the Bandanese was the eruption of a volcano on nearby Gunung Api. Ominously, the volcano belched a cloud of cinders and ashes onto Neira just as Verhoef’s fleet arrived.

As the days and weeks passed in stalled negotiations, Verhoef became agitated and uneasy. He had other business to attend to, particularly his similar mission of securing the Dutch East India Company monopoly over cloves at the islands of Tidore and Ternate, farther north. On April 25, 1609, he ordered about 750 of his soldiers ashore on Neira and set them to work clearing the foundations of an abandoned Portuguese fort. The people of the nearby villages fled to the hills or other islands, and Dutch troops and workers soon occupied their dwellings. Lacking the military power to dislodge the Dutch, and with the walls of the fort creeping ominously higher, the islanders on May 22 sought a meeting with Verhoef to discuss the details of the monopoly he demanded. They selected a remote site on the east of the island for the meeting, and Verhoef set off with a coterie of compatriots, including his most trusted captains, senior merchants and a contingent of heavily armed soldiers. He also dragged along, according to a biased English account, a string of English captives chained together to demonstrate his dominance over that upstart nation.

The clearing, however, was deserted. No one was waiting for Verhoef at the appointed meeting place, underneath a giant tree on the beach. Curious rather than afraid, he ordered his interpreter, Adriaan Ilsevier, to scout the surrounding woods, where Ilsevier stumbled upon a group of orang kaya suspiciously concealed in the brush. They informed him that they had become frightened at the sight of so many armed Dutchmen. Would Verhoef please leave his soldiers, arms and guns under the tree, bringing only his senior negotiators to them so that they could talk safely, without the soldiers shadowing the talks?

Secure in his assumed superiority, Verhoef consented. He and dozens of his staff marched unarmed into the brush, “and being entered among them he found the woods replenished with armed blackamoores, Bandanese, and orang kaya who instantly encircled them and without much conference between them…, were by them treacherously and villainously massacred.” They screamed out “To arms!” and “Admiral, we are betrayed!” but to no avail. Unarmed, they were quickly killed and none escaped. It happened so fast and unexpectedly that the armed guards who rushed the short distance to defend their commander and comrades arrived to find them all slaughtered. Verhoef had been decapitated, and his head was placed on a spiked stick. Over the next few weeks, there was a general uprising of the Bandanese against the Dutch, who scarcely left their ships or the fort. Their work on the half-completed castle, Fort Nassau, continued at an accelerated pace.

The new leader of the Dutch company’s forces, Simon Hoen, began to “execute and practise all revenge possible” by attacking islanders, burning villages, burning and destroying boats and plundering anything of value. After some of his troops suffered a defeat by Bandanese forces on July 26, Hoen retreated and ordered a naval blockade of the islands to stop the food imports vital to the survival of the people and to bring commerce to a halt. Soon many of the orang kaya were willing to accede to the company’s demands, and they sat down to negotiate with the Dutch invaders. On August 13 they grudgingly agreed to the Dutch monopoly over the nutmeg trade; all incoming ships now had to present themselves at Fort Nassau for inspection and to obtain a pass. And, furthermore, no one could settle on the islands without the permission of the company commander. The entire island of Neira was to become a dominion of the Dutch East India Company, “to be kept by us forever”—the first territorial acquisition by the company.

Hoen then sailed north, with the bulk of his fleet, to do business with Ternate and Tidore. But even after this first conquest the Bandanese showed no compunction about working around the Dutch monopoly, secretly shipping their nutmeg to English merchants who had established factories on the outlying islands of Ai and Run. Securing a trade monopoly was simple in theory but difficult to enforce, even on the remote and tiny Banda Islands.

In the seventeenth and early eighteenth centuries, the Netherlands was arguably the wealthiest and most scientifically advanced of the European nations. This period, known as the Dutch Golden Age, brought a flourishing of the arts and sciences that reflected the period’s unbounded optimism and affluence. Prosperous burghers and merchants became patrons of the arts, including sculpture, poetry and drama, and of public debates. They commissioned architects to design beautiful houses. Paintings and sculptures adorned the interior walls of these impressive homes. Rembrandt van Rijn, Johannes Vermeer, Jacob van Ruisdael and many others revolutionized painting, infusing new life into landscapes, portraiture and still life, as well as portraying contemporary life and society in the flourishing cities that were the most cosmopolitan in Europe. In science, the list of internationally prominent luminaries included the philosopher René Descartes; acclaimed jurist and theorist of international law Hugo Grotius; mathematician, astronomer and inventor of the pendulum clock Christiaan Huygens; and Anton van Leeuwenhoek, inventor of the microscope and founder of the study of microbiology. Book publishing flourished in the climate of tolerance and intellectual curiosity; ideas concerning religion, philosophy and science that were considered too controversial in other nations found their way into print in the Netherlands, and the books were secretly shipped abroad.

The Dutch Republic, newly freed from Spanish domination and relishing its freedom, was admirably situated to dominate European trade by providing an artery into the interior. Thousands of ships crowded its many harbours. The great city of Amsterdam was the centre of the international trade in the exotic luxuries of the Americas, India and the “Spice Islands.” The Amsterdam stock exchange, founded in 1602, was the world’s first, created by the Dutch East India Company (VOC) for dealing in its own stocks and bonds. The VOC was the first-ever trading company with a permanent share capital. This joint stock company attracted huge wealth in initial capitalization from over 1,800 investors, most of whom were merchants and other wealthy middle-class citizens, and the speculation on the fluctuating value of these shares relied on the success or failure of the company’s ships in bringing spices back to Europe from the Far East.

The first great global corporation, the VOC, was by the late seventeenth century the most powerful and richest company in the world. Its private fleet boasted nearly 150 merchant ships and 40 giant warships. At the height of its power, it employed nearly 50,000 people worldwide—seamen, artisans, stevedores, labourers, clerks and builders. The company was involved in a multitude of commercial activities, such as construction, sugar refining, cloth manufacturing, tobacco curing, weaving, glass making, distilling, brewing and other industries related to its global business enterprises. The payroll also included a 10,000-man private army.

The VOC, one of the foundations of Dutch prosperity and with its mighty fleet a key force propelling the young republic to look to the world for commerce, held a virtual monopoly over the global spice supply. It achieved this in a bloody struggle at the dawn of the Age of Heroic Commerce. Ironically, the company’s wealth was founded on a system and on values imposed in Indonesia that ran counter to the liberal and tolerant culture of many of its shareholders. Furthermore, its rise to global supremacy as a state monopoly, and its contribution to the artistic and cultural flourishing of the Dutch Republic, was founded on the ruthless strategy of a man whose character was entirely at odds with the character of his nation.

Sailing as part of Peter Verhoef’s expedition, and witness to what he termed the “Vile Bandanese Treachery of 1609,” was a junior trader named Jan Pieterszoon Coen. The Bandanese uprising and resistance to the VOC, he believed, had been sponsored by perfidious English agents and furthered by the untrustworthy nature of the Bandanese. Coen was destined for historical greatness and, some would argue, infamy. More than a decade later, as the governor general of the VOC’s enterprise in the East Indies, Coen would see to it that such disrespect for his company did not go unpunished.

·   2   ·

The spices of the east indies come from a variet...

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