Merchant Kings When Companies Ruled the World, 1600--1900

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  • Format: Hardcover
  • Copyright: 2010-12-07
  • Publisher: Thomas Dunne Books

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Commerce meets conquest in this swashbuckling story of the six merchant-adventurers who built the modern world It was an era when monopoly trading companies were the unofficial agents of European expansion, controlling vast numbers of people and huge tracts of land, and taking on governmental and military functions. They managed their territories as business interests, treating their subjects as employees, customers, or competitors. The leaders of these trading enterprises exercised virtually unaccountable, dictatorial political power over millions of people. The merchant kings of the Age of Heroic Commerce were a rogue's gallery of larger-than-life men who, for a couple hundred years, expanded their far-flung commercial enterprises over a sizable portion of the world. They include Jan Pieterszoon Coen, the violent and autocratic pioneer of the Dutch East India Company; Peter Stuyvesant, the one-legged governor of the Dutch West India Company, whose narrow-minded approach lost Manhattan to the British; Robert Clive, who rose from company clerk to become head of the British East India Company and one of the wealthiest men in Britain; Alexandr Baranov of the Russian American Company; Cecil Rhodes, founder of De Beers and Rhodesia; and George Simpson, the "Little Emperor" of the Hudson's Bay Company, who was chauffeured about his vast fur domain in a giant canoe, exhorting his voyageurs to paddle harder so he could set speed records. Merchant Kingslooks at the rise and fall of company rule in the centuries before colonialism, when nations belatedly assumed responsibility for their commercial enterprises. A blend of biography, corporate history, and colonial history, this book offers a panoramic, new perspective on the enormous cultural, political, and social legacies, good and bad, of this first period of unfettered globalization.

Author Biography

Stephen Bown is the author of Madness, Betrayal and the Lash; Scurvy; and A Most Damnable Invention. He lives in Canada.

Table of Contents

Introduction: The Age of Heroic Commercep. 1
First Among Equalsp. 7
The Dutch East India Company
Divided Loyaltiesp. 57
The Dutch West India Company
Companies at Warp. 103
The English East India Company
The Lord of Alaskap. 149
The Russian American Company
Empire of the Beaverp. 193
The Hudson's Bay Company
Diamonds and Deceitp. 239
The British South Africa Company
Epilogue: When Companies Ruled the Worldp. 285
Sourcesp. 291
Selected Bibliographyp. 295
Timeline for the Age of Heroic Commercep. 301
Acknowledgementsp. 307
Indexp. 309
Table of Contents provided by Ingram. 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 variety of sources. Nutmeg and mace grow together on the same tree, a shiny-leaved evergreen that can reach a height of nearly twenty metres. The fruit is yellow and peach-like and bursts open when fully ripe, exposing a small brown nut encased in a red membrane. The meat of the nut is the nutmeg, and the red membrane, after being dried in the sun until brown, is the mace. Cloves are the unopened flowers of the clove trees which blanket hillsides with their reddish new-growth leaves. The pink buds are harvested by hand and dried in the sun. A mature tree yields upwards of fifteen kilograms of dried buds per year. Pepper comes from a dark-leaved climbing vine, whose berries grow in clusters of as many as fifty. Picked unripe and green, the berries dry black in the sun. White pepper is derived from fully ripened red berries. The aromatic inner bark of the cinnamon and cassia trees is cut off the branches and dried in the sun until it rolls up. The bulbous root of a narrow perennial with leaves like grass yields ginger, historically eaten fresh in the East but dried and ground for shipment to Western markets. Bright yellow turmeric is likewise derived from a rhizome of a plant in the ginger family, and other exotic spices also have their prosaic origin in plants that grew historically in Indonesia.

These well-known spices were used as primary ingredients in medicines, perfumes and food flavourings, as an aid to digestion and as a preservative of meat. Their aromatic properties were so powerful that minute amounts masked foul odours and enlivened otherwise monotonous cuisine. Their odour disguised the stench of crowded cities and the reek of slightly rotten salted meats. These spices were so valuable that they doubled as currency, and people killed for them. A single pouch of some spices could be exchanged for a small herd of cattle or sheep, or offered as a fabulous wedding dowry. Spices were presented as gifts to kings, demanded as tribute by conquering generals and graciously received by popes as their due. The Roman Emperor Tiberius complained of the drain on the empire’s resources that resulted from paying for “exotic Asian products.” In ad 408 King Alaric of the invading Goths demanded three thousand pounds of pepper as payment for not plundering Rome. Nutmeg and ginger were even believed to ward off the plague. For centuries, gold and silver flowed east while dried and powdered plant matter flowed west.

In seventeenth-century Europe fashionable and well-off households possessed ornate spice graters and storage canisters, as well as small silver plates specially designed to serve spice cake and candied spiced fruit. Gentlemen and ladies wore pomanders loaded with spices and perfume blends to ward off infectious diseases and disguise body odours. An orange or apple might be punctured with dozens of cloves and left to scent a room of hanging clothes. Cloves were especially popular as breath fresheners; in ancient Han China a rule of the imperial court dictated that supplicants and courtiers must chew cloves to sweeten their breath before speaking to the emperor.

Apothecaries and physicians prescribed a melange of spices to ward off a variety of both minor and serious ailments. Nutmeg was reputed to stifle coughs and improve memory; pepper cured common colds, improved eyesight and reduced liver pains; cloves were a remedy against earache; tamarind was efficacious against the plague. Last, but certainly not least, it was widely rumoured that many spices, including nutmeg, mace and ginger, were aphrodisiacs. Not surprisingly, demand for these spices had long outstripped supply, and their prices frequently put them out of reach of all but the wealthy, except on special occasions. “The art of their various uses was common among civilized peoples,” writes historian J. Innes Miller in The Spice Trade of the Roman Empire, “in their homes, their temples, their public ceremonial, and in the seasoning of their food and wine. A peculiar attribute was their medicinal power. That they were dried and of small bulk made them easy of transport, and their rarity a form of royal treasure.”

For centuries, most people who used cloves, cinnamon, pepper, nutmeg and ginger, and even most of those who trafficked in them, had no idea where these spices originated or how they grew. Most of what the purchasers and users “knew” about these aromatic and astringent seeds, berries, roots and barks was myth and fantasy. The famous Roman natural philosopher Pliny the Elder described the adventurous methods by which spices were believed to be transported from distant lands—lands that he himself had never visited: “They bring spices over vast seas on rafts which have no rudders to steer them or oars to push…or sails or other aids to navigation but instead only the spirit of man and human courage…These winds drive them on a straight course, and from gulf to gulf. Now cinnamon is the chief object of their journey, and they say that these merchant sailors take almost five years before they return, and that many perish.”

Marco Polo falsely boasted that he had seen clove trees growing on islands in the China Sea, describing them in his Travels as little trees “with leaves like a laurel.” Arab middlemen, who profited immensely from their coveted role, discouraged inquiry into their sources by spinning blood-curdling tales: that “the spiceries,” the region where spices originated, were guarded by ferocious beasts, that the seas were perpetually storm-plagued and that fearsome pirates lurked along the route to sally forth and plunder unsuspecting ships and enslave their crews. Giant birds known as rocs dwelt in rock-bound aeries, went one common tale, and made their nests with cinnamon branches. Only the intrepid dared to climb the steep cliffs and claim the coveted bark, risking death from the razor-sharp beaks of the rocs. The route to the spiceries was also populated with giant crocodiles, went another tale. These monsters had an inordinate fondness for human flesh. Alternatively, the route was infested with prodigious swamp snakes that would devour unwary travellers. The tales of many other fanciful beasts were likewise deterrents to the curious—and certainly justified the exorbitant price demanded for spices in the marketplace.

Although no mythical beasts guarded the trade routes running east and west from the spiceries, the journey was long and arduous. The most desirable spices originated in two of the remotest island clusters of the Far East. The Indonesian archipelago, which ranges southeast from mainland Asia, is the largest archipelago in the world and comprises thirteen thousand islands, spattered like stars in the night sky, over roughly five thousand square kilometres of water. Bordering the equator, the archipelago has a climate that is hot and humid, and its soil is fertile due to frequent volcanic activity. The islands of Java and Sumatra, in the west of the archipelago, produced pepper (of all spices the greatest in demand), ginger, cinnamon and resinous camphor and were well positioned to dominate the spice trade through control over both the Malacca and Sunda straits. The second spice region in the archipelago was the famed Moluccas. Only five of these small islands had the soil and climatic conditions required to grow cloves. All were clustered together west of the giant island Halmahera and were dominated by sultanates on two islands, Ternate and Tidore. Hundreds of kilometres to the south, in the lonely expanse of the Banda Sea, were the tiny Banda Islands, the sole home of the elusive nutmeg tree.

The commerce in spices dates back to before the recorded history of the area, preceding the arrival of the first European ships by two thousand years. Javanese, Malay and Chinese ships were frequent visitors to the early, remote marketplaces where local spices were exchanged for rice, cotton, silk, coins, porcelain or beads in an ancient and intricate web of commerce. The demand inspired merchants to create elaborate trade routes that wound their way through these mostly tiny islands by sea and over land. Spices found their way to the great trading centres of Sumatra and Java, changed hands and then wended their way to India, where they were passed on to Hindu merchants who resold them to Arab merchants, who in turn took them west across the Indian Ocean to Egypt and the Middle East, and eventually north to the rim of the Mediterranean. There, Alexandria was the first great trading emporium for this lucrative commerce; centuries later, commercial power in the region shifted to Constantinople. And, of course, each time the goods traded hands, the prices increased as successive merchants took their profits and successive governments took their taxes and tariffs. By the time the spices reached Europe, what could be had for a basket of rice or a few pieces of cloth on the Banda Islands might be worth a small fortune in silver.

For hundreds of years during the Middle Ages, the spice trade in the West was dominated by the city state of Venice. Venetian merchants shut out all others from the marketplaces in Alexandria, and then Constantinople, where the Arab merchants offered their exotic wares for sale while concealing what they knew of their origin. In 1453, however, in a devastating siege, Constantinople fell to the Ottoman Turks and was sacked by the invading army, ending what remained of the Byzantine Empire. The fall of Constantinople placed the spice trade entirely in the hands of the Ottomans, who soon raised taxes and increased tariffs to virtually shut off the spice supply to “infidel” Europe.

During the late fifteenth century, however, the Portuguese discovered a sea route to the East by pushing south along the coast of Africa and around the Cape of Good Hope, conquering numerous east African cities and founding the colony of Goa on the western coast of India in 1510. A few years later Portuguese adventurers seized cities in Indonesia, where they constructed fortified settlements to dominate and control the local spice trade. Soon Portugal was one of the richest nations in Europe, boasting a complex trade network that extended around the world. But in its very success was the kernel of Portugal’s downfall: the nation had a population of only two million, and the Eastern spice trade, with its continuous wars, shipwrecks and deaths from disease, took a heavy toll on Portugal’s small population of males. To keep the enterprise running, Portugal hired foreign sailors, who soon shared the knowledge of this astonishing wealth. Others also wanted a share of the spice trade.

Beginning in 1519, in one of the greatest voyages of all time, a Spanish expedition led by the disaffected Portuguese nobleman Ferdinand Magellan circumnavigated the world by sailing around South America, crossing the Pacific Ocean and establishing a Spanish presence in the Spice Islands. Despite their quarrelling, the Spanish and Portuguese reaped great profits by monopolizing the spice trade in Europe for decades. In the mid-sixteenth century, dynastic politics in Europe resulted in Charles v, the ruler of the Holy Roman Empire, inheriting the throne of Spain as well as the dukedom of Burgundy and the provinces in the north, roughly in the region of today’s Belgium, the Netherlands and Luxembourg. In 1549 these provinces became an independent state under the emporer’s rule. When he abdicated the throne in 1555 to devote his life to the church, he divided this vast and unwieldy empire between his brother, Ferdinand, and his son, Philip. While Ferdinand retained control of the old Holy Roman Empire, Philip became king of Spain and the newly created Spanish Netherlands. The powerful chartered cities of this region were vital to the prosperity of the Spanish Crown. In 1580 Philip annexed Portugal, uniting the competing nations under one monarchy and one spice monopoly.

The Protestant reformation interrupted this cozy arrangement. In 1567 King Philip sent the ruthless Duke of Alva and an army of Spanish soldiers to the Netherlands to put down a revolt and collect a new series of taxes on the cities of the Lowlands. On February 16, 1568, the Inquisition declared that all three million citizens of the Netherlands, apart from a few exceptions, were heretics and were therefore condemned to death. Now Philip ordered Alva to carry out the Inquisition’s sentence. The cities of the Lowlands, chafing under their financial burden, Alva’s brutal massacre and the execution of thousands of citizens by rope, fire and sword, rose in revolt. Declaring the Spanish to be “cruel, bloodthirsty, foreign oppressors,” they coalesced around the leadership of William III of Orange. Since Spanish rule was strongest in the southern Netherlands, most leading merchants and capital fled north during the conflict, as economic and religious refugees from Spanish and Catholic rule.

The prime beneficiary of this movement of wealth and knowledge was the city of Amsterdam. For decades in the late sixteenth century, Spanish and rebel armies clashed inconclusively, effectively shutting down the port of Antwerp, and with it Portuguese commercial access to northern Europe. Amsterdam merchants began sailing to Lisbon to acquire spices until 1595, when King Philip shut down Lisbon, and thus closed Europe’s spice centre, to merchants from the Netherlands. This closure gave the merchants of what was becoming one of the greatest trading centres of northern Europe the incentive to launch their own voyages to the East.

·   3   ·

In 1592 a dutch Traveller Named Jan Huyghen van Linschoten returned from an eleven-year journey throughout the East Indies in the service of Portuguese merchants. “My heart,” he mused, “is longing day and night for voyages to far away lands.” In 1596 he had completed and published his travelogue Itinerario, a detailed guide to the peoples and products of India and Indonesia. Itinerario was a route map to the wealth of the Portuguese trading network, the native kingdoms, their customs and interests, the goods they desired and the goods they traded—a sort of commercial Lonely Planet guidebook for merchants new to the region. In it van Linschoten described for the first time the original locations of cloves, nutmeg, mace, cinnamon and other spices, blending his account with quaint observations of their daily uses. “The Indian women,” he recorded, “use much to chawe Cloves, thereby to have sweete breath, which the Portugales wives that dwell there, doe now begin to use.” Regarding nutmeg and mace, he related that “the fruite is altogether like great round Peaches, the inward part whereof is the Nutmegge…This fruite of Apples are many times conserved in Sugar being whole, and in that sort carried throughout India, and much esteemed.” The wandering Dutchman described the great benefits of all the spices, in case anyone still doubted that these were amazing substances.

The historian Bernard Vlekke writes in his Nusantara: A History of Indonesia that “Linschoten also avowed, and again probably many others brought the same information, that the Portuguese empire in the East was decayed, rotten and tottering, a structure which would collapse if given even a moderate blow, or to change the metaphor, it was a plum ripe for the picking.” To Dutch merchants, flushed with idle capital and waging war against Spain for their independence, this was good news. They recognized a good opportunity: Portuguese power was waning.

Thus Dutch merchants began to organize local expeditions to get to the spiceries themselves. Unlike the Portuguese ventures, which were directed and sponsored by the Crown, these were independent enterprises funded by private investors. Nine of them schemed in 1594 to form a “Company for Far Places” in defiance of the Portuguese monopoly and the papal decree that underpinned the Treaty of Tordesillas, which divided the world into two spheres of sovereignty, one belonging to Spain and the other to Portugal. The first voyage of four ships was led by Cornelis de Houtman, a merchant who had lived for a time in Portugal and was related to one of the key investors. De Houtman proved an unpredictable and dangerously erratic leader: one of his ships sank, 145 sailors out of 249 died and de Houtman insulted local traders wherever he landed. Since he had no maps and carried with him a poor choice of trade goods, including heavy woollen cloth and blankets, the enthusiastic reception he was given was due more to Malay traders being pleased with the competition he offered to the Portuguese and Spanish, who had earned a reputation for heavy-handed brutality and were openly hostile to local religions. De Houtman’s officers forced him to return to Holland without even attempting to reach the Moluccas, but he did manage to secure a small cargo of spices, and the expedition was hailed a success in Amsterdam.

The investors quickly grasped the great potential of securing a full cargo of spices. Aided by the wealth of practical advice on navigation and local customs that had been detailed in Linschoten’s newly published Itinerario and the experience of de Houtman’s surviving crew, they formed a new company. The new commander would be Jacob Corneliszoon van Neck, and the seven ships in the expedition would be armed—they did not expect to be welcomed by the Portuguese. Van Neck, a level-headed, diplomatic trader, formed friendly relations wherever his ships stopped throughout the Spice Islands. He returned with a full cargo of spices, particularly pepper, that brought a staggering 400 per cent return on invested capital, and the race was on. By 1598 five separate trading companies had launched twenty-two ships to the spiceries. Wherever they sailed in the Indies, they announced themselves as enemies of the Portuguese and as a result were warmly welcomed by the islanders. Within a few years, the mariners and merchants of the numerous Dutch trading companies had explored nearly every coast and visited every port in the region. In 1601 alone, sixty-five Dutch ships left for the Spice Islands.

The Dutch merchants were so successful, swarming and overwhelming the Portuguese traders, that they started to compete with each other, lowering the price of spices in Europe and raising them in the East Indies. The investors, now worried, came upon a simple yet effective solution: they would form a single company to limit competition among themselves and combine their efforts against the Portuguese and Spanish. The merchants of Amsterdam approached the States General, the governing body representing all the provinces of the United Netherlands, requesting a monopoly for themselves only and excluding merchants from other Dutch cities and provinces. For years the States General had been admonishing merchants from the various provinces to cease their cutthroat competition and join in common cause against their enemies. Their warning met with bitter opposition, however: each region feared losing its independence. Yet, after much negotiating, on March 20, 1602, the Dutch East India Company, the VOC, was formed under the auspices, direction and coercion of the States General. The company was to have a twenty-one-year monopoly on all trade with the East Indies.

The new company’s governing “Council of Seventeen” gentleman merchants met periodically in their offices in Amsterdam. Eight were representatives from the Amsterdam city government, four hailed from Middelburg, and one each came from the cities of Enkhuizen, Hoorn, Delft and Rotterdam. The final director was elected in rotation from cities other than Amsterdam, so that Amsterdam itself, the Netherlands’ largest commercial centre, could never hold a majority of the votes and decision-making power. Theoretically, any Dutch citizen could become a shareholder, but soon the entire enterprise was governed by a small number of powerful merchants, with capital invested for a ten-year period rather than in each voyage. This venture, the world’s first “joint stock company,” was set to become the world’s largest single business enterprise of the seventeenth century. Mere days after the initial public offering, and before the first shareholders had even paid for their shares, those shares were being traded on the Amsterdam stock exchange for a 17 per cent premium.

More significantly, the new monopoly was granted powers over the Eastern trade, not normally the province of merchants. It would be a private commercial corporation operating free from the direct control of the government of the United Netherlands, yet it would have the authority to make decisions in the name of that government. The VOC could make treaties and declare war or peace in the name of the States General, construct forts and arm them with cannons, hire troops, establish colonies, dispense justice and enact laws, even issue its own currency—its coins were not stamped with the symbol of a nation or head of state, but with the company insignia. The VOC would essentially operate as a state within a state. In the ensuing years, it forged its way around Africa in the wake of the Portuguese and proceeded to battle them for control of the spice trade, rapidly displacing its erstwhile enemy. The historian Philip D. Curtin has commented wryly, “The VOC began with its military force more important than its trade goods. It was less a capitalist trading firm than it was a syndicate for piracy, aimed at the Portuguese power in Asia, dominated by government interests, but drawing funding from investors rather than taxpayers.”

The first VOC fleet sailed from Amsterdam on December 18, 1603, with orders not only to trade but to attack Portuguese ships and forts wherever possible. The VOC’s relentless assault on the Portuguese progressed relatively smoothly and rapidly, the company pursuing trade and war with equal vigour. In the first years of its existence, cargoes on VOC ships sent out by the Council of Seventeen were weighted as heavily with guns and ammunition as they were with trade goods and silver bullion. When VOC ships clashed with Portuguese galleons, the Dutch almost always won. In 1605 the VOC captured the Portuguese fort on the island of Ambon, its first territorial acquisition, and continued its conquest rapidly. Within a few years the Dutch company spread across the East from Arabia to Japan, with a vast network of trade depots, forts and factories, many of them seized from the Portuguese, who retreated from this violent onslaught. But soon the VOC faced competition from a source closer to home, from an erstwhile ally in the struggle against Imperial Spain: England.

Although English merchants had formed their East India Company, with royal assent, in December 1600, two years earlier than the VOC had been set up, they pursued the spiceries at a more stately pace and with less capital. Having fewer ships and men and meagre financing, they had no choice, and in their absence the Dutch traders of the VOC swarmed the entire region with cannons blazing. The objective: to eliminate not only the Portuguese but also to redirect local trade networks into the fold of their monopoly. They had no interest in tolerating yet other competitors, such as the English. Edmund Scott, an English merchant at Bantan, wrote in February 1604 that “blowe which way the winde would, they had shipping to come thither, eyther from the East or from the West; insomuch that one woulde have thought they want to carry away the pepper growing on the trees.” English traders had difficulty obtaining spices because the Dutch company collected them first, so the English began shadowing Dutch company ships and erecting factories alongside VOC posts. Regarding the English merchants as interlopers and violators of their monopoly, the Dutch viewed them with hostility right from the start. Soon, even while peace reigned in Europe, the servants of the two nations’ companies were shooting at each other. Long before the VOC’s first twenty-one-year monopoly ended, its ships had engaged in naval battles with every major maritime nation in the world.

After several setbacks—enduring the huge expenses of the ongoing military campaign while failing to completely oust either the Spanish or the Portuguese, and witnessing the increasing presence of English traders—the Council of Seventeen realized the need for more coordinated activity in the region if its traders were ever to secure their monopoly—and the enormous profits that would then be forthcoming. It restructured the governing council at Bantam, now called the Council of the Indies, as a central authority over the VOC’s affairs in the spiceries and created a new position, that of the governor general, who would have unchallenged authority over all the company’s activities in the East Indies. Pieter Both, a trader of many years’ experience in the East, was the first man chosen for this lofty position. He arrived at Bantam in December 1610 with a group of colonists, including craftsmen, clerks, traders, artisans and thirty-six women. Both also brought with him Jan Pieterszoon Coen, now on his second voyage to the East Indies, as a senior trader and as Both’s assistant. Observing the terrible conflict descending on the merchant world of the Indies, Coen foresaw great opportunities opening up—opportunities both for revenge and for profit.

·   4   ·

The Man Stares From His Portrait with Rigid, self-righteous indignation. Sleek and manicured, Jan Pieterszoon Coen was a man of impeccable grooming, from his slicked hair to his neatly trimmed Vandyke beard, from his coiled moustache to his expensive clothes. His embroidered doublet is patterned with paisley that has detailed trim around the seams. His neck ruff is starched and perky, and he stands erect and stiff, almost regal, while his left hand grips the handle of a sword. His lean and hungry face is dominated by a large hooked nose and eyes that do not betray a shred of humour or liveliness. His eyes are his most distinguishing characteristic—they do not hint at warmth, forgiveness, humanity or empathy. They are hard and shiny like little pebbles. Overall, the painting conveys an impression of humourless arrogance. Coen was a harsh man, living in a harsh era, and the events of his life and his overriding competitiveness conspired to suppress his more empathetic characteristics.

On one occasion, when he discovered his twelve-year-old foster daughter, Saartje Specx, who had been left in his care when her father returned briefly to the Netherlands, in the arms of a fifteen-year-old soldier in his home, Coen displayed his characteristic, stunning inhumanity: the soldier was publicly beheaded and Saartje was publicly whipped. This was a reprieve from Coen’s first inclination, which was to have Saartje placed in a tub and drowned. Historian Holden Furber notes in his book Rival Empires of Trade in the Orient, 1600–1800 that “in single-mindedness of purpose, in ambition for personal wealth, in callous disregard for human suffering, Coen much resembles many empire builders in Africa in the later nineteenth century.”

Those who associated with him learned to fear Coen’s grim pronouncements. He was disliked even by his own men. Having little tolerance for anything other than work and defeating his enemies, Coen saw the lack of these essential characteristics in others as a failing. He despised the local peoples, considering them dishonourable, corrupt and untrustworthy, but he also was repulsed by his own countrymen, disdaining their love of alcoholic drink and the less-than-strict morality of some of the female colonists. Coen was ambitious and never shy to denigrate the soft-hearted opinions and actions of others if it made for the greatest profit. With everyone, he seemed to be locked in a death struggle from which only one would emerge victorious. All challengers had to be crushed, and all contracts enforced to the letter—with force, if necessary. Coen certainly believed that the use of violent force was the only path to prosperity for the VOC. An accountant by training, he proved to be a master tactician and ruthless strongman.

Born on January 8, 1587, in the village of Twisk, near Hoorn, a small seafaring community on the Zuider Zee, Coen was well educated. When he was thirteen his parents sent him to Rome, where they had secured for him a position with a Dutch merchant, Joost de Visscher (or Justus Pescatore), possibly a distant relative who lived and ran a trading enterprise there. Here he learned bookkeeping and general accounting, as well as some Italian, Spanish, Portuguese, French and Latin. He sailed with the VOC’s Fourth Fleet in 1607 as a junior merchant. The fleet, under Verhoef, had orders to use force and coercion to secure the monopoly of cloves and nutmeg in the Spice Islands, particularly in the Moluccas. Coen witnessed the failure of those ambitious goals, the killing of Verhoef and what he believed to be the culpability of the English in aiding the Bandanese in their attack on the Dutch. After his youthful experience with Verhoef’s disastrous expedition in 1609, his opinions hardened, and his distrust and hatred solidified. He never forgot these events, and they influenced much of his future behaviour.

After that calamitous voyage, Coen returned home to the Netherlands in 1610. He gained the confidence of his superiors with his forthright manner and shrewd analysis of the company’s operations. In 1612 he accepted a promotion to senior merchant, in charge of two ships, and sailed in the entourage of the new governor general, Pieter Both. After a grand tour of the VOC’s holdings in the Spice Islands, Both was impressed with Coen’s fervour, dedication and clear understanding of the company’s operations. Both appointed him chief bookkeeper and director of commerce at Bantam. Here the twenty-eight-year-old Coen produced his famous treatise—the “Discourse on the State of India,” a report on the company’s affairs that singled him out for further promotion—which he submitted to the Council of Seventeen in 1614. That same year, the Seventeen promoted him to the position of director general, the second-highest rank in the spiceries.

Coen’s analysis of the issues facing the VOC was clear and cogent, with a logical, if brutal, conclusion: the spice trade was vital to the economic prosperity of the Netherlands. Not only did profits accrue to the company’s benefit and the benefit of the United Netherlands, but their gain at the same time damaged the prosperity of their enemy Spain, and therefore weakened Spain’s military capacity to dominate the Low Countries. The VOC, Coen argued, had a legitimate right to be in the Spice Islands: it had acquired much of its territory by conquest, defending itself against Portuguese and Spanish aggression. Furthermore, the VOC’s claims of monopoly were not based on ancient papal proclamations but on formal legal treaties with various Indonesian nations, particularly in Ternate, the Banda Islands and on Ambon. Spices grew in such abundance in these regions that there was no shortage of supply. Hence competition from the English could not be tolerated, because this would lower prices in Europe and make the business unprofitable.

The spice supply had to be restricted to make the whole enterprise viable. Coen advocated a vast expansion of the company’s operations throughout the region, as well as insisting that the VOC’s monopoly over cloves, mace and nutmeg (these being the only spices that could be monopolized, because of their isolated region of origin) be ruthlessly enforced to artificially restrict supply and keep prices high. A powerful corporate fleet should be mustered to complete the assault on the remaining Portuguese and Spanish holdings, attacking them in the Philippines at Manila and in China at Macao. Finally, Dutch colonists, as well as slave labour, should be transported to the company’s distant commercial outposts. When the VOC was entrenched and its competitors had been eliminated, local rulers would have no alternative but to respect their contracts and deal only with the VOC under that company’s terms. Only then, Coen asserted, would the VOC become stable and secure in accruing vast and ongoing profits.

It was an absurdly ambitious vision, beguilingly wide in scope. The Council of Seventeen bought into this intoxicating scheme, overlooking the unsavoury, though unspecified, violence needed to secure it. They now dreamed of dominating not only the Europe-Asia trade, but Asian inter-island shipping as well. It was here that the greatest profits could be made, “as these countries of Asia exceed those of Europe in population, consumption of goods, and industry.” Coen argued that the only route for profit and stability lay in the conquest of the company’s enemies, a restriction on the production of spices and a monopoly on their sale not just in Europe, but throughout the world. Coen’s breathtaking vision called for the VOC to control and dominate the commerce of millions of people with ancient traditions and economies far greater than those of the Netherlands, or even of Europe. “Under this system,” writes Bernard Vlekke in Nusantara: A History of Indonesia, “the silk from Persia, the cloth from India, the cinnamon from Ceylon, the porcelain from China, and the copper from Japan would be exchanged for the spices from the Moluccas and the sandalwood from Timor, all under the supervision of the officials of the Company.” The VOC would be like a spider astride its giant web, strands stretching to the shores of distant lands none had yet visited, controlling all commercial activity throughout the vast, heavily populated region. The profits, of course, would slide back to investors in the tiny Netherlands, on the other side of the world.

But there was much work to be done before Coen’s landmark proposals could be implemented. In the meantime, Coen strove to rationalize and professionalize the company’s business activities from his base in Bantam and from the island of Ambon, a major administrative centre. During this time he also prosecuted his personal war against anyone who dared to challenge the VOC’s monopoly as best he could, given that he was still in a subservient position. Coen was furious to see profits slipping through his fingers, but he was not yet in a position to enforce all the VOC’s contracts. The governors general under whom he served during these years, Gerard Reynst and Pieter Both until December 1615 and then Laurens Reael, were far too lenient and genial, in Coen’s opinion, in their co-operation with the English and their respect for the rights and traditions of the local rulers and inhabitants.

In particular, Coen despised the traders of the English East India Company and did all he could to frustrate their efforts to secure spices. In one instance in 1613, when an English East India Company expedition led by John Jourdain cruised to Ambon to trade in cloves, Jourdain was shocked to hear Coen’s response to his proposal to buy his stock from the Dutch at slightly above their cost, rather than purchasing cloves from the locals: Coen flatly refused him and ordered him to abandon the island because the VOC had already secured contracts for all the cloves “growinge upon the iland.” Coen told Jourdain in a letter “nott to deal with the contrye people for any cloves.” He then sent notice to the local villages that he would attack and burn their dwellings if they traded with the English. When Jourdain, unable to convince the locals, went to meet Coen in person, the youthful-looking Dutchman strode out to meet the English captain. Not surprisingly, the two arrogant men took an immediate dislike to each other. They insulted each other “in a chollericke manner”—Jourdain mocked the younger Coen’s scanty beard and, according to an English account, “did everything to frustrate his endeavours, for it would have been all up with us there had he succeeded.” Admitting defeat, however, Jourdain sailed off without a cargo of cloves. Coen knew that depriving the English company of revenue was as important as gaining it for the VOC.

Coen’s particular interest was in securing the nutmeg monopoly in the Banda Islands, a task he knew to be possible because of the islands’ remote location and tiny size and because they were the only source in the world of the valuable spice. But the English company also had plans for the Bandas: two of the outlying islands, Ai and Run, had not signed monopoly agreements with the VOC and traded freely with English merchants. In 1615 the governor general, Gerard Reynst, led more than a thousand company troops to Ai but was repulsed by the Bandanese, who had received guns and training from English company troops. This resulted in a great defeat for the VOC, which was driven off the island. Reynst died a few months later, never having recovered from the humiliation. Coen dispatched letters to the Council of Seventeen, fuming that the English “want to reap what we have sowed, and they brag that they are free to do so because their king has authority over the Netherlands nation.” He also reported that “you can be assured that if you do not send a large capital at the earliest opportunity…the whole Indies trade is liable to come to nothing.” The following year the VOC sent out another, even larger, fleet to capture the island. Coen sent a letter to the English company troops, who were helping the islanders defend themselves, claiming that “if any slaughter of men happened…they would not be culpable.” The English company, cowed, abandoned the island and its people to the brutal, smothering embrace of Coen and the VOC.

With the VOC’s conquest of Ai, there remained only a single nutmeg-producing island, Run, free from the company’s control. That island became a focal point for Coen’s wrath. Even though the Netherlands and England were at peace in Europe, their two East Indies companies were at war in Asia, and Coen began laying plans for a final conquest. He wrote a condescending note to his superiors in Amsterdam: “If by night and day proud thieves broke into your house, who were not ashamed of any robbery or other offence, how would you defend your property against them without having recourse to ‘maltreatment’? This is what the English are doing against you in the Moluccas. Consequently, we are surprised to receive instructions not to do them bodily harm. If the English have this privilege above all other nations, it must be nice to be an Englishman.”

There were those on the Council of Seventeen who were sympathetic to Coen’s vision and dismissive of the price to be paid; after all, it was a price to be paid by others. Until Coen coolly laid out his grand scheme, the directors of the VOC had been content to make money in the usual manner: by commerce and trade. Coen’s proposal, argued logically and passionately, changed the paradigm for viewing the company’s distant activities—activities which were far from the scrutinizing view of citizens and government in the Netherlands. Who was there to hold the company accountable to the customs and laws that restricted behaviour in Europe? Coen’s strict Calvinist morality and conservative temperament urged him to take a greater interest in the affairs of others than a business entity should under healthy circumstances. Coen wanted to rule people and get rich as a bonus. Through force of will, single-mindedness of purpose, narrowness of thought, righteousness of conviction and the persuasiveness of greed, he was able to make the VOC’s business activities conform to his hatreds and his need for revenge.

In October 1617 Coen got a chance to implement some of his schemes. Although the Council of Seventeen was reluctant to embrace his bloody vision, his reports and actions hinted at an unusual talent and force of will, of decisiveness. When the temporary governor general, Laurens Reael, a dandy who had taken over from Gerard Reynst, resigned in protest over his low pay, Coen was the natural choice as the new head of Eastern operations, especially by those who were in favour of a more aggressive policy to secure and stabilize the VOC’s profitability. Coen assumed command on April 30, 1618, when he was only thirty-one years old. His initial orders from Amsterdam called for action: “Something on a large scale must be done against the enemies; the inhabitants of Banda must be killed or driven out of the land, and if necessary the country must be turned into a desert by uprooting the trees and shrubs.” Four years after he had conceived his vision for expanding the VOC’s trade and securing the spice monopoly, Coen could put his scheme into action. Finally he had a free hand to indulge his long-held conviction that violent force was necessary for profitability. “Your Honours should know by experience,” he wrote to the Council of Seventeen, “that trade in Asia must be driven and maintained under the protection and favour of Your Honours’ own weapons, and that the weapons must be paid for by the profits from the trade; so that we cannot carry on trade without war, nor war without trade.”

·   5   ·

When the Council of Seventeen Appointed Coen as the new governor general of its operations in the East Indies, the VOC was still on a shaky foundation. In more than a decade of warring, and after numerous agreements attesting to their monopoly trading rights, many of the Dutch traders had pushed their hosts too far. They had refused to acknowledge their hosts’ cultural and religious traditions and had annoyed others with their rudeness and constant quarrelling, including bickering with other foreigners, such as the English and the Chinese. There were attacks on VOC merchants and ships. Other peoples, at Ambon and the Banda Islands, continued to flout signed monopoly agreements and secretly traded with English, Chinese and Malay merchants. When Spanish and Portuguese prisoners escaped from a VOC ship and sought protection in the English company’s fort at Bantam in 1618, this caused an open rift in the fragile peace between the Dutch and English companies, and they began to skirmish with each other in the streets. Coen recounted with pride the chaos he had sowed: “One day they threaten to sail to Banda in force and take revenge, and the next they say they will attack our ships at sea. They expect to get even by reprisals in the Channel at home and they are going to break our heads. Daily they come up with new threats which clearly shows that they are quite confused.” The pretence of peaceful business was shed.

Coen had always hated Bantam for its cloying, fetid airs, so when the Sultan of Bantam commanded him to stop fighting with the English there, Coen ordered the removal of his headquarters from Bantam eighty kilometres east along the same coast to the little town of Jakarta, where he was welcomed by the prince. Coen had not been in Jakarta long, however, when he ordered a small English factory in the city burned and destroyed. Unexpectedly, an English East India Company fleet then arrived, led by Sir Thomas Dale. He ordered eleven of his ships to blockade Coen’s seven ships in the port and demanded Coen’s surrender. Although he was outmanned, Coen refused. After several days of stalling, naval warfare began between the two companies’ ships on January 2, 1619. They lined up in battle formation in front of Jakarta and slid past each other in “a cruel bloody fight.” All shipping in the Indonesian port stopped as thousands of cannons roared, acrid smoke clouded the air and hundreds of men were torn open by shards of splintered wood, mangled by flying grapeshot and picked off by sharpshooters in the rigging. As the fleets disengaged for the night, it was obvious that the English company’s fleet was trouncing the VOC’s ships. That night, Coen called his captains together for a council of war to discuss their weak position, a result of their battered ships, numerous wounded and depleted stocks of ammunition. When three more English company ships arrived the next morning, Coen, gritting his teeth in humiliation, ordered the men in his Jakarta factory to defend the depot to the death and then gave the signal for his ships to turn and flee before the superior forces of his hated enemy. It was something he had never done before.

As his battered fleet hoisted its sails and headed to the Moluccas, where he planned to regroup and reassemble a stronger fleet from the vessels stationed at his many trading entrepôts throughout the region, Coen, glowering with frustration, retreated to his cabin. His bony hand clutching a quill, he dashed off a letter to the Council of Seventeen castigating them for not providing him with enough men, ships and weapons. It is not difficult to discern the arrogance behind his caustic missive: “And now see what has happened…I swear that no enemies do our cause more harm than the ignorance and stupidity existing among you, gentlemen!” he wrote to his superiors.

But then things went from bad to good for Coen. Sir Thomas Dale, feckless, unfocused and unable to unify the independent captains of his fleet, allowed Coen to escape and then bungled the assault on the fort. Dale directed his ships not to hunt down the remnants of Coen’s shattered fleet. Instead, he headed to the coast of India, where he died of disease a few months later. The once-formidable English East India Company fleet scattered, partly because of the awkward governing structure of the English company. Dale’s fleet was not truly under his command: he relied on persuasion, since each captain was responsible for the profit or loss of his own expedition, with no overarching or coordinated corporate directive and no long-term financing.

After successfully holding off their English attackers, on March 2, the men of the VOC garrison decided to name their little fortress Batavia, “as Holland used to be called in days of antiquity.” In May, Coen returned in triumph to Jakarta, victorious in the face of the English company’s awkward, decentralized governing structure. He marched a thousand fresh troops into the fortress and on May 28 ordered them to attack. The local prince, stunned at the unexpected treachery, was unable to fend off Coen’s troops. Coen conquered the town of three thousand, burned down most of its buildings and seized the land for the VOC. He then drew up plans for a new settlement on the traditional Dutch model with which he was familiar.

Coen kept the name Batavia for the new settlement, a solid stone fortress surrounded by angled streets, canals and bridges. “All the kings of these lands know full well what the planting of our colony at Jakarta signifies, and what may follow from it, as well as the cleverest and most far-seeing politician in Europe might do,” he boasted. He then pressed his attack against the English company ships, which were now dispersed into smaller groups, and defeated them, capturing seven for his own use, effectively ending the English company’s challenge to the VOC in Indonesia. “It is certain that this victory and the fleeing of the English will create quite a furor throughout the Indies,” he admitted. “This will enhance the honour and the reputation of the Dutch nation. Now everyone will want to be our friend.”

On the verge of achieving his grand objective, the culmination of nearly a decade of dreaming, Coen received the worst news of his career. On July 17, 1619, he opened a letter from the Council of Seventeen: he must desist in his attack on the English company’s shipping. The letter was a truce, signed by representatives of both companies as part of an agreement between the two national governments to “forgive and forget” past hostilities. They would each return captured ships and prisoners and “henceforth live and converse as trusted friends.” The two companies agreed to work jointly to expel the Portuguese and Spanish from the Moluccas and to maintain their forts and factories. But the monopoly would no longer be exclusive to either company; it was to be shared, one third to the English company and two thirds to the Dutch company, with each supplying its share of ships and men and receiving its portion of the spices to sell as it wished.

Sensible though the partnership was, it infuriated Coen. He was either unaware of or uncaring about the European repercussions of the hostilities between the two companies in the East Indies, nearly sparking a costly war that would consume all the profits from the spice trade and then some. He knew only that the price of the spices in Europe would plummet and that the cost to purchase them in Indonesia would rise if there was competition. He fired off an impetuous letter to the Council of Seventeen, a letter dripping with sarcasm: “The English owe you a debt of gratitude,” he sneered, “because after they have worked themselves out of the Indies, your Lordships put them right back again…It is incomprehensible that the English should be allowed one third of the cloves, nutmegs and mace since they cannot lay claim to a single grain of sand in the Moluccas, Amboyna, or Banda.”

Coen had no intention of abiding by the treaty. In any case the VOC was too powerful to be compelled to listen to the dictates of the Dutch government. So far from Europe—with communication taking up to a year to get a reply—Coen knew he had a certain latitude in his interpretation of orders. He went about organizing a joint “fleet of defence” that would congregate in the bustling new capital of Batavia, where he now grudgingly permitted English agents to operate. Getting wind of the English company’s lack of capital, men and ships, he proposed a succession of grandiose plans to oust the Spanish and Portuguese by attacking their remaining bases. Not surprisingly it was not long before the English company was unable to meet its commitment to pay one third of the costs. At one convening of the joint council, on January 1, 1621, Coen proposed his long-delayed plan to invade the Banda Islands and seek revenge for the failed 1609 mission. He laid out his plans for a mighty invasion force and called upon his English allies to ante up a third of the men and ships—something they were unable to do, since most of their ships were already at sea, as Coen knew, having sent them all off on joint missions. He would proceed without them, he announced, under his own authority.

In February 1621 Coen arrived at Fort Nassau on Great Banda Island with a fleet of thirteen ships, dozens of smaller craft and nearly two thousand troops, including a small contingent of Japanese mercenaries trained as executioners, as well as Javanese rowers and labourers. Fort Nassau itself had a garrison of around 250, making Coen’s private army the greatest military force ever to assemble in the Banda Islands. Despite the apparent joint operation of the companies, Coen suspected, correctly, that many disaffected English were secreted on the mountainous islands helping the Bandanese to prepare for the impending invasion by training them in the use of guns and the construction of fortifications. One English merchant, at the request of some village elders, delivered a letter to Coen urging him to forestall violence. Coen reputedly swore at the messenger, pushed him out the door of his office and announced that “whomsoever he should find he would take them for his utter enemies, and they should fare no better than the inhabitants.”

With little fanfare, Coen launched his attack by ordering a small ship to circle the island in order to draw fire so that he could determine the location of gun emplacements. He secured this information with two men killed and ten injured. A few days later, after he had harangued his men about their indifferent morale and urged them on with appeals to their courage (and the suggestion of cash rewards for victory), the VOC troops began the assault. It was not easy, as Great Banda consisted of densely forested, inaccessible mountains and had become the focal point for Bandanese resistance to the VOC’s hegemony, drawing fighters from the other islands. After two days of fierce fighting along the crags and ridges, Coen bribed several turncoats with bags of thirty gold coins each to betray their comrades and undermine the defences of the island. His company troops then quickly seized control of most of the island’s defences and settlements. Suffering only six dead and twenty-seven wounded, Coen took over the entire island, with enormous casualties to the defenders.

A small group of orang kaya slunk down from the mountains and filed into a clearing to request a meeting with Coen, who awaited their surrender aboard his ship. They bowed low and offered him a golden chain and a copper kettle as a sign of their sincerity. In victory, Coen was not magnanimous: he demanded they surrender all their weapons, help destroy all remaining defensive forts and give to him all their sons, to be held as hostages aboard his ships. His economic terms were no less harsh: they would agree to cede sovereignty over all the islands, donate a tenth of all the nutmeg they produced each year to the governor general (that is, himself) and sell the remaining 90 per cent to the VOC at prearranged low prices. In return, Coen promised to protect them from their enemies—presumably meaning not himself but the Portuguese. Coen also promised them that they would not be enslaved or forced into labour or military service outside the Banda Islands.

Since the orang kaya had seen their mosques desecrated, their houses burned and commandeered for troops and their people terrorized, there was slim chance they would believe Coen’s promise of humane treatment. By his own admission, Coen did not expect the Bandanese to abide by these terms, though they had technically agreed to them. The orang kaya obliged him by remaining hidden in the mountains and delivering neither additional hostages nor weapons. “They are an indolent people,” he wrote, “of which little good can be expected.” Indeed, after a few weeks and on several occasions, armed groups of Bandanese ambushed and killed VOC patrols. Coen was waiting for just such an event for a pretext to completely crush them. Giles Milton, in his book Nathaniel’s Nutmeg, notes that Coen’s demand for the Bandanese to cede their sovereignty was “significant for any future uprising would not be considered as an act of war but an act of treason, and treason in Holland was punishable by death.”

Coen now brought from the hold of his ship the forty-five orang kaya whom he had seized earlier, when they originally came to treat with him. He ordered them to be tortured. Coen’s judicial process consisted of the rack and burning irons, and soon the orang kaya either died or confessed to a secret plan to attack the VOC. This treason, Coen concluded, was to be punishable by death. Coen’s Japanese mercenaries herded the terrified elders, bound in tight cords, into a bamboo enclosure. There they were convicted of treason and sentenced without a proper trial.

VOC lieutenant Nicolas van Waert—whose own men could not fight the order and some of whom were killed when refusing to comply—expressed the general revulsion towards Coen’s methods: “Six Japanese soldiers were also ordered inside, and with their sharp swords they beheaded and quartered the eight chief orang kaya and then beheaded and quartered the thirty-six others. This execution was awful to see. The orang kaya died silently without uttering any sound except that one of them, speaking in the Dutch tongue, said, ‘Sirs, have you no mercy?’ But indeed nothing availed.” Van Waert continued: “All that happened was so dreadful as to leave us stunned. The heads and quarters of those who had been executed were impaled upon bamboos and so displayed. Thus did it happen: God knows who is right. All of us, as professing Christians, were filled with dismay at the way this affair was brought to a conclusion, and we took no pleasure in such dealings.” Another VOC officer wrote that “things are carried on in such a criminal and murderous way that the blood of the poor people cries to heaven for revenge.”

Coen, however, was not finished. His plan had been brewing since 1609: he wanted to depopulate the islands to replace their inhabitants with imported slave and indentured labour under VOC control. He proceeded with the ethnic cleansing of the Banda Islands. Over the next several months VOC troops burned and destroyed dwellings, rounding up entire villages and herding the captives onto ships, so that they could be transported to Batavia and sold as slaves. Thousands of men, women and children died of disease and starvation during the voyage. Out of a total population of perhaps 13,000 to 15,000, barely 1,000 of the original residents remained in the Banda Islands. Several hundred others were later returned as slaves to work the plantations.

Coen also defied the agreement between the VOC and the English East India Company by capturing all the English on the islands, torturing some of them, manacling them, placing them in the holds of ships as prisoners, seizing their goods and destroying their factories and dwellings. For Coen it was total war—winner take all—and he expected no less from the English. He then began to ship in slaves and colonists to work the plantations. For his actions Coen earned a mild rebuke from the Council of Seventeen, but received a bonus of three thousand guilders for securing Banda nutmeg and mace—the entire world supply—to the VOC’s monopoly.

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His primary business completed and his hunger for revenge sated—the Bandanese punished for their defiance, the English company effectively defeated, the VOC monopoly on a sound footing and his plan to replace local peoples with imported slave labour well underway—Coen decided to take a rest, return to the Netherlands and enjoy the wealth he had accumulated. In 1623 he set sail for Batavia and Amsterdam, deciding on one final bit of business before he left the Indies. He had his ship put into Fort Victoria on Ambon, where he made a special effort to warn Herman van Speult, the governor of the VOC post there, to be wary of suspicious English activity. Coen was certain there would be retaliation for his actions on the Banda Islands. Ambon, a strategically important island on several major trade routes, was a major producer of cloves.

Coen then sailed to Batavia to tidy up his affairs and arrange for the settlement of the now depopulated Banda Islands. His plan for Banda was to exterminate all the nutmeg trees on the farthest-outlying islands and then to divide the remaining plantations into sixty-eight 1.2-hectare perken, which would be leased by the company to Dutch planters, who were to be paid 1/122 of the selling price of nutmeg in Amsterdam. This was apparently enough, particularly given the low wages and slave labour, for enormous profits to be made not only for the company but also for the perkeniers, who in the following decades commissioned opulent estate mansions to highlight their wealth and status as landowners.

While Coen sailed triumphantly to his homeland, his parting words to van Speult on Ambon were propelling events down a horrifying—though, to Coen, not unexpected—path. The seeds he planted were about to bear sickening fruit. Fort Victoria was manned by two hundred company soldiers, who controlled dozens of great guns mounted on tall stone towers. It was separated from the town by a deep moat and was bounded on one side by the sea. Armed VOC ships lay at anchor in the harbour—it would take a mighty force to challenge the power of the VOC fortress at Ambon. Nevertheless, from the battlements of his strong castle, van Speult cast a suspicious glance about the island and narrowed in on the small English East India Company factory, a dilapidated compound of about a dozen men that reflected the company’s fortunes. Van Speult’s network of spies and paid informants soon turned up the expected suspicious activity: a sentry spotted a Japanese mercenary employed by the English merchants skulking about the battlements of the VOC fortress. The next day, rumours that the man was a spy awakened van Speult’s fears, and he ordered the hapless man to be brought in for questioning. After a judicious application of torture, the man agreed that he and his thirty or so compatriots had a plan to seize the castle. All the other Japanese in the area were quickly rounded up and tortured until they were broken—after which they also “revealed” the complicity of the English chief factor, Gabriel Towerson. That Towerson routinely dined with van Speult and his men and had regular access to the fortress does not seem to have allayed van Speult’s suspicions.

Van Speult invited his erstwhile dinner companions to meet him in his castle. When they walked in unarmed, the VOC men-at-arms seized them. Some were manacled and tossed into the dungeons, others were locked below water level aboard a Dutch ship. The screams started soon afterward. In the atmosphere of fear and intimidation, many of the Dutch traders seemed to lose their humanity. While being questioned about their role in the alleged secret attack, the English merchants endured the fate of the Japanese mercenaries who had been compelled to betray them: they were burned, stabbed, stretched on the rack and partially drowned. Several of them, while chained to a stone wall, had their limbs blown off with gunpowder. A pamphlet published after the event, titled A True Relation of the Unjust, Cruel and Barbarous Proceedings Against the English at Amboyna, written by a conscience-stricken VOC employee, related how the English company employees had been forced to confess to the preposterous scheme of planning an attack against the heavily fortified VOC post and ordered to sign documents attesting to their villainy before they died. Ten Englishmen, nine Japanese and a resident Portuguese native were beheaded on March 9, 1623. Towerson, the alleged ringleader, was cut into quarters and then beheaded. His head was stuck on a pole and displayed for public viewing. In Nusantara: A History of Indonesia Bernard Vlekke writes that “for two hundred and fifty years the ‘massacre’ of Amboina retained its propaganda value in Europe. In Indonesia it was only one of many bloody episodes in the history of ruthless commercial competition.” The English company, now effectively eliminated from the Indonesian spice race, was never to regain a toehold in the Indies, and not surprisingly the massacre ended the joint agreement between the two companies. Coen had won. He had maintained all along that the enterprise would only be profitable if prices could be controlled, and after 1623 he set the VOC on the path to achieving this objective.

Back in the Netherlands, Coen settled into the comfortable life of a gentleman. He assumed the headship of the VOC chamber in Hoorn and settled himself in a stately house befitting a man of his wealth. He acquired a suitable wife, the daughter of one of the VOC’s leading directors, and had his and his wife’s portraits painted by a prominent artist. The Dutch historian Jurrien van Goor has called them “a testament to Coen’s ambition, pride and self-esteem…His robe and pose are almost regal.” But as news of his business methods trickled back to Europe, many of his countrymen were appalled by Coen’s actions and feared the horrible reputation the VOC was giving the entire Dutch nation. Coen’s plans for the Indies also raised eyebrows: if native Indonesians were replaced with Dutch colonists—working under the auspices of the VOC, with a monopoly on all trade and using slave labour to grow their food—how would the local people live? The VOC was a trading company, was it not? “There is no profit at all in an empty sea, empty countries, and dead people,” claimed one of the directors. But the immediate profits appeared to be enormous, and no one seriously challenged the VOC’s monopoly; its overseas activities were not governed, after all, by the laws of the United Netherlands. Outside of Europe, the only external laws they obeyed came from opponents with bigger guns. So, after much debate within the VOC, Coen sought and was appointed to a second term as governor general in 1624. His departure for Batavia was, however, delayed because of diplomatic fallout from the massacre at Ambon. By 1627 things had settled down enough for him to board a ship in Amsterdam incognito, along with his wife and her brother and sister, for his final voyage to the spiceries.

Coen did not arrive in Batavia until September 1627. Once there, he lost little time in continuing to consolidate the VOC monopoly. The local people did not, however, easily give up their livelihoods and ancient traditions and freedoms. In December, a few months after Coen arrived, Sultan Agung, who ruled Mataram, an expanding central Javanese empire that potentially threatened the VOC’s headquarters in Batavia, launched two deadly sieges against Coen at the headquarters. Once again, Coen proved that he was a master tactician. After a month-long failed attack, Agung’s army disbanded, and as punishment to his forces for their defeat, the humiliated sultan ordered 750 executions within view of the VOC castle walls. Before the end of 1628 Sultan Agung returned with an even greater force, numbering in the tens of thousands. The entire military strength of his empire, it was sure to crush the VOC’s private army and conquer Batavia. But during the months of the siege, Coen again proved a sly and dangerous adversary. Sensing a weakness in the seemingly overwhelming military forces arrayed against him, Coen narrowed in and devised an attack. At sea, the VOC was by far the most powerful force in the region, and Coen used its naval superiority to destroy all of Agung’s grain barges, which were slowly lumbering along the coast. By the time the remnants of Agung’s supply fleet arrived at Batavia, thousands of his troops were on the verge of starvation. Heartened by Coen’s early victory, the defenders of the VOC’s fort held out until Agung’s fleet fled, leaving a trail of dead bodies.

The VOC’s predominance was now recognized throughout the region. Unfortunately for Coen, the siege of Batavia was accompanied by a number of ailments that were common among crowds of humanity locked in a confined space for prolonged periods of time. Chief among these ailments were dysentery and cholera, and Coen himself died in his castle of one of these diseases on September 20, 1629. He was forty-two years old. Some claimed that his death was hastened by the fear of meeting his successor, Jacques Specx, whose daughter, Saartje, Coen had ordered publicly whipped years earlier.

After Coen’s death, Batavia and the Dutch were established as masters of the Indonesian trade and the most powerful military force in the region. A true merchant king, Coen had built the foundation of the Dutch company’s empire—without him and his bloody vision the VOC would have remained a trading company, content to let the symbiotic daily commercial activity of others flourish alongside its own. After he died, the VOC kept to Coen’s chosen path, becoming more entrenched, consolidating power, continuing to conquer and seizing as much autonomy from local peoples as military might permitted. In 1641 the company finally conquered Portuguese Malacca after a six-year naval blockade of the strait. The city and sultanate of Bantam capitulated in 1684, and the sultan agreed to expel all non-Dutch or non-VOC foreigners. The VOC continued its corporate war with the English East India Company, which mostly focused on the west coast of India. However, the war between the two companies significantly contributed to the three seventeenth-century Anglo-Dutch wars that were mostly fought in European waters, although they spilled over to North America and involved the corporate holdings of the Dutch West India Company as well. By virtue of its size, the VOC dominated much of the trade in Europe, controlling half of Europe’s foreign trade by mid-century.

To control production and keep prices high, VOC troops uprooted nutmeg and clove trees that were growing outside VOC-approved plantations. Islanders in Tidore and Ternate were forbidden to grow any clove, previously their sole source of income, and planting a clove tree became an offence punishable by death. The VOC depopulated entire islands and relocated the peoples to places where they could be controlled on plantations. There were, understandably, revolts by local peoples, but these outbursts were easily crushed. In the process of securing enormous profits, the VOC impoverished entire societies. By deciding where and in what quantity spices could be grown, by relocating peoples, by reordering whole societies and ancient cultural practices to ensure the highest possible return for distant shareholders, the VOC evolved from being just a company to becoming a quasi-colonial entity that intruded into the lives of Indonesians and determined all aspects of their lives—their commercial patterns, relationships, religious practices, food, clothing and freedoms.

By the late seventeenth century the VOC was the largest, richest and most powerful multinational company in the world. It traded from the Red Sea to Japan and had sent over a million Europeans to Asia, not incidentally contributing to a widespread exchange of ideas and culture. It directly employed tens of thousands of people at a time when the Dutch population was barely two million. Its navy dwarfed that of many nations; its private army approached ten thousand. Its shareholders and investors prospered. Yet, there were troubles. The company made dividend payments in most years, yet it was also servicing an increasing debt load. The government of much of the Dutch East Indies, responsible only to the Seventeen in Holland, the company grew fat, corrupt and inefficient.

The following century of the VOC’s history included many adventures—both advances and setbacks—that were tied into global political events. But, ultimately, maintaining the monopoly cost more than the spices were worth, particularly when the value of nutmeg and cloves declined in the mid-eighteenth century with a change in consumer tastes. The VOC’s policy of restricting local trade, including the trade in necessary food supplies, resulted in smuggling and piracy. Suppressing these infractions required troops, ships and constant inspection and vigilance. The battle for monopoly could never be won: the VOC would never be free of conflict, and maintaining fleets, forts and garrisons consumed its profits, as did the considerable corruption of its officials in Asia.

Although the VOC declared great dividends for over a century and a half and possessed enormously valuable stock, when the once-mighty company went bankrupt in 1799, during the Napoleonic Wars, it was twelve million guilders in debt. Despite paying huge dividends, it had been steadily losing money for over a century—the years it made profits decreased in number while losses grew as the decades passed. The VOC’s enormous income stream allowed it to incrementally increase its debt, to raise capital by issuing bonds. The historian Willard Hanna writes in his book Indonesian Banda that “Retroactive bookkeeping traced the troubles right back to the days of the VOC’s greatest glory…So the enormously wealthy and powerful VOC may have been a losing proposition all along.” Most historians, however, point to the company’s vitality during the eighteenth century, and its inability to adapt to changing consumer demands in Europe and the financial repercussions of the Fourth Anglo-Dutch War, between 1782 and 1784. “After the war,” writes Jurrien van Goor, “the VOC’s directors in the Republic spent vain efforts trying to revive the Company in its former state rather than looking for new ways of operating, with the result that, like a rudderless ship, the VOC sailed onto the financial rocks.” The Fourth Anglo-Dutch War was the final blow, revealing staggering debt that the company had been supporting for over a century. The debt was assumed by the government and taxpayers of the Netherlands when the nation took over the VOC’s former empire as a colonial holding. The new colony, known as the Dutch East Indies, continued under Dutch national rule until 1949. For over 150 years the VOC had been the effective government in much of Indonesia, governing not in the interests of local peoples or to maintain local traditions and culture, but simply to enrich shareholders and directors who lived tens of thousands of kilometres away and had in all likelihood never left Europe at any time in their lives.

The company’s success and ultimate failure, the cycle of its life, was based on the logical but somewhat warped dream of its greatest merchant king. Coen strove to reduce all commercial activity in the East Indies to a few transactions over which he could exercise total control—reducing the collective decisions of thousands and bending them to his will, reordering them for the maximum profit. He was a brilliant strategist and logistician, but either through hyper-competitiveness or a sickness of the mind, he tended to view the world much like a game board, with pieces to move about, gambles and sacrifices to be made, without regard for the value of human life. For Coen, winning was everything; the lives of other people—even his own countrymen—were mere externalities to be dealt with quickly and efficiently. One tends to believe, or hope, that there must have been more to his character than what has survived in the historical record. Perhaps, if he had lived longer, this would have become apparent, or perhaps he would have mellowed as he aged. But although he was long considered to be a Dutch national hero for putting the VOC on solid footing—he provided the gilded age of the Netherlands with not only a prime source of its wealth but also its worldly identity—his cruelty and violence, the corporate culture of the VOC that he created, overshadow his reputation now.

Coen’s vision for the VOC coaxed great things from the company and from his little nation, but like an addict on a high, they eventually burned out from exhaustion. Despite the company’s monopoly status, the costs of controlling and governing the spiceries eventually outweighed the benefits. And, along with the company, the brief flash of the Dutch Golden Age petered out. Many generations enjoyed the VOC’s profits until the final accounting revealed the company’s decayed inner workings. The rot had begun with its inception, along with Coen’s grand plan to use a private army to conquer and dominate the world’s most valuable commodities in the seventeenth century. The kingdom of the world’s first great merchant king eventually crumbled on its own faulty foundation.

MERCHANT KINGS Copyright © 2009 by Stephen R. Bown.

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