216. Establishment of the United Netherlands.—With the decline of Spain and Portugal the supremacy in European commerce passed definitely to the countries of the North. The country which first took the lead, and which we shall consider next, was the Netherlands, or as it is often called from its main province, Holland. The Netherlands, which has now an area but one fourth of that of New York State, was a part of the possessions which by marriage and politics had come under the rule of the Spanish crown. Its natural resources are slight, and in the early part of the sixteenth century it was far behind the adjoining Spanish territory now known as Belgium, which contained the developed manufactures of Flanders and the great port of Antwerp. The Dutch were strong, however, in the individual capacities of the people, and in spite of the disparity of the contest were able to win their independence from Spain in the Revolution which came in the last part of the sixteenth century.

A variety of causes combined to urge the Dutch to revolt. They suffered under Spanish rulers political oppression, and religious persecution designed to crush the Protestant movement which they had embraced. They suffered also, however, under the commercial restrictions of Spanish policy. These they could bear so long as they found an outlet for their growing commerce by trade with the East through Portugal, but the union of the crowns of Spain and Portugal in 1580 closed even this outlet, and forced them to fight for the means of existence and of growth.

217. Rise of Dutch commerce.—The Dutch were forced to the sea by the difficulties of life at home, and had made good progress in commerce with their European neighbors before their revolt. They had become used, also, to distant voyages by explorations designed to open up new routes for trade. In the vain attempt to establish a northeast route to India by the Arctic ocean they showed especial energy; and the names Tasmania, Van Diemen’s Land, New Zealand, attest their boldness later in exploring the southern hemisphere. When, therefore, they had achieved their independence and needed no longer to fear the threats of Spanish and Portuguese rulers, they made rapid strides in oceanic commerce. Before 1602 sixty-five ships had made the return voyage to India, and throughout the seventeenth century an active commerce was maintained with both Asia and America.

218. Dutch commercial policy.—We are tempted, by the position that the Netherlands took against Spanish oppression, to ascribe to the Dutch a greater love of liberty than they actually had. The government which they established for themselves was marked by serious faults of oppression and corruption, and their commercial policy was nearly as narrow as that of Spain. The exclusion of foreigners from trade with their distant dependencies was only natural in this period of commerce; even the Dutch, however, were not free to trade as they pleased. The colonial commerce was absorbed by great companies, which were granted a monopoly of trade in certain areas, and which regulated this trade with extreme minuteness. The companies had a complicated organization which prevented efficiency and encouraged the improper use of personal and political influence.

219. The Dutch West India Company.—The Dutch West India Company, founded in 1621, controlled the trade west of the Cape of Good Hope, comprising commerce with the west coast of Africa, and the east coast of the Americas. This company was an extraordinary specimen of its kind. It paid high dividends for a time, but its earnings were necessarily precarious for it made them not from the ordinary operations of commerce and colonization, but from armed attacks on the Spanish silver fleets. It was really a corporation of privateers. The character of the company can be estimated from the fact that it actually opposed peace between the Netherlands and Spain; in its remonstrance of 1633 it said that the services desired of it “for the welfare of our Fatherland and the destruction of our hereditary enemy could not be accomplished by the trifling trade with the Indians, or the tardy cultivation of uninhabited regions, but in reality, by acts of hostility against the ships and property of the King of Spain and his subjects.”

The Dutch soon lost their possessions in Brazil and New Netherland (New York), and the original company was dissolved; the possessions which the Dutch retained on the coast of Guinea and in South America were unimportant. Small islands in the Gulf of Mexico, which in themselves produced little of value, served as stations for the Dutch carrying trade, which continued to be considerable.

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

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

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

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

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

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

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

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

224. Reasons for decline.—So far as the facts are known Dutch commerce increased in amount till about 1730 and maintained about the same figures afterwards; but world commerce was growing so rapidly that relatively the Netherlands fell behind. The very size of the Netherlands told against the country in a political contest with other powers. It implied, too, a lack of native resources to support commerce when the hold of the Dutch on foreign trade was weakening. Furthermore, the Netherlands was like the Hanseatic League in that it lacked a strong central power and policy, and gave great independence to the separate units of which it was composed. The important units, in the economic aspect, were cities, which were able to carry on a small-scale commerce very successfully, but which could not unite to bring their best people to the front in a big-scale organization which could compete with that of other countries. The Dutch did not pull together to make the most of what they had, and the inefficiency and corruption which had always characterized the local governments grew worse with time. Rule by family rings brought with it favoritism and inordinately high taxes, under which industries labored and dwindled. Manufactures which had formerly flourished now declined. Weak at home, and, in comparison with other European states of the eighteenth century, weak abroad, the Netherlands fell from the first rank of commercial states, retaining in its colonies and in its developed banking system only reminders of its former greatness.

225. Character of the Dutch East India Company.—In the eighteenth century, when the Netherlands was struggling to maintain its commercial position, it was hindered rather than helped by the East India Company. The company seemed to have the chance to make stupendous profits, for it sold its wares for very high prices in Europe, and it paid for them in Asia very little or even nothing. It used its power to force the natives to supply it with some of these wares at nominal prices or absolutely gratis. The very fact, however, that the company could get its wares in this way, as a state would get them by taxation, suggests that the company had expenses like those of a state and unlike those of an ordinary commercial corporation. This was the fact; the company had to support the civil and military establishment of a regular government. This government shared, to the full, the political evils of the time; both at home and in the East it was corrupt and inefficient. It was strong enough to hold its own against the Portuguese, or against the English when they began their expansion in the East; but it was no match for the English when their strength developed in the eighteenth century.

226. Decline of the Company after 1700.—After 1700 the Dutch East India Company fell behind rapidly. It enjoyed such a high reputation, and kept its condition secret so successfully, that its credit was unimpaired, and it continued to pay dividends by borrowing money. For nearly two hundred years it declared dividends at rates ranging from 12¹⁄₂ per cent to 20, 40, or even 50 per cent; the average dividend from 1602 to 1796 was over 18 per cent. The crash was bound to come finally; the company paid its last dividend in 1782, and was dissolved in 1798, leaving debts of over fifty million dollars, which were assumed by the Dutch government.

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