Re: East India Company (was Help Sought)

[Jurriaan Bendien <quark19591@xxxxxxxxx>]

Effectively UEIC operated as a governmental entity itself, outside of Dutch national territory, and it was licensed from 1602 to do this by Dutch governing authorities in Holland who had initially called for unity among merchants. Thus, the UEIC had its own armed forces and police.

 

In colonial settlements like Cape Town, this seeme to be relatively straightforward, but in the Far East the Dutch had to deal much more with clearly defined local kingdoms which had their own jurisdiction (but many of whom were eventually subjugated).

 

Around 1685, the Corporate trading posts on Ambon, Banda, Moluccas, Coromandel, Ceylon, and Malacca had a measure of independent territorial authority and the UEIC appointed local "governors" there.

 

A century later, there were governorships also e.g. at the Cape of Good Hope, Northeast Java, and Makassar. In Bengal, Suratte and Persia the corporate office had a "director" however. Elsewhere, e.g. in Sumatra they were called commanders, and in Japan or Timor they were called "chiefs". 

 

The UEIC itself did not initially have any systematic policy of annexing territory and settling it, but rather to pursue trade, working from fortified trading posts in more than thirty foreign countries and kingdoms, which were defended by its own military forces.

 

However the first governor-general of the East Indies already arranged with the locals for space at Jakatra to build Batavia (now Djakarta) and the UEIC in due course became a conduit for more systematic colonisation and eventually annexation. The early Batavia settlement was attacked in 1628 and 1629 by the King of Mataram, but this attack was beaten back.

 

Initially, the UEIC with a starting capital of 6.4 million florins invested over ten years did not make any money at all, and the first dividends were mostly distributed "in kind" in 1610, i.e, eight years later (allotments of spices and so on). The capital was kept in the company, to set up an Asian trading network. As the trading process stabilised and expanded, the company expanded, and so did the share capital. The corporate bureaucracy within Holland became also quite large.

 

The rate of profit in the period 1602-1622 averaged 10%. Sometimes there were years there was no payout, because wars prevented shipments. Between 1703 and 1782 the annual dividend was 12,5% of capital invested. The founders of the UEIC were merchants, their heirs in the 1700s were regents only interested in maximising predictable shareholder returns.

Eventually, in 1795 the UEIC was nationalised and in 1801 it ceased to exist.  When it was founded in 1602, the Dutch provincial governments were still powerful, but two centuries later a centralised Dutch state apparatus had emerged, that could take over what remained from the UEIC empire, and defend its dominions and settlements better against Portuguese and British encroachment.

 

Jurriaan

 

 

 

 

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