VOC - ORGANIZATION


Contents
1. Introduction
2. Foundation of the VOC - the Charter
3. Directors and Shareholders
4. Central Management: Heren XVII
5. Organization of the VOC Chambers
6. Organization of the VOC in Asia
7. Batavia as Administrative Centre
8. The End of the VOC

F.S. Gaastra

1. Introduction

f all the trading companies of the seventeenth and eighteenth centuries, the Dutch United East India Company (Verenigde Oostindische Compagnie or VOC), which was created in 1602, was indubitably the most successful. Soon after its incorporation the VOC succeeded in firmly forcing back the Portuguese, who had established their commercial empire in Asia a century earlier, and pretty well eliminating them as competitors in the trade between Europe and Asia. The principal competitor of the VOC, the English East India Company (EIC), which had been founded in London in 1600, initially lacked the final capacity, the organizational ability and governmental support toanci offer any real threat to the Dutch Company. It was only at the end of the seventeenth century that the EIC developed into a really potent rival, which would cut the ground from under the feet of the VOC in various regions in the course of the eighteenth century. Nonetheless, until the end of its existence as a trading company in 1800, the VOC remained the largest of the Asiatic companies(1).

Branch of a clove tree ("kruidnagel");
The VOC captured the monopoly in 1667 by extirpation of the trees on various islands of the Moluccas and concentration the crop on Ambon.
(click image to enlarge)

A number of factors which had a bearing on the rapid growth of the Dutch Company can be indicated. To begin with the capital affluence available in the Dutch Republic provided the VOC with a substantial head start. By means of this the VOC was able to finance the costly military operations which were necessary to win the world monopoly on fine spices. The conquest of the Banda Archipelago in 1622 gave the Company the monopoly on nutmeg and mace. It took
longer to achieve the monopoly in cloves. By extirpating the clove trees on various islands
in the Moluccas, the VOC succeeded in concentrating this crop in Ambon. The capture of Makassar in 1667 meant that the last harbour where European and Asian merchants could purchase 'contraband' - that is to say traded outside the VOC - cloves had fallen into the hands of the Company. The monopoly on the trade in cinnamon was obtained by ousting the Portuguese from Ceylon. This took place in two stages: between 1637 and 1642 and from 1654 to 1658.

The operations of the VOC were not just confined to the transport of Asian products to the European markets. In Asia or Indië, as the whole trading area of the Company was known at that time, the VOC managed to accumulate the capital to build up a trade network between the various establishments. This intra-Asian trade provided a rich source of income for the Company during the seventeenth and eighteenth centuries.

Between about 1635 and 1690 this income was greater than the expenditure; thus the Asian business of the VOC ran at a profit and the enterprise in the Dutch Republic also profited from this. Furthermore, after 1639 the Dutch Company was the only European trader with access to Japan. During the seventeenth century this commercial connection proved extremely profitable and offered the Company a chance to buy up silver cheaply. All European merchants in Asia needed silver to buy textiles in India and pepper in the Indonesian Archipelago. Because of its 'Japanese connection' the VOC was able to make do with a fairly limited export of silver from Europe throughout the seventeenth century.

Branch of the nutmeg tree
("nootmuskaat"); the fleece of the nut is used to make mace ("foelie"). The conquest of Banda in 1622 gave the VOC the monopoly on these products.
(click image to enlarge)

At the end of the seventeenth century there was an enormous expansion in trade and shipping between Europe and Asia. Textiles from India, coffee from Arabia and later also from Java, and tea from China captured the European market. This growth in trade was general; other European companies also profited from it. The VOC gradually ceded its unique position. The monopoly on fine spices diminished to relatively limited importance. The income from the intra-Asia trade no longer compensated for the rising expenditure which mounted partly under the influence of the rising administrative costs. The result was that year after year throughout the eighteenth century the Asian business of the VOC made a loss. Moreover, the trade with Japan almost dried up; after 1700 this counted for only very little. The profits from the sale of Asian wares at home were still sufficient to cover the pay for the extensive outfitting of ships for Asia and to cover the annually recurring losses in Asia, but the financial reserves were shrinking.

The result of these structural changes was that the VOC leaned increasingly on sales results in the Dutch Republic. The financing of the business relied on these sales results and this put the Company in a vulnerable position: in the period after the outbreak of the Fourth Anglo-Dutch War in 1780, when no return fleets sailed home and no auctions of any significance could be held, the Company lost its credit in one fell swoop and found itself deeply in debt. After this war the Company was plunged into problems on such a scale that it was only able to remain afloat with governmental support. The invasion of the French and the collapse of the old Dutch Republic sealed the fate of the VOC. At the beginning of 1796, shortly after the founding of the Batavian Republic, the board of directors had to resign and the management was handed over to a Comité tot de zaken van de Oost-Indische handel en bezittingen (Committee for Affairs relating to East India Trade and Possessions). The VOC had been nationalized. On 1st January 1800 the VOC charter, the legal foundation of the enterprise, was revoked. Although the state of war in Europe permitted no drastic changes in course as far as shipping and trade to Asia were concerned, it meant the end of the Company.

VOC ships near Colombo,
VOC ships near Colombo, Ceylon

The total figures for the two centuries of the Company's operations, for trade turnover, shipping and personnel, are impressive. Despite the dwindling returns, the business was on a much larger scale in the eighteenth century than it had been in the seventeenth. For instance, in total the VOC fitted out some 4,700 ships, nearly 1,700 in the seventeenth century and a good 3,000 in the eighteenth. Between 1602 and 1700, 317,000 people sailed from Europe on these ships, while between 1700 and 1795 this total reached 655,000. Trade figures confirm the growth of the business after 1700. The expenditure on equipage, that is to say shipbuilding and outfitting as well as the money and goods that were sent to Asia, reached the sum of fl. 370 million between 1640 and 1700, and fl. 1,608 million in the years 1700-1795. In these periods the purchase prices of the return goods shipped home from Asia reached fl. 205 and fl. 667 million respectively; the sales prices of these return wares were fl. 577 million in the first period and fl. 1,633 in the second(2).


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