Japan's Economy by Proxy in the Seventeenth Century: China, the N ...

A 1629 pamphlet illustrates the dual functions of the East and West India Companies well in the following prayer, “Bless these [companies] with such success and progress that through [them] the enemies’ power is broken, [and] the trade and prosperity of these provinces are increased.”⁴⁰ It is this reason, more than any other, which led the company to renege on its obligations to pay a steady dividend to the shareholders. Dividends were of course paid, but instead of being in the form of cash they were often paid out in the form of some commodity, usually spices. These payments were also much more irregular than was promised in the company’s charter. Investors were obviously and justifiably enraged at this “betrayal,” but in the structure of the VOC the shareholders had very little influence with the directors of the company, while the company enjoyed the complete support of the States General. Therefore, the VOC was free to use the capital provided by the investors and subsequent profits to exploit the rights given it in its charter.

This extended introduction to the structure of the VOC and its relationship to the state is necessary to understand why, from the beginning, the Dutch were able to create such havoc in the Indian Ocean for both the Spanish and Portuguese, and why the company was able to play the part of sovereign power with local rulers throughout Asia.

The VOC in Asia

The primary trade between Europe and Asia at the beginning of the seventeenth century involved spices. And within the spice trade, pepper (both the black and white varieties) played a leading role in the VOC’s attempts to establish itself in the Asian trade.⁴¹ In an effort to facilitate the procurement of spices such as pepper, the Dutch from the very beginning sought to make alliances with influential local rulers, especially in the Spice Islands of what is Indonesia today. Many of these rulers were quite eager to use the Dutch to help them to escape from underneath the oppressive thumb of the Portuguese.⁴²