the Dutch East India Company, the VOC, was the world’s first joint stock company, with 1,800 initial investors.
When Constantinople fell to the Turks in the mid-fifteenth century, Christian businessmen could no longer easily buy from Muslim traders. By that time, spices were an essential ingredient in the larders of rich Europeans – spices preserved meat in an age before refrigeration, and they masked the taste when the flesh rotted. If Europeans wanted to maintain the supply of pepper, cloves and nutmeg, they would have to go directly to the islands where the spices were grown. That became possible in 1497, when the Portuguese adventurer Vasco da Gama sailed around the bottom of Africa and ‘discovered’ the sea route to the East. The Portuguese quickly found their way to Maluku, home to the most precious spices. They made first for Ternate, a volcano island cloaked in cloves. […]
Known as the Spice Islands, Maluku was obsessively sought for many years before they were rediscovered by Portuguese sailors in the 15th. century.
The British sea captain Francis Drake described the Sultan of Ternate’s court when he visited in 1579. Drake blew in to Ternate as one of his last stops on a voyage around the globe. Though this licensed pirate was no stranger to riches, he was duly impressed by the Sultan (the ‘king’) who, Drake said, was draped in gold cloth from the waist down. He wore red slippers, a huge gold chain, and rings on six fingers: two of diamond, two of turquoise, a ruby and an emerald.
As thus he sate in his chaire of state, at his right side there stood a page with a very costly fanne (richly embroidered and beset with Sapphires) breathing and gathering the aire to refresh the king, the place being very hot 1)↓.
Even in Drake’s day, the Sultan’s chaire of state was no longer the comfortable place it had once been. Portuguese cannons had blown holes in the principle of free trade. They didn’t want some of the spices, they wanted all of the spices. For them, trade was a zero sum game, though not, it turned out, one they were very good at. [ + ]
According to Drake, ‘The Portugals . . . seeking to settle a tyrannous government over this people . . . cruelly murthered the king himselfe.’ Their plans backfired; the people of Ternate revolted and kicked the Portuguese out. Then other Europeans – Spaniards, British and Dutch – sailed in. As they competed to buy spices in Maluku and sell them in Europe, prices in Maluku rose and profits in Europe fell. The backers of these expensive expeditions were displeased. In 1602 the merchants of the Dutch republic decided to do something about it. They banded together to form .
, with 1,800 initial investors. The hype around the company’s formation also gave rise to the world’s first stock exchange; early investors were selling off their stake in the company at a premium before the first ship had even sailed. The company’s directors, the ‘Gentlemen 17’, were under huge pressure to deliver value to their shareholders. The first step towards greater profits was to corner the market for spices, eliminating competition from other Europeans. Their strategies were bribery, co-option and brute force. […]
The VOC wanted to buy up every single clove, but they couldn’t – almost every family in the northern Maluku islands owned trees, and they would rather sell them to Muslim traders than to these hairy white infidels. Then the Gentlemen 17 hit upon the idea of destroying the clove trees in all but one island, Ambon. They paid the local sultans handsomely to achieve this, beginning a tradition of bribing and co-opting local leaders that was to last for over three centuries.
The market for nutmeg should have been easier to corner, because at the time, it only grew in one place on earth: the tiny, isolated Banda islands which rise out of one of the deepest seas on the planet, barely visible on most maps…
Elizabeth Pisani, Indonesia Etc.
1. ↑ Francis Drake, The World Encompassed by Sir Francis Drake . . . Collected Out of the Notes of Master Francis Fletcher . . . and Compared with Divers Others [sic] Notes That Went in the Same Voyage, ed. Francis Fletcher. London: Nicholas Bourne, 1652.
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