Dutch East India Company

East India Company, any of a number of commercial enterprises formed in western Europe during the 17th and 18th centuries to further trade with the East Indies. The companies, which had varying degrees of governmental support, grew out of the associations of merchant adventurers who voyaged to the East Indies following the discovery in 1497 of the Cape of Good Hope route by Portuguese navigator Vasco da Gama. The most important of the companies were given charters by their respective governments, authorizing them to acquire territory wherever they could and to exercise in the acquired territory various functions of government, including legislation, the issuance of currency, the negotiation of treaties, the waging of war, and the administration of justice. The most notable companies were the following.


Chartered in 1729 by King Frederick IV of Denmark after unsuccessful attempts by Denmark to gain a share of the East India trade in 1616 and 1634, it enjoyed great prosperity in India until the advance of British power there in the late 18th century. As a consequence of the destruction of Danish naval power in the war between Britain and Denmark in 1801, the power of the Danish company was broken. Its principal Indian possessions, Tranquebar in Tamil Nādu and Serampore in Bengal, were purchased by Britain in 1845.


Incorporated from a number of smaller companies by the States General of the Netherlands in 1602, its monopoly extended from the Cape of Good Hope eastward to the Strait of Magellan, with sovereign rights in whatever territory it might acquire. In 1619 Jan Pieterszoon Coen, regarded as the founder of the Dutch colonial empire in the East Indies, established the city of Batavia in Java (now Jakarta, Indonesia) as the headquarters of the company. From Batavia, Dutch influence and activity spread throughout the Malay Archipelago and to China, Japan, India, Iran, and the Cape of Good Hope. During the course of the 60-year war between Spain and the Netherlands (1605-1665), the Dutch company despoiled Portugal, which was united with Spain from 1580 to 1640, of all its East Indian possessions. It supplanted the Portuguese in most of present-day Indonesia and in the Malay Peninsula, Ceylon (now Sri Lanka), the Malabar Coast of India, and Japan. During this period it was also successful in driving English rivals from the Malay Archipelago and the Moluccas. In 1632 the Dutch killed the English factors, or agents, in Amboina, capital of the Dutch Moluccas; for this act the English government later exacted compensation. In 1652 the company established the first European settlement in South Africa on the Cape of Good Hope. At the peak of its power, in 1669, the Dutch company had 40 warships, 150 merchant ships, and 10,000 soldiers.

Between 1602 and 1696 the annual dividends that the company paid were never less than 12 percent and sometimes as high as 63 percent. The charter of the company was renewed every 20 years, in return for financial concessions to the Dutch government. In the 18th century, internal disorders, the growth of British and French power, and the consequences of a harsh policy toward the native inhabitants caused the decline of the Dutch company. It was unable to pay a dividend after 1724 and survived only by exacting levies from native populations. It was powerless to resist a British attack on its possessions in 1780, and in 1795 it was doomed by the ouster of the States General at home by the French-controlled Batavian Republic. In 1798 the republic took over the possessions and debts of the company.