Illustration of the Bank of Amsterdam, or Wisselbank. writing,“ For which thanked be Almightie God who hath delivered us from infinite perils and dangers.” The laws of supply and demand were brought home to the London merchants charged with selling these goods when these vast supplies caused the price of pepper to decline from eight shillings / pound to little more than one shilling over the ensuing months. Nevertheless, profits connected with the voyage rang in at 300 %.
The British and Dutch Companies began competing for the Indonesian spice trade. It was no contest. The Dutch Company was capitalized at almost 10 times the British version, its ships and armaments were better and more agile and their captains were more skilled. The sultan at one of the trading posts told the British flatly that,“ Holland was able to set out 20 ships for England’ s one, and the King of Holland was stronger by sea than all Christendom.” One British ship captain despaired early on that,“ If this frothy nation [ the Dutch ] may have the trade of the Indians all to themselves … their pride and insolence will be intolerable.”
The Dutch merchant class and the country’ s banking system were vastly enriched by this trade— with interesting results. The Dutch pioneered modern central banking with the founding of the Bank of Amsterdam in 1609, while its newly wealthy citizenry participated in the first well-documented financial“ bubble”: the tulip mania of 1634 – 1636.
Recognition of Dutch nautical and financial power, along with genuine horror at the cutthroat Dutch methods, convinced British East India Company leadership to redirect much of their trade to India and its distinctive fabrics and dyes. As they did so, the British were pleased to discover that they could sell these colorful Indian fabrics to the Indonesians.
The battles between the Dutch, English and Portuguese over this trade were brutal, and their treatment of the natives perhaps worse. The spices that produced these tremendous profits grew naturally on these islands— until the mid-19th century the world’ s nutmeg and mace originated from a half dozen tiny Indonesian islands— and productivity was exacted using slave labor harvesting. One German who spent five years in Banta, Indonesia in the 1630s recorded some two dozen killings carried out by the Dutch against natives who proved“ unruly.”
Some of the stories of this violent maritime competition made their way back to the port town of Leigh-on-Sea in Essex( near London) and were recorded by the local Anglican cleric, the Reverend Samuel Purchas. Purchas published the tales in five volumes and often editorialized. Of these East India Company stories, he wrote that those merchant seamen shed“ their warmer clothes in that hotter climate” along with“ their solid virtues, putting on Heathenish qualities with their commerce.”
50 FINANCIAL HISTORY | Spring / Summer 2026 | www. MoAF. org