The Dutch were drawn to Indonesia in the late 1500s by the promise of immense profits in the lucrative spice trade.
Cloves, nutmeg and mace – found only on a few volcanic islands in Indonesia – were luxury items in Medieval Europe. They were highly valued for their exotic flavours and perceived medicinal properties.
It’s hard to believe that these spices, which we can now buy for just a few dollars, were so expensive that wars were started over them and empires built on them.
Nutmeg (image below left), in particular, was so expensive that it was worth more than gold. The red covering of the nutmeg seed, mace, was also highly valued.
Cloves (image above right) from the spice islands had long been valued over the centuries. They were imported into China in the third century BC and used by the Romans in the first century AD.
The exorbitant cost of spices in medieval Europe was created by a number of factors.
Firstly, there was high demand for spices in medieval times. Not only were they used as exotic flavouring for food and drinks (also to disguise the smell of badly-preserved food), spices were also considered medicines.
Correct spicing of foods was thought to be important in retaining or rectifying the balance of health in the body. Nutmeg, in particular, was more valuable than gold because it was thought to cure Bubonic (Black) Plague.
The price of cloves, nutmeg and mace was also high because global demand was supplied by just a few small Indonesian islands – Ternate, Tidore, Makian and Bacan – in the Maluku Province, formerly called the Moluccas or the Spice Islands.
Lastly, these spices were expensive because they had to be transported halfway across the world from Asia in dangerous conditions. Each journey could take up to a year.
Dutch take over spice trade
In the early 1500s, the Portuguese became the first Europeans to sail around the southern tip of Africa. This enabled them to sail to Indonesia and cargo spices back to Europe.
The Portuguese (later joined by the Spanish and together known as the Iberians) dominated the Indonesian spice trade for nearly a century. In 1601, the Dutch – who also began to build ocean-going ships – defeated the Iberians in Indonesian waters in a battle despite being heavily outnumbered.
To help further weaken the Iberians’ dominant position, the Dutch Government quickly ordered rival trading companies in the Netherlands to form the Dutch East India Company. The government gave the company a monopoly in Holland to trade in spices as well as special powers to wage wars, sign treaties and set up colonies where it sought fit.
The Duyfken was one of the first Dutch East India Company ships to cargo spices. Over a period of nearly 200 years, the company made about 2000 journeys from Indonesia to Europe, carrying an estimated 2.5 million tonnes of cargo.
The profit margin made by those who traded in spices (Portuguese, Dutch and British) was staggering. The Dutch alone are reported as having made profit margins 300 times the purchase price in Asia.
Immense profit margins, high prices for the end user and growing demand throughout Europe brought untold wealth to the Netherlands for nearly two centuries during the 1600s and 1700s – a period known as the Dutch Golden Age. During this time, the Netherlands became one of the most powerful economies in Europe and was a dominant maritime force in Asia.
And the Dutch East India Company became the richest privately-owned organisation in the world. It not only had its own army and a fleet of over 200 ships, the company also paid its shareholders an average dividend of 18 per cent for nearly 200 years.
Blood spilt over spices
Many lives were lost over Indonesian spices. Initially, the Spanish fought the Portuguese during the 1500s.
After the Dutch defeated the Iberians in 1601, England fought a four-year battle with the Netherlands in the so-called ‘Nutmeg War’ over a small Island that supplied nutmeg.
The war exhausted both sides and lead to a famous treaty in which the British accepted a trade for the only nutmeg island they occupied in exchange for Manhattan Island in what was then New Amsterdam, now called New York.
Initially, the Dutch traded amicably with the Indonesians. Later in the 17th century, a Dutch East India Company Governor, Jan Pieterszoon Coen, tried to impose a restriction to prevent the locals of Banda Island, the ‘market’ island of the Spice Islands, from selling to Javanese, Arab, Indian, British and Portuguese traders.
But the independent islanders, who welcomed the competition and preferred trading items with other competitors, would not co-operate. Cohen’s solution was to massacre most of the island’s 15,000 people and take control of the spice.
Impact on Australian history
Early European discovery and mapping of Australia in the 1600s came about thanks to Indonesia spices and the Dutch East India Company.
As the Dutch established a foothold in the Indonesian spice trade, they began searching for new commercial opportunities in the region. On one such journey, the Duyfken became the first ship to make recorded contact and map what would later become known as Australia.
And thanks to a new, faster trade route to Indonesia, some ships owned by the Dutch East India Company made accidental contact with the west coast of Australia and started mapping it. Subsequent planned explorations of the new land led to charting of more than 4000 kilometres of coastline by Abel Tasman.