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Dutch, The discovery of the oceanic communication opened up direct maritime tradebetween Europe and Asia, and thePORTUGUESEset the trend in an extensive and directspice trade from Asia to Europe in the sixteenth century. Attracted by the vast market inEurope and the huge profits of the spice trade, the English and the Dutch East IndiaCompanies were formed in the early seventeenth century (the English Company in 1600

and the Dutch Company in 1602) with the primary objective of carrying on trade in Asia.By the middle of the seventeenth century the Portuguese were overshadowed by theDutch and the English who began their Bengal trade from around the middle of theseventeenth century after establishing their factories inHUGHLI.

The companies went to the so-called Spice Islands in the eastern archipelago to buyspices with silver obtained from the 'New World'. But to their great surprise they foundthat it was not silver which was in demand in these islands but coarse and cheap Indiancalicoes. So they turned to India in search of textiles which could be exchanged forspices in the Indonesian archipelago. First their attention was drawn to the CoromandelCoast which produced large quantities of cheap and coarse textiles greatly in demand inthe Spice Islands. But soon war, famine and political instability rendered theCoromandel trade risky, uncertain and expensive, and so the companies eventuallyturned their attention to Bengal.

Bengal offered certain unique advantages to the companies. It was the largest producerof coarse and cheap calicoes - much cheaper and of much better quality than thoseavailable in the market. Secondly, Bengal silk was a highly lucrative and profitablecommodity for the companies as there was a growing demand for it in Europe replacingItalian and Persian silk because of its comparative cheapness and good quality.Moreover a third lucrative item for the companies' trade was saltpetre which was in highdemand in Europe and which could also be profitably used as ballast for Europe-boundships.

The Dutch came to Bengal in 1630 and settled in Pipli. They obtained trading rightsfrom the Mughal government on condition that they would pay 3% custom duties onexports. After the departure of the Portuguese from Hughli in 1632, the Dutch obtaineda newPARWANAfrom the SubahdarAZAM KHAN in 1634 to establish a factory at Hughli.However, it was not until sometime between 1645 and 1647 that the companyestablished the factory at Hughli. The Westzanen was the first Dutch ship to arrivethere. The rate of the customs duty was not properly defined in the parwana and thatled to frequent disputes. AFARMANof November 1642 exempted the Dutch from payingtransit duties on the Pipli-Agra route that went through Bengal. The English factory wasestablished at Hughli in 1651.

Between 1633 and 1638, the Dutch opened factories in Orissa and Patna but these wereclosed soon after. Peter Sterthemins was the first Director of Bengal, who transferredthe Hughli factory toCHINSURA and the Company took lease of the villages of Chinsura,Baranagar and Bazar Mirzapur at an annual rent of Rs 1574 only, the rent of Baranagarbeing the highest (Rs 793). The dominance of the Chinsura factory soon became evidentand the Pipli factory was abandoned in 1675, although Balasore remained the anchoring

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point of the bigger ships. The Dutch opened a factory atDHAKAin the early 1650s at theplace where theMITFORD HOSPITALnow stands and they had a garden house at Tejgaon.

AURANGZEB, in his early years, had exempted the Dutch from payment of transit dutiesthroughout Bengal, Bihar and Orissa and had fixed the customs duties at 4% at Hughli

and 3% at Pipli and Balasore. Such discrimination was responsible for frequent quarrelswith the government. The Dutch had always tried to evade tax. This was also a cause fordispute. In 1671, Hughli Factors had informed Batavia, the eastern headquarters of theDutch company, that they had evaded the payment of at least 25% of the customs dutiesfor the last sixteen years. This was finally detected and the Dutch had to pay one and ahalf lakh rupees. Batavia encouraged the Hughli Factors to make such evasionswhenever possible. In 1678, the Dutch procured aNISHANfrom PrinceMUHAMMED AZAMfor payment of 4% at Hughli. In 1679, this was reduced to 3.5% and in 1709, by thefarman of Shah Alam, it was further reduced to 2.5%. This was confirmed by thefarman of 1712 by the emperor Jahandar Shah, who also exempted the Dutch frompaying transit duties throughout the Mughal Empire.

From around the 1670s the trade of the companies in Bengal became significant, with aboost in the export of raw silk from Bengal. But it was actually the big boom in theexport of Bengal textiles from around the early 1680s that revolutionized the pattern ofthe Asiatic trade of the companies. This was in fact in response to a revolution inconsumer taste in England and Europe where suddenly Indian textiles, especially thetextiles from Bengal, became a fashion and consequently there followed anunprecedented demand for Bengal textiles. As a result Bengal became the mostdominant partner in the Asiatic trade of the companies and from around the 1680s tillthe mid-eighteenth century, the Dutch and the English East India Companies played asignificant role in Bengal's maritime and international trade.

In the case of the Dutch, though their export to Europe began to decline in the 1720s, itpicked up from the early 1730s. In 1730, Nawab Shujauddin gave the Dutch aparwanaconfirming old privileges. In 1748,ALIVARDI KHANgave them the privilege that customsshould be collected from the Dutch private merchants at the same rate as that of thecompany (2.5%) instead of the 3.5% they had been paying so long. NawabSIRAJUDDAULAsentparwanasto the Dutch, French and the Danes to join him against the English. TheDutch had remained neutral. The nawab, after censuring them, besieged their factoryand demanded thirty lakh rupees, which was reduced to four lakhs through themediation of Khwaja Wajid and Raja Durlabhram. Finally the Dutch agreed to pay fourlakh rupees in lieu of free trade for the company. After the capture ofCHANDARNAGOREby the English, the Dutch gave refuge to its French inhabitants despite the protest of

Clive.

The importance of Bengal trade in the Asiatic trade of the companies can be seen fromthe fact that Bengal's share in the average annual value of Asian commodities exportedto Holland by the Dutch company was around 40 per cent in the early eighteenthcentury. Again, more than 50 per cent of the total value of the Dutch textile export fromAsia was in the form of Bengal textiles. Thus Bengal became the most important theatreof the Dutch company's activities not only in India but in the whole of Asia. No different

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was the case with the EnglishEAST INDIA COMPANY.The English factors regarded Bengalas 'the flower in the Company's garden' and the 'choicest jewel'.

The raison d'EAtre of the Dutch company's operations in Bengal was the procurementof export goods for other parts of Asia as well as for Europe. The role of the precious

metals and goods imported into the region from Europe and other parts of Asia waschiefly to provide the purchasing power needed to buy the export goods. Most of theseimports were precious metals because, given the structure of relative prices, the localdemand for imported goods was comparatively small. Most of the Dutch imports intoBengal were in the form of silver from Europe, though a certain amount of preciousmetals imported by the Dutch was obtained within Asia. This included silver and goldfrom Japan and silver from Pegu, Arakan and Persia.

The goods the Dutch company imported into Bengal were practically all of Asian originexcept a small amount of ordinary metals like lead, iron etc and some woollens fromEurope. An important constituent in the imports from Asian countries was pepper andother spices. Pepper was procured mainly from Sumatra and the Malay Peninsula. Theother spices, especially clove, nutmeg and mace, were obtained in the eastern part of theIndonesian archipelago. The principal items exported by the company from the regionwere textiles, raw silk and saltpetre. Comparatively minor items, mainly for export toAsian markets, included provisions such as sugar, rice, wheat, clarified butter andmustard oil, opium, wax, borax, sea-shells (cauris), gunny bags etc. Though in thebeginning raw silk played a crucial role first in the company's intra-Asian trade andsubsequently in the trade with Europe, it was textiles which dominated the exports ofthe European companies from Bengal in the late seventeenth and the first half of theeighteenth century.

In the second half of the seventeenth century the Dutch trade was much ahead of the

English. The same was the case in the first two decades of the eighteenth century, as willbe evident from the tables below:

Table 1Value of the English and Dutch Exports from Bengal 1701-1720

Years

Average AnnualEnglish Exportsto Europe (inFlorins)

Average AnnualDutch Exports toEurope (inFlorins)

Average AnnualDutch Exports toEurope & Asia (inFlorins)

1701-1710 1,382,595 2,315,384 3,274,369

1710-1720 2,666,764 2,650,607 3,616,242

Source & noteEnglish Exports calculated from K.N.Chaudhuri, Trading World, p.509with one-year lag. Dutch Exports computed from Om Prakash,Dutch Company, p.70. L= 12 florins, 1 Rupee = 1.5 florin.

It was around the second decade of the eighteenth century that the English trade fromBengal picked up and almost equalled the value of the Dutch exports, though the total

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Dutch trade, including the trade to their other Asian factories, was still higher than thatof the English. The English company's exports to Europe increased substantially fromthe early 1730s and reached their peak in the first quinquennial period of the 1740s.However they declined marginally in the first quinquennial period of the 1750s but thedecline was not really very marked or sharp, compared to the average annual value of

the English exports from Bengal in the period from 1730 to 1755, which was around L440,000 or a little over Rs 3.5 million. It may be pointed out here that the decline in theEnglish exports in the early 1750s was compensated by the increase in Dutch exports toEurope during the same period and as such, so far as Bengal's export trade to Europe asa whole is concerned, there was hardly any noticeable change in the position in the firsthalf of the 1750s as compared to the earlier period.

The average annual value of the Dutch export to Europe increased steadily throughoutthe period from the early 1730s to the middle of the 1750s. The growth of the Dutchexport to Europe was more remarkable in the early 1750s when the English tradedeclined, though not considerably. The interesting point to note is that the Dutch trade,which was much behind the English trade in the early 1730s nearly equalled the latter inthe early 1750s. However in this computation the Dutch exports included the value oftheir exports to their Asian settlements, which was on a steady decline from the 1730s.The average annual value of the Dutch exports to Europe was around L 284,775 or Rs2.3 million while the average annual value inclusive of exports to Asian markets stood ataround L 373,342 or Rs 3 million in the first five years of the 1750s. The following tablewill give an indication of the comparative position of the average annual value of theEnglish and Dutch exports from Bengal in the first quinquennial periods from 1730 to1755:

Table 2 Quinquennial Total and Average Annual Value of the English and DutchExports, 1730-1755 [in florins]

Years

English Dutch Average AnnualValue of TotalExports to Asia andEurope

Average AnnualValue of Exports toEurope

Average AnnualValue of Exports toEurope

1730-31-1734/35 5,082,453 2,020,460 3,489,567

1740/41-1744/45 5,764,284 2,390,558 3,475,770

1750/51-1754/55 4,879,785 3,417,306 4,480,104

Source & noteDutch exports compiled and computed from export invoices in the DutchCompany's records at the Algemeen Rijksarchief, The Hague. The figures for Englishexports calculated with one-year lag from K.N.Chaudhuri, Trading World, 509-10. Therate of conversion is L 1 = f 12

In this connection it is significant to note that the Dutch exports from Bengal whichwere so important a part of their trade in the late seventeenth and early decades of theeighteenth century show a steady decline in the period 1730-1755. On the contrary thevalue of exports to Europe was steadily increasing in the years from 1730 to 1745 and

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was marked by a substantial increase in the early 1750s. However in the firstquinquennial periods of the decades from 1730 to 1755, the value of the Dutch exports toBatavia showed a steady increase, though the Dutch intra-Asiatic trade declined as awhole. The percentage share of the average annual value of the Dutch export fromBengal to Batavia in the total value of Dutch exports from the province to the different

parts of Asia was 64.83 in the early 1730s, increasing to 77.02 in the first half of the1740s and to 89.92 in the 1750s. But the export to two other important Dutch marketsfor Bengal goods namely, Japan and Persia showed a gradual decline. The Dutch exportto other centres in Asia was almost negligible in the period from 1730-1755.

Thus a few interesting features of the export trade by the English and the Dutchcompanies emerge from the above analysis. The Dutch had a definite lead over theEnglish in the first decade of the eighteenth century while they were almost equal in thesecond. From around the early 1720s, the Dutch fell behind the English but were pickingup from the 1730s. The average annual value of the exports by the English reached thehigh mark in the first quinquennial period of the 1740s but it declined marginally in thefirst five years of the 1750s. On the other hand, the value of the Dutch exports, includingexports to Asia, nearly equalled that of the English in the early 1750s. And consideringthe total value of exports by the two companies, there was hardly any decline from 1730to 1755. The decline in the value of English exports in the early 1750s was made up for,as far as Bengal's export trade was concerned, by the increase in that of the Dutchduring these years. So far as the Dutch intra-Asiatic trade was concerned, there was agradual decline throughout the period, though the percentage share of Batavia in thetotal value increased steadily.

Here it should be noted that though it was held for long that the Europeans were themajor partners in Bengal's export trade, it has been shown recently that the exports ofthe Asian merchants from Bengal even in the mid-eighteenth century were much higher

than that of the Europeans. Textile export by Asian merchants can be computed ataround Rs 9 to 10 million a year while the total export of Bengal textiles by theEuropeans hardly exceeded Rs 5 or 6 million at the most. The Asian lead in silk export ismuch more spectacular. While the total value of silk exported by the Asian merchants isestimated at around Rs 5.5 million on an average during the period from 1749 to 1753and Rs 4.1 million in the next five years, the average annual value of the Europeanexport of silk was only around Rs 0.98 million over the same period. In other words, theAsian share of the silk export from Bengal was 4 to 5 times more than the Europeanshare of the same in the pre-Palashi period. Most of the other European companies'trade shrank considerably after Palashi as the British pursued a policy of wiping outtheir European and Asian rivals, and whatever remained of the latter's trade was

financed by private British individual's, who in return received bills of exchange inEurope.

It is surprising that the Dutch remained almost onlookers when the British were plottingthe conquest of Bengal. After Palashi, however, they made abortive attempts to recoverthe lost ground. In this respect they got an ally in the person of MIR JAFAR,the nawab.On 20th November 1759, the English seized the Dutch factory at Baranagar while theDutch landed troops on the 22nd on the Sankrael Reach. The English won the naval

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battle on the 24th and the Dutch attack on the English position at Chandarnagore wasbeaten back. On the 25th, the English defeated the Dutch at Badera, located betweenChandarnagore and Chinsura. Through the intervention of Miran, the Dutch were givenback their privileges by a convention signed on 5 December 1759. The battle of Baderaeffectively put an end to Dutch power in India.

WhenSHAH ALAM II invaded Bengal, the Dutch formulated a plan to drive the Englishout. But Mir Jafar's successorMIR QASIMforced the Dutch to demolish the outer work oftheir fort, Fort Gustavas, at Chinsura and to pay 50,000 florins. The nawab thendemanded Rs 50 lakh as compensation from the Dutch and seized their factory atKASIMBAZAR. The Dutch paid half the amount and with English help could draw up aconvention with the nawab on 23 August 1760, whose terms were very harsh on theDutch.

Despite the English help given twice to the Dutch, the friction between them continuedtill the authorities in London ordered the English in Bengal not to treat the Dutchseverely. The victory in the battle of BUXAR,1764 and the acquisition of theDiwani in1765 by the English further reduced the political position of the Dutch.

Their commercial position was also reduced as seen in the fall in their export of cottonpiece goods from 79,000 pieces in 1758 to 47,000 pieces in 1764. The reason of theDutch dependence on cotton piece goods was that after 1757 the English practicallymonopolised the saltpetre and opium trade.

One of the reasons of the soft English attitude towards the Dutch was that the Englishofficials used to send money home by purchasing Dutch bills of exchange. This helpedthe Dutch in Bengal to increase their investment in raw silk and cotton pieces, whoseinvestment in the seventies of the eighteenth century was nearly forty lakh rupees in

which import of bullion was not necessary, reflecting the prosperity of English privatetrade. However, with the coming of LORD CORNWALLIS as Governor General, Britishprivate trade declined and with that the Dutch trade came to a virtual stop in the 1790s.

True, the Dutch did not get the necessary encouragement and support from theHeerenSeventeen(Board of Directors) in Amsterdam. But it is true at the same time that theDutch officials in Bengal were rather not much interested in conquest. After the battle ofPalashi, there was a frantic effort by Mir Jafar and Khwaja Wajid to dislodge the British,and the two joined hands with the Dutch whom they tried to persuade to invade Bengaland act as counterpoise to the British. But the gamble failed miserably and the Dutchwere gradually eliminated from the trading world of Bengal. [Aniruddha Ray and Sushil

Chaudhury]

Bibliography KN Chaudhuri, The Trading World of Asia and the EnglishEast India Company,Cambridge, 1978; Om Prakash, The Dutch East IndiaCompany and the Economy of Bengal,Princeton, 1985; S Chaudhury,From

Prosperity to Decline - Eighteenth Century Bengal, New Delhi, 1995; OmPrakash, European Commercial Enterprise in Pre-Colonial India,

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Cambridge, 1998; S Chaudhury, The Prelude to Empire-Plassey Revolutionof 1757,New Delhi, 2000.