The Failure of the Dutch Free Ports in the Nineteenth Century: Commerce, Colonialism and the Constitution

ABSTRACT

In the 1820s and 1830s, two debates about free ports took place in the United Kingdom of the Netherlands. One debate concerned domestic fiscal policy and the regulation of foreign trade. In this debate the legacies of the political economic thought of Gijsbert Karel van Hogendorp and the mid eighteenth-century debate on turning the Dutch Republic into a limited free port were played out. The first Dutch debate on free ports was a response to changing conditions in global trade and a further attempt to regain the old staple market and connect it to an industrialising national economy. The other debate concerned the establishment of the Dutch Trade Company (Nederlandse Handels Maatschappij) and the declaration of a series of overseas free ports in the years after the British seizure of Singapore and its ratification in 1824. This second debate concerned the modernisation of colonial trade to halt the expansion of British commercial settlements in and around the Dutch East Indies as well as in the Caribbean. Together these debates represented the national challenge to put the entire Dutch economy on a new foundation and reflected differing constitutional perspectives that had pitted liberals against patriots since the late eighteenth century.

KEYWORDS:

• Free ports
• Dutch United Kingdom
• Dutch trade company
• Singapore
• Curaçao
• Dutch East Indies

1. Introduction

Carel Sirardus Willem van Hogendorp horribly mistimed the publication of his Coup d'Oeil Sur l'Ile de Java et les autres possessions Néerlandaises dans l'archipel de Indes.¹ When it appeared in 1830, printed in Brussels, with the aim to convince the citizenry of the southern provinces of the benefits of colonial trade for the Dutch United Kingdom, the Belgian Revolution had just erupted.² The translator’s introduction to the Dutch edition of the work of 1833, when Belgian independence was a fait accompli, stated the aim of the pamphlet more modestly: ‘By originally compiling this work in the French language, the aim of the writer was also mainly to inform the inhabitants of the then southern provinces of the state, who were often little familiar with the Dutch language, about our colonial affairs.’³

The Coup d'Oeil contained an extensive description of the free port of Riau (Riouw), which had been established in 1828, following the Anglo-Dutch Treaty of 1824 and the British creation of the free port of Singapore. The free port of Riau, or Tandjoeng Pinang, situated almost directly opposite its rival on the Singapore Strait on the island Bintang, was destined to become the successor of Malakka, which had been declared a free port in early 1824, but in the same year became British territory under the terms of the Anglo-Dutch Treaty.

With an eye on the ongoing Anglo-Dutch commercial rivalry in the East Indies, van Hogendorp hailed the recent growth of trade at Riau while deploring the ‘sad indifference’ [apathie désolante/ bedroevende onverschilligheid] that had seen ‘trade, in the last fifteen years, been treated with such little care’ alongside the rise of public sentiment that the East Indies was a costly liability for the United Kingdom.⁴ In a footnote with a Dutch translation of the section of the Coup d'Oeil on Riouw, published in 1830, van Hogendorp’s assertion of political negligence was disputed. The footnote drew attention to the fact that the Dutch Governor General, Godert van der Capellen, most certainly had not willingly consented to the scheme of Raffles to appropriate Singapore and create a free port in order to challenge the position of Dutch trade in the region.⁵ Yet, it was not so much the diplomatic circumstances surrounding the territorial loss and the creation of Singapore that irked van Hogendorp. His main concern was the failure of Dutch policy to align the commercial potential of its East Indies possessions institutionally with the interests of the Dutch state. Similar to how earlier texts, like Philippe Fermin’s A view of the present state of the Dutch settlements in the East Indies (1780), highlighted mismanagement, corruption and incompetence as rife in Dutch colonial government, but had blamed the mismanagement on the people, van Hogendorp argued that it was due to the Dutch Kingdom’s policy failure to tie Dutch trade to its own territory that ‘this little piece of land [Singapore] has resolutely absorbed all the trade of the islands of the entire archipelago!’⁶

One context of the creation of Riouw was the partial restoration of Dutch colonial territories by Britain following the end of the Napoleonic war and the unleashing of Anglo-Dutch commercial rivalry over the East Indies trade. A second context was the creation of the Dutch United Kingdom in 1815, the subsequent development of King William I’s economic policy and its tensions with the liberal constitutional as well as economic ideas of figures like Gijsbert Karel van Hogendorp (the uncle of the author of the Coup d'Oeil), who wrote the Dutch constitutions of 1813 and 1815, but ended up a critic of William’s commercial policy and even justified Belgian independence. A third context was the Dutch debate about fiscal regulations and free ports that had first been sparked in the 1740s, been reignited in the 1820s and that was now elevated to the global level of Dutch colonial territories. A fourth context was the ongoing debate over the appropriate Dutch colonial economic policy, notably the fiscal management of territory, but also the profitability and viability of the Intra-Asian trade as a source of Dutch colonial investments.

It was within this combination of contexts that William I established, in 1824, a national Dutch trading company, the ‘Nederlandse Handels Maatschappij’ (NHM), and in its aftermath a number of colonial free ports in both the Atlantic Caribbean (in Curacao and St. Eustatius) and the East Indies (Riau/ Tandjoeng Pinang, Sambas, Pontianak, Soekadana, Teluk Betung, Makassar, Menado and Kema – followed by Ambon, Banda and Ternate in 1853, and still later in Sabang, Bengkalis and Merauke).⁷ While there is not a single study available that focuses on Dutch free ports as such in this period, it is also questionable whether the phenomenon can be attributed to a deliberate strategy or policy vision. If the establishment of Dutch, as well as British, colonial free ports in the nineteenth century adds up to a practice or system, it was probably more a pragmatic fiscal tool that was used under circumstances of resource poverty than a political economic strategy.

The aim of this article is to provide an integrated perspective on Dutch free port policies and practices in the metropole and colonies in the nineteenth century and contribute to a bigger comparative perspective on the evolving functions of free ports in the global trade system. Recent publications, discussions, museum exhibitions, and research projects on Dutch history focus especially on the Dutch role in the slave trade, the involvement of the House of Orange, and the financial structures behind imperial governance and exploitation.⁸ This trend has also brought the long overdue recognition that the Dutch Republic was not a merely commercial (non-violent, less imperial) global actor that happened to be engaged in colonial trade, thus radically breaking with an enduring tradition of ‘Grotian’ national mythology and late nineteenth-century liberal conceptions of Dutch statehood.⁹ This article complements these perspectives by tracing an eighteenth-century debate about the restoration of the primacy of Dutch trade through the institution, domestically at first, of the free port to a nineteenth century global colonial setting.

In the 1820s and 1830s, two seemingly unrelated debates about free ports took place in the United Kingdom of the Netherlands, which had been established at the Congress of Vienna of 1815 on the post-Napoleonic remnants of the Dutch Republic. One debate concerned domestic fiscal policy and the regulation of foreign trade. In this debate the legacies of the political economic thought of Gijsbert Karel van Hogendorp and that of the earlier, mid eighteenth-century pseudo-constitutional debate on turning the Dutch Republic into a limited free port were played out. At the exact moment when other states adopted longstanding Dutch warehouse policies to create domestic forerunners of special zones, the first Dutch debate on free ports was a response to changing conditions in global trade and a further attempt to regain part of the old staple market and connect it to an industrialising national economy. The other debate concerned the impact of the establishment of the Dutch Trade Company (Nederlandse Handels Maatschappij), successor to the VOC and WIC and the establishment by the NHM of a series of overseas free ports in the years after the British seizure of Singapore and its ratification in 1824. This second debate concerned the modernisation of colonial free port trade to halt the expansion of British commercial settlements in and around the Dutch East Indies as well as in the Caribbean. Together these debates represented the national challenge of putting the entire Dutch economy on a new foundation and reflected differing constitutional perspectives that had pitted liberals against patriots from the late eighteenth century. What follows brings into the focus the economic, fiscal, intellectual and political elements of this vision and connects them to this intellectual dividing line.

2. The 1751 ‘Proposal for a General Porto-Franco’ as a Commercial Constitution of the Dutch State

The foundation of the Dutch free port debate of the nineteenth century lay in the eighteenth century. In 1751, stadholder William IV launched a well-known ‘Proposal […] for the reform and improvement of the trade of the Republic’ [‘Propositie van Syne Hoogheid ter vergaderingen van haar Hoog Mogende en haar Edele Groot Mogende gedaan, tot redres en verbeeteringe van den koophandel inde republicq’].¹⁰ The actual author of the text was the Amsterdam merchant banker Thomas Hope, although in part Hope was more of an editor, who arranged a number of options and opinions into an order that was suitable for publication and for initiating broad public debate. In fact, the ‘Proposal’ itself contained a peculiar ambiguity. On the one hand the text reflected the range of opinions involved in the preceding discussions amongst political advisors and merchants;¹¹ while on the other hand the text forcefully argued for a very specific political economic conception of the origins, nature and future of the Dutch Republic, which in its turn led to the inevitability of the limited portofranco solution that was recommended.

The question can be asked whether the policy that was advocated was actually captured by the term ‘portofranco’? Arguably, this was not the case, especially not from an Italian point of view. The Dutch vision and situation it responded to did not even remotely resemble any of the paradigmatic cases of Genua, Livorno, or other Mediterranean free ports. Rather than a designated circumscribed space or port city attracting trade or investments that otherwise might go elsewhere, the proposal stipulated free trade regulations and a tariff that applied to certain goods in the entire state of the United Provinces. Whatever models might be argued to have led to the establishment, or the functions as they had evolved, of the most famous free ports, the Dutch case was quite different.¹²

In a sense, the 1751 ‘Proposal’ was a commercial treaty between the constitutive parts of a political federation, the United Provinces. It attempted to align the range of private interests within the maritime and land-locked provinces under a single header and convert them into a single political economic interest. One of the reasons why the ‘Proposal’ was not put into practice (alongside the death of William IV and the advent of the Seven Years’ War) was the resistance by local manufacturers in the non-maritime provinces. As a commercial reform vision, the ‘Proposal’ was inspired and necessitated by the abolishment of the Franco-Dutch commercial treaty in 1745 that since the late seventeenth century (the Peace of Nimwegen and the Peace of Ryswick) had to an extent dictated the pattern of Dutch European trade.

The key challenge was how to revive Dutch manufacturing, despite the high wage level, and revolved around the question whether attracting trade could have (looking back on the plan of 1751) and could still (after 1800) connect to a successful restructuring of national manufacturing. The main idea of the ‘Proposal’ was that a more competitive and better organised (fiscally streamlined) Dutch trade republic might internally manage to get rid of smuggling (the Admiralties’ income suffered as a result), externally tie the Republic commercially and politically to other states (creating a new identity of and security for the Dutch state¹³), and allow all sectors of the Dutch economy ultimately to profit. The idea in any case was not to turn the Republic into a mere facilitating transit trade region, a giant entrepot without further economic activity.

While the 1750s did not see the implementation of the ‘Proposal’, in later years its vision was often referred to, not simply as an economic and fiscal policy proposal, but pretty much as a constitutional model for how to reform the Dutch state and align it with a reformed global political and economic order. Writers like Isaac de Pinto, Elie Luzac, Adriaan Kluit and many others referred to the 1751 ‘Proposal’ in works that engaged with much wider political economic themes, such as ‘Jealousy of Trade’, the rights of neutral trade in wartime and the balance of power. The escalation of Anglo-French rivalry, the polarisation of Dutch politics and the rise of ‘Patriotism’ and the outbreak of the Fourth Anglo-Dutch War were all themes that were put in contrast with and in opposition to the vision that was deemed to lay behind the 1751 ‘Proposal’. Moreover, the 1751 ‘Proposal’ was mentioned by Kluit in the course of an argument about Dutch constitutional history, the nature of the Republic and the logic according to which the reform of the Dutch state could legitimately take place.¹⁴ In other words, the 1751 ‘Proposal’ came to fulfil an enigmatic role in the development of a nascent ideology of ‘free trade’, global order and constitutional ideas about commercial society. The same Kluit was the person who ‘imported’ the Göttingen tradition of statistics and operationalised Laurens Pieter van de Spiegel’s idea about the ‘intrinsic power’ of the Dutch trade republic into a theory of international relations based on relative competitive strengths that derived from the natural/ physical, moral and accidental causes of a state’s character and strength.¹⁵ The latter formula came straight out of the 1751 ‘Proposal’¹⁶ and was referred to by most writers who mentioned the plan in the later part of the century. Here we can also recognise what the porto-franco idea represented: not simply an economic policy related to distinct and diverging economic interest groups within the state, but a geopolitical strategy through adoption of a fiscal position on the original nature and future development of the Dutch national economy.

In the early decades of the nineteenth century, the standard bearer of this vision was Gijsbert Karel van Hogendorp. Hogendorp had been tutored by Hendrik Herman van den Heuvel, the winner of a famous prize essay on the restoration of Dutch trade and initiator of the creation of the influential national association of the Oeconomische Tak.¹⁷ The role that William IV played in acting as the figurehead of the 1751 portofranco project, and this political way of thinking in general, greatly appealed to Hogendorp. Hogendorp was intrigued by Elie Luzac’s discussion of the role of the stadholder (one that earlier was fulfilled by Charles V who had his own decree defeated in court) in relation to the States General. It was important for the preservation of Dutch liberty that there was a figurehead who made sure that political economy did not revert to negotiating privileges for profit (as happened in stadholderless periods).¹⁸

The significance of this appreciation has been overlooked. Kluit had argued in pretty much the same way, in 1802, when he discussed the reform of the old trade Republic into a new kind of state, without it being a disruptive revolutionary event: it was important to recognise the physical, moral and accidental characteristics of the state, plus there needed to be an appreciation of the fact that sovereignty had never resided with the States General, which at best temporarily replaced the sovereign in the absence of one. Here the historical, legal-constitutional and political argument fit with the idea of the ‘intrinsic power’ of the state in a commercial and geopolitical sense, in much the same way that the 1751 ‘Proposal’ suggested such a fit existed.

A second way in which Hogendorp engaged with the 1751 ‘Proposal’ regarded not so much the ‘Verhandeling’, the manifesto written by Thomas Hope that accompanied the actual policy, but the economic policy itself that was promoted in the 1751 ‘Proposal’: Hogendorp was ambivalent, just like he was ambivalent about the 1725 (low) tariff that was reintroduced in 1813, but that had attached to it a whole list of goods that formed exceptions. The 1751 ‘Proposal’ as well formed such a combination of promoting (national) entrepot trade and a list of exceptions. The 1725 Placaet was long celebrated in the nineteenth century by opponents of Hogendorp who either wanted to restore the Amsterdam staple market (Holland traders, who ideally also wanted free transit), or protect domestic industries (writers and politicians like Gogel – who wanted no transit trade¹⁹), or both (Vreede, Falck, Ouwerkerk de Vries, most economic patriots and the official policy line from 1815). Likewise, the 1751 ‘Proposal’ had admirers and critics whose views differed from Hogendorp’s.

An interesting observation made by Hogendorp was that in the early nineteenth century the patterns of trade had changed because of modernised transport infrastructure. The staple market (one centre: Amsterdam) was no longer so important.²⁰ Instead a hundred smaller centres had adopted functions previously performed by the staple market. More important still is Hogendorp’s claim that in the nineteenth century, in contrast with the eighteenth, the combination of the policies of limited free port and transit were contradictory. The new reality of international trade created more stringent restrictions. A policy separation between two categories of goods was at odds with the new reality in which general and normal trade were much more intertwined. Combining two systems in the entire country would have the effect that general trade was diverted, which killed off the entire national economy (this is where the Dutch proposal is the opposite of a traditional free port where there is protection in the rest of the country and free trade in the free port).²¹

So from Hogendorp’s early nineteenth-century point of view the policy of the 1751 ‘Proposal’ could no longer work, and even in its own time was suboptimal. This was exactly why he disagreed with the political economy of King William I from 1815 and with Vreede who was its fiscal architect (and Falck, the ambassador in London²²). This was economically mistaken and out of step with the way the global economy had developed. Besides, and important to note, politically it turned the role of the sovereign King who had a unified political vision of the state and a clear view of the national economic interest into that of a negotiator of privileges to certain profits (i.e. William I became the opposite of stadholder William IV and emperor Charles V).²³

The background to this perspective is Hogendorp’s place in a tradition of Rotterdam thinking about economic policy that had argued, from the 1750s onwards, for a low tariff on a general (not limited) basis, combined with a low-duty transit.²⁴ While the staple market and the financial markets were bound to Amsterdam, where these interests remained an object of lobbying, in Rotterdam a tradition of thought existed that abhorred the idea that the entire state might be reduced to the function of a mere entrepot.²⁵

Hogendorp’s model for state reform was Britain, particularly after 1819. If the post-Napoleonic settlement had seen an increase in protectionism for the sake of peace, a few years later Britain started to experiment with economic liberalisation to see if being the most advanced national economy indeed meant barriers could be removed. Hogendorp recognised that not only was this true and good for Britain, he also believed there was a natural alliance (as in economic complementarity) between the two states and both states could profit from the same liberalisation policies.²⁶ Hogendorp analysed the development of the British debate on the abolition of the Navigation Acts from 1819 to 1825 through the views of Huskisson and William Jacob (a prominent member of the Board of Trade).²⁷ He regretted already in 1788, when he was himself involved in the negotiations as the Rotterdam pensionary (along with William Eden and L.P. van de Spiegel), that no commercial treaty with Britain was concluded.²⁸ Writing about the subject in 1814, 1825 and in 1828, he was highly disappointed about the inability to reach an agreement. Hogendorp was an admirer of the British constitutional system in which parliamentary (public) debate and fiscal and financial aspects (credit) helped to overcome particular interests and break group privileges and lobbies.²⁹ Famously, he defined himself: ‘ik ben liberaal en engelschgezind’.³⁰

The contrast between Hogendorp’s constitutional vision of a modern commercial state with the monarchical regime of the Netherlands was huge in this sense, where a King, from Hogendorp’s perspective, had reduced himself to negotiating compromises between private interests, and there seemed to be no clear sense of direction. The constitution that had been developed earlier when the United Netherlands was created, however, provided enough guidance for the Southern Netherlands to legitimately break away in 1830, or so Hogendorp argued. Having said that, Hogendorp and Ackersdijck (who had become a professor in Liege and had a good perspective on the matter) – were both not only highly critical of Dutch policy, but also saw that in Britain chances were missed and that the policies that were implemented were responsible for creating poverty and high inequality.³¹ This led Ackersdijck to start reading early socialist writings.

3. The Dutch Free Port Debate of the 1820s and 1830s

The 1751 ‘Proposal’ was a perfect example of an attempt to create a tighter national economy through fiscal politics. Understood as such, it would be the object of the doctoral dissertation of a student of Ackersdijck, one of Hogendorp’s closest friends. With Ackersdijck’s as his promotor, Willem Engelbert Engelen defended his dissertation on 29 May 1840, entitled Dissertatio historico oeconomico politico inauguralis de propostionibus Guglielmi IV.³² Intellectually, it was indeed a disappointing piece. Engelen approached the 1751 ‘Proposal’ as a general response to increasing competition from other states in the field of global trade (for which there is some textual evidence in the Verhandeling). Interestingly, he included in his scope also the dimension of the Indies trade, with reference to Gustaaf van Imhoff’s report of 1741.³³ Van Imhoff’s Considerations sur l'etat présent de la Compagnie hollandoise des Indes-Orientales were never published in their original Dutch version until the early twentieth century.³⁴ The French title Engelen cited referred to the selection of the text that was included in Dubois, Vies des gouverneurs généraux of 1763 and that was subsequently reprinted in Accarias de Serionne’s Commerce de la Hollande, in 1768, alongside the 1725 Dutch tariff regulation.³⁵ Engelen hailed van Imhoff as having worked ‘to diminish the jealousy of the English and suppress the inactivity, plundering and laziness of those who governed the Dutch territories'.³⁶ Engelen compared the limited free port to the alternative options of the free entrepot and drawback and concluded that its superiority as a policy in recent years had been affirmed in many texts that engaged with the British adoption of free trade (referring to Huskisson’s speech in Parliament) and the German Tolverbond [i.e. the Zollverein]. As Sismondi put it (implicitly rejecting Broggia):

C’est (le Port-Franc) l’expédient employé par les gouvernements de l'Europe pour favoriser le commerce qui n'ait pas agi à fins contraires, de ce que ces gouvernements s'étaient proposés.³⁷

Engelen praised the principles included in the Dutch constitution of 1815, with explicit reference to Hogendorp,³⁸ that forbid fiscal barriers between parts of a state that in other senses resembled a federation, in contrast with treaties between states as was the case in Germany and in the Sister Republics in the French period.³⁹ Economic integration had to be conceptualised as a means to create political unity.

Robbert van Breugel Douglas published two texts, in 1832 and 1834,⁴⁰ in which he proposed a mechanism for avoiding the problem identified by van Hogendorp that a limited portofranco with free transit trade could not work. Such a combination, by the early nineteenth century, would insufficiently strengthen the general trade of the state and disconnect protected manufactures from the national economy, flushout out the entire system. After 1813 (when the 1725 Placaet was reinstated), and definitely after 1830 following Belgian independence, the old predicament that the 1751 ‘Proposal’ had tried to alter had returned.

Van Breugel started his first work with a long, provocative quote from Wagenaar’s Vaderlandsche Historie.⁴¹ Citing the dual problem of heavy duties on trade and the competition by other states, which rather than use the Amsterdam indirect trade developed their own trade, van Breugel had a dig at his contemporaries who praised the 1725 Placaet (which was then in effect).⁴²

The mechanism van Breugel proposed echoed the 1751 ‘Proposal’. The difference with the 1751 ‘Proposal’ was that the original plan differentiated between goods based on what they were (certain goods were duty free, others were protected), whereas van Breugel differentiated between goods based on what they were used for (if they were consumed they had to be subjected to the payment of excise [by the consumer], if they were re-exported, they were free). In addition: if a good X was imported and consumed in the Netherlands, while the same good X made by a Dutch manufacturer had to be exported because the demand for foreign goods drove it out, then the import duty would not go to the state, but to the Dutch manufacturer. It has been shown that Hogendorp questioned if the idea was possible to realise in practice: whether reconciling manufacturing and trade through a complex repayment mechanism (including modern VAT) that was effectively a subsidy could work. However, that does not mean that Hogendorp was against the basic idea of such a ‘drawback’.⁴³

It is important to distinguish the plan by van Breugel from the plan by the Government introduced by Pieter Vreede in the 1820s, which was strongly criticised by van Hogendorp and others. Vreede too proposed a consumption tax on imported goods that would be repaid upon export of the goods. However, the purpose of Vreede’s plan was to create a level field between foreign and domestic industries (the fiscal principle being that the market price of foreign and domestic goods had to be made equal).⁴⁴ Van Breugel’s fiscal principles instead aimed, as he emphasised, at creating a level playing field⁴⁵: the restriction being twofold:

1. The height of the duty was dependent upon a general tariff per good, the height of which was in part determined by the ‘additional demand’ (effective demand without domestic production⁴⁶), but more still by a perceived need to lower the cost of labour (low import taxes on subsistence goods and high taxes on luxury goods (explanation principle 3),⁴⁷ which was also the aim of principle 2: abolition of all internal taxation of primary goods used in domestic manufactures, and of the proposal to abolish all consumption taxation on subsistence goods⁴⁸); i.e. domestic manufactures were not ‘protected from’ or ‘compensated for’ foreign competition in general, but liberated by removing faulty policies that remained from the past;

2. The quantity of domestically produced goods that could profit from the fiscal protection was limited to the quantity of domestic consumption, to prevent export subsidies and provide market competition among national producers (principle 5⁴⁹).

Van Breugel was confident that his measures would be found legitimate enough abroad not to spark fiscal retorsions.⁵⁰ The key was not to make foreign and domestic economic sectors equal through fiscal policies that interfered with normal price competition, as in Vreede’s plan (which could lead to retorsions and tax wars⁵¹), but to create (through a different kind of consumption tax on imported goods) a domestic equality not only between the manufacturing sector and trade in general, but also between different parts within manufacturing (not to create pockets of privilege and profit based on the good itself). Clearly, van Breugel responded in his presentation to the tensions that had erupted in the 1820s between Southern manufacturers and the traders in the Province of Holland. This is recognisable both in the text itself and in the fact that all van Breugel’s calculations about the consequences for public finance are based on the pre-1830 situation.⁵² In the last words of the work van Breugel noted that by transforming duties into a consumption tax he had turned them into ‘a kiss to trade and manufactures’.⁵³

At the end of an important passage, van Breugel alluded that the aim of the 1751 ‘Proposal’ to restore the Dutch (note: not Amsterdam) staple market might be reached should his plan be realised.⁵⁴ The logic was that his portofranco regulation and import-consumption tax would render the existing regulation that was treatied for in agreements with other states⁵⁵ ineffective, or unattractive. The aim of the portofranco, as van Breugel saw it, was to bypass and hence eliminate the regulations that promoted the present separation of the entrepot and transit functions that the seventeenth-century Amsterdam staple market had nourished from active trade and the rest of the national economy. Goods were transported in and out of the state, but were never part of the national market, apart from when the highest profits could be made there. This was a damaging condition that had grown out of the old ‘handelsvrijheid’ of the Amsterdam staple market. When the staple market weakened, the compound of high wages, high taxes and high production costs exercised pressure on active trade, domestic manufacturing (which relied on cheap transport to export markets) and ultimately the transit trade itself (indirect trade in general transforms into direct trade). A fiscal reorientation in the spirit of the 1751 ‘Proposal’ might help to restore active trade and the transit trade in one go (in other words: van Breugel saw durable and beneficial transit trade only as a side-effect of the active trade, which was not the way the existing regulations worked).⁵⁶ This was not just fiscal and economic policy, but an attempt at proper political economy that echoed how the 1751 ‘Proposal’ had been understood by writers in the later eighteenth century.

In his second work van Breugel applied the same theory to the languishing agriculture in the Dutch state. There was an apparent familiarity between what he proposed and the policy that the Government had put before the States General in 1831-2, but which it withdrew without being discussed. Yet, the difference was huge, van Breugel insisted: the Government’s proposal would only benefit the Treasury and put agriculture into a state of deep misery.⁵⁷

Concluding his argument with a statement on the export prospects of Dutch cheese and butter (which he claimed had superior taste over many local dairy products),⁵⁸ van Breugel continued his attack on the government’s economic policy. If the current situation was not improved soon, he foresaw that Britain would use Antwerp as its mainport for entering the German hinterland and the Dutch state would be reduced to ‘a mere transit place’ (‘blootelijk eene overladingsplaats’).⁵⁹ Even in his formulation he followed van Hogendorp and the Rotterdam tradition Hogendorp was part of (see above). In his conclusion, van Breugel drew attention to the fact that his system would have beneficial effects for the problem of smuggling, notably to Germany,⁶⁰ and underlined the need for reform by desperately asking an unresponsive political system to realise the urgency of the situation and listen to citizens who had constructive ideas.⁶¹

Finally, in 1843 the idea of the national free port was put forward in a publication by Pedro Wynnand Alstorphius Grevelink, entitled Het belang van het aannemen van het beginsel van porto-franco voor Nederland (1843).⁶² Grevelink had already written on economic policy in the 1830s in his doctoral dissertation on the means for promoting the national economy, where he repeatedly cited Hogendorp as well as the Dutch constitution on a par with other political economic treatises.⁶³

Grevelink started his work on the Dutch free port with three quotes from Slingelandt, Hogendorp, en Ouwerkerk de Vries, and in the first pages of the work echoed the commonplace that although the Dutch economy was in a bad state, the potential for reversing the situation was absolutely present. What followed was a set of observations about interconnections between public revenue, the state of Dutch trade and manufacturing, poverty, private investment, the cost of labour and the suggestion by some that revising the Constitution might be required. Grevelink rejected this suggesting, instead proposing that a long-term analysis of fiscal politics in the Dutch territories (before, during and after the Republic) might reveal the true source of the problem and its solution. Quoting from Grotius, De la Court, Slingelandt, Luzac, Say, Den Tex, Ouwerkerk de Vries, Sloet tot Oldhuis, Ackersdijck, Wttewaall and Hogendorp, Grevelink explained how old regulations and institutional arrangements between the provinces all made sense originally, but had become outdated and damaging to the national economy. In addition, ingrained ideas and prejudices pertaining to the ‘mercantiel stelsel’ had led to the uncritical reintroduction in the early nineteenth century of the 1725 Placaet.⁶⁴

The 1751 ‘Proposal’’s great merit was its perspective on reforming the fiscal regulations of the state in order to preserve its commercial foundation.⁶⁵ William IV’s death having been a national disaster that was felt until this day, Grevelink contrasted the old Stadtholder’s responsive attitude with that of the present government, which neglected all the knowledge it was offered to turn the tide (‘men had er de voorlichting der wetenschap, maar men bleef er blind voor’).⁶⁶ Grevelink quoted Ackersdijck to support his claim that the present government acted irresponsibly against the entire Dutch tradition of thinking about the grain trade and its fundamental role in nourishing the national economy (‘the mother trade’), as well as the entirety of political economic writers.⁶⁷

Describing the advantages of a portofranco for the Dutch economy, Grevelink associated the spirit of the reform idea with that of modern transport, solid monetary policy, practical education into new technology and the reform of colonial trade, specifically the abolition of slavery.⁶⁸ Economic liberalisation, Grevelink claimed, was a much more secure protection against decline and poverty than the cleverest treaties and tariffs one could ever negotiate.⁶⁹ Competition from Hamburg and Antwerp (now connected by rail to the German hinterland) was by means a new phenomenon and in the past had been overcome as well.⁷⁰ Grevelink appealed to King William II to follow in the footsteps of William IV by launching policies that were really for the public interest, rather than that they promoted particular interests such as represented by the NHM (unmentioned by Grevelink, William IV functioned as figurehead for the VOC and the WIC as part of chartered trade reform around 1750).⁷¹ Likewise, as part of the national interest it was significant to revitalise agricultural production.⁷²

Implementation of a portofranco did not mean that all duties and tariffs were scrapped. It just meant that the old logic of protection that was associated with the 1725 Placaet had to be revised, as these old regulations had ‘ontaard’ [degenerated].⁷³ The key to the functioning of the portofranco was a tax reform aimed at ‘redressing the balance’⁷⁴ between consumption taxes on different kinds of goods, notably those used in modern agriculture, the production of manufactures and subsistence.⁷⁵

Since changing the Constitution sas not a suitable alternative, Grevelink returned to his earlier idea.⁷⁶ The ‘principle of portofranco’, however it was implemented was the solution instead. The objections that ‘established interests’ and ‘protective measures by other states’ made it unsuitable were grossly overstated, according to Grevelink.⁷⁷ Had not Trieste profited amazingly from being a free port, Grevelink asked? And how about ‘Poelopinang [i.e. Penang, see section 5 below] and Singapoor’.⁷⁸ Franklin, Smith and Say had discussed, what Britain was putting in practice as well now. And even Russia (where Storch’s wise advice had been heeded) was establishing free ports in the Caucasus.⁷⁹ Rather than wait for all neighbouring states to implement the right system, it was time, Grevelink wrote, to ratify ‘a silent advantageous commercial treaty with the whole world’.⁸⁰

4. Caribbean Post-Revolutionary Trade and Dutch Free Ports

If the Dutch metropolitan free port debate of the early nineteenth century differed from the mid eighteenth-century one in its reference to a global level where new free ports were being established, the Caribbean and Atlantic had their own free port history that went back to the seventeenth century and the roles that Jamaica and St Eustatius played in attracting goods, but also as havens for clandestine trade that drove a political wedge into the Spanish South American Empire. Yet, the Caribbean was also the first space where free ports were deployed by France, Britain and other European powers, from the 1760s, in a fairly systematic way as new tools for integrating imperial and global markets.⁸¹ The post-Napoleonic reality that saw the establishment of independent South American republics created a new version of that eighteenth-century Caribbean free port system that may be imagined as placed ‘on top’ of the old island plantation economies.⁸² Within this system European states competed for the spoils of the Spanish Empire in different ways and through different political economic configurations.⁸³ The main players were the United States and Britain. Diplomats and entrepreneurs of the former power planned to create something of an economic Monroe doctrine through a customs union that connected the fiscally fenced-off metropole to the new states by ties between American free zones and Latin American free ports. British attempts to appropriate as much as possible of the South American trade on the contrary focused on connecting Latin America to the British Imperial economy through the warehouse and dock system that had just been built.⁸⁴

The new Dutch state too attempted to continue its Republican legacy as being a main commercial player in the Caribbean space.⁸⁵ King William I, in what appears to have been grounded on somewhat naïve hopes, developed its own ‘’free trade imperialism’. The key figure was Johannes van den Bosch, whom we will encounter later in his more famous role as Governor-General of the Dutch East Indies (from 1830) and ‘inventor’ of the cultivation system in Java.⁸⁶ Van den Bosch was sent to the Dutch West Indies in 1827 to operationalise the potential that William I saw for gathering some of the spoils of the Spanish commercial empire to attract trade to the Dutch Kingdom.⁸⁷ In particular, Dutch hopes were pinned on the potential of the new free port of Willemstad, on Curacao. On 10 July 1826 Willemstad was declared to become a free port from 1 January 1827, with the aim to develop it as the new version of St. Eustatius. The aim for Willemstad was to outcompete St. Thomas to become the main Caribbean commercial centre that St. Eustatius had been in the seventeenth and part of the eighteenth century. Indeed, St. Eustatius itself was proclaimed a free port again in 1828, followed in 1848 by Paramaribo in Surinam on the mainland.⁸⁸

The NHM saw itself in the 1820s as a major future beneficiary of South American trade and agencies were opened wherever a promise of commercial opportunity announced itself. Numerous free ports were created in Latin America in the early decades of the nineteenth century, and diplomatic initiatives were launched by William I to create a platform for Dutch traders. William I, likewise, was hopeful the Dutch might be involved in the Pan-American plan to create a canal through Nicaragua and had sent a representative to the Amphictyonic Congress of 1826, only to find that Dutch membership of the Holy Alliance and non-recognition of the independence of Latin American states were hard to reconcile with commercial friendship.⁸⁹

The policies implemented by van den Bosch in 1827 and 1828 were inspired by the ideal of the revival of the Dutch staple market and the usage of Dutch warehouses as they were connected to the Latin American trade by one single Dutch Caribbean trading post as the hinge point between the two asides of the Atlantic.⁹⁰ That vision of the future of Willemstad was first expressed in 1824 by a navy officer named Hendrik Willem De Quartel, and became the basis for the trade model of the NHM in the West Indies, as distinct from the American free zone model and the British ‘free trade’ docks.⁹¹

To add further focus the mission of reviving Dutch trade in the West indies, a separate national trade company was established in 1828, the West-Indische Maatschappij (WIM) which was modelled on the NHM. The WIM existed until 1863 and was devised as a platform for raising investment from Amsterdam merchant circles in particular. In a mission statements, published in 1828, the main proponents of the WIM argued, with lofty references to the greatness of King William I and the commercial history of Amsterdam, that:

The South American trade, wisely established and promoted seems only to be able to provide good outcomes; where the necessity of a connection exists, the trade that realises that connection, must benefit proportionately; and when – to conclude these considerations – the power of the capital that can be raised, the productivity of our industry, the knowledge of trade, which our city has ever retained, and the advantageous situation of our West Indian islands are kept in view, then it is clear that we enjoy such advantages that other nations lack that it would be truly irresponsible not to assure of their fruits and to make a powerful effort to do so.⁹²

The actual situation on the ground in Willemstad was a far cry from the positive picture that was painted.⁹³ And it seems that enthusiasm for investment in the new trade company was limited. Dirk van Hogendorp wrote on 16 May 1828 that ‘people do not want to throw away their money into the West-Indische Maatschappij. Those who have bought shares, I hear, have obtained 2 or 3 to buy or retain his Majesty’s favour’.⁹⁴

Ultimately, there were many reasons why the plan was unlikely to succeed: the lack of political leverage of the Dutch, compared with Britain and the United States, their inconvenient political stance on South American independence and the simple fact that the Dutch possessions were undistinguished places. Indeed Adam Smith had already qualified Curacao and St Eustatius as ‘barren islands’ that could only be successful as free ports in a mercantile world.⁹⁵ But that world of disconnected empires was no longer the reality of early nineteenth-century Caribbean free ports as they operated in an increasingly integrated global trade system.

The vision of Willem I and the policies implemented by van den Bosch differed essentially from the colonial vision of Gijsbert Karel van Hogendorp. Hogendorp projected his understanding of commercial agreements between the United States and Britain as well as between Britain and South American States in the 1820s onto a transformative future of international trade.

He discussed his vision of this transformation, most famously (and clearly), in a published commentary on a prize winning essay by Jan van Ouwerkerk de Vries in 1828. In the same years that the free ports of Willemstad and Riau were established, Hogendorp contrasted two colonial visions. One in which ‘the principle has long been retained, that all commerce has to be in function of the Motherland,and that all trade by other nations has to be excluded’.⁹⁶ And another one in which the volume of trade imports and exports on the basis of reciprocity is the measure of success. The trigger to create this insight, in theory and in practice, was the War of the American Independence and the realisation that what started as a traditional colony had emancipated into a self-standing political and economic entity that was economically way more beneficial than it had ever been as a colony.

The shift made by Britain was not just a fiscal or political one, focused on attracting trade or leveraging diplomatic power, given static economic roles by colonies and motherlands, but entailed an evolution of economic relations between post-colonial powers and European states. The latter would be able to benefit enduringly from trade with post-colonial states, by replacing colonial supplies with a wider market for consumer goods.⁹⁷

Hogendorp immediately continued his argument by stating that the same mechanism operated in the West Indies and South America:

England enjoyed, though Spain and Portugal, and directly through illicit trade, a great share in these colonies. But in our day similar circumstances have taken place in the Spanish and Portuguese colonies, that previously took place in the English. All colonies of America, North and South, have become independent states, and all offer England similar advantages as those already offered by the United States. The most wonderful manufacturers, abundant capital, knowledge and commercial instinct, have already guaranteed to England a large share of the trade in these new states. The population and the agriculture of these have improved at great speed and so the advantages for England grow from year to year.⁹⁸

If this mechanism had been triggered by the new situation of colonies having become independent, the lessons was not restricted to this differentiation but also applied to making colonial trade useful to the mother country. Here too, the world had changed and a change in mindset was warranted. Hogendorp’s next big example were the new free ports in East Asia, Penang and Singapore. The progress of the former was ‘surprising, and would have been even bigger had it not been for the constant resistance by the East India Company’.⁹⁹ In the case of Singapore, there was no resistance and ‘free trade’ had worked like a ‘magic wand’ attracting trade and promoting agricultural and manufacturing growth across the entire region.¹⁰⁰

Hogendorp dead-panned that ‘there are colonies and colonies and the difference between them is immense.’¹⁰¹ But the upshot applied directly to the colonial management of the Dutch West-Indies as well as the East Indies. The entire instinctive logic of previous colonial trade had to be abandoned:

It is therefore one and the same cause, that gives rise to the decline of the old West-Indies trade and the flourishing of the general trade or global trade. The changed state of the world is the cause of both, and the old colonial system needs be given up, to obtain the profits of global trade.¹⁰²

The irony at this point was that the Dutch King’s vision and policies to set up restricted trade companies and establish free ports to control the colonial trade between overseas territories and the metropole was much more indebted in his thinking to the Patriotic political economy and its nationalism than to the constitutional understanding of the national interest that ran from the 1751 ‘Proposal’ through to Hogendorp.¹⁰³

The other thing to bear in mind here is that just like ‘there are colonies and colonies’, there were free ports and free ports by the early nineteenth century. The same fundamental difference between traditional colonies and ‘modern’ (or liberal) ones would be at play in the context of the Dutch East Indies and the role of the NHM there. But different from in the West Indies, there was no tradition of free ports playing a role in the traditional colonial system. In fact, the history of free ports was a more recent one in this region.

5. Anglo-Dutch Colonial Free Port Competition and Indo-Pacific Trade Networks

Until the end of the Napoleonic wars, there were virtually no free ports in Asia. The story of Anglo-Dutch rivalry seen through the prism of free ports and commercial competition starts with the establishment of a free port at Penang in 1786. The reasons for establishing a free port on the island of Penang were less strategic and more contingent on political context and lack of resources. It is well documented that the British East India Company faced a negative balance of trade and that a series of diplomatic missions were made to Cochin-China (in present-day Vietnam) to create commercial opportunities and strongholds towards China. In the same period expeditions were launched to Acheh, Balambangan, Riau and Penang, and Trincomalee was also considered as a potential settlement.¹⁰⁴ The British support for establishing a free port on Penang (which was named Prince of Wales Island, with the main settlement George Town and the construction of Fort Cornwallis), as projected – and negotiated with the Sultan of Kedah – by the Country trader and former navy lower officer Francis Light, emanated from a lack of resources to develop a ‘proper’ settlement. Income from the free port was to supplement the very limited EIC investment.¹⁰⁵ Penang was the desired basis and connection point for extending the British India trade to China. It was not created out an innovative or distinctive free port vision. If anything, it aimed quite straightforwardly ‘to rival Dutch Melaka’ in attracting regional trade, while at the same time providing a basis for British ships and the EIC.¹⁰⁶

Following the French invasion of 1795 and the Batavian period, the Napoleonic Wars and the creation of the United Kingdom, the Dutch concern in the East Indies lay not only in the restoration of Dutch territories, but also in the reconsideration of Dutch colonial management. Since the invasion of Java in 1811, British officials had (until 1816) run the colonial fiscal and land system in a different way from the Dutch, preventing a direct return to old practices and bringing back older discussions about the appropriate way to cultivate commodities on Java in light of the national interest.¹⁰⁷ The wider topic of agricultural development, land, labour and taxation on Java is a topic that attracted major historiographical attention throughout most of the twentieth century. Often its focus lay on colonial officials like Raffles, Crawfurd, Minto, Muntinghe, Dirk van Hogendorp, Nederburgh, Daendels, Van der Capellen, Du Bus, and their positive or negative roles in promoting economic growth.¹⁰⁸ While the debate is complicated and hard to summarise and this is not to place to do delve into the details, it can be said that from the late eighteenth century there was an opposition between a liberal and a protective approach. Within this field, different figures developed more or less consistent and contingent theoretical positions that influenced policies, giving rise to a periodisation of subsequent regimes. For instance, 1802/3 saw the victory of Sebastiaan Cornelis Nederburgh’s proposal over Dirk (and Gijsbert Karel) van Hogendorp’s liberal policies. Between 1811 and 1816 Minto, Raffles and Crawfurd initiated forms of direct rule and changed economic institutions. From 1816, various attempts at creating a Dutch ‘liberal colonial policy’ faltered and gave rise to the ‘culture system’ of Johannes van den Bosch from 1830, which came to an end around 1870.¹⁰⁹ While trade to some degree is an element in these debates and evolving historiography, free ports have not been included in the discussion, certainly not in a more systematic way that allows one to see the different standpoints and frames of reference from which ideas about free trade or protection were developed.

Starting with the British perspective, the experience of Raffles and other British officials on Java and the prospect of a commercial system that could exist in proximity to the Dutch Indies inspired a drive to establish another trade post, next to Penang. After consideration of alternatives, including Riau, a series of administrative decrees were issued in 1823 that de facto established Singapore as a free port.¹¹⁰ In response, the Dutch declared Malacca a free port in March 1824, but after the Treaty of London and the exchange of Malacca for Bencoolen, Malacca became British and was included in the 1826 Straits Settlements, along with Penang and Singapore.

How did the Dutch respond to the creation of Singapore (other than by diplomatic objections and a complicated legal process that this is not the place to address)? On 10 April 1828, a few years after the cession of Malacca as a Dutch free port and the establishment of the NHM in 1824, the free port of Riau was declared by Royal Decree to take effect from 1 January 1829.

The creation of Riau free port was followed by a flurry of further declarations that although centrally endorsed, did not seem to come from a single policy or political economic vision. In the 1830s Sambas, Pontianak, Soekadana and Teluk Betung were declared free ports. The 1840s added Makassar, Menado and Kema,¹¹¹ and then, in the 1850s, Ambon, Banda and Ternate to the list. Later still Sabang (or Poeloh Weh) and Merauke extended the coverage of free ports to the full range of the Dutch possessions.

The Dutch ‘system’, as it emerged from the seemingly haphazard addition of new free ports, consisted of three types of ports, coastal ports, general ports and free ports. If there was an overarching logic to this typology, the hierarchy of access and fiscal rights presumably were to form a shell around the agricultural and land management of the colonial territories. At the same time, the free ports were to attract trade and connect Dutch trade to all the advantages of being integrated into a global trade system.¹¹²

By the later nineteenth century, most of the free ports had developed into free zones where spaces for value adding industry were exempted from duties. It may be noted that the network of free ports within the layered ‘system’ itself resembled in part the old trade system that had existed from pre-colonial times and that was carried on by indigenous traders and navigators.¹¹³ Including the trade of the outer islands, the NHM system functioned as an attempt to continue the old practice of a separate colonial venture that served in function of the metropole and that exploited land and labour and creamed off the intra-Asian trade.

During the 1820s and 1830s, the NHM and King William I not only held on to their territorial control, but also actively sought to extend it. British traders too, while the predicament of Singapore was still uncertain, were looking for alternative settlement elsewhere. Since Dutch and British colonial governors were not aware of each other’s plans, fear of the other creating settlements led to the feverish development of mostly short-lived (or never even realised) settlements in Papua as well as on the Australian North and West coasts. While the literature has focused largely on the Anglo-French rivalry in the discovery or mapping of the Australian shoreline, the protracted fears around the Dutch monopoly on Java and the security of the British settlement at Singapore inspired several expeditions and failed attempts at creating commercial settlements.¹¹⁴

Around 1900, the Dutch free port system changed. Some free ports were abolished. Others turned into industrial zones. While there was never a clear political economy of Dutch free port trade, the practice that had been shaped by King Willem I and his direct successor fizzled out.

There is not much of a historiography on the Riau free port, but mostly it emphasises the rivalry with Singapore, which in retrospect leads to the clear conclusion that people also drew at the time that the enterprise had failed spectacularly. The question is, what exactly failed? In so far as the objective was to rival Singapore or arrest its growth into the major paradigmatic free port that Singapore is today it was an obvious failure. Indeed, the failure of the free port of Riau was quickly (in 1833) and publicly (in 1855) recognised and became an accepted commonplace.¹¹⁵ Yet, beyond the obvious, there was a different way in which the institution of the free port did not bring the Dutch state what it had aimed for.

One of the people who engaged most directly with the free port of Riau was Willem van Hogendorp (see the introduction of this article). According to his biographer, he held the position that simply determining the right level of freedom and impose a mild tariff across the board was the perfect solution. Incessant attempts to protect domestic manufactures and try to have free trade at the same time were mutually inconsistent. A low discriminatory tariff was ideal to allow for the development of the colonial economy and to give space to imports and exports that were taking place anyway.¹¹⁶ This is fully consistent with what Gijsbert Karel argued in his Advys of 1828:

On the whole it is very difficult to convince certain people that not just the national wealth but also their self-interest requires us to allow foreign ships in. [..] The mutual exchange of products between the Motherland and the colonies is the foundation of reciprocal trade and navigation. [..] The goods of the Motherland are paid for with the products of the colonies, and all anticipated advantages depend on the abundance of these goods. The best incentive for the colonies to produce a lot lies in the security that they can sell their produce. […] When there are lots of merchants and ships, the demand for products provides an incentive to agriculture.[..] That is why foreign ships are allowed in now and this benefits our colonial system. […] Dutch ships and Dutch trade will always retain an advantage. […] For that reason duties are imposed [but] not to exclude foreigners, and in that way miss the great objective of letting them in.¹¹⁷

Excluding foreign trade would lead to high prices, smuggling and the complete stagnation of trade. It was impossible to stop illicit trade in goods, notably English cottons, anyway as Java and the other islands were so large that it made no sense trying to isolate national trade. The problem was that the Dutch had nothing to provide to the colonies. Domestic manufacturing in the metropole was the problem. That was why the Netherlands could not profit from the modern colonial system, as Hogendorp had described it and the British could.¹¹⁸

At the end of the previous section we saw how Gijsbert Karel Hogendorp understood the differences between two outlooks on colonial politics. While he and his brother held somewhat different ideas about colonial management around 1800, in the 1820s, Gijsbert Karel Hogendorp advocated very publicly for the implementation of a colonial free trade regime that would be beneficial for the Dutch state. But he also realised that his appeals had a limited window of opportunity. From 1816, the Dutch officials Muntinghe, Van der Capellen and Falck too held strong to try to continue in the direction of the reforms initiated by Raffles, and also pushed for a low tariff that was sufficiently friendly for foreign traders to promote exchange across the archipelago. At the same time, the economic lobbies and political climate in the Netherlands pushed for much higher tariffs and protective measures. In 1817, the Amsterdam Chamber lobbied for a 25% duty ad valorem, and in 1824 a 25% import duty on European and American cotton and wool (and 35% if they had come via another port) were imposed.¹¹⁹ These drastic measures not only annoyed Gijsbert Karel van Hogendorp, but were also unbeknownst to Falck and the negotiators of the 1824 Treaty of London, which was supposed to be concluded in the spirit of a bona fide commitment to free trade.¹²⁰

Worse, the fiscal barriers created a system where the institution of the free port contrasted heavily with the protective tariffs. It was a double rejection of the liberal vision of a mild tariff that would promote national economic growth and trade along with and through international free markets. Instead, the new policies represented an attempt to have it both ways through two separate paths: a protective layer of ports around the East Indies archipelago that channelled the investments and trade of the NHM, and a network of free ports that served to attract trade. That combination of two systems in one resembled the system of Vreede that Hogendorp had criticised, as well as that of the 1751 ‘Proposal’, which Hogendorp felt could no longer work in the nineteenth century because it combined a free entrepot with protection and would neither attract trade, nor stimulate competitive manufacturing. The unnatural outcomes of the incentives that the Dutch free ports created in Java and the outer islands were also criticised (in comparison with the effects of Singapore) by foreign observers and newspapers.¹²¹ Statistical analysis of the relative growth of Dutch intra-Asian trade also supports the conclusion that the Dutch solution, given the transformation of the international trade system, was badly designed.¹²²

6. Conclusion: From Anglo-Dutch Rivalry to the Dutch State in Global Trade

Following the Napoleonic wars and the restoration of Dutch colonial territories by Britain, the Dutch King William I established a new national trade company as well as a series of free ports in both the Caribbean and the East Indies. His vision, that a revival of the Dutch golden age of trade was possible, soon proved an illusion. This article has placed the creation of Dutch colonial free ports in a longer history of discussions about the revival of the Dutch staple market through creating free ports. These same discussions open up to different outlooks on the prospects of Dutch colonial trade in relation to taxation, constitutional debates, liberal political economy as well as the history of trade and humankind that merit further study.

The development of free ports in the East Indies differed from that of the West Indies where a free port system had gone through successive stages of functional logics between the seventeenth and the nineteenth century. Something of a system had grown out of the island plantation economies and illicit trade connections with South America to European metropoles. The Dutch attempt to participate in the nineteenth-century South American economic system by developing Willemstad into the new St Eustatius and regenerating St Eustatius itself as a free port did not succeed in the face of better placed and more powerful competition from the United States and Britain.

By all accounts Penang was the first free port to be established in East Asia, in 1786. But there does not seem to have been an underlying theory or system that inspired its creation. Instead, resource poverty and the British EIC’s aim to develop the China trade were the main drivers. The creation of Singapore, likewise, fit with the same British aims, and as argued by Borschberg in this issue, did not emanate from a political vision in which free trade played a central role.

Rather than to redevelop their colonial economic policy on a British ‘free trade’ model in light of emergent realities and transitions in world trade, the Dutch, under the leadership of King William I, opted for a restoration campaign of the previous chartered monopoly and within this campaign a series of free ports were established that were added to a protective fiscal layer to monitor interaction with the global trade system. While the documentary record of this history is very fragmented, imperfect and incomplete, it is clear that the Dutch throughout the early nineteenth century declared a number of free ports across the Indonesian archipelago in order to sustain regional ports in the face of the emergence of Singapore as a regional trading hub. In addition to the focus on protection of the monopoly, new opportunities to protect and extend this network against British competition were sought in Australasia in a spirit of uncoordinated colonial opportunism that was shared as much by the Dutch King William as by Dutch and British colonial officials, who engaged in the same adventurism.

Nonetheless, the conclusion that the early nineteenth-century history of free ports is essentially a story about Anglo-Dutch rivalry is not born out by the evidence.¹²³ While there was occasional fiscal competition between Dutch free ports and Singapore on certain goods and tariff adjustments, there was no battle for supremacy or heavily politicised ‘jealousy of trade’ focused on free ports. And while there was reluctance to a full restitution of Dutch territories in 1816, there were other reasons than nationalist sentiment at play. The starting point in the 1780s, when Penang was established was the Alliance Treaty that Britain and the Dutch Republic signed with an eye on the future of global trade. Likewise, the ‘free trade’ spirit included in the Treaties of London of 1814 and 1824 was to prevent an increase of French trade and power in the region.¹²⁴ Rather than pointing to an Anglo-Dutch rivalry that harked back to the seventeenth and eighteenth centuries, the rise of Singapore and the demise of the Dutch East Indies within world trade along with the failure of the Dutch free port network provides a window on shifts within the global trade system and its characteristics in the nineteenth century. Those shifts can be approached through looking at trade patterns or through the history of commodities and fiscal regimes on the production and trade of agricultural goods from spices to coffee and sugar. But they can also be approached through intellectual history, which has not really taken place.

Jealousy and rivalry are not very strong explainers of the issues at stake, and while diplomats may have used these words to express themselves, others reflected in more adequate terms about the situation. The NHM was not just discussed as an institution engaged in colonial management. It was understood not merely as a vehicle for investment and exploitation, but as aligned with ideological expressions of the role of the Dutch state in world trade and ‘golden age’ associations with Dutch exceptionalism. Its mission was understood in relation to ideology, constitutional expressions about the Dutch state and geopolitics. In this vein, a number of debates were held from 1824 where the NHM was associated with intellectual visions of the past and future and schemes of international trade and politics of earlier times. The epigraphs of some of these pamphlets related the mission of the NHM to contrasting ideas by Hogendorp about the future of international trade, but also invoked Raynal and Accarias de Serionne and the usage of commercial treaties to create international balance.¹²⁵

A further element was the notion of poverty. The decline of the Dutch Republic, a state that literally was held to be exceptional in having no poverty, went along with the rise of poverty and Johannes van den Bosch himself was a main contributor to the poverty debate of the early nineteenth century.¹²⁶ A family member of Grevelink, started his analysis of the new and improved colony of St Eustatius with a quote from Fénelon.¹²⁷ And Tydeman’s retrospective of the first decades of the NHM that was published in 1867 not only echoed all the tropes and themes about Dutch commercial politics since the time of the Republic, but also echoed the views of his grandfather, who was a close friend of G.K. van Hogendorp and the most important figure in the Dutch poverty debate.¹²⁸ The same themes came to the fore in the Geschiedkundig Overzigt Van Het Handelsstelsel in Nederlandsch-Indie by Johan Hendrik Mello Mollerus, of 1865.¹²⁹

Most importantly, Hogendorp himself provided important clues as to how his views contrasted with those of the standard-bearers of the NHM. For instance, he believed that the sovereignty of the state resided not in the people or the King, but in the constitution itself and that notion of constitutional sovereignty was deeply economic in character and invested in a vision about the renewal of the role of the Dutch state in the global trade system. Hogendorp’s early writing projects provide additional clues, as he once planned to write a history of European political and commercial relations through the perspective of the Republic.¹³⁰ And it would have been the same perspective on the developing relation between the Dutch trade republic and the way other states operated their national economies that inspired him to write his doctoral dissertation on the fiscal politics of federations (including the American federation, which he had just visited himself). Hogendorp’s wider concerns about the Dutch constitution and the future of international politics and trade also manifested themselves in a debate about his brother Dirk Hogendorp and S.C. Nederburgh on colonial management and chartered company trade.¹³¹

This article shows not so much that state rivalry was an essential concept in the transition of the global trade system, but points to the evolving functions of free ports and free zones. Writers like van Hogendorp and his followers had ideas about how free ports could contribute to national prosperity, but the instinct of jealous rivalry itself was the reason why they were misused and led to effects contrary to their design. This appears to have been the case with the Dutch free ports of the nineteenth century. As they were deemed to fulfil specific functions in both the East and West Indies, the Dutch free ports that were established in the early nineteenth century were attached to a disappearing reality of international trade and either disappeared themselves or transformed to fit with their context. Further sustained focus on the intellectual faultlines in historical discussions about these shifting realities can meaningfully increase our understanding of the functions of political economic institutions like free zones today.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Hogendorp, Coup d’Oeil. For insight in his colonial career see Hogendorp, Willem van Hogendorp.

2 On the Belgian Revolution, Marteel, The Intellectual Origins.

3 Hogendorp, Beschouwing: “Door dit werk oorspronkelijk in de Fransche taal op te stellen, was ook het oogmerk des Schrijvers hoofdzakelijk, de bewoners der toenmalige zuidelijke provinciën des Rijks, die veelal met de Nederlandsche taal weinig bekend waren, aangaande onze koloniale zaken eenigermate in te lichten.” The Dutch edition appeared in 1833 in Amsterdam, with the same publisher that also published Hogendorp, Tafereelen.

4 Hogendorp, Beschouwing, 529.

5 “Bijzonderheden nopens Riouw”.

6 Fermin, Dutch settlements; Hogendorp, Beschouwing, 530.

7 The main literature on the NHM is De Graaf, Handel en Maatschappij; Mansvelt, Geschiedenis. See also Klein, “Op de klippen” and recently Schrauwers Merchant Kings. Of special interest amongst numerous pamphlet sis also is also Tydeman, Nederlandsche Handel-Maatschappij.

8 Ahead of an exploding historiography was Oostindie, De parels en de kroon. A recent contribution of note is Allen et al, Staat en slavernij.

9 Koekkoek et al, The Dutch Empire.

10 Published in The Hague in 1751 in the form of a pamphlet, which also appeared immediately in English, Hope, Proposals. See Stapelbroek, “Limited free port“ and older, but extensively, Hovy, Beperkt vrijhavenstelsel.

11 Hovy, Beperkt vrijhavenstelsel, 5–7, 42, 72. A questionable tendency in Hovy’s study concerns his claims about the different points of view amongst the group of merchant-advisors, notably the gap between the ideas held by two prominent Amsterdam merchants Jan and Dirk Marselis and the policy – allegedly Thomas Hope’s – that was set out in the “Proposal” (Hovy, Beperkt vrijhavenstelsel, 405–8, in particular 406; see also 347–54). Hovy shows there were differences in opinion about the precise actual reform policy to be favoured and its implementation, yet on my reading the Marselis view, particularly their insistence on the reconciliation of different sectors (see Hovy, Beperkt vrijhavenstelsel, 350–2) filtered through directly into the text of the “Proposal”. Not all discussions in the Republic were divisive. Moreover, something Hovy does not acknowledge, Jan Marselis was Thomas Hope’s father in law and the Hopes and Marselises were at the core of Amsterdam’s close-knit merchant community. Interestingly, Hovy gives a convincing account of how this community after the rise to power of William IV developed political ambitions in Amsterdam, Holland and the Republic, which must have been one of the driving forces behind the William IV’s reform programme (Hovy, Beperkt vrijhavenstelsel, 249–52).

12 Its most obvious point of comparison was the plan contained in Matthew Decker, Decline of Foreign Trade.

13 Cf. Hope, Proposals, 62–3: “As to the Jealousy of our Neighbours, we need be under no Apprehensions about it, whilst the Republick tenaciously adheres to this fixed Maxim, not to give any well-grounded Cause of Offence, by those Dispositions and Measures which are proposed to be made in our Trade: On the contrary, most of the neighbouring Nations will be more or less concerned, in the Conservation of our Trade, as their commerce chiefly consists in the Vending of their own Products; and will therefore rather protect than obstruct ours, which has such a Connection with their own, that it may not improperly be called a Part.”

14 Stapelbroek, “Le ‘pouvoir intrinsèque’ de la république”. Cf. Hope, Proposals, 30, which argued that the intention was absolutely not to “set up a new Republick, or to make any Alteration in the interior Constitution of our Country … nor could any thing be conceived more dangerous than to attempt Innovations of this Nature”.

15 Stapelbroek et al. “Kluit’s statistics” and Stapelbroek, “Dutch Decline”.

16 Hope, Proposals, 11.

17 Stapelbroek, “The Haarlem 1771 Prize Essay”.

18 Overmeer, Economische denkbeelden van Hogendorp, 133–4.

19 Ibid., 377: the idea that free transit diminishes the potential for general trade through active trade.

20 Van der Kooy, Hollands Stapelmarkt.

21 Overmeer, Economische denkbeelden van Hogendorp, 378–9.

22 Ibid., 394–5.

23 Witlox, Welvaart en bedrijvigheid Cf. Falck in Overmeer, Economische denkbeelden van Hogendorp, 394: Falck acknowledged Hogendorp’s take on the transformation of Britain and was disappointed in the failed attempt to agree a commercial treaty with Britain. But he also questioned Hogendorp’s rigid dogmatism in politics.

24 Overmeer, Economische denkbeelden van Hogendorp, 377–79: 379. On the Rotterdam fiscal political tradition, Overmeer, Economische denkbeelden van Hogendorp, 514, n 88 and de Vries, “Rotterdamse aspecten 1751”, 250–63: 262.

25 Overmeer, Economische denkbeelden van Hogendorp, 377.

26 Ibid., 392 and bottom 385.

27 Ibid., 385.

28 Ibid., 391, 395, 378, 379.

29 Ibid., 519, 520 and 397–8.

30 Ibid., 397.

31 Mees, “Briefwisseling Hogendorp Ackersdijk”.

32 See Boschloo, Productiemaatschappij.

33 “Imhoffius qui anno 1751 inde redierat, aemulationem Anglorum diminuere et ignaviam, rapinam et segnitiem illorum, qui eam administrabant, reprimere conabatur” (Engelen, Propositionibus Guilielmi IV, 20).

34 Heeres, “Consideratiën” van Imhoff.

35 Dubois, Vies des gouverneurs généraux.

36 Engelen. Propositionibus Guilielmi IV, 20.

37 Ibid., 58–9. On Broggia’s influential phrase see the introduction by Stapelbroek and Tazzara.

38 Ibid., 65.

39 Ibid., 65–6.

40 Breugel Douglas, Nederland tot porto-franco; Breugel Douglas, Het porto-franco toegepast.

41 Wagenaar, Vaderlandsche Historie.

42 Breugel Douglas, Nederland tot porto-franco. 3–4, with reference to Ouwerkerk de Vries, Verhandeling, 121 on the 1725 tariff.

43 Cf. Overmeer, Economische denkbeelden van Hogendorp, 397, 519.

44 Overmeer Economische denkbeelden van Hogendorp, 378.

45 Breugel Douglas, Nederland tot porto-franco. 15–16: including imported goods from the Dutch colonies, import taxes on these goods would flow into a ‘koloniale kas’.

46 Breugel Douglas, Nederland tot porto-franco. 17: he declined to explain this further as this would attract too much attention and deviate from the actual logic of his plan.

47 Breugel Douglas, Nederland tot porto-franco. 14–15.

48 Ibid., 14.

49 Ibid., 6.

50 Ibid.

51 Overmeer, Economische denkbeelden van Hogendorp, 379.

52 Breugel Douglas, Nederland tot porto-franco. 77–8.

53 Ibid., 83, this was “a kiss to trade and industry.”

54 Ibid., Nederland tot porto-franco. 12. On 82 he cited page 39 of Hogendorp’s Advys regarding Ouwerkerk de Vries, Verhandeling, imagining “the Fatherland by the development of its own powers […] brought to the highest step of Wealth, and taking away the crown of global trade from Britain.”

55 Breugel Douglas, Nederland tot porto-franco, 11.

56 Ibid., 11–12.

57 Ibid., 12–14.

58 Ibid., 19.

59 Ibid., 19–21 (and 23–24).

60 Ibid., 23–27.

61 Ibid., 29–32.

62 Grevelink, Beginsel van porto-franco.

63 Ibid., Specimen oeconomico-politico-juridicum, with an eye-catching – ‘Broggia-like’ epigraph from Adam Smith: “It is thus that every system which endeavours, either, by extraordinary encouragements to draw towards a particular species of industry a greater share of the capital of the society, than what would naturally go to it, or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it, is, in reality, subversive of the great purpose which it means to promote. It retards, instead of accelerating the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour.”

64 Grevelink, Beginsel van porto-franco. 43.

65 Ibid., 47–9.

66 Ibid., 55.

67 Ibid., 59–60.

68 Ibid., 67–8.

69 Ibid., 69.

70 Ibid., 71.

71 Ibid., 72–77.

72 Ibid., 78.

73 Ibid., 80.

74 Ibid., 96.

75 Ibid., 79–97.

76 Ibid., 97–100.

77 Ibid., 100–103.

78 Ibid., 103. Poelopinang is the island Penang on the west coast of Malaysia, bought by the Brits in 1786, see Hullu, “Engelsen op Poeloe Pinang“.

79 Ibid., 103–4.

80 Ibid., 105: “En zullen wij dan wachten totdat alle onze naburen eerst het goede stelsel hebben ingevoerd; zullen wij wachten ons te verbeteren totdat alle andere menschen verbeterd en wijs zijn! Dan kwame er nimmer verbetering. Neen! laten wij een voorbeeld van vrijgevigheid geven; dat zal andere natiën uit lokken, om hetzelfde te doen en ook iets toe te geven. Wij zien, hoe dit bij handelstractaten gewoonlijk het geval is! Wij zullen dan stilzwijgend met de geheele wereld een voordeelig tractaat aangaan.”

81 See the contributions to this issue by Wilson and Kleiser & Røge and the introduction section II.2. See also Klooster, “Curaçao as a Transit Center”; Klooster, Illicit trade; Jordaan and Wilson “Danish, Dutch and Swedish Free Ports in the Caribbean”.

82 Oostindie, “Koning en de Caraïben”, 176 notes that slavery in Caribbean was only abolished in 1863.

83 See the introductory article section II.2. Essential is Orenstein, Out of Stock.

84 See the introductory article section II.2; Palen, ‘Conspiracy’ of Free Trade..

85 For context, see de Jong, Hollands Welvaren in het Caribisch Zeegebied; de Jong, Nederland en Latijns-Amerika; Oostindie, “De Koning en de Caraïben”. A major overview with ample source material is Goslinga, The Dutch in the Caribbean and in Surinam.

86 On van den Bosch, Sens, De kolonieman.

87 The best recent account of the context and vision is in Renkema, Leven in de West. See also Blussé, “Schepping van de koloniale staat”, 168. The classic study of West-Indian constitutional integration is Bordewijk, Staatsrecht van Curaçao.

88 de Gaay Fortman, “Curaçao in 1828”; de Gaay Fortman, “Brieven van den Bosch”.

89 Meyer, “Willem I en Curaçao”; Meyer, “Willem I en het kanaal door Nicaragua”; Meyer, “Economische betrekkingen Curaçao en Venezuela”; “De Nicaragua-kanaalplannen van Koning Willem I”. Valuable insights into the diplomacy between Gran Colombia and the Dutch Kingdom between 1815 and 1830 are in van der Veen, Groot-Nederland en Groot-Colombia.

90 de Gaay Fortman, “Brieven van den Bosch”, 191–2.

91 de Gaay Fortman, “Brieven van den Bosch”, 191.

92 West-Indische Maatschappij, 2–3, cited (in Dutch) by de Gaay Fortman, “De West-Indische Maatschappij”, 309.

93 de Hullu, “Curaçao in 1817”; de Hullu, “Toestand onzer Westindische Bezittingen”; de Hullu, “Aruba in 1816”; de Gaay Fortman, “De kolonie Curacao onder Engelsch bestuur”.

94 de Gaay Fortman, “De West-Indische Maatschappij”, 311.

95 Smith, Wealth of Nations, 571 [IV.vii.b.12]. For the development of the island plantation economy Renkema, Curaçaose plantagebedrijf; Heilbron, Colonial transformations; and the very interesting Bisschop Grevelink, Volksplanting op Sint Eustatius.

96 Hogendorp, Advys, 27.

97 Overmeer, Economische denkbeelden van Hogendorp, 350, 356–7. Cf. the introduction of Alimento and Stapelbroek, Politics of Commercial Treaties on equality in treaty relations.

98 Hogendorp, Advys 28.

99 Ibid., 30

100 Ibid., 30–31.

101 Ibid., 27.

102 Ibid., 39.

103 Cf. Schutte, Patriotten en de kolonien.

104 Lamb, British Missions to Cochin China.

105 See Tregonning, The British in Malaya; Tarling, Anglo-Dutch Rivalry; Lamb, British Missions to Cochin China; Kawamura, “Colonization of Penang”; Stevens, “Prince of Wales’ Island”.

106 Hussin, Trade and Society Straits of Melaka, 106.

107 Amongst numerous twentieth-century writings in English, in Dutch the classic study is Levyssohn Norman, Britsche heerschappij over Java.

108 Writers like Bastin, Wright, Tregonning and Tarling all had their heroes and foes pretty clearly marked.

109 For instance, Rengers, Failure of a Liberal Colonial Policy.

110 Marks, Contest for Singapore; Borschberg, “Dutch objections to British Singapore”; Wright, “Anglo-Dutch Dispute”; Bastin “Colonizing the Malay Archipelago”; Bastin, Native policies of Raffles.

111 Poelinggomang, “Dutch policy and Makassar’s trade”; ”Makassar als vrijhaven”; De Lange, “Menado en Kema als vrijhaven”.

112 Zeeman, Kustvaart in Nederlandsch-Indië; Kok, Scheepvaartbescherming in Nederlandsch-Indië.

113 Clayton, “Southeast Asian forest and marine commodities trade“.

114 Mörzer Bruyns, “New Guinea by the Dutch in 1828”; Overweel, “English/Dutch Rivalry in Eastern Indonesia and Australia”.

115 “De vrijhaven van Riouw in 1833”; and the traveler’s report Lith, Nederlandsch Oost-Indië: beschreven en afgebeeld, in which the attempt to emulate Singapore at Riouw is deemed “volledig mislukt” (18).

116 Hogendorp, Hogendorp in Nederlandsch-Indië, 75.

117 Hogendorp, Advys, 9–14.

118 This was also highlighted by Bastin, Native policies of Raffles, xi and 10: “The Dutch had nothing to sell”, “Dutch industry … was almost extinghuished”.

119 Wright, Free Trade and Protection, 186–206.

120 Overmeer, Economische denkbeelden van Hogendorp, 356.

121 Newspaper articles pointed out the unnatural population migration and cultivation in the outer islands as consequences of bad Dutch economy policy: Singapore and Java, A Contrast. (1854, March 31). Empire (Sydney, NSW : 1850–1875), p. 3. Retrieved August 19, 2023, from http://nla.gov.au/nla.news-article60150695; The Moluccas. (1854, October 11). South Australian Register (Adelaide, SA : 1839–1900), p. 2. Retrieved August 19, 2023, from http://nla.gov.au/nla.news-article49198476; Free Trade and Foul Trade. (1854, December 23). Launceston Examiner (Tas. : 1842–1899), p. 1 (Afternoon: Supplement to the Launceston Examiner). Retrieved August 19, 2023, from http://nla.gov.au/nla.news-article36291077.

122 Kobayashi, “Singapore in the Growth of Intra-Southeast, Asian Trade”.

123 Two articles by Sulistiyono.,“Java-Singapore Rivalry“; Sundara Raja, “Free Trade and Free Ports in the Straits“ present a lot of facts that overlap with my research but lead to more linear conclusions than my argument here, such as that there was a “free-port war” (Sulistiyono, 75).

124 Tarling, Anglo-Dutch Rivalry, 7–10, and Tregonning, The British in Malaya, 38 also acknowledge these parameters. For context see the introduction of Alimento and Stapelbroek, Politics of Commercial Treaties and Vergennes’s use of commercial treaties.

125 de Haan, Ernstige_Beschouwinge_van_de_Nederlandsche Handel-Maatschappij; Meylan, Ernstige beschouwing van de Nederlandsche Handel-Maatschappij wederlegd.

126 Schrauwers, “The ‘Benevolent’ Colonies of van den Bosch”.

127 Bisschop Grevelink, Volksplanting op Sint Eustatius.

128 Tydeman, Nederlandsche Handel-Maatschappij.

129 Mollerus, Het Handelsstelsel in Nederlandsch-Indie; Sautijn Kluit, [Review of] Handelsstelsel in Nederlandsch-Indie.

130 Overmeer, Economische denkbeelden van Hogendorp, 410.

131 On the Hogendorp brothers the latest main contribution is van Meerkerk, De gebroeders Van Hogendorp; van Meerkerk “Visions of a new colonial system”.