The Dutch Traded Manhattan to the English for Nutmeg
At the height of the spice trade, the Dutch traded Manhattan to the English for the Nutmeg-rich Run Island via the 1674 Treaty of Westminster. This treaty ended the Third Anglo-Dutch War (if not “the Nutmeg wars“) and allowed Britain to officially claim the land it had already occupied illegally since 1664. You know, until 100 years later when the Dutch’s monopoly goes bankrupt and the American patriots take Manhattan and then the British take back the island before giving it back to the Dutch.
The Story the Dutch, Manhattan, and the Spice Trade
We don’t always remember today, but the spice trade was the industry that set modern global trade in motion. Before the spice trade the main focus of Europe was war, after the trade… it was still that, but also there was lots of trade, pirates… and slaves (anyway, this is when the world economies and banks started becoming connected).
During the spice trade, the Dutch retained a 200 year long monopoly on the nutmeg trade specifically.
When the trade was threatened in 1647 due to deforestation of nutmeg trees, the Dutch agreed to trade Manhattan to the British for the Nutmeg-rich Run Island (part of the Banda Islands). Run Island was the long-coveted last link in the Dutch nutmeg trading monopoly in Indonesia.
Today Run Island is “no one cares” and “New York City” is the financial capital of the world, but in 1674 dominating the Nutmeg market (not New York) meant being a world superpower. Generally this story would be “the story of the worst deal ever”, but in context, and considering the history of Dutch Americans and the United States’ current relationship with the Netherlands (which “is good”), we can say “it worked out alright for everyone”.
The Nutmeg Wars | National Geographic.
Important Aspects of the Nutmeg Story
This story reinforces a few points that are perhaps more interesting than the long and bizarre story of 200 years of Nutmeg monopoly.
- The Dutch are a historic superpower in terms of finance, trade, and banking. They are one of only a few cultures not called by their nation’s name. Their nation being the Netherlands.
- The Dutch company the VOC (the Dutch East India Company) was the first publicly traded company and it dominated the spice trade along with the Portuguese and British East India companies (the ships of each company sailed east to “the Indies” in the spice trade, trading stocks to avoid risks related to pirates and other things). Interestingly, the VOC was the first multi-national state-backed monopoly. Thus this little story about Nutmeg is also essentially the story of the birth of modern economics and nation building.
- Many Dutch live in America. The Roosevelts are Dutch, so are the Bush family, so was Martin van Buren, and so was Warren G. Harding.
- Manhattan used to be called “New Netherland” when the Dutch owned it. New Netherland was ceded permanently to the English in November 1674 through the Treaty of Westminster.
- You know who can actually handle being out in the sun cutting down nutmeg trees, chopping sugar cane, and generally gathering spices? Hint, it isn’t pasty white Europeans. That is right, the African slave trade is VERY connected to the European Spice trade.
- Ironically(?) nearly every product gained in the spice or slave trade was a “luxury item”. So, it is historically amazing that trade helped bring the world from war to globalization… not so awesome that slave labor and luxury items fueled the bubble… but to be fair, there is no nation on earth who didn’t participate in the slave trade, including Africa.
- In 1809 the English returned to Indonesia and seized the Banda Islands by force. They returned the islands to the Dutch in 1817, but not before transplanting hundreds of nutmeg seedlings to plantations in India, Ceylon (now Sri Lanka), and Singapore. The Dutch were out; the nutmeg monopoly was over. While they would go on to have success trading steeland coal (not to mention tulips), the Netherlands declined as a colonial power, and they never again dominated European commerce.
Capitalism and the Dutch East India Company: Crash Course World History 229. The Dutch, at the heart of modern finance, trade, invented the state-based monopoly and the publicly traded company, etc. Just like you remember from school where you took a class on the history of the Netherlands in relation to modern global relations…
The Atlantic Slave Trade: Crash Course World History #24. Slave trade. One of the few times we get to absolve the American South by pointing out they were “less bad” than other slave-states. Learn more about the founders and slavery.
The Spice Trade.
FACT: The Europeans loved to name things Indies. Indonesia, India, American Indians, the India Companies, etc. See a map of east Indies and west Indies.