The Nutmeg Wars

In the 17th century, all Europe was mad to have the little brown nut from Indonesia- nutmeg. Especially the Dutch, who monopolized its cultivation and, in doing so, built their tiny nation into one of the wealthiest trading powers on the planet.

BACKGROUND

Spices have been used by human beings for millennia for food preparation and preservation, medicine, and even embalming. But until modern times they were largely an Asian commodity, and controlling their flow to the spice-obsessed West meant power and fortune for the middleman. Over the centuries, these hugely successful merchants were the Phoenicians, Persians, Arabs, and later, Venetians.

Many of the great European explorations of the 15th century were driven by the need to bypass the Arab and Venetian monopoly. Crying, "For Christ and spices," the Portuguese explorer Vasco da Gama shocked the Arab world when he sailed around Africa's Cape of Good Hope in 1498 and showed up in the spice markets of India. It marked the beginning of the decline of Arab dominance and the rise of European power. For the next 100 years, as Spain and Portugal fought for control of the spice trade, the tiny countries of England and the Netherlands looked on in envy, waiting for their chance to get a piece of the action. It came first for the Dutch.

THE DUTCH EAST INDIA COMPANY

Always in danger of being overwhelmed by their much larger neighbor, Spain, the Portuguese began subcontracting their spice distribution to Dutch traders. Profits began to flow into Amsterdam, and the Dutch commercial fleet swiftly grew into one of the largest in the world. The Dutch quietly gained control of most of the shipping and trading of spices in Northern Europe. Then in 1580, Portugal fell under Spanish rule and the sweet deal for Dutch traders was over. As prices for pepper, nutmeg, and other spices soared across Europe, the Dutch found themselves locked out of the market. They decided to fight back.

In 1602 Dutch merchants founded the VOC -the Vereenigde Oostindische Compagnie, better known as the Dutch East India Company. Other trading nations had formed cooperative associations like it but none were more successful than the Dutch. By 1617 the VOC was the richest commercial operation in the world. The company had 50,000 employees worldwide, with a private army of 30,000 men and a fleet of 200 ships. Yet even with that huge overhead, the VOC gave its shareholders an eye-popping annual dividend of 40% of their investments. How'd they do it? With sheer ruthlessness... and nutmeg.

MUST-HAVE

By the time the VOC was formed, nutmeg was already the favored spice in Europe. Aside from adding flavor to food and drinks, its aromatic qualities worked wonders to disguise the stench of decay in poorly preserved meats, always a problem in the days before refrigeration.

Then the plague years of the 17th century came. Thousands were dying across Europe, and doctors were desperate for a way to stop the spread of the disease. They decided nutmeg held the cure. Ladies carried nutmeg sachets around their necks to breathe through and avoid the pestilence of the air. Men added nutmeg to their snuff and inhaled it. Everybody wanted it, and many will willing to spare no expense to have it. Ten pounds of nutmeg cost one English penny at its Asian source, but had a London street value of 2 pounds, 10 shillings -68,000 times its original cost. The only problem was the short supply. And that's where the Dutch found their opportunity.

BRUTAL RULERS

Why was nutmeg so rare? The tree grew in only one place in the world: the Banda Islands of Indonesia. A tiny archipelago rising only a few meters above sea level, the islands were ruled by sultans who insisted on maintaining a neutral trading policy with foreign powers. This allowed them to avoid the presence of Portuguese or Spanish garrisons on their soil, but it also left them unprotected from other invaders.

In 1621 the Dutch swept in and took over. Once securely in control of the Bandas, the Dutch went to work protecting their new "investment." First they preempted any resistance by the islanders by executing every male over the age of 15. Village leaders were beheaded and their heads displayed on poles to discourage any rebels who might have survived. Within 15 years, the brutal regime reduced the Bandanese population from 15,000 to 600. Next the Dutch concentrated all nutmeg production into a few easily guarded areas, uprooting a destroying any trees outside the plantation zones. Anyone caught growing a nutmeg seedling or carrying seeds without the proper authority was put to death. In addition, all exported nutmeg seeds were drenched with lime to make sure there was no chance a fertile nut would find its way off the islands.

I'LL TAKE MANHATTAN

The Dutch had their monopoly ...almost. One of the Banda Islands, called Run, was under control of the British. The little sliver of land (a fishing boat could only make landfall at high tide) was one of England's first colonial outposts, dating to 1603. The Dutch attacked it in force in 1616, but it would take four years for them to finally defeat the combined British-Bandanese resistance.

But the English still didn't give up; they continued to press their claim to the island through two Anglo-Dutch wars. The battles exhausted both sides, leading to a compromise settlement, the Treaty of Breda, in 1667 -and one of history's greatest ironies. Intent on securing their hold over every nutmeg island in Southeast Asia, the Dutch offered a trade: if the British would give them Run, they would in turn give Britain a far-away, much less valuable island that the British had already occupied illegally since 1664. The British agreed. That other island: Manhattan, which is how New Amsterdam became New York.

MONOPOLY OVER

The Dutch now had complete control over the nutmeg trade. A happy ending for Holland? Hardly. By the end of the 17th century, the Dutch East India Company was bankrupt. Constant wars with rival powers, rebellion from the islanders, and just plain bad luck -some might say bad karma- eventually broke the back of the Dutch spice cartel.

Strike 1: In 1770 a Frenchman named Pierre Poivre ("Peter Pepper") successfully smuggled nutmeg plants to safety in Mauritius, an island off the coast of Africa, where they were subsequently exported to the Caribbean. The plants thrived on the islands, especially Grenada.

Strike 2: In 1778 a volcanic eruption in the Banda region caused a tsunami that wiped out half the nutmeg groves.

Strike 3: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.