What the Dutch Lost When They Lost Manhattan

Last week The Times ran a wonderful article about Pulau Rhun, a tiny, nutmeg-growing island in what is now Indonesia that Britain traded for Manhattan — sort of — in 1667. Considering the diverging fortunes of the two islands since that year, this appears at first blush to be the worst deal in history for the Dutch, who formally gained Rhun and lost Manhattan.

The broader history of the period, which I looked into after reading the Times story, is also fascinating. It encompasses empire building, the acquisition of monopolies, changing consumer tastes, the rise of the limited liability corporation and of mercantilism, a philosophy of trade that prevailed then and has remained influential right up to the present.

Let’s begin with that “sort of.” The British didn’t gain what was then called New Amsterdam in 1667, because they had already seized it from the Dutch three years earlier. Likewise, the Dutch didn’t gain Rhun, because they had already seized it to tighten their ruthless monopoly of the nutmeg trade. The 1667 Treaty of Breda, which ended the Second Anglo-Dutch War (out of four), merely acknowledged the facts on the ground.

On paper, the deal was even worse for the Dutch than if it had been only an island-for-island exchange. The Dutch gave up not just New Amsterdam but all of New Netherland, which extended north to present-day Albany, east to the Connecticut River and west and south to the Delaware River. In partial exchange, the British acknowledged Dutch control of various islands in the Caribbean as well as Suriname, on the northern coast of South America, along with a slave fort in today’s Ghana. (A separate treaty allowed Dutch ships to carry some cargoes to England without tariffs.)

But that was just on paper. As I said, the Dutch had already lost control of New Netherland and had little prospect of regaining it. “The Dutch figured, ‘If we got it back, how long would we keep it?’” Jan de Vries, an emeritus professor of history at the University of California, Berkeley, told me. “The English were encroaching on all sides.”

Today, the difference in value of just the two islands at the center of the deal is vast. In 2022, the gross domestic product of New York County — another name for Manhattan — was $886 billion. Rhun, on the other hand, as the story in The Times tells, has no cars, no roads, no high school and no electricity in daylight hours. (It does have the Manhattan Guesthouse.) Its people make a living off harvesting nutmeg and fishing for tuna.

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