Modern history


The Golden Rock

THE teapot of this tempest, St. Eustatius, a rocky meager spot less than seven square miles in area, hardly more than a volcanic outcropping above the waves, was an unlikely place for a rendezvous with history. Nevertheless, by virtue of an unexampled devotion to trade on the part of a virtually landless nation, and location at the hub of the West Indies, where it was a natural meeting place for trade coming from North and South America and for ships coming to the West Indies from Europe and Africa, the little island had made itself the richest port of the Caribbean and the richest territory per acre in the region—if not, as some boasted, in the world. Holland’s declared neutrality in the struggle between Britain and the American Colonies had assisted its enrichment.

Geography favored Statia with a splendid roadstead that could shelter 200 ships at a time and an invaluable position at the center of a multinational cluster of territories—English (Jamaica, St. Kitts, Antigua and Barbados), French (Ste. Lucie, Martinique and Guadeloupe), Spanish (Cuba, Puerto Rico and Hispaniola, the last divided between Haiti and Santo Domingo), and Danish (Virgin Islands). Taking advantage of Statia’s neutrality, these nations, as well as British merchants of the area who were actually sharing in the trade with the enemy, made Statia’s shores the principal depot for transshipment of goods to and from America.

Called the Golden Rock for the flood of commerce that flowed through its free port, stuffing its warehouses with goods for trade and the coffers of its merchants with the proceeds, it “was different from all others,” said Edmund Burke in a speech of 1781 when Eustatius in sudden fame leapt into public notice. “It had no produce. no fortifications for its defense, nor martial spirit nor military regulations.… Its utility was its defense. The universality of its use, the neutrality of its nature was its security and its safeguard. Its proprietors had, in the spirit of commerce, made it an emporium for all the world … Its wealth was prodigious, arising from its industry and the nature of its commerce.”

Two factors besides geography accounted for the prodigy of the Golden Rock: Holland’s enterprising neutrality amid the ceaseless and circular wars of her larger neighbors, and Statia’s role as a free port without customs duties.

The pressure of the merchant class represented by the formidable Dutch West India Company, which held a monopoly over trade with America, induced the States General to declare neutrality in the war of the British Crown against its Colonies. Neutrality, as the Dutch knew from experience in the preceding Seven Years’ War of Britain against France, was good business, although in the American war it went against the natural bent of the States General, which favored the British as fellow-rulers. Popular opinion, however, in a rare combination with business interests, added its pressure for neutrality. Out of inherited pride in their own revolution to overthrow the sovereignty of Spain, the mass of the Dutch people openly sympathizied with the American rebellion.

Neutrality on the high seas, always the most contentious element in international relations, balances on a tightrope of mutual contradictions. According to the much-disputed doctrine of “free ships, free goods,” a neutral had the theoretical right to pursue a normal trade with either belligerent so long as its supplies did not cause a military disadvantage to the other side. At the same time, the theory allowed a belligerent to prevent the subjects of a neutral state from sending military supplies in aid of the enemy. Between these two assertions—the right of a neutral to trade and the right of the belligerent to interfere to stop the trade—there could be no reconciliation.

Determined to take advantage of this condition, Dutch merchants and mariners, alert to every opening for commerce, braved the physical and financial risks of seaborne commerce to make it pay richly. Wealth filled their warehouses. The American Colonies sent rich cargoes of their products—tobacco, indigo, timber, horses—to exchange for naval and military supplies and for molasses, sugar, slaves and furnishings from Europe. Their agents in Amsterdam arranged the purchases and the delivery to St. Eustatius for transshipment to the American coast. Vessels loaded with 1,000 to 4,000 pounds of gunpowder per ship, and in one case a total of 49,000 pounds, made their way to Philadelphia and Charleston (the nearest port). To the rebels with empty muskets, St. Eustatius made the difference.

As a free port, Eustatius had reaped the profits both as marketplace and as storehouse where goods waiting sale or transshipment could be safely housed against predatory foreign fleets in search of loot.

The measure of profit in the munitions traffic can be judged from the price of a pound of gunpowder, which cost 8.5 stivers of the local currency in Holland, and 46 stivers or almost five and a half times as much on Eustatius, because its proximity saved American customers time and the risks of a longer passage. Trade swelled to and from the Colonies. On a single day in March, 1777, four ships from the Colonies came via Statia into Amsterdam bringing 200 hogsheads of tobacco, 600 to 700 barrels of rice and a large shipment of indigo. An English customs officials in Boston recorded, “Daily arrivals from the West Indies but most from St. Eustatius, every one of which brings more or less of gunpowder.”

The second factor in Statia’s golden growth came from her avoidance of the restrictive cult of mercantilism that prevailed among other nations.

Mercantilism was born of the belief that national power depended on the accumulation of hard currency to pay for the era’s increasing costs of government and of maintaining armies and navies for constant conflict. In pursuit of the favorable balance of trade necessary to earn revenue, the mercantilist policy laid strict limits on imports of foreign and colonial goods and on the carrying trade of other nations. The rule applied to a nation’s own colonies, which were considered to exist to serve the prosperity of the mother country and were therefore prohibited from exporting manufactured articles that could compete with the mother country’s industries. Except for loot in wars and simple seizures of property from disestablished monasteries or expropriated Jews or from Spanish treasure ships carrying silver and gold from the New World, the excess of exports over imports was the only source of external revenue. Hence the century’s overriding and pervasive concern with trade.

Subject to infinite variables of winds and currents, of supply and demand, of crops and markets, trade has a way of carving its own paths not always obedient to the mercantilist faith. The faith was embodied in Britain’s Navigation Act, enacted under Oliver Cromwell in 1651 in the interests of the rising middle class and the industrial towns and major trading ports—the so-called Cinque Ports, so long influential in British history. Aimed specifically at the Dutch to protect British trade against its most dangerous rival, the Act raised a wall of customs duties, and permitted transshipment of goods only in British bottoms calling at British ports. The natural result had been maritime war with Holland and bitter resentment of customs duties in the Colonies, feeding the spirit of rebellion which led to the American war. For Britain, the expense of fighting the Dutch and trying to suppress the American revolt was more costly than anything that could be gained by the trade laws, causing higher taxes at home and their natural consequence, a rise in domestic disaffection. That was not the least of Britain’s afflictions in her embattled time.

The instinct of the Dutch for commerce early persuaded them that profits were more likely to come from a free flow of trade than from restrictions. Did something grow within the narrow limits of St. Eustatius that bred a greater need for open doors and looser rules? Whatever the reason, Statia became a free port in 1756 when she abolished customs duties in order to compete with St. Thomas, which had become her only trade rival in the Caribbean. From then on her prosperity flourished extravagantly. As the neighboring islands could not trade with each other in wartime when their principals were entangled in the various belligerencies of Europe, as they were most of the time, they brought their goods to buy and sell in St. Eustatius and to purchase edibles from foreign sources, for no one of the West Indies, concentrating on sugar and slaves, was self-sufficient in food. In the next twenty-five years, Eustatius enjoyed its golden era. Population, which had numbered only a few thousand before the American war, rose to 8,000 by 1780, owing to the explosion of trade and storage service. Residences crowded up against each other along the shore of the Lower Town and were doubled by a row of stone warehouses occupying every space. Mercantile adventurers from all over flocked to St. Eustatius to store their goods, which otherwise might be lost on their own islands through the constant seizures of territory by naval predators in search of booty and land. Warehouses of the Lower Town overflowed with goods awaiting transshipment. The traders often took the precaution to become Dutch citizens while using the island as their depot. British blockade of the American coast and French entry into the war rendered American and French ports subject to attack, further encouraging the use of St. Eustatius for storage.

The Lower Town ended at Gallows Bay, where there was a sloping beach suitable for the bizarre business of cleaning ships’ bottoms. Barnacles and marine growths had to be scraped off and the bottom repainted every few months in an excessively awkward process called “careening.” It required hauling the vessel up on the beach and turning it over from one side to the other while masts, ballasts, guns and other equipment were removed or lashed in place. The fighting machine itself was out of action for the duration of its humiliation. Provided it had not bogged down in mud or been damaged by a squall while it lay helpless, it might then be relaunched. Rarely did human ingenuity fall so short of requirements as in this preposterous, almost farcical procedure. The only alternative, for navies which could afford it, was to sheathe their warships’ bottoms in copper.

Through the 1770s and ’80s, Dutch merchants continued to defy their government’s embargo on contraband, and the Americans to ignore as before the Navigation Acts, to which as British Colonies they were subject. So tempting was the opportunity to get rich quickly, complained Sir Joseph Yorke, that munitions were loaded in Dutch harbors as publicly as if no embargo had been declared. He tried to insist to the States General that they must enforce their orders, but he could get nothing done. Writing to a colleague, he came to the sore point that galled the British the most: “… the Americans would have had to abandon their revolution if they had not been aided by Dutch greed.” He did not see greed in the British merchants who were selling supplies to the enemy, for greed, like better qualities, often lies in the eye of the beholder.

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