With its nearly 3.5 million inhabitants in 1848 the United Provinces was dwarfed in size by its larger neighbours. Like its neighours, the country faced social and economic turmoil. Beginning in the late 18th century, there had been power struggle between two factions in the country, the Orangists, who supported the stadtholdership under the aegis of the William, Prince of Orange, and the Patriots, who supported the democratisation of the States General, with the most radical hoping to replace the stadtholdership with a republican form government. The Patriots had blamed the decline of Dutch naval and mercantile power on the House of Orange and saw a need to abolish or at the very least limit their role in governing the United Provinces, whereas the Orangists largely saw a need to establish a strong monarchy.
Economically, the Dutch Republic was suffering with a decline in exports and a rapidly increasing population. Dutch agriculture had suffered from a potato blight beginning in 1845, leading to famine. After Ireland, the Dutch Republic was the most potato dependent country in Europe, with food riots plaguing parts of the country by 1847. The famine would lead to an estimated 53,000 deaths between 1846-1849. Economically, the country was also ill prepared to face industrialisation. Unlike Britain and France, the Netherlands possessed no coal resources and the few steam engines in the country had to be imported. The first steam powered textile mill only was founded in 1830, and by 1850 the country only had 55,000 spindles producing mostly coarse cotton cloths to export to the Indies. The textiles were uncompetitive for the European market, and as a result, the Dutch exports lost market-share to the British and French in countries where the Dutch once dominated trade, namely Russia and the Ottoman Empire. Financially, banking remained important, but Amsterdam was surpassed by both London and Paris as Europe's banking and financial hub. Dutch sea power also declined as the Dutch Navy, once the most powerful in the world, ranked sixth in the world in size and Britain's Royal Navy by 1848. Additionally, the Dutch merchant marine it was slow to transition to steam power, relying almost exclusively on wooden sailing ships until the 1880s. Shipbuilding had been an important sector of the Dutch economy, but the lack of coal supplies hampered the embracing of steam power. As a result, by 1848 the United Provinces had fallen to the rank of a second-rate power. Discontentment in 1848 had reached its zenith.
Throughout 1847 and 1848 there had been calls in the press of the United Provinces to enact some sort of reforms to revive the Dutch Republic. Some were more radical than others, with some Dutch nationalists demanding an annexation of Flanders from France to create a "Greater Netherlands". The Stadtholder, William VI (1819-1886) was keenly aware of need to initiate some sort of reforms and rather than face the revolts occurring in neighbouring Germany and France, in March 1848 he called an assembly of the leading political thinkers of the country to draft a charter for a new government, transforming the Republic into a hereditary monarchy. The charter laid out the foundation for a government vesting executive power in the ministers of King, with legislative power in the hands of the States General. Modelled on the British system of government, the king would assume the role of mediator between political factions. Taking the title of William I, he was able to navigate the country through this "peaceful revolution" and the Kingdom of the Netherlands was born. Among the reforms was the establishment of direct elections for half of the members of the States General and the
ridderschappen (aristocrats), the other half representing the States Provincial. In 1868, this was eventually supplanted by a bicameral system where the representatives of the States Provincial and
ridderschappen sat in the upper house known as the
Koninklijke Statenraad (Royal States Council). Among the other reforms was the nationalisation of the WIC (Dutch West India Company) and the VOC (Dutch East India Company), with private shareholders receiving compensation from the Dutch government.
King William I of the Netherlands
Though the Dutch had declined vis-à-vis the other powers, the Netherlands still ruled an extensive colonial empire, with territories on four continents. With the abolition of the VOC and WIC officially taking place on 1 January 1851, a new trading company was formed by the Dutch government to encourage trade not only between the Netherlands and its colonies, but with the world at large. The
Nederlandsche Handel-Maatschappij or NHM had a mission to expand Dutch commercial activity. Additionally, it would establish offices throughout the Dutch Empire to provide capital for projects and would eventually expand into various economic sectors. Like its predecessors it was a private company which issued publicly traded shares, however it was not responsible for colonial administration.
In an effort to raise company revenues from the East Indies, the VOC had implemented the
cultuurstelsel or Cultivation System on the island of Java in 1829. The policy made it so that Javanese farmers were required to dedicate a portion of their farming activities to government mandated cash crops. One-fifth of all farm land was allocated to produce sugarcane, coffee, tobacco, pyrethrum or other crops. Additionally, rather than pay head taxes, villagers were required to work a minimum of 60 days per year on company plantations. The resulting boom in revenues led the system to be replicated in Ceylon, Sumatra and other Dutch possessions of the VOC. The nationalisation of VOC company assets in 1851 also led the Kingdom of the Netherlands to utilise the revenue on infrastructure projects at home along with paying slave owners in Surinam and the Cape of Good Hope compensation once slavery was abolished in 1878.
On the island of Ceylon, the Dutch waged a war against the Kingdom of Kandy on Ceylon between 1810 and 1818, finally controlling the entirety of the island. Cinnamon had been the island's primary export commodity, but by the 1830s prices were beginning to slump leading coffee cultivation to spread into the highlands of the former Kingdom. Having been introduced around 1740, its production was not encouraged by the VOC so as not to compete with that of Java. By the 1830s however, production grew so that by 1860 Ceylon had emerged as one of the world's major coffee producing regions. This boom would be short-lived, with a fungus first seen in 1868 destroying many of the island's coffee trees. Though the fungus would spread to Java by 1876, coffee production there would recuperate, in Ceylon it would be largely replaced by tea, so that by 1890 Ceylon was the world's second-largest producer after British India.
The VOC also held several enclaves on the Indian subcontinent, namely Negapatam, Pulicat, along the Coromandel, and Hooghly in Bengal, but by the 19th century these were of little economic importance and had been overshadowed by the larger French and British holdings that bordered them. On the Malay Peninsula, the Dutch control over Malacca had allowed the Dutch to excersise control over much of the Far Eastern Trade. In 1819 this was eroded with the British annexation of Singapore, though the Dutch were eventually able to establish control over several of the sultanates on the Malay Peninsula during the second half of the century. In the bay of Dejima, near the Japanese port of Nagasaki, however the Dutch continued to enjoy the fruits of a privileged trading monopoly with Japan, which was increasingly importing machinery and other goods from the Dutch.
In Africa, the WIC held onto half a dozen forts along the Gold Coast, mostly established during the 17th century to sell slaves to the Spanish colonies in the Americas, with the principal being Fort Nassau. With the abolition of the Atlantic slave trade by the Republic in 1837, the forts became superfluous. By 1850s however, the export of palm oil had given Dutch Guinea a new lease on life. In Southern Africa, the VOC ruled Cape of Good Hope which had emerged as the continent's preeminent settler colony. Controlling the strategic Cape of Good Hope had led other powers, namely France and Britain to eye as a strategic prize worthy of conquest. The territory exported largely wool to Europe and provisioned VOC shipping to the East Indies, but it was its geographical position which was made the territory so coveted. The threat of conquest had led the VOC to send 12,000 soldier/settlers to the territory between 1785-1787, so that by 1800, the colony had a population of 50,000 Europeans, nearly half of the total population.
The establishment of the a British colony at Natal in 1834 alarmed the States General, and the VOC was forced by the Dutch government to pay for the transport and settlement of 8,200 Europeans to settle along the western frontier along the Fish River. Of these, nearly half were Germans from Prussian-ruled Cleves (mostly from Duisburg), with the balance being Dutch and around 1,000 Scandinavians, mostly coming from Norway. This settlement meant to strengthen Dutch control instead would precipitate a war with the Xhosa whom were expanding into the region. Cattle raiding of the settler farms by the Xhosa would lead Dutch "commandos" to retaliate, leading to a state of war between the Dutch and Xhosa lasting until 1837. The Xhosa were forced to retreat east of the Keiskamma River, forming a buffer between the Zulus and the Dutch. The European settlers for their part were unhappy with company rule and in 1853 were finally granted limited autonomy with a legislative assembly called the Estates of the Cape. By 1851, the population of the colony had grown to 500,000, nearly two-thirds of whom were Europeans with the rest being Hottentots, and to a lesser extent, African and Malay Slaves. During this time, Dutch settlement pushed northward as well, a move which would transform the colony with the discovery of gold and diamonds in the 1870s.
In the Americas, Dutch Guiana remained the WIC's most important primary colony, with it producing over 50,000 tons of sugar, most of that cultivated by the nearly 200,000 African slaves imported from West Africa. By 1850, nearly 95% of the population were slaves, making this one of the highest ratios in the world and leading to runaway slaves forming maroon communities in the interior. After the abolition of slavery in 1878, Chinese and Javanese labourers were imported to work the sugarcane plantations, but shortly thereafter bauxite would supplant sugar as its most valuable commodity. The other Dutch colonies, namely the islands in the West Indies had for centuries served as conduits of trade between the Spanish Main and the outside world languished after the opening of Spanish ports to foreign commerce in the 1820s.