ECONOMIC AND FINANCIAL CONDITIONS The existence of the Netherlands as an independent State dates from the Union of Utrecht, 5579. The 17th century was charac terized by a degree of economic and commercial expansion, which made of the Netherlands and especially of the city of Amsterdam one of the great financial and commercial centres—for a time the greatest of all. Colonial expansion and flourishing science and art were the keynotes of this period, which is known as "the golden century" of Dutch history and is so vividly described in Sir Wil liam Temple's Observations upon the United Provinces of the Netherlands (1673). A period of stagnation and partial collapse then followed. The former spirit of enterprise waned and the Dutchman of the 58th century was characterized by a predom inantly rentier mentality. The founding of the kingdom of the Netherlands in 1813 brought little change at first, notwithstand ing the many efforts, and not least of all by William I., to imbue commerce and industry with fresh life. It was not until the second half of the 19th century that a new period of expansion and prosperity commenced, in which the Dutch colonies in Asia played their full share. This new growth is associated on the one hand with the general economic development of western Europe, in which Holland—so favourably situated for international traffic—reaps her full share, and on the other hand with the im portant agrarian and industrial revival in Holland. Moreover, the financial position of Holland in the world has, especially since the World War, considerably improved.
As shown by the following table, the move to the towns has been very marked, especially since 187o: A comparison of these figures with previous ones shows that, in the last decades in particular, the degree of employment in in dustry and transport has gone up (57% and 99% respectively since 1899) . The figure for agriculture shows the least increase (8% since Agriculture and Cattle-breeding.—Nearly half the terri tory of the Netherlands lies below sea-level. From the earliest times, intensive cattle-breeding has been a feature of this part of the country, while more recently horticulture has also flourished there. Agriculture is confined to the clay regions, and the higher and sandy regions where these are suitable.
The division of the cultivated land is as follows (in hectares) : The small farm is a characteristic feature. Only 2.11% of the farms in 1921 had an area of more than i oo hectares, whilst no less than 56% of the farms were managed by the owners them selves. The general agricultural crisis in Europe in the eighties, due for the most part to the imports of grain from the United States, did not lead in the Netherlands to the introduc tion of grain taxes. By a system of information and guidance and in other ways, the State supported agriculture, and more up to-date working methods, more intensive culture, and co-operation have helped it to get through the difficult years. The results, in so far as these are reflected in the increase of the yield per hectare, can be gathered from the following statement relating to the principal agricultural products: Industrialization was much accelerated by the World War. Al though many emergency industries, called into being as a result of the cessation of imports, have disappeared or decreased, the net result of these years has been expansion and modernization of pro ducing plant. After a reaction due to the general economic crisis in 1921, this plant provided a sound basis for the development which has shown itself ever since.
According to figures produced by the Central Office for Sta tistics—mainly for 1923, but completed from other sources—the value of the output of Dutch industry for 1923 may be estimated at 1,875 million guilders.
The coal mining industry deserves special mention. Its begin nings date from the end of last century, an increasing percentage of the production now emanating from State-owned mines (1926: 5,200,000 tons as against 3,400,000 tons from private mines) . The total annual output, which in 1910 reached 1,292,00o tons, is now well over 10,000,000 tons. The total Dutch consumption of coal is estimated at 12,000,000 tons a year.
The trend of industry since 1920 is reflected in the following figures: Cattle-breeding also had difficult years to face during the same period. Although essentially dependent on export, it had failed to pay sufficient attention to the quality of the product, with the consequence that other countries like Denmark were able to out bid Holland on the dairy products market. Here especially co operation, encouraged by the State, had much to do. Co-operative dairy factories and officially controlled standardized qualities of butter have led to a great improvement, whilst the improved water and land communications have greatly facilitated sales. This is also the case with regard to horticultural products.
For 1923 the value of the agricultural and dairy produce was estimated as follows, in millions of guilders : Agriculture . . 436.9 Horticulture .131.9 Cattle breeding . . 660.o Forestry . . . . In the absence of protective tariffs, the development of agricul tural production has become more and more independent of home consumption. Only s of the total amount of wheat consumed is produced in the country itself. On the other hand 3 of the total dairy produce is available for export . (the figures are for 1923) .
The transition from handicraft to mechanical production was gradual, and, compared with the surrounding countries, late. An exception to this is the cotton industry, which was called into existence with the help of the Dutch Trading Company (Neder landsche Handel Maatschappij, established in 1824), and found an extensive market in the Dutch East-Indies. Towards the end of the 19th century however, industrialization began to make considerable progress. The increase in population made it neces sary to seek new resources, the long crisis in agriculture brought down wages and, thanks to the existing free trade system, raw materials and semi-manufactured products could be imported free, or almost free, of duty.
The index figures, which include short time, relate to persons coming under the unemployment insurance system (297,600 in 1927). The figures vary considerably with the season and the different professional groups. They are highest in Dec. (fig ures for 192 7) (12.7) and Jan. (13.2), lowest during the sum mer months (4.9-5.6). The diamond industry (21.o) and cigar industry (10.4) always yield high figures, while, as a result of seasonal fluctuations, the building trade also shows a high average (14.6).
The following figures show the importance of Dutch trade, ex cluding transit trade which—in view of the geographical situation of the country—is also of prime importance.
The shipping of the Dutch ports considerably expanded after extensive improvements had been effected ; Amsterdam, already in 1825 connected with the North Sea by the "Noord-Hollandsche Kanaal," obtained direct access to the sea in 1876 by the "Noord zeekanaal." As the large river connecting Rotterdam with the sea was always subject to becoming blocked with sand, here too the building of a canal ("Nieuwe Waterweg")—completed in 1896—was necessary. The development of shipping of the Dutch maritime ports may be seen from the following figures: The share of the various countries in Dutch trade is shown in the following figures (percentages of total value, 1926) : Transport. Maritime Shipping.—The supplanting of sailing vessels by steamships did not take place in Holland until after other countries had given the lead: the following figures indi cate the development of the Dutch merchant fleet: Before the war one fourth of these vessels flew the Dutch flag ; in 1913 the percentage was 25.8; in 33.07; and 1926: 28.22. The greater part of these entered at the port of Rotterdam; in 1913, 67.9% of the total number, against 13.5% at Amsterdam; 1926: 59.39% and 15.58% respectively. At the same time, the traffic in the ports situated on the Nieuwe Water weg west of Rotterdam considerably increased (1926: Vlaardingen 9.5o%, Schiedam 3.05%, Hook of Holland Inland Navigation.—An extensive network of rivers, extended by innumerable canals, has led to a considerable development of inland shipping in Holland. The inland fleet consisted in 1920 of 13,00o ships of a tonnage of 1.9 million tons.
The following table gives figures for the inland shipping on some of the most important waterways, to Germany and Belgium, as well as from Amsterdam to Rotterdam and the Rhine.
According to Lloyd's Register of ships over 10o tons, the share of the Netherlands in the fleet of the world was, in 1898: 1.8%, in 1913: 2.8% and in 1926: 4•0%.
The first steamship company dates from 1825 ("Amsterdamsche Stoomvaartmaatschappij") with a regular service to Hamburg; about 1830 a service to Hull was instituted and in 1840 services to London and certain Baltic towns; the company was taken over in 1877 by Messrs. van Es of Rotterdam. In 1856, another steam ship company was founded, the "Koninklijke Stoomboot Maat schappij," originally only for the Baltic, but afterwards greatly ex tended. About 1870, a regular service with the Dutch East-Indies was established by the "Stoomvaart Maatschappij Nederland" of Amsterdam and by the "Rotterdamsche Lloyd" of Messrs. Ruys (in 1875, English capital and English ships came in and in 1883 it became a joint-stock company). The "Nederlandsch Ameri kaansche Stoomvaartmaatschappij" was founded during the same period (1873) ; the connection with the West-Indian colonies was established in 1883 ("Koninklijke West-Indische Maildienst," later taken over by the "Koninklijke Stoomboot Maatschappij"), and that with S. America in 1907 by the "Koninklijke Hol The importance of transit traffic is evident. The depression caused by the war reached its maximum (as far as the traffic on the Rhine is concerned) in 1918, with 11,624,00o tons.
Railways and Tramways.—Owing to water transport being of such prime importance in Holland, railways developed relatively late ; for the same reason they have never been in a position to yield large profits. Since about 186o, the building of railways was largely carried out by the State. In 1916 the two big com panies, which had in the mean time absorbed most of the private companies, entered into a pooling agreement—"Nederlandsche Spoorwegen"—whereby the mutual profits or losses are divided on the basis of the capital of each participant. In both companies the State holds the majority of the shares and has guaranteed a 5% dividend to the share-holders.
After a separate electric line had been built in 1908 between The Hague and Rotterdam (28 km.), the existing line Amsterdam Rotrerdam (84 km.) was electrified in 1927. Competition with motor-bus lines is often very strong and in 1928 the Dutch rail ways took the operation of motor-bus lines into their own hands. Since the war, the financial results obtained by the Dutch rail ways have been far from favourable; in 1922, 1923 and 1924 the State had to meet a deficit of 32.9, 30.5 and 23.o million guilders respectively. The causes must be sought in the increase of ex penditure on staff—in connection with the introduction of the eight-hours day—and in the increase in price of coal: this last factor however belongs to the past and in i927 the accounts again showed a small surplus (2 million guilders) .
Besides the railways there is an extensive tramway system; here too the competition of the motor-buses is strongly felt.
Postal Check and Clearing Department.—This service was established in 1918 and was closed Oct. 1923–Oct. 1924 for re organization. Since it was reopened no interest has been paid on the accounts.
Besides the silver guilder, a gold ten-guilder piece was intro duced a few years later. By the law of June 26, 1875 the gold pieces contain 6•048 grammes of fine gold, may be coined for private persons and are legal tender up to any amount ; thus the present system of the so-called "limping standard" was introduced. Gold coins have however never been in use for large amounts. The system was re-defined by the coinage law of May 28, 1901. Owing to the rise in the price of silver the amount of silver in the coins was reduced in 1919 from , to 00 • One guilder = is. 8d.; Li.— =12.107 guilders.
The Netherlands Bank.—The Netherlands Bank was estab lished in 1814. It is a purely private undertaking, which has been granted the monopoly of the issue of bank notes. The share capital is 20 million guilders. Two members of the directorate (the president and the secretary) are appointed by the queen, whilst a royal commissioner exercises a general control, on behalf of the Government.
When the World War broke out the circulation of bank notes amounted to about 30o million guilders. During the war, this increased to i,000 million guilders, but afterwards gradually fell (by June 25, 1928 to 768 million guilders). The balance in cur rent-account on that date amounted to 5o millions, including the holdings of the Treasury. The Bank Charter leaves the percentage of cover of the circulation to be fixed by royal decree. Before the war, this cover amounted to 40% of the total volume of bank notes, balances in current-accounts and bank drafts. When the war broke out, this percentage was reduced as a precautionary measure to 20%, and during a very short period the cover was slightly under 4o%.
During the war the gold reserve, which amounted to about 162 million guilders in July 1914, considerably increased. In 1918 the maximum of about 73o million was reached; then followed a gradual fall to about 400 million. On June 25, 1928 the gold reserve was about 435 million, which, together with the silver reserve of about 24 million guilders, constituted a cover of ap proximately The bill holding and loans were as follows : Telegraph and Telephone Services.—The telegraph system com prised in 1926 47,051 km. of wires; 2.4 million inland telegrams were transmitted, and 3.1 million abroad. The inter-urban tele phone system covered 291,121 km. of wire, besides 235 local sys tems, which in the big cities are run by the municipalities.
Postal Savings Bank.—The deposits at the end of the year were as follows, in millions of guilders: 1900 84.7 1920 . . . . . 273•0 1910 1915 . . . . . 189•I 1927 . . . . 32I.9 Money and Credit. Monetary System.—The present unit, the Dutch guilder, dates from the Constitution of 1798. From 1816 till 1847, the double standard ruled in Holland with a ratio of 1:15.87 between gold and silver. The law of Nov. 26, 1847 introduced the single silver standard with the silver guilder of 9.45o grammes fine silver. The fall in the price of silver about 1870 caused the Government to withdraw in 1873 the free silver coinage for private persons. The silver guilder, however, remained legal tender uo to any amount.
There is no legal obligation upon tae bank to convert its bank notes into gold. In 1903, however, the bank assured the Govern ment that it was prepared to continue to keep its gold reserve available for export, in the event of a rise in the exchange-rates above gold-parity, at the price of 1,653.44 guilders per kg. fine for bullion, and corresponding prices for gold coins, as long as it was in a position to do so. During the war, this declaration became inoperative owing to the ban on exports of gold; Holland and the Dutch East Indies returned to the gold standard at the same time as Great Britain, Australia and New Zealand—April 29, 1925; the prohibition to export gold was withdrawn and the declaration re-established.
The position of the Netherlands Bank has changed considerably in the course of time; the development of private banking, espe cially since 1911, has gradually given it the character of a bankers' bank. Since 1889 the State has participated in its profits, its share being gradually increased. After payment of a dividend of i % to the shareholders, a of the balance is allotted to the State, whose share is increased up to as soon as the dividend exceeds 7%. The bank acts, free of charge, as agent of the Treasury, whereas the Government has the right to take up a non interest bearing loan to an amount not exceeding 15 million guilders.
Commercial Banks. The rise of the private credit banks dates from about 1860. Owing to the concentration movement, which was started in 1911, five big banks have gradually come to the front, and have built up an extensive network of branch-offices and a clearing-system in the provinces, with the assistance of some provincial banking institutions.
During the World War and the first few years after it, the business of the private banks grew rapidly. The crisis of 192o-21 brought a change. One bank had to be liquidated and a few others needed financial support. Nevertheless, the big banks have displayed great capacity of endurance. Since 1924, the bank figures have again shown an increase.
The following figures from the joint balance sheets of the five principal banks : In the years after the war, the increased importance of Am sterdam as an international financial centre led to the establish ment of several foreign—chiefly German—banks there.
The requirements in mortgage credits are met by a large number of medium-size mortgage banks. The existence of a large number of small banking institutions and middlemen of all kinds —especially in connection with small credits—is still a feature of Holland.
Stock Exchange.—The fact that Holland has for centuries been a country of capital exports and to a large extent still is, is re flected in the stock-exchange transactions. A considerable number of foreign funds, mostly bonds, are registered on the Amsterdam stock exchange; Dutch colonial funds also play a prominent part.
Issues.—The development of issues of stocks and bonds (not including conversion loans and treasury bonds) is as follows : These figures show that foreign issues have very much increased during the last few years. The share of the principal countries in the foreign issues in 1927 was—Germany, 134 million (guil ders), France 63, Belgium 31 and the United States 20.
The World War entailed heavy burdens for Holland—neutral though she was. The mobilization of the army, the distribution of foodstuffs and unemployment involved considerable expenditure, whereas the proceeds from taxation could be but slightly in creased, which necessitated borrowing on a large scale. The in crease in State expenditure continued after the Armistice, due pri marily to house building by the State on a large scale, extension of social measures and increase in the general level of prices. Receipts and expenditure connected with the war and the crisis following upon it, formed a separate chapter of the budget during the years 1914-24. Its receipts consisted of a tax on war profits and a supplement on certain taxes levied during this period. The ex penditure incurred in connection with the crisis totalled 2,375 million guilders. The service of war loans and post-war crisis loans is administered apart from the budget itself, being defrayed out of certain taxes raised specially for this purpose and out of a supplement on a number of other taxes. The conditions on which these loans had to be contracted were often burdensome. The Government has however now been able to redeem and convert part of them.
The fall in the level of prices and the cutting-down of a num ber of items of State expenditure are reflected in the budget fig ures since 1923. The ordinary expenditure, which reached its maximum in 1922 with 632.4 million guilders, has fallen again to millions for 1928; the extraordinary expenditure of 284•0 million guilders in 1921 was reduced to 49•1 million in 1927; in 1928 it increased to 173.4 millions, as a result of further redemp tions of national debt. The receipts consist for the most part of taxes (546.3 million guilders in 1928), while the balance (1928: 183.3 million guilders) is made up from numerous smaller items, of which at present interest and reimbursement of advances are the principal factors. Part of these items is regarded as extraor dinary receipts. The profits of Government undertakings belong to this category; they are however very small. In 1928 the extraor dinary receipts amounted to 56.3 million guilders in all.
The origin of the present system of taxation is to be found partly in the taxes introduced during the period of French domi nation, and partly in levies existing earlier. A State income-tax was introduced in 1892-93. During the war and the succeeding years a number of crisis-taxes were levied and most of the existing taxes increased. In 1926, a..beginning was made with some reduc tions. In 1928, the proceeds from direct taxation formed 48.8% of the total tax proceeds. Among these, income tax yielded 15.6%, the dividend and bonus tax 5.1%, the national defence tax 5•o%; consequently all the taxes on income together yielded The tax on real and personal property yielded 6.1%, taxes on consumption 28.2% and customs 10.4% of the total amount.
The consolidated national debt increased from 1,148.4 million guilders on Jan. 1, 1914 to 2,916.4 million guilders on Jan. 1, 1925; on Jan. I, 1928 it amounted to 2,739.9 million guilders. While in 1928 130 millions of interest had to be paid, 49.4 millions were redeemed under the redemption-scheme and 187.5 millions out side. The floating debt of the State amounted to 13.2 million guilders on Jan. 1, 1914, 858.7 million on Jan. 1, 1922, and 251•5 million on Jan. 1, 1928. This last figure is however counter balanced by floating claims to an amount of 275.9 millions on the same date, arising, inter alia, from advances of the Treasury to communes, colonies and foreign countries.
Judged in the light of their total expenditure the municipalities are as important as the State. The provinces however have only a subordinate position. The following figures for 1926 may be of interest: The taxes per head of population in 1925-26 amounted (in guilders) to : State Communal-27.89, Provincial 2.35 : Total-104.83.
There is also a second-line or landsturm, in which service is voluntary. This force is divided into landsturm associations and special corps, in which 30o hours' training are done every year. The landsturm associations (6 groups) conduct preliminary mili tary training. The landsturm corps carry out motor transport, marine and railway services and anti-aircraft lookouts. Enrolment for the former is for men not liable to military service ; in the latter for men, and some women, over 16 years of age.
Headquarters of the 1st Division are at The Hague, the 2nd Division at Arnheim, the 3rd Division at Breda and the 4th Divi sion at Amersfoort. The Headquarters of the "divisions" of gen darmerie are at Hertogenbosch, Maastricht, Arnheim and Gronin gen. The companies of military police have their Headquarters at The Hague, Amsterdam, Breda, Nijmegen and Zutphen, with main Headquarters at The Hague.
There is a senior military college at The Hague to train offi cers for the Staff and higher commands (2 year course) . At Breda there is a Royal Military Academy to train cadets for commissions and officers of all arms (3 months courses).
The chief points of special interest are the existence of a School for Chemical Warfare under the engineers, a carrier pigeon service at the General Staff and a school for "storm troops" of the 1st and 4th Divisions.
The defensive strength of the Netherlands lies in the power to create inundations. The water-levels are complicated, and the system known only to expert specialists. There are headquarter staffs for the fortified lines covering Dutch territory and for those specially covering the Helder.
The military Air Force, consisting of a staff and 2 companies with Headquarters at Soesterberg and a detachment at Schipol, is directly under the General Staff. Not counting machines used for training, there are 17 fighting aeroplanes and S3 for recon naissance, no bombing machines.
(See also the League of Nations Armaments Year-Book, 1928 (Geneva). (G. G. A.) Navy.—The navy of the Netherlands protects the Dutch wa ters and coasts and also provides defence for the Dutch East Indies (q.v.). There are four coast defence ships (s,000 to 6,5oo tons), two cruisers, three armoured gun-boats, four sloops, five de stroyers (510 tons), and four destroyers of 1,62o tons. In addi tion, Holland possesses eight torpedo-boats, 24 submarines, 12 mine-layers and two submarine depot-ships. There were (1928) two further destroyers under construction, and the budget the same year provides for an expenditure of 40,555,610 florins. (X.) Rise of the Republic.—The following article deals with the history of the Netherlands after the confederation of 1579. For the events preceding that year the reader is referred to the article NETHERLANDS.
The Union of Utrecht, by which the northern provinces were confederated, was signed on Jan. 29, 1579. It remained in force until the fall of the Dutch republic in 1795, and its formation may therefore be taken as the starting-point of the history of the newly created state ; but that state was as yet so far from being fully grown that its leaders did not even consciously desire either republicanism or independence. In this first stage it was a loose federation, for defence, finance, and other limited purposes. The States General were still controlled by the estates of the prov inces, in which the work of government had always been shared between the estates and a monarch or his representative. It was eight years before the possibility of a monarch was ruled out, and throughout the whole history of the republic there was never a finally satisfactory adjustment between the powers of the estates, among which the States of Holland were predominant (see HOLLAND, COUNTY AND PROVINCE OF), and those of the stad holders (q.v.), the old royal lieutenants, who continued to exer cise the executive functions which had been theirs as the over lord's representatives. Collisions between the estates and the stadholders were to lead to constant strife and to five successive revolutions: in 1618, in 165o, in 1672, in 1747, and in 1787. For `the first 3o years after the Union of Utrecht the war of inde pendence was being waged, and constitutional developments were dictated by its fortunes. William the Silent, who was supreme in Holland and Zeeland, did not welcome the union, because he still hoped to unite all the 17 provinces against Spain. That, however, proved to be impossible, and the military situation grew alarming. Maastricht, Koevorden, Groningen, Delfszyl, Steenwyk were lost. Philip felt himself strong enough to pronounce the "ban" against William, that is, to declare him an outlaw whom anyone might lawfully kill. William saw that, without foreign aid, the northern provinces could not maintain themselves. He therefore gained the support of France by the offer of the sovereignty of the Neth erlands to the duke of Anjou, brother of the French king. With the reservation of ultimate control in all important matters to the states, this arrangement was made in the treaty of Plessis-les Tours, in Sept. 1580. Anjou, who took the field next year, was inaugurated early in 1582 as duke of Brabant and of Gelderland, count of Flanders and lord of Friesland. He did not become count of Holland and Zeeland. In these provinces he was dis trusted as a Catholic, and they would have no sovereign except William himself, who reluctantly yielded to their insistence and had agreed, before his death, to accept the title of count. At the same time the northern provinces solemnly repudiated the sover eignty of Philip II. and declared themselves absolved from their allegiance to him (July 26, 1581). In 1581 and 1582 military events continued unfavourable: more fortresses were lost, and Anjou was chafing at the limitations imposed on his sovereignty. On Jan. 17, 1583, his troops attempted to obtain possession of the city of Antwerp. By the vigilance of the citizens, this "French Fury" was frustrated, and in June the discredited Anjou returned to France, where he died whilst planning his return. Wil liam continued to organize defence from his refuge in Delft, though with little success, for Zutphen fell. He had been severely wounded by one of the gunmen let loose by Philip's ban; on July io, 1584, another, a fanatical young Catholic from Franche-Comte, named Balthazar Gerard, got admission to his house and shot him.
Leicester was in Holland from Dec. 1585, and did not finally leave until Dec. 1587, but his rule was an utter failure. Without Elizabeth's authority, and contrary to her wishes, he accepted the title of governor-general, with greater powers than had been en joyed by Anjou or even William himself. His influence with the queen had been his greatest asset, but it proved almost useless, and he had little ability either in war or in politics. He saw clearly the defects of the improvised constitution, and tried to remedy them by centralizing the financial and naval organization; but he did not know how to work with the States of Holland. He alienated them by prohibiting all trading with the enemy, though Holland and Zeeland were growing rich by that means and drawing from it taxes which financed the war. He set himself at the head of democratic and Calvinist extremists. Worst of all, he could not check the victories of Parma: one after another there were lost Grave, Venlo and Deventer, and the siege-works made for the recovery of Zutphen—the last two reverses being due to the treachery of English Catholic commanders. Finally Sluys, a port to the south of the Scheldt, surrendered. Made still more un popular by a peace-move which Elizabeth compelled him to take, Leicester attempted a coup d'etat but failed.
The year 1598 saw important political changes. By the Treaty of Vervins, France made peace with Spain, a separate peace in which neither the Dutch nor the English were included. Philip II. died in the same year, after arranging a new regime for the south ern Netherlands. The cardinal archduke, Albert of Austria, who had become governor in 1596, was to marry his cousin, Philip's daughter, the Infanta Isabella, and the two were jointly to rule the Netherlands as an independent sovereignty. If, however, they had no heirs, the sovereignty was to revert to Spain, as it ulti mately did in 1633. In practice, however, the "cession" made little difference to the dependence of the provinces on Spain, and it did nothing towards bringing about a reconciliation with the north. The Spaniards could not bring themselves to concede freedom of worship, and another factor now arose which made it impossible for the Dutch to gain peace except through victory. In came the first Dutch voyage to the East Indies. By r600, when the united Dutch East India Company was founded (see DUTCH EAST INDIA COMPANY), Dutch ships were trading everywhere in the East and West, and the Spanish colonial em pire was endangered. Nine more years were needed before the Spaniards would recede from their colonial claims. On land the character of the war altered. In 1600 Oldenbarnevelt and the other politicians made the unwilling Maurice undertake a march westwards across Flanders to strike at Dunkirk, from which port privateers preyed on the commerce of the channel. Maurice won a spectacular victory at Nieupoort (July 1) ; but nothing more. The great business of the next three years was the Archduke Albert's siege of Ostend, the isolated port which the Dutch were enabled to hold by their command of the sea. While the siege was in progress Maurice took Cadzand, Grave and the port of Sluys, which had been lost by Leicester; but Ostend itself he could not save. It fell on Sept. 20, 1604, after a resistance of 38 months, to Ambrosio Spinola, a member of the great Genoese banking house, who was equally eminent in policy and in arms. In 1604 King James I. of England made his peace with Spain, and the Dutch, now without allies, could no longer make such headway as before. Oldenzaal and Lingen were lost, and after them Grol and Rheinberg; but the resources of Spain had been sapped by the long war, and especially by disasters at sea. In 1607 Jacob van Heemskerk won a striking victory off Gibraltar. Soon of ter that the Spaniards' need for peace led to serious nego tiations. These were not easy, and the two stadholders would have been well content to continue the war; but by the mediation of France there was concluded, on April 9, 1609, a twelve years' truce. It was made with the provinces as free states over which neither Spain nor the archdukes made any claims. The frontiers were to be as they actually stood at the time. Nothing was said about religion or the Indies, but in a secret treaty King Philip III. undertook to permit Dutch trading there. So ended gloriously and advantageously the first act of the war of independence.
The interval provided by the truce was marked by little of im portance in external relations. The only event that need be named is the intervention of the republic in the dangerous succes sion-dispute in the neighbouring duchies of Cleves-Jiilich (1609 14). With this external calm there went growing economic pros perity, but also lamentable strife in domestic politics and religion. Estrangement between Maurice and Oldenbarnevelt had begun as far back as the Nieupoort campaign, had been accentuated in the negotiations for the truce, and now became open enmity. A theo logical professor at Leyden, Jacobus Arminius (q.v.), had criti cized the orthodox Calvinistic doctrine of predestination. His subtle argument led to a raging controversy in which one of the issues was the right of the States to control the Church. The followers of Arminius addressed a remonstrance, from which they were called Remonstrants, to the States of Holland. Among the liberal-minded men of affairs who composed that body they had many adherents, including the advocate himself, though not the representatives of Amsterdam, the leading town. The States tried to preserve unity, first by silencing the controversy and, when that failed, by taking the side of the Remonstrants; but Maurice and four provinces out of seven in the States General took the orthodox Calvinist side. The States General wished to call a national Synod or Church Assembly to settle the disputed ques tions, but the States of Holland refused their consent. Exasper ated by their failures, they passed a resolution which asserted the principle of provincial independence in such a way as to threaten the unity of the republic ; they raised levies of local militia (waardgelders) to enforce their will, and instructed the contin gents of the regular army paid by Holland that they owed no allegiance to the "generality." The States General and Maurice, with the army behind him, overawed the opposition and removed its leaders from their positions in the town governments. Olden barnevelt, the famous Hugo Grotius, and others were arrested. A special tribunal was erected to try, or rather to condemn, them. Meanwhile the national Synod had met at Dordrecht (Dort) on Nov. 13, 1618. Its decisions were entirely against the Arminians, who were silenced. The Synod closed on May 9, and four days later Oldenbarnevelt, in spite of long public service, was beheaded.