Rebellions in Java (1629) and the Moluccas (165o) were sup pressed with great severity, but in 1662 the company suffered a heavy reverse in Formosa, all its colonists being expelled from the island. A new war between Great Britain and Holland broke out in 1672 and was terminated by the Treaty of Westminster (Feb. 17, 1674). Thenceforward the British company devoted its energies chiefly to the development of its Indian possessions, while the Dutch were left supreme in the archipelago.
The weakness of Spain and Portugal and the withdrawal of the British left the Dutch com pany free to develop its vast colonial and commercial interests. In 1627 the so-called Dutch "colonial system" had been inaugu rated by the fourth governor-general, Jan Pieterszoon Coen (q.v.). Under this system, which was intended to provide Netherlands India with a fixed population of European descent, Dutch girls were sent to the archipelago to be married to white settlers, and subsequently marriages between Dutchmen and captive native women were encouraged. As early as 1624 vast fortunes had been acquired by traders. The system of practical slavery en forced on the native races provoked an insurrection throughout Java, in which the Chinese settlers participated; but the Dutch maintained naval and military forces strong enough to crush all resistance, and a treaty between the company and the Susuhunan in November 1749 made them practically supreme in Java.
In the second half of the 18th century there was a rapid decline in the revenue from sugar, coffee and opium, while the competition of the British East India Company, which now exported spices, indigo, etc., from India to Europe, was severely felt. The administration was cor rupt, largely because of the vast powers given to officials, who were invariably underpaid ; and the financial methods of the com pany precipitated its ruin, large dividends being paid out of bor rowed money. The burden of defence could no longer be sus tained; piracy and smuggling became so common that the com pany was compelled to appeal to the states-general for aid. In 1798 it was abolished and its authority vested in a "Council of the Asiatic Possessions." In 1803 a commission met to consider the state of the Dutch colonies, and advocated drastic administrative and commercial reforms, notably freedom of trade in all com modities except firearms, opium, rice and wood—with coffee, pepper and spices, which were state monopolies. Some of these
reforms were carried out by H. W. Daendels (1808-1811), who was sent out as governor-general by Louis Bonaparte, after the French conquest of Holland. In 1811 Daendels was recalled and J. W. Janssens became governor-general.
Netherlands India was at this time regarded as a part of the Napoleonic Empire, with which Great Britain was at war. A British naval squadron arrived in Moluccas in February 1810 and captured Amboyna, Banda, Ter nate and other islands. In 181I a strong fleet equipped by Lord Minto, then governor-general of India, captured Java. Raffles (q.v.) was appointed lieutenant-governor and he introduced many important changes in the departments of revenue, commerce and judicature. He was succeeded by John Fendal, who in 1816 carried out the retrocession of Netherlands India to the Dutch, in accordance with the Treaty of Vienna (1814).
Restoration and Reform of Dutch Power, 1816-1910.—The whole history of the archipelago was changed by Raffles' occu pation of Singapore in 1819, as a means of preventing the Dutch from acquiring a monopoly of trade throughout Malaya and with China. Questions at issue between Great Britain and the Nether lands were settled by treaty in 1824. The Dutch were given almost entire freedom of action in Sumatra, while the Malay peninsula was recognised as within the British sphere of influence.
The reform movement inaugurated by the commission of 1803 was resumed in 1830, when Governor-General Johannes van den Bosch was appointed governor-general (see JAVA). The reform movement was aided by the publication in 186o of Max Havelaar, a romance by E. Douwes Dekker (q.v.), which contained a scath ing indictment of the colonial system.
The extension of Dutch political power—notably in Java, Sumatra, Celebes, the Moluccas, Borneo, the Sunda Islands and New Guinea—proceeded simultaneously with the reform move ment, and from time to time involved war with various native states. A large expedition was sent to Lombok in 1894, and almost the whole of that island was incorporated in the Dutch dominions. A thirty years war with Achin (see SUMATRA) began in 1873.