The independence of the Republic of the United Provinces of the Netherlands was recognized in 1648 in the treaty that ended the Thirty Years’ War. Rejecting the rule of a monarch, the Dutch adopted a system of republicanism, whereby power rested in the hands of the people and was exercised through elected representatives. An oligarchy of wealthy businessmen called regents handled domestic affairs in each province’s Estates, or assemblies. The provincial Estates held virtually all the power. A federal assembly, or States General, handled foreign affairs and war, but all issues had to be referred back to the local Estates for approval, and each of the seven provinces could veto any proposed legislation. Holland, the province with the largest navy and the most wealth, usually dominated the republic and the States General.

In each province, the Estates appointed an executive officer, known as the stadholder. Although in theory freely chosen by the Estates, in practice the reigning prince of Orange usually held the office of stadholder in several of the seven provinces of the republic. Tensions persisted between supporters of the House of Orange and those of the staunchly republican Estates, who suspected the princes of harboring monarchical ambitions.

Global trade and commerce brought the Dutch the highest standard of living in Europe, perhaps in the world. Salaries were high, and all classes of society ate well. The moral and ethical bases of Dutch commercial wealth were thrift, frugality, and religious tolerance. Jews enjoyed a level of acceptance and assimilation in Dutch business and general culture unique in early modern Europe. (See “Individuals in Society: Glückel of Hameln.”) Tolerance contributed to profits by attracting a great deal of foreign capital and investment.