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In 1720, a fort was constructed on Flag Island (later to be called Fort Island). However, when Laurens Storm van Gravesande arrived as secretary to Commander Gelskerke in 1738, he immediately criticised its architecture and was vocally against its use. He set about to rebuild the fort on Flag Island and by 1743 work had progress so much that the seat of Government was moved to this new location. The fort itself, named Nova Zeelandia, was completed in 1744. The establishment of this sound means of defence gave confidence to planters who occupied lands upriver to abandon them and begin cultivation on lands down river. More settlement and cultivation of the coastal areas began with the arrival of small farmers from the English colonies in the West Indies.

Gravesande was appointed Commander of Essequibo in 1742 on the death of Commander Gelskerke. He tried to encourage Dutch settlers to the colony but few came even though they were granted a concession of no taxation for ten years. Gravesande then granted the same concession to English setters who seized the opportunity and migrated to Essequibo.

He also organised the free planters into a College of Keizers or Electors whose task was to nominate free planters to fill vacancies in the Council of Policy and the Council of Justice.

Sugar cultivation provided good profits, and soon plantations began to be established on the coastal plain, east of the Essequibo River. Here the land was fertile, and to obtain maximum profits, the Council granted large areas of land to planters. However, because of the low level of the land, an elaborate system of drainage and sea-defence was necessary. The planters themselves had to finance the building of this system which was enabled by the large profits that sugar was earning in the eighteenth century.

European businesses invested capital in the sugar plantations which continued to grow in number as the years went by. But sugar cultivation needed a large supply of labour and slaves brought from Africa filled this need. However, at first there was a shortage of slaves due to the fact that little attention was paid to health conditions and there were not many female slaves to ensure natural increase.

While all these were happening, there was a running battle between the Zeeland Chamber (one section of the West India Company) and the governing local Council of Ten which ran the affairs of Essequibo and, later, Demerara. From 1675, the Council refused to accept that the Zeeland Chamber could decide on the internal government of the colony. Since the Zeeland Chamber failed to send ships with supplies on a regular basis, the Council of Ten invited ships from all the Chambers (of the Company) to trade with Essequibo in order to obtain necessary goods. The Zeeland Chamber then proclaimed that only ships receiving its permission could enter Essequibo. The Council never liked this decision and little effort was ever made, even by Gravesande, to halt the smuggling that ensued. Due to the great need for slaves and consumer goods, smuggling of these commodities was rampant between the West Indian islands and Essequibo. This dispute between the Chamber and the Council dragged on and it seriously affected the administration of both Essequibo and Demerara.

The dispute between the Council and the Zeeland Chamber as to which body controlled the internal affairs of Essequibo and Demerara continued until August 1770 when the States General referred the issue to the Stadtholder of the United Provinces. The Stadtholder ruled that the trade to Essequibo could not be controlled by the Zeeland Chamber alone, but special privileges were granted to this Chamber because it was responsible for establishing the colony. He also ruled that the West India Company would not grant permits for trade in Essequibo and Demerara unless the Zeeland Chamber sent sixteen ships there with goods every year.