The story
Founded by Colin Campbell, Henrik König and Niclas Sahlgren on Jun 14, 1731, in Gothenburg.1
Background
Sweden was the last of the more prominent seafaring European nations to engage in the East India Trade. The royal privileges for the Swedish East India Company (SOIC) were granted almost a century after the other European trading companies were established.
With the advent of the East India trade in the 17th century, Chinese and Indian goods were imported to Sweden. Drinking tea, wearing Indian Chintz clothes and having Chinese objects became the height of fashion among Swedish socialites and the middle class. Culture, philosophy, art, agriculture, and architecture were also studied and copied. The most prominent example of this is the Chinese Pavilion at Drottningholm, which was followed by smaller parks like the one built by Jean Abraham Grill at Godegård. This culminated during the 18th century, when many Swedish scientists and politicians even suggested that Sweden should be governed by intellectual bureaucrats, "mandarins", led by a sovereign king in a Chinese manner.
Early attempts
The first attempt of organizing a Swedish East India trading company was made by a Flemish merchant, Willem Usselincx. During the 17th century, the Dutch merchants dominated the newly founded Gothenburg on the west coast of Sweden. The town was considered ideal for Sweden's international trade since most of the goods were transported on ships and this was the only major Swedish port accessible without having to pass the Danish customs at Øresund. On 14 June 1626, Usselincx received royal privileges for a trading company for twelve years, from the Swedish King Gustav II Adolf. The privileges included clauses about the ethics of trading with foreign, indigenous people. The first priority was to establish friendly, long-term relations that would be mutually beneficiary for both parties. The venture was supported by a number of prominent Swedes, including the King himself, but raising the necessary money proved harder. Political difficulties and Sweden's participation in the Thirty Years' War, where King Gustav II was killed, put an end to the plans. The resources were instead used for a smaller company, trading within Europe.
The next attempt to start a trading company was made in 1661, by German merchant Erlenkamp, who suggested a route over the Arctic Ocean, the Northern Sea Route, past Japan and further on to China and India. The aim was to bypass the Spanish and Portuguese blockades. The plan did not gain any support as the ice barriers proved even more difficult. At the end of the 1660s, a petition from diplomat and London resident Johan Leijonbergh was sent to the Swedish King Charles XI regarding one Olle Borg who had worked in the Dutch East India Company for eighteen years. Borg stated that if there was a war between Sweden and Denmark, he could deliver the Danish fort in Tharangambadi, India, to the Swedes. Knut Kurck, Peter Schnack and Johan Olivecreutz were appointed directors for the company, but the political unrest in Sweden at that time plus trouble with actually getting the money that had been promised from the investors thwarted this venture as well, and in 1674, the charter was dissolved. Residual resources were used to send two ships, the Solen (the Sun) and the Trumslagaren (the Drummer), to Lisbon for salt.
A later attempt to establish the Swedish trade on the East Indies was made by pirates sailing out from Madagascar. After having attacked other trading ships, they had become wealthy and were looking for a place to settle down and invest their money in legitimate enterprise. The pirates numbered about 1,500 and commanded a considerable and well-armed fleet of ships. They started by offering the Swedish King Charles XII half a million pounds sterling and 25 armed ships for his protection, but the matter was not resolved. In 1718, representatives for the pirates met again with the King at his camp during the campaign against Norway. The new offer was for 60 ships, armed and stocked with goods, if the pirates were allowed to settle down in Gothenburg and start a trade with the East Indies under the Swedish flag. One privateer by the name of Morgan actually obtained a charter for an East India Company and a letter of appointment for himself as governor over the colonies that could be the result of such an enterprise. When the King was shot and died on 30 November 1718, the venture folded.
Sweden after the Great Northern War
Sweden was impoverished after the Great Northern War, and trade was seen as an option for rebuilding the country. Opinions about whether trade with the East Indies would be profitable enough diverged. The greatest concern was that Sweden would not have enough resources to defend the company's ships and trading posts. The trading companies from Britain, France, and the Netherlands did not hesitate to attack other ships to prevent competition. A failed attempt to start a competing trade company in Austria, the Ostend Company, was discouraging.
What finally made the Swedish venture possible was the strong support from foreign traders and merchants, foremost British but also Dutch, who had been shut out from the companies in their respective countries. The majority of the investors, as well as the buyers of the goods imported by the company, were foreigners.
Granting permission for a charter was not entirely uncontroversial during that time when mercantilism, which advocated regulations so that the production of export goods was promoted and import reduced, was the dominant idea for trade. Opposition became even more apparent after the first journey made by the ship Friedericus Rex Sueciaes in 1735. Demands were made in the Riksdag for sanctions and restrictions for the trade company, a number of pamphlets were written, arguing that Swedish steel and timber were wastefully being exchanged for such "worthless goods" as tea and porcelain. One of the most ardent critics against the charter was Johan Arckenholtz. He even spoke of the moral aspects, saying that the Swedish population "would be weaned from work and crafts and lose their health, strength and spirit by using products from a warmer climate".
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The emerging Swedish textile industry was also threatened by the trade, and the new company soon promised to refrain from shipping textiles. Of sixty-one successfully returning voyages between 1733 and 1767, only three (in 1735, 1740, and 1742) carried cotton and silk textiles and raw silk from Bengal. Some opposition may have been rooted in pure jealousy of the profits the SOIC were making from the trade. Those who supported the establishing of a Swedish trade company argued that if people wanted goods from China, they were going to buy them anyway and it would be better to import them using Swedish ships and trading company, and thereby keep the profits within Sweden.
First octroi (1731–1746)
The first three directors of the SOIC was Henrik König, Colin Campbell and Frans Bedoire. König was a merchant from Stockholm. Bedoir was the son of a French wigmaker who had relocated to Sweden to import French wine. Campbell was the driving force for the whole enterprise since he had gained firsthand knowledge of the China trade as supercargo for the Ostend Company. He was knighted by King Frederick I and moved to Gothenburg to organize the first expedition.
The first two expeditions proved dangerous and complicated since the rest of the trading nations did not take kindly to Sweden's attempt to engage in the trade. The first ship was seized by the Dutch and the second was destroyed by the British and the French. This fueled the opposition against the trade in Sweden and the SOIC started a massive PR-campaign about the benefits of trading with the East Indies. They also agreed to make certain concessions about what goods to import from China. To avoid confrontations with the other trading countries, the company refrained from seeking trade with India and focused on China instead.
A total of 15 expeditions supported by 25 ships were launched during the first charter. Four of the ships were lost at sea. Only three of these expeditions went to Bengal; the rest sailed directly to Canton.
Books and accounts from the first expeditions are missing, partially or completely, but starting with the eighth expedition (the ships Fredericus Rex Sueciae, Stockholm and Riddarhuset in 1740) until the closing of the last in 1748, records were so complete that an estimate of the profits could be made for these. The total sum of the income from the imported goods was 24.649 million riksdaler (approx. US$1,222.6 million), making the dividend about 39% in average. During those years the share of the profit for the five directors totaled 550,000 riksdaler (approx. US$27.28 million) and the total sum that went to the 53 supercargoes was about 800,000 riksdaler (approx. US$39.67 million).
The unwillingness of the established trading nations, primarily Britain, the Dutch Republic and France, to help and acknowledge the SOIC during the first years were founded on the suspicion that the company was merely a front for those merchants who wished to circumvent the rules and regulations of the East India trade in their own countries. These suspicions were well founded. All of the initiators of the SOIC were non-Swedes or of foreign descent. Swedish law made it possible for anyone who invested in the company to receive Swedish citizenship and most of the crew aboard the ships during the first and the second octroi were foreigners. Of the 53 supercargoes during the first octroi, about 22 percent were Swedes.
First expedition
The first expedition was organized by Campbell. His reconstructed diary of the voyage, rediscovered in 1986, contains a complete account of the expedition. It started on 9 February 1732, as the ship Friedericus Rex Sueciae sailed out from Gothenburg. Campbell was the first supercargo onboard and had also been appointed ambassador to the Chinese court by the King. The other three supercargos were English: Charles Graham, Charles Morford and John Pike. The captain of the Fredericus was Georg Herman af Trolle, a seasoned sailor who had been brought up in Amsterdam and previously served on British, French, Dutch and Danish ships. He had also been employed as a privateer by the town of Middelburg. Both he and Campbell had previously visited China. The crew for the ship was approximately one hundred men.
The expedition started well – passing the Cape of Good Hope and crossing the Indian Ocean, the vessel arrived safely in Canton (now known as Guangzhou), the trading port for foreigners in China at that time, in September 1732. For the next four months, trading was carried out successfully. Initially, different spices were the primary commodity along with tea, silk and miscellaneous luxury items, but on later voyages, porcelain and tea made up the bulk of the trade to meet the demand for such goods back in Europe.
On its return, the vessel was stopped by the Dutch between Java and Sumatra, and brought to Batavia. Campbell protested and produced his papers, but the Dutch argued that they had suspected the vessel of falsely flying the Swedish flag. The expedition was eventually released, but time was lost and the winds unfavourable. Many of the seamen died en route and the ship had to recruit new Norwegian sailors upon reaching the coast of Norway.
Almost one and a half years after the departure, the vessel returned to Gothenburg on 27 August 1733. The expedition was a huge economic success, the auction bringing in some 900,000 Swedish riksdaler. The dividend paid was 75% of the capital invested. According to the ledgers of the Gothenburg Main Customs Cambers for Sea Trade in 1733 to 1734, goods for 518,972 riksdaler were exported; the rest stayed in Sweden.
Second octroi (1746–1766)
The charter was renewed in 1746, 1766 and 1786, creating the Second, Third and Fourth Octrois.
Under the terms of the second charter 36 ships were sent out, three to Surat, the rest to Canton, and only one was lost.
The profit for the shareholders during the first charter generated large interest for a second charter. Except for the foreign investors, most of the merchants during the first charter had been from Gothenburg. With the second charter, a number of merchants from Stockholm started to show interest in the trade. On 23 September 1745, a request for a second octroi was presented by the firm Abraham and Jacob Arfwedsson & Co. They received a preliminary grant for it. A couple of weeks later, a second request for an octroi was made by the company Anders Plomgren & C:o and partner Carl Broman. The directors from the first charter submitted their request on 20 January 1746.
A commission to investigate the applications was appointed on 24 March 1746, and some weeks later on 14 May, they concluded that the directors from the first charter were best suited to lead the second as well. However, the number of directors was increased from three to at least seven. In addition to Colin Campbell, Niclas Sahlgren and Teodor Ankarcrona, the directors were former secretary of the Executive Board Magnus Lagerström, the Stockholm merchants Anders Plomgren and Abraham Grill. These six members of the board later elected Claes Grill, Jacob von Utfall Jeanson, S. N. Wenngren and Nils Ström as directors.
The second charter was for 20 years and the directors followed the ways of the first octroi. They collected the means from the investors to fund each of the first 14 ships separately. In 1753, the company was reorganized into a joint-stock company by creating a fixed fund where anyone could subscribe for shares, but not for less than 500 riksdaler in silver.
Even after the company went public, it still retained its secrecy regarding the business. The management deliberately withheld information from the shareholders or lied about how profitable parts of the business were. The directors said that the profit from the trade with China was declining and that the company should be granted permission to send a ship to India, contrary to the regulations for the trade so far. An exemption was granted in 1749, and a ship was sent to Surat in India. On its return in 1752, that ship yielded a profit of 103% and two more ships were sent to Surat. The British and Dutch controlled most of the trade in the town and did everything to prevent the Swedes from doing business there and several incidents occurred. The company decided to refocus in the China trade instead. That trade yielded an average profit of 30–40% during the second charter.
Third octroi (1766–1786)
When it was time to renew the charter in 1766, the first directors were Robert Finlay of Irish and Scottish origin, Swedish Fabian Löwen and Georg Herman Conradi of German descent, all residing in Stockholm. With this the power within the management shifted from Gothenburg to Stockholm, where two new ships also were bought. The Swedish government extorted a loan at 6% interest to the SOIC to be paid during 1766–69, estimated in 1813 to have been the equivalent of £100,000, and another, interest-free, for half of that sum, to be repaid out of import duties, in essence an advance payment of duty.
During the third charter, 39 voyages were made to Canton and none of the ships was lost or damaged, but the profit from the trade with China was declining. The turning point for Sweden came in 1780 during the American Revolutionary War, when France, the Dutch Republic and Spain declared war on Britain and were subsequently unable to trade with China. The price of tea fell in Canton due to the lack of demand, but went up in Europe where Sweden was now practically the only supplier of tea. This was reflected in the total sum of the profit for the third octroi, which was 58% higher than the previous two.
The goods that were exported from Sweden also changed during that period. The former main products such as iron, wood and tar are missing from the freight lists. Instead the biggest item was silver, followed by English lead and Swedish woollen cloth or broadcloth. During the later part of the third charter, it became common practice for one of the supercargoes to stay on permanently in Canton for years. One of those was Jean Abraham Grill, who made ample use of his time there for his own private affairs, a practice that was continued by other resident supercargoes. Carl Linnaeus and the Royal Swedish Academy of Sciences also made use of the company's ships. They sent out scientists and researchers to gather information about animals and plants from all the places that the ships visited and to keep detailed journals. The company would not allow idle passengers on board, so most of the scientists were given "crash courses" in theology and were hastily ordained to serve as ship's chaplains. These arrangements started during the second charter and peaked during the third.
In 1758, the Swedes were finally able to let their ships anchor and replenish provisions at the Cape (now known as Cape Town), a port controlled by the Dutch, due to political changes in Europe. But with the end of the American war in 1783, Sweden lost its advantage in the tea trade and the decline of the company resumed. The SOIC's supercargo in Canton in 1777, Peter Johan Bladh, reflected on this and suggested that an emissary should be sent to the emperor of China with a proposition that the European trade with China should be conducted through one single European company, administered by Sweden. Bladh argued that unless efforts were taken to oppose them the British would dominate European trade with China the same way they had done in India by "securing an unbearable domination" there. The request was never sent since the directors wanted to continue the trade in the same way as before.
The mercantile expansion of the SOIC during the third octroi provided a setting for Jacob Wallenberg's comic Min son på galejan ("My Son on [sic] the Galley") written during the 18-month round trip to Canton in 1769–71. Among his other joking and casual racism, Wallenberg parodies the serious accounts published by traveling naturalists in the wide web of Carl Linnaeus' correspondence.
Fourth octroi (1786–1806)
The SOIC continued into the fourth charter, much the same company that had existed during the last part of the third. The management was the same, a fixed fund existed and some of the fees, taxes and regulations were altered. During this octroi, the company owned 12 ships that were sent out on a total of 31 journeys. Three of the ships were lost and one was damaged and sold. The shareholders received no dividend during the fourth octroi.
The profit from the trade continued to decline, much because of the new rules and regulations regarding the import of tea to England. Most of the SOIC's earlier tea cargoes had been smuggled to England, but the profit no longer made up for the risk of such an undertaking. Talk of shutting down the company started in 1789, and after 1804, no more ships were sent out from Sweden. On 27 June 1808, the company informed the shareholders of the situation and on 18 May 1811, the company of the fourth charter was declared bankrupt.
From Wikipedia’s article on Swedish East India Company, shared under CC BY-SA 4.0.4