Sweden was impoverished after the Great Northern War, and trade was therefore seen as an option for rebuilding the country. Opinions however were mixed, as steel and timber were used for trading; was it not a waste to exchange such goods for worthless tea and porcelain? The emerging Swedish textile industry was also threatened by the trade, so that the new company promised to refrain from it.
To start a new trading company that would venture into the interests of European powers France and Britain was not easy, but at the same time the monopoly given to trade companies was a help. The Scottish and English merchants left out of the British East India Company were more than eager to have their share of the trade, by financing the new Swedish company.
The reasons behind the last provision were both internal and external: British citizens were forbidden to engage in trade on Asia and within Sweden suspicions ran high against foreigners, as they were thought to siphon off Sweden's riches. Jealousy from merchants not in on the company also played a part. Thus the books were burned after they had been closed and revisioned; effectively concealing the company's dealings.
The letter of privilege was translated into French and Latin and distributed to the major powers. Their reaction was reluctant and they made clear that they considered the new company a most unwelcome competitor. The Swedish ambassador to Britain did not even dare to present the letter to the British government. Pledges of assistance at their bases if needed were not answered.
The expedition started well – the Cape of Good Hope was passed, the vessel arrived safely in Canton (Guangzhou), the main trading port in China at the time, and trading was carried out successfully. Initially, the goods sought were spices; however demand soon meant that porcelain and tea made up the bulk of the trade.
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 falsely flew the Swedish flag. The expedition was eventually released, but time was lost and the winds unfavourable. Many of the seamen died on route; so many so that the ship had to recruit Norwegian sailors upon reaching the coast of Norway.
On 27 August 1733 the vessel returned to Gothenburg, almost one and a half years after its departure. The voyage was a huge economic success, the auction bringing in some 900,000 Swedish riksdaler. The dividend paid was 25% of the capital.
From Gothenburg the vessels carried iron, both in bars and processed, as axes, anchors, steel etc. Copper was also brought, as was timber. The expeditions called at Cádiz where they traded goods to acquire Spanish silver, in the form of coins, "pesos duros".
The main cargo from China as of value was tea, in an overview from 1774 its share was about 90%. Much of the tea was re-exported and smuggled into England, undercutting the prices of that country's own trade monopoly. The other important item was porcelain, accounting for about 5% of the cargo's value. Over the years its estimated that some 50 million pieces of porcelain was imported by the SOIC.
The return on expeditions could be around 25-30% of capital invested, but up to 60% was achieved. Much depended on the merchants and the captain; the merchants had to close a large number of favourable deals, and the captain had the extremely difficult task of safely sailing the ship to China and back. The vessels were around 50 meters long, and besides cargo and men each also carried around 25-30 guns for self-defence. The last vessel returned to Gothenburg in March 1806, and even though the company had a privilege until 1821 it ceased to exist in 1813.
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