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Swedish East India Company

The Swedish East India Company (Swedish: Svenska Ostindiska Companiet or SOIC) was founded in Gothenburg, Sweden, in 1731 for the purpose of conducting trade with the far east. The venture was inspired by the success of the British East India Company and the Dutch East India Company and grew to become the largest trading company in Sweden during the 18th century, until it folded in 1813.

Background

The roots for the new company were more than a hundred years back. As early as 1626 the Dutchman Willem Usselincx got royal privileges from the Swedish King for a trading company, but wars and hard times had however stopped the company before it launched any ships to the Far East. Another attempt was made by pirates sailing out from Madagascar, as they thought Sweden better suited as a base. They offered solid financial rewards, and negotiations were well advanced with the Swedish King Karl XII at his camp in 1718 during his campaign towards Norway. With the king's death the venture folded.

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.

Establishing the SOIC

In 1729 the Scottish merchant Colin Campbell got help for setting up a company with the Swede Henrik König, after initially discussing the idea with Niclas Sahlgren. The reaction from the Swedish government was reluctant: the failure of a similar company based in Ostend in the Austrian Netherlands boded ill for the Swedes' competition against the main powers. König took the matters to the Swedish parliament and succeeded, gaining royal privileges for the company on 14 January 1731, initially for a period of 15 years. Among the rights were:

  • The company would have the right to all trade and shipping east of the Cape of Good Hope
  • All departures and arrivals should be out of Gothenburg (Göteborg)
  • The Swedish state was to have 100 riksdaler on each shipment, plus taxes.
  • In 1712 100 riksdaler was worth 1200 mark
  • The cargo was to be auctioned off in Gothenburg on arrival
  • The company could use as many vessels it wanted, but they were to be built and outfitted in Sweden
  • The ships were to fly the Swedish flag and have Swedish ships papers
  • The company had the right to issue shares to finance the trading trips
  • Goods and stores needed for the company were exempted of Swedish customs
  • The company's officers would have the same authority as Swedish naval officers
  • The crew on the company's ships was exempted from the Swedish military service
  • The company had the right to defend itself, to "meet violence with violence"
  • The company was to maintain secrecy on finances and shareholders

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 first expedition

The driving force was the Scottish trader Colin Campbell, who was knighted by the Swedish King and moved to Gothenburg to organise the first expedition. It sailed in 9 February 1732, on the vessel Friedericus Rex Sueciae, with Campbell onboard, also appointed ambassador to the Chinese court. The captain was Georg Herman af Trolle, both he and Campbell had previously visited China. Altogether the crew was around one hundred.

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.

Overview of expeditions

During its existence from 1731 to 1821 the SOIC launched 132 expeditions. Of these a total of 8 ships were lost, totally or partially. Probably the sorest loss was the "Götheborg" in 1745, as it sunk just off Älvsborg Fortress on the entrance to Gothenburg; it had managed to get safely to China and back. Even though most books were burned its evident that the voyages made huge profits for the shareholders, and many Swedes became wealthy due to the SOIC.

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.

Revival of one SOIC vessel

In 1993, a project to recreate the "East Indiaman Götheborg" and sail her from Gothenburg to Canton was started. The project is today run by a firm that uses the same name as the original company. The vessel was reconstructed and sailed in October 2005 for China, with a mixed crew of professionals and students.

See also

External links

References

  • Frängsmyr, Tore (1976) Ostindiska Kompaniet Bokförlaget Bra Böcker AB Höganäs

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