The Swedish East India Company was a chartered trading company based in Gothenburg, Sweden. Established in 1731, the company was entitled to conduct trade with India, China, and the Far East. The venture was inspired by the success of other European trading companies at the time. This made the city of Gothenburg a central hub in Europe for trade in Eastern products. The main goods were black pepper, spices, silk, tea, furniture, porcelain, precious stones, and other distinctive luxury items. Trade with India and China saw the arrival of some new customs in Sweden. The cultural influence increased, and tea, rice, arrack (a drink made from fermented sap or sugarcane) and new root vegetables started appearing in Swedish homes.
It grew to become the largest trading company in Sweden during the 18th century: a total of 132 expeditions were carried out with 37 different ships. The company folded in 1813; nevertheless, it left clear footprints that can still be seen in Gothenburg.
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 14June 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 30November 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".
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.
Establishing the SOIC
With the suspension of the charter for the Ostend company by the Emperor Charles VI in May 1727, the investors in that company had to look for other ways to be part of the profitable East India trade and they now looked to Sweden.
Scottish merchant Colin Campbell, formerly active in the Ostend Company, met with Swedish Niclas Sahlgren during Sahlgren's stay in Amsterdam in the late 1720s. Together they made plans for a Swedish trading company, but it was evident that Campbell was the driving force in the enterprise. Since foreign investors were met with suspicion in Sweden, they needed a respectable Swede to front the company. That person would be commissioner Henrik König, a Swede of German (Bremen) origin.
In 1729, Henrik König submitted an application for a charter for two ships. He supported his request on the charter given previously to other applicants, but the reaction from the Swedish government was reluctant: the closing of the Ostend Company in 1731, following British diplomatic pressure as part of the Treaty of Vienna, boded ill for the Swedes' competition against the main powers when trade and politics were so intimately associated. König took the matters to the Swedish parliament and succeeded, gaining royal privileges for the company on 14June 1731, initially for a period of 15 years. These privileges were the First Charter, or the First Octroi.
Royal charter The charter was given to Henrik König & Compagnie and consisted of eighteen precise paragraphs on how the trade should be conducted:
The company would have the right to all trade and shipping east of the Cape of Good Hope as far as Japan excepting the port factories of other European nations, unless free consent had been obtained in advance. All departures and arrivals should be out of Gothenburg, and cargo was to be auctioned promptly in Gothenburg on arrival. The Swedish state was to receive 100 riksdaler per läst (c. 2.5 tonnes) and two riksdaler per läst to the city of Gothenburg, on each shipment, plus taxes. The company could use as many vessels it wanted, but they were to be built and outfitted in Sweden unless something occurred that made it necessary to buy material from other countries. The ships were to fly the Swedish flag and carry Swedish ships' papers. The company was free to use as much money as needed for the expeditions and were entitled to issue shares to finance the venture. The company was forbidden from bringing Swedish coined silver into or out of the country. They were, however, allowed to trade with any other kind of silver. Once the ships were loaded for departure, and when they returned, they were free to enter any port in Sweden. All the equipment, armament goods, and stores needed for the company were exempted from Swedish customs. Goods from the ships were considered prioritized, and could be transported or stored toll-free on any road or in any town. The company's officers would have the same authority as Swedish naval officers. The crew were exempted from service in the Swedish military. The company's officers had the right to arrest and detain anyone in the crew who tried to desert or run away. When the cargo from the ships had been sold, the buyers should not have to pay any extra fees for the goods. The board of the company should always consist of at least three directors. The company was free to employ as many men as needed for the ships. They could be Swedes or foreigners, as long as they were the most skilled. The company had the right to defend itself, to "oppose force with force". The company was enjoined to maintain secrecy on its finances and shareholders.
The issuing of shares was such that early subscribers subscribed for each voyage and had the option of withdrawing their capital after its completion, in a traditional form of corporate trading partnerships; in 1753, this having been found inconvenient, it was determined that capital should be considered invested in the company as a whole, on the model of other East India companies. A partner desiring to withdraw his funds was responsible for finding another willing to substitute capital of his own.