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The Danish Asiatic Company, 1732–;1772Kristof Glamann aa CopenhagenPublished online: 20 Dec 2011.

To cite this article: Kristof Glamann (1960) The Danish Asiatic Company, 1732–;1772, Scandinavian Economic History Review,8:2, 109-149, DOI: 10.1080/03585522.1960.10411426

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The

SCANDINAVIAN ECONOMIC HISTORY

REVIEW

VOLUME VIII· No. 2 . 1960

The Danish Asiatic Company, 1732-1772*

By PROFESSOR KRISTOF GLAMANN, COPENHAGEN

The Foundation of the Company

The reorganisation of Danish commerce with the East Indies which was

carried through in 1732 by the foundation of the Asiatic Company (Asiatisk

Kompagni) differed in many respects from previous attempts to reorganize

this trade. The main difference lay in its success. Not only was Copenhagen's

overseas trade immediately revived but as a result of the foundation of the

new company a contact was established between Denmark and Asia of a

much more regular character than that which had existed in the seventeenth

and very early eighteenth century. In contrast to previous arrangements,

direct voyages to China constituted the predominant feature of the new

traffic. The very foundation of the company indicated that the Dutch were

no longer capable of putting effective obstacles in the way of Danish

commercial enterprise. It is true that Holland-together with England and

France.......succeeded in blocking the plans put forward in 1728-9 by the

Amsterdam merchant Josias van Asperen for the foundation of an East

India trading company at Altona, on the Elbe, which was to operate as

a branch of the Danish company. The Dutch, having just succeeded

in getting the Belgian Os tend Company dissolved, were on their guard

against new competitors. They also attempted to prohibit the insurance in

the Netherlands of Danish ships trading to China. The Altona project had

to be abandoned, but trade to the East Indies from Copenhagen could not

be prevented. Fears that the dissolved Ostend Company would reappear

• This paper is a revised and slightly abridged version of an article published in 1949 inthe Danish Historisk Tidsskrijt. The author wishes to thank Professor Holden Furber of theUniversity of Pennsylvania for informative discussions and generous help given in connectionwith the present paper.

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110 KRISTOF GLAMANN

in Danish disguise proved to be unfounded. A few employees of the Ostend

Company did indeed go into Danish service-one of them, the supercargo

Pieter van Hurck, later became a member of the Board of Directors of the

Asiatic Company-but a transfer of capital and plant to Danish territory was

out of the question. The Asiatic Company also differed from previous

Danish East India companies in its system of government. Its capital was

protected and favoured more effectively than before, and a hitherto

unknown freedom to arrange its own organisation was conferred on it.

The Company was granted a monopoly of trade beyond the Cape of

Good Hope, and it took over the remnants of the Danish factories in India.

In this way the Company had a sort of governmental function assigned to

it, as it was to maintain the factories, if possible try to develop them, and

defray the expenses of the military forces in the East. In fact, however, the

Company set about the performance of these military tasks only with

reluctance. To its managers in Copenhagen the decisive considerations

were mainly commercial. Success depended on many factors. Amongst the

most important were: effective organisation; the ability of the Company

to provide sufficient funds to buy return cargoes in the East and of the

factories to supply them in time; the results of the sales of imported wares;

and prevailing credit conditions.

In the following pages the history of the Company during the first period

of its charter, the forty years from 1732 to 1772, will be examined. Par­

ticular attention will be paid to its activities in Copenhagen, where it

unquestionably occupied the leading place among the Danish trading com­

panies of the eighteenth century; its activities in Asia will be considered

solely from the point of view of the trade between Asia and Europe.

The Share Capital and its Ownership

As to the organisation of the Company a distinction was made in its

charter between a 'continuous' and a 'circulating' fund."

The former was the share capital proper, fixed at 400 shares of 250 rix­

dollars each, which in the course of time was to be supplemented by the

receipts from the factories, by a 5 per cent duty on the cargoes sent to the

1 See the original charter in RA. (Rigsarkivet, Copenhagen), Kornpagniet's arkiv, General­forsarnlingsprotocol, 28 July 1732. On the economic organisation of the Company see Sections

1-14.

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THE DANISH ASIATIC COMPANY 111

East and a 10 per cent duty on the proceeds of the imports, and by any

credit balance that might appear after a dividend of 5 per cent had been

paid to the shareholders.

This share capital was mainly owned by a number of Copenhagen

merchants, prominent officials, and representatives of the nobility.s It is

difficult to classify these shareholders in detail, for their activities were often

both numerous and varied, combining land-ownership, commerce and ad­

ministration. So the motives which may have induced the capitalists of the

time to participate in the Company were likely to have been equally varied."

Some of the shareholders must be regarded as active, viz. those directly

interested in the trade to Asia, such as the merchants and a few noblemen

and officials. This was the dominant group at the outset and it continued

to play a leading role. Other shareholders were passive, regarding their

holdings as investment securities and having no other interest in the trade

itself. Their number included several noble landowners, a growing number

of female shareholders, and some foreigners. This category increased as

dividends rose, and at the same time certain changes occurred in the distribu­

tion of the shares. This is illustrated in Tables I and 2, in which the share

capital is analyzed according to number of shares per head in 1732, 1747,

and 1753.4 Although in each of the years there were some big shareholders

• The registers of shareholders proper have been lost. The following information is basedon some details of the shareholders from 1732, 1737, 1744, and 1753, RA., D. Kanc., EsmarckskeArkivaflev., 1730-61, Akt. ang. del. kg!. octr. Asiat. Komp. af Geheimeraad A. G. Moltkes Ark.som Przeses for Asiat. Komp. (quoted in what follows as Esmarck I).

The biggest shareholders in 1732 were: Desmercieres (42 shares), Count Gyldensteen (20 1/ . ) ,

the King (17+ the Royal Family ll), Fr. Holmsted (ll + 16 for others), Carl Adolf v. Plessen(13), Chr. Ludv. v. Plessen (10+ the v. Plessen family another 14), U. A. v. Holstein and hiswife (10+ the v. Holstein family another 4). In the next rank were Christoffer Blome til Hagen,Major General Reventfelt, and Peter van Hurck who subscribed for 6 shares each, the

Councillors of Justices Bartholin, Jacobi, and Bing, Madame Herman Fabritius, Corris Klau­rnann, and Hans Jergen Soelberg, 5 shares each.

The greatest shareholders in 1753 were: Desmercieres (77 shares), the King (76), Carl AdoIfv. Plessen (40), A. G. Moltke (20), Lerche (20), von Schulin's heirs (20), Gyldensteen's heirs (32),Bentzon (21), Reventfelt (20), Konnemann (22), Soelberg (20), and Chr. Blome til Hagen (24).

• Some of them were connected by family ties, and some of the shareholders belonged tothe Reformed Church. The family ties sometimes point towards Holland, thus suggesting alinkage with the Company's financial transactions with that country. The families of Fabritiusand Wewer, for example, were connected with the Amsterdam banker's firm of van Orsojthrough the family of Weiler just as the Pelts through the Weslingh family were related tovan Orsoj (cf. Slam-Boom der Pelten, 1755, Gem. Arch., Amsterdam). These family groups,for that matter, were also connected with the other Danish companies and with the bank ofissue founded in 1736.

• In 1744 there was an issue of shares by which the total number was increased to 1,600.

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112 KRISTOF GLAMANN

Table 1.

Distribution of shareholding, 1732.

Number of shares Number of persons Total number of shares

More than 10 6 11315-9 11 582-4 58 ISO!1 71 73!Less than I 12 4!

In all 158 400

who owned a considerable part of the total share capital, in 1753 the total

number of shares was more evenly distributed than previously.

As mentioned above, the shareholders had been given, by the terms of

the charter, considerable freedom to arrange the internal structure of the

Company. In accordance with this it was agreed that the Company should

have a Board of Directors of five members, three of whom were to be

merchants, elected by the general meeting to carry its decisions into effect.

In order further to stress the dependence of the Directors on the general

meeting, the latter elected a consultative and supervisory body, the so-called

'main participants' (houedparticipanterj, who were to supervise the actions

of the Directors. At the general meeting voting took place, votes cast being

related to shares held, though the number of votes was limited in the case

of the big shareholders.s Only rarely did the minor shareholders unite

in opposition to the big ones; throughout the period considered here the

management of the Company was dominated by the big, active shareholders."

The so-called circulating fund consisted of the capital necessary for the

purchase of ships and cargoes, together with the cost of all ships' supplies

• Cf. the regulations of the so-called Convention set up according to the charter.• At the beginning of the period the larger shareholders on the Board included the following:

Soelberg (1732-36), Klaumann (1732-39), Holmsted (1732-43), M. Fabritius (1736-45), andvan Hurck (I 745-54). During the later years we find, amongst others: J. van Hemert (1743-52),J. F. Wewer (1752-59), Blach (1752--61), J. Fabritius (1754--65), Iselin (1759--69), Falck (1761--68),C. Fabritius (1765-72), Behagen (1769-72), and John Brown (1770-72), who were all very activeas suppliers of goods and money and as buyers at the auction sales of the Company. From1732 to 1753 and from 1758 to 1772 there was also a member learned in the law on the Boardof the Company (from 1758 to 1761 this office was held by the Councillor of State Johan Fr.

Friis mentioned below), and from 1739 to 1758 there was a special. representative experiencedin seamanship. Cf. Fr. Thaarup, Historiske og statistiske Ejterretningar om det asiatiske Com­pagni (1824), pp. 50-51, and Aitoungen Apologi imod det Skrift, som under Navn af Grunde ...er udgiuet (1773).

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THE DANISH ASIATIC COMPANY 113

Table 2.

Distribution of shareholding, 1747 and 1753.---

Number of persons Total number of shares

Number of shares 1747 1753 1747 1753

More than 40 4 3 247 19320-39 17 11 400 258~19 56 62 594 6454--7 62 70 271 3001- 3 56 127 88 204

In all 195 273 1,600 1,600

and wages of seamen. This capital could not be fixed once and for all, but

depended on the trading conditions. Therefore it was decided that each

shareholder was to contribute his share to this fund in relation to the number

of shares in his possession, though everybody could decide for himself

whether he wanted to participate or not. If there was not sufficient support

among the shareholders of the Company, the Board of Directors was allowed

to try to raise capital from outside; this, however, rarely happened, as the big

and active shareholders usually subscribed for the additional amounts re­

quired. Finally it was decided that a quick settlement (repartition) with the

interested shareholders should be made after the arrival of each ship.

While the old company had been hampered by its lack of effective con­

solidation and by the general shortage of money, an attempt to remedy

this was now being undertaken by making the 'continuous' fund into a

reserve, a necessary counterweight to the unstable state of the market. It

was furthermore permitted to raise loans on the certificates of the 'circu­

lating' fund, a permission which was important in a period of scarcity of

capital.

Ships Stores and Export Cargoes

Much had to be done before each ship was dispatched to the East. The

most diverse commodities had to be obtained; for the repair of the ships,

for provisioning, and for the cargo. In the accounts of the Company a distinc­

tion is made between udredning (repairing and provisioning) and cargaison

(cargo), so that the expenditure for the former was always added to the

amount which each participant had invested in the cargo of the ship and

which usually constituted about 30 per cent of it.

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114 KRISTOF GLAMANN

The commodities were provided in various ways." Usually a kind of

competitive public tendering was preferred, prior to which the conditions

for the delivery of the goods were published. Sometimes agreements were

made with a particular supplier for the future delivery of a certain com­

modity; goods were also bought privately; and from time to another the

management of the Company, or those closely connected with it, themselves

decided to procure what was needed, hoping that the Company would

accept the goods offered. In 1752, for example, it was stated that although

tenders for French brandy and wine should have been publicly solicited,

Gysbert von Hemert had long ago provided the necessary quantity, for

which reason he was awarded the contract; to this was added: 'We do not

doubt that in fact he sells the goods at as cheap prices as possible, but

next year, God willing, tenders will be requested for wines and French

brandy as for other goods." Between these various methods of procurement

the boundaries were fluid but whatever the method the supplier enjoyed

'the usual exemption from tax and excise', which was one of the privileges

of the Company.

The goods had almost always to be delivered to the Company's head­

quarters; contract prices were, of course, fixed and only exceptionally were

they changed on delivery. On the other hand, the goods were not always

delivered on time," a lapse which was undoubtedly linked with the fact

that the suppliers were merchants who often ordered the goods from abroad

7 On the various forms of contracts see the resolutions in the minutes of the Board ofDirectors (in what follows quoted as RA., Dir. Res. Prot.),

• RA., Dir. Res. Prot., 16 October 1752.• For example, a public 'auction' of bar iron, English lead, hemp, etc., was held on 29 May

1747. Prices and time of delivery were stated (RA., Dir, Res. Prot., 29 May 1747). In the cash booksand main journals of the Company, however, the bar iron, which was to have been delivered

before the end of July, does not appear until I and 20 December. One half of the English

pannbar Sl1M dmaq ;lIIl 10 ared ~Orl1m ;lq.L ·~;lqm;l:J;la 011 ptre I lpun ~l1;lddl1 lOU S;l0P 1! Sl{ooq

aunooae ;lql U! rnq '~;lqOPO U! lS;l~ ;lql pue ~;lqUl;lld;lS arojoq P;l~;lA!PP uaaq ;lAl1q 01 SEM pE;l1to be delivered in July and August, but in the books it is not found until 22 January of thefollowing year. However, such discrepancies need not always mean delayed deliveries, for thedate shown in the cash-books and main journals is the date of payment, whereas the commodityin question may very well have been delivered some time previously. The process of paymenttook place by two stages: first came the assignment (assignationen), which was the store clerk'swritten order for payment of the amount after approving the goods supplied; and secondlypayment, according to the assignment note, by the cashier, often called 'prompt payment' and

honoured by a 2 per cent discount to the Company. The date of the 'assignment' might bedependent on the Company's own sales of imported goods. Thus on 30 May 1748 it was noted:'Payment for the goods in question will be assigned after the first sale either from Tranquebar

or China.' (RA., Dir. Res. Prot., 30 May 1748).

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THE DANISH ASIA'1'IC COMPANY 115

and therefore waited for the most favourable time when prices were low

and prospects of a large profit were high. Alternatively, they might be

engaged in other commercial enterprises occupying their capital and time.

Occasionally this meant great inconvenience to the Company, and in 1748

a clause was inserted in the regulations concerning supplies which ordered

that if the suppliers 'did not make delivery at the times stipulated, the

Board of Directors would have the same bought on the suppliers' accountand at their expense'c'?

For the victualling and 'setting to sea' of its ships, the Company needed a

wide range of goods: timber, cordage, hemp, pitch, and the like, as well as

provisions varying from 'genuine French brandy' to 'cheap pork from

Funen'. Only for the cargo, however, did figures become large and ex­

penses heavy. An analysis, by value, of the cargoes shows that for most

of the period they largely consisted of specie-a characteristic feature of a

commercial era during which theorists uttered general warnings against

the export of precious metals, but sanctioned it for those branches of overseas

trade in which no market for European commodities was to be found. They

eased their consciences by the argument that the amount of precious metal

exported would be recovered by the sale to foreign countries of the goods

imported.'! On an average 93 per cent of the value of the cargoes to China

and 79 per cent of those to India consisted of specie. During the later years

of the period some cargoes shipped to India consisted wholly of goods, e.g.

in 1759, 1768 and 1769; this was, however, partly dictated by specific

shortages of specie. By contrast, in 1751, a cargo consisting entirely of

specie was sent out. The total value of the cargoes dispatched is shown in

the following diagram which also shows the distribution of the trade to

China and the East Irtdies.P

10 RA., Dir. Res. Prot., 30 May 1748.11 Cf. Ludvig Holberg, Samling af adskillige nye Samtaler holden for Tidsfordriv (1728), and

Danmarks Stat (3rd ed.), pp. 648 f. Also, OUo Thou, Allerunderdanigste uforgribelige Tan­ker om Kommerciens Tilstand og Opkomst, 31 December 1735, RA., copy in Kom. Ko!.

,. From 'Fortegnelse paa aIIe til Kina og Ostindien udgaaende Skibe .. :, Kg!. Bibl., Ny kg!.Sam!. 793 band 793. In Bilschings MClgasin II (1769), pp. 276-77 (in Danish in Statsjournalen[1769] p. 76 and Hoicks Handelsmagasin [1780], pp. 121 f.) there are similar lists down to 1745­prepared by the Company's book-keeper Frants Faddesen, and Aug. Hennings has a surveydown to 1771 in Gegenwiirtiger Zustand der Besitzungen der Europiier in Ostindien I (1784). Onthe value of the outward cargoes these three sources show a fair measure of agreement; onthe value of the return cargoes, however, there is a notable difference between the manuscriptsand Hennings, on the one hand, and Frants Faddesen, on the other. F. Thaarup, Historiske ogstatistiske Ejterretninger om det asiatiske Compagni (1824), App. I-IV, prints both lists without

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116

12

11

10

9

8

7

6

5

4

3

2.."",

KRISTOF GLAMANN

:~;... ..,.'.'.'.

1732 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70

Exports to Asia, 1732-71 ('000,000 rd.)

-- Total •... Share of the trade to China - - - Five-yearly average of total.

What goods were exported? The ships always carried a heavy ballast

of iron, lead, and copper. The iron had to be thin bar iron, 'as the black­

smiths in India cannot apply as great a heat to it as here' .13 Ballast was also

carried in the form of miscellaneous ironware-guns, anchors, barrel hoops,

nails, spikes, cauldrons, etc. There were also such items of ship's stores as

timber, canvas, tar, cordage, red lead, and powder. For long periods a

consignment of domestic cloth was sent to China by each ship. This was

intended as an aid to Danish cloth manufacture, and did not bring about

any loss until 1753 when the consignment could not be sold because large

quantities of English and French cloth had been sent to Canton the pre­

ceding year. The immediate result was that the Company considerably

deciding which is correct. M. L. Nathanson, in his Historisk Fremstilling af Danmarks National­og Statshusholdning (1836), P: 446, rightly calls attention to an error in Thaarup's data. Asfar as can be ascertained from the books of the Company, it is the manuscripts (esp. 793 b, asthere are some clerical errors in 793) and Hennings which provide the most accurate picture.It is consequently these figures that have been used for all statements of the value of the

return cargoes given in the text.1.S RA., Esmarch I, No. 26. Ziervogel's notes 16 October 1758, Item 37. For the exported

goods see the cash-books and ledgers of the ships.

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THE DANISH ASIATIC COMPANY 117

restricted its purchases from the cloth manufacturers; and this in turn led

the Board of Trade [General-Landets-Okonomi- og Kommercekollegiet)

to emphasise to the Directors of the Company the great damage which the

manufacture suffered thereby. The Board wanted the Company to buy the

same quantity as previously. The Directors would not agree to this, but

suggested that the manufacturers on their own account should send the usual

quantity of cloth which would then be transported free of charge. The

Company would then buy Chinese goods for the amount received for

whatever cloth was sold, and repay it to the factories. This proposal was

rejected by the Board of Trade, and the General Meeting of the Company

having sanctioned cloth purchases to the amount of 3-5,000 rixdollars

instead of 20-30,000 rd., as previously, there the matter rested.> Various

other goods were also sometimes exported, e.g. velvet, hats, lace, gold and

silver brocade, thread, buttons, etc., as well as hardware and wines.

Silver Purchases

As specie constituted the greater part of the cargoes, it is important to

discover whence the Company obtained it and how. Tenders for silver

were always invited in the autumn, along with requirements for the ship's

provisions and equipment. Normally two invitations to submit tenders

were given at an interval of one month; the only exception was in 1743

when tenders were invited in the spring for the amount of 35,000 rixdol­

lars because of a special expedition to the Malabar Coast. The tenders for

the silver were invited at appropriate sums and they were granted to those

making the lowest tender. Often they were postponed because of a rise in

the rate of exchange greater than had been expected by the Board of Direc­

tors. When the tenders were to be made conditions of delivery were read

out; in these it was made clear what sorts of coin were wanted, their

fineness, the time of delivery, payment, etc. The Company soon got from

Hamburg a set of scales on which the silver had to be weighed. Because

some of the coins proved to be sub-standard, it was decided in 1760 to

appoint someone to superintend the deliveries, and a Jew, Ashur Unna,

was given this task. III

The suppliers may be divided into two groups: Copenhagen merchants

,. RA., Minutes of the General Meeting 3 April 1754, Item 3.15 RA., Dir, Res. Prot., 28 October 1735 and 29 August 1760.

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118 KRISTOF GLAMANN

(or merchant houses) and Jewish money-dealers, also residents of the

capital.l" Within both categories there seems to have been a comparatively

small number of firms who tendered year after year.

Among the merchants were Holmsted (down to 1743), Fabritius &:

Wewer, von Hemert, Iselin (from 1748), Desmercieres (down to 1741, and

once in 1749), Klecker, Black (both from 1740), Frants Faddesen, Daldorf

(both down to 1743) and some minor, occasional suppliers such as Klau­

mann, K6nnemann, Soelberg, Ackeleye, Fischer, Frachen, de Place, Becker

& Glerup, Falch, Ryberg, and others. These are all names which appear in

the lists of shareholders and directors; and both the book-keeper and the

cashier of the Company also appear among the suppliers (Frants Faddesen

and Daldorf).

In the other great category, the Jews, there are such names as Unna,

Samuel & Kantor, Jacob, Raphael & von Halle (from 1749), Goldschmidt

(down to 1741), Jacob Emanuel (from 1744), Lazarus Wallich (from 1753);

here too there are some minor suppliers, such as Jacobi, Salomon, Levy,

Nathan Lazarus, Schroder, Philip Meyer, Reh, and others. This is indicative

of the part which the Jews in Denmark had already come to play in monetary

transactions and bill-broking. The first Jewish immigrants had arrived

during the last 30-40 years of the seventeenth century; initially they were

Portugese Jews but soon thereafter German. It may well have been the

direct trade from Denmark to the East and West Indies that had attracted

at least some of them. There was room in Denmark for a certain volume of

transactions, and the country needed international financial connections.

It is evident from these examples that despite the existence, from 1726 to

175,4, of very strict prohibitions against the presence of foreign Jews, the

country could not do without them. During the Seven Years' War this

Jewish immigration increased sharply and the elder Count Schimmelmann,

who was then in charge of Danish finances, used their services a great deaL

The prohibitions gradually disappeared, and completely so during the

period 1757-1771.17 Few of the Danish Jews were merchants. Such names

as Unna, Samuel, Kantor or Goldschmidt often cover several members of

16 The most important source is Dir. Res. Prot., which gives detailed information, down to

1759, about each invitation to submit tenders. For the rest of the period the tenders of silverwere entered in a special register, which unfortunately has been lost.

17 M. L. Nathanson, Historisk Fremstilling at [edernes Forhold og Stifling i Denmark,

navnlig Kebenhatm (1860), pp. 22 f.

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THE DANISH ASIATIC COMPANY 119

a family, father, son, brothers, etc. Most numerous was the Unna family

which was named after a rabbi from Una in Germany. Its first representa­

tive in Denmark was Joseph Philip Unna, who in 1712 was licensed to

start a calico and wallpaper printing-works in Copenhagen. His son was

Ashur Unna who obtained a Copenhagen trade licence in 1737 and became

{me of the Company's main suppliers of silver.v Moses Meyer Goldschmidt

was the son of Meyer Goldschmidt, the Court Jeweller. At the census in

1728 he remarked of his trade: 'My business is now as before, God be

thanked, with bills and other honest trade.T"

The two greatest suppliers of silver, however, were the two wholesale

firms of von Hemert and Fabritius & Wewer. During the years 1732-44they delivered an average of 17.3 per cent (von Hemert) and 13.8 per cent

(Fabritius & Wewer) of the total amounts for which tenders had been

invited; the corresponding figures for the years 1745-58, when the total

amount of silver had increased, were 18.3 and 21.5 per cent, respectively.

For the whole period their averages were 17.8 and 17.6 per cent, while the

shares of the two greatest Jewish suppliers for the period were 10.7 per cent

(Unna) and 9.7 per cent (Samuel & Kantor). The two merchant firms thus

together supplied more than one third of the Company's silver, and the

four largest suppliers provided in all more than half of the sums for which

tenders were invited.

About 1752 Johan Fr. Friis questioned the desirability of the public

invitations to submit tenders for silver. He maintained that certain members

of the Board of Directors simply chose a substantial sum, say 100-150,000

rd., and shared it between them 'without any tenders being invited for

these amounts to determine the mean price, at which the remainder is

supplied'. The Directors did not refute the assertion, but defended them­

selves by stating that it had been done for the benefit of the Company,

which Friis doubted.s? This is of particular interest because after 1759 the

available sources do not show precisely where the Company obtained its

silver. It seems as though it increasingly imported silver from abroad

because, in the opinion of the Board of Directors, the home prices were

too high. The idea was not new. As early as 1745 the Company had received,

is Jul. Salomon and Josef Fischer, Mindeskrift i Anledning af Hundredaarsdagen for An­

ordningen af 29/3 1814 (1914), p. 140.1. Ibid., p. 139.

20 RA., Esmarck I, Nos. 19 and 20.

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120 KRISTOF GLAMANN

Table 3.

Tenders for silver, 21 July 1767.

Suppliers

Fabritius & Wewer

Raphael UnnaLazarus Wallich

Isaac Jacob Reh~elJacob ~eyer

Levin von Halle

Total

Rd.

98,00020,00030,000

20,00012,00020,000

200,000

from Count Gyldensteen, calculations and estimates relating to a purchase

of silver in Spain.s- In 1758 it was decided to buy a fairly large quantity of

silver in Hamburg and Amsterdam, but as Hamburg would not undertake

to provide it, the Company turned to Spain. The matter was arranged

through the Minister for Foreign Affairs, 1. H. E. Bernstorff, and the

Spanish Court gave its permission. After the Danish bank of issue, via Iselin,

had offered to take at cost price the silver which had been provided as aresult of the invitation to submit tenders at home, the Directors had no,

doubt that the silver ought to be fetched from Cadiz.22 Thereafter the:

purchases in Cadiz continued, although at the same time tenders were still

invited. At these tenders new names appear beside the earlier ones; thus

in 1761, Count Schimmelmann, through his agent Iselin, offered to supply

silver on credit against a 4 per cent annual interest." The following year,.

when the permit from the Spanish Government failed to appear, the Com­

pany turned to Amsterdam, where a promise had been given to supply

10,000 pieces of eight.24 The last traces of any public character in the invita­

tions to submit tenders for silver disappeared in the 1760s when the Com­

pany simply applied directly to the known leading suppliers. Thus at a

meeting of the Board of Directors in 1764 Iselin gave information about a

bond from Unna and Wallich for 100,000 rd. of silver to be delivered within

three weeks. No price was stated, but according to Iselin it would be 12 rd,

21 RA., Minutes of the general meeting 21 July 1745 and Dir. Res. Prot., the same date,

Item 4. The letter is dated from Paris, 21 June 1745.22 RA., Dir. Res. Prot., 16 and 20 November 1759, and Udenl. breves kopibog 1759, pp. 806--07_

ZI Ibid., 5 October 1761, Item 3... Ibid., 5 February 1762, Item 1.

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THE DANISH ASIATIC COMPANY 121

2 mk. per mark of fine silver.w The invitation to submit tenders on 21 July

1767 may perhaps be considered typical of the time: the Directors agreed

amongst themselves in advance to submit tenders to the Company 'in order

to moderate the price'; Mikael Fabritius then declared that he on his own

account kept a supply of 40,000 rd., which had been obtained at a rate of

exchange of 11 rd. 1 mk. 7 sk. per mark; and finally the intention was

announced of supplementing the total by buying 5,000 rd. from the firm

of van Orsoj & Zoonen of Amsterdam. The ultimate result of the transac­

tion is given below in Table 3.26

The Asiatic Company and the Financial Transactions ofCount Schimmelmann,1762-1767

The developments in the practice of tendering for silver in the later

1750s and during the 1760s are connected with the fact that the Asiatic

Company's demands for precious metal, large by the standards of the time,

were coming to influence the rate of exchange, and this was particularly

notable at a time when the public finances were in a crumbling condition.

In 1757 the redeemability of bank notes was suspended. During the

immediately following years Danish silver money poured out of the country

while the amount of paper money rose sharply as a result of the great

increase of credit facilities offered by the Danish bank of issue during the

favourable market conditions created by the Seven Years' War between

France and England. Moreover, the imminent danger that Denmark might

enter the war in 1762 caused the Government to lean still more on the

Bank for support, thus increasing the inflation." It was against this back­

ground that the Company began obtaining its silver from Spain. Early in

1762 Schimmelmann, who played a leading part in Denmarks' financial

history of that period, persuaded the Bank to advance him 400,000 rd. in

bills of exchange on Hamburg.28 On 12 March of the same year he conveyed

to the Company 50,000 rd. in bills on his factor at Hamburg (Lehn), to

which were added on 4 June another 40,000 rd.29 A few days later an

agreement was concluded between Schimmelmann and his partners, on

.. Ibid., 19 October 1764.

se Ibid., 21 July 1767.:n A. Nielsen (ed.). Diinische Wirtschajtsgeschichte (1933), pp. 299 f.

:IS Ju!. Schovelin, Fra den danske Handels Empire I (1899), p. 43... RA., Dir. Res. Pmt.. 12 and 4 June 1762.

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122 KRISTOF GLAMANN

the one hand, and the Asiatic Company, on the other, by which the Com­

pany undertook not to buy bills of exchange in Copenhagen nor to draw

from Hamburg before the end of September 1762, but to receive a total

of 100,000 rd. Hamburg courant from Schimmelmann & CO.30 From now

on the Asiatic Company was subject to the general endeavours to secure

the country from a disastrous development in the state of its exchanges.

By a compulsory loan in Hamburg on 30 Juni 1762 and by other means

Schimmelmann provided a fresh supply of bills for the commercial worldr"

and Iselin, who was a Director of the Company as well as Schimmelmann's

representative, could inform the Company on 5 October that he had

ordered 10,000 pieces of eight on its account, and that the remaining

amount of silver was to be bought at Hamburg or Amsterdam.P Towards

the end of the year he renewed the prohibition against the Company

drawing on Copenhagen or buying remittances there. This was done by

a new agreement, this time between the Bank and the Asiatic Company,

by which the Company had also to undertake on its own account 'to procure

100,000 sterling or 400,000 rd. Hamburg banco'.33 In other words, the

Asiatic Company was to provide credit for the country through its connec­

tions abroad. And, moreover, it succeeded in doing so. The Company raised

the loan on bonds with its most frequently used connection in Amsterdam,

the banking firm of Christian van Orsoj & Zoonen.s!

It was not the only loan that the Company was forced to raise; others

followed. They were all subscribed in Holland with van Orsoj & Zoonen.

Similarly, during the near-crisis conditions of 1763, Schimmelmann also

turned to Holland and arranged loans from the banking houses of Boas in

the Hague and Clifford & Zoonen in Amsterdam. Overskattekommissionen

(the Royal Revenue Commission), which was the main organ for the

exchange stabilisation and to which the Company at the beginning of the

year had had to transfer 200,000 rd. of its capital deposited in the Bank,

stated in August 1764 that the Asiatic Company could not be allowed to

pay instalments due that year on its debts in Holland, as the debts of the

Bank were to be reduced first; furthermore, it was not desirable 'that one

should act to the disadvantage of the other so that the rate of exchange

so RA., Dir. Res. Prot., Il June 1762.31 Schovelin, op. cit., pp. 46 f.

32 RA., Dir. Res. Prot., 5 October 1762.ea Ibid., 25 February 1763, Item 7.

:u RA., Udenl, breves kopibog 13 and 30 November 1762.

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THE DANISH ASIATIC COMPANY 123

would be raised still more to the great damage of the country'.35 In No­

vember 1764, in accordance with this programme, the Company, for die

account of the Bank, had to lend Schimmelmann 100,000 guilders raised

with Christian van Orsoj & Zoonen, while simultaneously telling its English

correspondents to reimburse themselves on Hamburg."

The general attempts to keep down the rates of exchange soon began to

affect the Company's auction sales of imported cargoes. The Directors of

the Company inserted rules in the auction regulations requiring an

appreciable part of the payment to be made in form of bills of exchange

at rates fixed in advance. Thus the rate of exchange of Dutch bills at the

sales in the autumn of 1763 and 1764 were fixed at 125 and 124, respectively;

both were low rates evidently designed to secure cheap foreign currency

for the Company." The buyers, however, arranged their bids at the sales

accordingly, forced the prices down and in this way rendered illusory the

advantage of this measure to the Company." The question of a fixed rate

of exchange soon became a topic of importance to the Company, for in

1764, about the turn of the year, Overskattedirektionen (the Royal Revenue

Department) finally gave permission for the termination of part of the

eventually very high Dutch debts, and on that account was to submit the

necessary remittances to the Asiatic Company. The Department demanded

that the Company should buy the remittances at a rate of 125. To this the

Company objected strongly, with the result that the two institutions agreed

on 124 as a fixed rate for 1765.39 In January of that year the Asiatic

Company was then able to repay to Christian van Orsoj & Zoonen the

minor loan of 100,000 guilders, mentioned above, at a rate of 124. The bill

was drawn on Clifford & Zoonen in Amsterdam.t? In February an instalment

of 500,000 guilders was paid on the greater debt of 1762, also by a bill

drawn on Glifford & Zoonen, and on 13 February a written agreement was

made between the Asiatic Company and Ouerskattedirektionen, in which

the terms for the repayment of the whole debt were fixed.v By this the

.. RA., Dir. Res. Prot., 30 March 1764. Overskattedirektionen I, A. XXXVI, 4: 31 August1764.

so Ibid., 29 November 1764. UdenI. breves kopibog 8 December 1764.37 Ibid., 21 September 1763 and 26 September 1764.ss RA., Overskattedirektionen, I, A. XXXVI, 4: 3 January 1765.3. Ibid.

.. RA., UdenI. breves kopibog 19 January 1765. Negotie hovedjournal 26 January 1765... RA., Overskattedirektionen I, A. XXXVI, 4: 13 March 1765. Dir. Res. Prot., 16 February

1765.

9 - 6' '742'4 Scand. Econ. Hist. Rev.

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124 KRISTOF GLAMANN

Company's debts to Christian van Orsoj & Zoonen were to be paid by March

I766, and the rate of exchange for all the transactions was to be 124.

However, only a month later the Company succeeded in having the rate

lowered to 116, at which rate 70,000 guilders were repaid in March and

300,000 guilders in April, after which the repayment stopped.v The direct

cause of this was the silver drafts from Spain, which also had to be paid.

Indirectly it was Schimme1mann who demanded that the Company itself

should find the remittances required. In an irate letter to Overskattedirek­

tionen the Directors of the Company complained of Schimmelmann's

behaviour and pointed to the danger, inherent in the newly created situa­

tion, of another rise in the rate of exchange. The result was that the Asiatic

Company had to raise a new loan of 400,000 guilders with van Orsoj &

Zoonen. In return Overskattedirektionen promised to cover the expenses."

The following period was full of complaints from the Company to Over­

skattedirektionen and Schimmelmann that the instalments failed to appear.

Reference was made to the difficulties which had consequently arisen for

the Company with its chief connection in Amsterdam.v' Not until May 1766

could the Company send another instalment on the old debt but then it

covered the whole balance, 343,200 guilders." On 13 June the Board of

Directors were able to assemble and count over the Dutch bonds, 315 in

all to a total amount of 1,301,400 guilders 'and after they had been inspected

and noted they were all scrapped and burnt'r'" The debt of 400,000 guilders

was still left. After repeated applications to Schimmelmann the Company

also succeeded in getting this repaid: in April 1767 the Company was at

last able to buy from Schimmelmann six bills of exchange drawn on five

Amsterdam banking houses for the amount mentioned. The rate of exchange

was now 124 1 / 2 •47

The Asiatic Company did not escape losses by these enforced operations.

The latter caused the comparatively fixed limits existing at the beginning

.. RA., Overskattedirektionen I, A. XXXVI, 4: 11 March 1765. UdenI. breves kopibog 23 Marchand 20 April 1765. Negotie hovedjournaler 23 March and 20 April 1765.

43 RA., Overskattedirektionen I, A. XXXVI, 4: 25 May and 1 June 1765. The Company, inaccordance with the reduction of the rate of exchange, reduced the rate for Dutch bills to 116per cent at the autumn sales; cf. Dir. Res. Prot., 10 July 1765.

.. RA., UdenI. breves kopibog 20 August 1765. Overskattedirektionen I, A. XXXVI, 4: 20 De-cember 1765 and 13 February 1766. IndenI. breves kopibog 4 and 28 January 1766.

•• RA., Overskattedirektionen I, A. XXXI, 4: 24 May 1766.•• RA., Dir. Res., Prot., 13 June 1766.

n RA., IndenI. breves kopibog 9 May 1767. Negotie hovedjournaler 14 and 25 April 1767.

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THE DANISH ASIATIC COMPANY 125

of the period in connection with the purchases of silver to be exceeded, the

road thus being open to speculations which were no doubt profitable to the

inner circle that controlled the Company's affairs.

The Company's Transactions in Foreign Bills

It was not only for its purchases of silver that the Company needed

foreign currency. Some of its shipping expenses had also to be paid abroad,

notably the insurance and the purchase of such goods as powder, hemp and

canvas. The relevant bill transactions may be illustrated from the many

examples to be found in the letter-books and journals. Table 4 covers all

remitted bills of exchange, sight drafts and otherwise, drawn in English

pounds sterling during the period 1732-58. 48

As is evident, two-month bills were the commonest. The source material

allows one to trace the course of only a few bills before they reached the

Company, as the letter-books mainly indicate only drawee, amount, and

date of payment. Those which can be traced, however, show that most of

Table 4.

Remitted bills of exchange in £s, 1732-58.

Number of Average perTime (months) Amount (£) bills bill

Over 2t 3,302 18 1842-2! 5,126 17 3022 21,841 129 1691-2 8,021 58 139Less than 1 6,096 34 179

Totals 44,386 256 173

the bills originated from Norway. In 1735, for example, the Company bought

seven such drafts, which were sent to the Company's chief correspondent

in London, John Collet. The bills were drawn by H. J. Soelberg, Collet &

Leuch of Christiania (Oslo), G. and Z. Simonsen of Skien (two drafts),

Nicholas Dunn of Bredvig, R. Mocliff of Frederikshald, and Georg Widget

.. Only the remitted bills have been preserved. It is consequently difficult to estimate theextent of exchange speculation, known to be widespread at that time; cf. Eli F. Heckscher,'En vaxelryttare under Frihetstiden' in Historieuppjattning, materialistisk och annan (1944).

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126 KRISTOF GLAMANN

Table 5.

Remitted hills in Dutchflorins, 1732-58.

Amounts Number of Average perTime (Dutch fl.) bills bills

Over 3 weeks 150,470 150 1,0033 weeks 33,275 43 77414 days 202,538 275 737Under 14 days 22,948 33 695

Totals 409,231 501 817

of Arendal. They were all drawn on English firms of London and Great

Yarmouth and were payable to H. J. Soelberg.

Table 5 gives the corresponding data for remitted bills in Dutch florins

during the same period.

Here the l4-day bill predominates. This depended, inter alia, upon the

fact that the Dutch bills, because of the difference in the rate of exchange,

were worth less than the English. Most of them originated, as far as can be

decided, from the big Copenhagen merchants, often from the Company

Directors themselves.

The India Trade

It was to the east coast of India, to Tranquebar on the Coromandel Coast,

that the Danish ships first went after the long voyage from the Cape of

Good Hope. The factory at Tranquebar was not in itself considered

adequate for the trading purposes and the Company therefore tried to

obtain a foothold in other areas of India, primarily in Bengal. During the

period under consideration, when England and France were in conflict,

Danish opportunities here would seem to have been good, and in fact the

Company succeeded in establishing an agency in Bengal; but it soon became

.apparent that the companies of the bigger powers could at least agree on

the need to prevent the advance of their smaller competitors." Furthermore,

the Danish Asiatic Company did not willingly undertake to defray expenses

involved in military expeditions, but tried to shift the burden to the Gov-

•• On the expeditions and attempts at colonisation during this period, see Kay Larsen,De danske ostindiske Koloniers Historie I-lI (1908), and J. Brandsted (ed.), Vore Gamle Trope­kolonier I (1952).

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THE DANISH ASIATIC COMPANY 127

ernment, Thus it was by the aid of royal troops and two warships that the

Company in 1753 bought a small town on the Hooghly river in Bengal,

which became the basis of the factory of Frederiksnagor (Serampore). The

same expeditionary force, on I January 1756, 'occupied' the Nicobars,

though this was of no real consequence, as soldiers as well as colonisers soon

succumbed to the unhealthy climate. During the unsettled conditions of

the 1750s and 1760s, the Bengal settlements had difficulty in holding their

own and towards the end of the period Tranquebar itself also suffered from

the Anglo-French clashes. The Danish settlers were not equally energetic,

and the Company often had difficulties in finding governors who would

stay for a number of years in India. Nor were abuses on the part of some

governors avoided.s" It is hardly an exaggeration to say that the Indian

factories were a constant cause of anxiety to the Company.

Factories were required to ensure that on the arrival of the ships there

were available sufficient supplies of goods for the return cargoes. The

Danish factories were only partially successful in carrying out this task. ll l

Difficulties appeared as early as 1738. Because of the 'rainy season, unrest

and high prices', it was impossible to procure sufficient returns for the ship

Kronprinsen, and she had therefore to leave part of the specie she had

brought with her at 'Tranquebar.P In 1741 this was repeated, at that time

because of 'high prices as a consequence of crop failures', and 19,259 rd.

had to be left at Tranquebar.P In the years that followed, it also proved

difficult to provide sufficient returns, so the amounts left were collected

into a so-called bottomry and factory account, which was to form a kind

of reserve under the 'continuous' fund in India. In 1742 this reserve fund

had increased to 66,249 rd., a bad sign and tantamount to the money

being inactive because of failure to convert it into return cargoes.s! It is

hardly surprising that the necessity of providing return cargoes in time was

.. Thus in 1759 proceedings were instituted against the previous Governor, H. J. Krog, andmany abuses were revealed thereby. Cf. RA., minutes of the general meeting 23 September

1741, Item 1.In An examination of the ledgers for Tranquebar, the cash-books of the special funds for

1735-58, and Cargaison cash-book of 176()...{)2 shows that the Company bought large quantities

of its goods from Indian merchants, who acted as intermediaries between the Indian weavers

and the Europeans. At the beginning of the period the firm of Sjungarama &: Sunderdasses

was frequently employed, during the second half of the period a merchant named Wengadasela

Setti,52 RA., Minutes of the general meeting 3 July 1738, Item 2.

53 Ibid., 23 September 1741, Item 1.

54 Ibid., 5 September 1742, Item 2.

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128 KRISTOF GLAMANN

stressed again and again. In 1743 Fabritius & Wewer sent a ship to Bengal

and the Malabar Coast for pepper and thus tried to indicate new methods.

Towards the end of the 1740s there was some improvement. The deficit

from the factory was replaced by a minor surplus, which in 1748 amounted

to 2,329 rd. The glory did not last long, as the Angle-French colonial war

had a destructive effect.55 During the last half of the period, the Danish

East-Indiamen had to cruise around to sell their cargoes and buy returns.

The following example illustrates in detail the Danish East-India trade

of the time.56

The Kronprinsen left Copenhagen on 17 February 1760. In the instruc­

tions to the captain and merchants (or supercargoes) it was laid down that

at Tranquebar they were to find out what returns were available and take

them on board. The ship was then to go on to Frederiksnagor in Bengal

and take on the rest. The Directors assumed that the greater part of the

cargo had to be provided in the latter place, as is evident from the fact

that in the same instructions an Armenian merchant in Bengal named

Galdar was appointed a commissioner with the task of procuring the return

cargo. On 22 August of the same year the ship anchored in the roads of

Tranquebar. As presaged in the instructions, few returns were to be had:

some caliatour wood, 200 bags of saltpetre, and two parcels of Bengali

kerchiefs. The chief council of the factory, the so-called secret council, on

the other hand, wanted money, which the supercargoes had to hand over

together with some wine. Attempts were then made to sell some of the cargo

to the English, but without success, as the parties could not agree about the

price. On I September the ship sailed to Madras with the intention of there

changing the specie which she carried into Bengali currency. This was not

successful, though the English governor at Madras bought some claret, tar,

pitch, and canvas, paying with a bill drawn on Calcutta in Bengali currency.

On 24 September Kronprinsen arrived in Bengal and the officers had their

first meeting with Galdar, the commissioner, who promptly declared that

he was unable to sell the cargo of Kronprinsen and still less could he

procure a return cargo. Accordingly the captain and the supercargoes then

went on to Calcutta. Here they were referred by the English governor to

his commissioner, Henkok, a taciturn gentleman, who proved to be willing

55 RA., Minutes of the general meeting 10 September 1748, Item 3... RA., Trading register of the ship Kronprinsen 176~2.

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THE DANISH ASIATIC COMPANY 129

to buy part of the cargo though not its quicksilver and gold and silver

threads, as large quantities of these had just arrived in India by the ships

of the English Company. However, as a result of negotiations the super­

cargoes succeeded in persuading him to take most of the cargo and to

promise to supply returns before 10 February 1761, it being stipulated that

Kronprinsen's cargo should be delivered at Calcutta; this meant that the

ship had to pay 4 per cent duty to the English Company and 2 1 / 2 per cent

for transport and risk. The return goods were, however, to be delivered

in the roads of Frederiksnagor. Galdar found the offer unacceptable and

suggested that the ship should stay in port and await the possibilities of

selling the goods the next year. As, however, he would not guarantee better

prices by this measure, the supercargoes preferred to accept Henkok's offer.

An English snow came from Calcutta and took on the cargo; at the same

time small quantities of wine, hardware, and copper were sold to native

merchants. The greater part of the return cargo was to consist of saltpetre,

but to the chagrin of the supercargoes this part of the deal took a long time

to complete and when the saltpetre did arrive the quality was not very

good. Complaints to Henkok were of no avail. On 15 March the ship at

length had a full cargo and was ready to sail. There still remained some

velvet unsold and this was offered to Galdar at the Copenhagen cost price,

but he refused it. He did, however, help the Company to raise an English

credit of 40,000 rupees at Calcutta which was to be repaid in Danish

currency in Europe; as a result of the many additional expenses incurred

the capital for the voyage turned out to be insufficient. Finally Galdar

himself obtained a commission of 2 1/2 per cent for his assistance.

More examples could be given to show that the India trade constantly

inflicted losses on the Company. From the financial statement of 1772 it

appeared that the Indian assets had to be written down by a total of

48 per cent. It was worst in the case of the agency in Bengal, the value of

which was reduced by 72.1 per cent." This is the background to the

throwing open of the trade to India in the charter of 1772 and the final

take-over of the Company's possessions by the State in 1777. The losses in

the Indian trade also explain why the Company was all the more eager to

concentrate on the trade to China, where it was encumbered with few

fixed establishments.

• 1 RA., Ledgers, Kompagniets Etat i Ostindien 31 December 1772: Ejendomme.

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130 KRISTOF GLAMANN

The China Trade

The Chinese had provided a fixed framework for trade with Europeans."

Canton was the most important port during this period; visiting ships were

not allowed to stay in port beyond the trading season; if prevented from

leaving for Europe they were to go on to Macao, where all Europeans

who remained in China after the trading season were expected to stay.

Each country's company had a workshop on the island of Whampoa for

ship repairs, etc., and a factory in Canton itself, leased from the Chinese

merchant guild through which all the trade took place, the Co-Hong. This

small group of merchants were also responsible to the Chinese authorities

for the conduct of Europeans. They had to guarantee that the import and

export duties were paid to the Hoppo (the Controller of Customs for the

town and province of Canton). Similarly all inquiries addressed to this

high official, the Emperor's personal inspector of foreign trade, had to pass

through the Co-Hong, each foreign nation choosing a Hong merchant as

its sponsor, i.e, agent or guardian of its intrests. Finally, there were detailed

and strict rules for the general activities of the Europeans in the town of

Canton.

The ships' supercargoes had a task of great responsibility. As there was

no control of their behaviour abroad, the companies had to be very careful

about the persons they sent out. At the beginning of this period, when the

trade to China was new and had practically never been carried on from

Denmark before, the Asiatic Company employed some Dutch supercargoes.

Later, Danes were employed. As early as 1739 the Company investigated

the activities of two supercargoes in China. They proved to have raised

loans on their own account without entering the amounts in the books,

and they were accordingly suspended.59

The responsibility of the supercargoes became still greater when the

Company began to make some of them stay in China after the trading

season was over. In 1742 the Directors decided on 'some suitable persons

staying-over in China' in order to make profitable contracts for tea against

the pre-payment of money on account as other nations did.IIO The same

.. See Kay Larsen, Den danske Kinafart (1932). During the whole period the Danish shipscalled only at Canton.

.. RA., Minutes of the general meeting 3 December 1739, Item 4.

.. Ibid., 5 September 1742, Item 5.

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THE DANISH ASIATIC COMPANY 131

happened in 1744, when seven men stayed on in this way. From 1760 this

practice became a permanent institution. There were several reasons for this.

It was perhaps due in part to the fact that some tea was left at the end of the

season which the Company wished to buy cheaply for next year's ships. But

there was also a more decisive reason: because of the ever increasing number

of ships trading to China a shortage of tea arose at Canton and consequently

each nation tried to secure the necessary quantities through contracts.

During the first ten to twenty years of the period twelve to sixteen European

ships arrived annually at Canton; thereafter during this period the cor­

responding figures were 24 to 30. The Co-Hong took the opportunity of

meeting this increased demand by forcing up prices. It had been especially

successful in so doing during the season of 1760 when a more rigorous

policy on the part of the Chinese guild caused all nations to pay dearly for

the tea. In the long run such a policy was not practicable, but by the time

that prices dropped again it had become a normal arrangement for repre­

sentatives of the Companies to stay on. For the Danish Company it was

also of some importance that space for the ships' crews was saved by this

procedure.

The changes in tea prices can be traced in more detail through the cash­

books and trade journals for the ships and the factory in Canton." Table 6

shows the cost prices for the sort of tea bought in the greatest quantities, viz.Bohea; the prevailing median price is given for each ship about which

information is available, together with the relevant ranges. The other

columns give information about the loans which were raised in connection

with the purchases of tea, especially during the later years of the period

(see below, p. 135).

It appears from the table that, apart from the fluctuating prices during

the first years, there was a continuous and fairly even increase in the tea

prices up to and including the season of 1754. Then came a sharp fall

and the low prices of the seasons 1756-58, followed by a considerable

increase in 1759 and very high prices in the succeeding years. It was during

these latter years that the number of European ships in Canton greatly

increased and that the Co-Hong attempted a rigorous monopolistic policy.

And for the Danish Company it was at this time that the practice of 'staying­

over' became a permanent institution.

81 RA. Table 6 gives the median price, which has the advantage over the correspondingmean that it always represents an actually existing price.

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132 KRISTOF GLAMANN

Table 6.

Prices ofChinese tea (Bohea), 1734-72.

Interest

Median price Bill of Bill of(taeIs per Range (taeIs Bottomry exchange Bottomry exchange

Year picul) per picul) (taels) (taeIs) (per cent) (per cent)

1734 11.0 10.4-13.01736 14.8 13.0-17.0 3,000 - 40-501737 12.5 12.0-17.01738 15.0 14.5-15.71739 14.2 10.5-14.51740 11.7 10.1-13.61742 15.0 12.0-15.61744 13.0 11.8-14.21745 13.8 13.2-14.51746 13.8 11.0-14.5

14.0 11.0-15.01747 14.0 13.6-14.51748 14.7 14.5-15.5

14.8 14.5-15.5 20,973 - 301749 15.6 14.6-16.01750 15.6 15.4-16.0

16.0 15.5-16.01751 16.0 13.5-16.01752 16.1 15.9--16.7

16.1 15.9--16.716.0 13.5-16.0

1753 17.2 16.0-18.517.2 16.0-18.5 24,000 - 34

1754 18.2 15.5-18.21755 15.5 15.0-17.2 14,000 - 301756 12.5 11.5-13.6 21,000 - 251757 12.5 10.0-12.51758 12.5 8.0-13.51759 15.2 14.4-16.0 2,000 15,000 30 15

16.0 15.5-18.5 14,330 15,000 30-33 1517.2 16.8-18.0 43,410 13,980 30 15

1760 19.5 18.9--20.4 10,544 19,374 20-30 1519.5 18.9-20.4 25,002 9,745 30 15

1761 19.3 11.5-19.31762 17.5 17.5-18.5 34,690 18,890 30-33 15-16

18.8 12.0-18.8 46,888 11,195 23-30-32 151763 19.9 17.0-19.9 10,194 8,700 30 15

16.0 12.0-19.917.3 12.0-19.9 9,300 - 30-31

1764 19.0 19.0 4,600 1,500 30 1519.0 16.5-19.0 - c. 30,500

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THE DANISH ASIATIC COMPANY 133

Table 6. (contd)

Interest

Median price Bill of Bill of(taeIs per Range (taeIs Bottomry exchange Bottomry exchange

Year picul) per picul) (taels) (tads) (per cent) (per cent)

1765 19.5 18.5-19.5 7,988 1,678 30-33 1518.5 18.5-19.5 6,783 2,740 30 15

1766 17.8 15.8-18.0 - 11,250 - 151767 17.0 15.5-18.3

18.0 15.5-18.3 4,855 - 241768 14.8 11.0-15.0 9,383 11,520 241769 14.5 11.5-14.61770 14.0 14.0-14.8 2,160 - 24

14.0 14.0-16.51772 13.5 12.5-14.0 c. 7,600 - - 20

13.5 12.5-14.0 9,900 - - 20

The last years of the period, from 1768 on, were marked, as Table 6

shows, by a considerable fall in prices. The low prices led to an attack on

'staying-over' during the lively discussion which arose in connection with

the start of the new company in 1772. One of the members of the old

company, Seren Lykke, maintained that there was no longer any reason for

this practice, as the low prices were indicative of the ample supplies of tea

which were now forthcoming. He contended, moreover, that the winter

contracts made the prices higher as a result of money advances to the

Chinese merchants; and that those who stayed over, being poorly paid,

earned money by raising loans in Europe at high interest and lending the

money in China at still higher interest, all to the detriment of the Com­

pany.62 Soren Lykke's assertions were countered by Westergaard and Fritz

who, like Lykke, had both stayed in Canton as supercargoes." Their main

argument was that as the other nations would not give up making their

supercargoes stay on in China, Denmark could not do so either. For that

matter, they also maintained that great advantages with regard to price

arose from the practice, and this they tried to prove by making a survey on

the basis of the trading journals of the ships. Table 7 summarizes this

ea Lykke's report is found in Beta:nkninger over Udkastet til Konventionen og na:rmere For­

slag desangaaende (1772), pp. 57--63.U3 Their counter-argument is to be found in Grunde for den af os udkastede og dere[ter i

det asiatiske Compagnis Generaljorsamling den 3. Aug. 1772 approberede Konvention tillige

med Svar paa de saakaldte Beta:nkninger over Udkastet (1772), pp. 71-84.

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134 KRlSTOF GLAMANN

Table 7.

Tea prices andforms of Chinese tea contracts, 1760-71.

TeaTea contracted

contracted for infor in winter November

Tea packed with promise Tea contracted for andin winter Tea contracted for of advances on arrival of December

on cash in winter on the arrival ship. withoutpayment Advance of the ship. Advance advances

Price Price on this Price Price on this PriceYear (taels) (taels) (taels) (taels) (taels) (taels) (taels)

1760 - - - - 18.9-20.4 IS

1761 11.5 13.5 8 - 19.3 13 19.31762 12 - - - 17.5- 14-

18.8 151763 12-13 15 7 16 17.3- 17 17

19.9 151764 - 16.5 10 17.5 19 161765 - - - - 18.5- 16 18.5

19.51766 - 15.8 8 17 18 121767 - 15.5 10 17 18.3 14 15.5-171768 11 14.6 10 151769 11.6 14.5 21770 - 14 6.51771 - 12.5- 11

12.8

survey' and also shows the various forms of contracts. The winter contracts

mentioned mainly referred to Bohea tea only.

According to this survey considerably lower prices were paid for tea

delivered or contracted for in winter, when the ships had gone, than for

tea bought during the peak season in November and December. This was

quite natural, since the difference in quality between winter tea and summer

tea was great. A comparison between the Danish winter-tea contracts and

the material available in H. B. Morse's edition of the accounts of the super­

cargoes of the English East India Company in Canton," shows that the

arrangements made by the Danish merchants for winter tea were not more

unprofitable than the corresponding English, Dutch, and Swedish contracts.

On the other hand, the prices paid by the Danish merchants for tea bought

.. H. B. Morse, The Chronicles of the East India Company Trading to China 1635-1834, V,Suppl. 1742-72 (1929).

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THE DANISH ASIATIC COMPANY 135

during the peak season were in several cases higher than the English prices,

and in contrast to the purchases of the English Company the majority of

the Danish purchases consisted of tea bought during the peak season and

therefore relatively expensive (cf. Tables 6 and 7). It may be that the Danish

Company put off buying its tea until the dear season, when competition

had forced up the price, because the Company wanted as good a quality

as possible, for which reason the supercargoes waited for the new harvest.

But this is undoubtedly not the whole explanation. The tea trade was not

simply a question of a Chinese monopoly, of quality, and of seasonal offers,

but also one of available funds. A remark in the trading journal of the ship

Kongen at Danmark from 1763 is very instructive in this respect. On 19

November of that year the supercargo wrote: 'We are still in need of 11,000

taels, which I do not yet know how to procure~ I think that it is most

necessary to conceal this shortage of money to the Chinese as long as possible,

hoping that later on, when the English have settled their accounts, we shall

be helped by that same nation.'65 In fact, he succeeded in this. The Company

borrowed 10,194 taels on a bottomry bond and 8,700 taels on bills of

exchange." The greater part originated from Englishmen in Canton, both

from those in the service of the East India Company and from private

English traders; a captain and a supercargo from the French East India

Company were also among the lenders. This is one among many instances.

The amount of money borrowed is shown in Table 6; throughout the whole

period most of it came from English sources. There was thus a reality of

practice behind the repeated warnings of the English East India Company

to its servants against lending money to foreign merchants and ships captains.

The greatest English creditor of the Danish Asiatic Company, however, was

a private Englishman, George Smith, who is well-known from the journals

of the East India Company.57 He was frequently commanded to leave Canton

because he was said to have damaged the interests of the English Company,

but just as often he was restored to favour, thanks to his loans to this Com­

pany. The Danish Asiatic Company also borrowed from Chinese merchants,

e.g. in 1762 and 1764; these loans undoubtedly contributed to the high

prices which the Company paid in these two years. Towards the end of the

period Danish supercargoes also appear as lenders to the Company.

.. RA., Negotiejournal for skibet Kongen at Danmark 1762-64.G' Cf. Table 6.

fJ1 Morse, op. cit., passim.

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136 KRISTOF GLAMANN

A variety of influences thus helped to shape the Canton tea market:

factors both of supply and demand, of quality and seasonality. One of the

most important, however, was probably the Co-Hong's monopoly of offers.

and the consequent attempts on the part of the Chinese to force up prices.

In such conditions the buyer who needed capital was badly placed. He

had to try to procure it by loans on bottomry bonds and bills at high

interest, he was dependent on the arrangements made by the merchants.

of other countries and he was the last in the race for the tea. The Hong

merchants in such cases well knew how to raise prices. The experience of

the Danish Company shows that this Company, like those of other small

nations, was periodically in just such a situation. The journals also show

that the servants of the other companies, in collaboration with private

Europeans and Chinese merchants, were willing to lend money, not least

because of the high interest, but also because of the possibility this lending

gave them of transferring their gains to Europe behind the back of their

own company. In this context the crux of Seren Lykke's criticism mentioned

above is his unchallenged demonstration of the supercargoes' abuse of the

funds entrusted to them.68 At any rate, it is certain that a good number of

the supercargoes of the Company returned to Copenhagen as rich men.

The Sale ofthe Goods in Europe

In the preceding sections some of the wares bought and shipped home

from the East by the Company have been mentioned. From China the

main item, both in quantity and in value, was tea. The type chiefly imported

was Bohea, a coarse, cheap tea, though considerable purchases of the so-called

Congou tea were also made. The other types of tea, such as Pekoe, Souchong,

Patri Souchong, Songlo, H yson, H yson Shin and Bing, were all dearer

and of finer quality. Besides tea, various goods were shipped in bulk such

as sago, china-root, galingale, rhubarb, star aniseed, borax, and tutenag.

The third most important group comprised Chinese silks and other textiles:

poesie damask, furniture damask, pour de soye, satin, Pekin, and nankeens;

sundry lacquered objects were also bought, such as trays, toilet cases, and

the like. Finally, the cargo always included some china, from large and

.. Oplysning om Betamkningerne, som [ustitsraad Westergaard og Supercargo Fritz have

meddelt (1773), p. 76. In the same publication Lykke maintained that Fritz had appropriated40,333 rd. as a supercargo.

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THE DANISH ASIATIC COMPANY 137

expensive sets to ordinary cups, which often caused a good deal of trouble

in transport because of its fragility and bulk. The Indian goods included

saltpetre and caliatour wood; furthermore such items as pepper, cardamom,

cinnamon, and arrack. Cottons and calicoes also played a major part, chiefly

the two main types, pano comprido and salampores, but also many others

of which some were further worked up in Europe; the finished textiles

comprised a rich variety of kerchiefs. On arrival in Europe the whole of

this heterogeneous collection was sold at public sales.

It is difficult to give the precise auction-prices for the whole period,

but surviving sources allow the general course of development to be

followed. The China trade made an unfavourable start. Prices fetched on

the tea market were low, and the Company itself had to buy up a quantity

of tea to keep the price at 3 marks a pound. The shareholders declared

themselves against this restrictive policy. In 1734 when, contrary to expecta­

tion, the sales did not result in high prices and the Board of Directors not

only repeated this policy but also sent a small lot of goods to Hamburg and

Amsterdam 'in order the better to make the good quality of the commodities

known', a large group of shareholders laid down as a condition of their

further participation in the East India trade that goods brought home

should at once be sold and a dividend paid out.6 9 In general, however, the

early years were marked by good prices for Chinese commodities, but less

good prices for Indian wares. Presumably it was as a consequence of this

that from 1740 the Company began to send two ships to Canton every year.

About 1744, however, conditions improved for the Indian goods, prices

rose, and in 1744-5 for the first time, four ships were sent to Tranquebar.

At the same time the trade to China was stimulated by the low prices at

Canton (see Table 6). In 1752 it was said that the sales of Chinese goods

yielded very profitable prices; and, indeed, as the graph of the value of

exported cargoes shows (see above, p. 116), the average for the quinquen­

nium of 1747-51 was the second highest in the whole period. These favour­

able market conditions soon came to an end. At the sales in 1754 the Direc­

tors again shored up the prices of Indian calicoes by keeping them off the

market and buying them up themselves. As this procedure proved successful

at first, there were no objections this time from the shareholders." The

fall in prices in 1755 also affected tea though only temporarily, an upward

()8 RA., Minutes of the general meeting 25 June 1734.TO RA., Minutes of the general meeting 16 October 1754.

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138 KRISTOF GLAMANN

tendency already appearing in the following year. On the other hand, the

rest of the period was full of complaints about the poor quality of the

Indian goods, which undoubtedly contributed to the low prices. As shown

above, it was the factories that failed. On Borne occasions East India ships

went on to China in the event of there being no returns to be had in India.

The prices at the sales of Chinese wares are known for the period 1756-70

and are given in Table 8 below."

The high prices of the early 1760s were no doubt connected with the

Seven Years' War. Comparing the figures in Table 8 with the graph of

cargoes exported (above, p. 116) it is apparent that these high prices coincide

with the peaks of exports in the quinquennium 1762-6.

Contemporaries naturally compared the auction prices with the cost

prices in the East. In 1733 the Board of Directors thus estimated that of

the China goods, teas and drugs provided the Company with its best profits,

viz. about 200-300 per cent; the other items yielded a smaller profit, viz.silk 71 per cent, china-root, galingale 8-9 per cent, and chinaware only

2-3 per cent.P This view persisted throughout the period.

Who bought the commodities at the sales? In the Company's trade ledgers

for 1734-6 there are some surveys of the purchases at the sales during

these years, from which it can be calculated how much each buyer bid for,

though these surveys do not state what goods were sold by the Company.

It can, however, be estimated from this material that it was only a very

small clientele that bought the majority of the commodities. Thus the

cargo of the Slesoig sold by auction in 1735 fetched a total of 544,031 rd.,

which were distributed over 230 buyers, 18.3 per cent of whom acquired

more than three quarters of the amount, to be precise 76.2 per cent. The

biggest of these large-scale buyers was Desmercieres, who was followed by

Mikael Fabritius, Jost v. Hemert, Michael Gren, Fr. Holmsted, Jost Fabri­

tius, Guillaume de Brouwer, Anthony Westken, Peter Brounet, and Chr.

Faeddersen. Among the minor buyers were the Privy Councillor Raben,

Chr. Ludvig v. Plessen, Count Danneskjold Laurvigen, and Thomas

Bartholin.P This impression of a few big buyers is confirmed for the 1750s

and onwards, from which date some of the Company's sales registers are

n See Statsjournalen (1770), p. 64, and Kebenhatms Adresse Kontor (26 October 1761, No. 81),pp. 644-45 (prices for 1756--61 only). Cf. M. L. Nathanson, Danmarks National- og Statshus­

holdning (1836), p. 447, Note.12 RA., Minutes of the general meeting 30 January 1733.1S RA., Negotie hovedbogen 31 December 1735.

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H 0 I g- "... ~ ... WT

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296

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07.

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--

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5-5

414

4-18

576

-80

11.5

-12

1768

37.2

73.5

-102

-28

.53-

3.5

-12

2-14

4-62

-72

10-1

0.7

1769

37-4

4-.5

--

323

596

6013

1770

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45-6

4-

30-3

4.5

2.5-

2.7

-48

-64

62-6

4

.... (,J:

)c.o

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140 KRISTOF GLAMANN

Table 9 a.

Saltpetre auctions, 1753-56.

18 July 1753

No. Amountof bought

buyers (pund)

21 Aug. 1754

No. Amountof bought

buyers (pund)

7 April 1755

No. Amountof bought

buyers (pund)

23 July 1755

No. Amountof bought

buyers (pund)

13 Sept. 1756

No. Amountof bought

buyers (pund)

Above theaverage 2 150,000 2 53,000 5 204,000 4 267,000 3 176,000

Averageand below 7 54,000 2 12,000 9 99,000 9 90,500 14 85,200

Total 9 204,000 4 65,000 14 303,000 13 357,500 17 261,200

Table 9b.

Fabritius & Wewerv, Hemert

J. BirckIselinKlecker

346,000165,00097,00079,00056,000

preserved. The following tables have been drawn up on the basis of the

surviving registers,"- The main tables (9 a and 10 a) illustrate the relation­

ship between the number of buyers and the quantities bought at each

auction for saltpetre and for Indian kerchiefs. The top row of figures

shows how many buyers took more than the average per buyer, and the

lower row the number of buyers found on and below the average. The

secondary tables (9 band 10 b) show the names of the five biggest buyers

and their share in the sales at all these auctions.

A corresponding examination of the other East India goods presents

the same picture, save that the names of the big buyers change. Thus N iels

Schiett, Meyer Moses, Borre & Fenger, and Skibsted & Beck appear among

the five greatest buyers of caliatour wood, and Holmsted and Lazarus Levy

7< The auction registers are found in RA., D. Kanc. Esmarckske Arkivaflevering, 1753-57,Geheimeraad A. G. Moltke's Eksemplarer af Auktionsprotokoller over bortsolgte Ladninger fradet asiatiske Kompagnis Skibe (quoted below as Esmarck 11). The auction registers show thatthe various commodities were offered in seperate items, each item consisting of the unit inwhich the commodity was sold (e.g. 1 chest of tea) and only one item was offered at a time;

when it had been sold, the buyer's name and the price was quoted against the item. In 1751the Board of Directors tried to have this tedious procedure (which makes the registers veryheavy going for the historian) altered, but in vain. Cf. RA., Minutes of the general meeting15 August 1751, Item 10.

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THE DANISH ASIATIC COMPANY

Table lOa.

Auctions of East India kerchiefs, 1753-57.

141

18]u1y 1753 21 Aug. 1754 23 July 1755 23 July 1757

Amount Amount Amount AmountNo. of bought No. of bought No. of bought No. of boughtbuyers (pieces) buyers (pieces) buyers (pieces) buyers (pieces)

Above theaverage 6 35,180 5 16,960 5 12,000 3 22,500

Average andbelow 22 15,246 14 7,053 11 3,400 9 4,200

Total 28 50,426 19 24,013 16 15,400 12 26,700

Table lOb.

Fabritius & Wewer 26,560Lyhne 12,100Iselin 11,400Frechen 7,700Gram 6,600West India Company 6,000

among the buyers of pano comprido. There usually were a number of

Jews among the minor buyers of Indian textiles; as well as being concerned

with monetary transactions, the Jews also tended to specialise in textiles,

especially from India.

Tables 11 a and b analyse the auctions of Bohea tea, the nucleus of the

Company's trade." Again there are a few big buyers, and again we find the

well-known names. The larger were the quantities offered, the more

pronounced was the difference between large and small buyers. On an

average, 23 per cent of the buyers bought 74 per cent of the tea.

Most of these wares were resold to foreign countries. According to the

charter, all goods that were exported within 9 months of the day of the

sale were to be charged with only 1 per cent duty, whereas 2 1/2 per cent

was to be paid on goods that remained in the country or were not exported

before 9 months. At the Company's sales in 1734-52, Chinese goods to a

value of 11,994,221 rd. were sold, of which 77 per cent were re-exported

and 23 per cent remained in the country. During the period 1753-70 the

75 The auction-sale on 1 September 1760 is recorded in Kebenhauns Adresse Kontor (1 Sep­tember 1760), p. 484.

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142 KRISTOF GLAMANN

Table 11 a.

The sales of Bohea tea 1754-60.

11 Sept. 1754 17 Sept. 1755 17 Mar. 1756 23 Sept. 1756 11 May 1757 I Sept. 1760

Amount Amount Amount Amount Amount AmountNo. of bought No. of bought No. of bought No. of bought No. of bought No. of boughtbuyers (chests) buyers (chests) buyers (chests) buyers (chests) buyers (chests) buyers (chests)

Above theaverage 6 120 20 1,628 10 60 22 1,051 9 777 22 4,731

Averageand below 10 50 65 577 12 14 62 527 31 223 90 1,363

Total 16 170 85 2,205 22 74 84 1,578 40 1,000 112 6,090

Table 11 b.

Fabritius & Wewer 1,914Iselin 1,043Conrad Fabritius 636

J. & D. Brown 620v. Hemert 308v. Hurck 247

total amount rose to 16,806,816 rd. and the comparable proportions were

81 per cent and 19 per cent respectively. The corresponding figures for

the East India sales were, for 1734-52, 4,799,251 rd., 78 per cent being re­

exported and 22 per cent remaining in the country; and for 1753-70,

5,944,902 rd., 71 per cent and 29 per cent.76 This considerable export was

carried on by the Copenhagen merchants who, as is evident from the tables,

were the main buyers at the auctions. It is more difficult to find out to

which countries the goods were sold. From 1754 we have some details of

the value of certain exports, of the firms that sold them, and of the places

to which they were sent. Becker & Glerup sent goods worth 7,760 rd, and

475 rd. to Ostend and K6nigsberg respectively, Niels Borup goods for

1,000 rd. to Liibeck, and Brown & Godenius goods for 250 rd. to Dunkirk.

The figures, however, are small and can only be considered as hints.t"

Table 10 b shows the West India Company as a buyer of East India calicoes,

.and we know from other sources that there was some trade to the West

Indian colonies. From the trade journals of the West India-Guinea Com-

7. The Royal Libr., Copenhagen, Ny kg!. Saml. No. 793 b; cf. p. 360, Note 1.

77 RA., Esmarck n. No. 84, 12 and 18 October 1754.

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THE DANISH ASIATIC COMPANY 143

pany it is possible to trace this Company's annual purchases of Indian

textiles. They were sometimes bought at the sales of the Asiatic Company,

but more frequently from the big Copenhagen merchants: Fr. Holmsted,

Gregorius Klaumann, Michael Fabritius, Wasserwall & Boes, Fr. Faddesen,

and others.:" Some of the goods must also have been sold to Holland. A

number of Copenhagen merchants as well as the Asiatic Company and

the West India-Guinea Company appear as debtors in the estate in 1754

of the then lately deceased Jan Arnold van Orsoj, a member of the Amster­

dam banking house mentioned above (above, p. 122). In a special account

there was also entered: 'Thee-bohe van Copenhage de Nostra Conte'

to a total of 9,863 guilders; similarly there were accounts for shares in

cargoes of nearly all the ships of the Asiatic Company. On the credit side

it appeared that Jan Arnold van Orsoj owed U. F. Edinger, of Copenhagen,

1,371 guilders for goods delivered." In a later statement of Christian van

Orsoj's property, a so-called 'inventarisse' dated 1766, various Chinese and

Indian goods from Copenhagen are listed under the heading of merchandise,

among them pano comprido and salampores belonging to the Asiatic

Company, and borax belonging to R. Iselin & Co. 80 Itseems probable that

many of the goods, perhaps the greatest part, were re-exported by Copen­

hagen merchants to Germany and the Baltic." The absence of private

Danish merchant archives from the eighteenth century prevents the proof

of this supposition. The great purchases of tea in the 1760s were apparently

made with a view to the German market: the trading journal of the Kongen

at Danmark records on the 28 October 1763 that 'for another few years it

T. RA., Vestindisk-guineisk Kompagnis Negotie hovedjournaler 16 April, 15 and 21 December

1735, 20 March, 17 April, 31 December 1736, 22 and 13 June, 27 November, 31 December 1737,

23 September, ll, 17 and 31 December 1738, etc.

7. Not. Arch. Amsterdam, 10,755 (Sal. Dorper), acte 865, 25 July 1754.so Ibid. 10,827 (Sal. Dorper), acte 650, 26 May 1766.Si Cf. M. L. Nathanson, Historisk Fremstilling at Danmarks National- og Statshusholdning

(1836), p. 417, where it is stated that large quantities went to Germany by way of Liibeck, tothe Baltic ports and to Holland. Nathanson also mentions internal trade (p. 395), saying that

considerable quantities were sent from the capital to the Danish provincial towns, the duchies

(i.e. Slesvig and Holstein), and Norway, where they ousted many German, French, and English

commodities which had previously been ordered from Hamburg and Liibeck.In this connection we may mention a lawsuit between the Slesvig Merchant Company and

Schildknecht, the district revenue officer, concerning privileges for the tea bought at the

sales of the Asiatic Company (RA., Kom. kol. Div, sager det ostindiske Kompagni vedkom­

mende 1746--48, II July 1748). Finally, Pontoppidan mentions that the other trading com­panies, i.e. the West India Company and the General Trading Company, also shipped some

East India goods (Oeconomisk Balance [1759], pp. 101 and 105).

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144 KRISTOF GLAMANN

may be hoped that tea will be well paid at home, as, thank God, there is

peace in Europe and the whole of Germany lacks and wants tea'.82 From

1766 there is a letter from Count Bernstorff to the Board of Directors of the

Company which would seem to indicate that there was some export to

Switzerland." In general, the great volume of the transit trade is evident

from the fact that during the years 1763-69 it was considerably greater than

the exports of other Danish products, including Danish West Indian

produce.w

Credit andSale of Goods

There remains the question of the payment for the goods sold at the

auctions. The decisive problem here was how far the Company was able

to go in offering credit facilities to the buyers. For prompt payment a

discount was allowed (4 per cent for amounts greater than 500 rd.): the

term was 14 days, extended in 1735 to four weeks. In the same year it was

also decided that bills of lading used in payment should be registered in

the buyer's or the owner's name."

The actual arrangement of the question of credit was made in 1743.

Then it was laid down as a main principle that the rules 'ought not to be

observed strictly, nor be overlooked'. In other words the Company would

like to give the buyers good credit without running too great a risk. It

was established that the Company would take cash, or bills of lading for

ships whose goods had been sold, or accepted bills drawn either on Copen­

hagen with a currency of two months or on Hamburg with a currency of

two or three months, though with the proviso that bills could only be used

for payment of half the purchase price and at a rate of exchange fixed by

the Board of Directors. In 1768 this clause was changed into a requirement

that two-thirds of the amount due should be paid in foreign bills, a move

which must be regarded as part of the attempts to prevent too high a rate

of exchange for silver. Furthermore, it was decided in 1743 that the Com­

pany would take short-term bonds and share-certificates, as well as bills

.. RA., Negotie journal for skibet Kongen at Danmark 1762-64, 28 October 1763.

.. RA., Komp. Arkiv, 'Diverse Dokumenter', In the letter, which is dated 13 October 1766,

Bernstorff gives information about a society recently founded in Geneva which was interestedin Bengali goods, for which reason he asked the Company to inform him about the comingauction-sales.

.. Schovelin, op, cit., I, p. 235 and Table 1.

Ill> RA., Minutes of the general meeting 26 March 1735.

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THE DANISH ASIATIC COMPANY 145

of lading for other ships of the Company, share-certificates in the Bank and

mortgage deeds, though for this latter group the buyer's note-of-hand was

also required together with an undertaking that the secprities should be

redeemed not later than three months after the auction.s" The way was

thus left open for goods to be bought on credit against a suitable security,

redeemable not later than three months after the purchase. However,

established rules are one thing and actual conditions quite another. The

years immediately following 1743 showed that the Board of Directors could

not in fact provide the credit stipulated, as the Company had to collect the

money immediately to meet its many expenses. This was not without in­

fluence on the course of sales, as the eagerness of buyers proved to be

dependent on the credit facilities offered. In 1748 conditions were re­

arranged. In future, payment was to be made to the Bank where, against a

receipt, buyers deposited the payment for their auction-account. When

this receipt was shown to the Board of Directors, the buyer was given an

order addressed to the warehouse keeper, who then delivered the goods.

The same procedure applied to those buyers who wanted the goods against

short term mortgages. Finally, the Company was willing to consider bills

with a currency of four to six weeks as cash and the Bank promised to

regard them as such.87 This characteristically close collaboration between

Company and Bank opened up new possibilities, especially as it is known

that the same interests predominated in the Bank, in the management of

the Company, and among the bigger buyers at the auctions. Initially, the

Board of Directors disclaimed all responsibility for the new practice, for

in the following year it declared: 'We will take no responsibility if anything

questionable should happen regarding bills of exchange that have been

accepted and then, for various reasons, are not honoured.' The general

meeting exempted them from any responsibility, but appointed two hoved­

participanter (see above, p. 112) to assist in the collecting of the mortgages

and bills of exchanger" How this precautionary measure worked depended,

however, entirely on the men who were appointed, a fact which is evident

from a description and criticism in a letter from Johan Fr. Friis addressed

to the President of the Company in 1758.89

In this letter Friis complained that the Board of Directors, represented

.. RA., Minutes of the general meeting 24 July and 19 August 1743, and 12 October 1768.Br RA., Minutes of the general meeting 10 September 1748... RA., Minutes of the general meeting 12 August 1749... RA., Esmarck I, No. 52. 9 September 1758.

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146 KRISTOF GLAMANN

by Fabritius & Wewer, did not keep check on the transactions, but contented

themselves with handing to the book-keeper a list of the mortgage deeds

and bills he might receive and at what discount. When Friis called a meeting

of the management to examine this list, a serious clash developed between

him and the 'main participant', Iselin, concerning bills of lading which did

not belong to the buyer tendering them. Friis maintained that, in accord­

ance with the rules such bills should be endorsed to the effect that the

owner allowed the bearer to use them as securities; Iselin protested strongly

against this contention which he regarded as malice directed against himself

and Wewer, who were the only persons to use such bills of lading as

securities. Friis then went on to state that 'these bills of lading are still less

valid when, as now happens, they are left for so long, a year or more, that

at last they are of no value, even if they are registered in the name of the

debtor in question and really belong to him. For they are never acceptable

in any other respect than when the conditions of the auction are observed

and they are redeemed in time, but this does not happen and Daldorph,

the cashier, has complained of it to me'. But this was not all. By attending

the sales himself, Friis learned of the worries of the book-keeper about

buyers who tried to give securities other than those stipulated in the list.

In this way he witnessed a violent dispute between Bornowski, the book­

keeper, and a merchant, Ryberg, during which they got into such a quarrel

'that they nearly came to blows'. Friis then intervened and explained to

Ryberg that the book-keeper was well within his rights, as he acted in

accordance with the Directors' instructions regarding securities. Ryberg

immediately withdrew, stepped over to his partner Thygesen, and returned

with other shares and bills of lading. Among these there was one which was

not in order, so he went away again and returned with a valid one. This

scene may have been representative of what in fact went on. When Friis

blamed Iselin because none of the Directors ever kept a proper check, he

was given the retort that Iselin 'did not find this so very necessary, for it

could be done by the book-keeper, particularly as it was not his concern,

nor would he do so even if they presented him with 1,000 rixdollars a year

because he would not waste his time at the expense of his other business

affairs'. After these experiences Friis maintained that the Company should

re-organise the conditions of the sales, and that perhaps the generalpro­

kuret (Solicitor-General) should work out the regulations. The merchants

succeeded in preventing this, and after Friis had retired as a Director in

1761, there were no more discussions about the auctions.

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THE DANISH ASIATIC COMPANY 147

It was, of course, difficult to strike the optimum of credit facilities. The

conditions described by Friis show one extreme; its opposite was seen at

the auctions of 1754, 1755, 1769, and 1770 when, as a consequence of the

strict conditions of sale, the Company had difficulty in finding buyers for

its goods.s" As a whole, however, the last years were characterized by the

granting of extensive credit to buyers; as a consequence of this, in 1772 the

Company had 3-400,000 rd. outstanding with the merchants of Copenhagen

from the sales of the preceding years. D1 This practice was confirmed in the

arrangements for the 1770s, which laid down very easy regulations for

credit; they were criticised by the retiring Directors, but without result.

Friis by no means limited his criticism to the supply of silver and the

granting of credit facilities at the Company's auctions. In the early 1750s,

disturbed by accidents to the Company's ships and by bad government in

India, he approached the new President of the Company, A. G. Moltke, and

suggested a reorganisation of the Company." The main object of Friis's

proposal was to curtail the dominant influence of the merchants. This

could be done partly by restricting their number on the Board of Directors

and partly by a regulation by which no Director might be a supplier to the

Company. By these truly revolutionary regulations he proposed to remedy

the difficulties of the Company. But those difficulties did not much worry

the management, a management which, in Fi-iis's opinion, consisted of men

who were at the same time Directors, merchants, suppliers, lenders on

bottomry bonds, and in general persons who knew how to recoup themselves

by more ways than one. The proposal came to nothing, but the retort

of the Board of Directors in office was very significant. They asked simply:

'Wo waren bei der Errichtung der Compagnie in den Copenhagenschen

Ringmauern so grosse Capitalisten und bemittelte Kaufleute, die mit keinen

Liverancen oder Commissionen abgaben, und der Compagnie ohne mit

asiatischen Wahren zu handeln dienen wolten?'93 (On the foundation of the

Company, where, within the walls of Copenhagen, were such big capitalists

and prosperous merchants to be found who were willing to serve the

so Cf. Grunde tor den at os udkastede og derejter i det asiatiske Kompagnis Generaliorsam­

ling J /8 1772 approberede Konvention, tilligemed Svar paa de saakaldte Betamkninger over

Udkastet (1772), p. 62.•, Cf. Betankning over Udkastet til den nye Konvention og ruermere Forslag desangaaende

(1772).•• RA., Esmarck I, No. 51, 25 June 1753, and Nos. 1&-21 and 30.03 Ibid. No. 31. Simultaneously, and no doubt at the instance of the Board of Directors, a

description of the Company's prosperity was published (Mercure Danios, December 1753),reprinted in Holberg, Danmarks Stat (Srd ed.), pp. 648 H. and in Thaarup, op. cit., pp. 44-49.

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148 KRISTOF GLAMANN

Company without being suppliers or commission merchants and without

dealing in Asiatic goods?).

In 1735 Otto Thott in his Uforgribelige Tanker, described the ideal

merchant (in contrast to the shop-keeper) and how he ought to behave

during the new mercantilistic era. Being at one and the same time merchant,

bill-broker, and banker he had to be a director both of partners who had

less expert knowledge of commerce, and of officials and landowners; more­

over, his activities had to cover a wide range, extending to include home

industries." It was precisely such merchants as these who became the

leaders of the Asiatic Company. But the very fact of their manifold

activities also implied that they considered the Company as part of their

own business, not as a body whose interests they were to serve for the

Company's own sake. It is this attitude which in no uncertain manner is

manifest in the answer which Friis got from the Board of Directors, just

as it is in Iselin's remarks that even if he was given 1,000 rixdollars a year,

he would not waste time on checking securities as he had other things to

look after. The opposition was probably right in its demonstration of the

abuses that took place, but it had no power to change anything, because the

merchants represented capital and connections at home and abroad. This

was evident in regard to insurance, purchases of ships, furnishing of supplies,

and to sales, and it stood out clearly in connection with the foundation

of the Danish bank of issue in 1736. At the beginning of the period these

interests had need of Government aid, and the many privileges they received

were a benefit in these difficult years. At the same time the Company in­

curred obligations for the settlements in India; this could not be avoided

but was undoubtedly felt as a burden. So the Company concentrated on the

trade to China and at every opportunity appealed to the Government for

help in the shape of ships and soldiers. When the Indian factories had at

length become heavily entangled in debt, it was the merchants who more

and more hinted at the desirability of freeing the East India trade, a wish

that was fulfilled by the new charter of 1772. To these circles trade remained

paramount, and their will and power to take part in it is incontestable. It

was Fabritius & Wewer who in 1743 first suggested and then carried through

the dispatching of a ship direct to the Malabar Coast for pepper because the

factory at Tranquebar had failed (p. 128 above), and it was Schimmelmann

.. RA., Otto Thott, op. cit. Cf. J. O. Bro-jergensen, 'Grosserer-Societetets Oprettelse', inVilh. Lorentzen (ed.), Grosserer-Societetet, 1742-1942 (1942). pp. 30 f.

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THE DANISH ASIATIC COMPANY 149

and Ryberg who in 1767 requested permission for private merchants to send

an extra ship to the East if the Company would not itself carry through

such a large mercantile undertaking."

It is difficult to decide whether Friis's criticism was representative of

the private shareholders' opposition. The majority of them rarely appeared

at the general meetings but left their capital to the care of their eo­

shareholders; this was evident at, for example, the auctions where the

merchants used their bills of lading as securities for payment. Moreover,

they could hardly fail to be satisfied with the large dividends paid by the

Company. The dividing line between the continuous and the circulating

fund became correspondingly blurred, because the participants in the

former were rarely asked whether they wished to take shares in the in­

dividual trading voyages, but instead the amounts necessary for new voyages

were raised by ploughing back part of the shares that were supposed to

be distributed among the holders of 'circulating capital', and the profits

soon became common to all types of shares.

.. RA., Minutes of the general meeting 3 April 1767.

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