Around 400 years ago the Danish King Christian IV, like most other European rulers, went around with lofty ideals of making his country great, wealthy and powerful, and he planned to achieve this through war and trade.
Trade with spices and other exotic foods was extremely rewarding in the 1600’s. In order to earn money through it, however, it required that rather than simply purchasing the goods, you collected them yourself from East India, as Southeast Asia was then called.
This demanded local support, trading stations and direct colonies and, not least, a trading company. Christian IV could see other European countries such as the Netherlands, Spain and Portugal growing wealthy from trading with their colonies – and he wanted to jump on the wagon.
Together with two Dutch merchants, the king established the East India Company on the 17th of March 1616. It was Denmark’s first limited company.
The next step was to acquire a sufficiently large sum of money to send an expedition to East India and establish a Danish colony. During 1616 and 1617 the Company sold stock, albeit with no great success; Danish citizens, and the nobility in particular, were not then familiar with the tricks of the stock market trade.
In the summer of 1620, however, Christian IV personally entered into the sales work, making direct contact with prominent, and not least wealthy, citizens and gentry. More or less voluntarily, the money began to pour in. If the new investors could not afford to pay up right away, then the king offered them a loan, at good interest rates for himself – and also made sure to be written into the investors’ wills, should they end up dying before they had managed to repay the loan.
In this way, in just a few months he succeeded in raising no less than 180,000 rigsdaler. Considering the entire Danish kingdom’s total income at that time came to around 400,000 rigsdaler a year, then this was a considerable sum. In total, 300 shareholders invested an amount between 50 and 16,000 rigsdaler into the East India Company.
The East India Company gained exclusive rights to all Danish trade in the area between the Cape of Good Hope on Africa’s southern tip to the Strait of Magellan in South America – theoretically four-fifths of the globe. In practice, however, it was only the area in the Indian Ocean that was interesting at this point.
In the autumn of 1618 the Company set off on its first expedition under the leadership of the then just 24-year-old admiral Ove Giedde on the naval ship ‘Elefanten’. The expedition succeeded in establishing the trading colony of Tranquebar on the east coast of South India.
In the following years, the East India Company dispatched many more ships to Tranquebar, and they also returned with the much sought-after goods. While we don’t know how much the very first goods were sold for, we do know that it was not enough to finance new expeditions. They were, instead, primarily funded with loans from the king. During the years 1621 and 1622, the king lent the Company no less than 265,000 rigsdaler to finance new expeditions.
Over the following years, the East India Company was constantly short of money. As the king could not continue to fill the coffers on his own, on several occasions he demanded that the other investors also paid a share. If they didn’t pay, he threatened to confiscate their original investment – a threat which was clearly illegal, but which proved effective nonetheless.
By 1638 the shareholders had had enough and demanded the Company be dissolved in order to avoid paying out any more for something which they believed was solely the king’s pet project. The king ignored them, however, and the East India Company clung on until 1650, when it was finally dissolved due to a lack of money, a direct consequence of Christian IV’s death in 1648.
Just 20 years later, however, in 1670, a new Danish East India Company was established with royal support. Once again, a ship was dispatched to Tranquebar. and by the end of the 1600’s, the Company was sending an average of two ships a year to East India.
However, the Great Northern War of 1700-1721 was to wreak so much havoc on the Company’s operations that it went bankrupt in 1729 and was dissolved.However, as early as 1732 all the privileges from the East India Company– including Tranquebar – transferred to the new Asiatic Company, which had the same investors behind it. In reality it was simply the same company under a new name – and now without debts.
The Asiatic Company had its golden era in the period from 1750 to 1772. In addition to spices, the Company traded in cotton and exotic types of wood such as teak.
The Company’s exclusive rights to trade in East India expired in 1772.In 1777 the Asiatic Company handed over ownership of Tranquebar to the Danish crown.
Things went rapidly downhill from here for the Company. The British-Danish wars of 1801-1814 hammered the final nail in the coffin, and Great Britain took over virtually all trade in India. From 1814 until the Asiatic Company’s dissolution in 1843,just a few individual ships were dispatched to Tranquebar.
It also meant that Tranquebar was sold to the British two years later in 1845 for just over one million rigsdaler, marking the irrevocable end of the Danish colony.