NORDIC NEUTRALS AND ANGLO-FRENCH WARS, Leos Müller, Department of History, Uppsala University.

NORDIC NEUTRALS AND ANGLO-FRENCH WARS, 1689-1815

Leos Müller, Department of History, Uppsala University [email protected] SESSION 36: The Northern Mediterranean. Economic Contacts and Cultural Exchange over the North Sea and Baltic, 1550-1750, 24 August 2006, XIV International Economic History Congress, Helsinki

1 Introduction The period 1689-1815 is characterised by the outdrawn conflict between France and Britain, sometimes described as the Second Hundred Years War. The struggle started with the Wars of the League of Augsburg and Spanish Succession (1688-1697, 1701-1713) and it continued, after twenty-five years break, with warfare from the War of Austrian Succession until the end of the French Revolutionary and Napoleonic Wars (1739-48, 1755-63, 1776-83, 1793-1815). But this conflict did not, primarily, concern territorial control of the enemy state, in contrast to previous wars. Instead the Anglo-French eighteenth-century warfare was fight for hegemony over long-distance trade and colonies. In a way, the Anglo-French Wars were another step in the continued struggle for hegemony of world trade, started by the Dutch in the early seventeenth century. From about the mid-seventeenth century trade had been perceived as the best source of state income—means rather safe, large and expanding source; thus the struggle for control of trade ultimately was the struggle for control of taxable resources. The AngloFrench Wars Despite the outdrawn destructive warfare the period is also characterised by large expansion of trade. Especially the long-distance trade, trade in colonial commodities expanded, and it should be stressed that the expansion concerned more the “national” (also including colonial

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trade) than the “international” trade. Evidence of the trade growth might be found as well in the figures for values of trade and in volumes of shipping capacity. 1 Growth of trade and outdrawn warfare were not mutually exclusive. However, there are authors who point out Anglo-French struggle, together with mercantilism and protectionism, as a hinder for trade expansion, with all the consequences it had for the economic development. Recently Kevin O’Rourke and Jeffrey Williamson have argued so.2 Correctly, O’Rourke and Williamson are not interested in warfare’s impact on economy. Their proper issue is beginning of globalization, which they date to the mid-nineteenth century and connect with liberalisation of world trade, peace and decline in transport costs. Before 1800, different national and continental markets were not integrated and the volume of the world trade was limited. Eighteenth-century warfare is perceived as one of the causes of the low market integration. Other scholars challenge this concept and put beginning of globalization much earlier. They see the eighteenth-century expansion of trade as an extension of this earlier process. The debate on beginning of globalization concerns the much bigger issue of the origins of capitalism and the modern economic growth and it will not be discussed here.3 My task is much more limited. I will show that small neutral states, such as Sweden and Denmark, might play significant role in reducing the total negative impact of eighteenthcentury warfare and protectionism. Early modern economies are alternatively studied as either regulated “national” economies or integrated world or regional economies, in Braudel’s meaning. The first perspective is often 1

Engerman, Stanley L, “Mercantilism and overseas trade, 1700-1800”, in Floud, Roderick and McCloskey, Donald (eds.), The Economic History of Britain since 1700. vol. 1:1700–1860. Cambridge 1994; Ormrod, David, The Rise of Commercial Empires. England and the Netherlands in the Age of Mercantilism, 1650-1770. Cambridge University Press, Cambridge, 2003, pp. 354-61. For shipping volumes see Romano, Ruggiero, “Per una valutazione della flotta mercantile europea alla fine del secolo XVIII”, In: Studi in onore Amintore Fanfani, vol V, evi moderno e contemporaneo. Milano 1962, Unger, Richard W, “The Tonnage of Europe’s Merchant Fleets, 1300-1800”, American Neptune, no 4 (Fall 1992), pp. 247-61; Maddison, Angus, The World Economy. A Millenial Perspective. Paris, OECD 2001, p. 77 (table 2-15). 2 O’Rourke, Kevin H. and Williamson, Jeffrey G., “When did globalisation begin?”, European Review of Economic History, 2002/6, pp. 23-50; O’Rourke, Kevin H. and Williamson, Jeffrey G., Globalization and History. The Evolution of a Nineteenth-Century Atlantic Economy. Cambridge (Mass.) 1999; O’Rourke, Kevin H. and Williamson, Jeffrey G., “Once more: When did globalization begin?”, European Review of Economic History, 2004/8 pp. 109-17. On warfare’s damaging impact see O’Rourke, Kevin H., “The worldwide economic impact of the French Revolutionary and Napoleonic wars, 1793-1815”, Journal of Global History, 2006/1, pp. 123-49.However, it must be pointed out that they focus on late eighteenth century warfare, not the whole Second Hundred Years War. 3 For a useful recent survey of the debate see introduction in Emmer, Pieter, Petré-Grenouilleau, Olivier and Roitman, Jessica V. (eds.), A Deus ex Machina Revisited. Atlantic Colonial Trade and European Economic Development XVIIth-XIXth Centuries, Brill, Leiden, 2006. And for a recent contribution see Acemoglu, Daron, Johnson, Simon and Robinson, James, ”The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth”, The American Economic Review, June 2005/3, pp. 546-79, theoretically inspiring but based on weak evidence.

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the consequence of historian’s interest in trade policy (mercantilism), or it reflects typical limitations by national sources (trade statistics, trade regulations, fiscal records etc.). The second perspective reflects theoretical ambitions, but sometimes fails correctly evaluate the effect of state intervention, either in the form of trade regulations or foreign policy. 4 Moreover, the majority of studies focus on great powers and states with colonial empires (Britain, France, the Dutch Republic, Spain). Yet regional economies did not consist only of empires. There were always a number of small more or less independent states, economic actors that might and did impact on the aggregate trade systems. There is a seldom-noticed paradox in the simultaneous being of warfare and mercantilism. Wars were fought in the name of the national trade, also protected trade, but protectionist measures frequently had to be abandoned, to continue trade and shipping in wars. Thus trade wars opened profitable niches for independent traders. This paper will focus on Denmark and Sweden and their role as neutral carriers and traders during Anglo-French Wars. The states did not belong among great powers. Sweden’s ambitions were crushed by Russia in the Great Northern War (1700-21) and Denmark lost its great power status already in the mid-seventeenth century, after the wars with Sweden. After the war with Sweden (1709-20) Denmark consequently followed foreign policy of neutrality. Sweden’s neutrality policy was less durable; for a large part of the century Sweden was France’s ally and it was engaged in wars. However, even Sweden consequently avoided confrontation with Britain and after costly and ill-prepared partaking in the Seven Years War it followed a policy of consequent neutrality in the great power struggle. How could the Nordic neutrals diminish damage on trade caused by war? First, they replaced the missing shipping capacity. For example, when the French or Spanish ships were excluded from shipping by the Royal Navy, the neutrals could replace them. This was the most obvious case, but the neutrals also could take market shares from the British merchant tonnage when British freight rates and crew wages soared in wartime. Second, the neutrals could infringe, and they frequently did, on protected trade of great powers. There are a number of examples unveiling how the Danish and Swedish merchants and companies took part in free trading in Asia. A large proportion of the teas imported by the Danish and Swedish East India Companies was smuggled to Great Britain. The Danes, and perhaps also the Swedes, took part 4

For a kind of Braudelian perspectives on North Sea economy see Ormrod, The Rise of Commercial Empires. Also eighteenth-century Atlantic economy has often been seen in this way, see Hancock, David, “The British Atlantic World: Co-ordination, Complexity, and the Emergency of an Atlantic Market economy, 1651-1815”, Itinerario 1999/2.

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in remittances of British subjects from India. Moreover, the Nordic neutrals took part in the trade between the West Indies, North America and Europe. Much of these trading activities were illicit, at least from the British perspective, but due to their neutral status the Danes and Swedes could carry on. Warfare seen from the point of view of institutional economics always increases transaction costs. This is the conceptual way of characterising the warfare’s damaging impact. Sinking or taking enemy’s vessels has always been a legitimate part of the warfare and this has entailed direct losses, and indirectly increase in shipping costs (insurance premiums, large crews and high wages, costs of armament, convoying, etc.). Undoubtedly, even the costs of the neutral carriers increased, but not as much as that of the belligerents. This difference made neutral shipping extremely profitable. Overall, the use of neutral shipping capacity and neutral participation in trade reduced wartime transaction costs. The negative impact of the warfare was reduced but not eradicated. It is difficult to make any general conclusion on the overall impact of neutral activities but following examples will hopefully show that the impact was of significance. In section 2 I will shortly explain the legal basis of neutral shipping. In section 3 the Swedish and Danish shipping in southern Europe will illustrate the logic of neutral shipping. The data are mainly based on the analysis of Danish and Swedish Algerian passports. The concluding section 4 will illustrate the exploitation of neutrality in the Scandinavian trade in colonial commodities, in the trade with Asia and the West Indies.

2 The concept of neutrality and neutral trade and shipping Taking or sinking of enemy’s merchant vessels has always been a part of the maritime warfare. The practice had been in use in the Mediterranean and there also the first codes on this kind of warfare developed, and, too, the concept of neutrality in conflict between two maritime powers. The crucial moment for the modern development of the rules of privateering and the concept of neutral status was the Anglo-Dutch wars in the second half of the seventeenth century. The wars were the first typical trade wars between early modern nation states, and damage of enemy’s merchant fleet, consequently, was one of important aims of the struggle. Large-scale maritime warfare opened economic opportunity for non-belligerent, neutral states to take shares in the belligerents’ trade. In practice, the concept of neutrality had little use outside sea-borne trade. That is one of the reasons why the issue of neutrality became 4

significant first after 1650, with trade wars between maritime powers. The main neutral principle was: free ships make free goods, which meant that the nationality (flag) of the vessel covered the nationality of the cargo. Neutral vessels, in principle, had the right to carry out commodity trade between belligerents and non-belligerents. An exception of this right was war necessities, such as arms and ammunitions, defined as war contraband. These neutrals’ rights were broadly accepted as an element of international law, and they were incorporated in bilateral treaties of early modern states, as well as in large international peace settlements. Yet, some ambiguous definitions opened for varying understanding of the concept and provoked frequent diplomatic quarrels between neutrals and belligerent great powers. For example, Britain applied different understanding of the definition of the contraband, depending on the nationality of the vessel concerned. Accordingly, the Dutch vessels, following the advantageous definition of neutrality in the Anglo-Dutch treaty of 1674, were treated much better than the Danish and Swedish vessels. The exploitation of neutrality in the Baltic and North Sea was remarkable already during the Third Anglo-Dutch War and the Scanian War between Sweden and Denmark in the 1670s. In 1672-74, English vessels disappeared from the Baltic, a consequence of the conflict with the Dutch. But, the number of Swedish vessels passing the Sound increased at 160. The situation reversed completely in 1675-79, when in the first two years of the Danish-Swedish War the Swedes were swept away from the Baltic and replaced by the neutral English tonnage.5 However, truly consequent exploitation of Nordic neutrality is connected with the War of the League of Augsburg. During this war the share of Nordic shipping in the Sound Toll data increased to 40 per cent (almost 1,500 vessels annually), while the shares of the Dutch and English declined to 32 and 9 per cent.6 In 1693, there were 750 officially registered vessels in Sweden. This was a very high figure. Next year when we have data for Swedish registered vessels is 1723, and then there were only 228 vessels. The end of the neutrality boom and, later, the outcome of the Great Northern War can explain the decline between 1693 and 1723. First in the late 1770s, during the American War of Independence, the number of Swedish registered vessels surpassed the 1693 figure. 7 5

Müller, Leos, “Britain and Sweden: the changing pattern of commodity exchange, 1650–1680”, Patrick Salmon and Tony Barrow (eds.), Britain and the Baltic: Studies in Commercial, Political and Cultural Relations 15002000, University of Sunderland Press, Sunderland 2003, p. 67 (table 2). 6 Ormrod, The Rise of Commercial Empires, p. 284, based on Bang, Ellinger, Nina and Korst, Knud, Tabeller over skibsfart och varetransport gennem Øresund 1661--1783. København 1930-1953. 7 Heckscher, Eli F., Den svenska handelssjöfartens ekonomiska historia sedan Gustaf Vasa Sjöhistoriska samfundets skrifter, no 1, Uppsala 1940, p. 18, Müller, Leos, Consuls, Corsairs, and Commerce. The Swedish Consular Service and Long-Distance Shipping, 1720-1815. Uppsala 2004, (available http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-4550 (2006-08-02), p. 142.

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Of course, a large share of the neutral merchant fleet of the 1690s were Dutch vessels supplied with Swedish papers. There was also a substantial inflow of Dutch shipmasters into Stockholm. To receive Swedish papers the vessel had to have shipmaster settled in Sweden.8 The same changes of flag of Dutch vessels was going on in the Danish kingdom, and many Dutch shipmaster moved to Copenhagen and other Danish ports. The economic exploitation of neutrality during the War of the League of Augsburg was possible due to co-operation between Denmark and Sweden, otherwise rivals for control of the Baltic Sea. To make their neutrality credible in the eyes of maritime powers, the two former enemies in 1691 signed the Union des Neutres pour la Securite de la Navigation et du Commerce.9 Such a pragmatic co-operation became a marker of Nordic foreign policy after 1721. However, the most successful neutral carrier of the first half of the eighteenth century indeed was the Dutch Republic. Denmark and Sweden became increasingly engaged in neutral carrying business from the Seven Years War. Thus, in 1756 Sweden and Denmark together signed a treaty of armed neutrality directed towards the belligerent states. The Baltic Sea was declared neutral, which meant closed to the belligerents’ privateers and fleets, and a joint Danish-Swedish squadron cruised between Jutland and western Sweden to guarantee the neutrality. 10 The co-operation was broken by Sweden’s declaration of war on Prussia n 1757, but, notably, Sweden did not engage in the Anglo-French war and continued to profit from neutral shipping. The golden age of Nordic neutral shipping was the War of American Independence and the French Revolutionary Wars. The exceptional neutrality boom was outcome of a number of beneficial factors. In 1778-83 Britain was isolated and less willing to confront neutrals. The major neutral carrier in Europe since the peace of Utrecht, the Dutch Republic, got involved in the war in 1780. Due to the formation of the League of Armed Neutrality between Russia, Denmark and Sweden, the Nordic neutrality got much more credibility and weight. The League of Armed Neutrality of 1780 became internationally accepted prototype of neutrality policy and so it has been perceived also in the nineteenth and twentieth centuries. The success of the neutral co-operation 1780-83 was the reason why the British acted so resolutely when

8

Ufke, Tonko, “Nederländska skeppare på stockholmska hansdelskepp 1685-1700”, Forum Navale 2000, nr 56. Malmborg af, Mikael, Neutrality and State-Building in Sweden. Palgrave Chippenham 2001, p. 31. 10 Pourchasse, Pierrick, Le Commerce du Nord. Les échanges commerciaux entre la France et l’europé septentrionale auXVIIIe siècle. Rennes 2006, p. 267; Jägerskiöld, Olof, Den svenska utrikespolitikens historia, vol. II:2, Stockholm 1957, pp. 195-6, Malmborg af, Neutrality and State-Building, pp. 33-4. 9

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the Second League of Armed Neutrality was established in 1800, however between 1793 and 1800 the neutrals were very successful.

3 The Nordic neutrals and carrying business The Sound Toll Register data provide a reliable and comprehensive picture of shipping activities of the Nordic states. The data make it possible to relate Swedish and Danish shipping to shipping of other states, and they indicate also very clearly the differing trends in shipping of neutrals and belligerents.11 However, the number of voyages through the Sound does not say much about the character of business the vessels were conducting outside of the Baltic. Were they only carrying Swedish and Danish cargoes, or were they going in freight trade for foreigners/belligerents? This question is very important if we aim to assess overall significance of neutral carrying capacity. For this issue an alternative source has been employed, the so-called Algerian passports. The passports had been issued as identity documents for Swedish and Danish vessels in traffic beyond Cape Finisterre, the cape in north-western Spain. Issuing of the documents was regulated in peace treaties between the Nordic states and North African Barbary states (Tunis, Tripoli, Algiers and Morocco). The documents made Swedish and Danish vessels safe in contact with Barbary corsairs. Due to passport’s character, the issuing procedure was strictly controlled and documented, which means that the passport registers provide us with reliable and detailed information about Nordic long-distance shipping. The shipping beyond Cape Finisterre includes ships in the Mediterranean, by the coasts of the Iberian Peninsula, ships in transatlantic trade and ships employed in East India and China trade. These were seas and territories affected much more by the Anglo-French warfare than the quiet Baltic; these also were areas in which economic benefits of neutrality were largest. Graph 1: Danish and Swedish Algerian passports, 1741-1807

1200 1000 800 600 11

400

For the general trend until 1783 see Ellinger and Korst, Tabeller over skibsfart. For a detailed analysis of post200 1783 period Johansen, Hans Chr., Shipping and Trade between the Baltic Area and Western Europe 1784-95. Odense University Press 1983.

Sw eden

D enm ark/total

18 05

18 01

17 97

17 93

17 89

17 85

17 81

17 77

17 73

17 69

17 65

7 17 61

17 5

17 53

9 17 4

17 45

17 41

0

D enm ark/southern E urope

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The analysed period is 1741-1807. The Swedish registers for the period contain data about 18,121 passports, representing as many voyages. The Swedish authorities issued in average 270 passports per annum. The Danish registers are in extant first from 1747 and there is also a gap between 1772 and 1778.12 The total number of passports issued exceeds 20,000, indicating that between 300 and 400 Danish vessels annually received Algerian passports. Nevertheless, annual averages do not say anything about the spectacular increase in shipping during wartime booms. Diagram 1 shows the long-term increase from less than 200 annual voyages in the 1740s and 1750s to spectacular top levels during the American War of Independence and the French Revolutionary Wars. The development was quite stagnant until the Seven Years War. Then there is a clear increase in Danish shipping and a less clear increase in Swedish shipping. The numbers of passports indicate that the Danes were more successful in exploitation of wartime conditions. On the other hand, in peace periods the number of passports issued by the Danes declined while there were no such large declines in Sweden. The years of the American War of Independence confirm a strong wartime boom. The number of Danish passports in 1781 and 1782 exceeded 600. Even in Sweden 1781 was the best year, with 441 passports issued. The Swedish decline in 1788-90 was the outcome of the war with Russia, which effectively stopped the Swedish trade through the Sound.13 The French Revolutionary Wars entail again new shipping boom for the Danes. Swedish shipmasters were slower to adjust but even in Sweden the number of passports increased rapidly. Table 1 illustrates the shifts between war and peace periods in annual averages for war- and peacetime periods. Table 1, as well as the diagram 1, includes also the Danish data for vessels with southern-European destinations. The comparison of the annual averages shows that between majority of Danish voyages were destined to the ports in southern Europe (c. 60-80 per cent); however, the share of vessels non-European trade was clearly increasing by the end of the period.14

12

Andersen’s databasis includes also some scattered data on the 1773-77 period, collected from consular shipping lists. 13 Johansen, Hans Chr. “Østersjøhandelen og den svensk-russiske krig 1788-90”, Erhvervshistorisk årbog Meddelelser fra Ehrvervsarkivet XXVII 1976-77, pp. 35-54 14 For the discussion of the Danish data see appendix.

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Table 1: Average numbers of passports issued in periods of peace and war 1741-1800 Period

Sweden

Denmark/total Denmark/southern Europe

1741-48 (war)

148,5

104,5

80,5

1749-55 (peace)

148,9

106,7

88,1

1756-63 (war)

172,8

205,6

171,1

217

155,2

107,6

1776-83 (war)

316,4

478,3

280,3

1784-92 (peace)

251,2

363,8

270

1793-1800 (war)

449,3

966,3

619,2

1764-75 (peace)

Source: See appendix.

The data on the Algerian passports also confirm the remarkable long-term increase in Swedish and, in particular, Danish shipping beyond Cape Finisterre, and they, too, show clear correlation between wartime booms and Nordic neutrality. Yet they do not unveil if neutrals indeed replaced belligerents as carriers, which is the most interesting question if we aim to assess overall role of neutral carriers. Description of shipping activities in Marseilles provides a better basis for answering such a question. Marseilles was the major seaport in the Mediterranean, with a large market for shipping services and many Nordic vessels stopped there to find cargoes for tramping in the Mediterranean. The market for shipping services in Marseilles was less influenced by protectionism in shipping (Navigation Acts). Diagram 2 compares neutral and British shipping activities in Marseilles. The neutral shipping includes Swedish, Danish and Dutch (until 1780) vessels entering the port. The diagram reveals a clear negative correlation between the two lines. This is apparent especially in the years when wars broke out. In periods of peace the British and neutral numbers indicate the same developments. Shipping activities in Marseilles shows also another enduring change, long-term decline in British shipping and increase in neutral shipping. Of course, wars are not the single explanation of why British vessels disappeared from Marseilles. Atlanticisation of British trade might be mentioned; the trade with Europe became less significant and, consequently, the share of British shipping in Marseilles declined.

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Diagram 2: British and neutral ships entering Marseilles, 1738-90

90 250 80 70 150 60 200

40

0

83

77 1780

74

68 71

65

59 62

56

1750 53

47

41 44

30 0 20 10

1738

50

86 89

Öst Väst Nord

50 100

Britain 2:aNeutrals (Britain) Linjär (Neutrals) 1:a kvart kvart 3:e Linjär kvart 4:e kvart

Source: Carrière, Charles, Négociants marseillais au XVIIIe siècle. Marseilles 1973, p. 1061. Note: Neutrals include Swedish and Danish vessels for the whole period, and Dutch vessels for the period 1738-1780.

The significance of trade protectionism for eighteenth-century development is frequently referred, and British Navigation Acts are mentioned as such typical arrangement that distorted markets. The Nordic neutrals implemented similar laws, Sweden in 1724 and Denmark in 1742. So, shipping services are an interesting case to test how well the European markets functioned. As regards the Danish shipping the answer is relatively simple.15 The Danes had very few export commodities and so their shipping business beyond Cape Finisterre was in large dependent of services for foreigners. There were some exceptions; for example Norway exported substantial volumes of timber and fish, and also colonial commodities from the Danish territories did play a significant role in the trade. Large share of the Danish colonial imports was re-exported to northern Europe. However, the Duchies (Schleswig and Holstein), that made a significant share of Danish long-distance shipping, had no big export commodity. The Danish historian Dan H. Andersen shows that about a half of Danish vessels destined for 15

For a general review of Scandinavian shipping see Johansen, Hans Chr., “Scandinavian shipping in the late eighteenth century in a European perspective”, Economic History Review, 1992/3, pp. 479-93.

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southern Europe (beyond Cape Finisterre) originated from the Duchies. It is obvious that their main trade was tramp shipping. 16 As regards Sweden the relationship between trade and shipping was more complex because Sweden had voluminous export-import trade. Swedish exports (iron, timber, tar and pitch) as well as major imports (salt and grain) demanded large carrying capacity and shipping of the commodities commonly has been perceived as the only task of the Swedish merchant tonnage. Sweden’s shipping policy (Swedish Navigation Act of 1724) was to guarantee this sufficient carrying capacity. Nevertheless, it is apparent that also Swedish vessels were engaged in tramp shipping on a great scale. There is evidence of such trade in the Swedish consular reports, because consuls were frequently engaged as shipping agents by Swedish shipmasters and shipowners. Moreover, a detailed analysis of Algerian passports appears to confirm the high share of vessels engaged in tramp shipping. Table 2: Swedish Algerian passports returned, according to the date of return, 1777-85 Year

Totally

Returned

Second

issued

same year

year

1777

253

29

162

44

8

3

1

1778

287

41

128

45

22

3

1

1779

282

40

122

67

20

6

5

1780

320

40

172

68

21

3

1

1781

373

49

190

85

22

4

3

1782

441

25

267

74

20

11

2

1783

339

35

208

50

23

4

2

1784

370

44

225

48

17

7

2

1785

389

49

192

96

10

3

4

Total

3,054

352

1,666

577

163

44

21

100%

11.5%

54.6%

18.9%

5.3%

1.4%

0.7%

Third year

Fourth

Fifth year

year

Sixth year

Source: Algerian passport register, KK Huvudarkivet, Sjöpassdiarier, 1769-78,CIIb, (Swedish National Archives, Stockholm) 1777-85.

In table 2 I have examined the passports issued in the “extended” period of the War of American Independence 1777-85 by looking at the date of the ship’s return. The passport 16

Andersen, Dan H., The Danish Flag in the Mediterranean. Shipping and Trade, 1747-1807. 2 vols, (PhD Dissertation) University of Copenhagen 2000, pp. 331-2, Appenix C. Duchies dominated completely this traffic

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registers both include the date of issue of the passport and the date of its return. The authorities required the return of the passport at latest fourteen days after homecoming; hence the return date of the passport reflects quite exactly the ship’s arrival in Sweden. The return dates indicate that more than a half of Swedish ships returned next (second) year and more than onefourth continued to sail even for third, fourth, and fifth year. And there were ships, which stayed abroad even for longer periods. Only one-tenth of vessels returned home the same year. This, by far, exceeds times needed for a turn-around voyage to southern Europe (a couple of months) and indicates that a large share of vessels with the passport was employed in tramp shipping.

The evidence from the Danish and Swedish Algerian passports, as well as other quantitative and qualitative sources shows that there was extensive neutral tramp shipping in southern Europe. And this appears to confirm the existence of rather free market for shipping services. The recurring periods of warfare made it difficult to carry out consequent protectionist policy in shipping, in particular in southern Europe. However, the increase in neutral shipping did not depend only on the wartime booms. It appeared to be part of a enduring trend, a restructuring of European internal trade and its shift towards the Atlantic. The Atlanticisation of the trade in Britain, France and Spain, connected closely to their colonial empires (protected “national” markets), opened opportunities for small actors. The carrying business in southern Europe is a good example of such opportunities. Neutrality was not the only competitive advantage of the Danish and Swedish shipping. In the 1730s and 1740s the Nordic countries signed peace treaties with the Barbary states, which made their ships safe and reduced their protection costs. Moreover, labour productivity on Nordic vessels appeared being relatively high and wage costs were significantly lower than in other countries. Swedish and Danish shipbuilding costs were lower than in Western Europe. We should not forget also that the Baltic Sea and Scandinavia were major suppliers of shipbuilding materials. 17

until the American War of Independence when the number of Norwegian vessels expanded to comparable levels. 17 However, as regards shipbuilding’s organisation this appears less efficient than, for example, in Britain and the Dutch Republic, see the contemporary debate by Johan Westerman, Om Sveriges Fördelar och Svårigheter i Sjöfarten, i jämförelse med andra Riken. Kongl. Vetenskaps Academiens handlingar för år 1768 vol xxix, (Stockholm 1768), pp. 289-318 (The treatise is available on: http://www.bruzelius.info/nautica/Maritime_history/SE/Westerman(1768).html)

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4 Nordic neutrals in colonial trade The neutral carrying business in southern Europe was not the only way of exploitation of the Nordic neutrality. There was another less voluminous and consequently less visible part other the neutral trade in which Denmark and Sweden did play a very significant role—trade in colonial commodities. Both Sweden and Denmark had a long history of colonial endeavour. In the course of seventeenth and eighteenth centuries, Denmark created a small colonial empire in the West Indies, Africa and India. Moreover Denmark traded with China via an East India Company. Sweden had many ambitious plans but no overseas colony until 1784. The tiny island of St Barthélemy was obtained this year from France, and it served as a basis for Swedish activities in transatlantic trade during the French Revolutionary Wars. Sweden’s trade with Asia was controlled by a chartered East India Company.18 The Scandinavian companies became to play a more significant role in trade with Asia from 1730s when the European demand for new Asian commodities, such as tea and cotton textiles increased. The Swedish East India Company was established in 1731, partially with money and people from the abolished Imperial Ostende Company. The Swedish Company early became more or less specialised on trade with Chinese Canton, the only East Asian port open to all Europeans. There was an attempt to establish a trading station in India, in Porto Novo, but this was effectively interrupted by the joint British and French action. 19 During its existence (1731-1813) the Company fitted out 132 expeditions, 124 of them went exclusively to Canton. Because the most profitable commodity in China trade was tea, the Swedish Company soon became more or less a specialised tea trader. Nevertheless, Sweden and the Baltic region were no large tea drinkers, so the major part of the Company’ imports were reexported either legally to the continent, or illegally to Britain. The trade of the Danish Asiatic Company, reconstructed in 1732, was significantly more diversified. The Danes had two trading stations in India and they imported, and re-exported, 18

The Danish literature on the empire and colonial trade is voluminous. For the economic significance of the West Indies see Andersen, Dan H., “Denmark-Norway, Africa, and the Caribbean 1660-1917: Modernisation financed by slaves and sugar?”, in Emmer, Pieter, Petré-Grenouilleau, Olivier and Roitman, Jessica V. (eds.), A Deus ex Machina Revisited. Atlantic Colonial Trade and European Economic Development XVIIth-XIXth Centuries, Brill, Leiden, 2006, and literature referred there. For the Danish trade with Asia see especially Feldbæk, Ole, India Trade under the Danish Flag 1772-1808. Scandinavian Institute of Asian Studies. Lund 1969, Feldbæk, Ole, Dansk søfarts historie, Storhandelens tid 1720-1814, vol. 3. København 1997, and other works by the same author. On the Swedish EIC see Koninckx, Christian, The First and Second Charters of the Swedish East India Company (1731–1766), Kortrijk 1980, and Müller, Leos, “The Swedish East India Trade and International Markets: Re-exports of teas, 1731-1813”, in Scandinavian Economic History Review, 2003/3, pp. 28-44.

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also large quantities of Indian commodities. Yet, it is clear that the China trade was the most profitable part of the business. The two Nordic companies did not send to Canton more than two or four ships per annum, but the volumes and values of cargoes were significant. According to British data from 1750 the Danish and Swedish companies imported combined 1,500 tons tea, which was more than the EIC’s tea import. It seems plausible that the Scandinavians counted for between one-fourth and one-third of all tea imported to Europe between 1740s and 1783.20 There was a clear connection between their increasing imports and the Seven Years War and especially the American War of Independence.21 In Sweden the value of re-exported Chinese commodities more than doubled between 1777 and 1782, reaching astonishing 4 million rixdollars—the figure almost equal Sweden’s total exports.22 As has been mentioned previously, the major part of the cargoes were sold on auctions in Gothenburg and Copenhagen and re-exported to the continent and Britain. And because Britons were the tea drinkers of Europe, the British market was the final destionation for Scandinavian re-exports. The scale of tea smuggling in Britain was massive. It reached such a scale that it was a subject of investigation by a number of parliamentary committees in the eighteenth century. Tea smuggling was such a big business that it served a case study for economic analysis of smuggling phenomenon. 23 The connection between smuggling and profitability of the Scandinavian companies is also apparent when we look at the effect of British policy after 1783 on the business of the Scandinavian companies. The reduction of import duties on tea in Britain (Pitt’s Commutation Act of 1784), together with peacetime increase in tea imports by the EIC, eliminated the basis of the Danish and Swedish China trade. Consequently, after 1784 the Swedish East India Company more or less ceased its activities, whereas the Danish Company shifted towards its Indian trade, which was less effected by the new British policy, but also much less profitable.

19

Gill, Conrad, “The Affair of Porto Novo: An Incident in Anglo Swedish Relations”, The English Historical Review, 1958 (Jan.) pp. 47-65. 20 Kent, H.S.K., War and Trade in Northern Seas. Anglo-Scandinavian economic relations in the mid-eighteenth century. Cambridge 1973, p. 117; Dermigny, Louis, La Chine et l’Occident. Le Commerce at Canton au XVIIIe siècle 1719-1833, tome 1-2, Paris 1964, p. 539. 21 Hoh-Cheung and Mui, Lorna H, “Smuggling and the British Tea Trade before 1784”, American Historical Review, 1968/1 (Oct.), p. 49. 22 Müller, “The Swedish East India Trade”, p. 36. 23 See Cole, W.A., “Trends in Eighteenth-Century Smuggling”, The Economic History Review, 1958/3, pp. 395410, Cole, W.A., “The Aritmetic of Eighteenth-Century Smuggling: Rejoinder”, The Economic History Review, 1975/1, pp. 44-9, and his critics Hoh-Cheung and Mui, Lorna H., “Smuggling and the British Tea”.

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The import trade from Canton and India also had another function that, after 1765, increased in significance. The British merchants and EIC employees in India found it difficult to transfer profits from their private trade in Asia to Europe, because of the monopoly rights of the EIC. The money was often transferred from India to Canton, in cargoes of cotton or opium, and in Canton it financed purchases of tea by the Europeans. Finally, the transactions were settled in Europe between merchant houses in London and their debtors, for example in Copenhagen. Remittances from India played very important role in financing of European activities in India and China, and they may explain decline bullion exports between 1770 and 1783. There is evidence for the use of British money, made in private trade, for financing of operations of Danish Company, and it seems plausible that the same method was used in financing of Swedish operations in Canton, but it is difficult to asses the overall significance of these operations. Also this kind of business was highly sensitive to shifts between peace and war times. For example, the Danish trade with India was highly profitable during the years 1780-3, which attracted many private Danish ships to India; the Danish trade with India was free since 1772. But profits turned in losses soon after the end of hostilities between France and Britain, and in the mid-1780s many Copenhagen houses engaged in India trade went bankrupt.24 In addition to the British connection, the Scandinavian companies were engaged in the Dutch and French trade in East Indies. Such trade, too, was connected to the exploitation of neutrality in 1780-83 and 1793-1807. For example, the Danish ships were engaged in carrying business from Batavia, as well as from the Isle de France. Notably, this trade was organised on private basis. 25 The Swedish Company also attempted to exploit wartime conditions and some ships were sent to India and Isle de France, but the scale of operations was not comparable with that of Danish business, or the Swedish trade in Canton before 1783. In similarity with shipping services in southern Europe, the neutrality was an important precondition of the Swedish and Danish trade in Asia. The number of vessels engaged in this trade was rather limited, especially as regards the trade with Canton. However, the values of cargoes were big and both the Swedes and Danes were important traders in tea and colonial commodities. Much of the operations were connected to the British private trade in Asia and illicit trade in Europe. Nevertheless, due to Denmark and Sweden’s status, British authorities

24

Feldbæk, India Trade under the Danish Flag, pp. 125-6. And Lauring, Kåre, “Kinahandelen – et spørsmål om finansiering”. in Hans Jeppesen (ed.) Søfart, Politik, Identitet, tilegnet Ole Feldbæk. Kronborg 1996, pp. 215-26. 25 Feldbæk, Dansk søfarts historie, pp. 113-20.

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could do little to stop such trade. First in 1784 with Pitt’s Commutation Act, and later during the Napoleonic Wars the opportunities to make money in Asia trade disappeared. The third branch of neutral trade that I would like to pay attention was the transatlantic trade. The Swedish participation in this domain was insignificant until 1784 and rather limited even after the acquisition of St Barthélemy. Therefore, the main attention will be paid to the Danish trade. Denmark owned three West Indian islands, St Thomas, St John and St Croix. The economy of the islands rested both on the sugar cultivation and exploitation of the Danish neutrality in trade between the British, French, Dutch and Spanish colonies. In that sense the Danish strategy mimicked that of the Dutch on Curacao and St Eustatius. The picture of Danish neutral trade and shipping with the West Indies again might be examined with the help of the Algerian passports, because all ships going in the transatlantic trade had to have these documents. The passport registers also indicate rather active traffic already during the first half of the century and during the Seven Years War. There were between 20 and 30 ships engaged in this trade. However, it was during the American War of Independence that the Danish neutrality fully could be exploited, because of the Dutch involvement in the war.26 Table 3 shows the rapid increase in ships destined for the West Indies, from about 50 in 1778, the year of French declaration of war, to almost 200 in 1782. In comparison, the increase was much faster than the expansion of Danish shipping to southern Europe. At the best years of the boom the West Indian ships accounted for one-third of all Algerian passports issued, while the southern Europe accounted for about 40 per cent. In normal years southern Europe accounted for at least 60 per cent of the passports. The difference shows that Danish shipowners were much more eager to exploit neutrality in the West Indian trade than in Europe. The expansion of neutral shipping in transatlantic trade is the major explanation of the different paths of development in Swedish and Danish shipping. The Swedish growth in 1778-83 and 1793-1807 periods was much slower than that of Denmark, because it was so closely connected with shipping in southern Europe. However, we should also note that the abuse of passports was much more usual in the shipping to the West Indies. The shipping to the West Indies was very much a Copenhagen business. According to the data from 1787 the Copenhagen merchant tonnage employed in the West Indies accounted for 22 per cent of the capital’s shipping, which made the West Indies the leading destination of the

26

Feldbæk, Dansk søfarts historie.

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capital’s vessels. In comparison, the tonnage from the Duchies employed in transatlantic trade was much smaller. For the vessels from the Duchies the major destination was France and the Mediterranean.27

Table 3: Danish Algerian passports issued for the Mediterranean and the West Indies, 1778-85 Year

Med

1778 1779 1780 1781 1782 1783 1784 1785

219 235 244 371 298 304 351 358

Med % 67,7 60,1 59,7 56,0 40,5 60,4 77,5 71,3

West Indies 57 71 81 124 195 89 46 68

West Indies % 23,7 27,0 27,5 29,1 34,2 21,0 13,4 19,6

Total passports 290 323 352 550 637 447 416 445

Source: Feldbæk, Ole, Dansk neutralitetspolitik under krigen 1778-1783. Studier i regeringens prioritering af politiske og økonomiske interesser. København 1971, p. 207. Feldbæk’s definition of the Mediterranrean shipping does not include vessels destined to Spain’s and Portugal’s Atlantic ports

The Danish trade with the West Indies had a similar character as the Danish trade in India— but in much larger extent. Because of the war between France, Spain and the Dutch Republic on the one, and Britain on the other side, Denmark was the only neutral carrier with access to the West Indies. In practice the exports from French, Spanish and Dutch islands were carried via the Danish islands. This traffic was dependent on British unwillingness to draw Denmark in the war and the Danish policy was characterised by the tricky balance between economic benefit and the danger of the war with Britain. Because of the Armed League of Neutrality this possibly also would mean Russia’s and Sweden’s involvement, so Britain let the neutral trade go on. The belligerents’ commodities were illicitly transported to the Danish islands. France in fact already in 1778 allowed free trade between French possessions and Danish islands. Denmark organized convoys between Copenhagen and the Danish islands, to make shipping safer. But convoying was also used as a tool against the abuse of the Danish flag and so a way to calm the Royal Navy. A too obvious abuse of the Danish neutrality was the most dangerous factor in the hard balance between Denmark’s and British interests.28

27

Johansen, “Scandinavian shipping”, pp. 489, 492 (tables 5 and 7). Feldbæk, Ole, Dansk neutralitetspolitik under krigen 1778-1783. Studier i regeringens prioritering af politiske og økonomiske interesser. København 1971, pp. 50-61, 114-21. 28

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Undoubtedly, the period 1780-3 was the most profitable time for neutral shipping and the Nordic neutral aimed to repeat the success after 1793. The Danish islands and newly acquired Swedish St Barthélemy once again became entrepots of neutral trade. The Danish Algerian passports data show growth in shipping to the West Indies, however not quadrupling as in 1778-82 period.29 Swedish consular reports also indicate a rapid increase in shipping in Gustavia, St Barthélemy’s harbour.30 Nevertheless this trade concerned mainly ships in the West Indies, and between West Indian islands and the United States. A new neutral carrier, the United States, took a lion’s hare of the neutral business.

5 Conclusions Neutrality undoubtedly was one of the key factors of the growth of Nordic shipping between 1689 and 1815. The correlation between periods of shipping booms and neutrality was especially strong during the War of the League of Augsburg (1689-1697), and the two wars of the late eighteenth century (1778-1783 and 1793-1815). These also were the wars that substantially reduced shipping capacity of another neutral carrier—at least for a large part of the eighteenth century—the Dutch Republic. However, it is important to stress that neutrality was not the only factor of the growth. Nordic shipowners had a number of other competitive advantages, which they could employ in competition with other carriers. Thus the strong position of Nordic merchant fleets by the end of the eighteenth century was a result of much more durable development. It has been argued in the introduction, that neutral shipping and trade hypothetically counterbalanced the warfare damages. Moreover, due to the neutrals’ special status, they could intrude on privileged trade, and their business activities even might effect deregulation of the trade, as the example of Pitt’s Commutation Act shows. Naturally, it is difficult to assess an overall impact of the neutrals on the conditions of eighteenth-century trade. One may argue that both Sweden and Denmark were small trading nations; militarily third-rank states, relatively poor, with small populations and low urbanization levels. Nevertheless, when we look at the shipping sector, the Scandinavian economies were developed, significant and well integrated with European and global trade. By 1786-7, the Scandinavian merchant fleet had a combined tonnage of over a half million

29 30

Feldbæk, Dansk søfarts historie, p. 96. Müller, Consuls, Corsairs, and Commerce, pp. 189-91.

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ton, far exceeding the Dutch tonnage and not long after the French tonnage. Denmark was the fourth and Sweden fifth carrier in Europe. Availability of such carrying capacity had to influence the conditions of shipping. The data for traffic through the Sound confirm the same rising significance of Nordic shipping, however, the trade between the Baltic and North Sea made only a part of European trade. In this paper the picture from the Sound Toll Registers has been completed with the data from Danish and Swedish Algerian passports, registering all Danish and Swedish voyages beyond Cape Finisterre, and other information about the neutral shipping and trade in southern Europe, the Atlantic and Asia. The data show that from the mid-eighteenth century Nordic neutrals played a significant role as carriers in the Mediterranean and Atlantic Europe. Danish neutral shipping was also an important factor in the transatlantic trade, especially during the American War of Independence. Both countries were engaged in European trade with Asia, and they were significant actors in the trade with China. Also these activities confirm strong connection to the advantages of neutrality. The Nordic neutrals were not the only neutral carriers and traders. For a major part of the century, the leading neutral carrier was the Dutch Republic, and, as we could see, the success of the Nordic neutral trade and shipping partially was an outcome of the Dutch involvement in the wars. After 1783, the United States became another large neutral carrier, which of course significantly affected the conditions of trade during the French Revolutionary Wars. If we aim to assess the overall influence of the neutral trade on the efficiency of eighteenth century markets we have, too, incorporate them.

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Appendix: The data on Swedish Algerian passports have been extracted from Algerian passport register archives (Kommerskollegium, Huvudarkivet, Sjöpassdiarier, 1739-1831,CIIb, Riksarkivet Stockholm-Swedish National Archives). In total the registers contain information on 30,546 passports issued in the period. The entry for every passport includes information on the number of the passport, the name of the ship, captain, homeport, the number of guns aboard, carrying capacity in Swedish heavy lasts, destination and the dates of issue and return of the passport.31 For the Danish data I have used Dan H. Andersen’s CD-ROM database, which is a part of Andersen’s doctoral dissertation and is available for public. Without this database the comparison with Swedish data would not be possible. The database covers the period 1747-1807. The lacuna (years 1773-77, see mark*) has been completed by Andersen with data extracted from consular shipping lists. The register for 1782 is missing for data on passports nr. 385-447, which effects the figure for passports issued for southern Europe (mark *). 32 The registers contain the same kind of information as that of Sweden. It is apparent that they were result of the same policy (treaties with the Barbary states).33 This set of data was created for the author’s PhD research on the Danish shipping activities in the Mediterranean and it includes only information on the passports issued for shipping to southern Europe, beyond Cape Finisterre (including also the Mediterranean destinations and Atlantic port in Spain and Portugal). Southern Europe beyond Cape Finisterre was the major destination of vessels with Algerian passports. For example, between 1747 and 1771 Denmark issued passports for 3,008 voyages, and all the voyages with exception 788 could be identified with vessels visiting the southern European ports. In the period 1747-1807 more than 15,000 voyages of the total of about 20,000 were destined to southern European destinations.34 To obtain the total numbers of Danish passports issued I have used the number of the passport (all passports were numbered) with the latest date of issue in the database (usually the end of December). This means that the correct total numbers of passport issued may be slightly higher than the numbers used in my paper (appendix, diagram 1 and table 1). However, I consider the difference as insignificant for the overall annual numbers of Danish voyages. Another, perhaps more serious source of error, may be the passports issued but not used for actual voyages. This sourc eof error most probably will impact mainly the Danish passports for the West Indies. In spite of the problems, I consider the total numbers of issued passport as closely corresponding the actual voyages beyond Cape Finisterre. 31

For more information about the Algerian passport registers see Müller, Consuls, Corsairs, and Commerce, pp. 144-54. 32 Andersen, Dan H., The Danish Flag in the Mediterranean, p. 327. 33 For more information of the Danish Algerian passport registers and their reliability as source see: Gøbel, Erik, ”De algeriske søpasprotokoller. En kilde til langfarten 1747-1840”, Arkiv. Tidskrift for arkivforskningn. 198283/2-3, pp. 65-108, and Andersen, Dan H. and Voth, Hans-Joachim, “The Grapes of War: Neutrality and Mediterranean Shipping under Danish Flag, 1747-1807”, Scandinavian Economic History Review, 2000/1, and Andersen, Dan H., The Danish Flag in the Mediterranean

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Year

Sweden

1741 1742 1743 1744 1745 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755 1756 1757 1758 1759 1760 1761 1762 1763 1764 1765 1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776 1777 1778 1779 1780 1781 1782 1783 1784 1785 1786 1787

134 114 126 167 176 163 173 135 159 160 151 183 145 112 132 156 141 177 132 174 187 203 212 225 201 169 172 180 176 198 246 270 267 278 222 236 253 287 282 320 373 441 339 370 389 289 321

34

Denmark Denmark/ Year Med 1788 1789 1790 1791 1792 1793 69 54 1794 140 107 1795 122 104 1796 111 98 1797 83 69 1798 102 83 1799 104 82 1800 99 81 1801 126 100 1802 208 176 1803 194 167 1804 218 184 1805 258 227 1806 208 184 1807 201 166 198 144 160 121 213 164 147 107 159 123 183 125 183 140 140 103 81 40 86 59 179 142* 156* 193*

298 342 377 602 779 472 436 457 282 280

Sweden 163 3 115 354 257 398 408 394 362 425 467 516 624 369 545 677 717 586 259 366

Denmark Denmark/ Med 334 227 323 231 461 371 342 250 359 238 749 532 1070 779 1126 701 1093 733 1059 736 947 556 845 458 841 462 542 383 707 472 717 479 915 564 794 489 911 524 483 202

212 235 245 353 350* 287 335 330 224 224

Andersen and Voth, ‘The Grapes of War”, pp. 9-11.

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