For a long time, exotic goods had reached Sweden via the Silk Road. But during the 17th century the land route was driven out of business by shipping. The naval powers of the Netherlands, Britain and Portugal were the first to start profitable trade with the East Indies. They came to be predominant also in the 18th century. But on 14 June 1731 a new player emerged: Sweden. The country desperately needed to increase its barter trade, which helped SOIC (the Swedish East India Company) quickly and easily gain its royal charter from the king. Immediately Sweden began successfully competing with the established nations.
SOIC was the first company to operate as a limited liability company in Sweden. The founders were Hindrich König, a nobleman of German descent, Scottish nobleman Colin Campbell, and Swede Niclas Sahlgren, the son of a merchant.
SOIC was in reality several different companies, which were formed and dissolved at different times. Even though the operation was protected from outside scrutiny and the detailed accounts were destroyed from time to time, calculations show that the average return on capital invested was around 40 per cent. In actual fact the company may be Sweden’s most profitable company ever.
Between 1732 and 1806 the ships operated like a shuttle service to the Orient. Thirty-seven ships made 132 voyages and created tremendous wealth for their owners, merchants and the whole nation. But all good things come to an end, and in 1813 the company went bankrupt due to higher prices for silver and falling demand. A historic and profitable era came to an end, but it left clear footprints which can still be seen today in modern Gothenburg.
The largest monument to the glory days of SOIC is East India House at Norra Hamngatan (now Gothenburg City Museum). Build in 1747-1762 it housed the company’s head office, showroom, auction room and warehouse.
The voyages to China meant very good business; Sweden received an injection of new capital, mainly through the export of exclusive good such as silk, tea and porcelain to wealthy merchants across Europe. The capital was reinvested in ironworks, hospitals and the shipbuilding industry. Gothenburg was swept along and became a flourishing trading city. The Company also contributed to increased knowledge about shipbuilding, navigation and international commerce. On the science front, the exchange resulted in the academy of sciences, hospitals, schools and two rather famous institutions; Chalmers University of Technology and Sahlgrenska University Hospital.