The money comes home again

In the colonial period the Danes were aware that the colonies in the West Indies and Tranquebar in India were places with activities that helped the Danish Kingdom prosper year after year. For example, the population increased in Denmark from 700,000 to 900,000 from the beginning of the 1700’s until around 1800.

By trying ones luck in the West Indies one could either become rich or lose one’s life.  Taking the chance one could gain a prosperous career and wealth created in the West Indies allowed one to climb the social ladder.

While the Far Eastern market for silk, porcelain and spice was also attractive for its exotic culture, the West Indian colony was merely for heartless money-making. It was considered a place without culture where everyone went only for the money.

Studies and papers have analysed what the Colony generated financially throughout its existence. Some people earned up to 25% on their investments, others went bankrupt. In the second half of the 1700s returns on investments were between 10% and 13%, and after the Napoleonic wars they were around 7%. After the abolition of slavery the colony was a relatively poor investment. Sugar prices rose and fell, reflecting conditions of war or peace, but they saw a steady upward trend from 1734 until 1780.

For Copenhagen in particular the West Indies generated vast fortunes. Most of the sugar production came to Copenhagen to be refined, and the sugar was sold in Denmark, Norway and Schleswig-Holstein, but it was also exported to Sweden and the Baltic countries.

In 1804 sugar imports to Copenhagen amounted to 50% of all overseas imports – 20.5 million pounds of sugar.

Sugar accounted for 66% of all exports in 1778; in 1784 for 50% and in 1804 for about 40%. Exports from Europe to the colonial planters were also a lucrative business for Copenhagen.

Land speculation was a great source of profit too. In the first year after the acquisition of St. Croix, a plantation could be bought extremely cheaply. The investment could even be covered simply by felling the rain forest and selling the large quantities of mahogany and other hardwood.

A plantation purchased by the Company for 500 dollars in 1734 could be sold for 1700 dollars in 1747. The value of the plantation increased with investment, and because the enslaved Africans were part of the real estate like buildings and animals, they constantly risked being traded to the new owners. This price spiral continued as long as sugar prices rose. Johan Castenskiold’s plantation on St. Thomas, for example, had a higher commercial value than his two Danish estates Hørbygård and Knabstrup combined.

The fact that the majority of the colony’s planters were not of Danish origin meant that many of the great fortunes made when the planters sold their property left the islands and ended up in the planters’ home countries – England, Ireland and Holland – not in Denmark. On the other hand, many ‘West Indians’ and merchants of English ancestry settled in Copenhagen, where they gave their names for example to places like Appelbys Plads and Potters Gård in Christianshavn.

As long as profits were good, enormous wealth from the colony was injected into Copenhagen. But between 1797 and 1829 plantation values fell by 36%. The soil was exhausted and yielded less, it was more expensive to procure slaves, and the peace after the Napoleonic Wars led to falling sugar prices.