Abstract

"Swindling From Copenhagen To Canton - Merchants’ Ethics and Colossal Fraud In 18th Century Danish Asiatic Company"

Anders Sørensen, Copenhagen Business School (ars.mpp@cbs.dk)

The Danish Asiatic Company was Scandinavia’s equivalent to the British EIC. Its Frigates traveled sailed the oceans, from Copenhagen to Canton, and brought home to the warehouses of Copenhagen tea, spices, silk precious China.
In 1783 a massive and unprecedented fraud was discovered in the company. The bookkeeper had gone missing, and so had an amount around the size of the entire Danish state budget. Prominent Danish merchant house, and indeed the Danish state, was shaken to its financial foundations.
Using a range of source, from the Danish Asiatic Company Archives to British and French material from the late eighteenth century, I analyze the causes and consequences of the largest fraud in Danish History. I show how, contrary to existing historical research, that place the blame solely on the company bookkeeper, the fraud was facilitated and even promoted by most of the company’s senior directors, officers, and clerks. As it turned out, the governance Danish Asiatic Company was characterized by a culture of disorder and financial opaqueness, that made possible both embezzlement and extensive fraud that spanned across the globe. From Canton over Copenhagen to the small island of St. Eustace in the Caribbean.
I argue that this culture of economic disorder stemmed from a particular “merchants’ ethic” that permeated every level of the company’s governance and management. Everybody, from directors to clerks, were constantly looking for new economic opportunities and risky business ventures that could be pursued. As such, the downfall of Danish Asiatic Company was not the result of a few bad apples, but the consequence of a distinct 18-century merchants habitus and excessive risk taking in with actors constantly pushed the limits between legitimate and illegitimate business.