A Gateway to Empire: Amsterdam Merchant Bankers and the Colonial Fortunes of the Danish West Indies

This paper explores the role of foreign finance in shaping the imperial trajectories of one of the lesser-known early modern European colonial empires, the Monarchy of Denmark-Norway. In the final decades of the eighteen century, the Monarchy of Denmark-Norway enjoyed an unprecedented boom in its colonial commerce after nearly a century of sluggish development. Sugar and coffee production on the Danish West Indian islands of St. Thomas, St. John, and St. Croix began to surge and the Danish capital of Copenhagen became a leading entrepôt for the importation and re-exportation of colonial commodities to the Baltic region. Intertwined in these processes, however, was also a rapidly escalating indebtedness of the plantation owners in the Danish West Indies. To expand production, the latter had taken up loans in Amsterdam in the late 1760s and early 1770s by mortgaging their plantations to money lenders and promising repayments in the form of sugar (a new financial scheme known as the negotiatie). By the mid-1780s, planters in the Danish West Indies – the majority of whom were not of Danish origins but Irish, Scottish, English, French, German, and Dutch – owed more than 15 million guilders to Amsterdam. To regain control of colonial profits, the King of Denmark-Norway therefore sent delegates to Amsterdam to purchase the entire debt of the Danish West Indies, yet in order do so, he had to take up a multi-million guilders loan with one of Amsterdam’s prominent bankers. By examining the negotiations underpinning these plantation loans, the paper thus highlights critical interconnections between foreign finance, Danish imperial state development, and early modern capitalist expansion.