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Baltic Trade after the Great Nordic Wars

(Baltic Sea Trade, part 7)

The Great Nordic Wars (1700-1722) — in which Poland and Russia, and from 1710 also Denmark-Norway, combined their forces against Sweden — contributed to a dramatic shift in the balance of Baltic trade. During the first phase of the war, Scandinavian shipping eastward through the Sound by far outstripped that of the Dutch. When hostilities between Sweden and Denmark started in 1710, all Scandinavian shipping through the Sound in both directions was paralysed. Trade recovered only in 1722, when the war that had sealed the fate of Sweden's Age of Greatness came to an end. It has long been stated that notably the Dutch bulk carrying trade recovered strongly once the Nordic wars were over and remained strong until the very end of the eighteenth century. The Sound Toll registers indicate that the number of ships entering the Baltic did indeed increase after the 1720s and occasionally even surpassed the numbers of the favourable years of the early seventeenth century. In reality, however, the Dutch lost their predominant share in the Baltic rich trades to the Scandinavian and northern German ports, and at best consolidated their shipping volume in the years after 1750.

Table: Average number of vessels passing eastward through the Sound each year, 1600-1800 

Period Low Countries Scandinavia &
northern Germany
British Isles Others Totals
1600-49 1118 (55%) 398 (19%) 203 (10%) 319 (16%) 2038
1650-99 822 (50%) 388 (24%) 181 (11%) 243 (15%) 1634
1700-49 722 (42%) 407 (23%) 310 (18%) 301 (17%) 1741
1750-99 877 (28%) 931 (29%) 742 (23%) 626 (20%) 3176

Source: J.A. Faber, "Structural Changes in the European Economy during the Eighteenth Century as Reflected in the Baltic Trade", in: W.G. Heeres a.o. (eds.), From Dunkirk to Danzig. Shipping and Trade in the North Sea and the Baltic 1350-1850 (Hilversum, 1988), p. 90.

The above table suggests a direct correlation between the contraction period of the Polish and East Prussian grain trade, which lasted until about 1740, and a decline in the number of ships entering the Baltic between 1650 and 1750. Since the Great Nordic Wars caused an interruption of the Sound trade, the slight recovery in the first half of the eighteenth century must have taken place after 1720. The second half of the eighteenth century witnessed a steep increase in absolute numbers, to the benefit of English, Swedish, Danish-Norse and northern German shipping. There are manifold reasons for the shifting trade balance. The Dutch share in the shipping of both colonial wares and wine and salt from the Iberian peninsula and France diminished as their direct trade with the Baltic increased. Much shipping was directed to Hamburg, which in the eighteenth century became the major entrepôt for commodities like sugar, rice, coffee, tea and tobacco. Such developments contributed to the erosion of the Amsterdam staple, which was increasingly circumvented. The rise in the number of ships passing through the Sound was largely caused by an increase in the herring exports of the towns in the Göteborg area and by the expansion of coastal trade through the Sound to the benefit of the northern Frisian towns in both northern Germany and the Low Countries. Such vessels were small and carried modest quantities of salt, wine and herring to the Baltic. The Dutch decline in the Baltic trade was thus both absolute and relative. The downward trend was mirrored in the decline of Dutch exports from the eastern Baltic. Between 1720 and 1780, the Dutch share in timber export shrunk from two-thirds to one-fifth, that in tar from more than 50 per cent to less than 25 per cent and in hemp from 44 per cent to 19 per cent. On top of this was the prolonged decline of the Baltic eastward grain trade, which recovered only after 1740. However, the Dutch share in the Baltic grain trade remained very important, ranging between 80 and 95 per cent of the total Baltic output in the first half of the century. Its share started to fall immediately after 1740 as England, France and the Mediterranean countries, as well as Hamburg, took over the role of the Amsterdam entrepôt. Nevertheless, the Dutch decline was less pronounced than that of the total Baltic grain trade.

Notably, Jonathan Israel pointed to the effects of mercantilist policies on the shifting balance in the Baltic trade. Once the Great Wars were over, a new style of mercantilism started to dominate commercial policies in Prussia, Russia, Sweden and Denmark. From 1720 onwards, governmental interventionism reached an unprecedented level. A series of protectionist measures were taken in order to curtail all foreign influence in industrial development and 'national' seaborne trade. In 1718, for example, Prussia banned the export of raw wool, which was formerly absorbed by the Dutch market. The consistency of its policies were reflected two years later in a ban on the import of foreign cloth to the benefit of the local industries. The measures had an effect in the sense that not Dutch but Prussian cloth was purchased by Russia, as governmental attempts to establish a domestic cloth industry had failed. In Denmark, a prohibition on the import of foreign woollens, silks, refined sugar and other colonial produce coincided with the royal founding of the Danish Asiatic Company. Royal custom concessions, granted to the provincial ports, stimulated entrepôt trading with Norway and opened the way to a lively Atlantic trade in the 1740s. The Danish-French commercial treaty of 1742 allowed merchant houses in Danish Altona, close to Hamburg, to gain ground in the Mediterranean. Outward-bound vessels leaving Copenhagen returned with tea from China and sugar from the Danish plantations on St. Croix. Most colonial imports were destined for re-export to Germany and the eastern Baltic regions, with refined sugar representing almost 50 per cent of Copenhagen's exports value in the 1760s. The Danish entry to the world market attracted foreign trading houses. For example, the Dutch De Coninck trading house established itself in Copenhagen, and the immigrant Beets, De Vliegher and Van der Smissen families headed Altona's main shipyards.

Mercantilist policies in Sweden also combined an almost complete prohibition on foreign manufacture with protective measures aimed at foreign seaborne trade. The Swedish Produktplakat of 1724 was designed to curtail foreign shipping to Sweden, as well as to undermine imports of foreign luxury products. Dutch trade in Swedish bar iron to Amsterdam indeed diminished to the benefit of direct exports on Swedish ships to England and the Mediterranean. As iron imports declined, prices rose and profits narrowed, Dutch investors residing in Sweden (e.g. the De Geer and the De Grill families), retreated from active trade and concentrated on financing. The big trading houses, both foreign and domestic, in Stockholm and Göteborg now advanced short-term credits to Swedish iron producers, which shipped their products under the Swedish flag to consuming markets around the North Sea and the Mediterranean. Foreign influence on the Finnish tar trade was reduced in 1765 when the Swedish government loosened its restrictive policies and allowed the Finnish staple harbours to trade directly on foreign markets. Commercial protectionism clearly benefited direct Swedish shipping and affected the position of foreign competitors from the west on the domestic market. Between 1740 and 1780, both Britain and the Low Countries lost much of their position in the Baltic region.

What mainly tipped the scales in the Baltic, however, was political rivalry for control over production markets. The economies of the south-coast Baltic states were competitive because of their dependence on the export of raw materials and unprocessed projects. Sweden, on the other hand, remained a major purchaser of foodstuffs and the main supplier of iron in the region, as it had been 100 years earlier. In the second half of the eighteenth century, almost all the ships involved in this traffic were Swedish. Nevertheless, the Swedish balance with the three Baltic countries was essentially negative. At its peak in the 1750s Poland for example purchased only 3 per cent of the Swedish export totals, declining to less than 1 per cent in the last decades of the century.

The outcome of the Great Northern Wars provided Russia with its first direct links with the Baltic, as Sweden's former possessions around Novgorod and the coastal regions in Estonia and Livonia, including Riga, Reval and Narva, fell into its hands. The peace treaty of Nystad (Uusikaupunki) in 1721 marked Russia's breakthrough to the Baltic. The empire increasingly advanced in the trading routes across the Baltic, and the newly-founded harbour of St. Petersburg gradually surpassed the former Baltic ports of Riga and Reval before 1800. As Russia now enjoyed unlimited access to the Livonian grain markets and was Sweden's most important trading partner, both powers for once were on the same side during the Seven Years' War (1756-1763). By 1780, Russia had fully outflanked Swedish Pomerania, which for a long time had benefited from Sweden's preferential treatment. Poland's trade succumbed under the effects of the First Partition, resulting in a diversion of Danzig's grain trade to Elbing in East Prussia and a serious, though short decline in its seaborne trade at the very end of the century. In 1792, only 65 ships left its harbor, a figure that is in stark contrast to the yearly average of 1100 ships landing in Danzig in the years before the Polish Partition. The former Hanseatic towns of Lübeck and Hamburg on the northern German coasts suffered heavily from Swedish protectionism. Lübeck's seaborne trade in the Baltic relied on the exports of finished textiles to the north. It had been an important trading partner in the decades around 1700, but it never recovered from the effects of the Swedish mercantilist restrictions, which since the 1740 had favoured the rise of a domestic textile industry. Hamburg on the other hand concentrated on the shipping of foodstuffs and raw products. Exports of cheese, meat, grain and woollens to Sweden put Hamburg at the top of the northern German cities in the Baltic, as it dominated Sweden's trade in the 1780s and reinforced its position as an international staple on the Elbe estuary.

Russia's rise as a seaborne power caused a reorientation of the trade flows, which instead of the traditional and dominating south-north direction now increasingly ran along an east-west axis with Stockholm as one of the Baltic's gravity points. This trend was reinforced by Denmark's rise as a major consumer on the Swedish markets. Between 1740 and 1780, figures indicating the volume of the cross-Sound trade almost tripled, with tar, copper and timber (and not iron) being the most important commodities. Danish North Sea herring imports, which had represented a major export commodity since the sixteenth century, seriously declined as a result of a spectacular rise in catches along Sweden's western coasts. The loss was only partially neutralised by Denmark's increasing mingling in the worldwide sugar rivalry in which, however, the big western colonial powers still took the lead. Though the roles had changed, at least from a Swedish point of view, England and the Mediterranean countries had gained ground on the Dutch Republic. In the Baltic, it was Russia and Hamburg that gained at the expense of Swedish Pomerania and Poland. In fact, it was a competitive change to both the east and the west of the Sound that led to the reshuffling of trading relations in the eighteenth-century Baltic system.