Saga - 1997, Side 137

TILSKIPUN UM AUKIÐ VERSLUNARFRELSI
135
Summary
The article examines the Trade Act of 1816 and the events leading up to it.
^Vith the abolition of the monopoly system in 1787 trade with Iceland was
extended to all subjects of the Danish realm. However, the new trade system
Was still cast in the colonial mauld. Merchants in Iceland were not permitted
trade directly with foreigners except through merchants in Denmark.
Only ships owned by Danish subjects could be used in the Iceland trade. The
effects of these stipulations were to strengthen the dominance of Danish
fPerchants in the Iceland trade as the most convenient way to run the trad-
lng companies was to operate them from Copenhagen and appoint factors
fo oversee the business locally in Iceland.
During the last years of the monopoly period the Iceland trade had been
^un by a company owned by the Danish Crown. With the system change in
1787 the Crown offered merchants ships and facilities on favourable terms
ar>d in 1792-93 they were granted further privileges which made it more dif-
lcult for native Icelanders and newcomers to enter the trade. These mea-
SUres together with difficulties in shipping caused by the Revolutionary
Aars led to deterioration in the Iceland trade. Icelanders blamed high im-
P°rt prices and insufficient supply on the legislative restrictions and mer-
chant monopolistic trading practices. In 1795 most of the senior officials in
celand joined in a strongly-worded appeal, the so-called Great Trade Petit-
lon, to the government, demanding full liberation of Iceland's foreign trade.
After Denmark was drawn into the Napoleonic war in 1807 navigation to
celand was almost brought to a halt, leading to price rises and short supply
°f imports. Trading of British and American merchants relieved the situation
somewhat during those years. After the war Iceland's trade arrangements
lvere debated within the government with Icelandic officials, demanding
relaxation, and Danish merchants, defending the existing system, represent-
lng the two main camps. The government set up a committee in 1816 to
mvestigate the Iceland trade in all its aspects and the same year a new trade
avv was enacted on the basis of the committee's recommendations. In
accordance with the committee's conclusions that the trade was not in need
°f any radical change the new law introduced only modest relaxation of the
fmde. Merchants in Iceland were allowed to trade directly with foreign sub-
,ects on the condition that Danish ships and crews were used. A limited
number of foreign merchants were allowed to do business in Iceland but the
nigh licence fees effectively barred them from sailing to Iceland. The only
excePtion was the trade in timber which was subject to lower fees. Thus, the
overall results was the continued dominance of Copenhagen-based Danish
nierchants in the Iceland trade.