Heinrich Carl von Schimmelmann (13 July 1724 – 16 February 1782) was a German-born Danish merchant, banker and politician. He was the largest Danish slave owner and slave trader, owning over 1,000 slaves in his plantations in the Danish-owned West Indies. He became one of the absolute richest people in Denmark and, among other things, owned the Odd Fellow Palace. During the Seven Years' War, he speculated heavily on currency debasement in close association with his business partner Abel Seyler. After supporting Denmark–Norway as the head of the banking system in Denmark, he was rewarded by becoming a member of the Danish nobility. Eventually, he became a plantation owner (and slave owner) and Danish finance minister. From 1774 onwards, von Schimmelmann was involved in the project of digging the Eider Canal. He died in 1782.
Early life and career His father Diedrich Jacob was a merchant and city councillor in Demmin, Swedish Pommerania, who sent him out learning the trade in Stettin.His brother Jacob, a theology student, translated the Edda into german. In 1746 he set up a supplies store in sugar, coffee and tobacco in Dresden. On 4 March 1747, at the age of 23, he married then 17-year-old Caroline Tugendreich Friedeborn. In 1755, Schimmelmann was responsible for tariff collection in Kursachsen. By the end of 1756 he delivered grain and flour to the Prussian army and was appointed as Geheimrat. In December 1756 or 1757 he bought pillaged Meissen porcelain from the Prussian king, which were shipped in 110 cases to Hamburg, and auctioned on 11 July 1758.Matthias Claudius: Biographie eines Unzeitgemäßen by Martin Geck (He secretly returned a part to the Saxon king August III.Daniele Antonin (2014) Das weisse Gold, der Wittelsbacher – Zum Sammlungsbesitz des Meißener Porzellans der bayerischen Kurfürsten im 18. Jahrhundert, p. 157]) In April Frederick the Great ordered him to contact Veitel Heine Ephraim and Daniel Itzig and deliver silver to the two mint masters who were leasing all the Prussian mints.C. Degn (1974) Die Schimmelmanns im atlantische Dreieckshandel. Gewinn und Gewissen, p. 9 Already in July 1758 Schimmelmann leased the mint in Schwerin (Mecklenburg) from Frederick II, Duke of Mecklenburg-Schwerin and started to compete with Ephraim & Itzig. Schimmelmann produced debased coins, but with a higher silver content than the debased Prussian coins.M. Kunzel (1994) Das Münzwesen Mecklenburgs von 1492 bis 1872, p. 162 Schimmelmann employed more than a hundred people at the end of 1759; one year later already almost 300 people.M. Kunzel (1994) p. 166-167
Connection with Denmark
The city of Hamburg did not allow him to settle within the walls, but with a trick, using his bookkeeper he succeeded to buy a mansion in 1758. In 1759 he bought the Ahrensburg estate in Holstein (paying cash) and became a Danish citizen. Early 1761 Schimmelmann leased the mints in Neustrelitz and Rethwisch, Stormarn and ordered Abel Seyler and his partner Johann Martin Tilleman to produce worse coins.M. Kunzel (1994) p. 169-172, 248 The head of the Danish government, Count von Bernstorff, realized how Schimmelmann's talents as a merchant could benefit the state of Denmark during those times of financial duress. In July 1761 Schimmelmann became a financial advisor for the king, Frederik V of Denmark. Schimmelmann introduced an extraordinary income tax, to be paid in silver, which led to unrest in the country. In 1762 he bought an estate in Wandsbek, closer to Hamburg. He appointed Johann Heinrich Gottlob Justi to improve the refining of silver and copper from debased coins through cupellation. Justi succeeded by using coal.
In cooperation with his business partner Abel Seyler Schimmelmann produced large amounts of coins (so-called Heckmünzen), that were exported to various German states during the war. The furnace in Rethwisch was taken over by Veitel Ephraim in 1762 and stopped.
The financial situation in Denmark at the time was dire, due to the large army of 20–25.000 soldiers stationed in Holstein, the rearmament following the aggression of Peter III of Russia in 1762, after the death of Frederick Charles, Duke of Schleswig-Holstein-Sonderburg-Plön. Because it was hard for the Danish state to get loans at the time, Denmark had tried to get funds through seignorage, but this destabilized both the state and the banks responsible. Lacking men of financial capacity, Schimmelmann's talents and reputation was utilized to get favourable loans from Amsterdam to keep the Danish state and financial system afloat.During the Amsterdam banking crisis of 1763 Schimmelmann succeeded in getting a loan for 3.4 million Thaler from Dutch banks for Denmark. He left after a few days but came back within a few weeks. In the years 1762–1765, Schimmelmann continued his work of securing the Danish government, sometimes even through loans of his own.The Evolution of Nordic Finance by Steffen Elkiær Andersen, p. 54
Schimmelmann on his own part benefited from the connection with the Danish government both due to Denmark's neutrality being beneficial for trade, and for reasons of prestige. Negotiations soon led to Schimmelmann being appointed as second in command to the Danish attaché in Hamburg, and the connection with Denmark was solidified by buying property in Copenhagen and Himmerland. Schimmelmann received the title of Baron of Lindenborg and the Order of the Dannebrog (April 1762).
Influence on tax policies
To better the state's finances, Heinrich Carl von Schimmelmann decided on an extraordinary poll tax in September 1762. It would have been too difficult at the time to create a progressive income tax, but the brutality of the poll tax led to civil unrest. However, it secured the state finances and stabilized the financial markets.
An advisory board was created in December 1762 with von Schimmelmann as a member, through which he became de facto administrator of Denmark's taxes and deficit. With short interruptions, this influence over the state's finances continued until his death.
Private business
Besides his duties as overseer of Denmark's taxes, von Schimmelmann also ran his own private business, having bought in March or April 1763 several of the largest Danish sugar plantations in the Danish West Indies,A Vexing Gadfly: The Late Kierkegaard on Economic Matters by Eliseo Perez-Alvarez, p. 58 including La Grande Princesse near Christiansted and La Grange at Frederiksted on St. Croix, and a sugar refinery in Copenhagen for 400,000 rigsdaler. Schimmelmann became the largest plantation owners in the Danish West-Indies. The plantations used slave labour from the Danish trading stations in present-day Ghana. Through the work of von Schimmelmann's son Ernst Heinrich von Schimmelmann among others, the slave trade was banned in 1792 (effective from 1803).
Schimmelmann also bought the Hammermøllen rifle factory north of Helsingør from the government for 70.000 Rigsdaler in 1768. Hellebækgård and the rifle factory, collectively known as Hellebækgård Manor (Danish: Hellebækgård Gods), was purchased by Schimmelmann in 1768. Schimmelmann commissioned Philip de Lange to remodel the house. In 1770, Schimmelmann moved the inn to another building while a chapel was installed in the east wing in its place.
However, the goal of his public endeavours was mostly the development of foreign trade. When Schimmelmann sought after a trade surplus, he thought it was especially important for a country like Denmark, where fiat money was the only means of payment. Through trade, one could avoid a weakening (depreciation) of the currency compared to other countries. Besides, the development of trade would improve domestic wealth and thus also the tax revenue and state finances.
He became connected with this important endeavour when he on 7 March 1767 was made deputy of the Kommercekollegiet (College of Commerce), and in December when he was given a seat in the newly formed Trade Balance Commission, which was supposed to investigate the state's finances and trade balance. Before Schimmelmann, other traders based in Copenhagen had realized that due to Denmark's lack of naturally exportable goods, it was necessary to start intermediary trade with overseas goods as compensation. This, among other factors, led to the formation of the Danish East India Company. Schimmelmann wanted to further this by establishing a free port in Copenhagen, which probably would have been accomplished had it not been for the influence of Johann Friedrich Struensee.
Personal life
Schimmelmann had 9 children with his wife, 6 sons and 3 daughters. The oldest child was his son Ernst Heinrich von Schimmelmann, who followed in father's footsteps, becoming both Minister of Finance and Minister of Foreign Affairs.
Besides his extensive career, von Schimmelmann enjoyed an excellent social life. His wife understood how to host great parties in the couple's winter home in Copenhagen, with royally approved masquerades. The summers were spent in the splendid castle Ahrensburg in Holstein. His circle of friends included the Danish statesmen with Bernstorff the Elder as the centre, with whom he agreed on other political subjects. For example, Schimmelmann co-negotiated an agreement settling the Gottorp Question on 27 May 1768 between Hamburg on one side, and Denmark and Gottorp on the other, where the Holstein-Gottorp territories of Schleswig-Holstein were taken over by the King.
Relationship to Christian VII Due to his many-faceted political influence, Schimmelmann came into close contact with the mentally-ill King Christian VII, with whom he also travelled abroad in 1768. His influence on the King was mostly due to the King's respect for von Schimmelmann's knowledge of trade and finance, and the King consulted with Schimmelmann on many occasions, e.g. regarding how much the country could spend on the army. Schimmelmann gained greater influence than Bernstorff ever could, and so it was von Schimmelmann, that convinced the King to banish the notorious prostitute Støvlet-Cathrine from Copenhagen in 1768.
Besides reflecting his personal abilities, Schimmelmann's influence also shows the importance of money. In this context, it was unfortunate that he both served the role as financial advisor and made money by serving as a bank and lender for the state. The possible conflict of interests was often pointed out by his enemies, as he used his official position to earn money as a trader. Even though he in no way cheated the state, this still put him in a bad light
Age of Struensee
During von Schimmelmann's rising influence, Struensee came to power in 1770. As the insane King's physician, Struensee came to be de facto regent, and deposed many of the statesmen besides Schimmelmann, before finally being overthrown and executed in 1772. Schimmelmann, however, was still valuable to the new men in power, and so decided to work with the new leaders to salvage what he could of his old policies, as well as securing his own personal business endeavours. He succeeded beyond all expectations due to the goodwill of Struensee and his fellows, who made him a member of a commission established on 28 December 1770 with the purpose of settling the main economic questions of the day. His wife also made good use of the new political climate, becoming close friends with Struensee's lover, Queen Caroline Matilda.