Trade and Crafts

The oldest source on trade at the offshore island of Hólmurinn (now Grandahólmi) near Reykjavík is from 1521. In 1700 the trader's buildings were moved to the island of Örfirisey. In 1759 the trader moved to Reykjavík, but the commercial buildings were not moved until 1780.

A royal declaration of the abolition of monopoly trading was issued on 18 August 1786, and on 17 November the same year six communities were granted exclusive trading charters. Only Reykjavík was to retain its charter permanently. Trading rights were, however, still limited to subjects of the King of Denmark, and Danish merchants continued to dominate trade.

In February 1787, when a survey was made of the trading community of Reykjavík, there was only one merchant there, Sunchenberg, former holder of the monopoly licence for the region. His business was located where Aðalstræti 2 now stands. A year later the first new trader, Hans Kristjan Fisker of Bergen in Norway, had a site measured out where Aðalstræti 3 now stands. Thus competition began in Reykjavík trade.

In the next few years ten or twelve Danish and Norwegian businessmen erected their commercial buildings along the shore (now Hafnarstræti). Most lived in Denmark or Norway, and appointed managers or factors to run the business on a day-to-day basis. In addition to merchants, factors and shop workers, craftsmen were eligible to become freemen of the town of Reykjavík. Soon the community attracted craftsmen in many different fields. Reykjavík traders' shops were generally in low-roofed tarred wooden buildings in the Danish style. Cold and dark, the stores contained a hotchpotch of goods. Cash trade was almost unknown until the end of the 19th century, and barter was the rule.

A second turning point in Icelandic commercial history was the introduction of Free Trade to all nationalities in 1855. After 1880 the commercial climate of Reykjavík changed, with new trading partners, a larger range of goods and improved service. Icelandic traders gained a growing share of business, and new trade links were established, especially with Norway (no longer subject to Denmark) and the British Isles.