For many years, the Danish West India and Guinea Company monopolized trade and shipping in the Danish West Indies. The plantation owners were not happy with this. They wanted liberalization.
In 1748, the island authorities reported home to Copenhagen that something had to be done for the plantation owners in dire straits, who were referred to by the settlers on neighboring islands with disdain as “the company blacks”. The company also had problems supplying the colony with goods, officials, settlers, slaves, and soldiers, as well as taking the products of the colony. The plantation owners and the merchants in the Danish colony in the West Indies demanded that the Danish king take over the islands, lift restrictions on shipping, and terminate the company monopoly on sugar refining. This was well-matched to the economic mindset of the era, mercantilism.
A. G. Moltke sells the shares in the company to the King
The company president, Lord Steward A. G. Moltke – who was the most powerful man in the realm – made sure that the King was able to buy all the company shares. The Danish West India and Guinea Company was dissolved, and the three islands were made a Crown Colony.
The administration of the colony was transferred from the company to a new government West India-Guinea office. Local rule of the colony was organized almost as a Danish county with a Governor-General and a local government. At the same time, the seat of the government was moved from St. Thomas to St. Croix. This meant that two privy councils on St. Croix and St. Thomas, respectively, came to play a bigger role than the local government. The local administration was handled by a city bailiff (“byfoged”) in each of the three major cities on St. Croix and St. Thomas and a rural bailiff (“landfoged”) on St. John.