Customised search for historical information

16 July 2012

On this day in history: First European banknotes, 1661

In November 1656, King Karl X Gustav of Sweden signed two charters creating two private banks under the directorship of Johan Palmstruch, a trade commissioner born in Riga. Palmstruch modeled the banks on those of Amsterdam where he had become a burgher. One bank offered clients a facility to deposit money and issue cheques; the other offered loans financed by short term giro deposits.

In 1660 the copper content of Swedish coins was reduced prompting many of the banks' customers to demand their older coins, which were now worth more as scrap metal than as currency. Since the money had already been lent out, the bank did not have enough coinage to fulfill these requests. Faced with this liquidity problem, Palmstruch's solution was to issue Europe's first banknotes that could be used as currency and exchanged for their value in coinage.

On 16th July 1661, Stockholms Banco issued the first set of Kreditivsedlar ('credit paper') in round denominations - 5, 25, 100 and 1000 kopparmynt. This financial innovation brought new pitfalls. The bank issued too many notes reducing their purchase value and leading to a flood of people wanting to exchange their notes for coins; however, the bank did not have sufficient coins to meet demand. The bank had no novel solution to this new liquidity problem, as a result it was liquidated in 1667.

Charged with irresponsible book-keeping Palmstruch was stripped of his title and sentenced to either death or exile. After the Swedish government reprieved the death sentence Palmstruch (now called Wittmacher) served a two-year prison sentence and died a year after his release.

Related posts
First banknotes issued in America: 3rd February 1690
The United States Mint established: 2nd April 1792
U.S. Congress authorised Two-Cent coin: 22nd April 1864

10 comments:

babu21 said...

Nice documentation about First European banknotes.
Finally Thanks for your article
Thanks,
History

friv said...

Thank you, Bill. It's on days such as these that the very sweetness of friendship acts like a natural and refreshing condiment subduing the other flavors and feelings I was experiencing.
wow your site is amazing, keep share with us. very nice interior, i love all. thanks for share :)
k7x | juegos de yoob | jogos mafa | ozov | jogos mafa | friv for school | friv4school

happy wheels said...

You have a real ability for writing unique content. I like how you think and the way you represent your views in this article. I agree with your way of thinking. Thank you for sharing.
unblocked games| unblocked games at school| unblocked games| friv4school| friv for school| friv games| frivgames| kizi2| kizi 2
unblockedgames| unblocked games at school| friv 4 school| friv4school| free online games| free online games| jogos da barbie| kizi

Juegos fri​v yoob said...

This article seems to be overlooking the fact that information is a saleable commodity and altruism comes a poor second to commerce, especially in the health field. Genetic research may be a totally fascinating pursuit for those involved but will it truly provide any realistic benefits?
Yoob | Gry yoob | Juegos fri​v yoob | Yoob friv |
This is an amazing charming space. Beautifully done. I had the opportunity to intern with Liz and she is absolutely incredible! I love all of her work!

2oon said...

This is an amazing charming space. Beautifully done. I had the opportunity to intern with Liz and she is absolutely incredible! I love all of her work!
yoob games | yoob games | 2oon | yoob |

7k8x games said...

This article seems to be overlooking the fact that information is a saleable commodity and altruism comes a poor second to commerce, especially in the health field. Genetic research may be a totally fascinating pursuit for those involved but will it truly provide any realistic benefits?
zoxy games |
7k8x games |
friv4school |
loola games |
fryv
This is an amazing charming space. Beautifully done. I had the opportunity to intern with Liz and she is absolutely incredible! I love all of her work!

cool math games said...

A great possibility for me and it was a superb knowledge to view this site. Very difficult to uncover these beneficial web page or web site. I have many devices and achieving proper picture of these worked well and energy continues to be seeing about this weblog. Often my own intend to make my personal site as well as my own enjoyment is growing due to this page. I we do hope you may well be more effective.
happy wheels| cool math games| 8 ball pool| sudoku| yoob| friv| monster high
tetris| shooting games| barbie games| friv4school|

Love KidsTV said...

Thanks for your post. Click to play Plants vs Zombies , Solitaire,Tom And Jerry Games, Brain Games, Happy Wheels , Five Nights At Freddy's

thị hậu nguyễn said...

Nice post, Critical things are explained in details. I appreciate it. Thanks
happy wheels
super mario bros
pacman
agario

juegosloola.us said...

Reinhard Rack, der var her lige før, påpegede, og jeg takker for hans tale – at undgå at godtgøre passagerer, en praksis, der benyttes alle andre steder
agariogioco.com friv.uno frivgames.online frivgames2016.net jeuxagario.com


Jeg takker også kommissær Liikanen for denne udtalelse, som han har afgivet offentligt. Men jeg vil også gerne tilføje, at vi har været under et enormt pres med disse betænkninger - det er jo adskillige, hele pakken i de seneste uger
jocuriagario.com jogosdeagario.com jogosfrivyoob.com juegosdeagario.com juegosfriv2016.org