The Early Modern Financial System and the Informal Credit Market

The 1834 currency reform marks the culmination of the period after 1772 that has been described as “…a new stage in the history of the Swedish credit system”.1 This period saw the further development of existing public credit institutions and the establishment of a number of new ones, the lending business of which was based on the 1777 currency reform; this introduced an effective silver standard (1777–89) that preceded the 1834 reform but was of limited significance at the time. The underlying question in the following chapter is precisely why the 1834 currency reform succeeded where the two previous attempts, the aforementioned of 1777 and a later one in 1803, both foundered. The problem must, however, be considered in the light of the wider historical context, in which the crises of the 1760s represented a type of culmination of the foregoing epoch up to the end of the Age of Liberty in 1772 and Gustav III’s coup d’état. The crises escalated over a long period of currency reforms right from the beginning of the seventeenth century that highlight the problems and disequilibria inherent in the financial sector and the credit market as a whole in the early modern period. As we shall see, only a few of the eighteenth-century public credit institutions referred to achieved genuine significance during the nineteenth century; the majority were no more than short-lived experiments. Until the 1860s, the credit market was dominated by private lenders.