A bank in a monarchy: an early modern anomaly? The Swedish Bank of the Estates of the Realm

ABSTRACT

This article aims to analyse credit as a core element in the political changes and processes of state formation that took place in Sweden in the second half of the seventeenth-century. The study focuses on discussions within the Council of the Realm and at the Diets about how to use the two Swedish seventeenth-century banks as creditors to the state. The two banks were essential parts of an elaborate attempt to the shift public debt regime from one based on private creditors and the personal credit of the king and the men in the government to a regime based on institutional creditors and the credit of the Estates of the Realm. The outcome of the procesess was contingent upon some of the core topics of early modern Europe’s political and financial discourses: the nature of the sovereign, the relationship between private interests and the public good, and the role and functioning of representative assemblies. This process marked the beginning of a development in which sovereign borrowing became a public concern, eventually strengthening the Estate’s position vis-à-vis the government, and is a significant example of the interconnectedness of politics and credit.

KEYWORDS:

• Credit
• state formation
• Bank of the Estates

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

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2. Swedish National Erchiv (SNA), Det odelade kansliet. Rådsprotokoll, Huvudserie (RP), vol. 34 and 35a, 7 March 1661.

3. SNA, RP, vol. 32c, 7 July 1660.

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10. Rosenthal, “The Political Economy”; Coffman and Neal, “Introduction”; Irigoin and Grafe, “Bounded leviathan,” 199–200, 223–4; Béguin and Genet, “Taxation and the Rise,” 1, 31; Barreyre and Delalande, “Introduction,” vi–xi; Grafe, “An Empire”.

11. Barreyre and Delalande, “Introduction,” xi–xii.

12. Reinert, Translating Empire, 271–88.

13. Glete, “Swedish Fiscal – Military”; Thomson, “Beyond the Military State,” 269–70.

14. Odén, “Naturaskatter och finanspolitik,” 1–19; Ladewig Petersen, “From Domain State,” 116–48.

15. Ladewig Petersen, “War, Finance,” 35–6; Tilly, Coercion, Capital, and European States, 25; Hallenberg, Kungen, fogdarna och riket, 13–6, 266–70, 403–21; Glete, War and the State; Glete, “Swedish Fiscal – Military”.

16. Lindegren, “The Swedish ‘Military State’,” 318–9, 331; Nilsson, De stora krigens tid, 278–9.

17. Hallenberg, Fogdarna, chapter 5; Scherp, De ofrälse och makten, 53; Hallenberg and Holm, Man ur huse.

18. Villstrand, Sveriges historia, 255–61.

19. Brännman, Frälseköpen; Nilsson, De stora krigens tid, 280. See also Glete, War and the State, 178, 196–9, 210–2, and “Swedish Fiscal – Military,” 87; Lindegren, “Military State,” 305–36.

20. Nilsson, De stora krigens.

21. Norrhem, Mercenary Swedes.

22. Sörensson, “Ekonomi och krigföring,” 295–320; Birgitta Odén, “Naturaskatter och finanspolitik – ett finansiellt dilemma,” Scandia 33:1 (1967): 394–9; Nilsson, De stora krigens, 184; Lindegren, “Kriget och skulden”.

23. Landberg, “Krig på kredit,” 46–9, 137–8; Hallenberg, Statsmakt till salu.

24. Wennerlind, Casulities of Credit, 169; Barreyre and Delalande, ”Introduction,” X.

25. Glete, “Swedish Fiscal – Military,” 103.

26. Wittrock, Förmyndares finanspolitik, 194, 249, 256, 300, 373; Torstendahl, “Mellan normalstat och fasta anordningar,” 257, 268–70, 281–3.

27. Nilsson, De stora krigens, 178–95; Hoffman and Norberg, “Conclusion,” 303; Parrott, The Business of War; Rowlands, The Financial Decline, 233.

28. Lagerroth, Statsreglering; Lindegren, “The Swedish ‘Military State’,” 318–30; Nilsson, De stora krigens, 284–99; Glete, War and the State, chapter 5.

29. Brisman, Sveriges riksbank, 90–6; Glete, “Swedish Fiscal – Military,” 97. See also Tham, Riksdagarnes och regeringsformernas historia, 246–7. The two most recent accounts of the bank, primarily building their narratives on Brisman’s study, by Gunnar Wetterberg and Klas Fregert are making the same analyses.

30. Fryxell, Berättelser, 172–3; Carlson, Sveriges historia, 336–7; Heckscher, “The Bank of Sweden,” 171; Heckscher, Sveriges ekonomiska, 631; Glete, “Swedish Fiscal – Military”, 97; Edvinsson and Ögren, “Money supply,” 301.

31. Heckscher, Sveriges ekonomiska, 631, for a similar argument see also Ögren.

32. Fregert, “Sveriges Riksbank,” 96.

33. Fregert and Gustafsson,” Fiscal statistics,” 204; Fregert, “Sveriges Riksbank,” 99.

34. “Såsom alle the medel, hwilka i Banken kunna inkomma, böre ther stå i en aldeles säker och oförryckt förwaring, så wele Wij härmed hafwa frijkallat alla både fremmande och inföddes Penningar ther sammastädes, at the hwarken af Oss eller någon annan, på ett eller annat sätt medh arrest beläggias, eller och wedh infallande Krig medh en eller annan Konung eller Stat confisceras, och icke eller (fast än nöden och trångmålet aldrig så allment eller stort wore) öfwer Wårt ther i hafwande avance och Credit angrijpas eller affordras skole. Hwilket och om the i Lähne-Banken försatte Panter och thess öfwerskått förstås skal, så at the både vnder warande förpantning, såsom och wedh och efter försälningen skole aldeles för arrest, confiscation och hwarjehanda intrång wara försäkrade.” Kongl. May:tz Nådige Försäkring gifwen Rijksens Ständer, på någre wilkor och Fördelar till Banckens bästa. Dat. Stockholm den 17. Septemb. 1668. Printed in Brisman, Sveriges riksbank, appendix VII.

35. In the assurance and the charter of the bank of the estates, ‘Konung eller Stat’ [King and State] is interchangeably used with ‘Potentat eller Republiqve’, Sweriges Rijkes Ständers Beslut och Förordning om Banken i Stockholm, Dat. Den 22 Septemb. Åhr 1668, paragraph 6, 35.

36. Fregert, “Sveriges Riksbank”. See also Bindseil Central Banking, 93 and Hendrickson, “The Riksbank,” 316, who base their account of the Swedish banks on Fregert.

37. Fredriksson, Försvarets finansiering 60–5, 127–8; Glete, “Swedish Fiscal – Military,” 104.

38. Lindegren, “Kriget och skulden”; Lindström and Norrhem, Flattering Alliances; Winton, “The political economy”; Winton, “Parliamentary control”; Ericsson and Winton, “The Rise and Fall”; Norrhem, Mercenary Swedes.

39. Jezierski et al., “Sweden, Inc”.

40. Wittrock, “Gustaf Bondes politiska program,” 51; Wittrock, Förmyndares finanspolitik, 72–3, 396, 439–50.

41. Wittrock, Förmyndares finanspolitik I, 63, 124–6, 194, 373, 439–50.

42. Fontaine, The Moral Economy, 2–7, 314–7; Nilsson Hammar and Norrhem, “Servants as creditors,” 20

43. Ito, English Economic Thought; van Bochove et al., “Real Estate”.

44. Risingh, Itt Vthtogh, 22, 101–2.

45. Risingh, Itt Vthtogh, 22; Dahlgren, “Johan Claesson Risingh,” 101–9.

46. Wittrock, “Gustaf Bondes politiska program,” 51.

47. Brisman, Sveriges riksbank, 3–11; Thomson, “Swedish Variations,” 331.

48. Wittrock, “Gustav Bondes politiska program,” 38; Wittrock, Svenska handelskompaniet, 34–8; Thomson, “Swedish Variations,” 33, 337; Tham, Bidrag till, 172; Wittrock, Förmyndares finansförvaltning, 38.

49. Svenska riksrådets protokoll 9, 294–2; Svenska riksrådets protokoll 10, 348, 507.

50. Brisman, Sveriges riksbank, 1–7; Platbārzdis, Banksedlar, 11.

51. Brisman, Sveriges riksbank, 4; Thomson, “Swedish Variations,” 340–1.

52. Svenska riksrådets protokoll 8, 551.

53. Kristoffers landslag, “The King’s Section”; Runeby, Monarchia mixta, 239–40.

54. Dahlgren, Karl X Gustaf, 6–12.

55. Svenska riksrådets protokoll 8, 538; Svenska riksrådets protokoll 9, 294; Svenska riksrådets protokoll 10, 348, 507.

56. Brisman, Sveriges riksbank, Appendix IV, The charter of Stockholm Banco, paragraph 6.

57. Brisman, Sveriges riksbank, Appendix IV, The charter of Stockholm Banco, paragraph 6.

58. Svenska riksrådets protokoll 10, 348, 507

59. Lindberg, Antika skevheten, 121–2, Christensen-Nugues, “The Benefit of Some,” 26; Jezierski et al., “Sweden Inc,” 369–73.

60. SNA, Riksarkivets ämnessamlingar. Miscellanea, Bankväsende, Skrivelser till Kungl Maj:t i bankärenden 1652–1808, vol. 2, Letters from Palmstruch to the king, dated 11 and 21 December 1656.

61. SNA, RP vol. 32 c, 7 July 1660.

62. SNA, RP vol. 38 and 39, 10 March 1663.

63. SNA, RP vol. 39, 10 March 1663.

64. SNA, RP vol. 38 and 39, 10 March 1663.

65. SNA, RP vol. 38 and 39, 10 March 1663.

66. SNA, RP vol. 46, 23 June 1666.

67. Stiernman, Alla riksdagars, 1473; Borgarståndets riksdagsprotokoll, 52

68. Runeby, Monarchia mixta, 110–1, 114, 125, 127, 130, 187, 257–9; Lindberg, Den antika skevheten, 91–2, 176–84.

69. Dickson, Financial Revolution, 55–6; Pincus, 1688, 394–6; Wennerlind, Casulities of Credit 69–70, 74, 111; Ito, English Economic Thought, 148–9; Kaiser, “Money, Despotism, and Public Opinion,” 1–28, 5.

70. Clapham, The Bank of England, 16–7.

71. Paterson, A Brief Account, 2.

72. Schultze, “Vom Gemeinnutz zum Eigennutz”; Runefelt, Hushållningens dygder, chapter 2; Pihl, “Mastering”; Christensen-Nugues, “The Benefit of Some”.

73. Schultze, “Vom Gemeinnutz zum Eigennutz”; Runefelt, Hushållningens dygder, 65; Christensen-Nugues, “The Benefit of some,” 25–6.

74. Runefelt, Hushållningens dygder, 46–7; Leemans, “Commercial desires”; McCormick, “Improvement”; Christensen-Nugues, “The Benefit of Some”, 27–8, 31.

75. Prästeståndets riksdagsprotokoll 1664, 484–5.

76. Sveriges ridderskaps och adels riksdagsprotokoll 1664, 450.

77. SNA, Sveriges riksdag, Sekreta utskottet 1668–1714, vol. R2373, 1668, 206–8.

78. Svenska riksrådets protokoll 9, 143.

79. SNA, RP vol. 39, April 24 1664; Prästeståndets protokoll 1664, 376.

80. Tham, Bidrag till, 80–3, 117.

81. Tham, Bidrag till, 80, 354; Fyhrvall, Svenska handelslagstiftningens historia, 47–52, 63, 70–3; Wittrock, Kopparhandeln,160–1. Heckscher, Sveriges ekonomiska, 593–601.

82. Hallenberg, Statsmakt till salu, 167–207.

83. Thomson, “Swedish Variations,” 336–7

84. Runefelt, Hushållningens dygder, 51–4.

85. Wittrock, Förmyndares finanspolitik, passim; Munthe, Joel Gripenstierna, 57–151; Landberg, “Krig på kredit,” 42–63; Torstendahl, “Normalstat,” 283; Glete, “Swedish Fiscal-Military,” 103–4.

86. SNA, RP vol. 46, 29 March 1666.

87. Wennerlind Casulities of Credit, 103; Brandon, War, Capital and the Dutch State, 20–1.

88. Nilsson, “Reduktion eller kontribution,” 69–114; Ågren, “The Reduction,” 251–7; Winberg, Grenverket, 201–8; Villstrand, Sveriges historia, 398–421.

89. SNA, RP vol. 45, 17 December 1666.

90. Stiernman, Alla riksdagars, 1473.

91. SNA, Säfstaholmsamlingen 1, Pappershandskrifter vol. 59, Oförgripligt betänkande till Stockholms bancos redres och stabiliment.

92. Sandberg, Slottets skugga, chapter 4; Thomson, “Swedish Variations,” 341.

93. Svenska riksrådets protokoll 8, 551.

94. SNA, RP vol. 33b, 14 December 1660.

95. SNA, RP vol. 34 and 35a, 7 March 1661.

96. Tracy, A Financial Revolution; ‘t Hart, “Financial Revolution,” 17–22.

97. SNA, RP vol. 39, 19 May 1663.

98. SNA, Säfstaholmsamlingen 1, Pappershandskrifter vol 59, Oförgripligt betänkande till Stockholms bancos redres och stabiliment.

99. Borgarståndets protokoll, 52.

100. SNA, RP vol. 49, 4 August 1668; Sveriges ridderskaps och adels riksdagsprotokoll 1668, 201; Brisman, Sveriges riksbank, 85–6.

101. SNA, RP vol. 49, 15 September 1668.

102. Sveriges ridderskaps och adels riksdagsprotokoll 1668, 371; Rystad, “Johan Gyllenstierna,” 610.

103. SNA, RP vol. 49, 15 September 1668.

104. SNA, RP vol. 49, 15 September 1668; Sveriges ridderskaps och adels riksdagsprotokoll 1668, 411–9.

105. See also SNA, Bankoutskottet 1672–1866, vol R4528, 48–9.

106. SNA, RP vol. 49, 15 September 1668.

107. Stiernman, Alla riksdagars, 1597, 1599.

108. Winton, “Parliamentary control”.

109. Ericsson and Winton, “The Rise and Fall of a New Credit System,” 32.

110. SNA, RP vol. 45, 5 March 1669; Munthe, Joel Gripenstierna, 87–90.

111. Brisman, Sveriges riksbank, 207–30; Wetterberg, Money and power, 64–74.

Additional information

Notes on contributors

Christopher Pihl

Christopher Pihl is docent in history and senior lecturer at Södertörns högskola. His research interest lies in the intersection of economic, political, and economic history. He is the PI for two research projects about credit and money in early modern Sweden: “Creating and maintaining trust after the first Swedish banking crisis: Riksens ständers bank (The Bank of the Estates of the Realm) 1668-1721” financed by the Swedish Research Council and “Monetary policies and practices. Money and state formation in early modern Sweden” financed by Riksbankens jubileumsfond.