The King’s currency: Gustav II Adolf and the copper standard (1619–1632)

ABSTRACT

King Gustav Adolf ruled Sweden from 1611, until his death on the battlefield in 1632. The king was at war in Russia, Poland, and Germany, throughout this period. Sweden was a poor and backward country; the crown struggled to pay and feed its armies. The Swedish crown did, however, operate the largest copper mine in Europe, and enjoyed a near monopoly on exports to the continent. In 1624 the crown began a bimetallic standard by minting copper coins alongside the existing silver standard. Eminent scholars from the last century, including Eli F. Heckscher, wrote that the crown’s intention was to manipulate the copper prices in Europe by restricting supply. The crown planned to consume substantial quantities of copper in the royal mints instead of exporting copper as ingot. I will seek to demonstrate that the king had another, parallel, purpose for establishing the copper standard. In addition to influencing the price of copper abroad, he also sought a rapid and simple means of turning copper into a fungible currency, which he could use to sustain his armies. Alongside manipulation, therefore, the king’s motive was to improve his liquidity and cash flow to fuel his military and political ambitions.

KEYWORDS:

• Copper standard
• Bimetallism
• Gustav II Adolf
• Axel Oxenstierna
• Louis de Geer

JEL CLASSIFICATION:

• N4
• N1
• N13

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Riksarkivet, Stockholm (RA) Handel och Sjöfart arkiv, vol. 46 (025) An Open Letter on the Trading Company, 24 July 1619.

2 Stiernman (1747, p. 726).

3 Oxenstierna (1888/2012, series 1, v. 1, p. 345).

4 RA, Handel och Sjöfart arkiv, vol. 46 (025), An Open Letter on the Trading Company, 24 July 1619.

5 Stiernman, ed. (1747, p. 728).

6 Oxenstierna, (1888/2012, series 2, v. 11, p. 363).

7 The riksdaler was a silver coin minted in the Holy Roman Empire. It was the reserve currency of the day in Northern Europe.

8 Oxenstierna (1888/2012, series 1, v. 1, p. 363).

9 Oxenstierna (1888/2012, series 1, v.1, p. 389).

10 Oxenstierna, 1888/2012 (series 2, v. 1, p. 54). Dahlgren, ed. (1934, p. 65).

11

Til thet Fempte … at hwar compagniet kan genom flitigt och troget dritwandt förföljia Ungerste Plåter för Etthundred Femptio daler penninger, eller och bringa den högre i prijs, at de det frill, och omyntat giöre måge sökiendes i så motto compagniets fordeel I och hwad der effter kan salla för proufit det comme participanterne till winst och gode. (RA, Handel och Sjöfart arkiv, v. 46, pp. 133–135. A transcription can be found in Stiernman, ed. 1747, pp. 923–924.)

12 In Sweden and Northern Europe copper was traded in skeppund or literally, ship pounds. According to Heckscher a skeppund weighed 136 modern kilograms (Heckscher, 1936, v. 1, p. 603). (A kilogram weighs 2.20462 pounds.)

13 For the example of nineteenth century France see Redish (2000, pp. 184–185).

14 RA. Handel och Sjöfart arkiv, vol. 46 (133). A transcription can be found in Stiernman, ed., 1747, p. 924.

15 Oxenstierna (1888/2012, series 2, v. 1, p. 299).

16 Oxenstierna, 1888/2012 (series 2, v. 1, p. 359).

17 Oxenstierna, 1888/2012 (series 2, v. 1, p. 380).

18 Oxenstierna, 1888/2012 (series 2, v. 1, p. 382).

19 Oxenstierna, 1888/2012 (series 1. v. 4, p. 71).

20 Oxenstierna, 1888/2012 (series 1, v. 4, p. 78).

21 Oxenstierna,1888/2012 series 2, v. 1, p. 29.

22 Dahlgren, ed. (1934, p. 168).

23 RA, Leufsta archive, v. 81 (117) Koppar Rechnings meds factoren (n.d.).

24 Oxenstierna, 1888/2012 (series 2, v. 11, p. 424).

25 RA, Leufsta archive, v. 81 (119) 1627–1629, Koppar Rechnings meds Erich Larsson.

26 Oxenstierna (1888/2012, series 2, v. 1, p. 391).

27 Oxenstierna (1888/2012, series 2, v. 1, p. 476).

28 Oxenstierna (1888/2012, series 2, v. 1, p. 743).

29 Dahlgren, ed. (1934, p. 121).

30 Dahlgren, ed. (1934, p. 112).

31 Dahlgren, ed. (1934, p. 115).

32 Oxenstierna (1888/2012, series 2, v. 10, p. 563).

33 Oxenstierna (1888/2012, series 2, v. 10, p. 567).

34 Oxenstierna (1888/2012, series 2, v. 10, p. 563).

35 Oxenstierna (1888/2012, series 1, v. 4, p. 82).

36 Oxenstierna (1888/2012, series 2, v. 4, p. 262).

37 The florin was a local currency used in Prussia and Poland. The occupying Swedes used to term florin for the copper currency they distributed in Prussia hoping the familiar term would encourage acceptance. It is not clear from the correspondence whether the copper florins were minted locally from imported Swedish copper or minted in Sweden (see Oxenstierna, 1888/2012, series 1, v. 4, p. 263).

38 Oxenstierna (1888/2012, series 1, v. 4, p. 263).

39 Oxenstierna (1888/2012, series 1, v. 4, p. 435).

40 Here the chancellor is referring to the cessation of hostilities between Denmark and the Imperial armies under Count Wallenstein.

41 Oxenstierna (1888/2012, series 1, v. 4, p. 436).

42 Oxenstierna (1888/2012, series 1, v. 5, p. 255).

43 Oxenstierna (1888/2012, series 2, v. 11, p. 568).

44 Oxenstierna (1888/2012, series 2, v. 11, p. 570).

45 Oxenstierna (1888/2012, series 2, v. 1, p. 519).

46 Oxenstierna (1888/2012, series 2, v. 11, p. 578).

47 Oxenstierna (1888/2012, series 2, v. 11, p. 442).

48 van Dillen, ed. (1937, pp. 235–236).

49 Oxenstierna (1888/2012, series 2, v. 1, p. 672).

50 Oxenstierna (1888/2012, series 2, v. 1, p. 385).

51 Oxenstierna (1888/2012, series 2, v. 1, p. 743).