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Blogs > OnDaFence > Bret's Blogisphere |
Avoiding the Backlash ! I am not going to cover FOOD at such a late hour instead I shall go with my second favorite topic.... MONEY! The first copper coins were minted when Sweden introduced the copper standard in 1624. The reasons for this are the shortage of silver and gold due to the prolonged wars, and a desire to maintain the price of copper, which was Sweden's most important export product.At first, only square-shaped small coins were minted, known as "clippings". But these were easy to reduce in size without anyone really noticing and they were therefore replaced after only a few years with round copper coins. Falu copper mine accounted for 2/3 of Europe's copper supply during the first half of the 17th century. The idea was that by using some of all the copper extracted in the mines for domestic coinage, the volume of copper exported would decline, which would push up the price. As copper is worth less than silver, large plates of copper were needed to replace small silver coins. The largest copper coin weighed almost 20 kilos or 45 pounds. Sweden had problems selling all the copper produced in the country. This was an important reason behind the minting of a great number of large copper coins up until 1644. For obvious reasons, the coins were not particularly convenient for business transactions. It was Johan Palmstruch, founder of Stockholms Bank, Sweden's first bank, who issued the banknotes. The background to this was that, in 1660, the central government had started to mint new coins of a lower weight than the older ones. This meant that many depositors wanted their old, heavier coins back, as they had a higher metal value. This led to a bank run. To counteract this, Palmstruch started to issue deposit certificates. This was a security that gave the owner the right to withdraw the deposited amount in coins. The special thing about the deposit certificates, which were called credit notes, was that the bank was no longer dependent on having MONEY deposited to be able to lend. Instead, the new certificates were handed out as loans from the bank. They could be used to purchase anything and so the first banknotes in Europe were invented on July 16, 1661... 357 years ago today. The new thing about Palmstruch's banknotes was that they were not linked to any deposit. Instead, they were based on the general public's confidence that the bank would pay the value of the note in coins upon demand. (The largest copper coin weighed almost 20 kilos 45 lbs] The banknotes quickly became popular as they were more convenient than the heavy and cumbersome coins made of copper. During the following years, the bank printed more and more notes. This led towards them falling in value, a phenomenon we now know as inflation. Confidence was finally lost among the general public and many people demanded that their notes be redeemed. But Stockholms Bank did not have enough coins and therefore started to demand the loans it had granted be repaid. It ended with a bank failure and many people suffered financial problems. The Council of the Realm – the government of the time – decided in 1664 that the loans would be repaid and that the credit notes would be withdrawn. By this act Sweden created the First Government Central Bank in Europe. Palmstruch was ordered to appear before the Svea Court of Appeal and was sentenced to death for mismanagement of the bank in 1668. He was reprieved but remained in prison until 1670 and died the following year. I did a little math on the side. The banknote above was for 100 dalers. With the silver coin of the era that came to about 5.5 pounds of silver or 2 kilos The half daler copper plate coin in picture #2 weighed . 365 grams. One hundred dalers is 161 pounds (73 kilos) of copper coins. I can fully understand why the general public would want to switch to the ease of banknotes. |
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7/15/2018 10:39 pm |
I put in a full dang day.
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7/15/2018 10:40 pm |
Left home before 10 got home after 10 tonight.
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7/15/2018 10:41 pm |
Got the problem solved and things are back on track full speed ahead.
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7/15/2018 10:42 pm |
would have been sooner but fucking ready to ost blog and it vanished on me and I had to redo it.
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7/15/2018 10:43 pm |
I am just dead...
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they needed pickup trucks to carry the money to go out and shop..
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7/16/2018 6:31 am |
they needed pickup trucks to carry the money to go out and shop..
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Very interesting historical information on the need for and creation of the bank note. I had no idea of its origin. Thank you. I am a whole lot smarter today after reading your post.
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good stuff Brett
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Maybe this is how we got the expression "keep the change".
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7/16/2018 8:30 pm |
Very interesting historical information on the need for and creation of the bank note. I had no idea of its origin. Thank you. I am a whole lot smarter today after reading your post.
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7/16/2018 8:31 pm |
good stuff Brett
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7/16/2018 8:33 pm |
Maybe this is how we got the expression "keep the change".
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7/16/2018 8:34 pm |
They had a rough beginning but sound management is key to their success.
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