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Multiple paper monies in Sweden 1789–1903: substitution or complementarity?

Published online by Cambridge University Press:  04 April 2008

Torbjörn Engdahl  and
Anders Ögren
Torbjörn Engdahl
Affiliation:
Uppsala University; EHFF/Stockholm School of Economics and EconomiX/Université de Paris X–[email protected]; [email protected]
Anders Ögren
Affiliation:
Uppsala University; EHFF/Stockholm School of Economics and EconomiX/Université de Paris X–[email protected]; [email protected]
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Abstract

Complementarity of money means that two or more kinds of monies together fulfil the demands of the users better than they would without the existence of the other(s). In this article we study complementarity between paper monies in Sweden. We address four questions: 1. What was used as money at a macro-level (money supply) and at a micro-level (monetary remittances)? 2. What was the relative value of different monies in parallel circulation? 3. Were there seasonal variations in use and/or value of these monies? 4. Were there geographical variations in use and value? What we find is that the complementarity helped to solve the problem of providing sufficient liquidity domestically over time and space and thus contributed to the maintenance of a stable value of the currency.

Résumés

La complémentarité de l'argent signifie qu'au moins deux genres de devises satisfont davantage les demandes des usagers que sans l'existence de l'une ou l'autre. Dans cette communication, nous étudions la complémentarité des devises en papiers en Suède. Nous adressons quatre questions: 1. Quel argent était utilisé au niveau macro (approvisionnement d'argent) et au niveau micro (versement d'argent)? 2. Quelle était la valeur relative des différentes devises en circulation parallèle? 3. Existait-il des variations saisonnières dans l'utilisation et/ou la valeur de ces devises? 4. Existait-il des variations géographiques dans l'utilisation et la valeur de ces devises? Nous trouvons que la complémentarité aida a résoudre le problème de l'approvisionnement suffisant en liquidité sur le marché domestique dans le temps et dans la région, et contribua ainsi à maintenir la devise à une valeur stable.

Abstrakte

Komplementarität des Geldes bedeutet, dass zwei oder mehr Geldsorten zusammen die Bedürfnisse der Benutzer besser befriedigen, als dies ohne die Existenz der anderen möglich gewesen wäre. Diese Abhandlung untersucht die Komplementarität zwischen den Papiergeldern Schwedens. Dabei werden vier Fragen erörtert: 1. Was wurde auf der Makroebene (Geldversorgung) und was auf der Mikroebene (Geldüberweisungen) als Geld verwendet? 2. Was war der relative Wert der einzelnen Währungen, die sich parallel zueinander im Umlauf befanden? 3. Gab es saisonbedingte Unterschiede in Gebrauch und/oder Wert dieser Währungen? 4. Gab es geografische Unterschiede in Gebrauch und Wert? Wir erfahren, dass die Komplementarität half, das Problem dessen, wie man über längere Zeit und an unterschiedlichen Orten eine ausreichende inländische Liquidität erreicht, zu lösen half und damit zur Sicherung eines stabilen Währungswertes beitrug.

Resúmenes

La complementariedad del dinero significa que dos o más clases de moneda juntas satisfacen las demandas de los usuarios mejor de lo que lo harían sin la existencia de la otra u otras. En esta ponencia estudiamos la complementariedad entre las monedas de papel en Suecia. Abordamos cuatro cuestiones: 1. ¿Qué se usaba como dinero a macro nivel (suministro de dinero) y a micro nivel (pagos monetarios)? 2. ¿Cuál era el valor relativo de las diferentes monedas en circulación paralela? 3. ¿Había variaciones estacionales en cuanto al uso y valor de estas monedas? 4. ¿Había variaciones regionales en su uso y valor? Concluimos que la complementariedad ayudó a resolver el problema de facilitar suficiente liquidez en el territorio nacional a lo largo del tiempo y del espacio y de este modo contribuyó a mantener un valor estable del dinero.

Type
Articles
Information
Financial History Review , Volume 15 , Issue 1 , April 2008 , pp. 73 - 91
Copyright
Copyright © European Association for Banking and Financial History 2008

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References

1 Cf. for instance the recent contribution by T. J. Sargent and F. R. Velde, The Big Problem of Small Change (Princeton, 2002).

2 The reduction of monetary transaction costs in the process of homogenising national currencies is discussed by E. Helleiner, The Making of National Money: Territorial Currencies in Historical Perspective (Ithaca and London, 2003).

3 When the Riksbank notes in the smallest denomination, i.e. 1 SEK, were abolished in 1879 the official reason was that the existence of this kind of note made the public confuse notes with coins; see A. Ögren, Empirical Studies in Money, Credit and Banking: the Swedish Credit Market in Transition under the Silver and the Gold Standards, 1834–1913 (Stockholm, 2003); A. Ögren, ‘Free or central banking? Liquidity and financial deepening in Sweden, 1834–1913’, Explorations in Economic History, 43 (2006).

4 N. Forssell, Svenska Postverkets Historia, vol. ii (Stockholm 1936), pp. 238–45.

5 Postmuseum, Archives, Stockholm (henceforth Postmuseum): Öppen assurans, ii.260.b (henceforth ii.260.b).

6 Cf. the estimated average total value of notes in postal circulation in one year between 1850 and 1870, which was 309 million Riksdaler Riksmynt. Bidrag till Sveriges officiella statistik. M, Postverket (Stockholm 1864–70).

7 ‘Statistiska tabeller 1668–1924’, in Sveriges Riksbank 1668–1918–1924. Bankens tillkomst och verksamhet, part v: Bilagor (Stockholm, 1931).

8 Ögren, Money, Credit and Banking, Appendix – numerical data.

9 G. Ahlström, Studier i svensk ekonomisk politik och prisutveckling 1776–1802 (Lund, 1974), pp. 93–4; B. Carlsson, ‘Riksgäldsfullmäktige 1789–1989’, in E. Dahmén (ed.) Upplåning och utveckling. Riksgäldskontoret 1789–1989 (Stockholm, 1989), p. 35.

10 E. F. Heckscher, ‘Riksgälds en unik fas i det svenska penningväsendets historia’, Ekonomisk tidskrift 51 (1949), pp. 235, 246.

11 Heckscher, ‘Riksgälds’, pp. 236, 245; ‘Statistiska tabeller 1668–1924’, p. 44.

12 See Heckscher, ‘Riksgälds’.

13 G. Hallendorf, ‘Bankens öden från mössväldet till den andra realisationen, 1766–1803’, in Sveriges Riksbank 1668–1918–1924. Bankens tillkomst och verksamhet, part iii (Stockholm, 1931), pp. 209, 221–35, 290; Heckscher, ‘Riksgälds’, p. 254.

14 Postmuseum: ii.260.b; Eksjö (1791), Ståhlhammar to von Krebs, Linköping.

15 See K. Fregert and L. Jonung, ‘Inflation and switches between specie and paper standard in Sweden 1668–1931: a public finance interpretation’, Scottish Journal of Political Economy, 43 (1996).

16 See Heckscher, ‘Riksgälds’; Fregert and Jonung, ‘Inflation and switches’, p. 458.

17 See A. Ögren, ‘Monetary theory and practice: parallel currencies in Sweden, 1789–1833’, unpublished paper presented at the H2S EconomiX seminar at Ecole normale supérieure (ENS) – Cachan (22 March 2007); ‘Statistiska tabeller 1668–1924’.

18 Hallendorf, ‘Bankens öden’; Heckscher, ‘Riksgälds’, p. 254.

19 See Ögren, Money, Credit and Banking, chapter 1. See also Table 5 below.

20 Ögren, Money, Credit and Banking, chapter 2; Ögren, ‘Free or central banking?’.

21 Ögren, Money, Credit and Banking, chapter 2; Ögren, ‘Free or central banking?’.

22 T. Lindgren, Riksbankens sedelhistoria 1668–1968 (Stockholm, 1968), pp. 199–203.

23 Postmuseum: ii.260.b; Härnösand (1863), Halén to Bergström, Umeå. The amount listed differed from that specified on the receipt without any obvious reason in only two instances. Postmuseum, ii.260.b; Härnösand (1863), Halén to Cederlund, Stockholm and Trelleborg (1864), Persson to Linderholm, Karlshamn.

24 See Ögren, Money, Credit and Banking, chapter 2.

25 The bank was Wadstena Enskilda bank. It was taken over by a local competitor, Östergötlands Enskilda bank. B. Segrell, Vadstena enskilda bank: 1857–1887 (Vadstena, 1993).

26 Ögren, ‘Free or central banking?’; A. Ögren. ‘The force of private note issuance: note-issuing commercial banks in the economic and financial development of nineteenth-century Sweden’, paper presented at the European Business History Association Conference in Geneva, 13–15 Sept. 2007.

27 Ögren, Money, Credit and Banking.

28 T. Engdahl, ‘Making better money: merchant demand for regional banking, 1830–1870’, working paper, Department of Economic History, Uppsala University (forthcoming).

29 See for instance Postmuseum: ii.260.b; Västerås (1848), Almström to Glosemeyer, Stockholm; Härnösand (1859), Halén to Asp, Hjo.

30 Postmuseum: ii.260.b; Borgholm (1874) and Mönsterås (1871): Kalmar Enskilda Bank to Skandinaviska Kredit Aktiebolaget, Stockholm. These two documents have not been included in the database otherwise used in this article.