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Overview/History

World History

A World History of Paper Currency

Early European Banknotes

Sweden is home of the first European banknotes. Its copper Taller coins were very large and suffered from changing world prices for the metal in 1660. To cope with the problem, Johan Palmstruch's bank in Stockholm issued hand-written notes with set denominations, issuing date, and pressed stamps the following year. Later issues were made with a press; only the signatures remained hand-written.

Palmstruch's notes became very popular and widely used in Sweden. They were easily transferable, could be used by anyone, and were payable on sight, making them much easier to use and superior to the available forms of credit at the time. Unfortunately for Palmstruch, he had never consulted the King.

Rumors circulated that coins were not available for reimbursement and the monarchy ordered the notes to be devalued. Eventually, Palmstruch's bank was closed and he was imprisoned. In 1668, the government recalled all circulating notes and issued its own official currency, which did not share many of the best properties of Palmstruch's notes.

By the 1680's, the use of paper money began to take place in other European countries and the New World. Canada (still a French colony) circulated notes on playing cards. Other colonies soon developed their own paper notes.

Right before the turn of the 18th Century, a few nations established national banks, including the Banks of England and Scotland. Scotland began printing pounds right away, a few years before England's bank began issuing banknotes in 1807.

Norway also circulated notes at this time, called Rixdaler. Jorgen thor Mohlen received permission from the ruling state of Denmark to print these notes on watermarked paper. Much like Sweden, rumors of insufficient backing spread and Mohlen soon died in misery.