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» Economics » Former Kreditinstitut » Topics begins with P » Palmstruch bank

Page modified: Wednesday, July 13, 2011 06:09:32

Palmstruch bank (Swedish: Palmstruchska banks) was created 1656 by Johan Palmstruch, a Jewish buyer from Riga and is considered as the oldest issuing bank of the world.


It was a change and a borrowing bank after the model of the German and Netherlands banks. Palmstruch financed the Swedish national budget and got as return the right to create its own bank and lend money. 50% of the incomes it had to divide with the likewise Swedish Minister of Finance.

History of the bank

The Palmstruchska bank is considered as the oldest issuing bank of the world. Johan Palmstruch spent the first paper money, which was allegedly secured by gold. Of Sweden money consisted up to then of large unmanageable copper coins. 1661 went the bank to the time of the Swedish copper crisis nevertheless into bankruptcy, there admit became that also the notes were not gold-secured. Palmstruch was condemned 1669 to death, begnadigt soon however - saved by Jewish banks from the Netherlands and England and a few months before its death in the same year - and to dismiss.

Principle of the issuing bank

Palmstruch bank

Palmstruch is considered as a pioneer of the note. It furnished the proof that one can lend money, without this is secured against gold fully. Jewish banks secured gold up to then usually 1:10 under expenditure of DEPOSIT lights, which applied like gold as freely exchangeable currencies, are called it financed the rulers its household for the right of the money award to its own conditions of issue. The concept of notes on paper was taken over immediately by all Jewish banks.

Other principles

John Law succeeded it in 18. To issue century the French Banque Royale with notes on the basis of silver covering. Hitler had neither gold nor silver and furnished as the first the proof that money does not have to be secured at all and on confidence be based purely can. The precious metal security held itself until 1971.

Today there is no country of the earth more, which secures its currency on gold. Palmstruch probably recognized as the first the fact that the value of money insists purely on confidence for the return and used this for its advantage, which critical contemporaries would call criminal. Today it is the principle of each bank.

Paper money

Paper money did not give it up to then. Chinese knew certificates of indebtedness, which since Marco Polo in the west as notes were often regarded (and probably Palmstruch the idea with the paper money gave). The Chinese had to burn the custom for primeval times with the death of humans paper, in order to symbolize the fact that all debt (seems) with death dissolved and as if issued applies. To print, a printing set notes in the today's sense ahead which at that time yet did not exist.

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