Krig, skulder och välfärd i Sverige 1800–1810

Abstract

War, debt and welfare in Sweden, 1800–1810

During the eighteenth and early nineteenth centuries thousands of charitable foundations existed in Sweden which focused on helping the poor, the sick and the elderly. Although they were often administered by public officials such as clergymen, the foundations were frequently based on donations from wealthy individuals. The donated money had to be invested in order to create dividends that could be handed to the needy. Many of the foundations chose to purchase government bonds. Consequently, financial ties were created between the foundations and the National debt office which issued the bonds and administered the realm’s government debt. These ties are analyzed in the article. What economic and social meaning did they have for the foundations and for the debt office? The period 1800–1810 is chosen because of the pressures that the political regime had to contend with: the Napoleonic Wars required the mobilization of more resources at the same time as the role of the monarchy was questioned by an increasingly dissatisfied elite.

The analysis shows that many foundations in and around Stockholm as well as along the coast of the Baltic Sea purchased government bonds. The bonds played a significant role in the investment portfolios of the foundations and thus the received interest payments were used to pay support for poor, sick and elderly individuals. The officials who administered the foundations argued that government bonds were the most trustworthy assets that were available on the credit market.

Although the foundations constituted a relatively small group of creditors in the perspective of the debt office, they provided stability since they tended to hold on to their bonds. The foundations also provided valuable specie assets at a time when the debt office had to contend with the negative effects of the promissory notes that the debt office issued.

In 1804, the debt office stopped further sales of bonds in order to cope with an increase in liquidity. This decision resulted in a weakening of the ties between the foundations and the debt office. Many foundations were forced to find other ways to invest their resources and they did not return when the bond sales restarted in 1808. The reduction in the size of the bond market had long-term consequences for the state’s ability to mobilize resources within the country.