12 Skilling – Denmark

In 1622, Denmark found itself in a severe monetary crisis, a direct consequence of the costly Kalmar War (1611-1613) against Sweden and the extravagant building projects of King Christian IV. To finance these endeavours, the state had significantly debased the currency, notably the skilling. The royal mint reduced the silver content in coins while officially maintaining their face value, a practice that flooded the kingdom with weak, inflationary currency and eroded public trust.

This situation created a destructive cycle of Gresham's Law, where "bad money drives out good." Older, high-silver coins were hoarded or melted down for their bullion value, while the new, inferior coins circulated widely, losing purchasing power. Prices for goods and grain soared as merchants and farmers demanded more of the debased coins for their products, leading to social unrest and hardship for the population, particularly those on fixed incomes like soldiers and civil servants.

Recognising the crisis, the Danish government took decisive action in 1622. A major monetary reform was enacted, introducing a new, stable currency system based on the rigsdaler as a large silver coin, subdivided into marks and skilling. The state recalled and demonetised the old debased coins, offering compensation at rates below their face value but above their intrinsic metal worth. This painful but necessary reset, funded by new taxes, successfully stabilised the currency and laid the foundation for fiscal recovery, though it came at a significant short-term cost to the populace.