½ Ducat – Sweden

In 1741, Sweden was embroiled in the War of the Austrian Succession (the "Hats' Russian War" in Swedish context), a conflict that placed immense strain on the nation's finances. To fund its military ambitions, the government, dominated by the pro-war "Hats" party, resorted to the large-scale printing of paper money known as riksdaler riksgälds. This currency was issued by the Riksens Ständers Bank (the precursor to the Riksbank) but was not backed by silver, functioning instead as a form of war credit based on the state's promise to pay. The result was a classic and rapid inflationary spiral, as the volume of paper money in circulation dramatically increased while its real value plummeted.

The currency situation was a direct continuation of the financial instability that had plagued Sweden since the Great Northern War earlier in the century. The silver-based riksdaler specie remained the official standard, but the proliferation of devalued paper created a chaotic dual-system. Prices for goods and services soared when paid for in paper money, causing hardship for the general population, particularly fixed-income earners and soldiers whose pay was in the depreciating notes. Public confidence in the paper currency eroded, and its exchange rate against silver coinage fell sharply on the open market.

This monetary crisis was a central political issue, fiercely criticized by the opposition "Caps" party, who advocated for peace and fiscal restraint. The inflationary financing of 1741, while providing short-term war funds, severely weakened the Swedish economy. It set the stage for further devaluations and economic difficulties in the following years, culminating in the 1747 decision to formally devalue the riksgälds against the silver specie, a recognition of the deep depreciation that the war-driven money printing had caused.