State Bankrupt in 1813
During the war 1807 - 1814 the government had raised money by issuing
banknotes in large numbers.
As the state was not able to cash them in silver, the banknotes lost
most of their values in normal trade.
In 1813 the state went bankrupt, as the government tryed to arrange the
economy in the following way. A national bank was founded, who was
obliged to cash the old banknotes by paying 1/10 of their face value in
national bank notes.
To secure the bank a foundation, they made an interfirence in the right
of property by requiring payment of 6% of the value of each property,
and if the ovner was unable to pay, the amount remained standing as a
priority, of which should be paid interest to the bank in silver.
But the national bank notes did not at once gain trust either and
dropped in price for below face value. The kingdom was alone to cary the
burden of the bank notes, because in Holsten it turned out to be a great
reluctance to the national bank notes, and the government had to
determine, that here silver should be the only legal way of payment.
The national bank notes were for a long time low priced, and for some
time they were priced only 1/20 of their face value. Not until 1818,
when the national bank was transformed into a new National Bank, which
was controlled completely independent from the government, the situation
In the end of Frederik 6th ‘s lifetime the banknotes
reached par value. They were in daily trade acknowledged for their full
The debts of the state had increased significantly during the war and
continued to increase for many years after the war, until it in 1835 had
reached a total of 260 million kroners.
From 1835 they were able to start to pay off the debts.