A history of money
Celebrating the bicentennial of Norges Bank
M. Michael Brady
On Friday, June 14, 1816, two years and four weeks after the Norwegian Constitution was signed on the 17th of May, Norges Bank was established by the Storting (Parliament), a legislative step taken to remedy the disarray of the monetary system brought about by the Napoleonic Wars of 1807-1813.
Initially, Norges Bank was the country’s banknote-issuing authority. With time, it became the country’s central bank, equivalent to the Federal Reserve System in the USA. The story of that evolution is the subject of A Monetary History of Norway 1816-2016, one of four books published in celebration of the bicentennial of Norges Bank.
The book is intended as a contribution in macroeconomics. Its three authors, a director at the Bank and two professors at the Norwegian School of Economics in Bergen, accomplish that goal well, in lucid English, supported by 197 color charts and graphs, 12 tables, and a 15-page bibliography. Though the book may appeal most to banking and macroeconomic professionals, it contains brief histories of significant events of broader appeal, at least two with an American connection.
The first is of a money matter relevant in the first 50 years of the great Norwegian emigration to America that started in 1825. When those emigrants left Norway, the national currency was the Rigsdaler (National Dollar). The word daler in the Scandinavian languages and dollar in English both came from a 16th-century unit of currency, the Joachimsthaler, named for a silver mine in Bohemia, a source of silver used in coins. So the emigrants left money in Dalers and arrived in America, to use money in Dollars. The coincidence ceased in 1875, when the Norwegian Money Act introduced the Krone (“Crown,” because coins usually had an image of a royal crown), upon Norway’s entry into the Scandinavian Mint Union to join Denmark and Sweden in establishing a common coinage based on gold.
The second is the World War II story of “the gold that wasn’t there.” On April 9, 1940, Germany invaded Norway. Less than a week later, German officials went to Norges Bank in Oslo to inquire about the location of the country’s gold stock. They were told that the stock, some 30 tons of bars and coins, wasn’t there, as it was on its way out of the country. Indeed it was, in a carefully prepared escape that had begun two years earlier when Bank director Nicolai Rygg had initiated packing of all gold items for quick transport should the country be invaded. Rygg’s foresight was prescient. The gold was trucked northward, then transported by ship to London, and finally to its wartime storage place in the U.S.
So A Monetary History of Norway 1816-2016 may be read as a superbly referenced contribution to monetary history or as a sourcebook reflecting Norwegian history. In any event, it’s a worthy addition to any Norwegian reference shelf.
A Monetary History of Norway, 1816-2016, by Øyvind Eitrheim, Jan Tore Klovland, and Lars Fredrik Øksendal, was published by Cambridge University Press in 2016.
This article originally appeared in the July 28, 2017, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.