The history of money

‘Raha’, the Finnish word for money, originally meant the fur of an animal, in particular that of the squirrel. Such furs in prehistoric times were used as a significant medium for exchange in Finland and widely in other parts of northern Europe. Metals, especially silver and gold, were already used in Europe as a means of payment thousands of years ago but, in those earlier times, metal always had to be weighed when being used as payment, as the metal was not struck into coins of a defined size.

The first metal coins

A tetradrachma issued by Alexander the Great, 4th century BC.

The minting of metal coins began in Lydia in ancient times, about 650 years before the common era. These early coins were metal and of a specific weight with a stamp stating their value. The earliest coins found in Finland are of Roman origin but there are larger finds from the age of the Vikings (800-1050) at which time silver coins arrived in Finland from both the Islamic world and from Western Europe.

Early minting of coins in Finland and Sweden

An imitation of a Byzantine silver coin minted in Finland, mid-11th century.

In Finland coins were first minted during the 11th century. These were copies of Byzantine coins and they were also used as pendants. Minting of coins by the state began in Sweden in the 990s. After Finland had become part of Sweden, the use of money became more widespread among the general population in Åland during the 13th century and in mainland Finland during the 14th century. However, barter still remained very important for centuries.

Minting of coins in Turku during the 15th and 16th centuries

Eric of Pomerania's 6 penning coin, minted in Turku in approximately 1410.

In the 15th century Sweden’s most important mints were in Stockholm, Västerås and Turku. The Turku mint was not in continuous operation and no ledgers or other documents remain from those early years. There is even uncertainty about the year in which it was established, but this is estimated to be around 1410. The final periods that the Turku mint was in operation were 1523-24 and 1556-58. At that time coins were minted in the castle at Turku and it is believed that this is also what had been the practice earlier.

Copper coins and paper money

A large 1/2 taler copper coin from 1742.

Development of the mining industry as well as the increased importation of precious metals that accompanied voyages of discovery to other parts of the globe, led to the use throughout Europe of larger silver coins. The use of gold coins also grew. In Sweden silver was the main metal used for coinage prior to the introduction of copper coins in 1624. At that time Sweden was the leading producer of copper in the world. From that time the Swedish monetary system was based for more than a century on both silver and copper. Large copper coins, called ‘plootus’ from the Swedish word plåt (plate) as large as 19.7 kilos in weight may have been minted and even a lightweight plootu weighed almost a kilo.

Because these plootus were awkward to carry around and because their value was affected by the availability of copper, in 1661 Sweden became the first country in Europe to adopt the use of paper money. Earlier, paper money had only been used in China. Banknotes were issued by Stockholm’s Banco which also had a branch office in Turku. Later on, banknotes were also issued by the National Estates’ Bank, the world’s first central bank.

Money in the time of autonomy

A Russian silver ruble from 1805.

When Finland joined Russia in 1809, the unit of currency became the rouble. For a long time the rouble, on which the Russian system of currency was based, was equivalent to Sweden's silver ‘riksi’ (from the Swedish word for nation). However, in Russia as in Sweden, the early 1800s saw the disappearance of silver coinage due to inflation in the value of paper money after the wars of that time. For this reason, in the early period of Russian control, Finland also used paper money based on the rouble and the kopek which was put into circulation by the Exchange Loan and Deposit Officefounded in 1811. In 1840, it changed its name to Bank of Finland. In addition to the Russian banknotes, Finland also widely used Swedish money until monetary reform took place in 1840, after which time the silver rouble became the main currency in circulation in the country. In 1860 Finland got its own unit of currency, the markka, and at the same time a mint was set up to produce these Finnish coins.