The Danish State Bankruptcy of 1813

Abstract

In the background of major crises and bankruptcies, there is a series of events that dragged states into this situation. The devastating effects of the wars that lasted until 1813, and especially the Napoleonic War, lay behind the declaration of bankruptcy of the Danish State in 1813. In the 1700s and 1800s, when the wars were intense, the common problem of almost all the countries of the world was the financing of the increased defence expenditures during the war. Although Denmark was seen as a strong economy with commercial success in the said period, wrong decisions, monetary and political instability, high inflation made a great economic collapse inevitable. In the study, first, the effect of the Napoleonic Wars will be examined in terms of Denmark, and then the banking system that developed in Denmark and the reasons for the economic collapse will be included. Finally, the financial reforms announced after the crisis and the subsequent developments will be discussed.