Europe's first banknote — and its first mistake

In 1661, Stockholms Banco in Sweden issued Europe's first banknotes. The idea was brilliant: instead of hauling heavy copper coins, you got a paper promising their value. Convenient, light, modern.

The temptation of the press

But the bank quickly gave in to temptation: it printed more banknotes than it had metal to back them. When people came to exchange their papers for coins, the bank had none left. It went bankrupt within years. Europe's first banknote also brought the first lesson about printing without backing.

A promise is valuable only as far as you can honor it. The rest is paper.