- Project Runeberg -  Finland : its public and private economy /
189

(1902) [MARC] Author: Niels Christian Frederiksen
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commercial marine, the Bank granted loans for long
periods to naval constructors, also to public associations
and municipalities. It continued to be a favour to
obtain a loan, and instead of rendering service to the
whole public, the Bank assisted a few privileged
persons. By maintaining a rate of interest much
lower than the market rate, and by allowing loans to
remain without amortising, the borrowers were too
often allowed to continue their antiquated business
methods without keeping pace with modern methods.
As a natural consequence of this, such loans lacked
security and were often lost, and the Bank was without
means to render assistance in periods of difficulty.
During the general financial crisis in 1847—8, it was
found necessary to grant debtors a moratorium of
three years, and when the Crimean War and a subsequent
short expansion of business was followed by
another general crisis in 1857, the Bank was again
without any means. Although the Bank of Finland
had been obliged in 1854 to stop the exchange of its
notes into silver, it had retained the rule which had
regulated their issue, that notes might not be issued in
any greater proportion to its silver than that of fifteen to
seven. It could therefore have exchanged into silver its
own notes, but to redeem those of the Russian Bank
too was of course an entire impossibility. The Bank
could not as a consequence act with the vigour and
elasticity which was necessary in order to satisfy the
demands of the crisis of 1857, as well as of the
following period.

In response to a proposal of the Senate, the
Emperor decreed on the 4th of April 1860, that
Finland should have its own monetary unit, the mark,
or Finnish “markka,” the equivalent of a quarter of
a silver rouble, and divided into 100 penni. It was

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