During Horn’s peaceful administration the financial conditions improved, the state debt was reduced and the peaceful trades and industries were furthered. The great deed accomplished was the completion of a new state law which was published in 1734 and is in force to this very day. Arvid Horn was a perfect type of the great Carolin era, of pure and severe morals and modest requirements. In a day of increasing scepticism and levity, he ostentatiously preserved the rigid religious practices of his youth. He showed unreserved indignation at the unworthy and immoral conduct of the king, for which reason strained relations existed between them. Count Horn was of impressive form and carriage, controlling the quick temper of the warrior beneath the smooth and dignified bearing of the statesman.
The decades which followed upon the fall of Arvid Horn were stormy ones and full of miseries. The friends of peace were called Caps and the warlike party Hats. The latter, now in power, commenced a war against Russia, which turned out badly, the Swedes being defeated at Vilmanstrand, in 1741, and at Helsingfors, in 1742. The government and secret committee felt ashamed of their work and had the poor generals, Charles Emil Lewenhaupt and Buddenbrock, executed for their lack of martial skill and good fortune. Peace was made with Russia in 1743, the towns of Fredericshamn, Vilmanstrand and Nyslott, in Finland, being ceded by Sweden, and the river Kymene made the boundary line.
Next the Hats had to face a rebellion. In order to please Elizabeth of Russia, Czar Peter’s daughter, they had selected Charles Peter Ulric, her nephew and the son of the duke of Holstein, as heir-apparent to the Swedish throne, to which he was the nearest in right, Ulrica Eleonore dying without issue, in 1741. But when chosen as Elizabeth’s successor in Russia, the Hats selected Adolphus Frederic, prince bishop of Lubeck, who on his mother’s side was a descendant of Gustavus Adolphus. This caused popular discontent, the people, forgetful of past enmities, desiring to make Crown Prince Frederic of Denmark heir-apparent. The peasants at the Riksdag of 1742 proclaimed loudly their desire of a personal union with Denmark-Norway, which would establish Scandinavia as one solid power against Russia. The peasants of Helsingland and Dalecarlia revolted. They gathered, and marching down to Stockholm, placed the government in a dangerous position by demanding the election of Crown Prince Frederic of Denmark and the execution of the two imprisoned generals. In that very moment peace was obtained with Russia, and the government persuaded the leaders of the rebellion, who had obtained admission to the Riksdag, that Adolphus Frederic must be chosen, since it was a part of the treaty of peace. Later the rebels, 3,500 in number, were forced to surrender. Their principal leader was executed.