What was the impact of government grants on the emerging national elementary school systems of the nineteenth century? This article deals with this question through a study of the introduction of matching government grants in Sweden during the latter part of the nineteenth century. The analysis shows that, although the government grants increased rapidly with the introduction of matching grants, they did not crowd out local funding. Instead, the grants stimulated local taxation, increasing the number of teachers as well as their salaries. This occurred because the grants were perceived as an incentive by local school boards and because the financial control of the Swedish elementary school system remained at a local level. Thus, this article also contributes to the research on the expansion of mass education during the nineteenth century, commenting on the significance of both state intervention and a decentralised organisation. (Contains 3 tables, 4 figures and 67 footnotes.)