Yes, they were. I'm not going to launch into a full exposition of the history of alchemy/chymistry (c.f. William R. Newman and Lawrence Principe, "Alchemy vs. Chemistry: The Etmylogical Origins of a Historiographic Mistake," Early Science and Medicine 3, no. 1 (Feb. 1998): 35-68). To answer your question, the philosopher's stone and chrysopoeia (turning lead into gold) were considered credible into the early modern period. It was only in the 18th (and arguably 19th) century that the division between "alchemy" and chemistry started to arise in chemical literature.

As to the second part of your question, absolutely. Pamela Smith has published an article in which she argues that Rudolf II, the Holy Roman Emperor, employed alchemists. These alchemists sought to transmute lead into gold in order to prove that God favored Rudolf, a Catholic monarch, over Protestant rulers. The article is "Alchemy as a Language of Mediation at the Habsburg Court," ISIS: Journal for the History of Science 85 (1994): 1-25. She's also published a book on similar issues called The Business of Alchemy: Science and Culture in the Holy Roman Empire (Princeton: Princeton University Press, 1994).