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At the same time the national credit banknotes, made in St. Petersburg, could be used everywhere in the Empire as usual Russian banknotes, as well in Poland.
From , the only currency issued for use in Congress Poland was the ruble consisting of Russian currency and notes of the Bank Polski.
The monetary system of Congress Poland was unified with that of the Russian Empire following the failed January Uprising in Following the occupation of Congress Poland by Germany during World War I in , the ruble was replaced by the marka plurals marki and marek , a currency initially equivalent to the German Papiermark.
The Polish marka was extremely unstable because of the constant wars with its neighbours. Attempts to reduce the expenditures of Polish budget were vain — all the money gained went to conduct war with the USSR.
To complicate the matters, those attempts did not please the elite, which ruled the country. The government's actions were not popular at all, so the taxes did not rise significantly, in order to avoid popular resentment.
The last attempt to save the Polish marka was made in , when Jerzy Michalski made out his own plan to raise taxes and reduce expenditure.
The Sejm accepted it, albeit with many amendments. Realisation of that plan did not succeed, and it had only short-term influence.
This disrupted the whole economy of Poland, and galloping inflation began. As hyperinflation progressed, Poland came to print 1, 5 and 10 million mark banknotes.
However, they were quickly almost valueless. Immediate action was needed. New coins had to be introduced, but were not immediately minted or in circulation.
The temporary solution of the problem was ingenious. Similarly 10,, marek notes were divided and overprinted to make two "coins" each worth 5 grosz. This was an emergency measure to provide the population with a form of the new currency.
The Sejm was weak in its financial control. Yet political parties demanded the government spend more money than had been projected in the budget.
The budget deficit ballooned and out-of-control inflation ensued. The government struggled to cut expenditures, and as a result often came into conflict with the Sejm.
However, the government could not allow hyperinflation to reoccur. Sigismund's Column , in front of the Royal Castle in Warsaw.
By the end of the Polish government was unable to redeem the released securities. The Polish economy was on the brink of collapse.
Despite the crisis, Grabski refused to accept foreign help, because he was concerned Poland would become dependent on the League of Nations.
However, deep-rooted lack of confidence in the Polish economy had made these expectations unrealisable. Grabski's government was forced to sell some of the country's property on unfavourable conditions, without any significant effects.
However, renewed hyperinflation was averted. Poland's economy weakened further to the point it was evident that the system could no longer function.
Almost immediately the budget was stabilised. Tax incomes rose significantly, credits were received from the USA , and the Bank of Poland's policy came more strongly under the government's control.
These developments prevented the Polish economy's further deterioration. As had happened earlier in the case of both Austria and Hungary , a special monitoring commission arrived in Poland to analyse the economic situation.
The commission was headed by Edwin W. Kemmerer , an American economist and "money doctor". Based on these developments, the government made the decision to adopt the gold standard for its currency.
In — the banks experienced large capital outflows, but by people were investing actively in the banks. As a result, imports became relatively cheaper as compared to exports, resulting in a negative Balance of Trade.
Again, Poland plunged into crisis. Economic growth was weak from to The main reason for that was the decline of industry, which was influenced by declining demand for Polish items.
The crisis deepened with the Great Crisis of — and lasted until the mids. Poland entered another economic crisis, causing the government again to attempt reduction of its budget deficit by cutting public expenditure other than for military purposes.
Despite cutting spending by a third, the deficit persisted. Tax income that should have been used to lead the country out of crisis was instead financing the debt burden.
Money required to stimulate the economy was devoted by the government to creditors and foreign banks. Further spending cuts necessitated Poland importing less and exporting more.
Import tariffs were increased again for foreign products, while subsidies were given to exporters. They were very disturbed by the crisis.
To reform the economy, the government was thinking about further intervention. As a result, between and , Poland nationalised its major industries, initiating the changes the communists completed after Volumes of produced goods output from state-owned factories exceeded expectations.
However, World War II abruptly terminated all prosperity. With the Soviet invasion from the east the government had to flee the country.
These were printed in the USA but never released. Cities on top mean that some number of coins was minted in a specific city. Mass in grams, diameter in mm.
The banknotes had to be accounted on the deposits of the people who gave them to the bank. It was massively counterfeited. It started working on 8 April In May , old banknotes of — were overstamped by the new entity.
Money exchange was limited per individual; the limits varied according to the status of the person.
A new issue of notes appeared in — The General Government also issued coins 1, 5, 10 and 20 grosz in zinc, 50 grosz in nickel-plated iron or iron , using similar designs to earlier types but with cheaper metals mainly zinc - copper alloy.
An additional 20 million were manufactured by the conspiratory typography of the Union of Armed Struggle. The first monetary reform of post-war Poland was conducted in , when the initial series of banknotes of socialist Poland was released.
This was essential for the recreation of the country, so the Polish Committee of National Liberation signed an act on 24 August introducing the banknotes.
The older General Government banknotes were exchanged at par with the new ones. The rest came onto the blocked bank accounts. The banknotes had a very simple design, with no people or buildings featured.
Printing was completed at the Goznak mint in Moscow. On 15 January the National Bank of Poland was finally created. The first Communist series' banknotes were easy to counterfeit, so additional replacement banknotes were printed in — The IV series banknotes had a longer life.
Older banknotes had to be exchanged within 8 days for the new series IV, which had been designed, printed and distributed in great secrecy.
The new banknotes were dated in , while the new coins were dated in As in all the Warsaw Bloc countries, Poland started nationalizing major industrial and manufacturing businesses.
The necessary legislative act was signed in However, smaller enterprises remained in private hands, in contrast to the USSR.
Despite this concession, the whole economy was under firm state control. In the agricultural sector, farmers still the major source of Polish income received additional lands from the government.
These properties were the result of confiscations from the church, wealthy families as well from farmers who were targeted as counter revolutionaries to Soviet Communist rule.
In the late s, Polish currency became unstable. This was largely due to initial opposition to the new Soviet imposed government and made an already difficult economic situation worse.
Beginning in , the Soviet controlled government started implementing communist collectivization policy on a mass scale.
Others supplied produce to the State for distribution and had to comply with obligatory centralized food deliveries first of cereals, in ; and from on, of meat, potatoes and milk.
Unable to compete with advantaged collective farms, privately owned and individually-run farms went bankrupt. The State bought at extremely low prices designed to impoverish private farms.
State Farms were reformed, enforced obligatory deliveries were reduced and State buying prices were raised.
On the whole the structure was little different from that of industry was state-owned, while agricultural production was State directed but mostly in private hands.
Serious reforms were proposed in the early s by Edward Gierek , which aimed to improve the situation for ordinary citizens. Unfortunately, the government had inadequate funds to initiate these reforms.
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