Polish Złotyball

Polish Złlotyball is the currency of Poland. His name literally means Golden. He is subdivided into 100 groszy.

## History

### **Kingdom of Poland and Polish-Lithuanian Commonwealth**

The first Złoty dated back to the late Middle Ages in the 14th to 15th century when his name was used for all kinds of foreign gold coins in Poland. Sometimes he was referred as a Florin. When the Russian Empire, Austria Empire and Kingdom of Prussia annexed Polish-Lithuanian Commonwealth, they still used the Złoty except for Prussia. He introduced the Mark instead.

### **The Kościuszko Insurrection and Russian part of Poland until 1807**

On the 8th of June 1794, the Polish Supreme Council Decided to make some new coins and banknotes. They made the 10, 25, 50, 100, 500, and 1,000 Złotych, 5, and 10 Grosz, and the 1 and 4 Złoty coins, and later the banknote versions of the 1 and 4 Złoty coins. But It didn't last long. Warsaw was already held by the Russians and they discarded the banknotes and made them invalid. They replaced the banknotes with Russian coins, but the Złoty and Grosz stayed.

### **Duchy of Warsaw**

The Złoty remained in circulation and the Duchy of Warsaw decided to issue coins denominated in Grosz, Złoty and Talar worth 6 Złoty. In 1813, when Zamość was under siege, Zamość authorities issued 6 Grosz and 2 Złote coins.

### **The Free City of Kraków złoty**

Between 1835 and 1846, the Free City of Kraków also used a currency, the Kraków złoty, Which were actually made in Vienna. There were 5 and 10 Grosz coins and 1 Złoty coins.

From 1850 all the way to 1924, the Złoty wasn't in circulation. The Marka replaced the Złoty from 1918 to 1924.

### **Transition to Złoty**

When the second Złoty was created, it was pegged to the US dollar. The Sejm was weak in its financial control. Yet political parties demanded the government spend more money than had been projected in the budget. By the end of 1925 the Polish government was unable to redeem the released securities. The Polish economy was on the brink of collapse.

### **Polish Złoty in 1930s**

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 spend by a third, 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.

### **General Government**

When German invaders established the General Government, they withdrew the 100 złotych banknotes from 1932 and 1934 and 500 złotych banknotes from 1919. The banknotes had to be accounted on the deposits of the people who gave them to the bank.

1 złoty *bilet zdawkowy*, issued in Będzin at the beginning of Nazi occupation

The 100 złotych banknotes were overstamped in red with: *"Generalgouvernement / für die besetzen polnischen Gebiete"* (The General Government / for the occupied Polish territories). It was massively counterfeited.

A little later the bank division of the *Główny Zarząd Kas Kredytowych Rzeszy Niemieckiej* was organized. It started to print the Reichsmarks, but later, on December 15, 1939, a decision came to create the new *Bank Emisyjny* (Emissary Bank) in Kraków, as the Bank Polski officials fled to Paris. It started working on 8 April 1940.

In May 1940, old banknotes of 1924–1939 were overstamped by the new entity. Money exchange was limited per individual; the limits varied according to the status of the person. The fixed exchange rate 1 Reichsmark = 2 złote was established. A new issue of notes appeared in 1940-41. The General Government also issued coins (1, 5, 10 and 20 groszy in zinc, 50 groszy in nickel-plated iron or iron), using similar designs to earlier types but with cheaper metals (mainly zinc-copper alloy). 1, 5, 10 and 20 groszy coins were dated 1923 and 50 groszy were dated 1938.

Banknotes were also issued, called unofficially "młynarki" (from the name of President Feliks Młynarski) or "krakowiaki" (from the place of release), in the denominations of 1, 5, 10, 20, 50, 100 and 500 złotych. 1000 złotych did not come into public circulation at all, and only reconstructions survive (although shown below). The total amount of them was approximately 10,183 million złotych. Additional 20 millions were manufactured by the conspiratory typography of the Union of Armed Struggle. From summer 1943 the Home Army received the złote produced in Great Britain.

### **Socialist Poland (1945-1950)**

The advance of the Red Army meant the transition to socialism, Poland being no exception.

The first monetary reform of post-war Poland was conducted in 1944, 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 1944 introducing the banknotes. The older General Government banknotes were exchanged at par with the new ones. There were limits, however – 500 złotych only for an individual and 2000 złotych for the private enterprises and small manufacturers. The rest came onto the blocked bank accounts.

The banknotes had a very simple design, with no people or buildings featured. They carried the name of the as yet unformed Narodowy Bank Polski (the National Bank of Poland). Printing was completed at the Goznak mint in Moscow. All the new banknotes of the series I (except for the 50 groszy, and 1000 złotych, which were only released later) had a faulty inscription, containing a russianism.

On 15 January 1945 the National Bank of Poland was finally created. Its first monetary action was the printing of 1000 złotych banknote in the newly built *Polska Wytwórnia Papierów Wartościowych* in Łódź. The first Communist series' banknotes were easy to counterfeit, so additional replacement banknotes were printed in 1946–48. As 500 złotych banknote was very easy to counterfeit, it was fully withdrawn in 1946. The IV series banknotes had a longer life. Mainly due to their underdeveloped security features, the first three series were taken out of circulation in line with legislation signed on 28 October 1950, covering the introduction of the new Polish złoty (PLZ). Older banknotes had to be exchanged within 8 days for the new series IV, which had been designed, printed and distributed in great secrecy. About in the same time, new coins were introduced, which circulated for more than four decades.

In 1950, a new złoty (PLZ) was introduced, replacing all notes issued up to 1948 at a rate of one hundred to one, while all bank assets were redenominated in the ratio 100:3. The new banknotes were dated 1948, while the new coins 1949. As in all the Warsaw Bloc countries, Poland started nationalizing major industrial and manufacturing businesses The necessary legislative act was signed in 1946. 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 generation 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 would no abide by the changed policies. In the late 1940s, Polish currency became unstable. This was largely due to initial opposition to the new government and made an already difficult economic situation no better. Eventually things changed and the złoty became stronger in 1948-9.

### **Financial crisis of 1980s**

The first big strikes started in Gdańsk and GOP (Upper Silesian Industrial Area). These restricted industrial production which by then had become the main economical sector. The situation was worsened by the previous period of prosperity in the early and mid 70s, which had promoted increased demand and consumption. The government was forced either to lower salaries and wages or to make workers redundant. This accelerated the crisis. Moreover, the demand was more diminished, as the government provided food rationing. The martial law of 1981–83 deepened the crisis. By the early 80s inflation in Poland becoming out of control – over 100% per annum in 1982. It was reduced in the mid-80s to about 15% per annum, but again started in late-80s. Economic conditions did not allow any salary and pension increases because of the huge debt burden, which doubled in the 1980s. By 1981 it was admitted that the situation was beyond management. In an effort to escape such situation, Poland started massively printing banknotes, without any covering from bank resources. Banknotes denominated at 5,000 złotych were introduced in 1982, 10,000 złotych in 1988, 20,000 and 50,000 złotych in 1989, and 100,000, 200,000 and 500,000 złotych in 1990. Grosz coins were rendered worthless and coins were mostly made out of aluminium (with the exception of the commemorative ones). Given the circumstances, the only solution appeared to be the liberisation of the economy. In 1988 Mieczysław Rakowski was forced to accept the possibility of transition of the state enterprises into private hands. In fact, as stated earlier, smaller enterprises were private, and 18% of GDP was made by private sector, additional 10% – by the cooperatives. These were not, however, the Perestroika cooperatives, but ones with limited experience in the market economy. These were ready to transfer to a market economy. The Communist authorities had to admit they had no grip on the economy, which was another reason to introduce changes.The worst years of the crisis began in 1988, when the level of inflation rose higher than 60% per annum. Inflation peaked in 1990, characterised as hyperinflation, as the monthly rate was higher than 50%. However, by December 1991 it decreased below 60% per annum, and by 1993 it firmly established below 40%, which was an acceptable inflation rate for the economy. As a result, the złoty regained the confidence of foreign investors. The remaining issue was the redenomination of the depreciated złoty. The worst years of the crisis began in 1988, when the level of inflation rose higher than 60% per annum. Inflation peaked in 1990, characterised as hyperinflation, as the monthly rate was higher than 50%. However, by December 1991 it decreased below 60% per annum, and by 1993 it firmly established below 40%, which was an acceptable inflation rate for the economy. As a result, the złoty regained the confidence of foreign investors. The remaining issue was the redenomination of the depreciated złoty.

### **Normal coins and banknotes of today**

On 17 July 1990 Władysław Baka (the then head of the National Bank of Poland) (NBP) stated that development work upon złoty denomination would start soon. At the same time PLN coins were minted (bearing dates 1990-1994) and released into circulation in 1995. This influenced the further process of money exchange in 1995, as exchanging low-value banknotes became considerably easier.

The banknotes posed a bigger problem. In 1990, a new series of banknotes from 1 to 500 zł was created by Waldemar Andrzejewski, was proposed, but failed acceptance testing due weak counterfeiting protection features. The designs featured buildings and structures from Greater Poland cities and proofs produced. Additionally 1,000 zł (Kalisz) and 2,000 zł (Biskupin) banknotes were proposed (but not essayed) to facilitate an exchange rate of 1 new zloty to 1000 old zlotys). At the same time, to conduct redenomination, the inflation had to be stable and below 10% per annum. Balcerowicz plan helped very much to achieve that in four years' time. On 11 May 1994 the Economical Committee of the Council of Ministers accepted the denominalization project from the NBP. The act allowing the project to come into force was ratified on 7 July 1994. At the same time, new banknotes were printed (dated 25 March 1994), which are still legal tender today. These feature the most prominent Polish monarchs. Their author is Andrzej Heidrich. These designs were revealed to the public on the 21 November 1994. The following day TVP, (Polish television), began publicising the designs on TV in a campaign that lasted until 1 January 1995 when the redenomination took place. 10,000 PLZ became 1 PLN. Unlike previous redenominations there were no restrictions on where the money was or who owned it. The new Polish złoty (PLN) was released it co-existed with the PLZ, for two years. All prices had to be indicated in both PLZ and PLN. The priority was to take the low-denomination PLZ to convert them to coinage. After 31 December 1996, PLZ was no longer legal tender. Between then and 31 December 2010, any PLZ banknotes and could only be exchanged into PLN by the NBP, its affiliates, or any bank. The sum for exchange had to be the multiple of 100 PLZ, which were worth 0.01 PLN. As of 31 December 2009, NBP estimate that some 1,748,000,000,000 PLZ (178,400,000 PLN) had not yet been exchanged. There was one thing that did not change: the official name of the currency. Although the ISO 4217 was altered the relevant legislation made the point that the official name of the currency is still the złoty. New Polish złoty is an unofficial way to address the Polish currency. In 2012 new banknotes were printed, with added security features. They do not differ greatly from the first version (except for the 200zł note), but may be distinguished by the colour of the field with the watermark on the obverse. In the original banknotes, these correspond to the note's main colour, while they are white on the newer ones. Starting from 50 złotych, the new security features differ from those on the older banknotes. Newer banknotes also have some randomly arranged dots, which are part of the EURion constellation. A 500 złotych banknote will be also produced in this series, currently scheduled for introduction in February 2017.