Bank of Issue in Poland ( pl, Bank Emisyjny w Polsce, german: Emissionbank in Polen, also translated into English variously as the ''Bank of Issue'', ''Issue Bank'', ''Issuing Bank'' or ''Emitting Bank in Poland'') was a

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

created by

Nazi Germany Nazi Germany (lit. "National Socialist State"), ' (lit. "Nazi State") for short; also ' (lit. "National Socialist Germany") (officially known as the German Reich from 1933 until 1943, and the Greater German Reich from 1943 to 1945) was ...

in the General Government (

occupied Poland ' ( Norwegian: ') is a Norwegian political thriller TV series that premiered on TV2 on 5 October 2015. Based on an original idea by Jo Nesbø, the series is co-created with Karianne Lund and Erik Skjoldbjærg. Season 2 premiered on 10 Octobe ...

) in 1940.Jerzy Jan Lerski, Piotr Wróbel, Richard J. Kozicki, ''Historical Dictionary of Poland, 966-1945'', Greenwood Publishing Group, 1996,
Google Print, p. 26
/ref>

Creation

After the

German invasion of Poland The invasion of Poland (1 September – 6 October 1939) was a joint attack on the Republic of Poland by Nazi Germany and the Soviet Union which marked the beginning of World War II. The German invasion began on 1 September 1939, one week afte ...

, the

Reichsbank The ''Reichsbank'' (; 'Bank of the Reich, Bank of the Realm') was the central bank of the German Reich from 1876 until 1945. History until 1933 The Reichsbank was founded on 1 January 1876, shortly after the establishment of the German Empi ...

decided not to introduce German currency there, as it did not want to increase the

money supply In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circul ...

. Instead, it introduced a system of Reichskreditkassen (''credit offices of the

German Reich German ''Reich'' (lit. German Realm, German Empire, from german: Deutsches Reich, ) was the constitutional name for the German nation state that existed from 1871 to 1945. The ''Reich'' became understood as deriving its authority and sovereignty ...

''), which issued temporary bonds. This system, intended to be temporary from the beginning, was to be replaced by a new German-controlled currency and central banks in occupied territories.Andrzej Gójski, ''Etapy i cele niemieckiej polityki bankowej w GG. Plany niemieckie wobec Generalnego Gubernatorstwa w latach 1939-1945'', BANK I KREDYT, August 2004
pdf
In the meantime, various Polish banks and credit institutions were temporarily closed, while some of their assets were nationalized by the German government. Many people lost their savings. In particular, institutions with Jewish ownership were targeted, as well as Jewish customers. At the same time, German banks began opening their offices in the newly available territories. The plans for a complete takeover of the Polish financial system by the Germans were not finished before the end of the war. On 15 December 1940

Hans Frank Hans Michael Frank (23 May 1900 – 16 October 1946) was a German politician and lawyer who served as head of the General Government in Nazi-occupied Poland during the Second World War. Frank was an early member of the German Workers' Party ...

, the governor of the General Government, passed a decree creating the Bank Emisyjny, which began operating in April. Bank Emisyjny was located in

Kraków Kraków (), or Cracow, is the second-largest and one of the oldest cities in Poland. Situated on the Vistula River in Lesser Poland Voivodeship, the city dates back to the seventh century. Kraków was the official capital of Poland until 1596 ...

.Andrzej Jezierski, Andrzej Jezierski, Cecylia Leszczyńska, Cecylia Leszczyńska, ''Historia gospodarcza Polski'', Key Text Wydawnictwo, 2003,
Google Print, p.366-367
/ref> It was the only institution in occupied Poland with the word Poland in its title. It was headed by Polish economist, Feliks Młynarski. His German supervisor, and representative of the Reichsbank, was Fritz Paersch.

Operations

Bank Emisyjny ''de facto'' replaced the independent

central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central b ...

of Poland, the Bank of Poland, which managed to evacuate most of its assets, including

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

, and part of the

mint MiNT is Now TOS (MiNT) is a free software alternative operating system kernel for the Atari ST system and its successors. It is a multi-tasking alternative to TOS and MagiC. Together with the free system components fVDI device drivers, XaA ...

, before the invasion. Officially, however, the Bank of Poland still existed, as the Germans unsuccessfully tried to use it on the international scene to regain the assets evacuated and under the control of the Polish government in exile. The bank's main functions were: issuing currency,

discounting Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.See "Time Value", "Discount", "Discount Yield", "Compound Interest", "Efficient ...

promissory notes and

cheque A cheque, or check (American English; see spelling differences) is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The pers ...

s, issuing short term loans, and taking deposits. The official exchange rate was set as 2 złoty = 1

reichsmark The (; sign: ℛℳ; abbreviation: RM) was the currency of Germany from 1924 until 20 June 1948 in West Germany, where it was replaced with the , and until 23 June 1948 in East Germany, where it was replaced by the East German mark. The Reich ...

. This system, favoring the German currency, by artificially undervaluing the Reichsmark, was one of the ways of boosting the German economy by pillaging that of the conquered country. A black market exchange rate varied between three and four złotys to a reichsmark. From 1940 until 1945 it helped finance the German economy. The Bank, as well as other financial institutions in occupied Poland, were tasked with gathering as much capital as possible, to be invested in the German economy. Approximately 11 billion złotys (5.5 billion reichsmarks) were transferred to the German army. It printed new

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...

(unofficially named after the Bank headquarters "złoty krakowski" - Złoty of Kraków - or after director Młynarski "the młynarki") with no backing which resulted in increasing

inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...

(market prices rose by three to six times and the exchange rate with the American dollar doubled over the war period). In January 1945, the remaining assets and German personnel of the Bank were evacuated into Germany proper. It was officially liquidated by the Polish communist government in 1950.

Resistance connections

Młynarski was in fact connected to the Polish Underground State which allowed widespread falsification of the new currency by the

Polish underground The Polish Underground State ( pl, Polskie Państwo Podziemne, also known as the Polish Secret State) was a single political and military entity formed by the union of resistance organizations in occupied Poland that were loyal to the Gover ...

. His very nomination to the post of the director was made in consultation with and approved by the Polish government in exile.Krzysztof Stolinski, ''Supply of money to the Secret Army (AK) and the Civil Authorities in occupied Poland (1939-1945)''
pdf

mirror
). Retrieved on 15 May 2009. The mint's printing presses were also used for falsification of other documents.Jan Moczydłowski, ''Produkcja banknotów przez Związek Walki Zbrojnej i Armię Krajową'', Biuletyn Numizmatyczny, nr 10-12 z 1989

Creation

Operations

Resistance connections

Notes

Further reading