The Bank of Issue in Poland (, ), also variously translated into English as the ''Bank of Issue'', ''Issue Bank'', ''Issuing Bank'' or ''Emitting Bank in Poland'', was a

bank of issue A bank of issue, also referred to as a note-issuing bank or issuing authority, is a financial institution that issues banknotes. The short-lived Stockholms Banco (1657-1667) printed notes from 1661 onwards and is generally viewed as the first-ev ...

created in 1940 by

Nazi Germany Nazi Germany, officially known as the German Reich and later the Greater German Reich, was the German Reich, German state between 1933 and 1945, when Adolf Hitler and the Nazi Party controlled the country, transforming it into a Totalit ...

in the

General Government The General Government (, ; ; ), formally the General Governorate for the Occupied Polish Region (), was a German zone of occupation established after the invasion of Poland by Nazi Germany, Slovak Republic (1939–1945), Slovakia and the Soviet ...

within

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

.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, also known as the September Campaign, Polish Campaign, and Polish Defensive War of 1939 (1 September – 6 October 1939), was a joint attack on the Second Polish Republic, Republic of Poland by Nazi Germany, the Slovak R ...

, the

Reichsbank The ''Reichsbank'' (; ) was the central bank of the German Empire from 1876 until the end of Nazi Germany in 1945. Background The monetary institutions in Germany had been unsuited for its economic development for several decades before unifica ...

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

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

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

German Reich German ''Reich'' (, from ) 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 entirely from a continuing unitary German ''Volk'' ("na ...

''), 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 Nazi politician, lawyer and convicted war criminal who served as head of the General Government in German-occupied Poland during the Second World War. Frank was an early member ...

, the governor of the

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

Kraków , officially the Royal Capital City of Kraków, is the List of cities and towns in Poland, second-largest and one of the oldest cities in Poland. Situated on the Vistula River in Lesser Poland Voivodeship, the city has a population of 804,237 ...

.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 Feliks Młynarski (20 November 1884 – 13 April 1972) was a Polish banker, philosopher and economist. Biography Feliks Młynarski was born to Jan Młynarski, a school teacher, and Honorate née Dziurzyńska. He attended a gymnasium in Jarosła ...

. 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, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

of Poland, the

Bank Polski SA Bank Polski SA, full name Bank Polski Spółka Akcyjna (), was the central bank of the Second Polish Republic. On , Bank Polski SA succeeded the Polska Krajowa Kasa Pożyczkowa (, ) that had been created in late 1916 for the puppet Kingdom of P ...

, which managed to evacuate most of its assets, including

gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...

, and part of the

mint Mint or The Mint may refer to: Plants * Lamiaceae, the mint family ** ''Mentha'', the genus of plants commonly known as "mint" Coins and collectibles * Mint (facility), a facility for manufacturing coins * Mint condition, a state of like-new ...

, before the invasion. Officially, however, the Bank Polski 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 Polish government-in-exile, officially known as the Government of the Republic of Poland in exile (), was the government in exile A government-in-exile (GiE) is a political group that claims to be the legitimate government of a sovere ...

. The bank's main functions were: issuing currency,

discounting In finance, discounting is a 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", "Effici ...

promissory note A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...

s and

cheque A cheque (or check in American English) is a document that orders a bank, building society, 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 person writing ...

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

reichsmark The (; sign: ℛ︁ℳ︁; abbreviation: RM) was the currency of Germany from 1924 until the fall of Nazi Germany in 1945, and in the American, British and French occupied zones of Germany, until 20 June 1948. The Reichsmark was then replace ...

. 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 A black market is a Secrecy, clandestine Market (economics), market or series of transactions that has some aspect of illegality, or is not compliant with an institutional set of rules. If the rule defines the set of goods and services who ...

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 Capital and its variations may refer to: Common uses * Capital city, a municipality of primary status ** Capital region, a metropolitan region containing the capital ** List of national capitals * Capital letter, an upper-case letter Econom ...

as possible, to be invested in the German economy. Approximately 11 billion złotys (5.5 billion reichsmarks) were transferred to the

German army The German Army (, 'army') is the land component of the armed forces of Federal Republic of Germany, Germany. The present-day German Army was founded in 1955 as part of the newly formed West German together with the German Navy, ''Marine'' (G ...

. It printed new

currency A currency 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 definition is that a currency is a ''system of money'' in common use within a specific envi ...

(unofficially named after the Bank headquarters "złoty krakowski" - Złoty of Kraków - or after director Młynarski "the

młynarki Młynarki was the popular name for the currency notes of the General Government (Nazi occupation of Poland, part of German-occupied Poland) during World War II that were issued by the German-controlled Bank of Issue in Poland. They were named afte ...

") with no backing which resulted in increasing

inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

(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 The Polish Underground State (, 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 Government of the Republic of Poland ...

which allowed widespread falsification of the new currency by the

Polish underground The Polish Underground State (, 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 Government of the Republic of Poland ...

. His very nomination to the post of the director was made in consultation with and approved by the

.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

See also

Notes

Further reading