Rašín's Struggle for the Currency 75 Years Ago

The first measure of the Czechoslovak Republic led to the almost complete reception of the state administration and the legal order of Austria-Hungary. In this framework also the financial law was taken over as well as the Austrian financial administration, a part of the received administration system. Also the currency development was entirely uninterrupted, being based on the Austrian crown system of 1892. Thus in the first period the new state shared its currency with the other successor states. Austrian banknotes were in circulation in all the countries, yet the administrative centers were in Vienna and Budapest. The economic situation of Austria-Hungary at the time of its definitive breakup was disastrous. The debt incurred during the war by the monarchy reached about 110 billion crowns1 the state borrowed for war loans and financed its inflation policy and the payment of the debt by printing an enormous amount of new bills. At the moment of the rise of our state there were about 30 billion crowns in circulation in the territory of the monarchy and the exchange rate in Zurich was 46.5 Swiss francs for 100 crowns. During the war the Austro-Hungarian bank issued money mostly on the basis of the lombard acceptance of war loans. The priceless loans, by which the monarchy financed the war, were accepted by the bank as pledge and on the pledge the bank printed and put to circulation its bills, which everybody was made to accept. Even such a complicated situation was further deteriorated by other negative factors, such as the tendency to smuggle large sums of money to our territory, as a better fate was expected to befall the bills here.