Topics of coins

100th Anniversary of Putting the Zloty into Circulation

After Poland regained independence in November 1918, the decision was taken swiftly to establish a new bank of issue and introduce a new Polish currency, the złoty. However, the effort put into the reconstruction of the state and the need to fight the war on the country’s borders made a speedy implementation of the reforms impossible. In addition, since the very start of its existence the reborn Polish state had to fight rising inflation, which morphed into hyperinflation in the second half of 1923. An economic crisis set in, and the social and political situation was very tense.

In December 1923, the Władysław Grabski government was formed and the cabinet faced the task of carrying out the fiscal and currency reforms. The Sejm (Polish parliament) granted the government special powers. The government managed to make a number of savings, impose levies on real estate, adjust the taxes, start to actively fight inflation and reform the banking system. Thanks to the recovery programme, it was possible to stabilise the exchange rate of the Polish mark, the then Polish currency. There was an increase in US dollar reserves, which along with the country’s gold stocks, were supposed to back the new currency.

The złoty was first put into circulation in April 1924 and its value was carefully calculated. The new Polish currency was based on the parity of gold and convertible currencies. One złoty was the equivalent of 9/31 grams of (pure) gold; 100 złoty was equal in value to 1 troy ounce, and the price of 1 kilogram of gold amounted to 3,444 złoty. One US dollar cost 5.18 złoty, and the value of the Polish currency was pegged to the Swiss franc. According to the reform arrangements, at least 30% of the issue of the new Polish currency had to be backed by gold stocks and foreign currencies. At the same time, the decision was made to withdraw the existing means of payment. The exchange rate was set at 1,800,000 Polish marks for 1 złoty. The issue of the złoty was within the remit of Bank Polski Spółka Akcyjna (a jointstock company), the newly established bank of issue which replaced the Polish Loan Bank (Polska Krajowa Kasa Pożyczkowa), the institution set up by the German occupant during World War I.

The reform proved to be an outstanding success, because it not only led to the consolidation of public finances, but also provided an impulse for the country’s economic development. The reform also resulted in a significant strengthening of Poland’s position on the international arena.

Grzegorz Jeż, PhD

The reverse of the coin shows the image of the reverse of a 1924 coin with a face value of 1 złoty. The 2024 coin also depicts the image of a fragment of a portal above the entrance to the main hall of Bank Polski SA in Warsaw and graphic elements of a 100 złoty banknote issued in 1934: on the left side, there is the allegory of commerce in the form of Mercury holding a caduceus staff, and dr Grzegorz Jeż on the right side, the personification of industry.
The obverse of the coin features the obverse of the 1924 coin with a face value of 1 złoty.