Bank of Poland
Encyclopedia
Bank Polski is the name of two former bank
s in Poland
, each of which acted as a central bank
. The first was founded by Franciszek Ksawery Drucki-Lubecki
in 1828 in Congress Poland
and functioned until 1885, when it was absorbed by the State Bank of the Russian Empire
.
The second was founded in 1924 in the Second Polish Republic
by Władysław Grabski and was liquidated in 1952.
Their legacy is continued by Poland's present central bank
, the Polish National Bank, founded in 1945.
The first Bank of Poland was founded in Warsaw
in 1828 by Prince Franciszek Ksawery Drucki-Lubecki
. An institution of the government of the Kingdom of Poland
, it was entitled with issuance of the Polish currency as well as control over the credit rates. It was also entitled with a concession to operate foreign currencies and buy off credits issued by foreign companies and banks.
Throughout its existence, the Bank of Poland was allowed to issue banknotes and coins
up to the amount of its stock
(initially 30,000,000 złotych, 42 millions in 1834 and 53 millions in 1841). As a legal entity, the bank also financed a number of important enterprises in Russian-held Poland. Between 1829 and 1837 it spent a large part of its income on road construction, until 1842 it was also the main sponsor of the coal mining development in the region of Zagłębie and the Old Polish Industrial Area around Skarżysko-Kamienna
. Seriously crippled by administrative measures after the November Uprising
, after the January Uprising
it was made subordinate directly to the Russian Imperial Ministry of Treasury. During the period of liquidation of Polish institutions following the failed uprising, in 1870 it was deprived of the rights of a currency issuing organ and banned from giving long-term credits. On January 1, 1886 it was officially closed down and by 1894 its assets were swallowed by the State Bank of Russia.
When Poland regained its independence in 1918, it was lacking a central bank. Following the State Treasury Repair Act of January 11, 1924, minister Władysław Grabski created a new Bank of Poland as a joint stock company
. Its stock was soon raised from the initial 100,000,000 złotych to 150 million, split onto 1.5 million share
s. The bank was independent of the government of Poland, though it carried out its monetary policies. As the main shareholder
, the President of Poland had the right to name the chairman and deputy chairman of the bank's board of trustees.
Until December 31, 1944 the bank had a monopoly
for printing currency, with the gold reserves
of 40% or higher. The dividend
could not exceed 8% of income. In case of higher income the state treasury had the right to 50% to 66% of it. Prior to the Polish Defensive War
of 1939, all of the gold reserves were evacuated from Poland to Paris and then to London and Canada. The Bank continued its functioning in exile, as the central bank of the Polish Government in Exile
and financed most of its armed forces, while in occupied Poland Nazis created their puppet Issue Bank
. In 1946 the remaining pre-war gold reserves were returned to the new communist authorities of Poland, while the Bank of Poland itself was closed down and finally swallowed by the newly-created National Bank of Poland
in 1952.
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s in Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
, each of which acted as a central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
. The first was founded by Franciszek Ksawery Drucki-Lubecki
Franciszek Ksawery Drucki-Lubecki
Franciszek Ksawery Drucki-Lubecki was an important politician of the first half of the 19th century in the partitioned Poland. He was a prince and minister of the treasury in the Congress Kingdom of Poland. He is known as one of the prominent economists and financiers of his era...
in 1828 in Congress Poland
Congress Poland
The Kingdom of Poland , informally known as Congress Poland , created in 1815 by the Congress of Vienna, was a personal union of the Russian parcel of Poland with the Russian Empire...
and functioned until 1885, when it was absorbed by the State Bank of the Russian Empire
State Bank of the Russian Empire
The State Bank of the Russian Empire was the main bank of the Russian Empire from 1860 to 1917. This bank is considered to be the predecessor of the Central Bank of the Russian Federation.- History :...
.
The second was founded in 1924 in the Second Polish Republic
Second Polish Republic
The Second Polish Republic, Second Commonwealth of Poland or interwar Poland refers to Poland between the two world wars; a period in Polish history in which Poland was restored as an independent state. Officially known as the Republic of Poland or the Commonwealth of Poland , the Polish state was...
by Władysław Grabski and was liquidated in 1952.
Their legacy is continued by Poland's present central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
, the Polish National Bank, founded in 1945.
History
Warsaw
Warsaw is the capital and largest city of Poland. It is located on the Vistula River, roughly from the Baltic Sea and from the Carpathian Mountains. Its population in 2010 was estimated at 1,716,855 residents with a greater metropolitan area of 2,631,902 residents, making Warsaw the 10th most...
in 1828 by Prince Franciszek Ksawery Drucki-Lubecki
Franciszek Ksawery Drucki-Lubecki
Franciszek Ksawery Drucki-Lubecki was an important politician of the first half of the 19th century in the partitioned Poland. He was a prince and minister of the treasury in the Congress Kingdom of Poland. He is known as one of the prominent economists and financiers of his era...
. An institution of the government of the Kingdom of Poland
Congress Poland
The Kingdom of Poland , informally known as Congress Poland , created in 1815 by the Congress of Vienna, was a personal union of the Russian parcel of Poland with the Russian Empire...
, it was entitled with issuance of the Polish currency as well as control over the credit rates. It was also entitled with a concession to operate foreign currencies and buy off credits issued by foreign companies and banks.
Throughout its existence, the Bank of Poland was allowed to issue banknotes and coins
Money supply
In economics, the money supply or money stock, is the total amount of money available in an economy at a specific time. There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits .Money supply data are recorded and published, usually...
up to the amount of its stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
(initially 30,000,000 złotych, 42 millions in 1834 and 53 millions in 1841). As a legal entity, the bank also financed a number of important enterprises in Russian-held Poland. Between 1829 and 1837 it spent a large part of its income on road construction, until 1842 it was also the main sponsor of the coal mining development in the region of Zagłębie and the Old Polish Industrial Area around Skarżysko-Kamienna
Skarzysko-Kamienna
Skarżysko-Kamienna is a town in northern Świętokrzyskie Voivodeship in Poland by Kamienna river, to the north of Świętokrzyskie Mountains; one of the voivodship's major towns...
. Seriously crippled by administrative measures after the November Uprising
November Uprising
The November Uprising , Polish–Russian War 1830–31 also known as the Cadet Revolution, was an armed rebellion in the heartland of partitioned Poland against the Russian Empire. The uprising began on 29 November 1830 in Warsaw when the young Polish officers from the local Army of the Congress...
, after the January Uprising
January Uprising
The January Uprising was an uprising in the former Polish-Lithuanian Commonwealth against the Russian Empire...
it was made subordinate directly to the Russian Imperial Ministry of Treasury. During the period of liquidation of Polish institutions following the failed uprising, in 1870 it was deprived of the rights of a currency issuing organ and banned from giving long-term credits. On January 1, 1886 it was officially closed down and by 1894 its assets were swallowed by the State Bank of Russia.
When Poland regained its independence in 1918, it was lacking a central bank. Following the State Treasury Repair Act of January 11, 1924, minister Władysław Grabski created a new Bank of Poland as a joint stock company
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...
. Its stock was soon raised from the initial 100,000,000 złotych to 150 million, split onto 1.5 million share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s. The bank was independent of the government of Poland, though it carried out its monetary policies. As the main shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
, the President of Poland had the right to name the chairman and deputy chairman of the bank's board of trustees.
Until December 31, 1944 the bank had a monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
for printing currency, with the gold reserves
Official gold reserves
A gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders , or trading peers, or to secure a currency....
of 40% or higher. The dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
could not exceed 8% of income. In case of higher income the state treasury had the right to 50% to 66% of it. Prior to the Polish Defensive War
Invasion of Poland (1939)
The Invasion of Poland, also known as the September Campaign or 1939 Defensive War in Poland and the Poland Campaign in Germany, was an invasion of Poland by Germany, the Soviet Union, and a small Slovak contingent that marked the start of World War II in Europe...
of 1939, all of the gold reserves were evacuated from Poland to Paris and then to London and Canada. The Bank continued its functioning in exile, as the central bank of the Polish Government in Exile
Polish government in Exile
The Polish government-in-exile, formally known as the Government of the Republic of Poland in Exile , was the government in exile of Poland formed in the aftermath of the Invasion of Poland of September 1939, and the subsequent occupation of Poland by Nazi Germany and the Soviet Union, which...
and financed most of its armed forces, while in occupied Poland Nazis created their puppet Issue Bank
Bank Emisyjny w Polsce
Bank Emisyjny w Polsce was a bank created in the General Government in 1940.-Creation:After the German invasion of Poland, the Reichsbank decided not to introduce German currency there, as it did not want to increase the money supply. Instead, it introduced a system of Reichskreditkassen , which...
. In 1946 the remaining pre-war gold reserves were returned to the new communist authorities of Poland, while the Bank of Poland itself was closed down and finally swallowed by the newly-created National Bank of Poland
National Bank of Poland
Narodowy Bank Polski is the central bank of Poland. It controls the issuing of Poland's currency, the złoty. The Bank is headquartered in Warsaw, and has branches in every major Polish town...
in 1952.