History of Early Monetary Systems in Poland by Robert S. Sherins, MD

In the 10th century, the Piast Dukes united the Polanie tribes into the nation of Poland. They diversified their society into agriculturally varied tasks as artisans, craftsmen, defense, and economic work. Trade was essential to the survival of the Poland. Earlier European tribes had used bartering as the means of exchanging goods, but all exchanges required assignment of some value to the products. Sometime weapons, such as arrow tips were used as currency. Later, metals became monetary equivalents for the valued products.

Archeologists discovered evidence of currencies in the 6th century BCE [Before Common Era, same as Before Christian Era = BC] in Greece, southern Ukraine, Scythia, and the Black Sea coast. Bronze coins were minted in Athens by the 5th century BCE that were struck in dolphin shapes. Later silver coins appeared that were cast as arrow tips. By the 4th century BCE, silver and copper coins appeared in Greece. The commercial use of coins became widespread and were circulated among the traders. Later during the Roman period, gold, silver, and brass coins were minted that were struck with the names and likenesses of the rulers.

By the 3rd century CE [Common Era same as Christian Era = AD], the so-called “barbaric tribes” began to mint imitations of Roman coins utilizing either brass or silver. Thrace [ancient region in the eastern Balkan Peninsula] minted imitations of Roman coins and later the Huns followed that practice in the 4th centuries. A mixture of currencies circulated between the Byzantines, Persians, Greeks, and Huns.

In the 10th century, the Kievan Rus issued currencies of gold and silver coins that were struck with the images of the Princes Vladimir, Jaroslav, among others. But, the Rus also utilized other European and Byzantine currencies in their commercial affairs. Grivnas were minted, as were other coins of fractional values, i.e., the ruble. By the 13th century, when the Mongol/Tatars invaded, Ukrainian currencies were too debased to be traded. Ukrainian currencies included those minted for Lithuania, Central Ukraine, and the Crimea. In Western Ukraine, Polish coins were often circulated. Sometimes, Turkish coins were circulated. By the 15th – 18th centuries, over-stamped coins were minted from the currencies of neighboring nations, because there was insufficient precious metal for creating new currencies.

Polish coins were first struck during the second half of 10th century. Previously, foreign currencies had been used, as well as bartering of goods, which continued until the 13th century. [1] However, in the 12th century unique Polish coins were minted with Hebrew letters. The Denar Brakteat with the likeness of Prince Miesko III was struck 1181-1202. Unfortunately, the metal weight and size of the denars was continually reduced until they were so thin that only one surface could be struck. Only a fraction of the original metal remained and the coins became severely devalued.

The Piast Brakteat with Hebrew inscription was the rarest and most unusual coin of the period. One example showed a figure with a sword and spear; beside it was struck the Hebrew word, “Bracha,” which meant “blessing.” Hebrew lettering ensured that traders at distant cities and ports, could recognize the Polish coins.

Silver coins were introduced as currency in Poland by the first Polish duke, Mieszko I. He valued silver coins according to the following standards: One pound equaled 367 grams of silver, from which 240 denars (called thick) were produced. During the political turmoil of 11th century, the coins lost value and had to be replaced during the latter half of the century.

A new system was introduced based on one grzywna (a weight unit) equivalent to approximately one Carolingian (French) pound. The new currency valuation was: one grzywna equaled four wiardunki skojce, which equaled 240 denars or 480 halfdenars (obol). But only denars, called thin, were struck. The thickness of coins decreased so that by the end of the 13th century, they were so thin that only one side of a coin could be struck. Coins were neglected and seen as a way of making high profits for the issuer by removing much of the metal from the currency.

In the 14th century, Casimir the Great created a new currency, which was based upon the grosz (grosh) that was utilized in Europe. One Kracovian grzywna consisted of 197 grams of silver. It was equal to four wiarunki, which was 24 skojce and equaled 48 groszy (grosh). The polgroszy (half grosh) equaled 96 denars.

Hungarian gold coinage was used for the most valuable transactions, but they also became debased. Other foreign coins of lesser value were accepted for use in Poland, but this was not consistent in all regions. Prussia and Lithuania utilized completely different coinage, which resulted in considerable commercial uncertainty.

The Polish monetary system was reformed in 1526 – 1528 and a new currency, the złoty, was minted: one grosh equaled 0.77 grams of silver; one złoty equaled five szostakow, 10 trojakow, or 30 grosh. One grosh equaled two half grosh, three szelag or six ternars, which equaled 18 denars.

The system was implemented in Prussia (1538) and in Lithuania (1569). Gold ducats containing 3.5 grams of gold were struck. In 1564 silver talars were introduced. The coin was meant to be equal to one golden ducat. One thalar equaled five orts, which was a stable currency until the beginning of 17th century.

During the reign of Zygmunt III the coins were debased again. Worthless German coins were imported, which replaced the melted Polish coins. In the second half of the 17th century after the war with Sweden, the coinage was devalued even further. In 1659, Boratyni was granted a license to strike copper szelags. In 1663, low-valued złoty were issued that contained only half of the amount of silver content of the royal coinage. Therefore, the coins were valued empirically rather than by their actual appraised value. That system remained in place until the end of the reign of Saxon elector kings in Poland (1763). During the seven-year war (1756 – 1763), the Prussians obtained the official dies and were able to strike counterfeit coins of very low intrinsic value.

Another official reform was required. In 1766 the new coinage was introduced; based upon the Kolognian grzywna. One Kolognian grzywna equaled 233.8 grams of silver, which in turn equaled 10 thalars or 80 złoty. After 1786, the grzywna was 83.5 złoty. One gold ducat equaled 16.75 złoty; after 1786 it was worth 18 złoty.

In 1772, Austria occupied Galicia and the monetary system was changed again. The official currency became the Maria Theresa THALER (MTT) [2] and was used for both commercial trade and foreign exchange. The thaler was created from pure silver and contained exquisite engravings on all surfaces, including the edges of the coin, which prevented counterfeiting and “clipping.” As a result, the thaler retained its value and became the most revered coin in history. [3]

Thalers had been minted since the 15th century, but Maria Theresa’s very strict standards were to be adhered to in the minting. Large silver deposits had been discovered in the St. Jachimsthal Valley of Bohemia, from which the coins were struck. By Imperial decree of the Hapsburg court in the 16th century, the Count of Schlick of Bohemia was given the rights to mine silver and mint the coins of the realm. From the German word, thal, which meant valley, came the name of their new coin, thaler. In later centuries, the American currency was based upon the dollar, a word derived from the name thaler. The MTT became the leading global currency by the time of Maria Theresa’s death in 1780. It remained the most widely used global currency during the 18th and 19th centuries.

Banknotes were first attempted in Poland during the reign of Stanislaw August Poniatowski 1764 – 1795). However, notes were in circulation only during the short period of the insurrection of Kosciuszko in 1795. The previous coinage was continually struck in the Warsaw Duchy. In 1815, the system was changed slightly and one Kolognian grzywna was valued at 84 złoty.

In 1834, the Kolognian grzywna was replaced by the Russian pound, which was valued at 409.5 grams of silver. Double denominations were introduced: 10 złoty equivalent to 1.5 rubles; one złoty equivalent to 30 grosh or 15 kopek.

In 1857, during the Austrian reign in Galicia, the “złoty renski waluty” [4] gold coin was briefly used. The name of the currency was abbreviated, “złr.” It was sometimes called a florin or gulden, which were the names of the Austrian currency. The special “złr” currency of Galicia was named the “waluta Austriacka,” currency of the Austrian standard monetary system, and was used from 1857 to 1899. Both currencies were used in Austria, but the “złr” was circulated mostly in Eastern Occupied Galicia.

Russian rubles were introduced into circulation in 1842. That system lasted until the end of World War I (1919). In the other parts of Poland, which had been annexed by Prussia and Austria, sovereign coins were used respectively. As mentioned above, the złoty became the traditional currency of Poland in the 15th century. In 1496, the Sejm declared the official monetary unit of one Polish Złoty would equal 30 Prague groschen. It was called the Polish grosz. Thirty Polish grosz equaled one “Polish Golden” or “Złoty Polski.” [5] However, another Polish currency existed, which was known as the “Red Golden” or “Złoty Czerwony.” A paper certificate was issued, the “Jeden Rubel Srebrem,” [6] which was valued at “one silver ruble.” Złoty were valued by a gold standard. All three countries introduced gold coins in the latter half of 19th century.

The monetary chaos of World War I lasted until 1922. Although since 1918 the Polish mark was legal tender, still Austrian, German, and Russian money was used.

A new złoty system was introduced in Poland in 1924 to reverse the hyperinflation that had occurred during World War I. The złoty denomination has remained the official currency. One złoty equaled 100 grosh and contained 0.1687 grams of gold. However, after a brief period of stabilization, the złoty’s valuation was again weakened by World War II.

Polish banknotes were issued in 1945 and coins in 1949, then under the name of Republic of Poland. The monetary system of socialistic Poland suffered from inflation. To decrease the amount of money in circulation, governmental policies were issued that resulted in devaluation of the “people’s savings.”

In 1995 Polish currency was devalued again, 10,000 old złoty were equivalent to one new złoty. New coins were issued in 1990; new banknotes in 1992. But, the banknotes were not distributed until January 1, 1995. [7] The new reform brought coins back to life. Since early 1990’s, coins were non-existent in the transactions due to their very small value.