Following the dissolution of the Austro-Hungarian Monarchy after October 29, 1918, Austro-Hungarian Bank banknotes remained in circulation in the successor states, in the Kingdom of Serbs, Croats and Slovenes (SHS) some even until 1922.
In January 1919, the Kingdom of SCS carried out the first nostrification of existing banknotes, prescribing the stamping of only those banknotes emitted up to 1916, but not later issues. The nostrification was carried out in a disorganized manner, so a portion of the banknotes not intended for stamping—having already been withdrawn from circulation or emitted even after 1916—was also stamped.
Therefore, in November 1919, a second nostrification was carried out, which was considerably more organized, and at that time all authenticated banknotes that had not been foreseen by the first nostrification were withdrawn from circulation. At the same time, by administrative state decisions, the crown banknote was significantly devalued against the Serbian dinar, despite the fact that the amount of authenticated banknotes in circulation remained almost the same, while the amount of Serbian dinar banknotes in circulation more than doubled.
By the will of the Great Powers of the Entente, and under French patronage, a state was conceived and proclaimed in Belgrade on December 1, 1918, into which all the „South Slavic“ lands of the former Austro-Hungarian Monarchy were to enter under the Serbian crown: the Kingdom of Serbs, Croats and Slovenes. Thus, in this new state, paper money issued by the Austro-Hungarian Bank—the krone—found itself serving as the legal tender. This very same krone, as is well known, also circulated in Austria, Hungary, parts of Italy, Romania, and Czechoslovakia.
By the international Peace Treaty with Austria, signed on September 10, 1919, in St. Germain (1), it was stipulated that „within two months after this Treaty comes into force, all those states that inherited parts of territory from Austria-Hungary ... shall mark all banknotes of the Austro-Hungarian Bank found on their territory with special signs ...“
However, the Kingdom of SCS fulfilled this international obligation much earlier, during January 1919. Although much has been written so far in various literature about the nostrification of existing Austro-Hungarian Bank banknotes, from a collector's perspective, it is necessary to analyze more thoroughly when, how, and what was stamped, or rather, not stamped.
I. Banknotes of the Austro-Hungarian Bank in circulation on October 29, 1918.
On the day of the historical decision of the Croatian Parliament on October 29, 1918, there were 9 types of banknotes in circulation(2):
1 Krone, December 1, 1916.
2 koronas, August 5, 1914 (during the retreat of July 31, 1917)
2 crowns, March 1, 1917.
10 crowns, Jan 2, 1904 (withdrawn as of July 31, 1915)
10 crowns, January 2, 1915.
20 crowns, January 2, 1913.
50 korunas, Jan 2, 1902 (withdrawn as of Dec 31, 1916)
100 crowns, January 2, 1912.
1000 crowns, Jan 2, 1902.
Although the Croatian Parliament on October 29, 1918, declared that „all previous constitutional and legal ties between the Kingdom of Croatia, Slavonia, and Dalmatia on the one hand, and the Kingdom of Hungary and the Empire of Austria on the other, are severed...“(3) the currency of the Austro-Hungarian Monarchy in reality continued to circulate, and the Austro-Hungarian Bank continued to issue banknotes everywhere they had previously been legal tender. Thus, as early as October 30, 1918, two new types of banknotes „for extraordinary needs“ were put into circulation:
25 crowns, Jan 27, 1918.
200 crowns, October 27, 1918.
printed single-sided, in offset printing, with an indication that their validity expires on June 30, 1919, featuring the former Austrian and Hungarian coat of arms, as well as on other banknotes of the Austro-Hungarian Bank.
On the same day, a regular banknote was also put into circulation:
20 crowns, January 2, 1913, 2nd edition,
identical to the first-edition banknote, which was already in circulation, but with a slightly modified background color and printed in offset rather than in intaglio like the previous one.
The next and last banknote of the Austro-Hungarian Bank put into circulation also in the Kingdom of SCS was the regular banknote:
10,000 crowns, November 2, 1918.
produced in supreme „intaglio“ deep printing, and it appeared in circulation on December 18, 1918, also with all the state insignia of the Austro-Hungarian Monarchy, and with the value printed in words in all the languages of the Monarchy(4).
Just a few days later, on Christmas Day, December 25, 1918, the Ministry of Finance of the Kingdom of SCS announced that, starting December 28, 1918, it was prohibiting the import into the country of Austro-Hungarian Bank banknotes in amounts exceeding 1,000 crowns(5).
In the so-called „Yugoslav“ press, i.e., publications of the Belgrade edition, it was often written at the time about the „worthlessness“ of the krone in relation to the Serbian dinar. To tell the truth, here is an overview of the market exchange values of the Austro-Hungarian (paper) krone against the US dollar on the Zurich stock exchange(6):
December 31, 1913 – 1 $ = 4.95 K
December 31, 1914 – 1 $ = 5.15 K
December 31, 1915 – 1 $ = 7.50 K
December 31, 1916 – 1 $ = 9.50 K
December 31, 1917 – 1 $ = 8.40 K
October 31, 1918 – 1 $ = 9.80 K
November 30, 1918: 1 $ = 11.40 K
December 31, 1918: 1 $ = 15.75 K
So, even without economic knowledge, it is clear that although the krone began a more significant depreciation at the end of 1918, one can by no means speak of the krone as „worthless“ money without backing, all the more so since the Austro-Hungarian Bank duly paid the Kingdom of Serbs, Croats and Slovenes the amount of 100,000,000 krone in gold coins as its share of the gold backing for Austro-Hungarian Bank banknotes.
II. First nostrification on January 9, 1919.
Based on the instructions of the Ministry of Finance, which were published on January 8, 1919, by Ban Decree 7, nostrification for Croatia and Slovenia began on January 9, 1919, and lasted for ten days, until January 19, 1919, from which day onwards only the stamped so-called “SHS" crown could legally be in circulation.
Banks and financial institutions, local authorities, military commands of the Serb Army (author's note: the army of the Kingdom of SCS was not yet organized at that time), religious institutions, courts, etc., validated them. The validation was carried out in an unorganized manner and without precisely established rules, so today we record more than 2,000 different stamps on banknotes, and many of them are completely illegible.
By decision of the Ministry of Finance, banknotes put into circulation by the Austro-Hungarian Bank up to and including the year 1916 could be nostrified:
1 Krone, December 1, 1916.
2 crowns, August 5, 1914.
2 crowns, March 1, 1917.
10 crowns. January 2, 1904.
10 crowns, January 2, 1915.
20 crowns, January 2, 1913.
51 crowns, January 2, 1902.
100 crowns, January 2, 1912.
1000 crowns, Jan 2, 1902.
Banknotes could not be nostrified (8):
20 crowns, January 2, 1913, 2nd edition
25 crowns, October 27, 1918.
200 crowns. October 27, 1918.
10,000 crowns, November 2, 1918.
Those banknotes had to be exchanged at the branches of the Austro-Hungarian Bank for banknotes of older issues, and such banknotes had to be submitted for authentication. After the completion of the process, it was determined that 5.323 million „SHS“ crowns were in circulation (9).
Well, the most interesting thing is – what was actually stamped? Although certain regulations limited which banknotes could be stamped, based on today's findings, it can be safely established that during the first nostrification, in addition to the banknotes prescribed for stamping, banknotes that were not intended for stamping were also nostrificated:
20 crowns, January 2, 1907.
20 crowns, January 2, 1913, 2nd edition
100 crowns, January 2, 1910.
Namely, the 20 krone banknote from January 2, 1913, II. Auflage, is very difficult to distinguish from the identical first-issue banknote, and it is completely understandable that the people applying the stamps could easily have missed that a banknote was of the second rather than the first issue. In addition, there were certainly some among these certifiers who were not overly knowledgeable.
As for the 20-krone banknotes dated January 2, 1907, and the 100-krone banknotes dated January 2, 1910, something else is at play. These two types of banknotes were withdrawn from circulation—the 20-krone from December 31, 1913, to December 31, 1915, and the 100-krone from May 31, 1913, to May 31, 1915—but with the option of subsequent exchange at the branches of the Austro-Hungarian Bank until December 31, 1921, and April 31, 1921, respectively. Therefore, at that time they still had legal tender value, i.e., the possibility of exchange (10).
Alongside the stamped “SHS„ crown, banknotes denominated in dinars of the Privileged National Bank of the Kingdom of Serbia were also in circulation. The value ratio between the “SHS„ crown and the dinar on January 9, 1919, thus on the day the stamping process began, was fixed at 2 crowns = 1 Serbian dinar, i.e., 50 dinars for 100 “SHS" crowns. This exchange rate had been prescribed by the Privileged National Bank as early as the beginning of November 1918 (11), at a time when the Serbian army was preparing its advance to the west and the occupation of Croatian territories; for example, the Serbian army occupied Kotor and Osijek on November 12, Dubrovnik on November 14, Split on November 18, etc. (12)
Although the parity was thus established at 2:1 in favor of the Serbian dinar, the fact is that at the time of nostrification, the two currencies had equal purchasing power(13).
Despite this, the state soon continued to adjust the exchange rate between the „SHS“ krone and the Serbian dinar to the detriment of the krone(14):
March 15, 1919 – 1 Serbian dinar = 2.50 „SHS“ crowns
May 25, 1919 – 1 Serbian Dinar = 3.30 „SHS“ Crowns
III. Second Nostrification on November 26, 1919.
Since the initial process of stamping validation was not satisfactory, the Ministry of Finance of the Kingdom of SCS proceeded to re-authenticate all banknotes validated up to that point.
The nostrification was carried out by affixing an adhesive stamp to banknotes previously nostrificated on January 9. However, it has been precisely determined which banknotes can be „stamped“:
10 Kronen, January 2, 1904.
10 crowns. January 2, 1915.
20 crowns, January 2, 1913.
51 crowns, January 2, 1902.
50 crowns. January 2, 1914.
100 crowns, January 2, 1912.
1000 crowns. January 2, 1902.
The 1 and 2 crown banknotes are not stamped. The adhesive stamps were produced differently for the individual types of banknotes: orange for 10 crowns, purple for 20 crowns, and green for 50 crowns, all trilingual; for 100 crowns yellowish-gold and for 1000 crowns yellow-blue in three types, in Slovenian, Croatian, and Serbian, depending on the territory where they were to be affixed(15).
It is interesting that not all submitted banknotes were stamped on that occasion. Specifically, 20% of the amount was withheld from each submitter of banknotes, primarily in 50-crown banknotes (the production of the adhesive stamp for that type of banknote was delayed) as well as in worn-out banknotes. For the money thus exempted, a receipt was issued with the explanation that this would increase the value of the banknotes (which did not happen because the state immediately put the withheld banknotes back into circulation to cover various state needs...), and that amount would be paid upon the exchange of the stamped „SHS“ crowns for the new banknotes of the Kingdom of SHS that were being produced. This was later abandoned, and receipts issued for amounts up to 1,000 „SHS“ crowns were paid in cash in 1922/23, while receipts for larger amounts could be used to pay taxes, but only by the owners in whose name they were issued(16).
All doubts regarding the exchange rate of the „SHS“ crown against the new dinar of the Kingdom were resolved at the beginning of 1920 – from January 20, 1920, the ratio of the „SHS“ crown to the Serbian dinar was fixed unalterably at 4:1, and of the Serbian dinar to the new dinar of the Kingdom of SHS at 1:1. Thus, the crown banknote was significantly devalued despite the fact that after the second nostrification was carried out, the amount of crowns in circulation increased from 5,323 to 5,686 million crowns, and of the Serbian dinar from 340.1 to as much as 711.4 million(17).
„SHS“ crown banknotes were withdrawn and replaced by the new dinar from March 15, 1920 (the 1000-crown note) until as late as March 31, 1922 (the 1, 2, and 10-crown notes).
IV. And a few details for collectors...
What all authenticated crown banknotes have in common is that they appear in lower grades of preservation. Certainly, in terms of rarity, the priority among the banknotes of the „first“ authentication goes to the 20-crown banknote of January 2, 1907, and the 100-crown banknote of January 2, 1910, which are true rarities (especially with the square so-called „Dalmatian“ stamps), followed by the 20-crown banknote of January 2, 1913, II. Auflage. All other types of „first“ authentication banknotes are not particularly rare. Among the banknotes of the „second“ authentication, certainly the only rarity is the 50-crown banknote of January 2, 1902, which is found very, very rarely, and even then in very poor preservation.
Since stamped crown banknotes are collected not only in the region where they once circulated (Slovenia, Croatia, and Bosnia and Herzegovina, and to a lesser extent Serbia and Montenegro), but also in Austria (whose national paper money catalog includes all types of stamped crown banknotes), and since unstamped Austro-Hungarian banknotes—most commonly starting with the year 1900 as the beginning of a collection—are also collected by enthusiasts of Croatian national currency, here is an overview of market values (in EUR) as achieved over the past three years at auctions in the USA, Croatia, Slovenia, and Austria—with the important note that the stated values apply to stamped banknotes with legible stamps(18):
Notes
(1) „Official Gazette of the Kingdom of SCS“, No. 133, June 19, 1920.
(2) Oesterreichische Nationalbank, Vienna, Dr. Ulrike Felber, Head of the OENB Archives.
(3) Dr. Rudolf Horvat, „Croatia on the Torture Rack“, Zagreb, 1942.
(4) „Oesterreichische Nationalbank“, Vienna, Dr. Ulrike Felber, Head of the OeNB Archives.
(5) Order of the Minister of Finance No. 1263/1918, December 25, 1918, Archives of the National Bank of the Kingdom of SCS.
(6) „Oesterreichische Nationalbank“, Vienna, Dr. Ulrike Felber, Head of the OeNB Archives.
(7) „National Bank of the Kingdom of SCS 1884-1924“, Ljubomir Kosier, Zagreb, 1924.
(8) Order of the Minister of Finance No. 36/1919, January 7, 1919, Archives of the National Bank of the Kingdom of SCS.
(9) „The Dinar Exchange Rate and Foreign Exchange Policy of the Kingdom of Yugoslavia 1918-41“, Goran Nikolić, Belgrade, 2000.
(10) „Oesterreichische Nationalbank“, Vienna, Dr. Ulrike Felber, Head of the OENB Archive.
(11) „Srpske novine“, no. 132, November 6, 1918.
(12) „Croatia on the Torture Rack“, Dr. Rudolf Horvat, Zagreb, 1942.
(13) „National Bank of the Kingdom of SCS 1884-1924“, Ljubomir Kosier, Zagreb, 1924.
(14) „Exchange Rate of the Dinar and Foreign Exchange Policy of the Kingdom of Yugoslavia 1918-41“, Goran Nikolić, Belgrade, 2000.
(15) „The Monetary System of Yugoslavia“, Miodrag Ugričić, Belgrade, 1967.
(16) „Currency of the Kingdom of Yugoslavia 1918–41.“ Jovan Hadži-Pešić, Belgrade, 1995.
(17) „National Bank of the Kingdom of SCS 1884-1924“, Ljubomir Kosier, Zagreb. 1924.
(18) „Fruehwald auktionen“, Salzburg, „Dorotheum auktionen“, Vienna, www.ebay.at, www.aukcije.hr, www.bolha.com, www.lynknight.com, www.numis.cz, www.ponterio.com.
Author: Ivan Škrabo
Source: Numismatic News, no. 59, Zagreb, 2006.
