Austro-Hungarian Korona

The Korona or Krone (Österreichisch-ungarische Krone (German) or osztrák-magyar korona (Hungarian) ) was the official currency of the Austro-Hungarian Empire from 1892 (when it replaced the Gulden/forint as part of the adoption of the gold standard) until the dissolution of the empire in 1918. The subunit was one hundredth of the main unit, and it was called Heller in the Austrian and fillér in the Hungarian part of the Empire.

Name

The official name of the currency was Krone (pl. Kronen) in Austria and korona in Hungary. However, currency names in other ethnic languages were also recognised and appeared on the banknotes: koruna (pl. korun) in Czech, korona (pl. koron) in Polish, корона (pl. корон) in Ukrainian, corona (pl. corone) in Italian, krona (pl. kron) in Slovenian, kruna (pl. kruna) in Croatian, круна (pl. круна) in Serbian, and coroană (pl. coroane) in Romanian. Sometimes corona (pl. coronae), its Latin name was used as well. Its counterpart in English is crown.

The symbol of the currency was its abbreviation: K. or sometimes Kr.

History

Introduction

After several earlier attempts the Austro-Hungarian Empire adopted the gold standard in 1892 according to the plan of Sándor Wekerle secretary of finance. This plan included the introduction of the new currency, the Krone. It consted of 100 Heller (Austria) or Fillér (Hungary). The value of the Krone was set at 2 Krone = 1 Gulden (Florin, or forint in Hungarian) of the previous silver-based currency. From 1900 onwards, Krone notes were the only legal banknotes of the Empire.

WWI

The value of the currency depreciated sharply as a result of the First World War, which was financed mostly by the issue of War Bonds rather than through taxation. Consumer prices rose sixteenfold during the war, as the government had no hesitation in running the Austro-Hungarian Bank's printing presses to pay its bills and triggering a higher inflation rate than in the other combatant countries.

After WWI

Austria

A note overstamped to restrict its circulation to the new Republic of Austria. High inflation led to a change of currency from the old Krone to the new Schilling in 1925
A note overstamped to restrict its circulation to the new Republic of Austria. High inflation led to a change of currency from the old Krone to the new Schilling in 1925

After the end of the First World War it was initially hoped that the Krone could continue as a common currency of the Empire's successor states, but in January 1919 the Kingdom of Serbs, Croats, and Slovenes (later Yugoslavia) became the first successor state to overstamp the Austro-Hungarian Bank's notes to limit their validity to its own territory. Czechoslovakia followed suit in February 1919, and on 12 March 1919 the new Republic of Austria stamped the notes circulating in its territory with "DEUTSCHÖSTERREICH".

The Austrian economy did not stabilise after the war, and a period of hyperinflation followed: money supply increased from 12 to 30 billion Kronen in 1920, to about 147 billion Kronen at the end of 1921. In August 1922, consumer prices were 14 000 times greater than before the start of the war eight years earlier. The highest value banknote issued was for 500 000 Kronen, in 1922. Faith in the currency had been lost, and money was spent as fast as it was received. In October 1922 Austria secured a loan of 650 million gold Kronen from the League of Nations, with a League of Nations Commissioner supervising the country's finances. This had the effect of stabilizing the currency at a rate of 14,400 paper Kronen to 1 gold Krone. On 2 January 1923 the Austrian National Bank (Österreichische Nationalbank) started operations, and took over control of the currency from the Austro-Hungarian Bank which had gone into liquidation.

In December 1923 the Austrian Parliament authorised the government to issue silver coins of 5000, 10 000, and 20 000 kronen which were to be designated half-Schilling, Schilling, and double Schilling. The Schilling became the official Austrian currency on 20 December 1924, at a rate of 10 000 Kronen to 1 Schilling.

Hungary

The Hungarian korona (Hungarian: magyar korona; korona in English is "crown") was the replacement currency of the Austro-Hungarian Krone/korona amongst the boundaries of the newly created post-WWI Hungary. It suffered a serious inflation and was replaced by the pengő in 1925. The last korona banknotes were withdrawn from circulation in 1927.

Introduction

According to the Treaty of Trianon and other treaties regulating the situation of countries emerging from the ruins of the dissolved Austro-Hungarian Empire, the former banknotes had to be overstamped by the new states and - after a given transition-period - replaced by a new currency. In the case of Hungary, this currency was the korona, which replaced its Austro-Hungarian counterpart at par. Hungary was the last country to fulfil the replacement obligation of the treaties and the stamps used for overstamping were very easy to copy, so a large portion of the common currency circulated in Hungary. This was a factor contributing to the process which finally led to a serious inflation. Finally, in 1925, the korona was replaced by the pengő at a rate of 12,500 korona = 1 pengő.

Coins

Körmöcbánya (today: Kremnica, Slovakia), the site of the only mint of Hungary (since the Gyulafehérvár mint in Transylvania (today: Alba Iulia, Romania) was closed in 1871) was awarded to the newly created Czechoslovakia according to the Treaty of Trianon. Thus, the mint machinery was moved to Budapest and set up at different places until the Hungarian State Mint was created.

Only 10 and 20 fillér coins were minted as part of the korona system: first in 1919 under the Soviet Republic with the original Körmöcbánya coin dies (1916 and 1918 restrikes); then in 1920 and 1921 with the correct years of minting but still using the same design and the K.B. Körmöcbánya mintmark.

Paper money

The first paper money printed in Hungary were 1, 2, 25 and 200 korona banknotes - similar to those issuead in Vienna during the end of the war. However, the use of these banknotes was limited to Austria and Hungary, and later even Austria considered the Hungarian issues to be counterfeights. Later, as there was no national bank in Hungary, the Postal Savings Bank received the right to print bills denominated 5, 10 and 20 korona. The overstamping of the banknotes of the Austro-Hungarian Bank started only in 1920 - the last of all states emerged on the ruins of the former Monarchy. Finally, the Hungarian Royal State Note Institute was founded and granted the right to issue treasury notes.

Further reading

    * (Hungarian) (English) (German) Gyula Rádóczy, Géza Tasnádi (1992). Magyar papírpénzek 1848-1992 (Hungarian paper money 1848-1992). Danubius Kódex Kiadói Kft. ISBN 963-7434-11-9.
    * (Hungarian) (summary in (German) (English) (Russian)) Károly Leányfalusi, Ádám Nagy (2006). A korona-fillér pénzrendszer - Magyarország fém- és papírpénzei 1892-1925 (The korona-fillér monetary system - coins and paper money of Hungary 1892-1925). Magyar Éremgyűjtők Egyesülete, Budapest. ISBN 963-229-523-4.

In Hungary the Austro-Hungarian currency was overstamped and then replaced by the Hungarian korona at par. This new currency was in circulation only for a few years and was subject of hyperinflation - due to the consequencies of the WWI and the Treaty of Trianon. The currency was replaced by the pengő on 21 January 1927, at a rate of 12 500 korona to 1 pengő.

Czechoslovakia

In Czechoslovakia, the currency was superseded by the koruna, at par. The name of the Austro-Hungarian Krone and Heller currency is still echoed in the contemporary koruna and haléř/halier currencies of the Czech Republic and Slovakia.

Croatia, Slovenia and Bosnia and Hercegovina

In these parts of Austria-Hungary, which became part of the Kingdom of the Serbs, Croats and Slovenes (later Yugoslavia) in 1918, Krone banknotes were stamped by the new authorities and became issues of the Serb, Croat and Slovene krone. This was replaced in 1920 by the dinar at the rate of 1 dinar = 4 Kronen.