Unexpected news
On the morning of the October the 29th, 1950, surprising news spread throughout Poland – the previous evening the government had enacted monetary reform. Although the new communist authorities had already made changes in the monetary field in 1944-1945, exchanging money from the years of occupation for the Polish zloty, nevertheless it was the operation in the autumn of 1950 which came to be imprinted in the memory of Poles. There was a mixture of shock, dismay and outrage at the actions of those in power. And it was all due to the extremely unfavorable principles of the reform, which many citizens regarded as theft. However, it was theft perpetrated by the state, and thus a kind of theft for which there existed no particular remedy.
Reform or robbery
The communists introduced a new zloty in place of the old one . Citizens exchanged their money in two ways: their cash was exchanged at a ratio of 100:1 (for every ‘old’ 100 zloty you received a ‘new’ 1 zloty), and their deposits, wages and prices at a ratio of 100:3. This proved to be a particularly hard blow for those who, not trusting banks, had kept most or all of their savings in their ‘piggy banks’. The reform had already come into force on the 30th of October. And although the old currency was still to remain in circulation until the 8th of November, the new conversion rates already applied. Along with the law reforming currency, a law banning the possession of gold, platinum and foreign currency also came into being. For what reason? The constant monetary policy perturbations convinced many people that the only safe way to hold on to savings was to possess foreign currencies. Those in charge knew that with this step they would get their hands on more of the citizens’ money to use for their own purposes, for instance in support of the Six Year Plan.
The thief knows when to attack
The timing of the reform was not coincidental. Firstly, it was a period when farmers had surplus money due to the earlier sale of their crops. In turn, they mainly kept their money at home, so exchanging it for new money would have to be done at a worse conversion rate. Secondly, the turn of the month meant that salaries paid at the beginning of November would already be handed out to employees across the country according to the new standards. On top of this, the autumn weather was not conducive to the possible organising of street protests.
Propaganda on banknotes
The introduction of the new zloty also provided the powers-that-be with an opportunity for new propaganda activities. The banknotes featured images of the ‘working people of towns and villages’. The lower denomination banknotes depicted images of village life, while the 500 zloty banknote, the highest denomination, featured an image of a miner. As a result of the 1950 reform, Poles lost confidence in banks for many years to come, which, albeit to a lesser extent, can still be observed today.