Poland Public Finance
Budgets and public debt. – In the early post-war years, Poland’s public finances went through a period of serious difficulties, both due to the existence of three tax systems not yet coordinated with each other, and above all due to the progressive depreciation of the Polish mark, and the financial years of those years ended with severe deficits. It was only in 1924, when the monetary reform was implemented, that a great step could be taken towards the consolidation of the budget; However, the breakeven was not reached until in 1926, when, after the economic crisis of 1924-1925, the revenue from taxes and that of companies (railways, forests, ports, mint, etc.) and state monopolies were affected by the improvement of general situation. Starting from 1929, following the onset of the world crisis, the pace of economic activity began to slow down and from 1930-31, both due to the contraction of revenues and the increase in expenses – especially in favor of the unemployed -, the budgets closed again in deficit.
According to clothingexpress, the main income chapters of the Polish budget are constituted by the tobacco monopoly, the alcohol monopoly, business taxes and customs duties. The main expenses are those for national defense, public education and for servicing the public debt (in millions of z ³ oty):
On the 1st January 1934 the public debt amounted to 4.303 billion of z ³ oty of which 759 domestic debt (350 million including the result of the national loan issued in September 1933) and 3544 the foreign debt, contract, especially with the United States, as well as with France and Great Britain. Poland has regularly serviced its foreign public debt, with the exception of the war debt for which it has suspended payments.
Money and credit. – The currency is the z ³ zloty, currency based on gold came into circulation on 1 May 1924 in place of deprezzatissimo Mark Polish (which was withdrawn by March 1925 to exchange for 1,800,000 marks for 1 z ³ zloty). The economic crisis that followed the currency reform, however, was due to new inflation and also the z ³ zloty suffered a continued devaluation until the first months of 1926, a time when the Bank of Poland was able to fix the exchange rate with the dollar at 8.91. On 13 October 1927 the z ł oty was therefore stabilized at this level and its gold content consequently modified (the kg. gold up = 5924.44 z ³ oty). The Bank of Poland, which was created by law and began operating on April 28, 1924, is a private limited company which has been granted a monopoly on the issuance of tickets (the issuance of coins is reserved for the government) with the obligation to keep a gold reserve not less than 30% of the notes in circulation and deposit (up to March 1933, the reserve was to be 40%, but could consist of 1 / 4 of convertible foreign currencies, gold); for each issue exceeding this limit, the Bank must pay the government a progressive tax. The gold convertibility of tickets (for a minimum of 10,000 z ³ oty), despite the international monetary disturbances of recent years, has still been maintained. On 1 March 1934 the circulation was composed of 939,100,000 of z ³ oty in banknotes and 346, the million in coins and the reserve consisted of 478,500,000 gold and 77.9 in coins and currency foreign (the gold coverage of the notes and sight commitments was on the same date of 43.12).
Poland has three state banks: the National Economy Bank, founded in 1924 (whose main function is to grant long-term loans to autonomous entities and mortgage loans to landed property and industry), the Agricultural Bank of state, founded in 1919, and the Postal Savings Bank, founded in the same year. In 1933, with the main task of converting short-term agricultural loans into 7-year loans and reducing interest, the Acceptance Bank, of which the state and state banks are the major shareholders, was established.