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Gold reserve



HISTORY OF CZECHOSLOVAK CURRENCY.

The basic goal of the monetary policy of Rašín and his successors was to achieve the union of the Czech koruna with gold and to include Czechoslovakia among the countries of the gold standard. The program of gradual changeover to the gold currency was dependent on the creation of a sufficient gold reserve of the future issuing bank. In order to speed up this process, Rašín proceeded in three ways:

- Call for the creation of a "golden treasure of the republic" through voluntary donations. The post-war patriotic enthusiasm was appropriately used. Although, for example, 94,520 gold coins and medals or 65 kg of pure gold were collected in fractions, the result was more psychological-political than monetary and did not play a role in the gold reserve in terms of quantity.

- Issuance of an internal currency loan by a law of 25 February 1919, by which the government was authorized to issue a four percent loan in gold and in currencies. It met with unexpected success (3260 kg of pure gold, 270025 kg of silver, etc.). It was repaid by 1926, with creditors routinely demanding repayment in korunas.

- Announcement of the tender obligation for currencies and foreign exchange and a ban on the export of gold coins and unprocessed gold and silver.

Only the stabilization of monetary developments in the second half of the 1920s, with a balanced state budget and a balance of payments, made it possible to unite the Czechoslovak koruna with gold, and thus to become one of the states of the gold standard. However, the direct convertibility of banknotes into gold coins has not been introduced. It was about convertibility into foreign exchange, which were associated with gold. The koruna became the currency of gold foreign exchange.
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