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History of Wiener Stadt-Banco
In 1703 the Banco del Giro was founded in Vienna by the Austrian imperial treasury. The bank did not have a very good reputation. Therefore it did not - as was planned originally - issue any paper money.
In 1705 the administration of the bank was transferred to the town Vienna. It was renamed to Wiener Stadt-Banco (town bank of Vienna) and started business as such in 1706. Initially the town Vienna was leading the bank's activities, but soon a power struggle evolved between it and the treasury of the Austrian court. The treasury gained more and more influence back and the town Vienna was later limited to a pure execution of the bank’s business activities.
In 1759 the bank started to issue its first paper money in the form of obligations. In 1762 they were replaced by Bancozettel (bank slips) – effectively a form of state paper money. The bills were very popular and stable during the first years. However from 1800 ever more of the notes were issued and hence their value dwindled. In 1810 notes worth 1 billion Gulden were in circulation and for a 10 Gulden silver coin nearly a 100 Gulden in paper money had to be paid. The state was practically bankrupt.
To cover up the financial situation it replaces the existing notes with a new issue. The monetary policy, however, did not change, which cause the ultimate failure of these undertakings. In 1811 the Bancozettel were replaced against Einlösungsscheine (redeem bills) at a rate of 5 old Gulden for 1 new Gulden. They were given out by the Privilegierte Vereinigte Einlösungs- und Tilgungs-Deputation. Denominations of 1, 2, 5, 10, 20 and 100 Gulden were issued and the notes were dated 1 March 1811.
The next try to resolve the financial misery was the introduction of the Anticipations-Scheine (anticipation bills) in 1813. They again were given out by the Privilegierte Vereinigte Einlösungs- und Tilgungs-Deputation. But all this was in vain, as the pure exchange of banknotes, without further monetary reform to stabilise the paper money did not yield any results. Finally a line was drawn under these monetary experiments. On 1 June 1816 the Privilegierte Oesterreichische Nationalbank was founded and given authority to control the money supply of Austria.
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