- regaining independence (Nov. 11, 1918) as result of World War I
- country destroyed by the war (front movements, exploitative German policy towards the industry of former Congress Kingdom, evacuation of part of factories to Russia)
- need of uniting different legal systems, technical standards, infrastructure (especially in transport)
- cultural differences between 3 partitions
- duality of power at the beginning of independence (Józef Piłsudski and government of Jędrzej Moraczewski in Warsaw without recognition of Entente vs National Polish Committee in Paris recognized by Entente)
- end of potential internal conflict - creation of Ignacy Paderewski government in Warsaw with support of NPC (Jan 16, 1919)
- Paderewski government: shaping the rule of full control of treasury minister over state finances (ministry of Leon Biliński, July - December 1919)
- frequent changes of governments & treasury ministers until 1926 resulting in frequent changes of state economic policy
- constant imbalances in public finance due to border conflicts, post-war reconstruction & unification, as also imperfect fiscal apparatus
- the greatest financial effort - war against Bolsheviks in 1920
Hyperinflation - money issuance at the end of war – Polish Country Lending Institution (Polska Krajowa Kasa Pożyczkowa, PKKP) – acting in the part of Congress Kingdom occupied by Germans and with German authorities, issuing Polish mark (on parity with German mark)
- monetary chaos, the need for transitory currency and central bank, hence polonization of PKKP
- inflation during armed conflicts period (until Treaty of Riga, March 1921) – result of financing budget deficit by paper money
- 1921-1923 - additional issuance of paper money (over the value of budget deficit) stimulating post-war reconstruction
- growth of dollar value in Polish marks (%): 1919 – 1123.6, 1920 – 435.8, 1921 – 395.3, 1922 - 509.1, 1923 – 35714.6 (October 1923 alone – 360.6)
- necessary reforms postponed because of failed attempts of obtaining foreign stabilization credits (USA, UK - but offered conditions unacceptable, especially British)
- January – June 1923 – Władysław Grabski in ministry of treasure in Władysław Sikorski (centre) and Wincenty Witos (centre-right) governments
- situation rapidly worsens after Grabski’s dismissal
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