Hungary’s first coins were issued in the third and second centuries BC by local Celtic tribes. The Roman province of Pannonia was located in present-day Hungary and coinage used to pay Roman troops there on the frontier circulated during the Roman Empire.
The Kingdom of Hungary was founded on January 1, 1001 when King Stephen converted to Christianity. He began issuing denars and obols soon thereafter. King Charles Robert (1308-42) introduced several larger silver coins and Louis I (1342-83) issued the first gold coins in Hungary. From 1525 on, the Hapsburgs ruled Hungary and its coinage gradually matched that of Austria. Coins included the gold ducats and silver talers for higher denominations and obols, denars and groschen for smaller denominations. 3 Krajczar (kreuzer) equaled 5 denars.
The Kingdom of Hungary was part of the Austro-Hungarian Empire until it became a separate country on November 16, 1918. Austria was a republic from 1918 until 1920, a kingdom without a king from 1920 until 1945, a People’s Republic from 1945 until 1989, and a republic since 1989.
Austria-Hungary followed the Holy Roman Empire’s monetary policies. Under the Edict of Ferdinand II in 1623, the Holy Roman Empire was divided into three currency areas. Austria and southwestern Germany (Bavaria, Swabia, Franconia and Rhineland) used the Gulden equal to 60 Kreuzer and 240 Pfennig, northern Germany used the Thaler of 30 Groschen and eastern Germany (Hamburg) used the Mark of 16 Schilling and 192 Pfennig. The Conference of Leipzig in 1690 and the Convention of Vienna on September 21, 1753 reinforced these currency areas, the latter fixing the exchange rate between the Thaler and Gulden at 1 Thaler equal to 1.50 Gulden. There was no centralized issuing authority for the Holy Roman Empire. Each principality, bishopric or other political entity could issue its own coins. Specie rates and Unit of Account (XAGA) rates often fluctuated from one area to another, but the Gulden, Thaler and Mark were followed as standards for each area.
Austria followed the Holy Roman Empire’s monetary policies. Under the Edict of Ferdinand II in 1623, the Holy Roman Empire was divided into three currency areas. Austria and southwestern Germany (Bavaria, Swabia, Franconia and Rhineland) used the Gulden equal to 60 Kreuzer and 240 Pfennig, northern Germany used the Thaler of 30 Groschen and eastern Germany (Hamburg) used the Mark of 16 Schilling and 192 Pfennig. The Austrian Gulden was divisible into 60 Kreuzer and 240 Pfennig for Account Gulden (XATA), and also divisible into 480 Pfennige for coins.
The Conference of Leipzig in 1690 and the Convention of Vienna on September 21, 1753 reinforced these currency areas, the latter fixing the exchange rate between the Thaler and Convention Gulden (XATC) at 1 Thaler equal to 1.50 Gulden. There was no centralized issuing authority for the Holy Roman Empire. Each principality, bishopric or other political entity could issue its own coins. Specie rates and Unit of Account rates often fluctuated from one area to another, but the Gulden, Thaler and Mark were followed as standards for each area.
Austria began issuing banknotes (ATP) through the Banco-Zettel after the Convention of Vienna in 1753. The banknotes fluctuated in value relative to specie throughout the Eighteenth and Nineteenth Centuries. The paper Gulden fluctuated in value relative to specie money as Austria-Hungary made repeated attempts to stabilize its currency in the 1800s.
Austria-Hungary joined the Convention of Germanic Monetary union on January 24, 1857 issuing Monetary Union Gulden (XATG), then withdrew in 1867, but continued to issue Gulden (ATG). Austria-Hungary linked its currency to the Latin Monetary Union on March 9, 1870, though it was not a formal member of the Union.
When Austria-Hungary moved to the Gold Standard on August 2, 1892, they replaced the Gulden with the Krone (ATK) with 2 Kronen equal to 1 Gulden. The Krone was divisible into 100 Heller.
The Hungarian Koruna (HUK) was created on May 4, 1921, but it quickly fell to inflationary pressures. The Koruna was replaced by the Pengoe (HUP) on November 4, 1925 with 1 Pengoe equal to 12,500 Paper Koronas. During World War II, German Reichskreditkassenschein (XDEK) circulated in Hungary, and during Soviet occupation in 1945, the Red Army Pengoe (HUR) circulated beside Russian Rubles.
In 1945, with little if any tax revenues, Hungary decided to pay its bills by printing banknotes. This led to one of the worst inflations in history. On May 25, 1946, the Milpengoe (HUM) replaced the Pengoe with 1 Milpengoe equal to 1,000,000 Pengo, and on June 3, 1946, the Bilpengoe (HUB) was introduced with 1 Bilpengoe equal to 1,000,000 Milpengoe or 1,000,000,000,000 Pengoe. Hungary also introduced an Adopengoe (HUA), or Tax Pengoe, which theoretically would maintain its value while the paper Pengoe depreciated, but it soon lost its value as well. When the Forint (HUF) was introduced on July 23, 1946, it replaced the Pengoe at the rate of 1 Forint equal to 400,000,000,000,000,000,000 Pengoe. The Korona, Pengoe and Forint were all divisible into 100 Filler. Only Yugoslavia has succeeded in Challenging Hungary’s hyperinflationary record.
The Austro-Hungarian Bank, the Treasury, and the Hungarian Post Office Savings Bank issued banknotes between 1918 and 1920. The Ministry of Finance issued banknotes between 1920 and 1925. The Hungarian National Bank had issued some banknotes in 1919, but obtained a monopoly of banknote issue in 1926 when the Pengoe replaced the Korona. Both the Ministry of Finance and the Hungarian Postal Savings Bank issued Adopengoe banknotes. |
