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Shvoong Home>Arts & Humanities>History>Protest against Paper Money under the Reign of Francis I (II) Summary

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Protest against Paper Money under the Reign of Francis I (II)

Article Summary by: Budapest    

Original Author: Budapest
The minutes of the Lower House of the Hungarian diet report about the returning protests of the Hungarians, especially the
estates against the Austrian paper money. (= Bancozettel) According to them money issue has always been a royal prerogative since the Middle Ages in Hungary, but the king has the right to issue gold and silver coins only. Base metal (ie. copper) coins and paper money should be issued only with the authorisation of the Hungarian diet - so stated the Hungarians.
The Napoleonic wars needed more and more money to pay the army and the Emperor (Franz = Francis 1792-1835) coul pay for the army with the help of issuing more and more banknotes with less and less backing of precious metal. In 1807 30 and 15 kreuzers appeared, made of copper, but served as small change for higher denomination paper money. People did not protest against copper coins, which were thought to be more valuable than paper and after a while copper coins were hoarded similarly to the silver and gold coins.
After the 80 percent devaluation in 1811 the series of paper money were issued with practically no backing. Any comment or criticism on money issue strictly forbidden. Consolidation did not more before 1816, after the Peace Treaty of Vienna. It was a return to the old "Convention" monetary system. The foundation of the Austrian National Bank in 1816 was a start of a new era in the history of paper money issue in the Habsburg Empire.
Published: June 04, 2007
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