The currency reform that took effect in Czechoslovakia on 1 June 1953 abolished the rationing system and carried out a general exchange of currency on terms unfavourable to the wealthier part of the population.
The Czechoslovak currency reform took effect on 1 June 1953 and consisted of a set of government measures that abolished the existing controlled system of supplying the population and carried out a general exchange of currency [1]. It is examined in detail in a book by the historian Jakub Šlouf, Praha v červnu 1953: Dělnická revolta proti měnové reformě, vyjednávání v továrnách a strukturální proměna dělnické třídy, published in 2021 by the Institute for the Study of Totalitarian Regimes together with the publishing house Academia [1].
Abolition of rationing
The controlled supply mechanism arose during the Second World War and continued during the post-war economic recovery [1]. From the late 1940s the state-socialist regime deliberately used it to favour or suppress certain groups of the population [1]. Workers in heavy industry received increased quantities of coupons that allowed them to buy goods on the tied market at low, state-regulated prices, while private farmers were excluded from this market entirely and had to meet their needs on the free market at considerably higher cost [1]. The reform removed this dual system and introduced a single price system, created as a compromise between the price levels of the two former markets [1]. In theory, this opened the possibility of buying goods without limit [1].
Exchange of currency
Alongside the abolition of rationing, a general exchange of currency took place [1]. Cash was exchanged at a rate of 5:1 up to 300 Kč per person, and above that limit at the unfavourable rate of 50:1 [1]. Ordinary deposits in financial institutions were converted in several tiers, from a rate of 5:1 for sums up to 5,000 Kč to 30:1 for sums above 50,000 Kč [1]. Funds dating from the Protectorate period and from earlier regimes, the so-called blocked deposits, which had already been frozen in 1945 for reasons of financial stability, were also liquidated [1]. In this way the reform substantially reduced the population's savings [1].
Interpretation and actual impact
The government explained the measures as the completion of the economic liquidation of the bourgeoisie, which had been politically defeated in February 1948 [1]. According to the historian Jakub Šlouf, however, it actually proceeded by a property criterion rather than a class one, so that it hit the more affluent strata of society hardest, regardless of how they had built up their savings [1]. In his account, the government underestimated that above-average savings were held not only by the former bourgeoisie but also by many industrial workers and Communists, who had accumulated them in the post-war period through ideologically preferred "construction labour" and numerous hours of overtime [1]. Šlouf states that some employees of the ČKD Stalingrad company exchanged cash sums exceeding 190 thousand Kčs during the reform [1].
Reaction at ČKD Stalingrad
Photographs preserved in the National Archives, in the collection of the Office of the First Secretary of the Central Committee of the Communist Party of Czechoslovakia, Antonín Novotný, show a demonstration against the currency reform at the ČKD Stalingrad company in Prague and a march of employees along what was then Fučíkova Street [1].
Sources
- Ústav pro studium totalitních režimů — 1 June 2023