Post Office Savings Bank
Savings Book “W” series
in Gold Zloty’s
Cover
Face value 500 gold zloty 1924 parity revalued to 860 gold zloty 1927 parity
Interest coupons payable 1 May and 1 November
This may look like a standard savings book and it actually bears Postal Savings Bank name on the front cover but in reality it is some sort of 3 % amortizable bond due on 1 November1942 issued by the State and it is listed as direct obligation of the State in official reports of state debts.
Bonds were issued in this form because of very close link to the actual savings books/accounts, the fact that actual face value could vary (but never exceeded 500 gold zloty per one book), the fact that it was a very convenient form in case of bonds which were registered and not-transferable and the fact that whole issue was administered by Postal Savings Bank and in practice treated as savings account subject to special conditions. For savers they looked just like any standard bank savings book evidencing their deposit so they got something which they could easily identify and understand. This was also an important factor as most of them were simple people with not much of an understanding of sophisticated financial instruments.
Face value and number of bonds issued to a particular individual was calculated as follows: currency originally paid in was converted to US Dollars, those were converted to gold zloty’s of 1924 parity at the rate of 5,185 zloty per USD. To this amount a 3% interest for the period 1 May 1924 to 1 November 1926 was added. Compensation amount calculated in such way was released to the holder in form of savings book alike looking bonds with face value of single bond not exceeding 500 gold zloty 1924 parity. In 1927 this 500 was converted to 860 gold zloty of 1927 parity.
This special issue was used to compensate people (Polish emigrants) who opened Polish mark savings accounts with the Post Savings Bank and deposited hard currencies (such as dollars or pounds). Such deposits were booked in Polish marks at the then current rate of exchange and eventually lost value due to hyperinflation. Because such deposits were heavily promoted by the State and a lot of propaganda effort had been made to convince Polish emigrants to transfer their hard-earned savings to a Polish bank, the State decided to compensate this special category of depositors in full. But the cash was in short supply, so compensation bonds in this unusual form were issued. Every six moths (1 May and 1 November, starting from 1 November 1926) certain number of bonds was drawn for redemption and paid.
On 1 April 1939 bonds with the face value of 10.985.607,81 złotych were still outstanding. Last drawing took place on 1 May 1939, no service thereafter.
After the war those bonds were treated as all other savings books/accounts (IMHO not on purpose but probably because nobody was bothered to check their real legal status and they look like bank savings books, not bonds) so one could cash them under certain conditions, but amounts actually paid were negligible: for a bond which was nominally worth 860 zloty of 1927 parity (almost 162 dollars in 1939) one could get 25,80 zloty in 1952 (100:3 conversion ratio applied because of 1950 monetary reform). At that time this was an equivalent of $6,45 at the very official (and totally fictitious) exchange rate, but on the black market one could buy only 25 cents for the same amount of zloty’s. From the other hand owners of standard internal state bonds got nothing so holders of PKO “W” Savings Books should still consider themselves lucky 😉
Of course this is a “borderline” case as far as collectors are concerned, but in my opinion considering all the facts mentioned above, those savings books deserve to be included in the scope of collection of bonds issued by the 2nd Polish Republic.