By DASHNOR KALOÇI
Memorie.al / Since its coming to power in December 1944, among the first steps taken by the communist government led by Prime Minister General-Colonel Enver Hoxha, within the framework of the “great reforms of the people’s power for the increase of the people’s welfare,” was the action of confiscating and collecting gold from all Albanian and foreign citizens who possessed even a little of the precious metal. The campaign for the collection of gold, which was implemented through unprecedented repressive measures, such as arrests, imprisonments, torture, internments, and even extrajudicial executions, fell mostly upon the backs of merchants, the wealthy, and large Albanian families who possessed considerable quantities of gold in coins, jewelry, etc., which they had accumulated through the sweat of their labor over the years, or had inherited.
At this time, many Albanian merchants and wealthy individuals, in order to save whatever they could of their wealth, began to break up their gold, converting it into cash. But even for this method, the communist government of Enver Hoxha found a “remedy,” and in 1946, it issued the decree-law for the exchange of currency, through which all Albanian citizens were obliged to present themselves to the branches of the Bank of the Albanian State to exchange their money. The maximum amount allowed to be exchanged per person or head of the family was up to 5,000 francs. And any additional amount exceeding this sum was confiscated by the state without the right of return.
Likewise, in that decree-law, which entered into force immediately on July 11, 1946, and about which the communist government of the time stated, among other things: “The removal from circulation of the old currency, which we inherited from the fascist occupier, and its replacement with the new currency of the Bank of the Albanian State is a step forward towards the recovery and strengthening of our economy, it is a step of great importance for the good of the people who from now on will have their own currency,” strict punitive measures were also clearly sanctioned for all those citizens who would hide their income, or who would give their money to others to exchange.
They would be labeled as saboteurs and would be referred for trial to the Supreme Military Court. These alibis used by the communist government of Enver Hoxha at the beginning of its rise to power, which under the guise of reforms that were propagandized as being undertaken “for the increase of the people’s welfare,” made possible the confiscation and extortion of the gold and money of all those wealthy Albanians who had built their wealth through sweat or had inherited it from their ancestors. Regarding these methods, which the communist government of Enver Hoxha formalized through the approval of several decree-laws by the People’s Assembly of that time, the following article, which is excerpted from the newspaper “Bashkimi” dated July 15, 1946, and which we are publishing with some abbreviations, speaks.
Newspaper “Bashkimi”: A sound currency for the people
Another important measure for the good of our people has been added to the great reforms and other measures that the People’s Power has taken so far. The removal from circulation of the old currency, which we inherited from the fascist occupier, and its replacement with the new currency of the Bank of the Albanian State, is a step forward towards the recovery and strengthening of our economy, it is a step of great importance for the good of the people who from now on will have their own currency, a secure, strong currency guaranteed by our People’s Power and supported by the economic power and the money of our country, as well as by the gold reserve held by the State Bank.
The new currency of the Bank of the Albanian State will be exchanged at a rate of 100 old francs, equal to 20 new francs. The old small coins of 20 francs and below will remain in circulation, all with a value reduced fivefold. The exchange begins today and ends at midnight on July 14, 1946; after this date, the old 20-franc notes will no longer be valid. The exchange, according to the provisions of Decree-Law No. 265 and the Order of today’s date from the Ministry of Finance, is carried out at the branches of the Bank of the Albanian State, or at the exchange offices opened specifically for this purpose in centers where there are no bank branches.
“For exchanging money, the sugar ration cards are also needed”
Every head of the family, provided with the sugar ration card, presents to the bank branch or exchange office the amount they possess and receives in return the corresponding amount in new currency. For the peasants, during these times of major agricultural work, our Power has foreseen to facilitate them, arranging that on behalf of the village, only one person, who will have along with the sugar cards also a complete list of all the families that will exchange money, will exchange the money. With the reduction of the currency, our Power has foreseen to reduce proportionally the prices of all commercial goods, all current and overdue taxes, debts, rents, public and private services, salaries of civil servants and workers’ wages, and any other financial transaction.
With this measure, the equilibrium of our market and all financial relationships remain intact. In a word, this operation brings no loss to anyone, only the great benefit that from now on the people will have in their hands a valuable, secure, and guaranteed currency. The worker, for example, with the wages he will receive from now on, will be able to meet, for the time being, exactly the same needs as he met with his previous wages before the currency exchange. And so on for the civil servant, the peasant, the merchant, the craftsman, and every other person. The Order of the Ministry of Finance provided that for each family, the immediate exchange would be made for up to 5,000 francs in old banknotes; any excess exceeding this amount would be placed in an interest-bearing deposit.
For the needs of agriculture and reconstruction, these deposits will begin to be returned after the end of the exchange period. The modalities of the exchange will be specified in detail by a special order of the Ministry of Finance. This shows that our Power is always thinking and acting for the good of the people with this measure, which aims for the reconstruction of our country to continue to progress as quickly as possible, thus ensuring the people a happier and more prosperous life. In this way, there will be more schools, hospitals, bridges, roads, and agriculture will be increasingly improved for the benefit of our countryside.
“Whoever hides money, to the Military Court as a saboteur”!
Against those who will try to hide money by giving it to others to exchange, with the aim that the excess amounts do not go towards the benefit of the people for the reconstruction of the country, as well as against those who will accept to exchange someone else’s money, our People’s Power will take strict measures, referring them to the Military Court as saboteurs of the Power. Also, against those who will try to disrupt the market by refusing to put their goods up for sale, our Power foresees, even for these, taking strict measures, designating them as saboteurs of the Power.
For such an important measure for the recovery of our currency, for the strengthening of the economy, and for the reconstruction of our country, all organizations and the entire people must mobilize so that the exchange is carried out as soon as possible and as fairly as possible. The issue here also arises for the peasants who, being far from the centers must be informed as soon as possible about such a measure, so that they do not end up with unexchanged money by the set deadline.
“The heads of the swindlers will be cut off”
It is in the high interest of the people and the homeland that the heads of the swindlers be cut off and that their place be shown to all those who will try to sabotage this important measure, either by deceiving the Bank or by speculating in the market. Not only must the market have all kinds of goods, but also measures must be taken to ensure that prices do not rise in contradiction to the spirit of this measure.
Above all, the interest of the people is paramount, and the people must achieve this by assisting their Power in this great undertaking for the good of our country. The reforms and measures taken so far by the Power have given the people many opportunities for a happier and more prosperous life. The people must safeguard these victories and carry them through to the end alongside their People’s Power.
The Decree of the Assembly for the implementation of the currency exchange law
Decree No. 94, dated July 11, 1946. The Presidium of the People’s Assembly. Pursuant to Art. 54 of the Statute of the People’s Republic of Albania; upon the proposal of the Government. Decrees: The implementation of Decree-Law No. 265, dated July 11, 1946, on the exchange of banknotes and currency checks issued by the National Bank of Albania and taken over by the Bank of the Albanian State, as well as currency checks issued by the Bank of the Albanian State, with the title and content as follows:
Decree-Law No. 265, dated July 11, 1946, on the exchange of banknotes and currency checks issued by the former National Bank of Albania and taken over by the Bank of the Albanian State, as well as currency checks issued by the Bank of the Albanian State.
Article 1
Withdrawn from circulation are: Banknotes of 20 and 100 francs put into circulation by the former National Bank of Albania and taken over by the Bank of the Albanian State. Currency checks of 20, 100, 200, 500, 1000, 2000, and 5000 francs issued by the former National Bank of Albania and taken over by the Bank of the Albanian State. Currency checks of 100, 200, and 500 francs issued by the Bank of the Albanian State on the forms of the former National Bank of Albania and on its own forms.
Article 2
Banknotes and metal coins issued by the former National Bank of Albania of 5, 2, 1, 0.40, 0.20, 0.10 francs remain temporarily in circulation at the following values:
– 5 Albanian lek for 1 franc
– 2 Albanian lek for 0.40 francs
– 1 Albanian lek for 0.20 francs
– 0.40 Albanian lek for 0.10 francs
– 0.20 Albanian lek for 0.05 francs
– 0.10 Albanian lek for 0.01 francs
While the other fractional metal coins lose their legal tender status for circulation.
Article 3
The Bank of the Albanian State is authorized to issue, as a replacement for the banknotes mentioned in Article 1, new banknotes with denominations of 500, 100, 200, and 5 francs. The deadline and the starting day of the exchange for all of Albania will be set by the Ministry of Finance. After this deadline, the banknotes mentioned in Article 1 lose their legal tender status for circulation.
Article 4
The exchange rate of the old banknotes for the new currency of the Bank of the Albanian State is set at 5 to 1.
Article 5
For the purposes of this Decree-Law, as of the first day of the exchange, all financial relations, such as the prices of goods of any kind (industrial and agricultural), public and private services, rents, salaries, various debts and credits, financial income and expenses of any kind, taxes, and any type of outlay, are considered automatically reduced in proportion of 5 to 1.
Article 6
The exchanges will be carried out at the branches of the Bank of the Albanian State and at the exchange offices that it will establish for this purpose. This exchange, with the exception of justified cases, must be compulsorily carried out at those exchange centers located closest to the usual place of residence of the bearers, and will be conducted according to modalities to be specified by a special order from the Ministry of Finance.
Article 7
The exchange of old currency for that of the new issue shall be carried out immediately when the total sum presented for exchange does not exceed 5,000 francs (equivalent to 1,000 francs in value in new currency) per family. When a person presents for exchange an amount exceeding 5,000 francs, the excess is deposited with the Bank of the Albanian State against the issuance of a deposit certificate in the name of the holder. The excesses that exceed this amount are held in interest-bearing deposits and will be used for reconstruction works.
These deposits will be returned within a period to be determined by an order of the Ministry of Finance. For the needs of agriculture and reconstruction, these deposits will begin to be returned immediately after the end of the exchange period. The modalities of return for each case will be specified in detail by the Ministry of Finance. State Entities, State Enterprises, Cooperatives, Trade Unions, and Political Organizations are not subject to the profit rates.
Article 8
Deposits created at the Bank of the Albanian State (current account deposits, savings deposits, temporary account deposits, uncashed payment orders, checks, etc.) are subject to the limitation of Article 7 of this Decree-Law, as far as withdrawals are concerned. When a person holds more than one account at a branch, these are considered as a single deposit, and the interested party may withdraw from them up to the total amount of 1,000 francs in new currency. Deposits opened at different branches of the Bank by the same person are also considered in the same way.
Article 9
Holders of bank checks in francs issued by the former National Bank of Albania must present themselves for exchange at the branches of the Bank of the Albanian State within the banknote exchange period. Upon the expiration of this period, the holders lose the right to reimbursement. These are subject to the limitation of Article 7.
Article 10
The Ministry of Finance is charged with determining, by a special order, the new exchange rates that the Bank of the Albanian State will apply in relation to gold and foreign currency.
Article 11
Anyone who exchanges or attempts to perform exchange operations on behalf of another, as well as anyone who exchanges or attempts to exchange through another, in addition to the confiscation of the banknotes, shall be referred to the Military Court as a saboteur of the power, based on Law No. 21, dated December 15, 1944. Likewise, all those who violate the deposits of this Decree-Law, as well as the orders that the Ministry of Finance will issue regarding the implementation of these provisions, shall be considered saboteurs of the power and shall be tried by the Military Courts.
Article 12
This Decree-Law enters into force immediately.
President Secretary
Omer Nishani Sami Baholli
D.V. D.V.
Tirana, July 11, 1946.
The communist regime also confiscated foreign currencies
Alongside the confiscation of the gold and money possessed by Albanian merchants and the wealthy in the first years after the end of the War, the communist government of Enver Hoxha, “within the framework of reforms and measures taken for the increase of the people’s welfare,” took care to also collect all foreign currency, which at that time was found mainly in the hands of hundreds of foreign citizens who had remained in Albania, such as: Italians, Germans, Greeks, Macedonians, Serbs, Poles, Austrians, etc. (most of whom had been arrested and were in prisons), as well as Albanian merchants who over the years had traded with various European countries and beyond.
For example: Greece, Italy, Yugoslavia, Germany, France, England, Turkey, the USA, Argentina, and even far-off Japan. All the currencies of these various countries, which, as mentioned above, were in the hands of Albanian merchants, the communist government of Enver Hoxha managed to collect through a special law it issued at that time. Through that taxative (compulsory) law, it significantly lowered the exchange rate of foreign currency when exchanged for the domestic Albanian currency.
Likewise, the decree-law that forced Albanian citizens to exchange no more than 5,000 old francs in exchange for the new currency issued at that time by the Bank of the Albanian State (any money exceeding this amount was immediately confiscated) was also valid for foreign citizens who were in Albania at that time.
In this regard, the decree-law of the Presidium of the People’s Assembly dated July 11, 1946 (signed by Chairman Omer Nishani and Secretary Sami Baholli), as well as the order of the Ministry of Finance, which at that time was headed by Minister Ramadan Çitaku, had a special article stating: “Private foreign nationals shall present themselves with their temporary residence permit.” / Memorie.al
