Road to an independent central bank
Calls for an independent central bank already appeared in the records of the county assemblies in 1790, although they were more pronounced in the demands of the reform age. Credit, or the Basics of Happiness authored by István Széchenyi (1830) dedicated a separate chapter to the need for a national bank. “As far as the establishment of a national bank is concerned, there are plenty of good examples; we have seen both positive and negative examples from other nations, therefore we can work out in advance what we should accept and what we should be aware of in adapting it to our country” he stated.
Point 9 of the 12 points demanded in 1848 was as follows: “A national bank.” The banknotes of the Austrian National Bank, founded in 1816 (which concentrated its economic development activities mainly on Austrian territories), were in circulation in Hungary at the time, and had to be accepted since 1800. Besides the Austrian National Bank, another bank operated in Hungary, the Hungarian Commercial Bank of Pest, which was established in 1841. This bank issued the 1 and 2 forints during the Revolution, after Kossuth failed to reach an agreement with the Austrian National Bank, which had the exclusive right to issue banknotes.
The Compromise of 1867 failed to settle the issue of the central bank. The Austro–Hungarian Bank was established after a lengthy debate in 1878 and became the joint dualist bank of the Austro–Hungarian Monarchy, after the restructuring of the Austrian National Bank. The bank was presided over by alternating Austrian and Hungarian governors, while the deputy was always provided by the other country. Its banknotes had a Hungarian and a German side. The denomination was also printed in small letters in other languages throughout the empire.
However, the issue of an independent Hungarian central bank remained on the agenda. “We only have banknotes... that are not controlled by our authorities... we have no independent national finances. We are a servant and fool of the money market in Vienna as well as the National Bank of Vienna. Nothing can save Hungary from this, but an »independent national bank.«” stated Mór Jókai in an article published in Hon (Nation) in September 1869. After the 1873 collapse, the issue of the independent central bank came up again in 1908, however, political crises repeatedly prevented the implementation of such plans.
Not only the common state, but the common bank ceased to operate after World War I. The Paris Peace Treaties provided for the establishment of an independent currency, which was accompanied by the foundation of an independent central bank. Until it was established, the Hungarian Royal State Note Issuing Institute was temporarily established on 1 August 1921 in the building of the OMB’s main institute in Budapest, at Szabadság square, with its professional staff, under the supervision of the Ministry of Finance, and in principle the Parliament. Even though it performed certain central bank functions, it still cannot be considered to be a classical central bank. It operated as an institution legally unrestricted to generate funds but dependent on the state and served the financial government. It did not issue banknotes but put into circulation state bonds issued by the state, which represented the contingent debt of the state. Meanwhile, the recovery and stabilisation programme continued with the involvement of international experts, and preparations for the establishment of the Magyar Nemzeti Bank were underway.
Source: Pesti Hírlap, Az Est, Népszava, Az Ojság,
Source: FSZEK Budapest Gyűjteménye, Zempléni Múzeum gyűjteménye, Budapest Főváros leltára