The "confusion" of Albanians with the expression of the real value of money seems to date even earlier than in 1964-'65, when the old lek was replaced with the new lek.
Determining a new course for the Albanian currency has been a practice followed immediately after the Second World War in Albania. In this period, with the argument of the fight against inflation, monetary operations were undertaken that reduced the amount of banknotes in circulation by more than 5 times. Within 3 years, at least 3 times the Albanians have faced the change of the money rate, taking the money they owned and giving them other money, with a new rate.
Iljaz Fishta and Veniamin Toçi have analyzed in their studies in detail the monetary operations undertaken in the first years after liberation in Albania, writes Gazeta Shqiptare. After liberation, there were 379 million 808 thousand 895 Albanian francs in circulation in Albania in the form of banknotes. The regime suspected that a large amount of currency notes had been taken out of the country and could be used for various purposes, including financing the overthrow of the government.
The first operation, the stamping of money
In June 1945, the special ordinance on the stamping of banknotes and checks of the former National Bank of Albania would be published. Based on this ordinance, banknotes of 20 and 100 Albanian francs were stamped, as well as checks and coins issued by the National Bank.
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The seal that was used had the shape of a rectangle and inside it contained an eagle with a star and the words "Albanian State Bank". Only banknotes with a denomination below 20 Albanian francs were excluded from the stamping.
The stamping of the money would be done in a short time, 10 days, from June 29 to July 8, 1945. This was the duration of the stamping of the currency for the whole country.
Based on the ordinance, currency exchange centers were included in three zones with certain deadlines.
A separate area included the main centers. This included the districts of the center of Durrës, Berat, Elbasan, Gjirokastra, Korça, Shkodra, Tirana and Vlora. For these districts, the exchange was scheduled to take place from July 4 to 8, 1946.
The border districts constituted another area which included Bilishti, Erseka, Vithkuq, Konispol, Kukësi, Libohova, Librazhdi, Luma, Peshkopi, Pogradec, Thethi, Përmet, Saranda, Puka, Zerqani and Delvina.
A third area included the districts of Ballsh, Burrel, Fier, Gramsh, Himarë, Kavajë, Kotë, Krujë, Lezhë, Lushnje, Peqin, Shijak, Mirdië, Tepelënë and Këlcyre.
The currency exchange for these districts was scheduled to take place from July 4 to 8.
The above division gave preference to border areas for the exchange of stamped coins. For these areas, it was predicted that the exchange would start earlier and be completed in a shorter period.
"This was intended to cut the way for the smuggling of banknotes from abroad. At the same time, the division into zones and the creation of many centers for the exchange of banknotes were aimed at the action being carried out as quickly as possible without obstacles of a technical and organizational nature" is written in the economic study of Fishta and Toçi.
And in fact, the practice of stamping was not that of putting money in front of a stamp but exchanging it for stamped money that had a new rate. Stamping of the coins was done at the printing press of the State Bank and in 14 other printing presses of the country that were mobilized for this issue.
At the end of the stipulated period, the banknotes and checks that would not be presented for stamping were considered worthless and, as a result, would be out of monetary circulation.
More than 20% of the currency in circulation remained outside the seal, and here it was also about the banknotes with denominations below 20 Albanian francs.
Avoidance attempts
And in fact, this would create spaces for hiding. In this period, there is no shortage of attempts to avoid declaring the amount of money that people owned, and as a result, the practice of distributing money among family members and acquaintances was followed.
Also, the phenomenon of purchases was found as a way to convert money into goods, even in many cases making the goods more expensive (and in this case, the cost would still be lower than the amount of tax that would be applied on them).
Another practice was that of "breaking" money; exchange with small denomination banknotes that were not subject to exchange.
The balance of this amount shows that 101 million 54 thousand 754 Albanian francs were not submitted for stamping, which as a result of not being stamped, went out of monetary circulation. This amount was equal to 1/4 of the banknotes and check-coins in circulation.
From the 384 million and 396 thousand francs that were in circulation in December 1944, as a result of the effect of the sealing, the amount of currency in circulation decreased to 286 million and 100 thousand Albanian francs.
73 thousand 87 people appeared at the exchange centers! 15 thousand 818 people were from what was considered the rich class, 9950 were workers, 5 thousand 26 of them were craftsmen and 26 thousand 574 were peasants.
In addition to the effects that this measure would have in hitting merchants and those who were considered enemies of the new regime, the reduction of the amount of currency in circulation through the exchange system with stamped money and a new exchange rate, according to the researchers, brought as an impact directly mitigated inflation and partially stabilized the situation in the country's market. Yes, this first measure would only be a preparatory measure for the second operation, which would be even stricter.
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The second operation, the replacement of old money with new money
Almost exactly one year after the first monetary operation, the communist regime would launch a second operation, which this time would further reduce the amount of money in circulation; decrease by more than 5 times the quantity.
On July 11, 1946, the Presidium of the People's Assembly approved the decree-law "on the exchange of banknotes and checks issued by the former National Bank of Albania" and stamped by the Bank of the Albanian State, as well as checks issued by the same bank. In this way, the stamped money was also removed from circulation, but this time a new banknote was given in exchange, with a new exchange rate.
Based on the law, banknotes of 20 and 100 Albanian francs that were stamped, checks of 20, 10, 200, 500, 1000, 2000 and 5000 francs issued by the former National Bank of Albania and stamped by the Bank were removed from circulation. of the Albanian State, the check-coins of 100, 200 and 500 francs issued by the Bank of the Albanian State on the forms of the former National Bank. These coins were replaced by new coins of the Albanian State Bank with denominations of 5, 20, 100 and 500 francs.
It was foreseen that the banknotes and coins of 5, 2, 1, 0.40, 0.20 and 0.10 Albanian francs issued by the former National Bank would remain in circulation temporarily. Other broken metal coins lost their legal circulation value, so they were declared invalid and could not be used for purchases or exchanges.
By law, it was determined that the exchange ratio of old currencies with new currencies was 5 old Albanian francs equal to 1 new franc. With this ratio, other coins that were not removed from circulation were also evaluated. Prices of goods, service charges, building rents, labor wages, debits and credits, etc. decreased with the same ratio.
"Deposit for reconstruction works" and "anti-informality" through the sugar cane
The amount of money that each family was allowed to exchange was up to 5 Albanian francs. The exchange was made by one family member for the whole family, presenting the sugar supply slip as proof. This measure was intended to avoid the presentation for exchange for the purpose of evasion of more than one member of a family.
The surplus over the specified amount of 5000 Albanian francs had to be deposited in the State Bank in the "Deposit for reconstruction works" account
The exchange of the old currency with the new currency took place from July 15 to 24, 1946 at the same time throughout the country.
Punishment of offenders
Those who violated the ordinance or attempted to maneuver to avoid the involuntary deposit had their money confiscated and brought before a military court.
Even on July 17, there would be a death sentence in Tirana on the charge of distributing currency for exchange to other people. Meanwhile, on this day, 6 people would be sentenced to imprisonment from 2 to 30 years on the charge that they were trying to avoid the ordinance. Similar decisions were made in Shkodër, Durrës, Elbasan, Korçë, Vlorë, etc.
With the exchange made at the ratio of 5 francs = 1 franc, the amount of currency in circulation decreased by 5 times. Indeed, with the scheme that followed, the diminution of currency in circulation was even greater.
In this "operation" 9.5 million francs were not presented for exchange, which with the new exchange rate were 1.9 million. More than 11 million francs or 3.4 million at the new exchange rate was spent as "Deposit for Reconstruction Works". This amount constituted what the ordinance described as "surpluses" over 5000 francs that were exchanged for each head of the family. A total of 26.6 million francs remained out of circulation, or 5.3 million at the new exchange rate.
Withdrawal of the franc from circulation
Still not "accustomed" to the new value of the money they had, a year later from the second monetary operation, the Albanians would again face a request for the replacement of the money they had.
In 1947, the decree-law would be approved that would remove the banknotes called Francs from circulation. The decree of 1947 also provided for the emission of a new show. In this way, the basic unit of currency in the country would be set to the Lek and consequently the franc would no longer be used. The new exchange ratio that was established in 1947 would be 1 franc of 1945 = 9 Lek of 1947. Through this move, only Lek banknotes would remain in circulation. The 10, 50, 100, 500 and 1000 ALL banknotes issued in 1947 had the same symbolism (the new coat of arms of the Albanian state and a soldier) except for the number and color.
The reform that brought the "new lek-old lek" confusion
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How was it decided in 1922 that the national currency would be called "Lek"
After a period of "stability" in 1964, another legal movement would be undertaken again where what was named as the "new lek" would be issued. In 1965, a new lek would be issued, essentially removing a zero from the coins. Due to the similarity, in appearance, the Albanians would not adapt to the change in the value of the banknote and would continue to name them with the previous value, a phenomenon that still continues today.
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