KRONE. (I) The monetary unit of Norway and Denmark. Divided into 'co ore. It is based upon the gold standard, and at parity is equivalent to 26.799 cents. The pound sterling equals 18.159 kroner.
Notes are issued in Denmark solely by the National bank, and in Norway solely by the Norges bank. Statistics of these are shown below.
Like other neutral areas, Scandinavia did not escape the in flation of the World War and subsequent years, and as the table shows, the internal value of the krone continued to fall in both countries until early 1925, while externally the Norwegian and Danish exchange against New York began to pick up in 1924 By the end of 1927 both rates stood very nearly at parity, and by the middle of the following year the gold standard had been re established in both countries.
The recovery of the krone during the period 1924-27 caused grave concern in both countries, as for a time the effects of de flation were extremely severe. Trade and industry were seriously affected, and in their attempts to deal with the financial problems that arose the Government and the banks were beset with many difficulties.
In each country, the krone has had the post-war record of a currency that has undergone a moderate depreciation, which was at length arrested. At the expense of a temporary crisis the ground lost was regained. Depreciation was worse in Norway than Denmark, but in so far as the direction of the changes was concerned, the two countries moved upon almost exactly parallel lines.
(2) Formerly the monetary unit of the former Austrian em pire, in Czech KORUNA. It was divided into roo Keller, and was worth 20.26 cents. The equivalent with sterling at parity was kr.24.o2 to the pound, and from 1892 until the outbreak of the war, the krone was based upon the gold exchange standard, in that it was permissible to import or export gold, but the notes in internal circulation were inconvertible.
After the break-up of the Austrian empire in 1918, the krone or koruna became the monetary unit of Austria, Hungary and Czechoslovakia. In Austria it rapidly became worthless, being
quoted in Aug. 1922 at 0.0022 cent. It was then that the Gov ernment appealed to the League of Nations for help, and under the guidance and supervision of the League, the task of economic reconstruction was put in hand.
The krone was "pegged" during this period at 0.0014 cent, or roughly 3.4uoo of its original gold value of 20.26 cents. When reconstruction was complete, the krone was abandoned as being, at its new value, far too small a unit to be practicable. In its place vas substituted the schilling, introduced in 1925. This was fixed as equal to io,000 kronen or 14.071 cents, and until the Anschluss of 1938 was the monetary unit of Austria; after that event the schilling was demonetized and gradually withdrawn, German coinage and notes taking its place.
In post-war Hungary, the krone, known as korona, went through much the same experience, and came to much the same end. Here, too, after extreme depreciation, the League of Nations came to the rescue, and during reconstruction the korona was in Hungary, too, pegged at 0.0014 cent. The new unit adopted was called the pengo. It was fixed as equal to 12,50o koronen or to 17.49 cents, or 27.82 to the pound sterling. It is based upon the gold standard and is the monetary unit of Hungary to-day.
In Czechoslovakia, the koruna survived. Until 1921 the prob lems facing the Government proved insurmountable, and the Czech koruna rose and fell with the German mark on one side and the Austrian krone on the other. The year 1922 witnessed a recov ery—a recovery which was too rapid for the industrial interests of the country—and from 1923, the Czech koruna was stabilized at approximately 3 cents; ultimately settling down at 2.961 cents. In March 1926 the Czech koruna was legally stabilized between the rates cts.2.90 to cts.3.03, and in Nov. 1929 was stabilized at 164.24 to the pound sterling. In Oct. 1936 a further devaluation to the extent of 86% took place.