Economy and Business

by Dalibor Brozović
(Excerpts from the book "Kune and lipe - Currency of the Republic of Croatia, Zagreb, Croatian National Bank)

Any change of currency is always a significant event in society and the national economy. Often enough it has its own political importance too. All this is particularly strongly reflected in a small country such as the Republic of Croatia because money is extraordinarily significant for every country. Currency is the foundation of national economies but also it signifies national sovereignty. It is a mirror of the country it belongs to. The symbolic role a currency has is one of its vital characteristics while its main feature is the actual name of the currency. That is why any change in the name of a currency often enough inspires great interest in society. Often enough, lively and sharp debates emerge. Various and odd names from where and whence ever are proposed. This goes without saying that debates, as most debates do, arouse society but at the same time can be exploited and misused in political struggles which may exist within that society. It is not unusual that just that happened here in Croatia. In fact, since its independence, this has occurred on three separate occasions ...

The first Croatian currency was the silver denar or a little more rarely, the poldenar (half denar). This currency was forged from the last decade of the XIIth century and up until the seventh decade of the XIVth century, therefore for less than 170 years. Until the mid fourth decade of the XIIth century, these denars were forged according to a foreign sample (so-called Croat "frizatics"). Since then the reformed and original denars were forged and known as the banovac or banice. This was the truest native Croatian currency ... Croatian bans (dukes) Pavao Šubić and his son Mladen ruled in Bosnia as well and as such laid the foundations for the currency to be forged in Bosnia. The Šubić's released silver currency, dinars and the groschen for over forty years at the turn of the XIIIth and XIVth centuries. This currency continued on through the rule of the Bosnian bans and kings, Stjepan Kotromanić, Tvrtko, Tvrtko II, Tomaš and Stjepan Tomašević who, with the exception of brief pauses, forged their currency for about 140 years during the XIVth and XVth centuries up until the fall of Bosnia.

The dinar was forged the most and often the poludinar (half dinar). King Tvrtko even forged the dinar in the town of Kotor, which towards the end of his rule, recognised his authority. The dinar was forged by the most eminent Croatian rulers including Split Herceg and great Duke, the Bosnian, Hrvoje Vukčić Hrvatinić (turn of the XIVth and XVth centuries), the Slavonian lord and later Bosnian king, Nikola Iločki (in the seventies of the XVth century), and Count Nikola Zrinski (turn of XVth and XVIth centuries). Naturally, they forged other denominations too, but mostly the dinar. And finally, the longest history of money forging in Croatia was enjoyed in the Republic of Dubrovnik from 1337 until 1803, i.e. virtually half a century. Four denominations were actually forged and their common name was the dinar, but this also included the poludinar (half dinar), dinarić (tiny-dinar) and the poludinarić (half tiny-dinar).

If we take all these details into consideration, it can safely be said that one time, the Republic of Croatia had the dinar as its temporary currency. Something that tied medieval Slavonia, or rather, north Croatian bans in general, the Šubić's, Hrvoje and the Zrinski and all the dukes of the Dubrovnik Republic cannot be excluded from native Croatian tradition. It gave the Croatian dinar its historical foundation and it took on the attribute of being the temporary currency within Croatia. ...

Later the newly introduced kuna (marten) and lipa (linden) were subjected to various objections, most often at the very name, based on two arguments: that the name was not founded on ancient Croatian tradition but rather that it only ties us to the Independent State of Croatia 1941 - 1945, which is detrimental to Croatian interests because it threatens Croatia's reputation in the modern world which is founded on the principles established in the anti-fascist war against the Axle forces 1939 -1945. ...

The history of the kuna relates to the original role of the kuna's fur as a method of payment in kind, primarily for various gifts ... A receipt exists from the island of Cres dating back to the XIth century. There is confirmation of this practise which can be traced until the end of the XVIIth century, for example, 1630 in Rakovac when "mardurinas pelles 2", i.e. two kuna pelts were paid; in 1623 in Vrbovec "...each house this summer owes us one kuna pelt..." and in 1699 "... each summer one good pig and a kuna..." From its original role the kuna later developed into its later function. ...

As soon as that good which serves as a method of payment in kind or "natural" currency, usually in various "legal" denominations, is on the way to becoming accountable money. There has already been mention of how medieval Russia used the kuna (originally in fact, kuna pelts) became the accountable unit of money. This too happened in Croatia. When kuna pelts gradually became accepted as a certain monetary value, as described in Smičiklas or in Fabry's historical reviews, "the currency exchange rate of 1224, noted that 1 kuna pelt was worth 10 dinars" (p. 78), this then creates the conditions where the actual pelt ceases to be necessary for payment and the word kuna becomes the expression for a certain monetary equivalent. This development occurred time and time again in various corners of the world - from the original source of payment in kind just the actual word for the payment remains. ...

The kuna was therefore portrayed for virtually a century and a half on the banovac, the most representative money in Croatia's past. The money was of good quality and reputable. It was even copied in eastern Srijem and Hungary and even in Transylvania where the currency was called banales... The fact is that the word banica in folk tradition survived to this day, that is, over seven centuries after the withdrawal of the banovac. It would truly be unusual that the focal characteristic of an individual such currency does not find its reflection in the informal title of the same coin. The 1,000 dinar note issued Underlined by the National Bank of the Kingdom of Serbs, Croats and Slovenes on 30 November 1920 portraying St. George as he is killing the dragon was in circulation for some ten years only however, the Slovenes still unofficially refer to any 1,000 dinar note as "Georgie", and even now to the 1,000 tolar note. The existence of, for now, unrecorded medieval Croatian reference to the banovac with the word kuna is witnessed by the Latin names which preceded it. It is highly unlikely though, that the Latin names would have been original - this would be a very untypical example of learned nominations.

Sometimes there is talk that the portrayal of the kuna on the banovac was taken from the renown Slavonian coat of arms where the central figure is the kuna in flight between two rivers. In fact the opposite is just the case - Klaić notes (according to Kukuljević's edition), the Charter proclaimed by King Vladislav Jagelović II, ordained Slavonia (the then Slavonia and not today's), with the coat of arms in 1496 - which is more than a century after the disappearance of the banovac... That means that once it had been forgotten that the kuna portrayed on the banovac originated from the initial payment system of kuna pelts, with time, it was believed that the kuna portrayed on the banovac was a form of state symbol and this belief continued on even after the banovac no longer existed. It is necessary to mention just one more thing, that this same coat of arms was in ancient times occasionally used not only as the historical coat of arms of Slavonia but also as that of the entire Croatian kingdom... ...

The history of the Croatian kuna from its use as a method of payment in kind through to its abstract use of accountable money and on to its proper use as a currency unit was never an exception, i.e. an isolated example of its development. In many places the development of its currency began in just this way, where firstly payment was made "in kind" with pieces of metal (gold, silver and other metals), with measured weight. At the next level, they are founded (later forged) plates with certain figures or symbols which guaranteed the weight of the coin. As such the oldest Roman aes rude a quite heavy rectangle bronze plate portraying an ox (treasure!). The weight measurement often becomes the title of the currency unit and when the appropriate money is no longer forged, that title remains as an accountable abstract unit to determine the relationship between various levels of money. This traditional name then is often taken as the name of the modern monetary unit and paper and forged coins then carry this name... ...

It can safely be said that the kuna as the name of a monetary unit is justified in many ways in Croatian monetary and fiscal tradition during one thousand years. The kuna as a complex occurrence has nothing its equal in Croatian economic history while in recent centuries the kuna as a figure or name did not have any role outside Croatia with regard to money events. This then is something historically specific to Croatia and is worthy of respect. For this reason, the kuna as the name of Croatia's currency is itself imposed upon us. The only other specifically Croatian historical names for our currency could be the banovac/banica, coin or conditionally Jelačić's križar (but even this is a translation from the German Kreuzer, Kreutzer). However, the term coin, also has several meanings and can refer to any diminutive coin and surely one must admit that the terms banovac/banica and križar aren't exactly the best solutions for a modern republic on the verge of the XXIst century. Apart from that, all these terms are a lot more difficult to pronounce than the kuna which is so much simpler especially with regard to tourists and the outside world who would probably mispronounce the other terms and refer to them as the banovak/banika.

The term kuna is not tied exclusively to medieval times nor to the Banovina period or the Second World War. In fact, it ties several eras while historically it is neutral yet characteristic and representative of Croatia. As such the question posed at the end of this introduction can now be answered documentatively and argumentatively. Firstly, the term is well founded on Croatian tradition and then the regime during World War II just drew it out of tradition just as it inherited the National Anthem or the traditional tri-colours and coat of arms which then served as the basis for the new state flag and coat of arms. These are the facts.

In memory of the conversion of Croatian dinars released by the Croatian Finance Ministry and the kuna and lipa released by the Croatian National Bank, a gold trade coin is being prepared for release. Its head will portray Ruđer Bošković as created by Zlatko Jakuš on all the currency denominations of the Croatian dinar along with the title "The Croatian Dinar 1991 - 1994". Bošković was a multi-faceted great - a mathematician, astronomer, physician, philosopher, theologist, diplomat and poet but never particularly bothered himself with finances but now with his figure on this Croatian money he will always be tied to Croatian finances. The Croatian National Bank is to release a gold trade coin in keeping with traditional international standards (diameter of 20 mm, weight 3.40 g of 0.986 carat gold), its head will carry the title "1 dukat". The gold coin was fashioned by Kuzma Kovačić...

Croatian Government Bulletin