The hungarian thrift-crown

The thrift-crown was a unit of account adopted by Hungary in 1924. Its value in paper crowns was comupet daily on the basis of three international quotations. Its purpose was to mitigate some of the ill effects of the rapid depreciation of the currency: remove speculation, encourage saving, correct the debtor-creditor relationship, and provide a basis for tax valutation. The brevity of the Hungarian experiment nullified its userfulness to a large degree. It existed for only four month. During that period speculation continued and saving delcined. The over-valuation of the thrift-crown resulted in an over-correction of the removal of the more objectionable results of infaltion on the national economy. Further ecperimentation is necessary before a satisfactory formula for the required unit of account can be devised. Such a formula must of necessity vary with the various stages of the inflation and the inter-relation of domestic prices and foreign exchange rates.