In the immediate aftermath of
World War I, a
currency union was planned to complement the
customs union between Danzig and the nascent Polish state. The
Polish National Loan Bank, Poland's provisional central bank, opened a branch to that effect in the city-state, while the latter's monetary needs were still served by the local branch of the
Reichsbank. Because of
hyperinflation in both Germany and Poland, however, that project failed to come to fruition, and it was abandoned in September 1923. The Bank of Danzig was created under the conditions of the stabilization loan coordinated by the
Economic and Financial Organization of the
League of Nations in 1923–1924, based on the successful precedent of
Austria a year earlier. It was established on with a capital of 7.5 million guldens, after the Reichsbank had ceased operations in the Free City on . Its investors were private businesspeople and companies, including a consortium of Polish banks. It soon started operations on . It issued the
Danzig gulden, which replaced the
Reichsmark which had been devalued by
hyperinflation. After the annexation of Danzig by the German Reich in September 1939, the
Reichsmark was introduced in Danzig and the Bank of Danzig was liquidated, similarly as the
Austrian National Bank had been following
Anschluss in 1938. The bulk of the bank's gold holdings, which served as currency cover and were mainly stored at the
Bank of England in London, were immobilized by the British government. ==Aftermath==