THE CONSEQUENCES OF FIRST WORLD WAR ON THE DEVELOPMENT OF BANKING IN THE CITY OF NIŠ

Abstract

The zest in thedevelopment of monetary institutes of Niš during the end of the 19th and the beginning of the 20th century AD was temporarily interrupted by Balkan Wars. However, the Great War brought not only interruption in the development, but also a great cost of war, followed by a detoriation of property and perennial termination of work. Portfolio of monetary institutes in Niš was buried in Trstenik, but due to the three-year exposure to atmospherics and wastewater, it was significantly damaged. For those reasons, most of the institutes were unable to completely restore the conditions of pre-war business. The additional problem for the banks of Niš was that besides banking, those banks were involved in trading, mortgage and industrial business and owned factories, water-mills, shops, buildings and storages. Those assets were utilized by Bulgarian occupationswithoutreimbursement, while Austro-Hungarian troops provided symbolic reimbursement. Therefore, the monetary institutes of Niš suffered great damage during the First World War. At the end of the war, it took banks several years to reach the pre-war level of business, which was aggravated not only by the staff and material damage banks suffered, but with the prolonged period for charging the damage reimbursement, the different terms of operation, high inflation and the general lack of capital. Due to the suffered damage, two of banks in Niš were unable to proceed with business. The Bank of Niš fused with General Bank in Belgrade and became a part of branch office in Niš, while Serbian-Jewish Trading Cooperative liquidated its business.