Juozas Paknys - the fourth Governor of the Bank of Lithuania


Today, 23 September, marks 138 years since the birth of Juozas Paknys (1883-1948), the last Governor of the Bank of interwar Lithuania. He was not only the last, but also the only Governor who had worked at the Bank of Lithuania from the very beginning. However, the held the highest position for a very short time. He became the Governor in 1939 during a historic turmoil and remained in the post for only a year. However, his contribution to Lithuanian banking history is enormous. So, who was he? 

Juozas Paknys was born on 23 September 1883 in Pakniškiai village (Rokiškis region), and he was one of 11 children. He studied at Jelgava Gymnasium where he acquired left-wing political views and he even founded a secret socialist organisation. He followed this path after graduating as well - he kept on gathering circles where he would explain Marxism. It might seem like a paradox, but he, a true socialist, joined a priest seminary in 1904. It is believed that he did so to avoid joining the Tsarist army because Russia was at war with Japan at that time. He stayed in the seminary for only a year. 

In 1905, Paknys joined the revolution that had started in the Russian Empire and organised rallies, strikes and demonstrations. He was even arrested and was sentenced to one-year imprisonment. 
In 1908-1912, he studied at St. Petersburg Institute of Commerce. There, he joined a society of Lithuanian students, was a member of the board and was an active member of the Social Democratic Party of Lithuania. After graduating from the institute, Paknys moved to Kaunas where he worked at the Bank of Commerce. In the summer of 1915, he joined the Lithuanian Scientific Society and moved to Vilnius. In 1917, Paknys took part in Vilnius Conference where he campaigned for Lithuania’s independence. When Lithuania gained independence, he was appointed the second government’s Minister of Nourishment and Community Service and later also became the fourth government’s Minister of Social Security. In addition, Paknys was one of the initiators of establishing a President’s institution. 
In October 1922, he was asked to join the already functioning Bank of Lithuania as banker practitioner. He remained there up until Lithuania’s occupation and the bank’s liquidation. In 1926, he was promoted to Deputy Governor and remained in this position until 1939. Interestingly, when the first Governor Vladas Jurgutis resigned in 1929, Paknys was the Acting Governor until the new Governor was appointed (Vladas Stašinskas).

In 1926, Paknys had to overlook the construction process of the new bank’s building and other internal matters, and he was also responsible for the inspection of divisions, the control of central accounting and the execution of estimates. Earlier, in 1924, he also had an important mission - negotiating a loan with the Bank of England. Interestingly, Paknys is the only person whose signature can be found on all of the litas banknotes issued during the interwar period.

Many have claimed that after Jurgutis’ resignation, Paknys was the actual Governor of the Bank of Lithuania. However, he only became the actual Governor on 25 October 1939. Sadly, it was rather late and the times were very dramatic. The war was raging on in Europe and people rushed to withdraw their deposits which resulted in an economic crisis. The loss of Klaipėda Region and regaining Vilnius were also a challenge to Lithuania’s economy. The value of litas was constantly deteriorating and it became practically impossible to regulate economic processes. 

Eventually, Lithuania was occupied by the Soviet Union in 1940 and Paknys unwillingly had to give up the bank to its new owners. On 17 September 1940, he was fired from his position as the Governor. Thus, he did not last in his post for even a year. However, while he was the Governor, he resisted the occupants as much as he could. One of such examples was a dialogue between him and Vladimir Dekanozov, the Special Representative for Lithuania. He tried to transfer Lithuania’s gold to the Gosbank. Paknys refused to do it, so Dekanozov told him: “When we are fulfilling the Soviet Government’s objectives, we do not leave the work unfinished, even if it means that someone’s head will have to roll.” To this, Paknys replied: “Yes, I know that in Lithuania, you have sufficient means to make anyone’s head roll. It is not that hard to do. Now, growing a head - that’s another thing entirely. By protecting the gold of the Bank of Lithuania, I am doing no harm to Lithuania’s or the Soviet Union’s economies. I am just protecting the stability of the litas.” After this conversation, the head of Paknys did not roll but he had to leave his post as the Governor. 

After he was fired, he worked as an adviser to the Minister of Finance for a while and then became Deputy Minister. During the Nazi occupation, until autumn of 1941, he worked as Deputy Minister of Finance at the Interim Government of Lithuania. The Nazis had even temporarily reinstated the Bank of Lithuania (though as a commercial one) and Paknys became its head again. However, the bank was liquidated in 1942. 

When he was fired, Paknys took part in anti-Nazi resistance and aided in the establishment of the Supreme Committee for the Liberation of Lithuania. In 1944, he retreated to Germany. He continued community work there, took care of refugees, took part in various commissions and so on. Paknys passed away on 3 January 1948 at the age of 65 in Reutlingen (Germany).