The KSCS government withheld twenty per cent of the notes submitted for tagging as a compulsory loan to the state.

In the final days of World War I, Austria-Hungary disintegrated and its former territories that were mostly inhabited by South Slavs were organised into the short-lived State of Slovenes, Croats and Serbs.

Austro-Hungarian Bank honoured claims under the bonds without exception by printing the required banknotes, increasing the supply of currency and thus inflation.

[6] In late 1918, the SCS finance minister Momčilo Ninčić sent a committee (Milko Brezigar, Velizar Janković [sr], and Milan Marković) to Vienna and Budapest to find out if it was possible to stop the printing of the Austro-Hungarian krone.

The governor of Austro-Hungarian Bank, Ignaz Freiherr Gruber von Menninger, told the committee printing would continue to avoid fuelling a potential Bolshevik uprising in the Republic of German-Austria.

Stamps were applied to several areas of krone notes, and had varying contents in several languages, including German, Hungarian, and Italian.

One hundred million stamps and accompanying receipt forms were printed in Vienna in exchange for three railroad goods wagons—two loaded with flour and one carrying bacon.

The loan was not repaid in cash; its terms were modified several times until 1930, when it was determined the receipts may be used to pay taxes or fines.

These calls were based on assertions the krone was enemy money that was used to cause destruction and death in Serbia.

Some politicians from the territories formerly belonging to Austria-Hungary, including Nikola Winterhalter, Vitomir Korać, Janko Šimrak, and Ivan Ancel, shared this view.

The government rejected this approach, saying it would wipe out the private financial property of a large part of the population, risk an economic crisis, and be politically problematic.

[23] This rate was used, in a limited extent, to exchange krone for dinars in parts of Bačka, Banat and Baranja, where both currencies had been in circulation before the official swap.

This was because the KSCS had not yet legislated a national bank into existence and Ninčić wanted to avoid delays in replacing krone notes.

Shortages of ink, paper, and spare parts, as well as a governmental collapse and the replacement of Ninčić with Vojislav Veljković [sr], caused further delays.

At the same time, prominent Slovene politician Gregor Žerjav conceded to the 4:1 krone-to-dinar exchange rate but requested the krone remain a legal currency within the KSCS.

[28] The withdrawn krone notes were stored in the Petrovaradin Fortress until they were handed to German-Austria pursuant to a special agreement.

[29] The dinar-krone notes were gradually replaced in 1922 with new designs without krone denominations, causing dinar to be the sole legal tender in the KSCS by 1 January 1923.

[30] The issue of the currency swap rapidly grew into a political question of whether Serbia plundered inhabitants of the former Austro-Hungarian territories within the KSCS.

[31] There were and still are conflicting views about the effects of the introduction of the Yugoslav krone and its exchange for KSCS dinar at the rate of 4:1.

[13] According to historian Marko Attila Hoare, the exchange caused a loss of 1.4 billion krone to the former Austro-Hungarian lands and increased Serbia's purchasing power at their expense.