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Ex-money life: way from the Russian empire to the soviets

Credit slips, assignations, treasury and currency notes ≈ these are the names for once circulating paper money. Nowadays they are kept only in collectors▓ albums and named ╚bonds╩ i.e. ex-money. In 1897 the first hard currency ≈ banknotes entirely based on gold ≈ was put into circulation in Russia. Banknotes based on gold appeared as a result of the reform made by the Finance Minister Sergei Witte.

Each note has an inscription ╚State credit notes go about the Russian Empire together with gold coins╩. It was not necessary to go to the bank if one wanted to exchange some credit notes for gold, as it could be done in any shop. Paper money circulated together all in one with gold coins with nominal of 5 and 10 rubles. Still averaged citizens preferred to deal with safe and handy credit notes. Coins were of small size and could be easily lost.

State bank note with nominal of one ruble. Russia, 1898 [zoom (75k)]

In the beginning of 1914 the gold reserve of Russia was 1 500 million rubles. It guaranteed all the country money supply available at those times. Treasury notes had a nominal value of 1, 3, 5, 10, 25, 50, 100 and 500 rubles. The largest notes were decorated by the portraits of the Russian tsars from Peter I (500 rubles) to Alexander III (25 rubles) and people called them ╚Romanov╩ or ╚Nikolaev╩ ≈ by the name of the last tsar ≈ money.

Everything changed after the beginning of the First World War. Fast growing budget costs made the State bank end free change of notes to gold. Mintage of metal coins was stopped. By the end of the XIX century gold, silver and copper coins were gone.

To carry on trade the government decided to issue coins substitutes ≈ ╚money√stamps╩. They started being printed from blocks made for a series of postage stamps issued in 1913 when Romanov Dynasty celebrated its 300th Anniversary. ╚Money√stamps╩ were printed not on paper but thin cardboard. On the back side an inscription was made: ╚Goes together with a subsidiary copper coin╩ or ╚┘silver coin╩ depending on the nominal.

But inflation absorbed that strange money and soon paper ╚treasury signs╩ had to come in circulation. They were just paper with a forced rate of exchange. Alas, at that time only 10% of the emission had gold cover. The ruble▓s purchasing power was decreasing and by February, 1917 it amounted to 27 kopecks.

The Provisional government continued the policy of issuing fiduciary notes. Being in a great hurry, it did not wait for the samples of new money with democratic symbols and began to re-emit all the notes and ╚money-stamps╩ that circulated in the Imperial Russia. But inflation did not stop.

So when in June, 1917 the Provisional government emitted new banknotes the largest ones were 1000 rubles nominal worth. They have never seen such notes in Russia before! The notes had a picture of Tavrichesky Palace where at that time the State Duma was situated and people called them ╚dumki╩.

Notes with nominal of 250 rubles were also presented. They didn▓t have an image of Duma but symbols of a two-headed eagle and a swastika. A swastika is a sign of prosperity and richness in the ancient Greece and East that did not have an ideological meaning before it was used by fascists. But during the war and economic collapse the sign was uncalled.

Alexander Kerensky being a Prime Minister, new bank notes began being issued ≈ so named ╚kerenki╩ that had maximum cheap prime cost. They were printed on uncut sheets (40 pieces per sheet) from blocks for consular charge stamps, the phrase ╚consular charge╩ having been changed for ╚treasury note╩ ≈ without dates and numbers. An eagle in the notes was called ╚picked╩ as its wings were down. The new notes did not have late protection and were widely forged. Because of the poor appearance the notes were called ╚quass labels╩.

In October 1917 the Russian ruble purchase power was equal to 6√7 pre-war kopecks. The first decrees of the Soviet Government included the one on nationalization of all the banks and banking-houses. That decree declared all the notes emitted by previous governments available for circulation. In January 1918 the People▓s Bank of the RSFSR replaced the previous banks. Inflation speed decreased a little but not for long.

Currency notes were short of and in spring 1918 the Council of Peoples▓ Commissioners put new money substitutes into practice ≈ stocks and coupons of tsar loans, Loan of freedom issued by the Provisional government and also short-term liabilities of the State Treasure house and state interest bearing securities. These were the first money the Soviet system was able to issue. It is no wonder that they were received with incredulity by common people ≈ they did not want to settle in it and sometimes were committed to court in return.

On May 18, 1918 V.I. Lenin enunciated a project of money reform ≈ the new power had to emit new notes that should be technically better that the tsars▓ ones and substitute all the previous notes. The project was rational but the result turned out to be not so good. The first Soviet notes named ╚State credit slips╩ were put into circulation in 1918 in a hurry.

They were emitted from the old blocks prepared by the Provisional government and thus were ╚decorated╩ by a two-headed eagle deprived of crown, scepter and ball. They differed only by the date and signature of the bank executive G. Pyatkov ≈ and were called ╚pyatakovki╩ in common parlance.

State bank note with nominal of twenty five rubles. Russia, 1909 [zoom (72k)]

The official emblem of the RSFSR was set only in July, 1918. They tried to design the own currency with the Soviet symbols together with the emblem ≈ there was a competition for designers but all the works failed.

The first notes with Soviet symbols called ╚estimated signs╩ appeared in May 1919. They were 1, 2 and 3 rubles nominal worth but in fact they were equal to kopecks as ruble had gone down in value so far forth. Soon estimated signs with nominal of 1000 rubles were issued. The slogan ╚Proletarians of all countries, unite! ╩ written in Russian and in six more languages on the threshold of the world revolution enriched the notes.

At those times and even earlier ≈ since the end of 1918 ≈ the Soviet power consciously started emitting fiduciary money. The reason was the most honourable ≈ if the quantity of notes increases, their cost will decrease. And if the money begins fading away that means communism is coming. The notes issued in 1919 were called ╚sovznaki╩ (that means Soviet signs).

The communists began destroying exchange relationships. They dreamed of the time when money would be only of historical value. Accommodation payment and utility rate were cancelled; workers often got goods instead of money when receiving salaries, food-cards were put into action.

But the intense emission made prices grow and new notes were to be issued. The nominal of Soviet notes was increasing. The largest one was 10 000 rubles worth (appeared in March 1920). In 1921 a note with nominal of 1 000 000 rubles was issued.

During the Civil war local currency was being printed in the territory of the former Russian Empire. The period of the Civil war was characterized by a quick change of powers. Each power needed its own currency notes ≈ to demonstrate the power status and to realize money transactions. It turned out that is was not possible to leave without money even in the period of war communism. Because of the economic necessity the local Peoples▓ Commissar for Finance of Yakutia give orders to put wine etiquettes into circulation when there was lack of real notes.

Some theatres, shops and factories put into practice currency notes of their own (for example, Sevastopol ╚Lotus╩ theatre). Talking about rare but convertible currency of that time one can mention bank notes of the Northern Russia. They were exchanged by the Bank of England at the rate of 1 pound sterling for 40 rubles. It turned out that since the First World War a part of the Russian gold reserve ≈ 26 million rubles ≈ was stored in the UK. That money was used by the government of the Northern Russia to make its emission.

Together with rubles foreign currency was used. For example, German marks and Austrian krone were officially put into circulation in the western regions. Later Polish marks began to be used. Finnish markkas were popular in Karelia.

And all the notes that had ever circulated in Russia were allowed to circulate in the territory occupied by Nestor Makhno. Governments of generals A. Denikin, P. Wrangel, A. Shkuro, admiral A. Kolchak, atamans S. Petlura and G. Semenov had their own notes...

In 1918 notes booked in the US by the Provisional government appeared in the east of the country. They were used in turn by Territorial Authorities of Transbaikalia, government of A. Kolchak and the Provisional government of the Far Eastern Republic. At that each of them made their subfixes on the notes.

The Northwestern government (the general Yudenich was a member of the government) issued its money in Sweden on a loan got in 1919 from the Germany. The emission was huge ≈ more than a milliard rubles. Those currency notes with a Yudenich▓s signature were called ╚krilatki╩ (that means ╚winged╩ in English) because of the figure of a two-headed eagle that spread his wings in such a way that they covered almost all the note. After the defeat of Yudenich▓s army its rests retreated to Estonia. There ╚krilatki╩ were being bought up by foreigners who hoped for the soon collapse of Bolsheviks▓ ministry. But before long they got so depreciated that they began to be used as candies wrapping or as firing for power plant▓s stoves ≈ full bags of notes were burnt up.

In 1922 New Economic Policy was established. Free market began to develop and more or less stable money was in need. That was the year when new notes were emitted. One ╚new╩ ruble was worth 10 thousand of all the ╚old╩ ones.

For the first time in the Soviet Union the money was issued not to complement the already existing currency notes but to replace them. The first stage of the money reform was its putting into circulation. The next stage was the emission of gold ╚chervontsi╩. In fact those were notes with nominal of 1, 3 and 5 rubles. They were called ╚gold╩ because they were secured by a precious metal. That was the first Soviet convertible money. They were issued not by the government as before but the State Bank of the USSR. At that all the emitted money could be secured by gold and other valuable assets.

In October 1922 gold chervontsi were exchanged at the rate of 1 chervonets for 167 rubles (╚sovznaki╩) in 1922 and 50 thousand rubles in 1924.

State bank note with nominal of two hundred fifty rubles. Russia, 1917 [zoom (55k)]

In 1923 buyers often had to ask what currency was indicated at a price ticket: rubles issued in 1922 or 1923 or chervontsi. That was a result of a new stage of the reform when new ╚sovznaki╩ of different nominal were emitted instead of depreciated ╚sovnaki╩ of 1922. One ruble of 1923 was worth 100 rubles of 1922 or one old million. But even the new notes of 1923 quickly went down in value and the government was faced with the necessity of issuing of notes with nominal of 10, 15 and 25 thousand rubles. They all had an emblem of the Soviet Union and the nominal indicated in the languages of union republics. It was the first money of the USSR. All the notes issued before that were emitted on behalf of the RSFSR.

The last stage of the money reform ended in 1924 by the emission of notes to replace sovnaki and to exchange chervontsi. Those were 1, 3 and 5 rubles secured by gold. As well as silver and copper coins were minted for the first time in the Soviet Union. Gold chervontsi also appeared but they were destined only for foreign trade. In such a manner in 1924 the Soviet money system got worked up. The chervonets sat tightly. One could get 1 ruble and 92 kopecs for 1 American dollar at Moscow exchanges in 1924.

The Soviet economists had moments at that time. Five years later NEP collapsed and printing presses re-started printing money according to the government▓s orders ≈ at that the government did not aim to secure it by gold or goods.