February 1, 2023

Russian ruble: history of confiscations and devaluations

We already told in our materials about the unenviable history of fiat money - pieces of paper, the cost of which supported by the force of law (from lat. "fiat" - decree) Now, I would like to dwell on the recent history of one of them. Let's trace the fate of our national currency, the Russian ruble, over the past century.</strong>

The Russian ruble met the beginning of the 20th century in a verygood shape. After the Witte monetary reform of 1895-1897, which established a consistent gold standard, and until the very beginning of World War I, the paper ruble freely changed to gold at the rate of 0.774234 grams per ruble. It is this period of history that can rightfully be called the golden age of the heyday of the Russian economy - the state did not impede private initiative, legislation was modernized, industry was developing rapidly, the structure of production was complicated, GDP grew at an unbelievable pace, real capital was accumulated, which became the driver of development, construction of infrastructure, railways throughout the Russian Empire.

The vast general market of the Empire by 1913 included170 million people (for comparison, the population of all of Europe then did not exceed 300 million people) and was, without exaggeration, the largest in the world. Many at that time were convinced that it was Russia, and not just America, that would become the locomotive of economic development and technological progress in the 20th century.

However, everything changed in 1914 - with the beginningcatastrophic for Russia of the First World War. Shortly after the outbreak of war, the free exchange of paper rubles for gold was discontinued. Gold coins (Nikolaev chervonets) immediately disappeared from circulation, and increasing military spending began to be financed by the government (as in other warring countries) with the help of unsecured money emission. As a result, the volume of paper money began to increase rapidly. If at the beginning of 1914 there were 2.4 billion rubles in circulation, then in 1916 there were already 8 billion in the country. Together with the decline in the production of civilian goods, this caused serious inflation and problems in the economy.

Discontent of the population with the hardships of war andall kinds of revolutionaries were cleverly exploited by economic problems, the main backbone of which was socialists of all stripes (including the Bolsheviks). After the change of the “rotten regime”, they promised earthly paradise, abundance and unthinkable happiness for all with the help of a simple recipe - socialist redistribution. It is enough to “expropriate the expropriators”, as Marx taught, and everything else will somehow form by itself.

However, the reality was far fromso rosy. After the February Revolution and the fall of the Empire, the only economic recipe for the new government was the accelerated printing of money, after which the number of zeros on banknotes began to grow rapidly.

"Kerenka" 1000 r. The largest bill of 1917.

The proletarian revolution that soon triumphedfully adopted the practice of the Provisional Government, continuing to actively pump up the money supply. Since 1919, along with the introduction of a total and all-encompassing “surplus appraisal,” the so-called “soznaki” began to be published by the Soviet government.

The printing speed of the Sovznaks was such that they had to be denominated twice - 10 thousand times in 1922 and 100 times in 1923.

Towards the end of the era of “war communism”, the countrylay in ruins, the economy was completely degraded, any confidence in Soviet banknotes was undermined. Willy-nilly, the Bolsheviks were forced to start a new economic policy (NEP), part of which was the introduction of a gold-backed parallel currency.

To emphasize the fact that the new monetary unit is much better than the previous Sovznaks, they even came up with the special name “Soviet gold coin”.

The exchange was made at a rate of 50,000 old"Sovznak" for 1 gold ruble. Only by 1924, inflation was more or less extinguished. The total accumulated ruble denomination amounted to 50 billion by that time (that is, in 10 years the ruble has depreciated 50 billion times).

The main Soviet propagandist Mayakovsky wrote about this:

Equal silver and a new paper ticket,
today there is no difference between them.
Take what tastes better -
now the paper is a solid course.

NEP returned private initiative to the economy andhard money, and these two factors quickly restored the country's economy, which by 1928 had grown almost to the pre-war level. But the Bolsheviks always perceived the NEP as a temporary retreat before the devilish power of free markets. Therefore, having strengthened, the Soviet nomenclature quickly curtailed the NEP and began a total sweeping of the private sector and the nationalization of the entire economy.

As a result, the Soviet ruble quickly lostconvertibility, and by 1932 already ceased in reality to be exchanged for gold and quoted abroad. It is this period that Bulgakov described in the famous episode "Hand over the currency, citizens!" On the Soviet treasury bills of 1938, there is no mention of gold content, instead, "the ticket is provided by all the property of the USSR." This wording will be preserved on all subsequent issues of Soviet bills.

In 1947, confiscation was carried out.monetary reform. She canceled all types of previously addressed Soviet banknotes, and seriously plucked the savings of the population. All deposits of Soviet citizens over 3 thousand rubles were cut by a third, more than 10 thousand by two-thirds, and cash rubles, and so on, were exchanged one to ten, that is, reduced ten times. Interestingly, those close to the authorities could have avoided confiscation - for example, Beria himself ordered his assistant to distribute 40 thousand rubles to various savings banks. We only learned about this because "Beria, Beria has come out of confidence."

Monetary Reform of 1961held from January 1, 1961,carried out in the form of denomination with devaluation. Banknotes of the 1947 type were exchanged for new banknotes of a reduced format in the ratio of 10 to 1. Denominations of the 1961 type were printed over the next 30 years, and were remembered by the whole late Soviet generation as classic Soviet money “with Lenin”.

The last Soviet monetary reform wasPavlovskaya, in 1991. The reform aimed to get rid of the excess money supply in cash circulation, and at least partially solve the problem of shortages in the USSR commodity market. Therefore, it is not surprising that the reform was confiscation. All 50 and 100-ruble banknotes were replaced, only three days were given for the exchange of population and the limit was only 1000 rubles. All other bills of large denomination "burned".

The decree was reported at 21 o’clock on television, so the most resourceful managed to spend or exchange their bills on the same day, until knowledge of the reform was spread among the population.

Since 1992, for the printing of rublesalready taken by the Russian government. The beginning of the independent existence of the new Russian ruble was not very successful. The Soviet planned economy collapsed, integration with the former Soviet republics fell apart, directors of former state enterprises unfamiliar with the market, who were suddenly told to "survive as you can!" Were in complete prostration.

There was no budget filling, and Russianthe government once again resorted to a tried and tested recipe - a printing press. Already in the first years of the existence of independent Russia, so much money was printed that the post-Soviet inflationary price adjustment quickly turned into hyperinflation.

In 1993, another confiscation took place.reform. Banknotes of the old type were exchanged for new ones with a limit of 35 thousand rubles (about $ 35), raised to 100 thousand in a few days. It was about this reform that Chernomyrdin uttered his catch phrase: “We wanted the best, but it turned out as always".

Only by 1997, when almost all Russiansmanaged to become ruble millionaires (which, however, did not bring joy to anyone, since there was little that could be bought for a million), hyperinflation was finally stopped.

Soon, a denomination of 1000 to 1 was carried out, which led the Russian ruble to the model that we know and is dear to this day.


So, to summarize the history of the ruble in the twentieth century. In just this century, the ruble has been denominated four times, a total of 500 trillion times and there were three confiscation reform (four if we consider the reform of 1921, when the exchange of common signs, but not previously released Russian rubles).

Therefore, you probably should not be surprised thatoverwhelming majority of our citizens, generations have developed a deep distrust of the ruble as a means of preserving purchasing power. Do not be offended when the ruble is sometimes scornfully called “wooden” - because in the 20th century it became one of the first completely fiat currencies (after the Bolsheviks quietly stopped exchanging for gold in the early 30s), and therefore fully experienced all the troubles inevitable for this type of defective money.

After the denomination of 1997 and the devaluation of 1998,The ruble, until very recently, enjoyed a period of relative calm, without sharp shocks and monetary reforms. However, it seems that this period of calm has come to an end. What do you think the ruble will face in the future?

Based on materials: Wikipedia, RussianMoney, Livejournal

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