Visit https://ebookgate.

com to download the full version and

explore more ebooks

Money of the Russian Revolution 1917 1920 1st

Edition Mikhail V. Khodjakov

_____ Click the link below to download _____

https://ebookgate.com/product/money-of-the-russian-
revolution-1917-1920-1st-edition-mikhail-v-khodjakov/

Explore and download more ebooks at ebookgate.com

Here are some recommended products that might interest you.
You can download now and explore!

The Russian Revolution World War to Civil War 1917 1921

Images of War 1st Edition Nik Cornish

https://ebookgate.com/product/the-russian-revolution-world-war-to-
civil-war-1917-1921-images-of-war-1st-edition-nik-cornish/

ebookgate.com

The Russian Revolution of 1905 1st Edition Anthony J.

Heywood (Editor)

https://ebookgate.com/product/the-russian-revolution-of-1905-1st-
edition-anthony-j-heywood-editor/

ebookgate.com

Cell Cycle Checkpoints and Cancer 1st Edition Mikhail V.

Blagosklonny

https://ebookgate.com/product/cell-cycle-checkpoints-and-cancer-1st-
edition-mikhail-v-blagosklonny/

ebookgate.com

Strikes and Revolution in Russia 1917 Diane P. Koenker

https://ebookgate.com/product/strikes-and-revolution-in-
russia-1917-diane-p-koenker/

ebookgate.com
Russian Women 1698 1917 Experience and Expression An
Anthology of Sources Robin Bisha (Editor)

https://ebookgate.com/product/russian-women-1698-1917-experience-and-
expression-an-anthology-of-sources-robin-bisha-editor/

ebookgate.com

Crisis Revolution and Russian Jews 1st Edition Jonathan

Frankel

https://ebookgate.com/product/crisis-revolution-and-russian-jews-1st-
edition-jonathan-frankel/

ebookgate.com

Russian Postmodernism New Perspectives on Post Soviet

Culture 2nd Edition Mikhail N. Epstein

https://ebookgate.com/product/russian-postmodernism-new-perspectives-
on-post-soviet-culture-2nd-edition-mikhail-n-epstein/

ebookgate.com

Digital orthodoxy in the post Soviet world the Russian

Orthodox Church and Web 2 0 Mikhail Suslov

https://ebookgate.com/product/digital-orthodoxy-in-the-post-soviet-
world-the-russian-orthodox-church-and-web-2-0-mikhail-suslov/

ebookgate.com

Competing Voices from the Russian Revolution Fighting

Words 1st Edition Michael C. Hickey

https://ebookgate.com/product/competing-voices-from-the-russian-
revolution-fighting-words-1st-edition-michael-c-hickey/

ebookgate.com
Money of the Russian Revolution
Money of the Russian Revolution:
1917-1920

By

Mikhail V. Khodjakov

Editor: Alex Lane

 Money of the Russian Revolution: 1917-1920, by Mikhail V. Khodjakov

This book first published 2014

Cambridge Scholars Publishing

12 Back Chapman Street, Newcastle upon Tyne, NE6 2XX, UK

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Copyright © 2014 by Mikhail V. Khodjakov

All rights for this book reserved. No part of this book may be reproduced, stored in a retrieval system,
or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or
otherwise, without the prior permission of the copyright owner.

ISBN (10): 1-4438-6681-4, ISBN (13): 978-1-4438-6681-1

 TABLE OF CONTENTS

Author’s Note ............................................................................................ vii

Introduction .............................................................................................. viii

Part I: Government-issued Currency 1917–20

Chapter One ................................................................................................. 2

Money Circulation in Russia in 1917

Chapter Two .............................................................................................. 25

Money in “the time of troubles": Finance in the “war communism”
Period, 1918–20

Chapter Three ............................................................................................ 51

“Tsar money” for the Dictatorship of the Proletariat: Manufacture
and Use of “Romanov” Banknotes during Soviet Rule

Part II: Money of the White Guard

Chapter Four .............................................................................................. 74

Money Circulation in the Russian North

Chapter Five ............................................................................................ 102

“Army money” in the North-West of Russia: Emissions of Generals
A.E. Vandam, A.P. Rodzyanko and N.N. Yudenich

Chapter Six .............................................................................................. 122

The Finances of Generals A.I. Denikin and P.N. Wrangel

Chapter Seven.......................................................................................... 145

Money of Admiral A.V. Kolchak, the Supreme Ruler of Russia,
and Ataman G.M. Semyonov
vi Table of Contents

Part III: Money in the Everyday Life of Russian Population

Chapter Eight ........................................................................................... 178

“Rich” and Poor

Chapter Nine............................................................................................ 221

Counterfeiting during the Russian Revolution and the Civil War

Conclusion ............................................................................................... 240

Bibliography ............................................................................................ 242

 AUTHOR’S NOTE

The idea of writing this book first occurred to me in the mid-1990s,

when I was giving a special course of lectures on the history of currency
circulation in Russia to students of the Faculty of History at St. Petersburg
State University. My trips to other towns and cities, where I delivered
lectures to university students and lecturers of history and economics
faculties, only convinced me further that this area of study, at the cusp of
history and economics, merited both serious scientific research and active
popularisation.
Unfortunately, course books available in Russia on Russian economic
history, as well as the various popular science volumes dealing with the
history of currency circulation in the 20th century, are responsible for
propagating numerous fallacies serving only to reinforce established
myths, and I frequently found myself feeling distracted by questions from
my audience regarding the current literature relating to the period of the
Russian Revolution and Civil War. Given the weight and breadth of earlier
publications on financial political history from the 1920s and after,
however, one cannot imagine the slightest difficulty arising as a result of
insufficient sources in the literature. And yet, my audiences experienced
persistent difficulty due to the lack of corresponding illustrative material.
In other words, contemporary books were often bereft of any images of the
monetary (payment) units of the period they described. In most cases
where they do appear, they are, for technical reasons, poor quality
reproductions. Thus, even professional historians often muddled, in their
books, the names of the numerous monetary issues of the time. Catalogues
of securities and special editions which give a good idea of the appearance
of the monetary units are rare, and meant for specialists of the history of
paper money (numismatists).
The purpose of this book is to provide a compendium of knowledge
about the history of currency circulation in the period of the Russian
Revolution and Civil War (gained also through research of a number of
Russian archives) together with corresponding illustrative material
showing banknotes, postage currency, treasury and payment units,
subsidiary cheques, short-term bonds etc.
 INTRODUCTION

The ancillary-historical branch of science which concerns the study of

paper money no longer in circulation, as well as various loan obligations
and securities, issued by a state treasury, municipalities, or firms, and used
by their holders as a means of purchase and exchange, is known as
numismatics (in Eastern European papers one can often find the term
bonistics). Owing to the relatively large size of paper notes in comparison
to stamps or coins, they often incorporate drawings of different kinds:
coats of arms, monograms and facsimile reproductions of signatures of
some prominent figure or another. The issue of a new note into circulation
tends to lend itself, with the help of graphic art – emblems and symbols,
mottos and slogans, wordings, patterns and ornaments, stamps and colours
– to an expression of the ideology of the issuing party. Based on an
examination of the attributes included by the issuers on a note, one can
establish not only the time and place of issue and the geographical range
of circulation of the notes, but also on their class and position in society of
their issuers.
Paper money appeared as a result of exigency, in providing an
alternative to the use of metal coins where and whenever the latter became
impractical. Its soaring popularity as a means of exchange can be
attributed to the haphazard diversity of metal money. Banks had to sort,
weigh and check gold and silver coming from all parts of the world. At a
certain stage of the historical process a bank's inscription on a piece of
paper became recognised as a best form of money rather than a state stamp
on a coin. Leather currency which was in use in China B.C.E. became the
forerunner of paper money. Banknotes of the Ming Dynasty dating back to
approximately 1368 are the earliest extant examples of paper money, and
have certainly stood the test of time: paper used for their manufacture was
made of strong bark, and they were consecrated before statues of Buddha.
This money was 32.5ɯ22.5 cm in size, and bore an inscription that they are
"to circulate forever and ever under the heavens." The banknotes also
featured a promise of a large reward for exposure of forgeries, which
points to the existence of problems with counterfeiting as early as those
times.i
In European countries, paper money did not appear in circulation until
the 16th–17th centuries. In Russia the issuance of paper money began
 Money of the Russian Revolution: 1917-1920 ix

during the reign of Catherine II in 1769. Prior to that, so-called “fur

money” – vekshi and kouny (skins of squirrels and martens) – foreign silver
coins (Arab dirhams), ancient Kiev coins srebreniks, silver ingots of home
manufacture (grivna of silver), and silver and copper coins were in use at
different stages of Russian history. The minting of gold coinage, which
started in 1701, was of a fairly small scale due to the chronic lack of gold
in Russia.ii
The first attempts to switch to paper money circulation were made
during the reign of Empress Elizaveta Petrovna. In 1760, to expedite
Russian participation in the Seven Years' War the Procurator General of
the Senate, Prince Ya.P. Shakhovskoy, suggested the introduction of paper
money – “bank tickets” – which could subsequently be quickly redeemed.
The Senate, however, rejected Prince Shakhovskoy’s idea.
Nevertheless, a reorganisation of the circulation for a solution to the
currency problem continued to be of vital importance to the state. Thus, on
25 May 1762 by an edict of Peter III the establishment of the state bank
and an issue of bank notes to a total of 5 million roubles were declared.
These bank notes were to have all characteristic features of paper money:
they would be legal tender and circulated at parity with coins; accepted for
all governmental payments; partly guaranteed for exchange. iii However,
this promising idea was doomed as a result of the short reign of the
Emperor. Catherine II ascended the throne following a coup-d’état that did
away not only with her husband, but also with most of his initiatives.
Yet another Russo-Turkish War (1768–74), which followed soon after,
demanded significant spending and the Empress’ manifesto of
29 December 1768 announced the establishment of banks in Russia. The
real reason for issuing paper money was hidden from the people. The
manifesto indicated that the only purpose for issuing the new money,
which was called “ɚɫɫɢɝɧɚɰɢɹ” (“assignatsiya,” i.e., banknote), was to
promote “the circulation of money upon which the happiness and
prosperity of the people, and flourishing of trade, depended so much."
Besides, the document stated that “the heavy weight of a copper coin
which speaks for its own value, at the same time makes its circulation
more difficult." The publication of the manifesto on February 1, 1769
marked an important milestone in the history of currency circulation in
Russia.
Over time, mass paper money (assignatsiya) issues took place in
Russia, changing life dramatically. By 1817 a paper assignatsiya rouble
was worth only 25 kopecks in silver. For the purposes of economic
recovery, and following the monetary reform of 1839–43 carried out under
the initiative of the Minister of Finance Ye.F. Kankrin, the assignatsiya
x Introduction

was replaced with state bank notes. This was followed by a series of
changes which resulted in the introduction of a system of currency
circulation in which paper money was exchanged for silver and gold.
According to articles 163 and 164 of the 1857 currency regulations, the
silver rouble became the basic common unit of payment.iv
Meanwhile, as early as the 1870s, the need to reinstate the exchange of
paper money for metal and to transition from the silver to the gold
standard became obvious. Preparation for the reform began in 1880s, when
the post of the Minister of Finance was occupied by N. Kh. Bunge
(1881–86) and then I.A. Vyshnegradsky (1887–92) who both carried out a
policy of shoring up the state gold reserve. S. Yu. Witte, Minister of
Finance (1892–1903), held to the same policy, becoming one of the main
promulgators of Russia’s transition to the gold coin system. An increase in
world production of silver, and an unloading of stocks of silver ingots and
coins by a number of countries, caused silver prices to drop and acted as a
catalyst in the decision to undertake the reform.
By the turn of the 20th century, Russia’s gold reserve was considered
one of the largest in the world. The country had become a world leader in
gold production. By 1897, the State Bank had succeeded in increasing its
gold stock from 300 million roubles to 1,095 million roubles, and that
amount almost corresponded to the total value of banknotes in circulation
(1,121 million roubles).v The 1895–97 monetary reform of S. Yu. Witte,
comprising a series of government initiatives, resulted in 1899 in a new set
of monetary regulations stating amongst other things: “The Russian
monetary system is based on gold. The Russian state currency unit is the
rouble containing 17.424 grains of pure gold”. The “gold standard” had
been introduced. According to an edict of 29 August 1897, paper
banknotes issued by the State Bank – the country’s chief issuing institution
– were backed by the state gold reserve, and could be freely exchanged for
gold. A series of gold coins was placed in circulation in denominations of
5 and 10 roubles, as well as 15 roubles (the “Imperial”) and 7.5 roubles
(the “half-Imperial”). Due to the inconvenience of counting such coins, the
15 and 7.5 rouble coins were withdrawn in 1899, and they quickly
disappeared from circulation. The main monetary unit was the rouble,
which was equal to 1/15 of an Imperial (the gold content in Imperials was
11.6135 grams of pure gold). Silver and copper money circulated
alongside gold coins and paper banknotes. There were two types of silver
coin: bank issue (with face values of 1 rouble, 50 kopecks, and
25 kopecks) and subsidiary coins (with face values of 20, 15, 10 and
5 kopecks).
 Money of the Russian Revolution: 1917-1920 xi

Fundamental changes occurred in Russian currency circulation during

the First World War and the ensuing Civil War. The national rouble zone
was shattered. Central authority was incapable of providing funds to
various regions of the vast country. All this resulted in the appearance of
numerous issuing centres. According to varying estimates, between 1917
and the beginning of the 1920s, between five and twenty thousand
varieties of paper monetary units were in circulation. vi It is remarkable
that, under these circumstances, tsar notes, which were also called
“Romanov” or “Nikolai” notes, were legal tender abroad, and circulated
throughout the former Russian Empire. Up until 1922, they were willingly
accepted by the population, which considered them a “strong” currency,
and were often kept for savings. Moreover, having its own purposes in
mind, the Soviet government continued printing and issuing tsar notes for
a number of years.
The history of money circulation in Russia, including paper money,
has been studied by several generations of national historians. A literature
dealing with these matters appeared as early as the 1920svii, and sparked a
discussion in the 1960–70s regarding the commodity-value relationship
model under socialism. Soviet historians of this period carefully examined
the Russian financial policies of the World War and the early years of
Soviet rule.viii In recent years, catalogues and encyclopaedia-type editions
have been published, along with scientific research papers on the
economic history of Russia of the 20th century.ix Works have appeared,
being dedicated directly to the history of money, securities, governmental
issues and local issues of non-compulsory circulation in various regions of
the Russian Empire.x
The present book cannot be regarded as an in-depth analysis of the
financial situation in Russia during the period of the Revolution and Civil
War. It covers several aspects, and these are arranged into three parts. The
first part of the book describes the monetary units of the nation-wide
circulation. The second part describes the characteristics of the most
noteworthy money issues which were compulsory for local circulation
(first and foremost printed by the governments and military authorities that
controlled the vast territories of the country in 1918–20). Finally, the third
part relates to the role of genuine and forged money in everyday life in
different parts of Russia.
In view of the multitude and variety of local issues for non-compulsory
circulation (issued in the given period by cooperatives, enterprises, trading
firms, clubs, shops, cafes, canteens, and restaurants in more than 350
towns in Russia), the author considers an examination of these to be
xii Introduction

unwarranted in the context of the present work, beyond the summary

account given in the first part.

Notes
i
For more details about the origins of paper money see: “Kollektsionirovanie
bumazhnykh deneg i tsennykh bumag." Miniatjura. Gazeta dlja kollektsionerov.
Iss. 22 (October 1994); Iss. 23 (December 1994); Iss. 27 (October1995); Iss. 28
(January 1996), and other.
ii
The formation of Russian money system was examined in the following works:
I.G. Spassky, Russkaja monetnaja sistema. 4 izd. (Leningrad: Avrora, 1970);
A.S. Melƍnikova, Tverdye denƍgi. 2 izd. (Moscow: Politizdat, 1973);
M.P. Sotnikova, and I.G. Spassky, Tysjacheletie drevnejshikh monet Rossii
(Leningrad: Iskusstvo, Len. otdelenie, 1983); A.S. Mel’nikova, Russkie monety ot
Ivana Groznogo do Petra Pervogo: Istoriia russkoi denezhnoi sistemy s 1533 po
1682 g. (Moscow: Finansy i statistika, 1989); A.S. Mel'nikova, and
V.V. Uzdenikov, and I.S. Shikanova, Istoriia Rossii v monetakh (Moscow:
Menatep, 1994); A.I. Yuht, Russkie denƍgi ot Petra Velikogo do Aleksandra I
(Moscow: Finansy i statistika, 1994); M.P. Sotnikova, Drevnejshie russkie monety
X–XI vekov (Moscow: Banki i birzhi, 1995); A.G. Veksler, and A.S. Melƍnikova,
Rossijskaja istoria v moskovskikh kladakh (Moscow: Zhiraf, 1999);
A.S. Melƍnikova, and V.V. Uzdenikov, and I.S. Shikanova, Denƍgi v Rossii.
Istoriia russkogo denezhnogo hozjaistva s drevneyshih vremen do 1917 g.
(Moscow: Izd-vo “Strelets”, 2000); V.L. Yanin, Denezhno-vesovye sistemy
domongolƍskoj Rusi i ocherki istorii srednevekovogo Novgoroda (Moscow: Jazyki
slavjanskikh kul’tur, 2009), and other.
iii
Vse o denƍgakh Rossii, pred. red. koll. S. Dubinin. Moscow: Izd-vo “Konkord-
Press”, 1998. P. 44.
iv
Ibid. P. 55–65.
v
Russkij rublƍ. Dva veka istorii. XIX–XX vv. Moscow: Izd-vo “Progress-
Akademia”, 1994. P. 131.
vi
The amount of “about 5000 paper money items” is indicated in: Bumazhnye
denezhnye znaki Rossii i SSSR, sost. A.I. Vasjukov, V.V. Gorshkov,
V.I. Kolesnikov, M.M. Chistjakov. St. Petersburg: Politekhnika, 1993. P. 5. –
According to the well-known historian R.I. Thorzhevsky, there were “more than
20 000” obligatory and non-obligatory (local and private) paper money items
issued at that time. – R.I. Thorzhevsky, “Bonistika." Voprosy istorii,
no. 6 (1985), 172.
vii
I.A. Trakhtenberg, Bumazhnye denƍgi: ocherk teorii deneg i denezhnogo
obrashchenia (Moscow: Moskovskij rabochij, 1922); Denezhnoe obrashchenie v
Rossii i za granitsei v gody voiny i revoljutsii (1914–1921), pod red. S.V. Voronina
i K.F. Shmeleva (Moscow: 4 gos. tipografiia, 1922); M.I. Bogolepov, Bumazhnye
denƍgi (Petrograd-Moscow: Koop. izd-vo, 1922); Denezhnoe obrashchenie i kredit.
Sb. Statei. Vol. 1 (Petrograd: 4-ia Gos. tip., 1922); Z.P. Evzlin, Denƍgi (Bumazhnye
denƍgi v teorii i zhizni). Part 2 (Leningrad: Nauka i shkola, 1924); L.N. Jurovsky,
 Money of the Russian Revolution: 1917-1920 xiii

Na putjakh k denezhnoj reforme (Moscow: Finansovaia gazeta, 1924);

A.I. Pogrebetsky, Denezhnoe obrashchenie i denezhnye znaki Dalƍnego Vostoka za
period vojny i revoljutsii (1914–1924) (Kharbin: O-vo “Knizhnoe delo”, 1924);
R.E. Vajsberg, Denƍgi i tseny (Podpolƍnyj rynok v period «voennogo
kommunizma») (Moscow: Izd-vo Gosplana SSSR, 1925); Nashe denezhnoe
obrashchenie: Sbornik materialov po istorii denezhnogo obrashcheniia v 1914–
1925 gg., pod red. prof. L.N. Jurovskogo (Moscow: Fin. izd. NKF SSSR, 1926),
and other.
viii
N.D. Mets, Nash rublƍ. Istoricheskij ocherk (Moscow: Sotsegiz, 1960);
A.L. Sidorov, Finansovoe polozhenie Rossii v gody Pervoj mirovoj vojny (1914–
1917) (Moscow: Izd-vo Akad. nauk SSSR, 1960); Z.V. Atlas, Sotsialisticheskaia
denezhnaia sistema (Moscow: Izd-vo “Finansy”, 1969); V.P. Dƍjachenko, Istoriia
finansov SSSR (1917–1950 gg.) (Moscow: Nauka, 1978), and other.
ix
Earliest considerable catalogues, used by specialists for a long time, were:
Bumazhnye denezhnye znaki, vypushchennye na territorii byvshej Rossijskoj
imperii za vremja s 1769 po 1924 gg., pod red. F.G. Chuchina (Moscow:
Upolnomochennyi po filatelii i bonam v S.S.S.R, 1924); Katalog bon i denznakov
Rossii, RSFSR, SSSR, okrain i obrazovanij (1769–1927), pod red. F.G. Chuchina.
3 izd. (Moscow: Sovetskaia filatelist. assotsiatsiia, 1927); N. Kardakov, Katalog
denezhnyh znakov Rossii i Baltijskih stran 1769–1950 (Berlin: S.n., 1953) – They
were followed by: Ju.B. Polynsky, Katalog bumazhnykh denezhnykh znakov
RSFSR 1917–1923 godov (Leningrad: Gosudarstvennyi muzej Velikoj
Oktjabrƍskoj sotsialisticheskoj revoljutsii, 1990); P. Rjabchenko, Polnyj katalog
bumazhnyh denezhnyh znakov i bon Rossii i SSSR (1769–1990 gg.). 2 izd. (Kiev:
Izd.-kul’t. tsentr “Sofiia” – “Lisbank”, 1995); Bumazhnye denƍgi, khodivshie na
Ukraine (Katalog XX stoletiia), sost. A.S. Badaev (Chernigov: Obl. upr. po
pechati, 1991); Natsionalƍnye bumazhnye denƍgi Ukrainy. 1918–1920, sost.
R. Thorzhevsky (Donetsk: “Aspekt”, 1992); Katalog bumazhnykh denezhnykh
znakov Rossii i stran SNG (1769–1993) (Moscow: Izd-vo “Laventa”, 1996);
L.Z. Kats, and V.P. Malyshev, Entsiklopediia bumazhnykh denezhnykh znakov
Rossii. Vol. 1. Pravitelƍstvennye emissii 1769–1995 (St. Petersburg: Izd-vo
Razumovoi N.A., 1998); V.Ju. Kozlov, Bony i ljudi: Denezhnoe obrashchenie
Urala: 1840–1933: Opyt nestandartnogo kataloga (Ekaterinburg: Bank kul’tur.
inform., 2000); A.G. Baranov, V.V. Abrosimov, Ju.A. Artem’ev. Otechestvennaia
bonistika. Bibliograficheskij ukazatel’ knig, statei i zakonodatel’nykh aktov (1699–
2005 gg.) Moscow: PAFSBRF, 2006, and other.
x
V.I. Tarankov, Tsennye bumagi gosudarstva Rossijskogo (Moscow-Tolƍjatti: MIP
“Inter-Volga”, 1992); Bumazhnye denezhnye znaki Rossii i SSSR, sost.
A.I. Vasjukov, V.V. Gorshkov, V.I. Kolesnikov, M.M. Chistjakov (St. Petersburg:
Politekhnika, 1993); R. Nikolaev, Denƍgi beloj gvardii (St. Petersburg: Izd-vo
“Miniatjura”, 1993); M.M. Glejzer, Sovetskij chervonets (St. Petersburg: Izd-vo
TOO “Real”, 1993); M.M. Glejzer, Bonistika v Petrograde – Leningrade – Sankt-
Peterburge (St.Petersburg: Aleksandr PRINT, 1998); E.I. Ovsiankin, Arhangelƍskie
denƍgi. 2-e izd. (Arkhangelsk: OAO IPP “Pravda Severa”, 2008); E.I. Ovsiankin,
Denezhnye znaki Severnoj Rossii. 1918–1923 gg. (Arkhangelsk: “Arkhkonsalt”,
xiv Introduction

1995); I.S. Shikanova, “Russkie denezhnye znaki, otpechatannye v SSHA (1917–

1920)." In Novejshie issledovaniia v oblasti numizmatiki. Numizmaticheskij
sbornik. Part XIII (Trudy Gosudarstvennogo Istoricheskogo muzeia. Iss. 98),
183–210 (Moscow: Izd-vo “Strelets”, 1998); Vse o denƍgakh Rossii, pred. red. koll.
S. Dubinin (Moscow: Izd-vo “Konkord-Press”, 1998); Denezhnye reformy v
Rossii. Istoriia i sovremennostƍ. Sb. statej, otv. red. E.A. Tjurina (Moscow:
Drevlekhranilishche, 2004); O.V. Paramonov, «Dutovki." Bony Orenburgskogo
otdeleniia Gosudarstvennogo banka v 1917–1918 gg. (Moscow:
Numizmaticheskaia literatura, 2005); N.V. Prohorova, Monety i banknoty Rossii
(Moscow: OOO “Dom Slavjanskoi knigi”, 2007); EZGB – FGUP “Goznak."
Istoria v sobytiiakh, faktakh, sud’bakh, avt. i sost. A.V.Trachuk, N.M. Nikiforova
(Moscow: Ima-press, 2008), and other.
 PART I:

GOVERNMENT-ISSUED CURRENCY 1917–20

 CHAPTER ONE

MONEY CIRCULATION IN RUSSIA IN 1917

Notwithstanding the financial disaster caused by the Russo-Japanese

War, which had made vast demands on the Imperial Treasury, the
Russian state’s monetary position was stable. The State Bank had
1,695.2 million roubles in gold reserves, 1,528 million of which was kept
within the country and 167 million held abroad. That provided a 101.8 %
gold guarantee for banknotes and allowed for a free (unused) note-issuing
authority of 330.5 million roubles.1
By law, the State Bank was allowed to issue 300 million roubles in
paper notes above the amount backed by gold reserves. Therefore, the
State Bank issue was even more constrained than the law permitted. As
S.I. Timashev, Governor of the State Bank wrote, “our monetary emission
law seems to be very stringent; it is significantly stricter than emission
laws of most foreign states."2
By 1914, the total amount of currency units in circulation was
2,402.8 million roubles, including banknotes amounting to 1,664.7 million
roubles and gold coins worth 494.2 million roubles. Banknotes were the
most commonly used form of payment and were issued with face values of
1, 3, 5, 10, 25, 50, 100, and 500 roubles. Of these, the 5, 10, 25, and 100
rouble notes played the most important part in pre-war money circulation.
Silver and copper money circulated alongside gold coins and paper
banknotes. The former were considered inferior as their face value was
higher than the value of the metal they were made of. For example, one
copper rouble contained copper worth only 20 kopecks.
Compulsory acceptance of silver and copper coins for payments was
limited: for bank silver (1 rouble, 50 kopecks, and 25 kopecks) it could not
exceed 25 roubles total per payment; for subsidiary silver and copper
coins, 3 roubles.
 Money Circulation in Russia in 1917 3

Russian Monetary System in 1897–14 (million roubles, as of January 1)3

Years Gold Notes in Banknotes Percentage Percentage

coins in circulation gold of ratio of gold
circulation guarantee banknotes in
gold circulation
coverage and notes
1897 30.0 1067.9 1095 102.6 3.4
1898 147.8 901.0 1164.2 129.2 16.4
1899 451.4 661.8 1005.4 151.9 86.2
1900 641.3 491.1 838.8 170.8 130.6
1901 683.1 555.0 732.5 132.0 122.9
1902 694.2 542.4 700.8 129.2 128.0
1903 731.9 553.8 765.8 138.3 132.2
1904 774.8 578.4 903.0 156.1 133.9
1905 683.6 853.7 1029.4 120.6 80.0
1906 837.8 1207.5 919.7 76.2 69.4
1907 641.9 1194.6 1190.5 99.7 53.7
1908 622.4 1154.7 1168.3 101.2 53.9
1909 561.1 1087.1 1220.0 112.2 51.2
1910 580.9 1173.8 1414.5 120.5 49.4
1911 641.7 1234.5 1450.3 117.4 52.8
1912 655.8 1326.5 1436.2 108.2 49.4
1913 628.7 1494.8 1555.4 104.1 41.3
1914 494.2 1664.7 1695.2 101.8 29.6

Specimen of the 1905 State banknote

4 Chapter One

The Ministry of Finance treasury offices accepted silver and copper

money without restriction. Both copper and silver coins were minted by
the State Treasury. According to 1899 currency regulations the Treasury
was not allowed to issue silver coins worth in excess of 3 roubles per
capita. This limit proved more than sufficient and was never completely
exhausted. Indeed, silver per capita in circulation never amounted to even
half the specified limit by the beginning of the First World War. There was
no limit or rule set for issuing copper coins, therefore the Minister of
Finance had to submit a separate request for each issue of copper coins.

Specimen of the 1909 State banknote

As of January 1, 1914 there were 494.3 million roubles of gold coins,

122.7 million roubles in bank silver, 103.1 million roubles of subsidiary
money, and 18.1 million roubles in copper coins in circulation. 4 At the
beginning of 1914, P.L. Bark, the newly appointed Minister of Finance
following the dismissal of his predecessor V.N. Kokovtsov, embarked on a
new policy of allocating large quantities of funds for defence needs and
“industrial projects in the economic sector."5
 Money Circulation in Russia in 1917 5

Specimen of the 1909 State banknote

Russia’s entry into World War I on July 19, 1914 sharply changed the
financial situation in the country, with cash in huge demand as the
population started panicking. Gold and silver coins began quickly
disappearing from circulation. There was an acute shortage of banknotes
of small denominations and subsidiary money in a number of border
regions (Riga, Warsaw, Lodz, and the whole territory of Privislinsky Krai
(“Vistula Land”). In that situation, decisive and immediate action from the
Government was required. On July 23, on the advice of Minister of
Finance P.L. Bark, the Council of Ministers adopted a decision, with
reference to the exceptional circumstances of war-time and particular
economic conditions, to suspend the gold standard for redeeming
banknotes into gold coins. The very same day an “Imperial Edict” was
signed, and on July 27, after discussion in the State Duma and the State
Council, a law was passed extending the note-issuing authority of the State
Bank. The latter was now authorized to issue 1.5 billion paper roubles not
backed by gold reserves.6
The Minister of Finance, while not hiding his dismaying outlook from
the Council of Ministers, “strictly adhered to his course to prompt neither
excessive optimism nor poor-spirited pessimism. Even during secret
government sessions he would not allow himself ‘any hint of panic."7
6 Chapter One

Specimen of the 1899 State banknote

Specimen of the 1910 State banknote

Gradually though, the reality of the situation made itself felt in the
mood of the Minister of Finance. In June 1915, he declared that “it is time
to ready ourselves for a collapse of the monetary system." Issuing
banknotes was becoming one of the main sources for financing the war.
Russia was switching to paper money circulation. As a result, in 1915 it
became necessary to abandon the previous sequential six-digit numbering
system for banknotes and introduce a so-called series numbering system.
The first banknotes to exhibit this innovation were the 1898 one-rouble
paper notes. The same sequential numbers (with a reduced number of
 Money Circulation in Russia in 1917 7

digits) were repeated within each two letter series, each series consisting
of one million banknotes.8

Specimen of the 1912 State banknote

This issue of new banknotes, however, could not alleviate the shortage
of money with a face value of less than 1 rouble. Notwithstanding the fact
that the State Bank issued about 30 million roubles of subsidiary silver
coins (which exceeded by 10 times the size of the annual pre-war mint)
they still continued to disappear from circulation in the period from the
beginning of the War to August 1, 1915, causing circulation to consist
virtually entirely of paper.9 An attempt at minting nickel coins by placing
an order in Japan, in 1916, ended in complete failure. All this led to a
subsidiary money circulation crisis in the economy.10
To satisfy the demand for subsidiary money the Treasury began issuing
postage currency with face values of 1, 2, 3, 10, 15, and 20 kopecks. They
were printed on sheets measuring 24×30 mm, with perforations. Emission
of subsidiary postage currency began per a Council of Ministers decree of
September 22, 1915. The appearance of this currency was based on pre-
Revolutionary commemorative stamps of the so-called ‘tsars series’,
which consisted of 17 postal stamps.
8 Chapter One

Specimen of the postage stamp currency emission

This series was printed in 1913 to mark the 300th anniversary of the
reigning dynasty. The stamps were designed by famous artists I.Ya.
Bilibin, R.G. ZariƼsh, and Ye.Ye. Lansere. Of the 17 stamp images, 14
featured portraits of various Emperors and Empresses; the three other
images depicted architectural motifs. Nicholas II was very fond of these
stamps of the ‘Romanov issue’. An album with trial proof prints and the
stamp series was presented to him becoming a most precious family relic,
and they kept it with them until their tragic death in 1918.11 As for postal
usage, these stamps proved, like many commemorative stamps, to be
rather inconvenient. A number of people considered them to be too big. As
a result, the Department of State Currency Production (DSCP) curtailed
their issue in 1914. The World War, though, had caused these stamps to be
remembered, and led to their reissue as monetary units. For circulation
convenience the postage currency was printed on heavy paper and, unlike
 Money Circulation in Russia in 1917 9

ordinary postal stamps, they had an explanatory note on the reverse “in
circulation at parity with a silver coin” (or “in circulation at parity with a
copper coin,” for postage currency with a face value between 1 and 3
kopecks). As one-kopeck stamps were very similar in colour to the 15-
kopeck stamp (and the two-kopeck stamp, to 20-kopeck stamp), it was
decided to overprint the numbers “1” and “2”, respectively, in black ink on
their front sides.12

Specimen of the Treasury small change banknotes

A total of 48.7 million roubles of postage currency was issued in

September 1915. Officially it was withdrawn from circulation under
decrees dated September 8 and 28, 1922, issued by the Sovnarkom (the
Council of People’s Commissars) but their actual distribution within the
country had already ceased in 1919 and they virtually disappeared from
circulation, having lost their purchasing power. By that time, the total
amount of postage currency in circulation had reached 480.3 million
roubles.13
Next to follow the subsidiary stamps were new subsidiary treasury
units issued under a Government decree of December 6, 1915. These were
paper rectangles with face values varying from 1 to 50 kopecks and they
were bigger in size than the stamps. The assumption was that they would
10 Chapter One

be more convenient to use than postage currency money and would

gradually supersede the latter in circulation. For some unexplained reason,
10, 15 and 20 kopeck units were never issued and in 1918 they were
mostly consumed in the furnaces of Moscow and Nizhny Novgorod power
plants.14 By the time of their effective disappearance in the summer of
1919, the total issue of subsidiary treasury units had amounted to 231.6
million roubles.15
Huge war expenses forced the Government to extend the note-issuing
authority of the State Bank several times. From an initial 1.5 billion
roubles it had grown to 6.5 billion roubles by December 1916. The total
value of banknotes in circulation rose above 9 billion roubles at the
beginning of 1917 and kept increasing rapidly.
The Provisional Government, which came to power in March 1917,
continued issuing initially ‘tsarist’ and later its own money, actually
surpassing the overthrown regime in this respect. The State Bank note-
issuing authority was extended 5 times under the new regime, reaching
16.5 billion roubles in October 1917. A total of 9.5 billion roubles of paper
money was issued within 8 months, which doubled country’s money
stock.16
The Department of State Currency Production in Petrograd (its
building was situated on the Fontanka embankment), which dealt with
issuing paper money, was forced to undertake a series of steps of a purely
technical character. At the beginning of May 1917, a decision was made to
issue the 1909 state 5-rouble banknotes with a simplified design, to
provide the State Bank with a sufficient amount of paper money. “The
numbering on the front side of each note” was abandoned in order to speed
up printing. New 5-rouble notes of the Provisional Government bore a
series number consisting of two letters and three digits while notes of
imperial times had a letter series designation with a six-digit number.
The Provisional Government even saw fit to "reinvent the wheel" by
reintroducing postage currency. The 1915 issue, dedicated to the 300th
anniversary of the Romanov dynasty, was printed again, the only
difference being an absence of the Russian Imperial coat of arms on the
reverse side of the new postage currency denominated at 1, 2, and 3
kopecks (stamps of 10, 15, and 20 kopecks were never issued). Plates of
the 1915 stamps of the same denominations were used for printing. A total
of 95.8 million roubles of this money was issued between March and
October 1917.
 Money Circulation in Russia in 1917 11

Specimen of the 1917 State banknote

Specimen of the 1917 postage stamp currency emission

At the same time as the Provisional Government was involved in

issuing “old” money, it also took steps to draft designs for new banknotes.
Representatives of the “creative intelligentsia” were at the fore in this
matter. By the beginning of March 1917, a meeting of representatives
from various branches of the creative arts had been organised on M.
Gorky’s initiative in his apartment on Kronverksky Prospect in Petrograd.
More than 50 people were present, among which were artists A.N. Benua,
I.Ya. Bilibin, M.V. Dobuzhinsky, G.I. Narbut, and N.K. Roerich;
architects N.Ye. Lansere and I.A. Fomin; and actors I.V. Yershov and F. I.
12 Chapter One

Chaliapin. 17 The meeting elected a ‘Committee for the Arts’ that was
instructed to negotiate with the Provisional Government about all art
matters, including the conservation of existing sites of national heritage.
Soon afterwards a “Special Art Council” was organized under the
Provisional Government commissar for matters concerning the former
Ministry of the Imperial Court. On March 13, 1917 it was merged with a
similar commission of the Executive Committee (Ispolkom) of the
Petrograd Soviet of Workers’ and Soldiers’ Deputies. A group of famous
artists joined this new organisation to discuss a new state coat of arms.
I.Ya. Bilibin, a member of the Commission, suggested a provisional
design for a new Russian coat of arms based on a drawing of a two-headed
eagle that had appeared on Ivan III’s seal. The eagle, however, was
deprived of the imperial symbols of crown, sceptre, and orb.18
It was then that the artists came up with the suggestion of issuing new
stamps, and started work on new monetary units of Russia, the so-called
“Republic credit." And on March 16, 1917 the men of art came forward
with an initiative for creating “new banknote designs,” to be drawn by
famous artists. In his April 20 letter to the chairman of the Committee for
Arts established under the Executive Committee of the Petrograd Soviet of
Workers’ and Soldiers’ Deputies, Minister of Finance M.I. Tereshchenko
expressed “sincere and profound gratitude for this kind proposal.”19 His
advice to the artists was to familiarise themselves “especially closely with
the relevant particularities of this matter” while creating drawings of
monetary units corresponding with the new regime in Russia and to
contact the head of the Department of State Currency Production for any
further explanations. In addition the minister stated that if “presented
drawings satisfy technical requirements, the services of the artists
concerned might be remunerated as soon as presented drawings are
approved and ratified.”
On April 21, 1917 the Special Credit Office informed M. K. Lemke,
who was the head of the Department of State Currency Production from
March 1917 to August 1918, that “The artists were given all necessary
data and explanations…for creating draft drawings for banknotes."20As a
result, at its session on April 26, 1917, the Provisional Government
ratified a draft of a new state 1000 rouble banknote. This note was to be
issued “in addition to the denominations in circulation.” Because the notes
of the new issue bore an illustration of the Tauride (Tavrichesky) Palace in
Petrograd, where the State Duma sat, they became known under the
general name of “Duma money” or “dumki."21
 Money Circulation in Russia in 1917 13

Mikhail Tereshchenko, Minister of Finance

Printing of the notes was undertaken very quickly. On June 3, the State
Bank was sent a draft of the new banknote by the head of the DSCP.22The
increased issue of money, however, did not improve the financial
situation. Subsequently, at a session attended by the Minister of Finance,
his deputies, the director of the Special Credit Office, and the heads of the
DSCP and the State Bank, a decision was adopted to “urgently
recommend, to the Provisional Government, that an issue of treasury units
with face values of 20 and 40 roubles be placed in circulation.” Another
matter under consideration at the same time was an issue of 250 roubles
notes and the expedited “preparation of banknotes of a simplified design”
with denominations of 25 and 50 roubles.23On July 6, 1917 the Governor
of the State Bank informed the Ministry of Finance that “there are heavily
increasing demands from everywhere for banknotes of small
denominations, the replenishment of which is significantly more difficult
than it is for large denominations. With the issuance of 1,000 rouble
banknotes, the Department started delivering a total of 50–55 million
roubles of notes to the Bank daily, which are numbered and signed the
next day, and are sent to bank branches the following day... Only 1,000
rouble notes remain in bank branch cash offices, and these are unpopular
with clients who demand notes of medium denomination, i.e., 10, 25 and
100 rouble notes.”24
14 Chapter One

Specimen of the 1917 State banknote (“dumki”)

 Money Circulation in Russia in 1917 15

Specimen of the 1917 State banknotes

Preparations for the issue of new 25, 50 and 250 rouble banknotes
were completed in summer of 1917. However, notes of the two lowest
denominations were never printed. Meantime, modifications made in their
detailed draft design are of significant interest. According to information
from V. Marshal, the Director of the Special Credit Office and head of the
1st Department, the Assistant Minister of Finance ordered the words
“Russian Republic” on 25 rouble banknotes to be replaced with the word
“State." I.P. Shipov, the Governor of the State, Bank made the following
remark regarding the 50 rouble banknote draft design: “there are no
objections, apart from the positioning of the two numbers on the front
side; they are located on the very fold of the banknote in one line; thus I
suggest it is advisable to move the lower one to the right and the upper one
to the left, accordingly, as indicated in pencil on the specimen.”25
At the August 22 session of the Provisional Government, the Minister
of Finance's recommendation regarding the issue of 250 rouble banknotes
was considered. On August 28, 1917, M.V. Bernatsky, Assistant Minister
of Finance, approved a proposed 250 rouble banknote specimen but with
the added text “counterfeit of banknotes is subject to prosecution by law.”
16 Chapter One

At the same time he gave directions to “start printing the specified

banknotes immediately without waiting for the resolution on them to be
published.” 26 Such haste in this matter appears to have been wholly
unnecessary. As early as May of 1917, I.P. Shipov admitted the gravity of
the situation concerning banknotes. In a communication to the Ministry of
Finance he wrote “A catastrophe appears to be approaching. One must
wonder how we have managed to this point.”27

Specimen of the 1917 State banknote

Banknotes denominated at 250 and 1,000 roubles now featured an

unusual symbol for Russia, most often called a swastika today. The
official description of the banknotes said: “at the centre of each large
rosette lies a geometric pattern, which is made of crossed wide stripes bent
at right angles, to the right at one end, and to the left at the other. The
stripes are covered with a set of horizontal lines and are edged with a thin
outline at a small distance.”28
The appearance of swastikas on “dumki” notes can probably be traced
to the fact that I.Ya. Bilibin, creator of the original drawings for
banknotes, turned at a certain stage of his creation to styled Russian folk
ornaments, lubok (woodcut prints), and icons. Those who knew the artist
closely recollected that he had a collection of domestic implements used
by Russian peasants, including spinning wheels, lubok pictures, wooden
sculptures, clothes, and sets of embroidery patterns representing a history
of Russian ornamental crafts. Russian embroideries were a living language
for him. Looking at them he would guess where that lion or peacock, or
the cabalistic symbol of Sun or Man came from… He would decipher
these patterns like ancient writings." Bilibin also had a keen sense of
 Money Circulation in Russia in 1917 17

beauty for lines and their expressiveness. He described artists who (using
his words) “smeared in a helter-skelter way” as “counterfeiters." 29 The
cross, as one of the universal symbols of ancient times, was most often
regarded by many peoples as a sign of fertility, well-being, life, and
immortality. Through Bilibin’s efforts, this sign appeared on Russian
currency in 1917.
The total amount of “Duma money” issued in 1917 was 5,889.2
million roubles. The Soviet government continued to issue them from
1918 to 1921. By autumn 1922, after the revaluation of that year, when
they were withdrawn from circulation, the population had about 37.5
billion of “Duma money” in hand. Some of this was never redeemed.30

Specimen of the 1917 banknotes (“kerenki”)

In September 1917 treasury units with face values of 20 and 40 roubles

were issued; they were immediately called “kerenki” notes, after the
surname of the head of the Russian Government of the time. A
corresponding decision on their issue was adopted at a session of the
Provisional Government on August 22, and not long before that,
preparations for their issue began. On August 7, the State Bank notified
the Department of State Currency Production that the new treasury units
should be follow the design of consular stamps. On the front side words
“consular duty” were replaced with “treasury unit,” while the “1917
pattern” coat of arms replaced the two-headed eagle and crown. In the
lower part of the note, an inscription “mandatory for circulation at parity
18 Chapter One

with banknotes” replaced the abbreviation “Ɇ.ɂ.Ⱦ.” (Ministry for Foreign

Affairs). On the reverse side, the text “counterfeiting is subject to
prosecution by law” and a number denoting the banknote's value were to
appear. On September 1, 1917 the Assistant Minister of Finance approved
the drafts for the new monetary units and R.G. ZariƼsh, the DSCP senior
technician for art and graphics, received them on September 6.31

Specimen of the 1917 banknotes (“kerenki”)

“Kerenki” notes were issued as uncut sheets, each bearing 40 notes.

They had a simplified design and weak counterfeit protection: they had no
serial number or year of issue, and carried no facsimile signatures of the
Governor or the Chief Cashier of the State Bank. All this is indicative of
the haste which accompanied the new monetary issue. Counterfeiting of
the new treasury units became the favourite activity of banknote forgers
during the Civil War.
The population received “kerenki” notes with suspicion, calling them
“kvass labels” (kvass is a beverage made from fermented bread). However,
they became the main means of exchange quickly enough, owing to a lack
of money. Another reason was that people used them as a means of
exchange in preference to banknotes of large denominations, which were
kept as savings. There was also a lower rate for “kerenki” notes compared
to “Romanov money” – only 15-20%. “Kerenki” notes, like many other
monetary units, were actively issued by the new Bolshevik government as
well. In June 1919 alone, there were more than 23 billion roubles issued.
By the time “kerenki” notes were withdrawn from the circulation in
 Money Circulation in Russia in 1917 19

autumn 1922, printing presses had managed to “roll out” over 38 billion
roubles of them.32

Specimen of the 1917 Union of Russian Stock Commerce Banks

Soon after the Bolshevik coup d’état, M.V. Bernatsky, the last Minister
of Finance of the Provisional Government, in reviewing the state of the
country’s money circulation, justified the appearance of “kerenki” notes,
called them “disgraceful money,” and noted that they indeed “were issued
under his auspices,” but “if it had not been done, the October Revolution
would have been a September one.” According to the former Minister’s
words, he received telegrams about the ruin of exchequers in various
locations: “It was necessary to do something at whatever cost.”33 A good
20 Chapter One

chance for issuing ‘good money’ was wasted, and as early as summer
1917 Bernatsky took steps to place an order for printing banknotes abroad.
However, it was not until the end of 1918 that these notes started arriving
in Russia and they never reached the central regions of the country. Notes
denominated at 50 kopecks, 25 roubles, and 100 roubles were put to use
by different governments in Russia’s East, i.e., the Baikal Provisional
zemstvo authority, Kolchak’s government, the Far East Provisional
Government and others. These notes had corresponding overprints.
In 1917 another project for state banknote emission was prepared but
this never came to fruition and was never issued. These were notes with
face values of 25, 50, 100, and 500 roubles. They featured images of Ceres
and Mercury, as well as a cornucopia overflowing with magnificent
flowers and a variety of fruits, symbolising new life, buoyancy, the end of
winter and fortitude. The creator of banknote’s original drawing was the
famous artist S.V. Chekhonin. This is evident from the original drawing,
done in graphite pencil, of the bonds of the Union of Joint-Stock and
Commercial Banks, from which it was taken. In 1919, Chekhonin gave his
original bond drawing to the Russian Museum in Petrograd.
The idea of issuing state banknotes of joint-stock banks backed by gold
deposits (about 20 million roubles) first appeared in 1915. In 1917, a
consortium of the 30 largest Petrograd and Moscow banks decided to issue
cheques intended to be a means of exchange and payment with a limited
term of circulation. This emission project contemplated cheques
guaranteed by bank property. It was assumed that, effective January 2,
1919, any cheque bearer could produce it in a bank and receive state
banknotes in exchange for it. This issue could have become a profitable
source of capital growth for the banks, but these cheques were never put
into circulation despite having been printed by Golike & Vilborg printers.
Good quality paper without watermarks was used. Cheques denominated
at 25 roubles were light-green with a purple pattern and a border on their
front side, while the reverse side featured a light-purple grid of different
tints, ranging from pink to greyish purple. The front side of the 50 rouble
note was light-blue with a brown pattern, and a green net appeared on the
reverse. The front of the 100 rouble note was light-blue with a grey pattern
and a border, and a yellow net appeared on the reverse side.34
As they were printed, these cheques were sent to the State Bank’s
warehouses. After all central authority was moved to Moscow in 1918, the
cheques were stored in a warehouse of the Monetary and Payment Units
Department of the People’s (Narodny) Bank until November 9, 1920, at
which time a record of their destruction was made. The document said that
“the 1917 banknotes” denominated at 100 roubles (260 thousand sheets)
 Money Circulation in Russia in 1917 21

and 25 roubles (100 thousand sheets) amounting to 28.5 million roubles,

“printed at a private printing house in Petrograd” were put into a furnace
and destroyed by fire. Then “ashes were raked out and extinguished with
water to such effect that there were no parts of notes that retained their
original appearance.”35
Up to and through 1917, the Russian government widely exploited
another source of funding (besides paper money issues) for the war effort
– domestic loans. In this connection, it is necessary to stress that the
domestic loans helped the government to receive cash money which had
been accumulated in people’s hands, and with an increasing money supply
crisis, state bonds and coupons from securities started functioning as
banknotes. Up to February 1917, the tsarist government had issued six
loans for a total of 8 billion roubles. In the event, proceeds from these
loans totalled only 7.5 billion roubles.36

Specimen of the 5 % “Freedom Loan” bond

The Provisional Government, which came up with a slogan “war to a

victorious end” decided to follow the trodden path. At a session on March
26, 1917 a decision was adopted to issue a 5% state loan named “Freedom
Loan, 1917." A corresponding decree was signed next day. Denominations
of the initial bond issue varied from 50 to 25,000 roubles. A month later, it
was decided to issue 20 and 40 roubles bonds as well.37
22 Chapter One

The loan conditions mentioned benefits for the propertied classes.

They could acquire loan bonds at a relatively low rate: 85 roubles for 100
roubles. Bond holders had some other benefits as well, most importantly
tax free allowances. However, the government appeal ‘to lend money to
the state’ (which appeared on the bonds) largely fell on deaf ears when it
came to the general population of Russia. The loan subscription deadline
was extended twice: first, to July 15, 1917, and then, until the convocation
of the Constituent Assembly Even the endorsement that the former
Emperor and members of his family had taken up the cause by buying
“Freedom Loan” bonds at their own expense could not save the situation.
The amount which could be made available for this purpose was discussed
in summer 1917. Nicholas Romanov was prepared to acquire bonds “from
his own capital” even if his family maintenance allowance was terminated.
However, he planned to spend “only up to 100,000 roubles” on “Freedom
Loans."38
The total amount raised by the loan fell short of expectations. Just over
4 billion roubles were received. The “Freedom Loan” bond is not typical
in its appearance for securities. For the first time in the history of Russian
bonded loans, what essentially amounted to a proclamation was printed on
the front side. It was an agitprop appeal and not an explanation of the
loan‘s financial conditions (the latter were printed on the other side). The
Loan name itself bears witness to the fact that the issue was made for
political goals. Another peculiarity of the bonds’ appearance was the
facsimile signatures of 10 Provisional Government ministers, as well as
the signatures of the head of the State Commission for Loan Redemption
and that of an accountant on the reverse side.
According to a government decree of August 11, 1917 preparations for
the issue of a new loan – the “State Internal 4.5% Lottery Loan of 1917” –
commenced that summer. Due to the shortage of banknotes in circulation,
these bonds, as was the case with the “Freedom Loan” bonds, would
relatively soon be in use as currency and become legal tender in a number
of localities.
The variety of currency units during the Revolutionary period is
explained by soaring prices which led, amongst other things, to a shortage
of cash, and an increase in the face values of banknotes. It also encouraged
issues of all sorts of surrogate money: coupons, loans, stamps, etc. To cope
with the increased workload, senior officials of the Department of State
Currency Production (DSCP) took extraordinary measures: women were
permitted to work night shifts and additional labour was brought in.39 The
result was a significant growth in the number of workers. While in 1914,
there were 1,600 people employed by the Department, in March 1917,
 Money Circulation in Russia in 1917 23

there were 8,000, and by July their number had increased to 9,200
employees.40 By October 1917, the Russian monetary economy was in its
deepest crisis. The amount of paper currency in circulation totalled 19.5
billion roubles.41 Just before February 1917, the purchasing power of the
rouble on the domestic market was about a quarter of its pre-war level (27
kopecks), and by November 1917, it had depreciated by an additional 75%
and was worth only 6-7 pre-war kopecks. It can be stated unequivocally
that the financial legacy inherited by the Bolshevik government was an
unenviable one.

Notes
1
A.D. Gusakov, Ocherki po denezhnomu obrashcheniiu Rossii nakanune i v
period Oktjabr’skoi sotsialisticheskoi revoljutsii (Moscow: Gosfinizdat, 1946), 5.
2
“Zapiska upravljajushchego Gosudarstvennym bankom S.I. Timasheva o
denezhnom obrashchenii v Rossii. 1904–1907 gg.” In S.I. Timashev: zhiznƍ i
dejatelƍnostƍ. Izbrannye soshchineniia, sost. A.L. Vychugzhanin, 285–317
(Tumen’: ID “Slovo”, 2006), 313.
3
Rossiia 1913 god. Statistiko-dokumentalƍnyj spravochnik, red.-sost. A.M.
Anfimov, A.P. Korelin (St. Petersburg: Izd-vo “BlITS”, 1995), 173–74.
4
Nashe denezhnoe obrashchenie, 72.
5
Ganelin, R.Sh., and Florinsky, “M.F. Ministr finansov P.L. Bark v gody Pervoj
mirovoj vojny (Po publikatsijam A.N. Yahontova i materialam ego arhiva)” In
Istoriia finansovoj politiki v Rossii. Sb. statej, sost. I.N. Baranov, A.L. Dmitriev
(St. Petersburg: Fak. menedzhmenta SPbGU, 2000); Beljaev, S.G. P.L. Bark i
finansovaia politika Rossii. 1914–1917 gg. (St. Petersburg: St. Petersburg State
University, 2002).
6
Nashe denezhnoe obrashchenie, 109.
7
A. Yahontov, “Pervyj god vojny (ijulƍ 1914 – ijulƍ 1915 g.). Zapiski, zametki,
materialy i vospominaniia byvshego pomoshchnika upravljajushchego delami
Soveta ministrov / Vvodnaia statƍia i kommentarii R.Sh. Ganelina, M.F.
Florinskogo." Russkoe proshloe. no. 7 (1996): 331–32.
8
Bumazhnye denezhnye znaki Rossii i SSSR, 34–35.
9
The stamping of Russian coin was stopped in 1917. The only exception was the
stamping of copper and silver coins, made in February 1918, as some numismatists
suppose, for keeping the army at the frontline. M. Smirnov, “1917 god v russkoj
numizmatike." In Kollektsioner. Sbornik, gl. red. L. Melƍnikov (Moscow, 1995).
10
Russkij rublƍ. Dva veka istorii, 181.
11
N.V. Prohorova, Monety i banknoty Rossii, 196, 198.
12
M. Maksimov, “Marki-denƍgi." Bonistika (prilozhenie k gazete «Miniatjura»).
Iss. 4 (September 1996).
13
Nashe denezhnoe obrashchenie, 82–84, 90–91.
14
M.M. Glejzer, Sovetskij shchervonets (St. Petersburg: Izd-vo TOO “Real”,
1993), 6.
24 Chapter One

15
Nashe denezhnoe obrashchenie, 86–88.
16
A.L. Sidorov, Finansovoe polozhenie Rossii v gody Pervoj mirovoj vojny (1914–
1917) (Moscow: Izd-vo Akad. nauk SSSR, 1960), 135, 144.
17
V.P. Lapshin, Khudozhestvennaia zhiznƍ Moskvy i Petrograda v 1917 godu
(Moscow: Sovetskij khudozhnik, 1983), 74.
18
For details see: B.I. Kolonitskij, Simvoly vlasti i borƍba za vlastƍ: k izucheniiu
politicheskoj kulƍtury rossijskoj revoljutsii 1917 goda (St. Petersburg: Izd-vo
“Dmitrij Bulanin”, 2001), 84–85.
19
Rossiiskij gosudarstvennyi istoricheskij arkhiv (RGIA) f. 1682, op. 1, d. 101, l.
6; Tsentral’nyi gosudarstvennyi arkhiv Sankt-Peterburga (TsGA SPb) f. 1255, op.
1, d. 13, l. 3.
20
RGIA f. 1682, op. 1, d. 101, l. 6 ob.
21
Arhiv novejshej istorii Rossii. Zhurnaly zasedanij Vremennogo pravitelƍstva:
Mart–oktjabrƍ 1917 goda. V 4 t. Vol. 1, otv. red. B.F. Dodonov (Moscow:
Rossiiskaia politicheskaia entsiklopediia, 2001), 354.
22
TsGA SPb f. 1255, op. 1, d. 13, l. 2.
23
RGIA f. 587, op. 56, d. 734, l. 6.
24
RGIA f. 587, op. 56, d. 734, l. 13 ob.
25
TSGA SPb f. 1255, op. 1, d. 13, l. 26.
26
Arhiv novejshej istorii Rossii, 409; TSGA SPb f. 1255, op. 1, d. 13, l. 17, 32.
27
RGIA f. 587, op. 56, d. 734, l. 4 ob.
28
TsGA SPb f. 1255, op. 1, d. 13, l. 9; Sobranie uzakonenij i rasporjazhenij
pravitelƍstva, izdavaemoe pri Pravitelƍstvujushchem Senate. 1917. 6 June. Otd. 1.
N 128. St. 697. P. 1112–1115.
29
Ivan Yakovlevich Bilibin. Statƍi. Pisƍma. Vospominaniia o hudozhnike
(Leningrad: “Khudozhnik RSFSR”, 1970), 155, 179.
30
Nashe denezhnoe obrashchenie, 94–95.
31
M. Maksimov, “Kaznachejskie znaki Vremennogo pravitelƍstva («kerenki»)."
Bonistika (prilozhenie k gazete «Miniatjura»). Iss. 4 (September 1996).
32
Nashe denezhnoe obrashchenie, 94–95.
33
Voprosy denezhnogo obrashcheniia, pod. red. A.E. Lomeiera (Petrograd: Izd-vo
“Kopeika”, 1918), 80.
34
V.P. Vjazelƍshchikov, “Denezhnoe obrashchenie treh system." Sovetskij
filatelist–sovetskij kollektsioner. no. 12 (1927), 16.
35
Rossiiskij gosudarstvennyi arkhiv ekonomiki (RGAE) f. 2324, op. 1, d. 7, l. 66–
66 ob.
36
A.L. Sidorov, Finansovoe polozhenie Rossii v gody Pervoj mirovoj vojny, 151.
37
Arhiv novejshej istorii Rossii, 170–172, 347–348.
38
RGIA f. 560, op. 26, d. 1450, l. 3.
39
RGAE f. 7733, op. 1, d. 61, l. 13 ob.
40
A.E. Mikhaelis, and L.A. Kharlamov, Bumazhnye denƍgi Rossii (Perm’:
Permskaia pech. f-ka Goznaka, 1993), 21.
41
A.L. Sidorov, Finansovoe polozhenie Rossii v gody Pervoj mirovoj vojny, 145.
 CHAPTER TWO

MONEY IN “THE TIME OF TROUBLES”:

FINANCE IN THE “WAR COMMUNISM” PERIOD,
1918–20

World War and Revolution had, among other upheavals, caused both a
depression in the Russian economy and a breakdown in the economic ties
between the administrative centre and the regions. A subsequent “liquidity
shortage” of cash to keep the economy afloat was one of the consequences
of this. Despite attempts by the central authorities to bring the printing of
money under control and prevent the circulation of multiple, local
monetary units, a breakdown in the system of rate-collection for services
such as utilities as well as for municipal railways, bath houses, laundries,
chimney-sweeping services etc., meant that issue of new local currencies
was quite often seen as the best option for supporting regional budgets.
This phenomenon, which had made itself sharply felt as early as 1917,
became endemic during the Civil War, and became known as “money-
crafting." The spread of “money-crafting” and the growth of separatist
sentiments were largely brought about by the inability of the central
government to maintain more or less functional channels of cooperation
with local authorities. Tax revenues and other budget sources were drying
up. Even at the end of 1918, as several heads of various governmental
agencies admitted, the provinces were quite often left “without directions
or instructions from the centre” thus being “left to their own devices." All
this resulted in enhanced “bell-tower patriotism and detrimental
separatism”, one of the expressions of which was the issue of a variety of
local monetary unit surrogates.1 Within months of the Narkomat (People's
Commissariat) for Finance having started its work, it was literally
inundated with telegrams complaining about the “catastrophic money
shortage” from local authorities.2 In a report by the People’s (Narodny)
Bank (still called the State Bank until the spring of 1918) during its first
year, its “normal course” of working was disrupted, as noted pointedly, by
a lack of data from offices and branches located in Ukraine, Central Asia,
the Caucasus, and Siberia.
26 Chapter Two

Kiev State Bank Branch

The circumstances were further aggravated by the introduction of

banknote surrogates in circulation in various localities in Russia, which
was taking place “in response to a severe lack of money in the outer
regions of the Republic.” As the governors of the People’s Bank admitted,
an important part of its work was taken up by matters “of clarifying and
settling invoices of both the Bank and the Treasury with the Ukrainian
State Bank. The latter originated from the offices and branches of the
former State Bank, with treasuries assigned to them.” 3 And indeed, in
Ukraine, the Central Rada was attempting to raise money to fund its
operations in its attempt to get rid of the Provisional Government’s
“patronage” as early as spring 1917. There was a plan to “levy a special
duty on the population for the national interest, and systematically and
immediately transfer it to the treasury of the Ukrainian Rada” starting July
1, 1917. 4 By autumn 1917, the financial situation had become even
worse. As a result of the breakdown of the economic ties with the central
authorities in Petrograd and in the absence of financial support from the
Rada, a number of towns in Ukraine started their own “money-crafting”
activities. Thus on December 9, 1917, a Committee of Odessa Credit
Institutions approved a project for issuing local “subsidiary notes." The
Odessa Municipal Government acted as the issuing body. An agreement
between the Committee and the Municipal Government stipulated an issue
of subsidiary notes with face values of 3, 5, and 10 roubles for a total of
five million roubles.
 Money in “the time of troubles" 27

Specimen of the Odessa subsidiary roubles and stamps

28 Chapter Two

Per an agreement between corresponding institutions in Odessa and

Nikolayev, the subsidiary notes officially circulated at parity in both cities.
In fact, they circulated over nearly the entire territory of Kherson
Province. Inflation took its toll, however, and forced adjustments to the
issuer’s plans. Notes with face values of 3, 5, 10, 25, and 50 roubles were
printed, along with subsidiary stamps of 15, 20, and 50 kopecks. As a
result, by June 1918, more than 115 million roubles of Odessa subsidiary
units had been placed in circulation.5

Specimen of the Odessa subsidiary roubles

It turned out to be impossible to curtail separate issues given the

national currency shortage. The central government tried to bring this
process within an organised framework. On August 8, 1918, at a
Sovnarkom committee meeting, a petition was discussed, submitted by an
extraordinary delegation from the Central Executive Committee of the
Turkestan Soviet Republic for the provision of funds to Turkestan.
 Money in “the time of troubles" 29

Following that, the Narkomat for Finance made a finding and prepared a
draft decision, which was approved in principle by the Sovnarkom
committee on August 24. By a decree of the RSFSR Sovnarkom dated
September 3, 1918, the Tashkent branch of the People’s Bank received
authorization to issue interim Turkestan Krai banknotes (turkbonds) “in an
amount of not more than 200 million roubles.”6 By a Sovnarkom Decree
dated April 24, 1919, the turkbonds became legal tender and were
circulated at parity with the national monetary units in the Transcaspian,
Samarkand, Semirechinsk, Syr-Darya, Fergana, Turgai, and Akmolinsk
Regions, as well as in Khiva and Bukhara.

Bukhara State Bank Branch

At the beginning of 1918, on the basis of a submission by a group of

industrialists, a project for a banknote issue was discussed in the Economy
and Finance Department of the Moscow District Economy Committee
(MDEC). The project prompted “lots of controversy,” however, and was
ultimately rejected. At which point, it was noted that “given the dire
present situation, it is better to boost the quantity of the [national. –
M.Kh.] currency, even if this means doing it less efficiently,” rather than
bring local monetary units into circulation.7
Due to a shortage of monetary units, the Southern Regional Council for
the National Economy was forced to turn a blind eye to the fact that the
worker’s administration of the nationalised enterprises of the “Union”
joint company in Makeyevka had placed into circulation special notes
signed by the head of the worker’s administration V.M. Bazhanov.8
30 Chapter Two

In his speech at the 1st Congress of the Northern Regional Soviets at

the end of April 1918, A.L. Scheinman, the Commissar for Finance of the
Union of the Northern Regional Communes, characterised the developing
situation as follows, “If we cannot ‘raise ourselves’ in this matter, no
amount of installing another press and printing millions in paper money
will not rectify the situation. After all, in a while nobody will accept these
notes; a blank piece of paper can at least be written on, while these
trammelled papers are good for nothing.” Another attempt to normalise the
work of the Commissariat for Finance of the Northern Region was through
the Interdepartmental Council for Reduction in Government Expenditure—
“the reducing commission”, which, besides concerning itself with carrying
out possible economies in government expenditure, also took on
responsibility for the regulation of financial organisations throughout the
industrial zone.9

Nizhny Novgorod State Bank Branch

Given the money supply crisis, there was an increasing tendency for
local authorities to lose stable ties with the centre, and to undertake their
own measures to prevent regional economic collapse. Local money issues
became one of the methods used by provincial administrative bodies to
achieve this. On August 5, 1918 a meeting on the circulation of money
surrogates was held in the building of the People’s Bank to address the
proliferation of such issues. By this time currency circulation had already
absorbed bonds of the Orenburg branch of the State Bank, banknotes of
 Money in “the time of troubles" 31

Penza and Tashkent Branches, Nikolayevsk-on-Amur and Khabarovsk

cheques, and interim banknotes of Tsaritsyn and Astrakhan. Heads of
financial bodies could not deny that large amounts of surrogate issue were
in circulation, including serial issue (State Treasury notes), ‘Freedom
Loan’ bonds, State Treasury small paper notes and short-term obligations,
interest bearing security coupons, and town and locality bonds of various
People’s Bank’s branches and offices.10
Local Councils for National Economy had also started issuing their
own monetary units. In the middle of June 1918, a separate issue of Baku
Town Board was replaced by an issue by the Baku Council for the
National Economy, which placed 117 million 459 thousand roubles into
circulation by September 1918.11
In his speech at the 1st All-Russian congress of the Councils of the
National Economy (end of May – beginning of June 1918),
F.F. Syromolotov, a representative of the Urals Region Council of the
National Economy, placed emphasis upon the currency shortage in
describing the financial situation in the region. According to him, the
Council for the National Economy had no choice but to issue money itself
under these conditions. With its help, printing of new bonds commenced at
exploration sites, mines, individual plants, and towns. However, in some
cases the new issues were not well received by the public. For example,
the monetary units issued by Krasnoufimsk Uyezd Zemstvo in 1918 were
given “short shrift”, while in the Bazhenov asbestos producing region,
according to Syromolotov, the local bonds were welcomed well, “at the
Bogoslovsky plants and in Ust-Sylvitsa as well.” These issues temporarily
helped economic administrators out of a tight spot. The local
Commissariat for Finance followed this course even further. In the Urals,
the regional Council concluded that it needed its own issue. After
consultations, “the emission of a specified amount of State Urals’
monetary units was authorized by Moscow on a provisional basis." At an
artists’ competition, “five different units” were approved, and the new
regional banknotes of the Yekaterinburg Branch of the State Bank soon
appeared in circulation.12
Multiple monetary issues were popular not only in the Urals and in
Siberia,13 but in other regions as well. For example, in February 1919, in
Zhitomir, the town’s autonomous government issued bonds of 1, 3 and 5
karbovanets, and by July a total of 30 million roubles of these had been
printed. Later, according to the records of the Narkom (People's
Commissar) for Finance, the Zhitomir district and neighbouring Uyezds
issued local money as well. This occurred because the area was completely
surrounded by the enemy and its communications with the centre of
Random documents with unrelated
content Scribd suggests to you:
 Section 4. Information about Donations to
the Project Gutenberg Literary Archive
Foundation
Project Gutenberg™ depends upon and cannot survive without
widespread public support and donations to carry out its mission
of increasing the number of public domain and licensed works
that can be freely distributed in machine-readable form
accessible by the widest array of equipment including outdated
equipment. Many small donations ($1 to $5,000) are particularly
important to maintaining tax exempt status with the IRS.

The Foundation is committed to complying with the laws

regulating charities and charitable donations in all 50 states of
the United States. Compliance requirements are not uniform
and it takes a considerable effort, much paperwork and many
fees to meet and keep up with these requirements. We do not
solicit donations in locations where we have not received written
confirmation of compliance. To SEND DONATIONS or determine
the status of compliance for any particular state visit
www.gutenberg.org/donate.

While we cannot and do not solicit contributions from states

where we have not met the solicitation requirements, we know
of no prohibition against accepting unsolicited donations from
donors in such states who approach us with offers to donate.

International donations are gratefully accepted, but we cannot

make any statements concerning tax treatment of donations
received from outside the United States. U.S. laws alone swamp
our small staff.

Please check the Project Gutenberg web pages for current

donation methods and addresses. Donations are accepted in a
number of other ways including checks, online payments and
credit card donations. To donate, please visit:
www.gutenberg.org/donate.

Section 5. General Information About

Project Gutenberg™ electronic works
Professor Michael S. Hart was the originator of the Project
Gutenberg™ concept of a library of electronic works that could
be freely shared with anyone. For forty years, he produced and
distributed Project Gutenberg™ eBooks with only a loose
network of volunteer support.

Project Gutenberg™ eBooks are often created from several

printed editions, all of which are confirmed as not protected by
copyright in the U.S. unless a copyright notice is included. Thus,
we do not necessarily keep eBooks in compliance with any
particular paper edition.

Most people start at our website which has the main PG search
facility: www.gutenberg.org.

This website includes information about Project Gutenberg™,

including how to make donations to the Project Gutenberg
Literary Archive Foundation, how to help produce our new
eBooks, and how to subscribe to our email newsletter to hear
about new eBooks.
Welcome to our website – the ideal destination for book lovers and
knowledge seekers. With a mission to inspire endlessly, we offer a
vast collection of books, ranging from classic literary works to
specialized publications, self-development books, and children's
literature. Each book is a new journey of discovery, expanding
knowledge and enriching the soul of the reade

Our website is not just a platform for buying books, but a bridge
connecting readers to the timeless values of culture and wisdom. With
an elegant, user-friendly interface and an intelligent search system,
we are committed to providing a quick and convenient shopping
experience. Additionally, our special promotions and home delivery
services ensure that you save time and fully enjoy the joy of reading.

Let us accompany you on the journey of exploring knowledge and

personal growth!

ebookgate.com