Apr 29, 2022
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Was there a gold ruble in the Soviet Union?

Russian economists Sharapov, Nechvolodov, Butmi warned that Witte’s gold ruble would destroy Russia

After the start of the sanctions war against Russia of the collective West), discussions intensified in our country on the possible creation of a gold ruble. Such a ruble, according to some experts, is able to protect the Russian economy from Western sanctions and give impetus to its development. At the same time, such experts argue that there is no need to reinvent the wheel, one should use their own experience in introducing the golden ruble. Three precedents for the establishment of a gold currency in our history are named. Let’s look at these cases and find out if the ruble was really gold.

First case.We are talking about the introduction of the gold ruble as part of the monetary reform, which was carried out in 1897 in the Russian Empire. The initiator and organizer of that reform was the Minister of Finance Sergei Yulievich Witte. Prior to this, a considerable number of countries had already switched to the so-called gold standard. It was understood as the introduction into circulation of the national currency, backed by the gold reserve of the Central Bank; such security was supported by the establishment of the right of the holder of banknotes (banknotes) to exchange them at a certain rate for precious metal from reserves. At the same time, not only banknotes, but also gold coins were in circulation. The issue of paper banknotes by the Central Bank was tied to the value of the gold reserve (in the form of establishing a certain percentage of coverage of the issue with gold). The first country to set the gold standard was Britain (1819). A massive transition to the gold standard occurred in the 70-80s of the XIX century (Germany, France, Belgium, Italy, etc.). Russia, according to Witte, made such a transition with a great delay.

Russian conservatives called the transition to the gold ruble a “golden mousetrap”. Among them were an entrepreneur, a public figure and an economist. Sergei Fedorovich Sharapovgeneral Alexander Dmitrievich Nechvolodov, public figure Georgy Vasilievich Butmi other. They explicitly stated that the gold standard was a Rothschild project. After the Napoleonic wars, a huge amount of precious metal was concentrated in their hands. They wanted gold not to be a dead weight, but to be capital, to make a profit. This could be done with gold loans. And the demand for such loans will inevitably arise from those states that are hooked on the needle of the gold standard. After all, for the development of the economy it is necessary to increase the emission of money. And if, within the framework of the gold standard, it is tied to the reserve of the precious metal, then, therefore, it is necessary to increase the value of this reserve. And one of the simple and obvious ways of such an increase should be the gold loans received from the Rothschilds. Gold turns into capital and begins to enrich the Rothschilds. It is no longer necessary to say that the value of each gram, each ounce of gold will increase over time. After all, the amount of gold in the world is limited, the growth of gold reserves will inevitably lag behind the growth of the mass of commodities. Consequently, the purchasing power of the precious metal will automatically increase. And Sharapov, and Nechvolodov, and Butmi warned that Witte’s gold ruble would destroy Russia. Indeed, Russia began to increase external borrowing, resorting to gold loans from the Rothschilds. On the eve of the First World War, Russia and the United States had the largest foreign debts. However, if the United States had a private debt, then Russia has a sovereign one. Such a debt threatened Russia with the final loss of its national sovereignty. True, for the duration of the war, the operation of the gold standard in Russia (as in other warring countries) was partially suspended. There was no return to this standard until October 1917. Even theoretically, such a restoration was difficult to imagine, because. a significant part of the gold reserves of Russia during the war years was lost. These questions are discussed in more detail in the book: Katasonov V.Yu., Nechvolodov A.D., Sharapov S.F., Butmi G.V. Secrets of gold. “Masters of money” against humanity. (M.: Oxygen, 2020. – 960 p.).

Second case.In the mid 1920s. ideas of returning to the gold ruble, which was before the revolution, began to soar in the USSR. The basis for such conversations was the appearance of the so-called golden gold piece. This gold coin (also called the “Sower”) with a face value of 10 rubles and a mass of 8.603 g and a fineness of 900 was minted in the USSR in 1923. It was equated to a 10-ruble gold coin of royal minting. The number of such coins was very limited (almost the entire supply of minted coins was in the reserves of the State Bank).

In 1924, a fairly large number of paper chervonets came into circulation, which Soviet newspapers also began to call “gold”, since the People’s Commissariat of Finance hatched plans for the free exchange of paper signs for metal coins. And up to this point, the People’s Commissariat of Finance announced that the treasury paper chervonets is backed by 25% of its value with gold, other precious metals and foreign currency and by 75% with easy-to-sell goods and short-term obligations. On paper chervonets the inscription was placed: “The bank note is subject to exchange for gold. The beginning of the exchange is established by a special government act.

The then People’s Commissar of Finance G. Sokolnikov stated that the Soviet gold chervonets would circulate on all currency exchanges in the world. This people’s commissar was flatteringly called by some “the second Witte.” In 1925, the Soviet chervonets really began to be officially listed on the stock exchanges of a number of countries (including Austria, Turkey, Italy, China, Estonia, Latvia, Lithuania), and transactions with it were carried out in Great Britain, Germany, Holland, Poland, the USA, etc. The benchmark for bidders was the gold parity of the ruble, which was set by the People’s Commissariat of Finance at the level of 0.774234 g of pure gold. Everyone expected that not today or tomorrow the free exchange of banknotes for precious metal would begin. At that time, there was a sharp struggle in the party and government around the problem of the convertibility of paper gold coins into gold, but the exchange of gold coins for gold never came. Moreover, in 1925 even the minting of the “Sower” was stopped, the coin became a collector’s rarity.

As for People’s Commissar G. Sokolnikov, in 1925 he joined the “new opposition” (leaders of which were Kamenev and Zinoviev), actively opposed the state monopoly of foreign trade and the state currency monopoly, doubted the need for industrialization (he expressed at the XIV Congress of the CPSU (b) in December 1925). In January 1926, Sokolnikov was removed from the post of People’s Commissar for Finance, and in the spring of 1926 a decision was made to stop the chervonets quotation on foreign exchanges.

Supporters of industrialization prevailed in the leadership of the party and government. A fundamentally different type of monetary system began to take shape. Paper banknotes and treasury bills circulated inside the country. Paper money was supplemented by non-cash money, which served the sphere of production. Both the cash and non-cash ruble was backed by manufactured goods and commodity stocks (“commodity ruble”). I.V. Stalin at the Joint Plenum of the Central Committee and the Central Control Commission of the All-Union Communist Party of Bolsheviks in January 1933, he stated that “the stability of the Soviet currency is ensured primarily by the huge amount of commodity masses in the hands of the state, which are put into trade at stable prices“.

In the sphere of external payments, the state currency monopoly operated, and the ruble was not used for external transactions. Thanks to the monetary system that had developed in the USSR by the early 1930s, we were able to industrialize.

Third case.The introduction of the so-called “golden ruble” by Stalin in 1950 (Decree of the Council of Ministers of the USSR of February 28, 1950). Let me remind you that since the 1930s, when the state currency monopoly was fully introduced in the USSR, the Soviet ruble did not leave the country, but the exchange rate of the ruble in relation to foreign currencies was established. Initially, the State Bank of the USSR determined the exchange rate of the ruble against the French franc (in the 1930s it was the core of the so-called “gold bloc” and had the lowest volatility). At first, the rate was equal to 3 francs. francs per ruble, after the devaluation of the franc – 4.25. Since July 1937, the exchange rate of the ruble began to be determined in dollars, in which since 1934 a constant gold content was fixed (1 US dollar for 5 rubles 30 kopecks). To raise the prestige of the Soviet ruble and for political purposes, in 1950 the ruble was freed from the US dollar and other Western currencies, the exchange rate of which fluctuated quite noticeably, and a direct peg of the ruble to gold was established. True, such a link did not provide for the possibility of exchanging the ruble for gold either for foreigners or for individuals and legal entities within the country. Here is what our well-known expert on currency issues, Professor CM. Borisov: “In order to demonstrate the firmness of the positions of the Soviet ruble against the backdrop of a massive devaluation of Western currencies, its exchange rate was transferred to a gold basis from January 1, 1950, with the gold content set at the level of 1 ruble. = 0.222168 g of pure gold. Based on this value, the exchange rate rose to 4 rubles. for 1 dollar against 5 rubles. 30 kopecks, which was used in all cash settlements for foreign economic transactions from July 19, 1937. How was the new gold content of the ruble determined? There is a version that initially it was supposed to establish a new exchange ratio at the level of 1 dollar = 5 rubles. However, when the draft of the corresponding decree was shown to Stalin, he crossed out the number “5”, wrote “4”, and this decided the matter. The desired gold content was obtained by dividing by this figure the gold content of the dollar, which was then 0.888671 g. ”(S.M. Borisov. The ruble is the currency of Russia. M., 2004, p. Thus, we see that the gold parity of the Soviet ruble was set without taking into account the size of the country’s gold reserves. However, these reserves were by that time very significant. In 1953, the country’s gold reserve reached its maximum – 2048.9 tons. the increase in the gold reserves of the USSR, according to my estimates, amounted to 1900 tons (see: Katasonov V.Yu. Gold in the economy and politics of Russia. – M .: Ankil, 2009, p. 92-93). The precious metal was accumulated not in order to make the Soviet ruble gold, but in order to form reserves of gold as “emergency money”. Therefore, it is not surprising that the accumulated gold was mainly on the balance sheet of the Ministry of Finance, and not the State Bank of the USSR.

So, summing up, we can say that in the history of our state, the gold ruble was introduced only once – in 1897, and it existed de jure for only two decades (de facto less, since with the outbreak of the First World War, the gold standard was suspended).

In the Soviet Union – given the negative experience of using the gold ruble in pre-revolutionary Russia – the ruble was never gold. It could only be about establishing the gold parity of the Soviet ruble, which made it possible to calculate its exchange rate in relation to other currencies. If you try to define the Soviet ruble, then it is better to call it commodity. This is the ruble we need today.

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