Subscribers enjoy higher page view limit, downloads, and exclusive features.
The Monetary Reform in Russia N February 22, 1924, the Govern- ment of the Federated Soviet Socialist Republics issued a decree by which silver coin was inaugurated, for the first time since 1914, to be ac- cepted on par with the gold currency. On March 9, 1924, the government added a decree on the redemption of the sovznak, or the soviet paper ruble, put- ting a firm price at 50,000 rubles of the issue of 1923 for one gold ruble to be accepted by all, at that price, until the tenth of April and by the government banks up until the 10th of May, then to be withdrawn alto- gether from circulation. These two decrees have made an end to the worthless steadily falling sovznak, and have the Socialist Re- publics put on a basis of firm stabil- ized currency. The soviet ruble itself, steadily on the decline, became by the last decree until its final withdrawal, a firm currency, its worth being stabilized by the decree, and accepted by the population with great desire as small change, in which Russia, even after the issuance of the silver and copper currency, is yet in great need. The decree on the silver coin tells that there are going to be five de- nominations of it; namely, in 10, 15, 20, 50 copeks and one ruble, while the copper coin will be 1, 3, 5 copeks. The silver coin of one and one-half ruble denomination must contain ninety per cent silver and ten copper, the rest half and half. The decree tells that it has been decided to mint and let in circulation up until the first of January, 1925, silver coins to the amount of one hundred million gold rubles, and prohibits the acceptance of any of the silver and copper coins of the old tsarist designs excepting the state banks who are to accept them only for the amount of sterling silver in them. The decree, besides, prohibits any and all institutions to issue surrogates in any form. The monetary reform under the cir- cumstances the Soviet government finds itself, with no credits in the out- side world, still boycotted by many great powers, still threatened on all sides, hardly emerged from the most painful hunger and with industry less than a third of what it was before the war, was an undertaking of tre- mendous dimensions and demanded a serious change in the whole financial and economic life of the land. But it was put thru, and hard cash is ringing now as of yore in the pockets of the soviet citizen, and his ruble now is as real as it was never before, in fact, more real than all the favorite foreign currencies that the diverse “black bourses” in the big Russian cities were dealing in until the publi- cations of the decrees. The Russian citizen refuses now to buy any foreign money on the markets and the “black speculators” have closed their street bourses. The most favorite of the foreign currencies, the American dol- lar, fell inside of two days on the “black bourses” of Moscow, Lenin- grad, Kieff, ete. from 2.60 chervony rubles to 1.98, and it is still on the decline, so that the dollars now sent by relatives to Russia do not leok at all as big as before. A total end was also made to the speculation in tsarist gold and silver coin, because in the first place, the dealing in them is pro- hibited by decree and in the second place, the peasants who have hoarded them, have quickly decided to get rid of them, now that they have soviet “real money;” and while they have been getting only a month before as much as 1.20 chervony ruble for the tsarist silver ruble, they are glad to sell them now at 55 chervony copeks and the same holds true as to the gold tsarist coin. The new monetary reform, while tremendous in scope and daring, was not altogether a surprise and was ex- pected to come. Im fact, life itself decreed the fate of the sovznak, For the last year the Soviet Government was constantly curtailing the emission of the sovznak or the soviet paper ruble, withdrawing it steadily from circulation, and lately it had become only as a means to cover deficits in the budget which, in fact, quickened the total elimination of it from the economic life. In the beginning of 1923, in the soviet republics, there were almost exclusively only sovznaks, but in January, 1924, the amount of the guaranteed and stable chervonietz in circulation was 81 per cent while the sovznak was only 19 per cent, and in February, this year, the amount of the sovznak in circulation fell still further down to 12.6 per cent, the amount of the chervonietz being some thing like about 300 million gold ruble and that of the sovznak about 39 million gold rubles, Still there was a need in the emis- sion of the sovietznak. In the first place, the deficit in the budget had to be taken care of. The government, in order not to put the chervonietz in the same class as the sovietznak, that is in order not to depreciate the cher- vonietz, had to fall upon the emission of the sovznak for this purpose. And in the second place, because the chervonietz was of big denomination, the populace and especially the peas- ants used the sovznak for their con- venience, that is, for small change. But the sovznak was tremendously falling in worth in the beginning of this year; the tempo of the fall of the sovznak was much quicker than the emission of it, and it was quickly realized that even as a means of cov- ering the governmental deficits it would not do. It fell in worth in fore, when prices were low and the only ones that had gained were the richer peasant and the speculaitor. The monetary reform practically forced itself on the Soviet Republics. “We were forced into the monetary reform,” declared Kameniey in_ his speech at a conference of active and representative workers of Moscow, because the sovznak had reached the actual bottom and we cannot hold out with it even a few more weeks. The peasantry refuses to sell grain to the government in exchange of sovznak and the inauguration of this policy is therefore as much political as financial. It will be undoubtedly a painful process but which we must pull thru.” But to assure the stability of the new stabilized currency, many things were to be done and they were done with the energy and endeavor char- acteristic of the Soviet government. “The monetary reform,” said Kam- eniev in his quoted speech, “has two deadly enemies, the government de- ficit and the high prices on commodi- ties, and if we shall not conquer these two enemies we will have to ac- knowledge that we have acted heed- lessly. We must therefore fight for the reform more energetically because when we lose out we have lost not only technically but more so _ poli- tically.” The deficit is therefore a deadly enemy of the reform, Kameniev ex- plained, because if the deficit shall WHY COMMUNISM IS A MENACE The American Legion has offered a purse, To be paid for the best Exposes of the curse; Which is first above mentioned. So, let us proceed To win part of said cash, with all possible speed! “Americanism” as these brave heroes view It, means lynching whoever dares differ from you! As Frank Little whose murder the Oil Thieves acclaim, Or John Brown whose “Rebellion” brought Immortal Fame! To “Americanism” like that, it is plain COMMUNISM is a Menace, indeed! In vain, Do we quote from the words of “The Crucified One!” When we follow CHRIST’S TEACHING, THE LEGION IS DONE! Among, HIS DISCIPLES, there was no room for Greed! They were COMMUNISTS sharing as each one had need! I. D. McFadden. January over a third and in February still more. There were, for instance, in January sovietznaks to the nominal amount of 178 billion rubles, and in February to the nominal amount of 333 billion rubles, whereas the worth of all that amount in January was 58 million gold rubles, and in February, with almost twice as much in amount, only 39 gold or chervony rubles. Together with the speedy decline of the sovznak there was an equiva- lent rise in prices on commodities. Grain products have shown the great- est rise, textiles the smallest and the chervonitz something between. Grain products have risen in comparison with 1,000 for October of last year, to December, 4,456; January, 104,702; February, 38,852. Textiles in compari- son with 1,000 for October; Decem- ber, 2,451; January, 5,160 and Febru- ary, 14,602. And the chervonietz, Oc- tober, 1,000; December, 3,425; Janu- ary, 7,500 and February, 20,500. The smaller rise in textiles is explained by the big cry of “coming together of the scisors” previous to the inaugura- tion the new monetary reform, when it was decided to lower prices on manufactured goods so that the peas- ant can buy them, but this “coming together” did not show the success expected of it. Prices on manufac- tured goods really fell somehow and on the other hand prices on grain products really rose, but neither the workers nor the poor peasants gained much by it. The worker, as a matter of fact, suffered because of the high prices on bread and the poor peasant had already sold his grain be- 19 rere met me A be covered by more emissions the standardized currency will have the fate of the sovznak, it will have to become worthless in time. And we related how the government, in an- ticipation of the reform, made a great cut in emission and a very serious one in the budget for the last two months and is ready to go on that way further in-the future months. But the second enemy, that of the high prices on products, is just as serious. The fact is that the cher- vonietz, high in the foreign bourses, was lower in domestic markets be- cause of that, and the government had already taken means to right this wrong. Commissions were appointed to commence lowering prices on basic commodities and for that purpose as- semble stocks of bread products in the cities and industrial points, and there is the assurance that there will be enough. Seventy million puds of bread is needed, for instance, to feed the population till the new crop and there is as much and more. Prices must come down, because if they stay high it-will mean the high prices of the merchandise ruble and the low prices of the gold one, and the. failure of the new monetary reform. A plan was also worked out by which the wages of the workers shall be pro- tected during change of currencies by announcing a parity between the merchandise ruble and the gold one. Needless to say that the “nepmen” were against the new monetary re- form, putting as it did an end to speculation,but’ they have met the most active resistance of the govern- ment and the Communist party, mobilized especially for this new “front.” : The merchandise ruble, of which Kameniev and the rest spoke, is prac- tically a currency in theory. Because the sovznak was constantly falling in price, the government and the trade unions have devised a means by which the real wages should be more protected. Every month a commis- sion of the workers and the govern- ment have taken up the budget of the worker, and striking an average figure for a given locality have calculated the amount of soviet rubles to be re- ceived by them. It had greatly bet- tered the lot of the worker but still never given him the full assurance of real wages. The sovznak was so constantly falling in worth that if, for instance, a worker did not buy in all his products right after pay he was in danger of getting for his pay, a few days later, much less, often as little as half. (The only exception to the rule was housing where the worker gained by the decline of sovznak. According to the law, rent was to be collected of. workers and clerks every tenth for the previous month, in amounts according to the worth of the sovz- nak on the 15th of previous month. The workers by this law have often paid less than a half of their real rent gaining on this decline of the sovznak for nearly a month.) The reduction in prices was on all lines. At first on certain staple com- modities, then many others, the ra- duction still keeping on. The pri- vate traders are not compelled to lower prices, the decree being only for the state and co-operative insti- tutions, but they are nevertheless, compelled by law to hang out their price lists like the state and co-opera- tive stores in a conspicuous place, and the result is that they had to fall in line. As to the state manufactur- ers, their prices were reduced even more by eliminating the so-called in- surance against risk of the decline in sovznak that they have always added to the price. In general, prices on manufactured products fell from 16 to 35 per cent. Even newsprint paper and newspapers became cheap. The soviet citizen today buys his “Izves- tia” at five copeks a copy and the loaf of bread for five copeks. Compet- ing heavily with the private trader thru the state and co-operative stores, the government nevertheless decided to come to the help of the very small one. The small trader shows great tenacity of life not alone in the vil- lages, but in the big cities as well. Even in Moscow where there is the greatest network of co-operatives and state stores, ninety per cent of the small trade is still done by the small private trader, a half of that in the popular markets. It has been decided therefore, to help them first by en- abling the small trader to buy his goods directly from the state factor- ies, avoiding the middle man and the middle state institutions, and then (Continued on page 7.) PAUL VAILLANT COUTURIER Communist Deputy, French Parliament.