User:Herbor/The monetary system of the Russian Empire in 1885-1896

Monetary system of the Russian Empire Денежная система Российской империи) is the consisted of the main currency paper ruble and auxiThe device of the monetary system in 1885The device of the monetary system in 1885liary currency metallic gold ruble; the mutual exchange rate of these two currencies was determined by the market. The use of gold currency was allowed only in foreign trade turnover.

Formally the paper ruble was called a credit note (that is, a banknote exchanged for a coin) and was considered silver, and its rate against gold was fixed, that is, the monetary system was legally bimetallic. In fact, the state did not exchange the credit ruble for either gold or silver, and full-weight silver coins went out of circulation.

The paper ruble was supplemented by an auxiliary underweight silver coin and a copper coin. The system began to operate in 1885, with a slight devaluation of the gold ruble, and ceased to operate in 1897, after its transformation into a monometallic gold monetary system.

Prehistory of the Monetary System 1885
The monetary system was of a transitional nature and combined the features of silver monometallism and bimetallism. On the one hand, the ratio of the value of silver and gold was fixed by law, the right of free coinage extended to both metals, the treasury was obliged to accept gold coins in all payments, in circulation, as well as in the metal reserves of the state, silver and gold coins were represented approximately equally all these are signs of bimetallism.

On the other hand, the law recognized the gold coin as an optional currency, and in transactions between individuals it was used only with the consent of both parties. In addition, the denomination of the gold coin was 3% lower than the rate at which the treasury issued and accepted this coin, which theoretically could indicate a state-reserved right to change this rate in the future. In the eyes of the population, the silver coin and banknote ruble was a continuation of the silver coin ruble, which circulated until 1843. All these circumstances made it possible to consider the Russian money circulation as silver monometallism.

In 1854, the Russian banking system began to experience difficulties: with the onset of international complications that preceded the Crimean War, the ruble exchange rate against European currencies fell, and the population began to actively exchange credit notes for coins. The government responded by imposing various restrictions on the amounts and terms of exchange, mainly in relation to the gold coin. Finally, in 1858, the exchange of banknotes for gold and silver was completely stopped. Credit notes turned into paper (fiat, unsecured) money, the ratio of the value of silver and gold to them was now determined by the market. The metal in gold and full-weight silver coins now cost more than their face value, and therefore these types of coins left the internal money circulation now the population considered them as precious metal ingots. The treasury continued to use imperials to pay coupons on government loans denominated in gold. From May 1862 to November 1863, the government, in an attempt to restore metallic money circulation, exchanged credit notes for specie, but after the exhaustion of the change fund, they abandoned their plans. Formally, the ruble was still considered credit (secured), but in fact it became paper (unsecured).

In 1877, the state demanded that customs duties be paid in Russian gold coins, after which, in general terms, the system of monetary circulation was formed, which, with minor modifications, would operate until 1897. This system was dual-currency with a floating rate (in the then financial practice, instead of the rate, lazh was often taken into account) currencies among themselves, with the paper ruble as the main currency and with the golden coin ruble as the special currency for foreign trade. The silver ruble, formally the main monetary unit, actually disappeared from circulation and was used only for accounting purposes.

Money
The main monetary unit was the silver ruble, issued in the form of state credit notes, a gold coin (imperial) and a full-fledged silver coin. The ruble contained 4 spools of 21 shares (17.995 grams) of pure silver, that is, the price of silver was 5.557 kopecks per gram. A ten-ruble gold imperial contained 2 spools of 69.36 shares (11.614 grams) of pure gold, which amounted to 1.1614 grams of gold in a ruble and 86.103 kopecks per gram of gold. Although the imperial was physically a gold coin, its formal denomination was expressed in silver rubles. The ratio of gold to silver at the nominal rate of the coin was 1:15.495. A token coin was made of silver (underweight coin) and copper. A small change silver coin was minted in denominations of 20, 15, 10 and 5 kopecks. The coin was 50% silver and 50% copper by weight. The content of pure silver in a token coin was two times lower than in a full-weight (bank) coin - 8.998 grams in a ruble. Copper coins were minted in denominations of 5, 3, 2 and 1 kopecks, half kopecks and quarter kopecks. The ruble in a copper coin weighed 327.61 grams. A small change was accepted in all payments (without the consent of the second party) in the amount of not more than three rubles in each paymen.

Securities with signs of money
In addition to rubles, two more types of government securities, which had some properties of money, participated in the money circulation. Deposit metal receipts were issued to gold miners who handed over the mined gold to state gold-alloy laboratories, usually located directly in the areas of gold mines. The receipts gave the right to receive the amount corresponding to the surrendered gold in gold coins, in the offices of the State Bank in St. Petersburg, Moscow, Odessa, Riga, Rostov and Warsaw. Receipts were issued in denominations of 5, 10, 25, 50, 100, 500 and 1000 rubles. Receipts did not have an expiration date, from April 1895 they could be used in transactions between individuals (with the consent of both parties) and were accepted by the state at face value in all payments, which made them a surrogate for a gold coin of limited circulation.

The actual structure of the monetary system
The actual structure of the monetary system was determined by the fact that since 1858 the treasury had refused to freely exchange banknotes for silver and gold. After that, credit notes and small change turned into paper currency, exchanged for gold and silver at the market rate, but not backed by precious metals. On credit notes there was an inscription that they are subject to free exchange for gold and silver coins (this inscription was preserved even on tickets of the 1887 model); but this promise was not actually fulfilled by the state.

1885 Monetary System Estimates
The project of introducing gold currency since the mid-1890s has become the subject of lively discussion in the economic community, in specialized literature, periodicals and even in the popular press. Since such a discussion could not do without comparing the projected monetary system with the existing one, the monetary system of 1885, at the end of its existence, also became the focus of attention of the public and economic science. A feature of the discussion was that by the time it began, the historical alternatives to the gold standard - the silver standard and bimetallism - had already shown their failure; the choice was only between gold and paper ruble. Thus, the dispute was about whether to leave the money circulation in its current state or switch to gold monometallism.