Monetary Reform of G.Ya. Sokolnikov

Abstract

The article covers the transformations in the sphere of commodity-money relations during establishment of Soviet power. The period under review starts from the chaotic monetary policy in the first post-revolutionary years with attempts to abandon money exchange to the period of creating stable money circulation in the country. NEP brings positive changes, when trade resumes, monetary wages are required, and a for-profit model (khozraschyot) is established. Theoretically, the advantage of a fixed equivalent of value is proved, and stable money is needed, the basis of which is gold. The State Bank is restored. It becomes possible to issue a bank card backed by gold. Under the People's Commissariat of Finance, a Currency Department is created. G. Ya. Sokolnikov is appointed to the post of People's Commissar, a group of specialists is selected, among them N. Kutler, L. Yurovsky, V. Tarnovsky. The reform begins with the implementation of two denominations that have eliminated many varieties of banknotes and reduced their number. The chervonets becomes the main monetary unit, which has a gold content and security. In 1924, the reform is completed. The Soviet Union is able to restore the national economy. The article states that the reform proved the viability of the Soviet currency, as well as the high qualification and theoretical training of its performers. Being in more difficult conditions than other countries participating in the First World War, the Soviet Union carried out monetary reform before them and with a higher result.