Новая экономическая политика 1916 г.

 

Content

Introduction

Chapter 1.

Chapter 2.

Chapter 3.

Conclusion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

 

After successful political revolution, and then after a victory in a Civil War V.I.Lenin and his companions have faced a problem of absence of real program of economic reforms. It was extremely clear that the economic model of “military communism”, dominating in 1918-1920, played passing role and has become obsolete, in relation to what followed the call of the transition from requisitioning to the food tax. At all importance of similar economic maneuver more complex and detailed program of economic transformations during this period was necessary.

In 1922 socialist state planning bases are put, the general staff of planning in the name of the State Planning Committee – the national commission on economic planning is formed. The first long-term plan for development of an economy of Russia for 10-15 years, become history under the name of plan GOELRO (the State plan of electrification of Russia) is developed.

At the same time to the country’s leadership come to power was clear that hardly generated and, who came to power, the country's leadership was clear that hardly arising and becoming independent planned system of housekeeping is not able to cope burning issues of revival by the destroyed revolution and war the Russian economy.

V.I.Lenina's innovative mind has suggested an original exit from the critical economic situation which has developed in the country. Instead of bringing economic system into accordance with political foundations and to form communistic foundations of housekeeping, the so-called new economic policy (NEP) has been declared. The country destroyed by arising Russian capitalism and going to the declared socialism, took suddenly a course on market reform under the form, directed on restoration trading, and partially industrial capitalism. To recover economy has entrusted not to socialism, and the reliable, commodity-money economy checked up by experience.

Monetary reform was a radical measure of improvement of monetary system when there was its full or partial transformation for the purpose of streamlining and monetary circulation strengthening. Currency reform - it is always a necessary element of development of the economy, leading to streamlining and monetary circulation strengthening. Since this measure is a radical, it never passes without significant consequences for the economy.

In this paper we will consider a monetary reform in 1922-24. As a result of which was a unified monetary system, gold coins issued (hard currency), as well as treasury coin silver and copper coins.

This reform is a necessary part of the new economic policies pursued those years and gave tangible results in the economy. Considerable importance for the NEP was the creation of a stable monetary system and stabilizes the ruble.

 

 

 

 

 

1. The reasons and currency reform preconditions.

 

1.1. First World War consequences.

 

In 20th years ХХ centuries monetary circulation in Russia as well as in other participating countries of the First World War (except the USA), was disorganized. In order to normalize the governments of these countries have spent monetary reforms. Forms and methods of carrying out of monetary reforms in Russia were defined by changes preceding them in economic and political position of the country.

The termination during the First World War in all belligerent countries of exchange of banknotes on gold and its export abroad was one of the basic changes. After the war gold has been forced out from the circulation in a large wholesale and international traffic. About three dozen countries, including 16 West European, have passed to the gold exchange standard. This form of the organization of monetary-currency relations provided an exchange of credit money for mottoes in currencies of the countries of gold bullion standard, and then on gold. The most radical post-war reforms were in Germany and the USSR. Disorder of economic and financial systems became the cause of radicalism reason in the USSR there were result not only World War, but also revolutions, changes of a social and economic system and civil war. The reason of radicalism in the Soviet Union became collapse of the economic and financial system, caused not only by world war, but also by revolution, changing in socio-economic system and the civil war. All these actions had only negative influences on a country economic situation. The provisional government could not cope with growing unemployment and exacerbate inflation. Since the country’s precious metal reserves were exhausted, and the currency issue proceeded, it should lead to a crisis situation. The come power initially knew that for the people blessing followed deduce definitively money from economy as it considered that they are hindrance for socialism development. But the real situation of it is not proven, and even on the contrary demanded the return. This forced to make difficult decisions and to change economic policy. Thereby the new economic policy (NEW ECONOMIC POLICY) has been developed.

 

1. NEP – NEW ECONOMIC POLICY.

 

The NEW ECONOMIC POLICY – economic policy of the Soviet state in the conditions of a multistructure economy of a transition period from capitalism to socialism, directed on a socialism victory at use of commodity-money relations and private capital. The NEP – the continuation and the further development of the policy formulated by Lenin in the spring of 1918 and spent prior to the beginning of civil war and foreign military intervention and move in this regard to the policy of military communism.

Greatness and originality of the design of the new economic policies as economic reform was, in fact, both were two economic reforms at various levels and in different directions.

At the macro level the steady long-term reform focused on formation of centralized state planning and policy management of the country's economy, total the total nationalization of the economy. The base of the future command control system was put by economy from party-state apparatus, compulsory nationalization of manufacture.

At the same time at the micro level freedom to the market and small market has been given in the limited sizes to the managing forms, recovered trading-enterprise activity and then the yet not collectivized agricultural production. Such symbiosis, apparently, incompatible reforms has appeared successful in the sense that the Russian economy of 20th years could if not to rise on feet, to rise in the beginning on knees, to provide is minimum necessary living conditions of people.

On-site barracks switchgear “military communism”, virtually abolished the mechanism of market exchange, and its main tool - the money, again under the influence of the new economic policy formed the economic system, based on a true market principles of social reproduction, with correspondingly very significant role of monetary factors.

It is necessary to underline especially that as country inclusion in the international division of labor and development of cooperation with the foreign countries was one of New Economic Policy principles, the new currency should be converted, and it demanded creation of monetary system of the same type, as in industrially developed capitalist countries.

Before economists there was a problem to find concrete ways and methods of improvement of monetary circulation. Before to develop any practical recommendations, it was necessary, as the commissar of the finance G.Ja.Sokolnikov wrote at that time in one of the articles, to decide what will express themselves this new currency, how this new currency will establish its attitude to foreign currency, how to establish its relation to gold, and finally, how commodity prices are expressed in the new currency... In this regard, there has passed discussion about a value in a transitional economy. The gold problem as cost criteria was discussed, were considered its role in maintenance of stability of monetary circulation and its place in system of a commodity economy in general. During the discussion, there have been two opposing views on the relationship of the future unity of the world's money, i.e. gold (for the need to maintain this connection expressed nearly all economists as theorists and practices, regardless of how they imagined the nature of money).

The only one who spoke out against it, was known at that time an economist and later a prominent Soviet economist and statistician Academy of Sciences of the USSR, SG Strumilin. Contrary to the rate for the inclusion of countries in the international division of labor, he proposed to create a monetary system, not connected with the world's money. SG Strumilin regarded as liaison between Soviet money and the world an unnecessary luxury, and offered to issue money is the ruble trade, serving only the domestic commodity market. Indicator of the strength of the ruble trade, he regarded as constant price index. Maintain it, in theory, SG Strumilin, the state must, by issuing the sale of such quantities of goods that would correspond to a previously issued in the mass circulation paper money.

Simultaneously with discussion about gold and commodity ruble there was a search of concrete ways and methods of improvement of monetary circulation. Theorists and experts had no general point of view on problems of a monetary policy. Estimations which they gave to separate actions in this area, were frequently opposite, as well as opinions of timeliness and correctness of theoretical working out and reform realization.

The question on transformation of system of monetary circulation was many times discussed in 1921-1924. During discussions various ways of transformation of monetary system were offered. Opinions of economists were divided on three basic questions. There was a dispute, first, about terms of realization of reform, secondly about that, it is possible and whether it is necessary to create any new rather steady means of payment (thus that existed depreciating Sovznak and all economists inevitability of its further depreciation admitted), thirdly about what should be new money: the paper or gold metal.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The reasons of transition to the NEW ECONOMIC POLICY.

 

 

 

 

- The First World War termination;

- The termination of civil war;

- Mass country revolts;

- Urban population excitements;

- Disorders in army and on fleet;

- Rupture threat between working class and peasantry;

- Generalization of the previous practice of socialist building

 

- Reduction of the population by 10,8 million foreheads;

- Industrial production falling in 7 times;

- Reduction of gross output agriculture on 2/3 pre-war levels;

- Necessity of creation of the mechanism of realization of material interests of all levels of population.

 

 

Essence of the NEW ECONOMIC POLICY.

 

 

- Strengthening of the union of workers and peasants on an economic basis

- Development of the industry on the basis of electrification

- Cooperation of the population of Russia on a voluntary basis

- Use of commodity-money relations            

- Self-financing introduction. Stimulation of personal interest in results of work

- Government perfection

- Struggle against bureaucratic, command manners, komchanstvo

- Culture increase in all fields of activity

- Minimum-link with the global economy by state monopoly of foreign trade 
- State ownership of the largest and most significant part of the secondary industry, commerce, transportation 
- Cost accounting in state industry at the level of trusts 
- Nonequivalent exchange with the village 
- Inhibition of growth of the largest individual farm 

- Replacement of surplus-tax in kind 
- Resolution of private trade and small-scale production 
- Allowing state capitalism (concession, lease) 
- Monetary reform 
- Free-manpower

 

 

  1^st stage – Regenerative 1921 – 1925.

  2^nd stage – Reconstructive 1926 – 1936.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. CHANGES IN MONETARY AND CREDIT AND FINANCIAL SPHERE.       

 

Sources of this difficult and huge work had a people's commissar of the finance G.Ja.Sokolnikov, which else in 1918 objected to impetuous monetary issue. But during that moment Sokolnikov hasn't been understood, issue proceeded, and only the plan of full cancellation of money and closing of a narcofloor-mat of the finance as superfluous by miracle hasn't been realized. Later V.I.Lenin recognized. That this major narcofloor-mat in days of civil war has been almost destroyed, liquidated on 90 %.

Now, in new economic conditions, for financial system improvement followed, on the one hand, remove interdictions for all kinds of trade. On the other hand, it was necessary to liquidate huge budgetary deficiency by sharp reduction of the State expenditure and development of effective tax system. These actions allowed to liquidate enormous «a monetary canopy», formed for previous years. Comissariat led by Sokolnikov insisted on removing from the state maintenance weight of the small unprofitable enterprises, to reduce huge officialdom of the Soviet establishments and number of fighters of Red Army.

G.Sokolnikov constantly underlined that the state and the industry and trade enterprises shouldn't give anything each other free of charge, but only on the basis of economic (financial) calculation. But the majority of "red business executives» disagreed with it and demanded more and more money, insisted on additional issue. They opposed Sokolnikov, reproaching him with aspiration to «dictatorship of Narkomfina».

Under the direction of G.Sokolnikov financial bodies in the center and on places were anew created, qualified employees stole up. So, for currency reform preparation skilled financier N.N.Kutler who participated in carrying out of the well-known reform of S.JU.Vitte in 1895-1897 has been invited.

Throughout 1922 there was heated debate about how to conduct monetary reform that take as the measure of merit in the transition to new money. Proposed a so-called "commodity ruble." That would be associated only with an average rate of goods, or commodity index. Falconers also insisted on the gold standard, and by the end of 1922 it was decided to carry out reform on the basis of the gold standard.

 

2.1. Denomination.

 

Denomination — a way of "deletion of zero» — multiple integration of a standard of price.

The first denomination has been spent in the end of 1921 with release to the reference of new bank notes under the name «the State bank notes of RSFSR of the sample of 1922». The rouble in new bank notes was equated to 10 thousand rbl. of all before the let out bank notes. All old bank notes have lost the payment force.To stabilize the ruble was held denomination banknotes, that is, change their face value on a certain ratio of old and new signs. First, in 1922, were issued so-called Soviet notes. The new ruble for 10 thousand old rubles. In 1923, the other Soviet notes were issued, of which one ruble was equal to 1 million old money and 100 rubles a sample of 1922.

 

2.2. "Tchervonets".

 

Simultaneously with release new Sovznaks at the end of November 1922 was issued in the new Soviet currency – "the tchervonets" equal to 7, 74 grams of pure gold, or to a pre-revolutionary gold ten-rouble coin has been released. New "golden notes" on 25 % were provided with gold, other precious metals and foreign currency, on 75 % - easily realized goods, bills and other obligations. Tchervonets release meant crisis in development of a financial system of Russia. It was strictly forbidden to use tchervonetses for a covering of budgetary deficiency. They intended, first of all, for crediting of the industry and commercial operations in wholesale trade.

And though for January, 1st, 1923 the share of tchervonetses in monetary weight was insignificant – only 3 %, in the second half of the year they have almost forced out Sovznaks from large economic circulation. In the autumn peasants agreed to sell grain only for tchervonetses, at times even reducing the prices if only to receive "golden notes". Stability of a tchervonets proved to be true that the State Bank exchanged all shown banknotes for foreign currency at a firm course.

 

2.3. Stock exchanges.

 

In autumn 1922 were created stock exchanges where purchase and sale of currency, gold, bonds of the state loans at a free course was resolved. If the tchervonets course rose above official parity, the State Bank bought up gold and foreign currency exchange, letting out additional quantity of tchervonetses, and on the contrary. As a result of it within 1923 the tchervonets course raised in relation to foreign currencies. So, if on January 2nd 1924 the dollar exchange rate at the Moscow stock exchange made 2 rubles 20 kopecks by April 1st 1924 it has reached 1 ruble of 95,5 kopecks and at this level has stopped. The same occurred to pound sterling, franc, mark and other currencies. In 1925 the tchervonets became convertible currency, it officially was quoted at various currency stock exchanges of the world.

 

2.4. Redemption Sovznaks.

 

The final stage of reform was the acquisition procedures Sovznaks. In March 1924 was designated a fixed rate basis of 50 thousand rubles Sovznaks 1923 to 1 ruble gold Treasury notes. But as the denomination in 1923 equated at the time of 1 ruble. sample in 1923 to 1 million rubles. signs of pre-revolutionary and revolutionary designs to 1921 inclusive, it meant a depreciation of the paper ruble to 50 billion times. But it was not the record figure. If we talk about the global practice, at that time Germany had surpassed it.

 

2.5. Tax reform.

 

Simultaneously from the monetary tax reform has been spent also. Already in the end of 1923 the basic source of incomes of the state budget of a steel of deduction from profit of the enterprises, instead of taxes from the population. Transition from natural to the monetary taxation of country economy was a logic consequence of return to market economy. And, though process passed very slowly, the basic line was looked through accurately enough. During this period new sources of reception of the monetary tax are actively developed. During the period between August 1921 and February, 1922 taxes to tobacco, spirits, beer, matches, honey, mineral waters and other goods have been established. To the last quarter 1922 Sokolnikov has declared that third of all receipts of the budget is received for a set of the monetary taxation, it is less than third – at the expense of release of banknotes, and other part – at the expense of the natural tax.

 

2.6. Credit system.

 

Gradually the credit system revived. In 1921 has renewed the work the State Bank abolished in 1918. Crediting of the enterprises of the industry and trade for a commercial basis has begun. Until there was ruble stabilization, the State Bank gave out loans under rather high percent: from 8 to 12 % a month, but gradually the interest rate decreased. In the country there were specialized banks: Commercial and industrial bank (Prombank) for industry financing, Electrobank for electrification crediting, the Russian commercial bank (1924 – Bank for foreign trade) for foreign trade financing, (Tsekombank), etc. These banks carried out the Central bank of a municipal services and housing construction short-term and long-term crediting, distributed the loan, appointed loan, a discount rate and percent on contributions.

 

2.7. The first state grain loan.

 

Summer of 1922 was taken another step towards stabilizing the financial system: a subscription to the first state grain loan totaling $ 10 million pood rye grain. The state has issued interest-free bonds in denominations of 100 poods which was payable during the period from December 1, 1922 to January 31, 1923 in kind or in cash at full market price of rye in the day of payment. Following that was released on 6% loan of 100 million gold rubles. All of this is to prepare the conditions for monetary reform, as the bond served as a domestic credit, as well as a means of repayment of depreciated paper money.

 

2.8. Joint-stock banks.

 

The whole network of joint-stock banks among which shareholders were the State Bank, syndicates, cooperative societies, private persons and even foreign businessmen has been created. These banks financed, basically, separate industries. For crediting of the enterprises of consumers' cooperative society cooperative banks, for the agricultural credit – agricultural banks, for crediting of the private industry and trade – societies of the mutual credit opened, for mobilization of monetary accumulation of the population savings banks were established. In 1923 in the country there were 17 independent banks, and in 1926 their number has increased to 61. The State Bank share in the general credit investments of bank system has decreased in this time with 66 to 48 %.

 

2.9. The commercial credit.

 

As acknowledgement of market character of economy the competition arising between banks in struggle for clients by granting by it of especially favourable credit conditions can serve. Frequently the same organizations, the enterprises, trusts were financed at several banks simultaneously. The wide circulation was obtained by the commercial credit, that is crediting each other the various enterprises and the organizations. Approximately half of short-term bank credit was carried out through the account of commercial bills. All it means that in the country the uniform monetary market with all its attributes already functioned.

 

2.9. The commercial credit.

 

As acknowledgement of market character of economy the competition arising between banks in struggle for clients by granting by it of especially favourable credit conditions can serve. Frequently the same organization, the enterprises, trusts were financed at several banks simultaneously. The wide circulation was obtained by the commercial credit that is crediting each other the various enterprises and the organizations. Approximately half of short-term bank credit was carried out through the account of commercial bills. All it means that in the country the uniform monetary market with all its attributes already functioned.

 

2.10. Foreign trade.

 

The great attention was given to foreign trade. The people's commissar of the finance G.Sokolnikov repeatedly underlined that successful economic development of the country probably only in the event that it can «economic adjoin the world market». Contrary to Lenin's opinion which firmly insisted on the state monopoly of foreign trade, Sokolnikov (especially in 1922) supported its some liberalization as it not only would allow to fill up country gold reserves, but also would provide receipts in the budget from the customs duties, and also would increase home market capacity. The foreign trade monopoly, according to Sokolnikov, didn't give possibility more full to use a country export potential as peasants and handicraftsmen received for the products only the depreciated Soviet bank notes, instead of currency.