XRUSSIAN MONEY
Beforethe war for £10 you received 94 roubles, but now you receive 150. Last year after the great Russian retreat the exchange stood at over 160, but banks refused to give more than a nominal exchange. And in order to stop traffic abroad and foreign speculation in Russian money it was forbidden by law for any one to take more than 500 roubles out of the country. Now, however, the new value of the rouble seems to have been accepted, and banks generally give the due exchange value. Although the rouble has slightly improved it is not anticipated that the paper money will ever regain its guaranteed gold exchange. EachRussian note is in the form of a certificate that the State Bank will pay in exchange for it a certain quantity of gold. That certificate has little value to-day, and it is an open secret that the Government buys gold at a rate which assumes a lower value for the rouble. People who have hoards of gold coinage—and they are many in Russia, for the people are disinclined to use banks—are keeping their gold, and their action is justified by the privileges which are already accorded those who can pay the Government in coin. It is expected by many that at the end of the war the rouble will be assigned a lower gold value.
One obvious effect of the depreciation of the rouble has been that all real estate and material belongings have increased in money value. If you have an estate worth 94,000 roubles before the war, it is now worth 150,000 roubles, and you are lucky if your fortunewas in this comparatively more real form, of land. People, on the other hand, who were in debt have found the actual weight of the debt diminishing as money lost value. This has been particularly noticeable in the case of people who have mortgaged property. Suddenly it has been possible to sell the property at a high figure, pay off the debt, and still retain an unexpectedly large margin.
My friends the M.s have long wished to sell their large house in Vladikavkaz, but have held its value at what was in the old days an absurdly high figure. People used to laugh when the price was mentioned. But this year, “as if by miracle,” to use my friends’ phrase, a purchaser turned up, agreed to their price and completed the transaction in six hours. He was pleased and they were pleased. “What sort of a man was he?” I asked. “Oh, a sort of aTartar,” they replied. He made a long way the better bargain, for he understood to what extent the rouble had lost value. On the other hand my friends paid off a big debt with these depreciated roubles, and there also they gained.
The people who have made money by the war are busy buying land and houses. This is reproachfully called land speculation, but is in reality commonsense action on the part of those who wish to make fast their wealth. When I paid a visit to Kislovodsk in the Caucasus, an extremely popular watering place in the mountains, I found a perfect rage of buying and selling property, brought about by this elementary change in values.
The public are still exhorted to pay for their railway tickets in gold, but are less inclined to do so than ever. There is reason to believe that there are a number ofmillions of gold coins being hoarded in the country. Friends have shown me their private supplies. When one reads of burglaries, there is often a mention of several hundreds of roubles in gold being stolen.
In the southern districts of the Empire German agents have appeared, offering 15 roubles paper for 10 roubles gold. In this way Germany is said to have collected a considerable amount of Russian gold. The traffic was discovered by the police in Russian Central Asia, where men were found to be carrying this gold into Persia and thence to Turkey and Germany in small hand-bags. Many arrests were made, including that of M. Poteliakhof, a rich Bokhara Jew and dealer in cotton, who was found to be deep in this nefarious trade.
Russia has no gold in circulation, but also she has no silver and no copper. Russian silver coinage became last year, at least inpopular estimation, worth its weight in silver, and people began hoarding it; copper also was hoarded, and after the retreat from the Carpathians there were a series of small-change panics in the towns in the background. Many shops were sacked because the shopkeepers refused to give change; people travelled free on the trams because the conductors could not change their rouble notes. On other occasions you were obliged to accept sticky postage stamps as change. Thorough Government action swiftly followed, and paper tokens for all the small coins were introduced. Postage stamps without gummy backs were issued for 10, 15 and 20 copecks, a shilling note (50 copecks) was issued, and slips were printed for 1, 2, 3 and 5 copecks. How filthy this money became may be imagined. People gave it to beggars saying, “I give you this not because I pity your state, but because themoney is so dirty.” Still this new paper was accepted without riots, and the people soon realised that it was more convenient than “sounding” money, and that five roubles’ worth of it could be put in a small purse without adding a considerable weight to one’s pockets. Thoughtful people welcomed it as teaching the ignorant that money had no value in itself, but only as a token of exchange. To-day one never sees a silver piece in Russia. All is being hoarded.
Perhaps, however, the war and the substitution of paper for coin has taught some people to care less for money. The Russian word isdengy, which is really a Tartar word. Indeed, where money is concerned the Russian is a bit of a Tartar and loves to feel the metal between his hands. If a substantial sum is mentioned, he nods his head and exclaims, “That is money!” as if he could see it being emptied out with ajoyous clash on the table in front of him. Of course the people who see money that way always see it in small quantities. The Russian business man is crafty over small deals. I imagine his money sense fails him more or less in very large deals and financial operations. To the true financier money must be somewhat of an abstraction and high finance a sort of higher thought.