Early monetary reforms

Автор: Maks Дек 1, 2020

There were times during the long history of Russia when its grand princes and czars and extravagant empresses were able to balance the country’s budget. There were other periods when fiscal instability, most often caused by the expense of waging war and the country’s bloated bureaucracy, plagued Russia’s rulers and their treasury ministers.

Such was the case in the first half of the seventeenth century. Decades of waging war against the bellicose Poles had sapped the national treasury so alarmingly that Czar Alexey resolved to reform the country’s currency. He ordered that the mintage of silver coins cease and be replaced by minting exclusively copper coins, which in due course depreciated in value.

Since the law held that taxes were to be paid only in silver, but at the same time the coin of the realm for making and receiving payment was copper, farmers and merchants were brought to the brink of insol vency. Eventually Czar Alexey’s unsuccessful monetary reforms led to street rioting that has come to be called the Copper Uprising.

When Peter succeeded his father to the throne, he too was beset by fiscal woes. Forever seeking new sources of income to avoid financial calamity, Russia’s first emperor hoped to build a sufficient surplus in the imperial treasury to fund his myriad projects. One of Peter’s decrees included the following: “Assessors shall collect the taxes owing on all sales and all purchases, without undue craftiness in deciding what shall be taxed and what shall be exempt from taxation, and without imposing an undue burden on the populace.”

The major perpetual drain on the state’s finances during Peter’s reign was the prodigious expense the state incurred from waging the twenty-year-long Northern War against Sweden. Nonetheless, the empire’s monetary plan, the world’s first to be based on the decimal system of single units, tens and hundreds, that is, the copeck, grivennik, and rouble, established a pattern for other countries to follow and has remained Russia’s basic currency system till the present day.

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