NEW MONEY IN RUSSIA

Gisborne Herald, Volume LXXIV, Issue 22511, 15 December 1947, Page 5

NEW MONEY IN RUSSIA

REPLACING INFLATED CURRENCY BLOW AT WAR SPECULATORS (N.Z.P.A.—Reuter— Copyright.) (10.30 a.m.) LONDON, Dee. 14. The Moscow radio announced that Russia has decided to issue on Tuesday “new money of full value” to replace the present' inflated currency. A decree issued by the Council of Ministers and Communist central committee also abolishes the rationing system for food and ' industrial goods.

Hoards in Moneyboxes The decree was aimed at “speculators who had enriched themselves during the war and who are keeping large stocks of money in moneyboxes.” Reviewing the situation which led up to the decision on currency reform, the decree said that the war demanded an enormous expenditure on maintenance of the army and the development of war industry. Simultaneously, the production of goods for domestic consumption decreased. “German and other invaders issued large quantities of false money in roubles,” it said. “As a result more money came into circulation than was necessary for the national “economy.” The decree said that Russia now faced the task of proceeding to expand trade at unified State prices. The decrease in State and co-operative trade with consumer goods and the population’s increased demand in collective farm markets had led to an acute increase in market prices which sometimes exceeded pre-war prices ten or fifteen times. All the money in the hands of the population in co-operative and State untakings, organisations and institutions would be exchanged on Tuesday for new roubles. Foreign Obligations Unchanged The obligations under the agreements between the Soviet and foreign countries remain unchanged. Bank deposits in Russia from 3000 to 10,000' roubles will be converted as follows: 3000 roubles at the nominal value and, of the remaining sum, each three old-type roubles for two roubles of new currency. Conversions of over 10,000 roubles: The first 3000 at the nominal value, the next 7000 at three old type roubles to two new, and the rest at two old to one new. Bank deposit operations will not be transacted tomorrow or Tuesday and Wednesday. Money in circulation and cash inhand will be exchanged at the rate of 10 old roubles for one new. Savings bank deposits up to 3000 roubles will be revalued at par. Loans issued before 1947 will be merged into a unified loan and converted on the basis of three roubles in the old loans for one in the new. • Money in co-operative concerns and collective farms will be exchanged at the rate of five roubles to ‘ four new roubles. Wages and peasants’ incomes from State deliveries will be paid in new money at the previous rates. The decree said that the population, must bear some of the “great sacrifices needed, especially as this will be the last sacrifice-” The conversion would affect the entire population but would hit “first of all the privileged element.” The decree instructed the Ministry of Commerce to fix, In accordance with the reform, new prices for food and industrial products. The new price schedule will not apply to collective farm markets. There will no longer be two different prices for goods—a “commercial” price and a “rationed” price—but a single State retail price. Bread will be -12 per cent cheaper and cereals and beer 10 per cent. Other foodstuffs, wine and vodka will be ur* changed. Unified prices for industrial goods will be higher than ration prices, but will average one-third lower than commercial prices. Reuter says that the rouble’s value for travelling purposes was, until today, 21.3 to £l. Russian food rations have been: Meat 78oz. monthly, sugar 18oz., fats 280 z., bread 270 z. daily, and other cereals 70oz. monthly. , The Associated Press recalls that the United States Information Service broadcast 10 days ago reports of a wild buying rush for luxury goods in Moscow and other Russian cities because the currency reform was rumoured.