Currency and the National Debt.

For a comprehension of the currency system of Russia, and the controversies which centred round it during our period, it is essential to go back to the Currency Reform of 1897, and consider the main changes brought about by it. Prior to that date, the standard of value in Russia had been the silver rouble, which served as a basis for the monetary unit, the credit rouble. Recent changes in the world situation with regard to silver had involved grave disadvantages for Russia, as a silver-standard country, in her commercial and financial connections with the bi-metallic or gold-standard states of Western Europe. These changes included the demonetization of silver over a considerable part of Europe, and an increase in the amount of the white metal mined, with a consequent fall in its price. ¹ The fact that the course of the credit rouble was liable to sudden and violent fluctuations from these causes, which could not be controlled from within the Empire, introduced an element of uncertainty into foreign trade, and encouraged speculation in the Russian rouble on foreign bourses, which reacted unfavourably on the whole economic life of the nation. A further embarrassment had been experienced from 1881–96 in the scarcity of money tokens within the country. Not only had the quantity of credit notes not increased during that period, but a slight decrease had been apparent: on 1 January, 1881, the credit notes in circulation amounted to 1133.5 million roubles, whilst on 1 January, 1896, they equalled only 1121.3 million roubles. ² This stationary 106condition of the currency coincided with a constant increase in the economic forces of the country. There was a considerable increase in population, in the totals for the output of grain, and for the export trade, and a great expansion of the railway net. ¹ It was obvious that these increased economic activities demanded increased monetary resources, which could not be suitably provided on the existing basis.