In 1960, the government of the Soviet Union adopted a decree on monetary reform. To date, all documents relating to its implementation are classified. We can talk about the reasons that led to it, and in most cases they, today called researchers, really took place, but this does not give us the completeness of the picture. What is the 1961 monetary reform in the USSR? Intrigues of enemies, economic voluntarism N.S. Khrushchev or the need? To answer this definitely will not work right away.
The essence of monetary reform
Before the monetary reform of 1961, banknotes circulated in 1947 were circulated in the USSR. The reform began on January 1, 1961, lasted for the first quarter, and was in the form of denomination and devaluation. Although the government did its best to emphasize that it was a simple exchange of money (denomination).
All banknotes were accepted for exchange without restriction. Old paper bills were replaced with new ones, which had a smaller format and a ratio of 10: 1.
In addition, in accordance with Decree of the Council of Ministers of the USSR dated May 04, 1960 No. 470, wholesale, retail, purchase and estimated prices for all types of goods, work, services, as well as allowances, mark-ups, and discounts, which were established in solid amounts. As well as all types of deposits stored in savings banks, cash desks, banks, all types of labor remuneration, including tariff rates, salaries, prices, fees, bonuses, any kind of monetary allowances, etc.
Denomination
As the official version of the reform, presented by the USSR Ministry of Finance, stated, the monetary reform was caused by the facilitation of the circulation of money and giving it greater usefulness. The true reasons for holding this event remained undeclared, which allowed experts to make their own conclusions, and for most people, the exchange of money remained a simple denomination in their memory.
Devaluation
Since the circulation of foreign currency in the country was prohibited at that time, the overwhelming majority of the population had no idea about the exchange rate, and most of the country's inhabitants judged the cost of gold by the price of jewelry, the changes in the exchange rate of the ruble against the dollar and its gold security.
In other words, according to financiers, there was a devaluation of the ruble of the Soviet era, as a result of which its gold content was sharply reduced and the exchange rate to the dollar changed. If before 1961 they paid 4 rubles for one dollar, then after the reform its value did not change, like everything else, 10 times, but only 4.44 times. Now the dollar was worth 0.90 cents. Gold has risen in the same amount of time. If before the reform one ruble contained 0.222 g, then after the reform this indicator became 0.987.
Reasons for devaluation
Monetary reform of 1961 in the USSR was devoted to a lot of research. They are extremely controversial. In particular, one of the reasons for the reform is called the increase in oil production and export by the Soviet Union. It is hard to say how justified this reason is, but oil production did increase from year to year.
A number of reasons are also mentioned: economic difficulties associated with ongoing reforms in management and agriculture; an arms race is also a real factor that could negatively affect the economy of the USSR, which confirms the reduction of the army; gratuitous assistance to "friendly" countries.
How did the reform go?
After the publication of Decree No. 470 in the press, purchases of industrial goods increased many times, sales in jewelry and fur stores increased, and people's deposits in savings banks increased, as they were automatically subject to exchange and recalculation.
In October 1960, recounts of deposits with banks began. There were two prices on the price tags in the stores: new and old. This was done in order to enable the population to get used to the new prices. On January 1, 1961, the exchange of old banknotes and coins for new ones began. Special exchangers were created where any amount of old money could be exchanged .
Money of a new sample
The size of the banknote of the monetary reform of 1961 was very different from those that were in use. They were many times smaller than old bills. In addition, they were multi-colored - red, green, lilac. In principle, the form of money is more convenient when calculating.
Banknotes were issued in denominations of 1, 2, 3, 5, 10, 25, 50, 100 rubles. They began to mint and new coins in denominations of 1, 2, 3, 5, 10, 20, 15 kopecks and 1 ruble. All old-style coins were withdrawn from circulation. The exception was copper money 1, 2, 3 kopecks. Beginning in 1958, their coinage ceased and the release of new coins in large numbers began. For example, a coin of 15 kopecks was issued in huge quantities and continued minting using one stamp for as long as 30 years, which made their release truly gigantic.
The "old" and "new" money differed in appearance, as the latter were smaller and more convenient to handle. In this regard, people came up with a new name for banknotes after the 1961 reform - candy wrappers. Reducing the cost of paper when printing notes is one of the positive factors. The design of money, in principle, has been preserved. The only thing, instead of a portrait of Lenin on banknotes appeared his profile.
Consequences of the reform
The positive aspects of the reform include a reduction in the cost of money production and the normalization of prices for basic food (bread, salt, sugar, milk) and matches.
The negative consequences include, first of all, a decrease in the purchasing power of the population, an increase in prices for food and goods. For products with a low initial cost price increase was 10%. For example, if the cost of 1 kg of tomato on the market was 15 kopecks before the reform, then after the reform they cost “new” 15 kopecks.
The state gold security of the ruble, as mentioned above, was reduced, which led to its depreciation. The ruble to dollar exchange rate has changed. If earlier Soviet money was independent of it, then after the reform this changed, which entailed the high cost of imports.
The effect of the reforms was and lasted for more than 30 years, but, according to several researchers, the negative consequences affected after these years and led, together with the Gorbachev perestroika, to the collapse of the USSR. To survive without obvious consequences, except for the deterioration of the life of the population, this period of time was possible due to the lack of a labor market and all the factors accompanying it: cheap labor resources, high export profitability. It is these factors that allowed the state to develop quite successfully in economic terms.
What caused such a hasty monetary reform?
Background
In short, the monetary reform of 1961 was not carried out on its own. She went, according to some scholars, in the complex of reforms outlined and implemented by N. S. Khrushchev. There is another opinion that monetary reform was caused by these reforms, since most of them can be considered unsuccessful and led the country to economic instability.
Like most transformations of N. S. Khrushchev, the 1961 monetary reform in the USSR was rash and sudden in nature, which did not take into account the consequences that they could lead to. Most of them were planned even under Stalin, while calculations were carried out, the consequences were predicted. But for a number of reasons it was not possible to implement them.
N. S. Khrushchev took advantage of this, deciding to eliminate all problems in one fell swoop, which subsequently negatively affected the country's economy and was called economic voluntarism.
Management reform
One of the reasons for the exchange of money is attributed to the failure of the management reform begun in 1957 by N. S. Khrushchev. During its implementation, the entire territory of the USSR was divided into administrative regions. In them, for management were created Economic Councils. They, instead of ministries, carried out the management of the national economy on the ground.
Most of the union and republican ministries involved in industrial and construction issues were abolished. The subordinate enterprises were transferred to the local Economic Councils. The goal of the reform was to bring industry or construction management closer to the lower ranks and reduce administrative and managerial staff.
Economic councils are collegial bodies that initially consisted of several people, but over time, new sections and departments began to be created to solve the necessary issues. If in the first years the reduction in the administrative apparatus was significant and brought the desired result, then over time its growth exceeded all expectations.
Agricultural reform
Khrushchev experiments were subjected to agriculture. By the end of the 50s of the twentieth century, industrial production stepped forward far in comparison with agriculture. The fastening of residents of villages and villages to a certain place of residence, caused by the need to avoid hunger, began in the 30s and remained after the Patriotic War until the restoration of the central part of the country, which was under occupation. Cities, villages, towns were turned into ruins. Factories, factories were destroyed or evacuated inland. The implementation of reforms precisely at this time would lead to unpredictable consequences, so this issue was postponed for some time.
The Stalinist government managed to restore factories, establish life in the countryside, but banknotes were not used to pay for the work of the collective farmers. In most cities, people began to live better. Earn more and, naturally, spend. Such inequality between rural and urban residents, of course, caused a lot of fair complaints.
During the reform, these issues, of course, needed to be addressed. But along with them were made, to put it mildly, erroneous decisions. In particular, this concerns the closure of the MTS, which has led to a reduction in the machine and tractor fleet, and specialist machine operators. This step caused irreparable harm to agriculture, forcing the state to purchase bread abroad. Unreasonable meat harvesting plans have led to a significant reduction in the number of cattle.
The need for reform was urgently needed, but the government of N. S. Khrushchev made mistakes.
Army reduction
It was under Khrushchev that the army was reduced, which became 1300 thousand less and, according to some researchers, which caused significant damage to the Soviet armed forces. The fact is that the reduction of the army was prepared under Stalin. This was supposed to be planned. Everything was thoroughly calculated, the time of the reform was to be 3 years, in addition, the urgent needs of all those laid off in the reserve (housing, pensions) were taken into account.
The reform of the army by the Khrushchev bore a kind of unpredictable and derogatory attitude towards the front-line soldiers, the people who gave the army the best years of their life, went through the war from the first to the last minute. Without a military pension, they left not only those who needed to serve the prescribed term of 1-2 years, but also 1-2 months.
Such a reduction, of course, saved the state money in the form of unaccounted pensions, reducing the cost of maintaining more than a million people. But a powerful blow was inflicted on the army. Millions of servicemen and their families who were left without work, housing and livelihood were thrown out.
Conclusion
The issue of reforms by N. S. Khrushchev, including monetary reform, has been and remains rather interesting and little studied. Unambiguously answer it will not succeed. It is not entirely appropriate to perceive the enemy influence of the West here, although it probably could not have done without it.
Space exploration, the USSR’s economic breakthrough is the result of a long-term military (preservation and transfer of most enterprises deep into the country) and post-war visionary economic policies of the state and the whole people as a whole, and not the activities of Khrushchev as a “great” reformer. But to deny his positive merits is also not worth it.