Cancrin Monetary Reform

Egor Frantsevich Kankrin was the Minister of Finance during the reign of Alexander the First and Nicholas the First from 1823 to 1844. In 1829, he was awarded the count title.

The economic views of the activist were realized in measures to strengthen the financial system that Kankrin took. The monetary reform that he carried out was a major political event. It allowed to strengthen the financial system in the country.

As you know, there are various types of monetary reforms. Among them are the transition from one financial product to another, and the replacement of depreciated and defective coins, and the formation of a new financial system. All these transformations allow eliminating negative phenomena in the country's monetary sphere. For long-term maintenance of the state at the proper level, it is necessary to take certain measures.

Kankrin's merit consisted in improving the system of state and financial reporting, introducing strict control over the item of expenses, and implementing an accurate customs policy. Thanks to the activities of the Minister, the material situation of Russia as a whole has significantly improved. In addition, the value of the ruble has risen. Kankrin sought to increase revenue by raising taxes, both direct and indirect. At the same time, significant importance was given to the restoration of drinking farms. Kankrin’s monetary reform made it possible to achieve a state-free budget. The minister also introduced a patronizing tariff.

Kankrin's monetary reform lasted four years (from 1839 to 1843). Financial transformations in this period had a significant impact on events in Russia in the future. Kankrin’s monetary reform contributed to the Minister’s main goal: to strengthen the material economy in the country, as well as eliminate the budget deficit.

In preparation for the transformation, the Minister of Finance studied the work of Speransky. After some amendments, additions and comments, Kankrin issued a new “Note on Coin Circulation”.

On July 1, 1839, the Manifesto was published. With its proclamation, monetary reform of Kankrin began. A solid credit ruble was introduced. He was equated to one ruble in silver. The ratio of bank notes to silver was also established. It amounted to 3.5 to 1.

The transformation of the Minister of Finance did not mean only the exchange of banknotes, as this would only reduce the amount of money by three and a half times. The key to Kankrin's reform was to give money actual strength by ensuring that it is exchanged. For these purposes, a fund was formed, which was replenished by buying silver and gold coins, precious bullions.

Kankrin chose silver as the monetary unit. There were several reasons for this. Firstly, most of the countries of Europe adhered to a double unit. In addition, silver was used in ancient times in Russia, but silver, despite the fact that there were more gold mines in the country.

The next stage in Kankrin's financial transformation was the issue of special credit tickets. They were accepted for circulation along with silver coins. The final stage of Kankrin’s monetary reform was the exchange of credit cards for all bank notes. This process was started in September 1843.

As practice has shown, Kankrin’s monetary transformation paid off completely. The financial system of the state has significantly strengthened.

In addition to money, the minister carried out guild reform. These transformations have contributed to the expansion and strengthening of foreign trade relations. Trade reform was aimed at enhancing the forms of Russian entrepreneurship. These transformations greatly expanded the rights of mid-level urban merchants. In addition, Kankrin earned income from small-scale peasant trade.