The Soviet Gold Reserve
(1921-1923)

From “European Currency and Finance”, Commission of
Silver Inquiry, United States Senate Foreign Currency and
Investigations, Serial 9. Vol. II: Washington, 1925.

Gold and
Exchange

DISSIPATION OF THE GOLD RESERVE
By M. L. JacossoN
At the outbreak of the war the total gold holdings of the state
bank were about 1,744,000,000 rubles, of which about 1,604,000,000
constituted the portion held in the country. One of the earliest
financial measures: following the declaration of war was the law
of July 27 (August 9, Gregorian Calendar) 1914, which suspended
gold payments by the bank and modified the provision of the bank
act, which restricted the issue of uncovered bank notes to 300,000,-
ooo rubles. This opened the era of paper money inflation, dis-
cussed in previous sections. The bank was authorized to issue an
additional 1,200,000,000 of uncovered notes, and the new issues were
made largely for account of the Government and against the security
of short-term Government obligations. But these measures were in-
sufficient to meet the war necessities of the Government. Large war
orders for munitions had to be placed abroad, funds had also to be
sent to foreign financial centers to pay the interest and amortization
on Russian state and corporate obligations held in the allied and
neutral countries, while the efforts of the Government to obtain for-
eign credits did not prove immediately successful.
In October, 1914, therefore, the Russian Government in accord
with the British Government made a first shipment of gold to
England of 75.3 million rubles (equivalent to about £8,000,000
sterling), which was to cover a credit granted by the British Gov-
ernment for war orders placed in Great Britain and in the United
States. As the war proved more protracted than expected, and the
British Government found it impossible to extend further credits,
unless the allied Governments shared in gold shipments to the
United States for the purpose of maintaining sterling exchange in
New York, the Russian Government in conjunction with the French
and Italian Governments undertook to make further shipments of

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