Russian Money

A recent post led us into questions about the Russian ruble of the first half of the nineteenth century, which in turn leads us to this post of background and clarification.

The earlier post referred both to rubles (Johann Cornies was worth more than a million rubles) and to silver rubles (a servant could earn 30–70 silver rubles, presumably per year). Further research reveals the differences between the two.

To begin, we should be clear that a ruble is, at base, a unit of measure, not an object per se. It may be put into objective form as a coin or a bill, but that state is derivative, not primary. This may seem like fussing over minutiae, but it helps us to understand the language of rubles in nineteenth-century Russia.

One of the oldest measurements of currency in the world, the ruble was used widely as early as the thirteenth century. According to Jarmo T. Kotilaine, “The term derives from the verb rubit (to cut), since the original rubles were silver bars notched at intervals to facilitate cutting” (2004, 1306). 

The ruble was issued as a copper coin in the seventeenth century but was standardized as a silver coin of a specified weight in the early eighteenth century. However, the Russian government also issued gold and copper rubles during this period. To complicate matters even further, “from 1769 to 1849, irredeemable paper promissory notes called assignatsii … circulated alongside the metal currency” (Kotilaine 2004, 1307). The word irredeemable is important here, since it signifies that this paper money, like ours today, could not be exchanged for a specified amount of silver or other precious metal. 

1834 silver ruble bearing the image of Nicholas I.
See the Yale University collection here.

Deficit spending and government borrowing around the time of Russia’s wars with Napoleon spurred high inflation and general monetary instability throughout the first third of the nineteenth century. To restore order, Nicholas I, tsar from 1825 to 1855, reestablished the silver ruble as the basic currency unit, as well as issuing redeemable, or convertible, paper rubles between 1843 and 1853.

During the time around the Crimean War (1853–1856), the Russian government returned to its earlier habit of funding a war by printing money. In addition, during the decade that followed Russia issued silver rubles with a decreased silver content. The end result of these policies was predictable: a soaring inflation rate.

This brief history enables us to imagine a little more precisely the worlds in which our ancestors lived, whether Benjamin 2 during the time of Nicholas I’s reforms or David and Peter D during the inflationary years following the Crimean War. This survey also helps us to understand several of the comments that von Haxthausen made in his travel journal (see here).

1. Payment of Mennonite servants was made in silver rubles. This was a hard currency whose value was fixed and thus stable. It is possible that payment for services rendered was commonly made in silver rubles, but we cannot say that for certain. What we do know is that the Mennonite servants could rely on the value of the payment they would receive, since the coinage retained its value far better than any paper money ever could.

2. Johann Cornies’s wealth was said to be in excess of 1,000,000 rubles. It seems obvious now that the word silver is not used because the value of his holdings was not fixed but was subject to the rise and fall of the economy. Cornies was no doubt the richest person in the colony, but his wealth was not liquid, covertible; thus it needed to be measured in rubles as a monetary unit, not imagined in terms of silver coins.

1843 1 ruble note

3. To take this one step further, it is almost certain that Cornies’s wealth was measured, so to speak, in terms of paper rubles. Earlier in von Haxthasen’s account of the Mennonites he mentions that the Russian government had advanced the Chortitza colony a sum of 341,800 silver rubles, which the translator clarifies in terms of British pounds: £54,830 (1856, 1:424).

The German edition offers a different perspective, since it clarifies the value of 341,800 silver rubles by stating it in terms of paper rubles (Rubel Banco): 1,196,300 (1847, 2:175). By dividing the second figure by the first, we can determine that around 1847 one silver ruble was worth 3.5 paper rubles. Or, to turn things around, a paper ruble was actually worth only a little more than a quarter of a silver ruble—a clear sign of an inflationary economy.

4. One final note: based on this new information we should recalculate the earlier measure of Johann Cornies’s wealth. His 1,000,000 net worth would be equivalent to 285,714 silver rubles and thus, by extension, the same as the salaries of 4,082 Mennonite servants being paid 70 silver rubles a year (not the over 14,000 estimated earlier). Cornies was still incredibly wealthy, just not as much as we had previously imagined.

Works Consulted

Haxthausen, August von. 1847. Studien über die innern Zustände, das Volksleben und insbesondere die ländlichen Einrichtungen Russlands. 2 vols. Hanover: Hahn. Available online: vol. 1, vol. 2. For the section on the Mennonites, see pages 171–96 in volume 2.

———. 1856. The Russian Empire: Its People, Institutions and Resources. Translated by Robert Farie. 2 vols. London: Chapman & Hall. Available online: vol. 1, vol. 2.

Kotilaine, Jarmo T. 2004. Ruble. Pages 1306–7 in Encyclopedia of Russian History. Edited by James R. Millar. New York: Thomson Gale.

Pravda.ru. 2007. Russian Ruble Was World’s Hardest Currency in Late 19th Century. Translated by Guerman Grachev. Available online here.