XVII Military Intervention Finance
The financial contrivances of this Military Intervention in North Russia, while conceived with the best of intentions, perhaps, and being presumably in the interests of Russian welfare, created much suspicion and bitterness among the peasants and the soldiers. The country having been flooded with Kerensky and Bolshevik paper money, it was impossible to maintain any general European value, so a new rouble was issued called the “English rouble,” with a guaranteed minimum value based on deposits of securities with the Bank of England. But the peasants were not interested. They did not give up their old roubles for the new. So it became necessary to force matters. A schedule of depreciation of all old roubles was published. While the English roubles stood as guaranteed at forty to the pound all old or “Russian” money, as the peasants called it, stepped down a ladder of fortnightly rungs from forty-eight to fifty-six, to sixty-five, to seventy-two, to eighty, to ninety, after which it was to have no value whatever. It was hoped, of course, that all people would avail themselves of the opportunity thus offered to dispose of their worthless money and the region would have a sound currency of some intra-national value as a result.
Then, finding that it had a lot of old roubles on hand, the British paid their Russian soldiers and civilian labor in these old roubles that they had proposed to put out of circulation, at the same time making it impossible for the holder to spend this money in availing himself of any of the resources of the Military Intervention.
Dozens of times I have seen Russian soldiers tear up this old money with which they had been paid and throw it on the floor in anger, because they could buy nothing with it.
Yet the old money stayed in circulation. When eighty was reached no attempt was made to press the process of depreciation any further. Old “Nicolai” paper had gone out of circulation, and in the early days of August the peasants generally were preferring old roubles at eighty to new ones at forty. And there was a very general feeling among the Russian people that the Military Intervention had taken all that value out of their old roubles and in some mysterious way put it into its own pocket.