Chervonets

Overview

Chervonets (pl.: chervontsy) is the traditional Russian name for large foreign and domestic gold coins. The name comes from the Russian term червонное золото (chervonnoye zoloto), meaning 'red gold' (also known as rose gold) – the old name of a high-grade gold type. Originally, this gold coin was identical to the gold ducat of 3.5 grams, 98.6% fine gold. The first known chervonets of Russian coinage was the Ugric gold; it was created in the 15th century under Ivan III. Sometimes, chervonets were considered any large gold coin, including imperial and semi-imperial coins. Since the beginning of the 20th century, banknotes were often referred to as chervonets with the value of ten units (for example, rubles, hryvnia, euro, etc.). This is due to the initiation of the Russian Soviet Federative Socialist Republic during the monetary reform of 1922–1924 banknotes, or chervonets. They were provided with the same amount of gold that was contained in a coin of 10 rubles during the reign of Nicholas II. A small percentage of gold coins were issued in denominations of one chervonets with a picture of a peasant on the front and a coat of arms of the RSFSR on the back. According to the weight characteristics (8.6 g of 900 samples) and the size of the coin, the chervonets completely matched the pre-revolutionary coin of 10 rubles.

Ducats of foreign coinage

In 1252, Florence, Italy issued a gold coin of 3.537 grams, which was soon called the florin. A similar coin, the genovino, began to be minted in Genoa, Italy. In 1284, Venice followed by example; these coins are known as ducats (from the 16th century, they became known as the sequin). They first weighed a little more than florins, but shortly after became equal to them. Soon, the name "ducat" was well established all over Europe as a synonym for a high-quality gold coin weighing about 3.5 grams. Imitations of the ducat were minted in almost all European countries, some even up to modern times. The basic types of these imitations were: Hungarian, German, and Dutch. The first Hungarian imitation was well known in Eastern Europe and Russia, thus becoming the prototype of the Polish zloty, Russian gold (chervonets), and also Hungarian forint. In Germany, imitations of cechinas and florins were originally called gulden (later Goldgulden), but because of a rapid decrease in weight, there was a need to return to the prototype in 1559 and the name "ducat" was accepted (silver coins began to be called guldens and florins). Dutch ducats began to be minted relatively late (only in 1586), but in such quantities that in the 17th and 18th centuries they became one of the most important coins of world trade. Some countries (in particular, Austria) minted ducats before the First World War.

Chervontsy of Russian coinage

Beginning with Ivan III until Peter the Great, gold coins that were minted were known as chervontsy or chervony, but they were used mainly as award medals. Depicted on them were either a two-headed eagle on both sides or a tsarist portrait and a two-headed eagle. As a result of the monetary reforms of Peter I in Russia, a new monetary system was introduced and the first chervontsy appeared. In their weight (3.47 g) and [alloy] sample (986), they fully corresponded to the Hungarian ducat (golden Ugric). These coins were also issued in denominations of two chervonets with a mass of 6.94 g. 118 copies of the first chervontsy were issued in 1701. Chervontsy were usually only used in trade with foreigners. The Chervonets of 1706 (the date is in letters) is the only known copy in gold. From the collection of Biron the coin got to a museum in Vienna. Although gold chervonsty from 1706 exists in private collections in Russia, these were both removed from pendants, thus without flaws. In the Hermitage there is a copy in low-grade silver, which is authentic (tested by Udzenikov). The known replica of this chervonets are made of high-grade silver and copper. B.S. Yusupov noted in his book, "The Coins of the Russian Empire" (Kazan, 1999, p. 231) that before the silver chervonets of 1706 were known as a shestak. Today, the low-grade silver chervonets of 1706 is an unidentified coin in the Russian numismatics system. When confirming a sample of silver about 210, it should be recognized as the first shestak. There are two types of [shestak] coins: without the medal on the chest and with the medal on the chest. On each form there are several variants of stamps with small differences in details. The cost of a new copy in high-grade silver in 2010 is about 50 thousand rubles.The description of a 1706-year old chervonets (1707 model) with the letters of the engraver, IL-L. In the domestic market, gold chervontsy were traded at a rate of 2 rubles and 20 kopecks to 2 rubles 30 kopecks. Under Peter I, the chervonets were minted from 1701 to 1716. Then, for gold use in the country, gold coins with a face value of two rubles with a smaller breakdown were minted. They portrayed the patron of Russia, Saint Andrew I. The coining of the chervonets was renewed by Peter II in 1729. During the reign of Elizabeth, chervonetz had in addition to the year, information about the month and, more rarely, the date of coinage were given. On the reverse of Elizaveta Petrovna's chervonets there is a coat of arms, a two-headed eagle, and on the reverse of a double chervonets is the image of St. Andrew. With Paul, the coinage of gold coins without a denomination with mass and a regular breakdown for chervonets was briefly restored, but they were quickly rejected, adjusting the release of a 5 and 10 ruble coin with a high .986 breakdown, which was subsequently reduced to .916 (88/96). In the future, coins without par value were not issued. Chervonsty are also called gold coins with a 3-ruble denomination, .917 tests and weighing 3.93 grams., Consent of their release was received by the State Council from Alexander II on February 11, 1869.

Platinum Chervontsy

Platinum coins were minted in Russia in the middle of the 19th century, they were sometimes called white or Ural chervontsy. By 1827, the Russian treasury had accumulated large reserves of platinum, extracted from the Ural mountains. Its quantity was so great that the selling of them would crumble the metals market, so it was decided to put them into circulation. Count Georg Ludwig Cancrin was the originator of platinum coins. The coins were made of untreated platinum (97%), and were minted from 1828 to 1845 with denominations of 3, 6, and 12 rubles. Such unusual denominations in Russia appeared for the convenience of coinage, their sizes was chosen to be the equivalent of a 25 kopeck, a half ruble coin, and one ruble coin, the amount of metal in the coins with the equivalent amount of metal. In the first case of this coinage, all coins were minted entirely out of platinum. Before that, platinum was used to produce coins only as a ligature (in metallurgy) to gold or copper (with the counterfeiting of coins).

Dutch ducats of Russian coinage

Exact replicas of Dutch ducats (chervontsy) were secretly minted from 1735 to 1868 at the St. Petersburg Mint. In official documents, these coins were known as “famous coins”. Initially, the coins were intended only for foreign payments and salary payments to Russian troops who were conducting military operations in Central Asia, the Caucasus and Poland. Eventually, the coins fell into internal circulation in these places. Local names were used - lobanchik, arapchik, and puchkovyi (from the depiction of the soldier on the coin clutching arrows). These ducats were taken out of circulation in Holland in 1849 (this is the last date on the Russian copies), and in Russia they ceased to be minted in 1868 after the protest of the Dutch government.

Imperial

In 1898–1911 under Nicholas II, gold coins were minted from the alloy of 900 samples with values of 5, 7.5, 10 and 15 rubles. The content of pure gold in the 10 ruble coin was, 1 spool and 78.24 shares (7.74235 g). The total weight of the coin was 8.6 g. The coins in denominations of 15 and 7.5 rubles were called, respectively, imperial and semi-imperial. After the monetary reform of 1922–1924, coins with a value of 10 rubles were called “chervonets”, even though in reality they were not. This name entrenched itself because the chervonets began to be called the base monetary unit first in the RSFSR, and then the USSR, it was equivalent to 10 Soviet rubles and like the tsarist ten-ruble coin, contained 7.74235 g of gold.

Chervonets in Soviet Russia

The first years of Soviet power were marked by the disorder of the money-circulation system and a high rate of inflation. Currencies in circulation included tsarist credit tickets, Duma money, "kerenki", securities and sovznaki (Russian: совзнаки), which did not enjoy the confidence of the population. The first denomination in 1922 (the exchange was made against 1:10,000) ordered the monetary system, but could not stop inflation. The 11th Congress of the RCP (B.) in March/April 1922 adopted a policy of creating a stable Soviet currency - the resolution of the Congress stated:

For this moment, it is necessary, without in the least setting the task of an immediate return to the golden appeal, to firmly establish that our economic and financial policies are resolutely oriented towards restoring the gold standard. There was a discussion about how to name the new money. There were proposals to abandon old names and to introduce new, "revolutionary" ones. For example, the workers of the People's Commissariat of Finance proposed calling the unit of hard Soviet currency the "federal". Traditional names were also proposed: "hryvnia", "tselkovy" and "chervonets". Because the hryvnia had circulated in the anti-Soviet Ukrainian People's Republic of 1917 to 1921, and because the "ruble" was associated with the silver ruble, it was decided to call the new money "chervontsy". In October of the same year, the State Bank of the RSFSR was granted the right to issue banknotes in gold, with a value of 1⁄2, 1, 2, 5, 10, 25 and 50 chervonets. This money was completely backed by the state with reserves of precious metals and foreign currency, goods and bills of reliable enterprises. Already before their release, the pre-revolutionary gold ruble became the basis for financial calculations in the RSFSR, and in 1922 it was legalized as a payment instrument. On November 27, 1922 the circulation of banknotes in denominations of 1, 3, 5, 10 and 25 chervontsy began. The denominations of 1⁄2, 2 and 50 chervontsy were withdrawn, though in 1928 a note with value of 2 chervontsy went into circulation. On banknotes it was recorded that 1 chervonets contained 1 spool and 78.24 shares (7.74 grams) of pure gold, and that "the beginning of the exchange is established by a special governmental act". The market valued the Tsarist-era gold ten-ruble coin at 12,500 sovznaki of 1922; the State Bank, which was guided by the conjuncture, estimated one chervonets was worth 11,400 sovznaki, somewhat lower than the price of a gold ten-ruble coin. The population showed confidence in the new chervonets, viewing it not so much as a medium of circulation, but as a non-monetary security. Many expected that there would be an exchange of paper chervontsy for gold, although no government act on the free exchange of the chervonets for gold was issued. Nevertheless, the population changed paper chervontsy to royal gold coins and vice versa, sometimes even with a small overpayment for paper chervontsy (due to the convenience of liquidity and storage). Thanks to this, the course of the chervonets remained stable, which gave a solid foundation for the deployment of the Soviet New Economic Policy (NEP) of 1921 to 1928. There is an opinion that the introduction of "solid" money marked the failure of the Bolshevik social experiment five years after its inception in 1917.

Strengthening of the chervonets

During 1923, the share of chervonets in the total Soviet money supply increased from 3% to 80%. Two currency systems operated within the country. The State Bank announced a new exchange rate of the chervonets daily against the ruble, which created speculation and created difficulties for the development of trade and economic activity. The chervonets became predominantly a city currency. In the village, only well-off peasants could afford to purchase it, while for the mass of peasants it was too expensive. At the same time, peasants believed that it was unprofitable to sell their goods for sovznaky, and this led to an increase in the prices of agricultural products and a reduction in their supply to the city. This was the reason for the second denomination (1:100) of the ruble. Gradually, the chervonets began to penetrate foreign markets. From April 1, 1924, the course of the chervonets was quoted on the New York Stock Exchange. Throughout April, the chervonets stood at a level higher than its dollar parity. In 1924–1925, informal transactions with chervontsy took place in London and Berlin. At the end of 1925 the question of its quotation on the Vienna Stock Exchange was solved in principle. By that time, the chervonets was officially quoted in Milan, Riga, Rome, Constantinople, Tehran, and Shanghai. The Soviet chervonets could be exchanged or purchased in countries practically all over the world.

Golden Chervonets

Simultaneously with the release of paper chervontsy, in October 1922 a decision was made to issue chervontsy in the form of coins. According to its weight characteristics (8.6 g, 900 sample) and the size of the chervonets, it fully corresponded to the pre-revolutionary coin of 10 rubles. The artist of the drawing was the chief medalist of the Petrograd mint, A. F. Vasyutinskiy (who also designed the 1934 version of the medal of the Order of Lenin and the first badge of the Ready for Labour and Defence of the USSR program (Russian: Готов к труду и обороне СССР). The face side of the coin depicted the emblem of the RSFSR; on the reverse was a farmer-sower, modeled from the sculpture by I. D. Shadr (the models were two peasants in the village of Pragovaya Shadrinsky: Perfiliy Petrovich Kalganov and Kipriyan Kirillovich Avdeev), which is now in the Tretyakov Gallery. All the chervontsy of this period are dated "1923". Metal chervonets were mainly used by the Soviet government for foreign-trade operations, but some of the coins also had circulation within Russia. Coins were usually issued in Moscow and from there spread throughout the country. With the beginning of the issue of metal gold chervonets for trade with foreign countries a problem arose: Western countries resolutely refused to accept these coins, since they depicted Soviet symbols. The solution was found instantly – the Soviet Mint began issuing a gold chervonts sample of Nicholas II, which received unconditional acceptance abroad. Thus, the Soviet government bought necessary goods abroad with coins depicting the deposed tsar. In 1924, after the formation of the USSR, it was decided to issue a new type of coins, with the coat of arms of the RSFSR replaced by the USSR coat of arms, but only test specimens were issued, they were dated 1925 and had exceptional rarity. The non-use of the metal chervonets was explained by the fact that the financial system of the country was sufficiently strong enough to give up free circulation of gold. In addition, abroad, seeing the strengthening of the chervonets, traders refused to calculate in a gold coin in favor of gold bars or foreign currency.

After the NEP

The collapse of NEP and the beginning of industrialization made the metal chervonets unnecessary for the economic system of the USSR. The course of the chervonets fell to 5.4 rubles per dollar and subsequently ceased to be quoted abroad. In order to unify the financial system, the ruble was tied to a paper chervontsy. Already in 1925, one chervonets was equal to 10 rubles. Subsequently, the import and export of gold chervontsy from the USSR was banned. In 1937 a new series of banknotes in denominations of 1, 3, 5 and 10 chervonets was issued. They were the first to show a portrait of Lenin. An exceptionally rare sample of a copper coin was minted in 1925; in all respects it was completely identical to a similar gold coin. In April 2008 one was sold at a Moscow auction for 5 million rubles (about $165,000).

The 1980 Olympics

From 1975 to 1982, the State Bank of the USSR issued the 1923 model of the chervonets coin with the emblem of the RSFSR and new dates, there were a total of 7,350,000 copies in circulation. It is believed that the issue of these coins was timed to the Olympics in Moscow (1980). These coins were also a legal means of payment, and mandatory for admission throughout the USSR, such as jubilee coins made of precious metals. They were sold to foreign tourists and used in foreign-trade operations. Since the mid-1990s, the "Olympic chervontsy" have been sold by the Central Bank as investment coins. By the decision of the Central Bank in 2001 they were made a legal tender in the territory of the Russian Federation together with a silver coin with a nominal value of 3 rubles known as a "Sable". At the moment, "newly-made" chervontsy were used as investment coins and were implemented by a number of banks – both Russian and foreign.

Uses of the word

Today, in everyday life, banknotes with a nominal value of ten units are called "chervontsy" or "chiriki". This applies not only to Russian, Tajik, and Transnistrian rubles, but also to modern banknotes with values of 10 hryvnias, euros or dollars. Among other things, having a reddish tinge, distinguished Tsarist and Soviet as banknotes with a face value of 10 rubles. In Russian criminal argot, "chervonets" refers to ten years of imprisonment. The saying, "I'm not a chervonets, to please everyone" reflects the high value of the gold coin with this denomination. In Mikhail Bulgakov's play "Zoikin's Flat" (1926), Soviet chervontsy in the Nepmen slang of the 1920s are called "worms" (chervi or chervyaki in Russian) as a play on words.