A banknote is How did the people call banknotes?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

It is simply impossible to imagine modern life without money today. Even the most ardent opponents of material we alth are forced to deal with them. You can refuse electronic payments, not use credit cards, but none of us, most likely, will be able to live without paper money.

Banknote concept

There are several of them. The simplest of these defines banknotes as cash made from paper with paint. From the point of view of classical economic theory, a banknote is a form of credit money. They are issued by the central bank of a particular country, which in the vast majority of cases is one of the institutions of state power.

However, in terms of its economic content, a banknote is not an absolute synonym for paper money. These two concepts have a number of significant differences.

1. Banknotes are only issued by a bank, while paper money can be issued by the Treasury or the Treasury.
2. Banknotes are backed by gold or bills of exchange. Paper money is, in most cases, nothingsecured.
3. The banknote is issued to ensure the turnover. The purpose of issuing paper money is to cover the budget deficit.

Types of money

Banknote is one of the forms of existence of money. One, but far from the only one. At different times and under different conditions, different types of them were used.

All money can be conditionally divided into full and defective. The first are those that have their own real value - this is the cost of their production, and it is equal to their face value. This type includes commodity money, which was widely used for barter exchange at the dawn of the birth of money circulation, and metal coins, silver and gold.

In defective money, the nominal value significantly exceeds the real one. These include paper and credit. The banknote is one of the varieties of the latter.

The history of banknotes

Credit money arose to ensure the process of buying and selling goods on credit. In the beginning, for these purposes, the buyer wrote out a bill of exchange in the name of the seller. This is an unconditional obligation of the debtor to pay the holder of this paper a certain amount of money after a certain period.

Over time, the bills themselves become the object of an agreement between the debtor and the creditor. Commercial banks began to issue their own receipts secured by bills of exchange. They became the first banknotes. They enjoyed greater confidence among merchants compared to the obligations of individualdrawers. This was explained mainly by the fact that banks at that time were the most solvent institutions.

The very first banknotes originated in China back in the 8th century. They were pieces of cotton paper. Paper currency in Europe originated in Sweden in 1661. England began issuing banknotes in 1694, Denmark in 1713, France in 1716.

Paper money in Tsarist Russia

The idea of issuing banknotes, as the people called banknotes, in tsarist Russia arose during the reign of Elizabeth Petrovna, in the first half of the 18th century. However, it was categorically rejected by the Senate, which could not in any way admit that some kind of "paper" would go into circulation instead of "real" money. Under Peter III, the state treasury was completely empty. As a result, already in May 1762, the issue of bank notes began, which replaced metal money in circulation. However, they never entered circulation. A coup d'état prevented, as a result of which Catherine II ascended the throne.

Nevertheless, the idea of issuing paper money was already implemented in 1769, when two banks were established by decree of the Empress, in St. Petersburg and Moscow. Russian banknotes put into circulation had denominations of 25, 50, 75 and 100 rubles.

Banknotes of the USSR

The revolutions of 1905 and 1917 had a huge impact on the entire monetary system of the country. And how could it be otherwise, when the whole way of life of the whole state was completely changed? At that time, the country's budget wascompletely unbalanced: the reputation of the Russian state at the world level has been discredited by the ongoing global changes in the political system. Inside the country itself, things were also not in the best way. The masses of the population decided that, finally, their finest hour had come. They demanded to reduce the length of the working day, to increase the level of wages, the amount of various benefits, to impose on the state the responsibility to provide factories and factories with food. As a result, the new government was forced to use paper money not only to finance huge military spending, but also as a source of covering the budget deficit.

More than 9.5 billion rubles were put into circulation. Already by November 1, 1917, the volume of paper money amounted to 19.5 billion rubles, and the purchasing power of the ruble was a little more than 8 kopecks. The provisional government was forced to issue banknotes in denominations of 250 and 1000 rubles. “Kerenki”, as the people called the banknotes, formally denominated in gold rubles, in fact, had no security. They walked throughout the country until the very end of the Civil War.

With the advent of Soviet power, the construction of communism began in the country. And communism and money, as you know, are two things that are completely incompatible. But everyone is well aware that the state simply cannot exist without them. And the new government found a way out of the situation: they issued "settlement signs". At its core, it was the same money, only “under a different sauce.”

Monetary reforms of the USSR of the XX century

During the Great Patriotic War, the country's monetary system was relatively stable, despite all the difficulties. This was achieved by introducing a rationing system and fixing prices for goods. But a strong reduction in the mass of commodities inevitably led to the formation of a large amount of surplus money in circulation. In addition, in the difficult post-war years, the country was literally flooded with counterfeit banknotes. This seriously complicated the process of economic recovery. Therefore, in 1947, it was decided to carry out a monetary reform, as a result of which 10 old-style rubles were exchanged for 1 new ruble.

Another reform was carried out in the middle of the twentieth century. It was then that “Khrushchev candy wrappers”, or simply “wrappers”, as the banknotes of 1961 were called, entered circulation. They got such a name for their small size, comparable to a candy wrapper. This money existed until the 90s and ceased to exist along with the whole country, the symbol of which they, among other things, were.

Banknotes of modern Russia

The extremely difficult economic situation and high inflation in 1991-1993 led to the decision to issue 50 and 100-ruble notes. But this led to an even greater jump in prices. Gradually, "wooden rubles", as the people called banknotes of any sample, turned into paper in the truest sense of the word. Their purchasing power was falling exponentially.

The reform carried out in 1998,assumed the strengthening of the ruble immediately 1000 times. It was carried out more gently than the reforms of the 1940s and 1960s. Firstly, there were no clear deadlines within which the population had to exchange cash in hand. Secondly, the "old" and "new" banknotes had the same circulation throughout the country throughout 1998.

Modern banknotes of the Bank of Russia are banknotes made using the most advanced technologies in the field of protecting their authenticity. To prevent the appearance of fakes, the Central Bank constantly puts into circulation new modifications of existing samples, the protective functions of which are strengthened from time to time.

Today, banknotes of 10, 50, 100, 500, 1000 and 5000 rubles are in circulation.

US dollar is the world currency

The US dollar has long been a recognized international means of payment. It has firmly become one of the world's reserve currencies. This is due to the fact that the United States was the last to abolish the gold standard of its currency. It happened only in 1971, while European countries did it at the beginning of the 20th century, during the Great Depression.

The functions of the Central Bank in the United States are performed by the Federal Reserve System. It is she who has the right to issue and issues cash banknotes into circulation. The US dollar in circulation has denominations of 1, 2, 5, 10, 20, 50 and 100. There are also denominations of 500, 1000, 5000 and even 10,000 dollars, but they are used only for domesticcalculations by the Fed and the US Treasury.

Interesting facts about banknotes

Money has been around for several centuries. During this time, a lot of interesting and truly amazing facts related to cash have accumulated. The most interesting banknotes in the world - what are they?

The largest banknote at face value was issued in Hungary in 1946. Its value is one billion billion (i.e. 1021). The diameter of the Universe, by the way, is 1023 km.

The largest bill in terms of purchasing power has circulation in the UK. Its face value is 1 million pounds. There are 2 such banknotes known to exist.

The smallest banknote at face value was in circulation in the USSR. This is a check for 1 kopeck, which was issued by the State Bank for internal settlements.

Banknote is a form of existence of cash, without which the modern monetary system simply cannot exist. Despite the development of non-cash payments, we are unlikely to be able to completely abandon paper money in the near future.