On May 15, 1919, the People’s Bank was authorized to emit as much money as in its view the national economy required. From then on, the printing of “colored paper” became the largest and perhaps the only growth industry in Soviet Russia. At the end of the year, the mint employed 13,616 workers. The only constraints on emissions were shortages of paper and ink: on occasion the government had to allocate gold to purchase printing supplies abroad.
Even so, the presses could not keep up with the demand. According to Osinskii, the second half of 1919, “treasury operations” – in other words, the printing of money – consumed between 45 and 60 percent of budgetary expenditures, which served him as an argument for the most rapid elimination of money as a means of balancing the budget!
In the course of 1919, the amount of paper money in circulation nearly quadrupled (from 61.3 to 225 billion). In 1920 it nearly quadrupled (to 1.2 trillion), and in the first six months of 1921 it doubled again (to 2.3 trillion).
By then, Soviet money had become, for all practical purposes, worthless: a 50,000 ruble bank note had the purchasing power of a prewar kopeck coin. The only paper currency that still retained value was the Imperial ruble; these notes, however, were hoarded and all but disappeared from circulation. But since people could not carry on without some unit to measure value, they resorted to money substitutes, the most common of which were bread and salt.
Source:
Pipes, Richard. "War Communism." The Russian Revolution. New York: Knopf, 1990. 686. Print.
Original Source(s) Listed:
Iurovskii, Denezhnaia politika, 71, 75.
Z. V. Atlas, Ocherki po istorii denezhnogo obrashcheniia v SSSR (1917-25) (Moscow, 1940), 58-59.
NKh, No. 1-2 (1920), 10.
Malle, War Communism, 194.
Peter Cheibert, Lenin an der Macht (Weinheim, 1984), 250.
Further Reading:
https://youtu.be/IYD9xu92zSg