Transcription
Friends, hello. One of the poets of the Silver Age, Georgy Ivanov, wrote these lines: "Everything in this world is still the same. The moon rises as it used to. Pushkin mortgaged his estate or was jealous of his wife." Well, as is known, Pushkin was constantly in debt. Money was a very important, even painful, topic for the poet. We often talk with you about the Russian Empire, about culture, about history, about trade, about restaurants, about war, about politics, in general, about life. But every time I talk about some important figure of that era, some important event, I always ask myself the question: "And what was all this happening for? Who paid for all this, anyway? What was going on with money in that era?" Therefore, today we will discuss the most important element of any era. Money. In general, where did modern banks come from in our country? How many years has the financial system of Russia existed? We will discuss how nobles mortgaged their estates, and even recall the most famous bank robberies. Let's begin. Well, to the modern banking system, to the one we are accustomed to, our country, of course, came by long, long roads. Even under Tsar Alexei Mikhailovich, an attempt was made to create a private bank in Russia. How did it happen? The governor appointed to Pskov, Afanasy Ordyn-Nashchokin, proposed a reform. Let's, therefore, transfer the management of the economy, trade, and civil court into the hands of elected zemstvo people. And besides, this very zemstvo izba would have the right to issue loans, well, to small merchants. Why? For the purchase of export goods, for maintaining trade turnover, and so on. In general, a kind of first version of a "Storgbank," as it would later be called in the Soviet Union. The Tsar initially approved the plan, but then changed his mind. It is unclear why. Perhaps the city elite of Pskov was dissatisfied and managed to lobby for this governor to be disgraced, thinking, "What, some outsider will manage our money?" Or, conversely, the law began to take root well, and the first hints of Pskov's independence appeared. And what, it seems, would not have pleased the central government and any centralized monarchy at all. In any case, no bank came to be. A lot of time passes, and the next time banks are remembered is under Peter I. It seems Peter, yes, traveled to Holland, he traveled to England, he saw how this whole financial system worked. Banks that pump the blood of the economy, that is, money, and it should have happened, but it didn't. The sovereign emperor abandons the idea. Why? One of the reasons is the financial crisis in France, when the banking system collapsed overnight and thousands of people went bankrupt. The second point is, in general, the conviction of the sovereign emperor that money, as it has always been, should lie in the sovereign's treasury. What other private banks? They will, you know, mess with the money here. We don't know why it didn't happen. Perhaps both one and the other influenced the decision, or rather, the lack of a decision by Peter. Besides, well, of course, the country, the country's economy was simply not ready. In the early 16th century, Russia lived by a natural economy. There was little money in circulation, credit was almost not used. Finally, entrepreneurs as a class of people who could take loans, implement them, conduct foreign and domestic trade, there are very few of them. The people who manage money are the nobles. The entrepreneurial class is very small, and the vast majority of the dominant population, who are they? Serf peasants. Besides, Peter is primarily concerned with the formation of a strong centralized state, not a market. The market will come later. The main thing is geopolitics. The state collects and distributes money independently. The state directly finances manufactories. Because what is produced in manufactories? Military goods. First of all, it is an economy of wartime, because Peter is waging a very difficult war with the Swedes. But there was another problem, of course. People always need money, of course. And if there are no banks, you still have to borrow from someone. You have to turn to usurers. Well, there are no other options. Usury was not only a professional occupation. Amateurs also did not shy away from this business. Well, you don't need to be a genius for that. If you have money, you just lend it out and then charge an exorbitant interest. For example, royal nobles lent money to nobles and merchants at incredible interest rates. The sums reached tens of thousands of rubles. That is, in our money, it's hundreds of millions. Of course, debtors often could not pay, which often led to tragedies, suicides, exiles, and being sent to the galleys. And all this usury, naturally, forms a kind of parallel economy, and the state only takes it under control during the reign of Anna Ioannovna. In the early thirties of the 15th century, the mint received the right to help debtors, nobles, by buying out gold and silver items. That is, what is this? Well, more or less a pawnshop. And then the office became the mint chancellery. And it already had the right to issue loans. So, what was noted in the royal decree? Quote: "Many of our subjects, being in need of money, are forced to borrow from foreigners and others at 12-20%, which is not found anywhere in the world. Moreover, interest was often withheld in advance. Now the chancellery could issue loans against gold and silver items as collateral, but this is important, not villages and houses." The rate was simply amazing. 8%. The loan term was no more than a year, but with the possibility of prolongation, that is, extension. The collateral of defaulting debtors was melted down, and this is surprising, practically a natural economy. What happened to the melted metal? Coins were minted from it. The difference between the loan amount and the value of the collateral was returned to the borrower. And thus, thanks to the mint chancellery, state reserves of precious metals grew, primarily silver. But it is clear that, in general, the scale of this enterprise was modest. Thus, a semblance of a state pawnshop arose in Russia, the first seed of a credit system. But, of course, there was another problem. Many nobles perceived the money received not as credit and not as a loan, but rather as a sign of monarchical favor. There were no paper banknotes yet. large sums were literally transported in chests and on carts. That is, you need to buy something in the neighboring region, and you carry three pounds of silver coins. And only in 1754, under Peter's daughter, under the bright Peter, under Elizabeth Petrovna, banks more or less resembling modern ones appeared in Russia. The first bank was logically for nobles, the second was also logically for merchants. And at the same time, Count Pyotr Ivanovich Shuvalov came up with a proposal to direct state resources to lending to merchants and nobles. That is, the empire was trying to cultivate a class of entrepreneurs. The Merchant Bank became the first State Bank specifically for trade. What did it do? It issued short-term loans against collateral of goods and operated in the capital, St. Petersburg, near the port and trade centers. Everything is also very clear. Where the goods arrive, business goes there. Merchants were given credit for a term of one to six months. The collateral was, in fact, the goods in the merchant's warehouse. At the same time, it is clear that merchants were not particularly trusted. And the decree stated: "It is necessary to check whether it is true that the goods belong to this or that businessman who is taking this loan. Is it true that the goods correspond to the nomenclature?" otherwise he will write: "He has furs there, but there might be moth-eaten rags." That also happened. But there was a nuance here too. The merchants who officially traded at the St. Petersburg port were mainly foreigners. That is, they could do what? Get favorable credit from their homeland, in Western Europe, for example, in Holland, and buy goods, bring them and sell them in Russia. And Russian merchants treated the new institution with skepticism. If someone took a loan, colleagues immediately considered him gullible, an amateur, in simpler terms. But little by little, loans began to be taken. And, of course, mainly for trade with foreigners. By the end of 1754, 193,000 rubles were issued out of the 200 allocated to the bank. And then, you know, it began, I wanted to say, unforeseen, but of course, foreseen, because there is a wonderful Russian proverb: you take others', but you give your own. And, you know, debts stopped being repaid to such an extent that the most malicious defaulters were taken into custody. And 7 years later, a tragedy occurred at the port. The warehouses with export goods, with hemp and flax, burned down. That is, the goods of hundreds of clients of the merchant bank, which served as collateral, simply burned down. Well, we talked about merchants. For nobles, loan security was provided. They could pledge gold, silver, diamond jewelry, pearls. Guarantors could also secure the credit. What is this? So, if some count could not pay off the loan, then the people who guaranteed him paid off this debt for him to the bank. In addition, real estate, villages, hamlets, accordingly, with what? With peasants and all the land were accepted as collateral. The cost of one serf peasant was about 10 rubles at that time. For approximately the same amount, you could rent an apartment with a stable for a month. That is, why do we all, when economists operate with these figures, that a family of peasants cost so much, it's not only because we know that they were sold on the free market. Mainly they served as collateral, that is, they secured the loan. Well, pay attention, under Peter, it was forbidden to pledge villages and serf peasants, and now it is possible. Well, as they say, it took off. Many nobles mortgaged and re-mortgaged their estates. Why did they need money? Well, you might think that the nobles suddenly rushed into business. Well, of course not. Nobles needed money for a luxurious life. Frankly speaking, extravagance. It was feathers, balls, and card games. Some borrowed from usurers. However, many indeed turned to the state for loans to survive. But still, to make an estate profitable was not an easy task. Not everyone succeeded. And this, by the way, became one of the most important prerequisites for the peasant reform, because the nobles did not want to engage in business, they did not want to conduct modern farming. And all this together led the noble class to complete bankruptcy by the middle of the 19th century. And now let's figure out how to properly mortgage an estate if you are a Russian nobleman of the 15th or 19th century. >> If you had land with serfs, then you were on the short list for a state loan secured by property. It was not targeted. It could be used for any needs. The main thing is not to forget to pay interest to the treasury. If there were problems with this, your estate was transferred to the ownership of the credit institution, for example, the Noble Bank or guardianship councils for the help of orphans. Formally, these were not banks at all, but they received so many charitable funds that they conducted credit activities with them. For many noble families, even very large and influential ones, the prospect of ruin through collectors in the 19th century was quite real and happened quite often. We read about this in school. Ranevskaya from Chekhov's "The Cherry Orchard" mortgaged her estate, spent the money, did not pay interest, and the bank put the estate with the cherry orchard up for auction. Pierre Bezukhov paid tens of thousands of rubles to the guardianship council. There are mortgaged estates in Ostrovsky, and in Gogol, and in Turgenev. both in the works of heroes and authors. Pushkin mortgaged and re-mortgaged his estates several times, but the matter was not limited to estates with gardens. Less often, they talk about another very important collateral, namely, souls. Serf peasants. Landowners had not only real estate but also movable property. Legally, they belonged to them just like an object. To mortgage the family of your janitor to the bank was very simple. And losing them was not so scary. On the eve of the abolition of serfdom, 2/3 of all serf peasants were listed as collateral in the State Banks. It's terrible to think about living people, but this entire army of bank assets was valued at 425.5 million rubles. Something around 2 trillion rubles in our money. The debts of the nobles to the state grew annually. Only under Catherine II and to the Merchant Bank alone, nobles owed almost 8.5 million rubles. That's tens of billions today. Non-payment in Russia became a stable tradition. Remember, perhaps, Tolstoy's Anna Karenina, how Vronsky puts his financial affairs in order? Firstly, he does it five times a year. Secondly, he divides all his debts into three categories. Only debts of honor, usually card debts, need to be paid immediately. It makes sense to partially pay everything related to horse racing. All other debts according to Vronsky's system are not worth thinking about. But not only he thought so. Being in debt was an aggregate state of a Russian nobleman, especially a rich one. And with all this debt confusion, banking bureaucracy was initially completely incompetent. When the Catherine Merchant Bank first checked the books in 1779, it turned out that there were simply no books. For 10 years, the bank did not keep accounts at all. Where did the funds go? Who knows. They collected debts for another 10 years. About a million was returned. The Merchant Bank was eventually merged with the Noble Bank, and together they became part of the new loan and assignment bank. And this organization is very important to us here. The assignment bank was an issuing bank, that is, it issued assignments, secured by hard currency. These were the first paper banknotes in the history of Russia. The offices of the assignment bank were in both capitals. In Moscow, on Bank Lane, in the Mnyonniki district, and in St. Petersburg, near the bridge with griffins. A progressive reform for the 15th century, but Catherine undertook it for a very rational reason. To cover the expenses of the war with Turkey, to print money and bring the started to completion. The bank, which was publicly presented as the salvation of Russia's banking system and for which the empress personally vouched, ultimately drowned in uncontrolled issuance. According to the plan, the issue should not have exceeded 1 million assignments. By Catherine's death, 157 times more had been issued. Paul I then had to literally burn all this cash on Palace Square to curb inflation. Nevertheless, quietly, all these noble merchant banks, assignments, modern loans, all this gradually formed a complete system. >> Gigachat, how to jump above your head? How to build one like it, but 10 times bigger? >> Will this material work? >> Yes, it's perfect for the ramp. Only a little left. >> Higher, higher than your head, don't jump. >> Higher than your head, don't jump. >> Higher than your head, don't jump. >> Egachat, jump higher than your head. >> And finally, Alexander I decides to bring order to finances. First, everything needs to be brought to a unified management standard. Thus, the Council of State Credit Institutions arises. What is this? It is a single center that looks at the entire system from above. It is not yet a bank, it is more of a management headquarters, a superstructure over the credit system. In 1817, a structure crucial for our history appeared. The State Commercial Bank. Its capital was set at 30 million rubles in assignments. This was an astronomical sum for those times. But the most interesting thing is what operations it was allowed to conduct. They show how an almost modern bank appears in Russia. So, the bank could accept deposits for transfer. What is this? Essentially, cashless payment, cashless transfers, cashless transactions, as they would say now. True, only within the city where the account is opened. A commission of a quarter percent was charged for transfers to another city. And a paradoxical situation arose when, on the one hand, cash was transported in chests and on carts, and on the other hand, a sum could be transferred simply by signing in the relevant institution. In addition, the bank offered deposits for circulation with interest. That is, for us, it's a deposit. And for such deposits, the bank paid 5% per annum. Gradually, bank branches appeared in different parts of the empire. In Moscow, in Kharkov, in Yekaterinburg. It is worth saying a couple of words about how the work was organized during fairs. So, it's a big event, with a large turnover of money. The State Commercial Bank opened a temporary branch in places where money from all over the country was collected. For example, at the fair in Nizhny Novgorod. Imagine a fair, crowds of merchants, deals, convoys, goods, and right there, the opportunity to get a loan for your goods or make a transfer. A kind of, well, an ATM, but with employees inside. Next comes the era of Nicholas I. Under him, the banking system remained more or less the same. Nobles could still mortgage their estates, but a reform of the assignment system, that is, the first paper money in the country, was carried out. New credit notes were introduced in the Russian Empire, and assignments gradually disappeared. It was at this time that perhaps the most famous Russian bank was founded. Well, we can talk about assignments for a long time. For now, let's discuss a couple of important things. Firstly, they were actively counterfeited. For example, the first assignments were issued in denominations of 25, 50, 75, and 100 rubles. Well, people, not being fools. With a light movement of the hand, they turned a quarter into 75 rubles. At some point, there were so many fakes that the issuance of the seventy-five-ruble assignment was stopped. Hence the famous saying: "A bird in the hand is worth two in the bush." A five-ruble assignment was called a "titmouse." It was blue. There are other stories about counterfeiting, well, for example, completely cinematic ones. During the invasion of Russia, Napoleon's army itself put counterfeits into circulation. either to support the soldiers, or to strike at the Russian economy. The funniest thing is that the fakes looked more convincing than the real ones. The paper was of better quality. They could be distinguished by details. The French confused the Russian letters D and L. Instead of "gosudarstvennoy" (state), it appeared "gosudarstvennoy" (state). It should be noted that many people would later use this experience of Napoleon during the First World War, during the Second World War, Hitler's Germany would engage in counterfeiting coins of Great Britain, etc. Ah, well, let's return to the 19th century. After the victory over Napoleon, it was decided to issue assignments of a new sample. And they began to be printed from July 1818. And to the previous denominations, a 200-ruble note was added, so to speak, for big people. To improve the quality of paper and security, an expedition for the preparation of state papers was created in the capitals. It was there that paper money and stamp papers would later be printed. >> A funny story is associated with the Expedition for the Preparation of State Papers, which is the current Goznak factory. Filipp Vigel, Pushkin's friend, memoirist and official, left an anecdote in his notes about how the Spanish architect and engineer Agustin Betancourt was hired into Russian service. Betancourt was a European celebrity in mechanics. He also managed to build a telegraph in Spain and launched the first hot air balloon there. In Russia, he was seen as a designer of machines for printing new money. Betancourt resisted, but when Napoleon approached Spain, the prospect of traveling to Russia immediately seemed more attractive. He was assigned a substantial salary of 24,000 rubles in assignments. But by the time he arrived in Petersburg, the assignments had depreciated again, so the architect had to be issued several tens of thousands of rubles more. But Betancourt was still unhappy. He demanded a substantial rank and was accepted as a major general. Then the Spaniard declared that the rank was still too low for a person who had been a minister in his homeland. Two years later, he was promoted to lieutenant general. Third class in the Table of Ranks. People strove for such a rank their whole lives. Alexander I even sent him the Order of St. Anna, but Betancourt complained again: "Well, it's not fitting to award such an order to a knight of the Order of St. James of Compostela. It should be higher." In the end, they agreed on the highest Order of St. Alexander Nevsky. The initial financial order was fulfilled by this demanding expat. Betancourt personally designed most of the machines for printing new money. The new assignments went into circulation in 1819. And again, as last time, the Tsar himself vouched for the safety of the capital. And it was even proposed to regularly publish bank reports. But still, the economy was overwhelmed by excessive issuance, and therefore, inflation. Assignments would last for another 30 years. Already under Nicholas I, they would be replaced by much more modern state credit notes. When the circulation of money was put in order, the state thought about something else. How to involve the common person in the financial cycle? What needs to be understood here? The banking system at that time was something like the stock market before 2010. That is, entertainment not for everyone. When, remember, it was the business of professional brokers, and thinking about investing in something and even earning from it without leaving home was impossible. So in the 19th century, access to the simplest financial instruments was considered a privilege of a few percent of society, residents of large cities and noble estates. Everyone else, please go to the old women moneylenders and usurers, where they will charge you 60% per annum. The solution was found in savings banks, banks for ordinary people. They were established by Nicholas I in 1841. In St. Petersburg, the first savings bank was opened in the building of the guardianship council on Kazanskaya Street. In Moscow, on Solyanka. The meaning of savings banks was as follows: the population received the opportunity to save not in a chest and not under a mattress, but in a protected institution. And the state, in turn, received millions of small deposits. Savings banks were democratic organizations. Not only a nobleman or a merchant, but also a simple person, not too rich, but who wants to increase his well-being, could become a client of a savings bank. Factory workers, artisans, petty officials, townspeople, peasants. Gogol's Akaky Akakievich would have been an ideal depositor of savings banks. But "The Overcoat" came out before they opened. Savings banks accepted sums from 50 kopecks to 10 rubles in silver at a time. And the total amount of deposits from one person could not exceed 300 rubles. This deterred wealthy nobles and merchants. Savings banks were primarily self-help institutions for the poor, not deposit banks. And yes, even then there were savings books, almost like in the USSR. They reflected the balance, where interest dripped, albeit small. First 4% per annum, then generally three. For the opening of the first savings banks, a special brochure was published as advertising. A conversation about a savings bank between Alexei Nikiforovich and Egor Prokhorovich. The brochure opened with an epigraph. A savings bank is the mother of economy, the wealth of an artisan, the cure for poverty, and the producer of capital. Then a simple play began. Egor Prokhorovich visits Alexei Nikiforovich, a literate person, and asks him to explain what this savings bank is. And he explains: "The Tsar-father ordered to establish a savings bank for poor people, for whom money is earned with labor. And its function is as follows: you know how it happens? You have a quarter or a half-ruble, and then a friend comes over, you go to a tavern, and the half-ruble is gone." And then, vividly describing social horrors, it was explained in an accessible way why it is necessary to save money in a savings bank. Because whoever doesn't invest money will drink it away. The first depositor in St. Petersburg was Nikolai Antonovich Kristofari. He deposited 10 rubles in silver into the account. Kristofari was not a random passerby. He was an official of the judicial treasury, a representative of the service bureaucracy elite. That is, he played the role of an influencer who was supposed to show everyone. A savings bank is a solid, state institution. Money can be entrusted to a savings bank. And so, year after year, gradually, Russian subjects got used to keeping their savings in savings banks. Thus ended the youth of the Russian financial system. Everything changed completely in 1860. If before Alexander II, banking life in Russia was mainly state-owned and class-based, then under the Tsar-Liberator, a real banking system appeared. The State Bank was at the center. Around it were private banks and credit societies. Money began to work according to market, economic logic. Before the reforms, the Russian credit system looked, well, quite strange. It seemed like there were banks, but they didn't work as a single organism, but as a set of separate instruments under the treasury. Somewhere they accepted deposits, somewhere they issued loans, somewhere they saved the nobility from debts. The Tsar carried out reforms that are usually remembered from school programs. abolition of serfdom, judicial reform, zemstvo reform, military reform. But in reality, economic reform also took place. And in this economic reform, the banking system is one of the supporting structures. On May 31, 1860, the State Bank of the Russian Empire was established. Essentially, what is this? It is an update of the old State Commercial Bank. But a cardinal update. It had long been clear that the class-based approach in the financial sphere had not justified itself. Well, I already told you at the beginning of the episodes. By 1859, the debt of the Russian nobility amounted to almost half a billion rubles. And it was formed against the collateral of both luxurious and not-so-luxurious, and frankly neglected noble estates. That is, the Russian nobility had a century of revelry. champagne, comet wine, splashed juice, cards, and such billion-dollar debts. Despite the opening of savings banks, for the majority of the empire's population, bank credit remained not just an inaccessible service, but something completely out of the realm of fantasy. Even the most financially savvy part of Russia's population, merchants, treated banks with distrust. The State Bank was created by Evgeny Lomansky, a well-known economist. He created the Russian bank based on the French model, which was relatively independent of the authorities but had the right to print money. The State Bank was supposed to lend to small and medium-sized entrepreneurs, but due to the fears of high-ranking officials, it focused on loans for large industry and large merchants. Popular credit was needed by everyone, and private commercial banks began to issue it. The first such bank was the St. Petersburg Private Commercial Bank, as it was called. It opened in 1864 and operated until the October Revolution, that is, until 1917. The bank's charter was approved personally by Alexander II. Prominent businessmen from Petersburg and European bankers acted as founders. The bank financed operations on the stock exchange. It issued loans mainly for railway construction, because roads were being built rapidly, and there was a good economy formed around them, and dividends reached 16% per annum. Soon after the abolition of serfdom, a banking boom began, because Russian capitalism was emerging. Among the first private banks was, for example, the Russian Bank for Foreign Trade. such a, well, a window to Europe, a bank for crediting exports and imports. Then, in 1870, the Volga-Kama Commercial Bank was founded. It was created with the participation of Russian merchants and actively operated in the central provinces of the country. By the beginning of World War I, the network of the Bank for Foreign Trade included dozens of branches in various parts of the empire. Another example of a large private bank is the Azov-Don Commercial Bank. Founded in 1871 in Taganrog, it served the trade and industry of southern Russia for a long time. Then it moved its management to Petersburg and began to finance metallurgical plants, the coal mining industry, as well as large-scale construction projects. The buildings of bank branches in the cities of the Russian Empire deserve special attention. Well, it's clear, to make an impression, to show the power of their bank, they ordered all this magnificence from leading architects. In the pre-revolutionary banking system, bankers from other countries, especially French and Germans, played a significant role. The Russian banking system was considered reliable and profitable. And with this money, among other things, domestic industry developed. But foreign
Specialists played, among other things, ambiguous roles. In the history of Russian banking. And here's why >> the question is, where could a person, usually a subject of the Russian Empire, generally get a loan? The first banks and pawnshops appeared only in the 16th century, but, as we said, this was a privilege for the chosen few. Only businessmen could use them. For the majority, credit was an informal and personal matter. In Russia under Nicholas I, one could receive an excellent education, enter service with a decent salary, manage large sums of money, and have no idea about banks. However, people were enveloped in a network of debt relations not with financial institutions, but with each other, with relatives, with colleagues, with neighbors. The Russian Rothschilds were the Old Believers, who often lent money to their own and others without any receipts. Simply on trust and conscience. The network of private credit was both wider and more important than banks. Everything began to change in the era of Alexander II. Trust in banks grew. Bank credit, more profitable, transparent, and reliable, began to catch up with informal credit, when you borrowed from acquaintances on your word of honor. And an interesting set of services appeared. In addition to deposits and loans, banks allowed one to receive money on promissory notes and checks, transfer funds to each other, sell and buy securities, and even leave valuable items for safekeeping. Deposit volumes in some Russian banks grew by 30-40% per year. Rates like in the nineties. People with zero financial literacy, familiar at most with the idea of a savings bank, rushed into credit institutions on a whim. Banks suddenly became fashionable. Of course, bankers spared no effort to build their reputation and invested in marketing. With us, your money will not only not be lost, but will also multiply. However, soon after the appearance of the first banks, the first bankruptcies began. The great Russian artist Vladimir Makovsky has a beautiful painting called "Collapse." Here's how art critic Vladimir Stasov describes it. The old lady, driven to despair, became a real fury and menacingly approached the clerk. The woman fainted. The old man turned pale. The painting is indeed based on real events. What happened then? In 1875, the first Russian bank collapsed. It was the Moscow Commercial Loan Bank. The bank was respected. Its head was the Moscow city mayor Daniil Schumacher. But, as it turned out, this man was not clean-handed. He was exposed by a young merchant, Nikolai Alekseev, a cousin of the theater director Stanislavsky. He was a depositor of this bank, and he was refused the return of his deposit without clear reasons, as if it were about winning at an illegal casino. Alekseev went to complain to the prosecutor, after which the police arrived at the bank on Nikolskaya Street. And it turned out that the bank had no money. The branch was sealed at night. By morning, all of Moscow knew about the bank's arrest. Real chaos began on Nikolskaya Street. Depositors broke through the police cordon and rushed into the bank. The directors were cornered and showered with curses. Women wept and had hysterics. The collapse of the Moscow Commercial Bank led to the bankruptcy of several other smaller banks and banking houses. People began to withdraw money from deposits all over Russia. Up to a quarter of small financial organizations in Russia did not survive this crisis. The state returned money to the defrauded depositors at 75 kopecks per ruble invested. But the management of the ruined bank was still brought to court. It was necessary to find out where the money had gone at all. And before we find out, a little context. Problems with financial literacy were not only among depositors, but also among bankers. After the abolition of serfdom, private banks in Russia were created according to a very simple scheme. They took a European, most often German, model, slightly adapted it to domestic realities, and that was it. The rewritten bank charters were approved by the emperor himself, but it was difficult to realistically assess how sensible they were. Russia was just beginning its modernization. There was a deficit of qualified specialists in the government. They were also absent in the labor market. There were no bankers, no bank accountants, no economists in the modern sense in Russia at that time. In practice, this meant that in banks, where, I remind you, people began to massively bring money, accountants got confused in keeping books and recording transactions. Over half a century of operation of private commercial banks in the Russian Empire, historians have counted about 800 top bank managers. Of these, only 7% had specialized education in banking. Far from everyone understood how this whole system worked, especially in the provinces. Loans in small banks and cash desks were often issued without any collateral, and shareholders hid embezzlement from each other. As a result, by 1916, in many small banks, the proportion of unreturned loans reached 100%. Imagine a bank from which no one returned a loan at all. Inspectors reported to Petersburg that provincial amateur bankers did not know basic terminology, such as share, loan, dividend, correspondence, overdue. Nowadays, these people wouldn't even pass the first stage of an interview. When the collapse of the Moscow Commercial Loan Bank happened, all this became obvious. The respected city mayor Schumacher, the head of the bank, had zero banking experience, and was generally busy with his main service. He was appointed there because of his reputation as a businessman with experience managing a pawnshop. But there was also a professional in the bank, the manager of international operations, a certain Gustav Landau. And he turned out to be a fraudster, buying junk stocks abroad, sometimes falsifying the purchase price, inflating it, and pocketing the difference. At the same time, the respected foreign specialist allegedly did not know Russian, which only added mystery and solidity in the eyes of Russian depositors. When the bank learned about Landau's scheme and the incurred losses, they decided to replace the accounting, and the losses were hidden in current operations, and even the dividend rate was raised from 6 to 8%. But this did not kill the bank. The collapse occurred due to a loan to the German-British railway king Strusberg. He was also not clean-handed, bribed officials, gave contracts for kickbacks, falsified the mileage of roads not yet built, and everyone knew about it. >> In European banks, Strusberg already had a bad reputation, and they didn't give him loans. But he still conducted business. He had factories that built wagons, and the Russian Empire needed wagons. So Strusberg began to look for money in Russia, where he did not yet have a bad reputation. A loan was issued by the Moscow Commercial Loan Bank for 8 million rubles, secured by wagons. True, there were only enough wagons for a million, but the bank's management earned by receiving a kickback of at least 150,000 rubles. At that time, this was a crazy amount of money. And there was a nuance. Strusberg valued his wagons at 1,200 rubles each. And competitors offered their wagons to Russia for 600 rubles. That is, he inflated the price by half. The return of the loan seemed pointless. As a result, Strusberg retained both the wagons and the money. And who was fooled? The bank's board. Well, the bankers rushed to the lawyers, promising them mountains of gold. And among the defenders was one of the best lawyers in the empire, Fyodor Plevako. They tried to beg for forgiveness from Tsar Alexander II, but he was adamant. This is a court matter, and it's not for us to interfere. The court sentenced Landau, Strusberg, and a couple of other people to the deprivation of all special rights. That is, in fact, it equated them to peasants. Russian subjects were sent into exile. Daniil Schumacher was sentenced to one month's arrest. Strusberg was either expelled from Russia or sent into exile for 8 months. In any case, he lost his influence. But, despite the fact that banks sometimes collapsed, the empire's financial system grew and strengthened. Short-term credit banks appeared, as well as land banks, which issued loans for up to 60 years, that is, essentially providing mortgages. So-called city public banks began to play a huge role. And they issued loans at high interest rates, but a significant portion of the income went to urban improvement. And thanks to their work, provincial Russian cities began to flourish. Well, the government understood, what is the main issue in Russia? Land. Therefore, in the 1880s, noble and peasant banks were established. All this, of course, under the patronage of the State Bank. The noble bank accepted landed estates as collateral, and the peasant bank helped peasants become landowners. Both banks became levers for the economic redistribution of land in the country. A new step was taken by Finance Minister Sergei Yulievich Witte. Under him, the State Bank began to issue loans to small and medium-sized entrepreneurs. Under Nicholas II, the government guaranteed depositors of savings banks that their savings were protected. In a couple of decades, deposits grew from 300 million to 2 billion rubles. By 1916, more than 14,000 savings banks would be opened and more than 12 million savings books issued. For perspective, the population of Moscow and St. Petersburg combined at that time was just over 4 million people. In the mid-1890s, Sergei Witte conducted a famous monetary reform and introduced the gold standard. Well, it must be said, the reform was difficult. The majority of senators opposed it. The press was outraged, and only the personal approval of Nicholas II paved the way for the innovation. The State Bank received emission rights and introduced the gold ruble. The famous Nikolayev imperial. Gold coins were minted in denominations of 5 and 10 rubles and exchanged for banknotes. The gold standard strengthened the Russian ruble. In Germany, economists compared it to the British pound sterling. Paper money, of course, was also printed. And on the reverse of the new banknotes, one could read: "The State Bank will exchange banknotes for gold coin without limit." Russia's gold reserves were considered one of the largest in the world. The situation was favorable. The ruble was one of the most stable world currencies. The Russian Empire, by many indicators, was the fastest-growing economy in the world. The banking system of Russia, finally, after a century and a half of banking development, was put in order. Before the start of World War I, 53 joint-stock banks operated in Russia with seven branches throughout the empire, from Warsaw to Vladivostok. And it was banks that helped Pyotr Stolypin in his monumental reform to turn peasants into farmers, or rather, one bank, the Peasant Bank, was given free appanage lands throughout the empire, which he then sold to peasants on preferential credit without an unbearable down payment. The interest rates were low. The Peasant Bank covered up to 890% of the plot price, and landless and land-poor peasants were given 100% loans. Over the years of the reform, loans totaling over a billion rubles were issued through the bank, and about 10 million dessiatines passed into peasant private ownership. This is rarely taught in schools, but Stolypin invested in private enterprise precisely through the credit mechanism. While the Peasant Bank was helping millions of peasants get on their feet, other banks ensured the colossal pace of Russia's economic and industrial growth. By 1913, Russian banks held 86% of all Russian metallurgy, 77% of coal mining, and 86% of oil. The lion's share of heavy industry enterprises was controlled by St. Petersburg banks. Nevsky Prospekt became the bankers' street. Among thousands of bank clerks and managers were outstanding personalities. For example, Alexei Ivanovich Putilov, an official of the Ministry of Finance. He was the grand-nephew of the famous industrialist Nikolai Putilov, the owner of the Putilov defense plant. Alexei Ivanovich attracted the attention of Finance Minister Sergei Witte. and in 1905, thanks to his patronage, he became the manager of the Noble and Peasant Banks. Putilov was one of those who, under Stolypin's leadership, prepared the agrarian reform, but he also had his own projects. Once he submitted a memorandum to Nicholas II with a proposal for the compulsory purchase of noble lands. The idea did not appeal to the Tsar, and the zealous Putilov quit his service and became a banker. Soon he would head the Russo-Chinese Bank. Unlike the previous banks in this issue, this one was of Polish dimensions. It was created in the late 1890s to strengthen Russia's positions in the Far East in opposition to British influence. Russia under Nicholas II was expanding eastward diplomatically, infrastructurally. Consider the construction of the Trans-Siberian Railway and the Chinese Eastern Railway, and financially as well. Then the Russo-Chinese Bank merged with a subsidiary of the French bank Société Générale, and under the name Russo-Asian Bank, it became the largest in the empire. Under Alexei Putilov, the bank dominated machine building, metalworking, oil, and even the tobacco industry. Before World War I, Putilov created an entire military-industrial syndicate, which included, among others, the St. Petersburg plant of his relative, Putilov. Within a few years, almost all artillery and shells would be produced at enterprises controlled by the Russo-Asian Bank. In other words, a private military industry emerged in Russia, still largely autocratic. The bank even financed the construction of most of the light cruisers and armored destroyers of the Baltic Fleet. For this, during World War I, all the blame would be placed on the bankers. They said that all the army's failures depended on the banks, bankers, and industrialists. Putilov, however, was involved in more than just the military-industrial complex. He was simultaneously chairman and board member of almost fifty companies associated with the bank. Putilov's annual salary was enormous. 400,000 gold rubles a year, 32 million rubles a month in our money. This is not counting other income. But, being one of the richest men in Russia, Alexei Ivanovich behaved unconventionally in public. At high-level meetings, he appeared in a worn jacket, always sprinkled with cigar ash. After the revolution, he supported General Lavr Kornilov and financed the famous Kornilov rebellion. And after the failure of this adventure, he fled Petrograd across the ice to Finland. The Soviet government declared him an enemy of the revolution and confiscated his property. But Putilov still had money. He used it to finance the Whites. He could have written such a biography for himself, but he might have missed one important detail. It is known that Putilov tried to offer his services to the Bolsheviks through his former colleague Leonid Krasin, an old revolutionary and, moreover, a former board member of the Russo-Asian Bank. >> Putilov proposed to Krasin to create a bank with foreign participation in Soviet Russia. The project could not be realized. Krasin died in 1926, and Putilov himself died in obscurity in emigration. Another famous banker was the head of the St. Petersburg International Bank, Alexander Vishnegradsky. He was known as a bon vivant. They said about Vishnegradsky: "He sleeps during the day and carouses at night." The banker was known as a football and yachting enthusiast, and even competed for the Russian sailing team at the 1912 Olympics, winning a bronze medal. Malicious tongues said that Vishnegradsky only dropped by the bank for half an hour, but in any case, he was a quite successful top manager. The International Bank financed gold miners, sugar kings, textile factories, steamships, railways, and insurance companies. Of course, before starting work at the bank, Vishnegradsky was an official on special assignments, and not just anywhere, but in the Ministry of Finance of the Russian Empire. This man was also a passionate music lover and even tried to compose himself. He regularly appeared in society chronicles. Colleagues noted that Vishnegradsky could instantly put a собеседника at ease and effortlessly extract any commercial secrets from him. He himself never said too much. That is, behind the image of a partygoer, a born financier was hidden. The number of banks in the Russian Empire was growing. Agriculture developed along with them, and peasant cooperatives appeared. The State Bank injected loans into joint-stock and commercial banks. They directed money into industry and other sectors of the economy. In parallel, French and German capital also flowed into the country. By 1917, fifty banks, over a thousand credit societies, and three hundred city banks operated in the Russian Empire. Anyone could get a loan from a bank. The problem that was recognized in the 16th century seemed to be solved. Well, of course, it happened that banks were robbed. However, until the beginning of the 20th century, Russia did not know loud bank robberies, as, for example, happened in America. In our parts, the profession of a "bear hunter," that is, a quiet safe cracker, was more popular. Revolutionaries began to rob banks in Russia. In 1906, in Helsingfors, modern Helsinki, one of the most famous robberies took place: an expropriation. Latvian Social Democrats robbed a branch of the State Bank of the Russian Empire, but it is believed that Leonid Krasin was behind the operation. In those years, he was responsible for financing the Bolsheviks. They robbed banks with a very simple, understandable goal: to finance underground activities. There were eight robbers. They cut the telephone wires and took positions on the bank's staircase and at the entrances. At 2:00 PM, four entered the operating room, drew knives and pistols. The branch manager was tied up. The bank guard rushed to help, and he was shot. The raiders took more than 170,000 rubles in cash. The robbery was discovered only when the wife of one of the employees did not wait for her husband for lunch. The revolutionaries hoped that the Finnish authorities would not want to investigate the case because the imperial Russian bank had been robbed. But the government and the police were outraged by the murder of the guard. And the next day, a cashier on the railway noticed a suspiciously plump wallet on one of the passengers and called the police. During an attempted arrest, the robbers wounded a policeman and tried to escape into the forest, but they were caught and about a third of the loot was recovered. The case even reached the Finnish Senate. The criminals were sentenced to life imprisonment. But this was only the beginning. In June 1907, the famous Tiflis expropriation occurred in Georgia. Under the leadership of Stalin's associate, known by the pseudonym Kamo, a combat group attacked cash collectors. The Bolsheviks decided to overcome the reinforced convoy with a treasury carriage of the State Bank with bombs and revolvers. The raid was terrible. Windows were shattered within a verst radius. Horses were blown to pieces. The incident happened in the center of Tiflis, and passers-by were hit. According to closed police reports, about 40 people died that day. Kamo, dressed in the uniform of a tsarist officer, successfully escaped from the crime scene. The haul was 300,000 rubles, about 5 million dollars in today's money. But large banknotes of 500 rubles - two or three annual wages of a worker - turned out to be useless. You can't exchange them on the market. You have to go to the bank. The numbers had already become known and were sent everywhere. Many of the raiders were soon apprehended by the secret police. Lenin fled abroad. The combatant, Kamo, to avoid sentencing, pretended to be insane for 2 years, simulating insensitivity to pain. In the end, he achieved admission to a mental asylum and successfully escaped from there. But the largest bank robbery occurred later, on Christmas Eve in 1916, in Kharkov. Criminals stole a million rubles from the protected vault of the mutual credit society. About 15 million dollars in our money. The robbers broke through a wall 15 meters thick, removed about 16 tons of bricks, then cut through the steel wall of the fireproof safe with an electric saw and remained unnoticed. It was Christmas. All employees were at home, and there was no security either. The crime was discovered only after 2 days. The robbers took almost no cash, only shares and bonds worth 2.5 million rubles. We note that by 1916, at least the robbers had no problems with financial literacy. >> The first Russian capitalism ended in 1917, briefly outliving the Russian Empire itself. In December of that year, the Bolsheviks took the State Bank an hour earlier than the Petrograd Telegraph. Without a single shot, 40 sailors from the former Guard Fleet crew occupied it. The Bolsheviks began to demand money from the bank. First, Trotsky sent a delegation, then M. D. Minzhinsky delivered a directive: "Give the new authorities 10 million." Vyacheslav Minzhinsky, by the way, also once worked at a bank, moreover, at the French giant Crédit Lyonnais. And on the day of the State Bank's seizure, he made a mistake, forgetting to get Lenin's mandate signed. And precisely on this pretext, the manager of the State Bank did not give the money, saying: "Do you have a signed paper?" No. "Goodbye." The first 5 million rubles were received by the Bolsheviks only 10 days after the overthrow of the Provisional Government. And it took a month to gain control of the State Bank. They replaced 60% of the striking bank employees. By the end of 1917, the Bolsheviks adopted a decree on the nationalization of banks. The All-Russian Central Executive Committee declared banking a state monopoly. Well, they promised, among other things, of course, to ensure the interests of small depositors, but despite the Bolsheviks' promise to ensure the interests of small depositors, they did so in a rather peculiar way. On December 27, 1917, armed Bolshevik detachments seized private banks in Petrograd, and the next day in Moscow. The first to be taken was the Petrograd Private Commercial Bank, the first Russian joint-stock credit institution. At 10 a.m., sailors burst into the building on Nevsky Prospekt. Thus began the operation to seize leading commercial banks. In total, 28 of the largest banks in Russia were occupied in one day. That is, everything was done quite smoothly. Each detachment was headed by a commissar, a bank employee from the Bolsheviks, who understood banking. Well, who could he be? For example, the son of one of the bank guards. And by lunchtime, the Bolshevik newspaper "Pravda" wrote the following about bankers and capitalists: "With their predatory robbery, they are ruining the national economy." Soon, the Council of Workers' and Soldiers' Deputies posted a rather illiterate explanation for ordinary people on all fences. The civil war was escalating, and supposedly the bourgeoisie began to transfer their millions to help the Whites. And to put an end to these actions, the Council decided to take all the money into its own hands, "drink it up," and return it to the people. Well, in general, an illogical explanation, but for ordinary people, probably quite understandable. After the revolution, during the Civil War, the banking system as such practically did not exist. Joint-stock and private banks were closed, economic ties were broken, settlements went into barter. Wild inflation, which is not surprising, chaos reigned in the country. No further. The Soviet state tried to breathe at least some market element into the economy, and the banking system began to recover. In the early twenties, a number of specialized banks were created for industry, trade, and agricultural and construction financing. In 1923, the State Bank of the RSFSR was transformed into the State Bank of the Soviet Union. Thus, we have a central institution for the entire financial system. By the mid-twenties, there were quite a lot of banks. The number of independent banks grew, they issued loans and even conducted international operations. For example, in the novel "The Golden Calf," Ostap Bender searches for the underground millionaire Koreiko. So, Koreiko did not use the bank because the sum was too large. The state closely monitored such transfers to identify class enemies and, of course, to confiscate money from them. But ordinary people brought money to the bank. The Trade and Industry Bank operated for industrial lending and accepting deposits. In 3 years, the volume of deposits increased from 6 to 206 million rubles. In early 1922, Roscombank began operations. The bank's shares initially belonged to Swedish companies and individuals, but 2 years later they were bought out by the People's Commissariat of Foreign Trade and the State Bank. Thus, Roscombank became Vneshtorgbank. Agricultural credit banks operated. There is the Housing and Communal Services Bank (Tsekombank), there is Elektrobank, there is Pobank, the bank of consumer cooperatives. Mutual credit societies, which were very popular before the revolution, were revived. Their clients were private trading and industrial companies. Such societies received small loans from the State Bank and then offered high deposit rates to attract clients. Loan rates were also attractive. In 1925, 176 such societies operated in the Soviet Union, but this was almost 10 times less than in the Russian Empire ten years earlier. By the end of the twenties, the country changed course. Industrialization and collectivization began. The NEP was forgotten. The role of banks was rethought. Commercial banks gradually lost their meaning. Well, although the NEP was not officially abolished, the banking market, as it existed throughout the NEP era, was effectively curtailed. This was consolidated by the credit reform of the early thirties. The commercial credit market was curtailed, and settlements were centralized. After this, the banking system of the Soviet Union became strictly centralized. At the center was the State Bank, surrounded by a special set of institutions for financing different sectors of the economy. Here is trade, agriculture, and housing and communal services. And here is import-export. This model is called a monobank system. A single center of settlements and lending for the entire planned economy. Savings banks became the most important element of the Soviet banking system. In 1922, the Council of People's Commissars adopted a decree on the establishment of state savings banks. In Moscow, the first new savings bank opened in February 1923. And it was already called Soviet: the State Labor Savings Bank. But people still remembered how their money was confiscated from savings banks during the revolution. Therefore, money was deposited reluctantly. The network was small, there were not enough cash desks. Therefore, in mid-1923, the state allowed postal-telegraph, railway, and mobile cash desks to be opened. And in the mid-twenties, a monetary reform took place. The population began to trust the ruble again, and accordingly, the volume of deposits grew. If in March 1923 there were only five cash desks, then by January there were more than 4,500. Many worked at institutions. In 1925, people brought just over 22 million rubles to savings banks, and within another 2 years, annual deposits increased almost fivefold. It must be said that savings banks were actively promoted by the famous posters of the twenties and thirties, which directly stated: "He who carries money to Trutsgbergsu removes many worries from you." Or, "If the state is richer, we will all live differently." In the summer of 1925, agitprop wagons traveled through the villages, and the play "Grandfather's Piggy Bank" was read in izbas and reading rooms. The play clearly stated that it is better not to keep money under the mattress, but to put it in a savings book. This detail is also present in Ilf and Petrov. Ostap Bender and Kisa Vorobyaninov travel along the Volga on an agitprop steamboat for savings banks. In clubs, actors performed skits about the loss of savings books and urged people to make deposits in savings banks. Literally at every step, townspeople saw a poster: "Where everyone goes, I go to the savings bank." In 1926, pensions began to be issued through savings banks. This was a very serious step. That is, people were accustomed to going to savings banks. Then transfers and securities operations appeared. But the real role of savings banks was revealed in the thirties, when the country needed money for industrialization. Savings banks became a mechanism for mobilizing the population's funds. Many agitprop posters repeated the same familiar theme: the fight against drunkenness. It was proposed not to drink away money, but to save it, to bring it to the savings bank, turning small savings into proper labor capital. And, you know, people really did bring it. For example, in 1930, a sixteen-year-old Tambov schoolgirl, Liya Malyavina, dreamed of traveling with the help of savings bank money. But with the start of the Great Patriotic War, many had to revise their plans. It must be said that savings banks even operated in besieged Leningrad. Front-line soldiers and officers feared that their money would be lost or devalued. And in the rear, often, well, there was no opportunity to spend cash. As a result, by 1947, the amount of deposits had increased to 16.5 billion rubles, compared to 7 billion at the beginning of 1941. To raise money for the war, savings banks used additional mechanisms. Thus, money and goods lotteries appeared, where not only money but also valuable prizes were raffled: clothing, shoes, watches. Voluntary contributions to the needs of the Red Army were accepted, and compensation for unused leave was kept. There was no leave during the war, and the money was promised to be paid later. Through state loans and lotteries, it was possible to cover one-sixth of the war expenses. And what did the State Bank do? Well, the war for the Soviet state was not entirely
with surprise. By the end of the thirties, the economy was already being actively transferred to a war footing. Defense spending grew, reserves were accumulated. If in 1939 about a quarter of the budget went to defense, then by forty-one, it was almost half. The State Bank was preparing in advance for emergency conditions. The network of field institutions was expanded, which were to serve the troops, especially in border areas. Far from Moscow, in the rear, storage facilities for money and valuables were being built, and reserve sums were being delivered there. Premises and documents were being prepared for the evacuation of bank employees. During the Great Patriotic War, the State Bank faced a difficult task. Simultaneously, to find resources for lending to the defense industry, to support evacuated enterprises, and to ensure clear settlements between the front and the rear. And most importantly, to continuously supply the army and the country with cash, while limiting emissions. After the war, the state carried out a monetary reform in 1947. Old money was exchanged at a ratio of 10:1, but for Sberkass depositors, the rate was significantly more favorable. A year later, a new charter was approved. Sberkass began to conduct non-cash settlements, transfer salaries to accounts, and developed prize deposits, where one could win scarce consumer goods. By fifty-two, the network had returned to its pre-war level, about 42,000 branches. After the victory, the image of the hero on posters changed. If before it was primarily a worker, now the victorious soldier appeared more and more often. He seemed to say to the older generation: "Stop keeping money under the mattress, bring it to Sberkass." In fifty-nine, the phrase from an advertising poster became ingrained in the mass consciousness of Soviet people, becoming a major, one of the main memes of the late Soviet era. "Keep your money in a savings bank." In seventy-three, Leonid Kuravlev improvised successfully during the filming of "Ivan Vasilievich Changes Profession," and, quoting, "The people are leaving." In the seventies and eighties, the system worked stably, but without development. The interest rate was low, 3% per annum for term deposits, 2% for current and demand deposits. But it was more reliable than in an apartment. At least, the comedy by Gaidai convinced us of this. A little earlier, in sixty-one, the state carried out another monetary reform. Officially, it was called a change in the scale of prices. What is it? Old money was exchanged for new at a ratio of 10:1. Salaries, prices, and deposits in Sberkass were recalculated in exactly the same way, but a loophole was quickly found in the domestic economy. Small coins of one, two, and five kopecks retained their nominal value. It was around this story that the film "Money Changers" later appeared. A tragicomedy about people trying to profit from the reform by exchanging paper money for copper. The essence of the scam was very simple: to accumulate old coins, which did not lose their nominal value, and then exchange them for new banknotes, but at the old rate. Since the nominal value of the coins did not change, their actual value increased tenfold relative to the old rubles. If before the reform a box of matches cost 10 kopecks, then after the reform its price dropped to 1 kopeck. And with 100 kopecks in small coins, one could buy 100 such boxes of matches, while with a new ruble, only 10. But soon the state banned the exchange of old paper money for copper coins, and speculation stopped. After the sixty-one reform, Sberknizhki (savings passbooks) were established in a special role. They became a symbol of reliability. They were often given as wedding gifts, passed down through inheritance. Even the way savings were recorded had psychological significance. Handwritten numbers and the bank employee's signature instilled calm and, as they say, confidence in the future. My grandmother used to show off her savings passbook. "Well, after school, I'll give you this savings passbook." I finished school in another country, no longer in the Soviet Union, but in New Russia. But let's return to the Soviet Union. In eighty-seven, Mikhail Sergeyevich Gorbachev announced perestroika, which, in general, became the finale of the Soviet mono-banking system. State Labor Savings Banks were transformed into the Savings Bank of the Soviet Union, a state specialized bank for the population and organizations. Sberbank advertising in the era of the Soviet Union's decline is a separate genre. Lyrical commercials lasting several minutes appeared. One could say, short films about the everyday advantages of Sberbank. By 1990, the Soviet Sberbank held 369 billion rubles, more than a third of the entire Soviet Union's GDP. And then, in just over a year, all this money was burned in the fire of inflation. I am sure that our viewers, those who are older, also remember these events. Or your grandmothers and grandfathers told you about them. How did this happen? It's a complex question, and one episode won't answer it. The Soviet financial system experienced ups and downs over decades. There were many crossroads, but it was finished off by a very specific person. In 1991, the Soviet Minister of Finance and Prime Minister Valentin Pavlov implemented the infamous monetary reform. It is believed that Pavlov intended a gradual liberalization of prices, but only the first step was implemented: the withdrawal of some banknotes. On January 22, 1991, USSR President Mikhail Gorbachev signed a decree on the withdrawal and exchange of 50 and 100 ruble banknotes of the 1961 issue. As if by chance, on the eve of the reform, salaries were paid precisely in fifties and hundreds. People kept them in their savings. Now the cash had to be submitted to enterprise cash desks. The expropriation on a state scale was carried out technically. The public was informed about the reform at 9:00 PM Moscow time, when shops and banks were already closed. Some people managed to exchange money in the first hours in the metro, at train stations, from taxi drivers. Some sent urgent transfers through the post office, and some bought train and plane tickets with large banknotes to then, after the exchange ended, turn them in and receive new money. People improvised with all their might, but this was no longer an adventure from "Money Changers," but a nervous finale of the Soviet monetary system. According to Prime Minister Pavlov's plan, he was fighting against large banknotes, which allegedly had accumulated abroad and in the hands of the shadow economy. The head of government gave interviews about a conspiracy of Western bankers, almost Rothschilds and Rockefellers against the USSR, to justify what happened to the money of Soviet citizens. Besides conspiracy theories, the reform's design is now obvious to any economics student. There was a monetary overhang in the country, more money than goods. Funds not backed by goods were withdrawn from the population. The result: most people felt robbed. Pavlov did not succeed in improving the economy. The issuance of rubles still exceeded the volume of money withdrawn. Inflation could not be contained, and prices increased several times. Those who did not manage to exchange old banknotes for new ones lost their savings. Pavlov's reform turned out to be the last attempt at serious intervention in the financial system in the history of the USSR. Next came shock therapy and privatization. By the end of 1992, the purchasing power of savings had decreased by 98%. Banks again stopped being trusted. >> How did we arrive at the modern banking system? The country had to go through, in general, severe trials. The first Russian bank, it is believed, was the Leningrad Patent Bank. And by the end of eighty-eight, 25 commercial banks were operating in the Soviet Union. And by the end of ninety-five, there were already 2,500 credit institutions in Russia. Today, there are many times fewer banks, only 306. But that situation was truly unique. Even before the collapse of the Union, in the summer of ninety, the Supreme Soviet of the RSFSR adopted a resolution on the Russian State Bank. The republican bank became the State Bank of the RSFSR. In the early nineties, the banking sector grew rapidly and chaotically. Some banks were created not only by businessmen but also by criminal structures. Opening a pocket bank was quite easy then. Subsequently, the funds were used to finance criminal activities, bribe officials, and participate in various illegal schemes. And, you know, people very often associated a banker with a "New Russian" or a bandit. Either he was their associate, or their accomplice, or a victim. In newspapers, journalists practiced dark wit. "Russia is ruled by seven bankers." An analogy to the "seven boyars" of the Time of Troubles. In Russia during that period, as you know, there was a huge number of contract killings. And a significant portion of the victims were bankers. Another sign of that era was financial pyramids. Well, everyone has probably heard of MMM and HR Invest. But, for example, in the early nineties, Chara Bank was also popular. I saw its advertisements in the Moscow metro, for example. It was created by a certain Vladimir Rachuk, son of a film critic and former chairman of the State Committee for Cinematography of the Soviet Union. A respectable person, it seemed. The bank was registered in ninety-two, and in ninety-three, it began to accept money at high interest rates. Large sums simply flowed abroad. Chara Bank operated without a license from the Bank of Russia. But when they tried to pressure it, to legalize its activities or simply to inspect it, many famous people came to its defense. For example, poet Bella Akhmadulina or theater artist Boris Messerer, and many others. They were clients of the bank. Well, most likely, for this support or endorsement, as political technologists would say, they were, of course, paid money. A year later, the bank stopped paying depositors. Well, then Rachuk was found dead in his own bathtub. His wife hid from the investigation for a long time. She was arrested only in 2004. Most of the depositors' money, naturally, disappeared. Private banks, both honest and fraudulent, cared about their reputation and strived to appear reliable and respectable. To do this, they commissioned advertising in the spirit of the times. Well, the main advertising of the nineties in general and of nineties banks was the series of commercials for Bank Imperial. "Bank Imperial, World History." The commercials were directed by Timur Bekmambetov. What was in these commercials? For example, Tamerlane and his warriors piled a kurgan of stones. Suvorov did not drink until the first star, "Mother and Catherine the Great," awarded Field Marshal Suvorov Alexander Vasilyevich a star. Alexander orders the swans to be fed better and refuses to suppress the peasant revolt. And so on. There is a very long list, amazing works. It was impossible to compete with this advertising. The business of Imperial and its shareholders went uphill. By ninety-seven, the bank's capital had reached one and a half trillion rubles. Of these, almost 6 billion were depositors' money. For its subsidiary bank, Slavyansky, commercials were made in the same spirit, but with poems by Russian poets. Yesenin's blog, Pushkin's. Mandelstam's poem "with burning gold" is read in an advertisement by a Chekist interrogating a poet. Well, in general, the commercials had the characteristic humor of the era. And then I witnessed the first financial crisis. In ninety-eight, the default struck. Imperial almost had its license revoked. The court prohibited the Central Bank from revoking it, and for several more years, Bank Imperial tried to survive. It finally went bankrupt only in 2005. The country's financial system needed decisive measures. In 2004, a mandatory deposit insurance system was created in Russia. The reduction in the number of banks intensified after the start of a large-scale cleanup of the banking sector. In 10 years, the number of banks decreased by almost half. However, the remaining ones became stronger. There was a transition from a wild market to a regulated system with supervision, with clear rules of the game, with tools for the rehabilitation of troubled banks and consolidation of assets. What have we arrived at? A bank in Russia began as an organization where one could pledge a noble candlestick, a merchant's batch of goods, serfs, family estates. Today, the system is much more complex, but also, it must be said, more rational. At the head of everything is the Central Bank. It sets the rules of the game and monitors the stability of the system using the main lever. You have undoubtedly heard this word many times. The key rate. This is the interest rate at which the state lends to the largest banks and organizations. And they, in turn, lend to their clients. Among them are smaller banks, businesses, and us, i.e., individuals. Once a month, the Central Bank looks at two domestic indicators: the unemployment rate and the inflation rate. And based on this, it decides to raise or, conversely, lower the key rate. Roughly speaking, when inflation rises, the rate is lowered, prices cool down. If unemployment rises, the rate is lowered to create new jobs. On one side, from the Central Bank, there is the Ministry of Finance, the budget, and the state debt. On the other, the Ministry of Economic Development, which is supposed to ensure the country's growth and investment. Between all this, banks are like the circulatory system that serves the entire structure: people, businesses, loans, daily transfers, our everyday settlements, and so on. There is a separate category of systemically important banks. Their list is approved by the Bank of Russia. It currently includes the largest players from VTB and Alfa-Bank to Gazprombank and Sberbank, which celebrates its 185th anniversary this year. This is the infrastructure on which a significant part of the economy rests. Payments, deposits, mortgages, business settlements, and services for the state. It is obvious that such banks must be truly stable. They must withstand, in general, any crises, and moreover, they must be technologically advanced. That is why today, large players are actively developing digital services. Using the example of the "green bank" (Sberbank), one can clearly see the path the system has taken. From the Savings Banks of Nicholas I to ATMs with biometrics, anti-fraud, an ecosystem, and its own artificial intelligence, the first and so far the only one in the banking sector. What is the situation? Once, Russia was catching up with European banking, borrowing models, inviting specialists. Now, specialists from our largest banks are actively being invited abroad. And biometric payment systems in many countries still either do not work at all or work in a limited mode, while Sberbank's payment by smile started back in 2023. And in this sense, we have something to be proud of. All these achievements set industry standards and ultimately affect our convenience and security. But the story does not end here. Banks still have to solve issues of trust and security, and search for new forms of money. Once, banks feared that the debtor would disappear with the collateral. Today, that clients' money can be stolen via a smartphone in a couple of minutes. The tools are changing, but the essence remains the same. The history of finance continues.