A banknote is ... How did people call banknotes?

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

Concept of banknote

There are several. The simplest of them identifies banknotes as cash, made from paper using 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 country, which in most cases is one of the institutions of state power.

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

1. Banknotes are issued only by the bank, while paper money can be issued by the Treasury or the Ministry of Finance.
2. Banknotes have gold or bill support. In most cases, paper money is not provided for anything.
3. The banknote is issued to ensure turnover. The purpose of issuing paper money is to cover the budget deficit.

Types of money

A banknote is one of the forms of existence of money. One, but not the only one. At different times and in different conditions, various types of them were used.

All money can be conditionally divided into full and inferior. The first include those that have their own real value - it's the cost of their production, and it is equal to their face value. This category includes commodity money, which was widely used for barter exchange at the dawn of the origin of monetary circulation, and metal coins, silver and gold.

Inferior money, the nominal value is much higher than the real value . It is to their number include paper and credit. A banknote is one of the varieties of the latter.

History of the appearance of banknotes

Credit money originated to ensure the process of buying and selling goods on credit. In the beginning, for these purposes, the buyer wrote a note 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 of time.

Over time, bills of exchange become the object of an agreement between the debtor and the creditor. Commercial banks began to write their own receipts against bills of exchange. They also became the first banknotes. They enjoyed the confidence of traders in comparison with the obligations of individual issuers. This was explained mainly by the fact that banks at that time were the most solvent institutions.

The earliest banknotes arose in China 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 in circulation, as people called banknotes, arose in tsarist Russia even 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 admit that any "paper" would come into circulation instead of "real" money. Under Peter III, the state treasury was completely empty. As a result, in May 1762, the issue of bank notes was started, which replaced the money in circulation. However, they did not enter into circulation. Stirred a coup, as a result of which Catherine II ascended to the throne.

Nevertheless, the idea of issuing paper money was realized already in 1769, when by order of the Empress two banks were established, in St. Petersburg and Moscow. The Russian bank notes that were in circulation had a denomination 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. But could it be otherwise, when the whole way of life of the whole state was completely changed? At that time, the country's budget was completely unbalanced: the reputation of the Russian state at the world level was discredited by the ongoing global changes in the state system. Inside the country itself, things were not the best either. The masses of the population decided that, at last, their hour of glory had come. They demanded to reduce the duration of the working day, increase the level of wages, the size of various benefits, to entrust the state with the obligations 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 expenditures, but also as a source of covering the budget deficit.

In circulation more than 9.5 billion rubles were issued. By November 1, 1917, the volume of paper money amounted to 19.5 billion rubles, and the purchasing power of the ruble was slightly more than 8 kopecks. The Provisional Government was forced to issue banknotes worth 250 and 1,000 rubles. "Kerenki," as people called banknotes, formally nominated in gold rubles, in fact, no security. They went to the country until the very end of the Civil War.

With the advent of Soviet power in the country, the construction of communism began. And communism and money, as you know, two things are completely incompatible. But everyone understands that the state can not exist without them. And the new government found a way out of the situation: they issued "settlement signs". In essence, it was the same money, only "under a different sauce".

Money reforms of the USSR of the twentieth century

During the Great Patriotic War, the country's monetary system was relatively stable, despite all the difficulties. This was achieved through the introduction of a card system and the establishment of firm prices for goods. But a strong reduction in the commodity mass inevitably led to the formation of a large amount of extra money in circulation. In addition, in the difficult post-war years, the country was literally awash with counterfeit bills. This seriously complicated the process of economic recovery. Therefore, in 1947, it was decided to conduct a monetary reform, as a result of which 10 rubles of the old model were exchanged for 1 new ruble.

Another reform was carried out in the middle of the twentieth century. It was then that the "Khrushchev's candy wrappers" or simply "candy wrappers" were addressed, as the 1961 banknotes were called. Such a name they received for their small size, comparable to a candy wrapper. This money lasted until the 90s and ceased to exist together with the whole country, of which they were, among other things, a symbol.

Banknotes of modern Russia

The extremely difficult economic situation and high inflation of 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 people called banknotes of any type, turned into paper in the literal sense of the word. Their purchasing power fell at a cosmic speed.

The reform, carried out in 1998, implied the strengthening of the ruble at once 1000 times. It was carried out more gently, compared with the reforms of the 40's and 60's. First, there was no clear deadline for which the population had to exchange cash on hand. Secondly, "old" and "new" bills had the same circulation on the territory of the country during the whole of 1998.

Modern Bank of Russia notes are banknotes made with the use of the most advanced technologies in the field of protecting their authenticity. To prevent the appearance of fakes, the Central Bank constantly introduces new modifications of already existing samples, whose protective functions are amplified from time to time.

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

US dollar - world currency

The US dollar has long become a universally recognized international means of payment. He firmly entered the number of world reserve currencies. This is due to the fact that the US last canceled the gold standard of its monetary unit. It happened only in 1971, while the European countries did it in 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 notes in circulation. The US dollar in circulation has denominations of 1, 2, 5, 10, 20, 50 and 100. There are also bills of 500, 1,000, 5000 and even 10,000 dollars, but they are used only for internal payments by the Federal Reserve and the US Treasury.

Interesting facts about banknotes

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

The largest denomination banknote was issued in Hungary in 1946. Its worth is one billion billion (that is, 1021). The diameter of the universe, by the way, is 1023 km.

The largest in terms of purchasing power of the bill has circulation in the UK. Its face value is 1 million pounds sterling. It is known that there are 2 such banknotes.

The smallest denomination in denomination had circulation in the USSR. This is a check for 1 kopeck, which was issued by the State Bank for internal settlements.

A banknote is a form of existence of cash, without which the modern monetary system simply can not exist. Despite the development of non-cash settlements, we are unlikely to completely abandon paper money in the near future.