A small but interesting history of the penny

Background

In 2012, the cost of manufacturing (minting) a coin with a face value of 1 kopeck was 47 kopecks. That year, the Central Bank decided to suspend the minting of coins with a face value of 1 — 5 kopecks. At the moment, these coins have not been withdrawn from circulation and are the official means of payment of the Russian Federation. In everyday reality, we can only see the mention of kopecks on promotional price tags in stores. In fact, a coin with a face value of 1 kopeck has not been minted since 2009, although there are rumors among numismatists about a certain trial circulation of kopecks in 2011. But still. If we take into account the period of the dashing 90s, when the penny stopped minting in 1991, then the modern refusal of the penny is the second time in the entire history of the domestic coinage when the state stopped minting penny coins. Although, who knows, in our country in the twentieth century alone there were five monetary reforms, as a result of three of them the penny was returned to circulation. So, with a high degree of probability, we can assume that one day the saying “A penny saves the ruble” will acquire its permanent historical meaning.

 

Origin and history of the word «Kopeika»

With a little digging in the sources, you can easily find four main versions of the origin of the word “penny”. This is a weak version, but suitable for a complete review, about the Khan of the Golden Horde named Kepek. There is also a version from Russian language expert V. Dahl. In his opinion, the word kopek comes from the term «to save». Another version about a coin from the time of Timur is not even worth mentioning. But still, the main version was, is and remains the story about a horseman with a spear. 1534, the de facto ruler of the Muscovite kingdom, Elena Glinskaya, carries out a monetary reform, as a result of which one hundred money is equal to one ruble, with a corresponding standard in weight. Although at that time the ruble did not exist as a coin, but it was a kind of figurative measure.
Monetary reform was necessary for the development of the economy of the grand duchy. The reform was preceded by popular unrest, fueled by dissatisfaction with the arbitrariness of the coiners. Coins at that time were minted by individual boyars, as usually happens during periods of interregnum; there is a temptation to make money on everything you can make money on, so the minters reduced the share of the money then in circulation. From five rubles per pound of silver to ten rubles of the same weight. Elena Glinskaya issues a decree that all damaged coins be seized, melted down, cleaned of impurities and minted according to a new standard. Six rubles per pound of silver.
Why not five, as it was before, now no one will know, but it is in this format that money weighing 0.68 grams of pure silver appears. However, they were able to mint according to the new standard only in Novgorod and Pskov, while in Moscow they continued to mint money weighing ten rubles per pound of silver. And so Pskov and Novgorod coins in official documents and in general circulation begin to be called “Kopeynye money” or simply Novgorod, while Moscow coins were called “Sabelniki”.
So, in the chronicle of 1535 there is the following entry:

“And under the Grand Duke Vasil Ivanovich there was a banner on the money: the Grand Duke on horseback. and the name of the sword is in rutz; and the great prince Ivan Vasilyevich erected a banner on the money: the great prince on horseback, and the name of the spear in the Ruts and from there he nicknamed the money of kopecks.”

And this is one of the first documentary mentions of the name of a coin with the root word “spear”.

 

 

Russian kingdom and the decimal monetary system

In order not to get completely confused about what was then called penny money and what was saber money, you just need to understand that before Glinskaya’s reform, they did not differ in weight in any way, but then it was established that saber money weighs should be two times less than a penny. Then, it was the penny money that became the standard for one hundred coins to the ruble. And you know what? It turned out that this was the first reform of this type in history.

The Russian kingdom became the first country in the world with a decimal monetary system.

The fact is that before this time, the ancient Greek type monetary system was widespread in the world. This is when a large coin was divided into 20 medium coins, which in turn were divided into 12 small coins. Imagine such a system when receiving change in a store? Or when calculating a discount on a discount card? So, both our merchants and tax collectors very quickly appreciated the advantage of the decimal monetary system. However, in Europe this was achieved only after two hundred years. In France, the decimal monetary system was introduced only in 1795, in the USA a little earlier in 1792. True, some researchers argue that the beginning of the use of the decimal monetary system in Russia should be attributed to the reform of Peter I, since it was under him that the first ruble was minted. Before that, the ruble was an abstract unit, and therefore the decimal monetary system was incomplete. But in this case, we can recall or recall that the first minted rubles were made under Tsar Alexei Mikhailovich in 1654. Then a batch of Polish thalers was minted under a new design. However, in our country, European silver coins were not very popular due to a constant misunderstanding of how many shares of pure silver they contain.
On average, one penny-type money during the time of Ivan the Terrible could buy half a chicken, a dozen eggs or three kilograms of rye. And there was also the habit of carrying money in my cheek, of course, if the amount was not large. It was during the reign of Ivan IV that the minting of money in the Russian kingdom became the prerogative of the sovereign.

Monetary reform of Peter I

A time of troubles, when all kinds of transitional rulers reduced the weight of a penny by half, the reign of the first Romanovs, a lack of money in the treasury, a copper riot, etc., as a result, by the beginning of the reign of Peter I, a penny weighed only 0.4 grams, and after that it completely decreased to 0 .28 grams. And the active development of the American continent and the export of hundreds of tons of silver led to an unprecedented inflation of silver in Europe. In general, the need for monetary reform matured gradually. But Peter really understood and remembered the copper riot under his father. Therefore, it was decided to introduce copper coins gradually, without removing silver “lice” from circulation and without stopping their minting. First, copper half-kopecks (money) and quarter-kopecks (half-penny) were introduced into circulation. As we usually say today, the experiment was carried out for four years and was considered successful. Indeed, the people accepted large, convenient and truly solvent copper money. It is worth recalling that the main reason for the copper riot under Alexei Mikhailovich was the fact that traders and shop owners refused to accept copper money at the cost of silver.

Now for a little math. The cost of making one kopeck of the 1704 model was approximately 0.35 kopecks. It turns out that 65% of the value of the face value of the new copper money became direct income to the treasury. And it should be noted that this was very necessary in the conditions of the Northern War. And also, thanks to the income received, it was possible, albeit temporarily, to reduce the tax burden. At the same time, the production of silver coins brought a profit of no more than 5% to the treasury. Gradually, new copper money filled the state market and the minting of new coins could cause inflation. This was well known in those days, but there was nothing to be done, and besides, the cost of making the smallest coin – half a coin – did not cover its denomination. Therefore, since 1711, coins began to be damaged in the Russian Empire. In silver money, the fineness of the silver is reduced, and in copper money, the weight of the copper coin itself is reduced. So well known to all GRP diggers is the half-shell. A counterfeiter’s dream.
As we can understand, it was not only the emperor who wanted to make money on such a high difference in the denomination and cost of the copper coin. Foundry skills in our country have been well developed and at a high level since the Bronze Age. Almost every large village had its own foundries who made jewelry and religious paraphernalia. The ability to make very skillful jewelry came in handy when making counterfeit copper coins. The counterfeit coin was made as follows. First, they made a wax copy of the real coin. Even today, a good artist can create copies of coins from wax using sharpened wooden cutters in a couple of hours. Then the wax blank was sprinkled with sand with a special adhesive composition, when the molding composition hardened a little, it was cut along the edge with thin wire, and they waited for the composition to completely harden. And then it’s a matter of technology.
A legend or story has been preserved that Peter the Great ordered caught counterfeiters not to be executed, but to be sent to the sovereign’s mints to serve out their service by labor. The story is, of course, interesting, but has no documentary evidence. But the method of catching counterfeiters was effective both in those days and today. If a buyer at a bazaar or in a store paid with new, unworn coins and almost all of them were of the same stamp, then the person could be detained on complaint, and if he had the same money with him in the amount of more than one ruble, then this, according to the tsar’s decree, was considered direct proof

that the money is counterfeit.

The average salary of an infantryman during the period of service under Peter I was 11 rubles per month, during the period of garrison service 4-6 rubles. But the question is, what could you buy for one penny in the time of Peter I? There is a lot of information on specialized historical forums where they clarify the cost of grain, beef and even weapons at that time. But. But they do not specify where this data was taken from. Someone writes that at that time you could buy a peasant hut for THREE!!! Pennies. But this is very dubious information. Again, they write about the price of a bucket of beer. Some indicate 1.2 rubles, others thirty kopecks. And, of course, the notorious price of a cow is one ruble. And here, too, some historians point out that a cow never cost one ruble, even under Ivan the Terrible, in total three rubles, and then it increased according to the inflation rate. In a discussion on that forum, I left my remark that measuring the price of a ruble in cows is the same as measuring gases in centimeters. In the 90s, my grandfather, in order to buy one cow with good milk yield, sold two cows from his small herd. And it’s worth remembering that the cost of the same grain fluctuated depending on the year’s yield. So we can only guess whether an infantryman’s salary of 11 rubles is a lot or a little. Provided that with this money he fed himself, treated himself, washed himself and repaired his uniform.

 

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Monetary reform of Anna Ioannovna.

At the beginning of the note, I wrote that in the entire almost five-hundred-year history of the Russian penny, it stopped being minted only twice. I admit, sorry, I was wrong. During the reign of Anna Ioannovna, the kopeck was completely stopped being minted, with the exception of a few trial runs; moreover, Peter’s coins with a denomination of one kopeck were actively withdrawn and minted into money and half coins. What is the reason for the almost complete abandonment of the kopeck as the denomination of a copper coin? After all, we know very well that denga and polushka are one of the most popular copper coins in the history of the Russian Empire.
First of all, the penny was abandoned because it became the most popular coin among counterfeiters. The profit from counterfeiting one-kopeck coins could be 600-700%. The reason for this decline was the actions of the state itself during the recent reign of Peter I, then Catherine I, then Menshikov and, ultimately, Peter II. The minting of copper coins again reached 10 rubles per pood. And the sample of silver coins reached 32 spools. Moreover, under Menshikov they tried to dilute silver with arsenic; to the surprise of the chemists, after a couple of days such coins turned black and floated. For this reason, the most reliable means of payment in the Russian Empire at that time was precisely the pre-Petrine kopecks made of silver wire – scales. So Elena Glinskaya’s penny of the 1535 model was in full circulation and two hundred years later it was a reliable means of payment and savings.
In general, with her accession to the throne, Anna inherited a thoroughly destroyed monetary system of the empire. When copper money was seized, up to a third of the total money supply was counterfeited. The version about the withdrawal of the penny from use due to the activity of counterfeiters is confirmed by the fact that the test coin of 1730 was a silver penny. It is noteworthy that the copper kopeck of the Peter the Great period was withdrawn from circulation not at the price of a kopeck, 100 pieces. per ruble, and at a reduced coefficient of half the value of the face value. Peter’s kopecks were on par with Anna’s half kopecks at the same price. Accordingly, the money went like half a dollar, and GRP went out of circulation altogether. So even here, during the recoining, the state treasury made a profit, a small one, but still a profit.
The second version of the absence of a penny in monetary circulation under Anna Ioannovna is an attempt to return the monetary system to the European model 1:12:20. This means that for one ruble there had to be at least 240 money. Something that could be tweaked over time. While the penny did not fit into the monetary system of the European model.
It is also worth noting that as part of the fight against counterfeiters, new degrees of coin protection were introduced. These were images of a cord or mesh on the edge of a coin. As I noted above, the main method of counterfeiting coins was casting in molds. In this case, the edge of the coin can only be smooth and polished, so that no traces of the molds or casting head are visible. This technique did not stop the activity of counterfeiters, but it significantly reduced their ranks; now every foundry worker could no longer easily produce a high-quality counterfeit at home, and it did not make economic sense to continue casting Peter’s coins.

General imperial period.

What happened next in the history of the Russian penny? Yes, in principle everything is the same. As soon as the power weakened, as happened under the young Ivan Antonovich, copper coins again began to be minted at twenty rubles per pood of copper. Which again returned people to use in trade and small accumulation of old proven silver pennies. Then the damaged copper coins were confiscated and minted in ten rubles per pood. Coins with a denomination of a penny began to be minted again only in 1755 under Elizabeth Petrovna. To protect against counterfeiting, a complex pattern with many fine lines was developed. This is the same “eagle in the clouds” copper penny desired by any digger. Then, due to the high cost of producing such a complex design, the design of the penny and two-kopeck coins was simplified to the well-known image — a horseman with a spear and the empress’s monogram. In this form, the kopeck existed until the beginning of the reign of Paul I. And as is usually the case with monarchs, at the end of her life, Catherine began to miss many important state issues, including a new wave of intensification of counterfeiters. But when the silver kopeck scales finally disappeared from trade, I was never able to establish. It is believed that among the small peoples of Siberia and the Far East, scales were used as money until the beginning of the 20th century.

Due to the fact that the Russian Empire began to actively develop its own copper deposits, as well as due to general technical progress in mining, the price of a pound of copper began to fall steadily. As we can understand from previous experience, reducing the cost of producing copper coins is, on the one hand, good for replenishing the treasury, on the other hand, counterfeiters are sharply becoming more active, from which the treasury begins to receive less profit. And in this regard, the example of the monetary reform of Nicholas I is indicative, what we know as 1 kopeck in silver.
The meaning of the monetary reform of Yegor Frantsevich Kankrin was to once again restore order to the state’s monetary system. The circulation of unsecured paper notes, a large volume of copper coins, which objectively could not cost one hundred to one silver ruble. Therefore, Kankrin introduces a silver ruble standard. Old government banknotes are bought back at a price of 3.5 rubles old per ruble new. A new copper coin was minted with the inscription kopeck in silver, which meant that only these copper coins could be valued at one hundred to one silver ruble. That is, only new coins could be guaranteed to be exchanged for silver ones. Old copper coins were not removed from use, but their value was reduced fourfold. So five kopecks of Alexander I (a freemason) were accepted in payment as 1.2 kopecks in silver. Exactly the same operation with copper money was repeated under Alexander III, only then the gold chervonets was established as the standard, and all copper coins were withdrawn from circulation at a price much lower than the specified denomination. The old coins continued to circulate and have purchasing power. It’s just that then everyone got used to the fact that an old penny is no longer a penny, but half a penny. This is why many diggers often find coins from various monetary reforms in wallets and stashes.

Paper pennies.

In 1914, the Russian Empire took part in the First World War. True, they didn’t yet think that it would become the first and world-wide. All participants hoped that the war would be short, victorious and would bring many dividends, glory and good mood to the winners. As a result, already in the second year of the war, all participating countries faced crazy economic problems. How and by what means the budget could be replenished? The Russian government thought intensely about this issue. And, of course, one of the main and immediate ideas on this issue was the proposal for additional issue of money. And what to do? After all, the ruble was silver then, and the standard was gold. The answer is correct, start printing paper money using small change. Just as in his time Peter I received money for the war with the Swedes by issuing copper money, so the Russian government in 1915 decided to replenish the budget by issuing paper money in denominations of 1,2,3,5 kopecks.
The idea was approved, the printing press was launched, and the newspapers explained to the people that paper pennies are a necessity, since copper is a scarce metal in war conditions and must be directed to the needs of the front. They also explained to the people that, in fact, there were not enough copper change coins to conduct small trade transactions, since people began to actively hide money. Of course, the latter version was more suitable for explaining the shortage of small silver coins, but certainly not for understanding the lack of one-kopeck coins. Well, in general, paper banknotes in denominations from 1 to 5 kopecks were put into circulation, people accepted them, and the state received an additional source of income. And the very next year, a cheaper version of copper money was put into print – banknotes. Yes, these were typical postage stamps, the cliches for this money were made for the circulation of commemorative stamps, and monetary stamps were distributed in sheets of one hundred pieces 10×10.
And with this version of printing small coins, the state treasury could have received fabulous profits, if not for the hyperinflation that had begun in the country. Old silver money disappeared from circulation, new paper money depreciated, as in the period of the copper revolt. There were double price tags in shops and stores, and it was problematic to exchange paper money for metal money in banks. However, it is worth noting that the volume of minting copper kopecks only increased with the beginning of the war. For example, in 1916 the circulation of one kopeck was 46.5 million. things. In 1915, 58 million. Whereas in 1911, only 38 million kopecks were minted. It turns out that the introduction of paper kopecks was not due to a lack of copper, but to progressive inflation and the same desire to replenish the treasury. Indeed, along with copper analogues, stamps were issued for silver money in denominations of 10, 15, 20 kopecks.
My family has a story that my great-great-grandfather sold a cow at a fair in 1917, and a month later they could only buy an aluminum ladle with that money in a city store. And don’t think that at that time

aluminum cookers were more expensive than today.

 

The Soviet period or how one kopeck survived three reforms

The monetary system of the RSFSR, and then the USSR, had its own characteristics, but lived according to world standards and the laws of economics. Although the founders of the Soviet system in their early works argued that there would be no money under Soviet rule, and that gold would be used for toilets for dorms, money still had to be minted. But first they were printed. During the Civil War, a large variety of paper banknotes and all kinds of banknotes circulated throughout the country. It got to the point that the atamans in the territories they occupied printed their money. Unsecured paper money depreciated in conditions of hyperinflation. So, for example, at the end of the civil war, one hundred thousand sovznak were equal in value to one royal kopeck. After the end of the civil war, it was noted that in small-value trade transactions, citizens most often used in-kind exchange of essential goods. So salt, cereals or moonshine acted as money.
For the young state, the issue of monetary reform was paramount. And from the very beginning they acted very competently. The Soviet monetary system completely copied everything that existed under the last emperor. Bimetallic standardization of currency, size and denominations of coins, as well as material of manufacture. The appearance of small coins made of copper was preceded by the period of minting silver coins. The new government was not going to deny itself the pleasure of repeating the successful experience of the same Peter I, only, as in the case of Peter, there were justified fears about whether the people would accept small money. Or there will be riots.
I assume that the idea of ​​minting small coins from aluminum bronze was formed at the very beginning of the monetary reform. The only question that remained was how citizens would accept such coins, so people needed to be prepared. Give them the opportunity to believe that new money is a reliable payment material. Therefore, silver rubles and decimal coins were first issued. Then new copper coins were minted in similarity to the royal copper coins. And after that, through the newspapers, people were prepared that the country needed copper for restoration, and therefore, along with copper coins, aluminum coins would be used. The people again accepted the idea, there were no riots, counterfeiters at that time worked more on silver, so the money took root.
Of all the coins of that period, the penny was the most expensive to produce. One kopeck coin was minted for 8 kopecks. But this difference was more than covered by the minting of coins in denominations of 10, 15, 20 kopecks. In general, as with previous monetary reforms, the Soviet government was able to make quite good money by minting money. And then came inflation, then the Great Patriotic War, and then another monetary reform in 1947. Frankly, when I got acquainted with the conditions of this Stalinist monetary reform, I realized that this reform, in comparison with the reform of Nicholas I and Anna Ioannovna, is the most humane and humane. Let’s remember. Under Anna, copper coins, the main source of savings for peasants and lower classes, were exchanged at a rate of half. Under Nicholas, paper money was exchanged at the rate of 1:35, copper money 1:4. What happened under Stalin?

Under Stalin, money in the savings of the USSR Savings Bank was exchanged: up to 3,000 rubles at a 1:1 rate, up to 5,000 rubles – minus 30% of the amount, over 5,000 rubles – minus 50% of the amount. Cash kept at home was exchanged at the rate of 1:10. As statistics subsequently showed, more than 80% of the country’s population did not suffer at all from this monetary reform. There were curious cases when, on the eve of the reform, wealthy citizens, having learned through rumors about the upcoming change of money and conditions, began to withdraw large sums from their personal accounts and break them down into amounts of 3 thousand rubles. Return money back to the bank for the savings books of children and close relatives. So, after the reform, many such relatives refused to return their money to benefactors. And one more interesting point that must be taken into account to continue the story. All the coin change remained in circulation and no one changed it or confiscated it. Just coins, like money, suddenly became 8-10 times more expensive. Also a small, but pleasant gift for those who have small items lying around in piggy banks or in distant lockers, because metal money at that time had almost gone out of trade due to inflation.
What was the point of the last fact? Yes to the subsequent story about Khrushchev’s monetary reform of 1961. Although the state, through newspapers, informed the population in advance that this would not be a reform, but a denomination. Old banknotes will be exchanged for new ones at the rate of 1:10. Prices in stores did not change and were indicated in two units. However, panic among the population could not be avoided. The purchase of durable goods, jewelry stores were empty, and buyers of metal coins began to travel through villages and villages. By that time, inflation had again eaten away at the value of the coins, and a significant amount of small change was kept by the population almost as souvenirs. So buyers appeared in remote villages and villages who bought this little thing a little more than face value. Maybe not quite a bit. Giving twice the face value. The resellers hoped for very substantial profits, but even here the state was able to bypass the far-sighted resellers. Coins in denominations of 1, 2, 3 kopecks remained in circulation after the denomination, and all other small change was confiscated at the established rate of 1:10. In general, the general result of the Khrushchev denomination was that after the exchange of money, although the state tried to contain inflation, free prices in the markets increased by 40-50% during the year. In the public sector, prices increased by the same 50% over several years. That is, in fact, the announced denomination deprived the population of half of all savings.
Well, our penny, model 1926, circulated freely in the trade turnover of the USSR until 1991. Yes, whenever possible it was confiscated, but still it was an official and valid monetary unit. In 1991, the last kopecks of the 1961 model were minted. At that time, the cost of one 1-kopeck coin cost the state 12-20 kopecks. Therefore, when new coins without the symbols of the USSR were issued at the end of 1991, the denomination began with 10 kopecks. So for a long time, the penny again went out of circulation in our country. Then hyperinflation brought the money supply to banknotes with a face value of 100,000 rubles. And already during the denomination of 1998, a coin of 1 kopeck was again introduced into circulation.
And then? And then the story that you, dear readers, already know well.