At the present time the Soviet state faces the task of carrying out a monetary reform in order to strengthen the rate of the ruble, as well as the task of abolishing the rationing system of supply and of transitioning to open trade at uniform state prices.

The Great Patriotic War of 1941-1945 required the utmost exertion of all the forces of the Soviet people and the mobilization of all the material resources of the country. During the years of the Patriotic War, the expenditures of the Soviet state for the maintenance of the army and for the development of the war industry increased sharply.

Enormous military expenditures necessitated the issue into circulation of a large quantity of money. The amount of money in circulation increased significantly, as in all states that participated in the war.

At the same time, the production of goods intended for sale to the population decreased, and retail trade turnover declined sharply.

Moreover, as is well known, during the period of the Patriotic War on temporarily captured Soviet territory, German and other occupiers issued large quantities of counterfeit money in rubles, which further increased the surplus of money in the country and contaminated our monetary circulation.

As a result of all this, considerably more money was in circulation than the national economy required, the purchasing power of money fell, and special measures are now needed to strengthen the Soviet ruble.

Despite the conditions of wartime, the Soviet government succeeded in maintaining throughout the war, unchanged, the pre-war state prices on rationed goods, which was ensured by the introduction of the rationing system of supply of food and manufactured goods.

However, the reduction of state and cooperative trade in mass consumer goods and the increase in the demand of the population on collective farm markets led to a sharp rise in market prices, which at certain periods were 10-15 times higher than pre-war prices.

It is understandable that speculative elements took advantage of the large gap between state and market prices, as well as the existence of a mass of counterfeit money, in order to accumulate large sums of money for the purpose of profit at the expense of the population.

Now, when the task of transitioning to open trade at uniform prices has become pressing, the large quantity of money issued during the war impedes the abolition of the rationing system, since the surplus money in circulation drives up market prices, creates an inflated demand for goods, and facilitates the possibility of speculation.

Nor can speculative elements who enriched themselves during the war and accumulated significant sums of money be permitted to buy up goods after the abolition of the rationing system.

Therefore, the Council of Ministers of the USSR and the CC of the VKP(b) have decided to carry out a monetary reform which provides for the issue into circulation of new full-valued money and the withdrawal from circulation of both counterfeit and depreciated old money. This reform will be carried out on the following basis.

First. The exchange of cash money currently in circulation and in hand for new money shall be carried out with restrictions, namely: ten rubles in old money for one ruble in new money.

Second. Cash deposits in savings banks and the State Bank shall be revalued on more favorable terms than the exchange of cash money, with deposits up to 3,000 rubles revalued ruble for ruble. This means that deposits belonging to the overwhelming majority of depositors are preserved in their former amount.

Third. A conversion of all previously issued state loans, with the exception of the 1947 loan, shall be carried out, i.e., previously issued loans shall be consolidated into a single loan, with the exchange being made at a ratio of 3 rubles in bonds of former loans for 1 ruble in bonds of the new single loan — that is, on more favorable terms than the exchange of cash.

In so doing, the Council of Ministers of the USSR and the CC of the VKP(b) proceed from the task of protecting to the greatest possible extent the savings which the population has lent to the state. It cannot be disregarded, however, that a significant portion of the state debt on loans was incurred during the war years, when the purchasing power of money fell, whereas after the monetary reform the state will be repaying this debt in full-valued rubles.

Fourth. In carrying out the monetary reform, the wages of workers and employees, as well as the income of peasants from state procurements and other labor income of all sections of the population, shall not be affected by the reform and shall be paid in new money in the same amounts.

The carrying out of a monetary reform is a common occurrence in all states after major wars. However, the implementation of monetary reform in our country differs fundamentally from the implementation of reforms in capitalist countries.

In capitalist states, the liquidation of the consequences of war and monetary reform is accompanied by a major increase in prices for consumer goods, consequently a reduction in the real wages of workers and employees, a reduction in the number of employed workers and employees, and an increase in the army of the unemployed. Thus, capitalist states place the main burden of the consequences of war and monetary reform on the working people.

In the USSR, the liquidation of the consequences of war and the monetary reform are not carried out at the expense of the people. The number of employed workers and employees is not being reduced. We have no and will have no unemployment. The wages of workers and employees are not only not being reduced but, on the contrary, are being increased, since commercial prices are being reduced severalfold, and for bread and cereals even ration prices are being reduced, which means an increase in the real wages of workers and employees.

Nevertheless, in carrying out the monetary reform, certain sacrifices are required. The state is taking upon itself the greater part of the sacrifices. But it is necessary for part of the sacrifices to also be borne by the population, the more so as this will be the last sacrifice.

The exchange of cash money for new money, due to the restrictions indicated, will affect nearly all sections of the population. However, this procedure of exchange will strike first of all at speculative elements who have accumulated large stockpiles of money and are keeping them "under the mattress."

The losses of the overwhelming majority of working people connected with the exchange of money will be brief and insignificant, and will be fully compensated by the abolition of high commercial prices and the reduction of existing ration prices for bread and cereals.

Simultaneously with the monetary reform, the Council of Ministers of the USSR and the CC of the VKP(b) have decided to carry out the abolition of the rationing system for food and manufactured goods, to abolish high commercial prices, and to transition to the sale of goods at uniform state prices with a reduction in ration prices for bread and cereals. This creates substantial material advantages for the population.

The abolition of the rationing system for food and manufactured goods shall be carried out on the following basis.

First. The sale of food and manufactured goods shall be conducted in the manner of open trade without ration cards.

Second. Uniform state retail prices are introduced in place of the existing commercial and ration prices.

Third. Uniform prices for bread and cereals are set at a level lower than the current ration prices, with ration prices for bread reduced by an average of 12% and for cereals by 10%, while in comparison with current commercial prices they are reduced by more than two and a half times.

Fourth. Uniform prices for other food goods are maintained in the main at the level of current ration prices.

Fifth. Uniform prices for manufactured goods are set at a somewhat higher level compared with the low ration prices, while in comparison with commercial prices they are reduced on average by more than 3 times.

Thus, as a result of the monetary reform, the abolition of ration cards, and the transition to open trade at uniform prices, the population, instead of the currently circulating ruble with its reduced purchasing power, will receive a full-valued ruble. The ordering of monetary circulation, the growth of production of mass consumer goods, and the growth of retail trade will make possible a further reduction of prices, that is, will bring about a new increase in real wages and incomes of collective farm workers.

This is not the first time that a monetary reform has been carried out in our country.

After the First World War, the Civil War, and the intervention, money became completely devalued, and the monetary system was undermined at its very foundations. A fundamental monetary reform was required. The depreciation of money was so great that upon the completion of the monetary reform, one ruble in new money was equated to 50,000 rubles of old money of the 1923 type, or to 5 million rubles of old money of the 1922 type. As a result of the monetary reform carried out in 1922-1924 according to the instructions of and under the leadership of Lenin, new money was created which contributed to the rapid development of the national economy of the USSR.

The Great Patriotic War was incomparably more severe than all previous wars. However, the situation with monetary circulation in Russia during the period of the First World War, when monetary circulation suffered a complete collapse, cannot be compared with the state of monetary circulation in the USSR after the Second World War.

The Soviet state successfully withstood the exceptional trials of the war of 1941-1945, despite the fact that this war was far more devastating and was accompanied by many times greater sacrifices as a result of German occupation than the First World War.

The strength and vitality of the Soviet system, created by the working people of the Soviet Union under the leadership of the Bolshevik Party, and the heroic efforts of all the people who rose up in defense of their socialist Motherland, ensured military and economic victory over the enemy.

The Soviet monetary system withstood the severe trials of the war of 1941-1945. Despite the reduction in the purchasing power of the ruble, the monetary circulation of our country does not require a fundamental overhaul.

Now, in exchanging old money for new, we do not need those extreme measures which were carried out during the monetary reform of 1922-1924. The monetary reform of 1947 is called upon to liquidate the consequences of the Second World War in the field of monetary circulation, to restore the full-valued Soviet ruble, and to facilitate the transition to trade at uniform prices without ration cards.

The monetary reform will strengthen the role of money in the national economy, raise the real wages of workers and employees, and raise the value of the monetary incomes of the rural population. The implementation of the monetary reform will contribute to raising the level of the material well-being of working people, to the restoration and development of the national economy, and to the further strengthening of the power of the Soviet state.

The Council of Ministers of the Union of the USSR and the CC of the VKP(b) resolve:

I. Monetary Reform

1. To issue into circulation from December 16, 1947 new money in rubles of the 1947 model.

2. All cash money in the possession of the population, state, cooperative, and public enterprises, organizations, and institutions, as well as collective farms, is subject to exchange, with the exception of small change.
Small change is not subject to exchange and remains in circulation at face value.

3. To assign the carrying out of the exchange of old money for money of the 1947 model to the State Bank of the USSR.
The exchange of money throughout the territory of the USSR shall be carried out within one week, i.e., beginning December 16 through December 22 inclusive, and in remote districts within two weeks, i.e., from December 16 through December 29 inclusive, according to a list approved by the Council of Ministers of the USSR.

4. To carry out the exchange of cash money currently in circulation for new money at a ratio of 10 rubles in money of the old model for 1 ruble in money of the 1947 model.

5. From the day of issue of money of the 1947 model until the end of the exchange period, old money shall be accepted in all payments at one-tenth of their face value.
Old money not presented for exchange within the established period shall be annulled and shall lose its purchasing power.

6. The payment to individual citizens of sums of money by internal money orders, letters of credit, and depositor accounts, for which funds were received at state institutions before the issue of money of the 1947 model, shall be made at a ratio of 10 rubles in old money for 1 ruble in money of the 1947 model.

7. Wages of workers and employees for the first half of December 1947, monetary allowances of military personnel, stipends, pensions, and benefits for December 1947 shall be paid in money of the 1947 model on December 16, 17, 18, 19, and 20, 1947 throughout the territory of the USSR, regardless of established dates of wage payment.

8. Simultaneously with the issue of money of the 1947 model, to carry out in savings banks and the State Bank of the USSR a revaluation of deposits and current accounts of the population as of the day of issue of money of the 1947 model on the following basis:
a) deposits of up to 3,000 rubles inclusive shall remain unchanged in nominal amount, i.e., revalued ruble for ruble;
b) on deposits of up to 10,000 rubles inclusive, the following shall be credited to the deposit: the first 3,000 without change of nominal amount, and the remainder of the deposit revalued at: 3 rubles old money for 2 rubles new money;
c) on deposits of more than 10,000 rubles, the following shall be credited to the deposit: the first 10,000 rubles in the amounts provided in point "b" above, and the remainder of the deposit revalued at: 2 rubles old money for 1 ruble new money.
Operations for the acceptance and issuance of deposits in savings banks and State Bank offices shall not take place on December 15, 16, and 17, and beginning December 18 shall take place in the normal manner.

9. Cash funds held in current accounts of cooperative enterprises and organizations, as well as collective farms, shall be revalued at a ratio of: 5 rubles old money for 4 rubles new money.

10. Simultaneously with the monetary reform, to carry out the conversion of all previously issued state loans and savings bank certificates on special deposit accounts on the following basis:
a) bonds of the State Loan of the Second Five-Year Plan (fourth-year issue), the Loan for Strengthening the Defense of the USSR, all issues of the Loan of the Third Five-Year Plan, issues of war loans, the Loan for the Restoration and Development of the National Economy, as well as obligations issued to cooperative organizations on loans, and savings bank certificates shall be exchanged for bonds of a conversion loan to be issued at 2% per annum in 1948. Bonds of the new conversion loan shall be exchanged for bonds of former loans at a ratio of 3 rubles in bonds of previously issued loans for 1 ruble in bonds of the conversion loan.
The exchange of bonds of former loans and savings bank certificates shall take place from May 3 to August 1, 1948;
b) the Second State Loan for the Restoration and Development of the National Economy of the USSR, issue of 1947, is not subject to conversion. Subscribers to this loan shall continue to make payments on the same terms and shall receive bonds of this loan at their face value after completion of payment of the subscription;
c) bonds of the State Lottery Loan of 1938 shall be exchanged for bonds of the new freely circulating State 3-Percent Internal Lottery Loan issued on December 13 of this year, with the exchange of bonds of the 1938 loan taking place within the period established for the exchange of money, at a ratio of 5 rubles in bonds of the 1938 loan for 1 ruble in bonds of the 3-Percent Internal Lottery Loan.
During this period, savings banks shall purchase bonds of the 1938 loan for cash at the same ratio.

11. From the day of announcement of the conversion of state loans until August 1, 1948, the carrying out of regular drawings of winnings and the payment of regular coupons on bonds of loans subject to conversion are deferred; from August 1948, regular drawings and payments shall resume, including for the preceding period.

12. Tax payment rates, the amounts of debt and contractual obligations between enterprises, institutions, and organizations, the amounts of obligations for payments of the population to the state, as well as the amounts of contractual obligations between the USSR and foreign states, shall remain unchanged.

II. Abolition of the Rationing System of Supply

1. Simultaneously with the carrying out of the monetary reform, i.e., from December 16, 1947, to abolish the rationing system of supply of food and manufactured goods, to abolish high commercial trade prices, and to introduce uniform reduced state retail prices on food and manufactured goods.

2. In establishing uniform retail state prices on food and manufactured goods, proceed from the following:
a) for bread and flour, reduce prices by an average of 12% compared with currently applicable ration prices;
b) for cereals and pasta, reduce prices by an average of 10% compared with currently applicable ration prices;
c) for meat, fish, fats, sugar, confectionery goods, salt, potatoes, and vegetables, maintain prices at the level of applicable ration prices;
d) for milk, eggs, tea, and fruit, in place of currently applicable high commercial prices and excessively low ration prices, establish new prices approximately at the level of applicable ration prices for basic food goods;
e) for fabrics, footwear, clothing, and knitwear, in place of currently applicable high commercial prices and excessively low rationed supply prices established in cities and workers' settlements, establish new prices at a level 3.2 times lower than commercial prices;
f) for tobacco products and matches, maintain prices at the level of applicable ration prices;
g) for beer, reduce prices by an average of 10% compared with currently applicable prices;
h) for vodka and wine, maintain currently applicable prices.

3. To instruct the Ministry of Trade of the USSR to establish in accordance with this resolution new, reduced state retail prices for food goods by zone, as well as new state retail prices for manufactured goods for urban and rural areas.

4. The prices established by this resolution do not apply to collective farm markets or to cooperative trade in self-purchased goods.