861.13/2–2850: Telegram
The Chargé in the Soviet Union ( Barbour ) to the Secretary of State 1
704. Translation Foreign Office circular note dated February 28 just received reads:
Termination rationing which took place same time as currency reform in December 19472 and important lowering of consumer goods prices carried out three times 1947–50 has led to still further strengthening of ruble, to increase in its purchasing power and to increase in its value in relation foreign currencies.
At same time in western countries depreciation of currencies has taken and continues take place which has already led to devaluation European currencies. As for USA, continuing rise in living costs and inflation which continues on that basis about which responsible US Government representatives have often made statements have also led to substantial lowering of dollar’s buying power.
In connection with above outlined circumstances, ruble’s buying power has become greater than its official rate.
On basis of above, USSR Council Ministers has decreed following ruble rate in relation foreign currencies from March 1, 1950: four rubles to one US dollar instead of present 5.30 rate; 11.20 rubles per pound sterling instead 14.84; and correspondingly in relation other foreign currencies.3
USSR Council Ministers has decreed that as an exception temporarily to preserve regime whereby foreign diplomatic representatives in USSR may buy rubles with foreign currencies at discounted rate within prescribed limits, existing discount rate is altered and for period from March 1, 1950 through June 1950 discount rate for diplomatic representatives in USSR for exchange in Gosbank USSR of foreign currencies for rubles is established as follows: 6 rubles per US dollar; 16.80 rubles per pound sterling; 115.83 per 100 Swedish crowns; 137.21 per 100 Swiss francs.
From July 1, 1950 diplomatic rate will be abolished.
- This telegram was relayed to Paris at 4:00 p. m. on February 28.↩
- For documentation regarding ruble revaluation, abolition of the ration card system, and price changes in the Soviet Union under the decree of December 14, 1947, see Foreign Relations, 1947, vol. iv, pp. 626–649 passim.↩
- The text of the decree of the Council of Ministers of the Soviet Union was published in the press on March 1, and translation of it was sent in telegram 708 from Moscow on that day. It provided that the exchange rate of rubles for foreign valutas would no longer be based upon the dollar, but would be transferred to the more stable base of the gold content of the ruble. The gold content of the ruble was accordingly fixed at 0.222168 grams of fine gold, and the purchasing price of one gram of fine gold at the State Bank (Gosbank) of the Soviet Union would hereafter be 4 rubles and 44 kopeks. On this basis the exchange rate would be 4 rubles for 1 American dollar. (861.13/3–150)↩