REFORM OF RUSSIA'S FINANCES AND CENTRAL ADMINISTRATION 97state lands to private individuals (the sale of settled lands to the
peasants working them was a long term project). 1
Even after all the measures suggested so far have been taken, there
still remains the task of tackling the most important problem of all:
elimination of the tremendous quantity of assignats in circulation. To
this end, Speransky proposes several measures to be initiated imme-
diately and carried out with unflinching determination. The exchange
of one issue of assignats for another, a common practice, must be for-
bidden completely. Such an exchange is, after all, not only a cum-
bersome operation, but a fictitious alleviation of the evil as well.
Moreover, it falls most heavily on the poorer classes. The redemption
of assignats has to proceed in orderly fashion under the supervision of
a special bureau, a kind of "caisse d'amortissement." Its capital, as
mentioned earlier, is to be raised by floating a domestic loan, bearing
an interest paid at regular intervals. The interest on the loan must be
paid at all costs, so as to bolster public confidence in the government's
financial policy. Speransky proposes to float a IO-year loan of 25 millions
rubles; the capital would be placed at interest and "the interest earned
would serve to build up a redemption fund. Should the first loan be
unsuccessful, it can be complemented by state lotteries. But even in case
of failure of the lotteries as well, the state should nonetheless start
redeeming the assignats immediately. Of course, any additional source
of revenue which the state might find, will be applied towards the
redemption operation. 2
For the administration of the loans and redemption fund, Speransky
recommends the creation of a special state bank with a capital based
on silver. Part of the bank's shares are to be held by the government,
and a part is to be owned by private individuals who can purchase them
by paying ~ in silver and % in assignats. One third of the shares will
constitute the bank's active capital used for its regular banking op-
erations: discounting of notes, safekeeping of jewels, payment of interest
on short-term state loans. In avoidance of competition with the
Nobility's Land Banks (established by Catherine II), this "redemption"
bank would not be entitled to make loans upon the security of real
estate. Nor would the bank be permitted to make transactions involving
the sale and purchase of merchandise (except gold, silver, and copper
bullion). The institution will be managed by the shareholders, pro-
portionately to their participation in the bank's capital, the government
being only one of the shareholders, albeit the most important one. 3
1 Plan Finansov, Sees. 117, 118, pp. 25-26.
2 Plan Finansov, Sees. 143, 144, 147, 156, 159, 160, pp. 58-60.
3 Plan Finansov, Sees. 178-185, pp. 64-65.