Freedom Loan: Bright Start and Early Finish

[19.04.2020 10:32:40]

On March 27 (April 9), 1917 the Provisional Government issued the "Loan of Freedom" - to combat inflation and finance the costs associated with World War I. Samples of these bonds are on display in the Russian money museum of Goznak JSC.

The issue of the bonds was accompanied by an active propaganda campaign. Special brochures and posters were printed, city holidays and rallies were organized. Patriotic poems were written by famous poets: Anna Akhmatova, Sergey Esenin, Velimir Khlebnikov, Sasha Cherny. Sergey Rachmaninoff participated in the concerts. They not only agitated, but also signed up for a loan. Fyodor Chaliapin contributed the biggest sum - 100 thousand rubles.

The press predicted that the new loan would be a "quick and undoubted" success. Unlike previous military loans of the tsarist government, the new five percent loan was issued as a long-term - it was designed for 54 years, with repayment over 49 years, starting from 1922. The subscription price was set at 85% of the bond's nominal price, i.e. only 85 rubles were required to pay for a 100-ruble bond.

Series I bonds were issued in denominations of 50, 100, 500, 1000, 5000, 10 000 and 25 000 rubles. The second, third and fourth series, apart from these denominations, also included bonds of 20 and 40 rubles.

On the front side of the bonds of all denominations was placed the image of the Tauride Palace, which in 1917 was no longer perceived by the population as a mansion built for the favorite of Empress Catherine II Gregory Potyomkin, but as a "temple of freedom" and "symbol of revolution". In the central part of the bond the par value was indicated and the appeal of the Provisional Government to lend the money to the state by placing it in a loan was placed. Under the text of the appeal - the signatures of the Provisional Government ministers and the inscription: "Petrograd, March 27, 1917.

On the reverse side of the bonds - the main terms of the loan, the signatures of the manager of the State Commission for the repayment of debts and the accountant.

Part of each bond was a sheet of coupons, on which the payment of income was made.

Representatives of the banking sector suggested using a different name - "Victory Loan". But among the general public, the new bonds were to become a kind of symbol of a renewed Russia, the embodiment of the changes that have occurred in the country, to give credit really nationwide.

The publicist N. Sukhanov recalled: "The noise over the Freedom Loan"... ...was raised by the incredible. Propaganda, oral and printed, went like in the big parliamentary elections: even the Holy Synod took part in it...".

However, the Bolshevik newspapers expressed a different viewpoint. In March 1917, the newspaper "Pravda" published an article entitled "A loan of freedom or a loan of enslavement", criticizing the idea of continuing the war by raising public funds.

According to the Credit Office of the Ministry of Finance, by mid-September 1917 the number of subscribers to the loan reached 900,000 people, and the subscription amount was about 4 billion rubles.

After the October Revolution, on December 29, 1917, the Council of People's Commissars of the RSFSR suspended payments on all coupons and banned securities transactions.