Evening star., 1947-12-04
Bank Runs Reported
In Russia on Rumors
OF Rub|e DevaIuation
BY the Associated Press

Soviet Russia's tightly man
aged Communist economy is re-
ported in serious trouble at home
from wave of bank runs and
panic buying in Moscow and
other cities.
Well-based reports. some of them
broadcast to the world in % Ian
guages last night by the State De-
partments official Voice of America
radio, said:
/. Crowds excited by rumors that
the ruble was about to be devalued
have forced many stores to close in
the last few days because of frantic
efforts to turn paper money into
durable goods.
O.. A rush to withdraw money from
savings bank accounts resulted in
an order to limit individual with
drawals to 200 rubles daily.
Diplomats Are Cautious.
These spectacular reports-com-
ing out of Russia itself-gave such a
sudden new twist to the Kremlin S
relations with the rest of the world
that diplomats here were cautious
in weighing the likely effects.
MoscoW's unceasing propaganda
against American plans to aid West
ern Europe has hammered the
theme that "a the capitalist United
States is headed for an inevitable
depression. while (b) the Soviet
/ economy is secure.
Now, however, there appear to be
grave doubts among the Russian
people themselves.
| Detailed accounts reaching Wash
! ington said the residents of Moscow
seemed to consider as true rumors
that the Kremlin would decree a
new currency tomorrow and that
later new and higher prices would
be ordered into effect.
Any scaling down Of the value of
the ruble or raising prices for con-
sumner goods would be harsh blow
to savings. Together, such actions
would have the same effect as in
f1ation in the forms made familiar
in China and other countries.
There, imitation is measured in
terms of foreign currencies and
prices have assumed astronomical
proportions.
In Russia, however, the ruble has
an arbitrarily decreed value of 20
American cents, although foreign
diplomats have been permitted an
exchange rate of II to the dollar.
There is no free convertibility as in
the case of French francs and dol
lars and English pounds and dollars.
The word of Russia's economic
woes broke into print with startling
suddenness.
Dispatches Give No Hint.
Dispatches of American and other
news correspondents in Moscow
have given no hint of any such de-
velopments. But these dispatches
must be sentover Soviet-controlled
transmission facilities.
AS received here from sources in
a position to know, the informa-
ton is that Moscow last week was
on a phenomenal buyers spree, with
crowds lining up at shops to buy
any durable goods regardless of need
or intrinsic value.
BY weeks end one of MoscoW's
principal department stores, Mos
torg, shut it's doors and posted signs
saying store closed for repairs"
Other establishments posted d
"olosed for inventory
Those remaining open had many
bare shelves, but still we're being
beseiged, the reports said.
On the streets scores of peasant
women and poorly dressed workers
were seen carrying crockery, Chi
nese vases and other objects nor
mally beyond their means. Sub
urban trains were said to be over
flowing with men and women loaded
with packages. Luxury restaurants
and cafes were crowded with men
and women out for fling on rubles
they decided would soon lose their
value.
Effective December 5.
1 IlS NluClJ Sui Civ HASooo" 49,
mors were that the new currency
would become effective about De-
cember 5, that the present ruble
would be accepted in exchange only
up to the amount of two months
salary and that at least a portion
of savings accounts might be
frozen"
Coupled with this rumor was an
other that by December Is the
Kremlin would decree a single price
system to supplant the current
method of rationing some goods at
fixed prices and letting the others
find their own higher levels. The
new prices would be sharply higher,
this rumor had it.
The Soviet government raised
prices somewhat similarly IA months
ago in an effort to blot up excess
currency, but this move gradually
lost it's effect.