The beginning, evolution and involution of the Romanian “Leu”

The Romanian Leu exists as a currency since 1867. On the 19th of January 1881 the first Romanian banknote started to go around from hand to hand – the 20 lei banknote. It is enough to look at the collection of the lei from the first appearance until today to understand how the history on the Romanian territory has been written.
The lei were at first like the French franc. The same value, the same weight in gold. The world wars changed them, contorted them, becoming at one point the smallest banknote that ever existed (as large as a postage stamp).
The communism, which among other things aimed for a moneyless society more than anything, came to have the banknote with the largest written value in the history of Romania: five million lei. It was the inflation following the World War Two. The “Balcescu” and “Vladimirescu” followed, the famous banknotes of 100 and 25 lei. Then, the liberalization of the market brought an avalanche of monetary emissions. Between 1990 and 2003, almost every year had new coins and banknotes produced. And yet, more than ever, people were complaining about the lack of money.
Below is the history of our currency..

Why is it called leu?
During the middle of the 17th century, during the political decline of Wallachia and Moldavia, the monetary market is invaded by many foreign currencies.
The most popular became, however, the Dutch taler (leeuvendaalder), which had a lion engraved on one of its sides. The “Dutch lei/lions” were used for more than a century. Their popularity was so high that even after they were immobilized, they were identified by the people as a currency. This lasted for around two centuries, until the leu receives a birth certificate. On the 22nd of April – 4th of May 1867 the law that brings the Romanian monetary system into being is passed. At the same time the leu appears alongside its monetary subdivisions, and not in parallel, as before. A leu equaled a French franc. The 5, 10 and 20 lei coins were made of gold and the 1 and 2 lei ones, as well as those of 50 bani were made of silver. Until the state security printing office has been established (1870), the first coins were made in Birmingham and Brussels.

Carada, he is “the father of money”!
Eugeniu Carada was the great mind that was in charge of everything in regards with the beginnings of the Romanian National Bank: from the functioning law (17-29th of April 1880), to the construction of the building and the manufacture of the first banknotes. In July 1880, from Paris, he sent a letter to the country: “I turned to the necessary endeavors that would ensure the manufacture of the paper for the tickets of the Romanian National Bank. The first and foremost project is the making of the canvases, the filigree being today almost the only real guarantee of the fiduciary paper (n.r. – with conventional value)”.
From Paris, Carada came back with a pile of money. The money of Romania: 900.000 tickets of 20 lei, 300.000 tickets of 100 lei and 25.000 tickets of 1.000 lei. Carada also chose the blue colour of the money, the effigy of emperor Trajan and the embodiment of Romania as the mother between her sons. All of these were drawn by the French painter George Duval, also taken on by Carada, there, in France.
Eugeniu Carada (1836-1910) was a Romanian writer, politician and economist. Alongside his efforts to found the Romanian National Bank, he also drafter the first Romanian Constitution, in 1866. Carada was a mason and a member of the Liberal National Party. For 30 years he was an employee of R.N.B. (B.N.R.), but he never accepted the supreme title, of a governor.
At the beginning of the 20th century, Romania had 6.5 million inhabitants. A polarized society in which money moved almost exclusively in the big cities. The newspapers of the époque unravel a consumerist and mercantile urban environment. Soaps, powders, wonder-recipes again hair loss filled the pages of the newspapers.
The First World War would bring an end to the capitalist bloom. The leu fall in the hands of the German army, along with Bucharest, on the 6th of December 1916. Between 1917 and 1918, the Germans print lei through a bank with German capital: The General Romanian Bank. Refuged at Iasi with the entire Government, the Ministry of Finance releases in 1917 the smallest banknote in the world, as it is renowned in the Book of Records: the 10 bani banknote, with the effigy of King Ferdinand. It measures 27,5 x 38 millimeters, just like a postage stamp.
After the Great Union, the Romanian currencies have been united with those foreign that were in circulation on the new Romanian territories (the Austro-Hungarian krone in Transylvania, the Romanov ruble in Bessarabia and the Lvov in Bucovina). The pairing with the German leu which was in circulation during the German occupation was also made. All of these, but most of all the losses from the First World Was made the leu drop significantly more than the French franc: in 1920, the franc and the leu were no longer equal. The French currency equaled 2,5 lei. In 1922, the prices rose 22 times from what they were in 1916. The 30s were dark years for the leu, everything culminating with the great financial crisis. The bank crash in New York (29th October 1929) had an impact on the leu as well. We had roaring bankruptcies: the General Bank of Wallachia, the Marmorosch Blank & Co. Bank or the Berkovitz Bank. The active population of Romania was directly affected through consecutive salary cuts: 10-23% in 1930, 15% in 1932, 10% in 1933.
During the Second World War, the nickel coins were discontinued and used for munition. These were replaced with zinc coins. And during the war the leu entered a new process of devaluation. The end of the 40s is the toughest in the history of the leu. The inflation “gallops” like in the Ploiesti race track.
In 1947 the banknote with the highest numerical value in the history of the Romanian National Bank is released: five million lei. In this context, in 1952 a new monetary law is passed and money changes its look again, and 1 new leu accounts for 20 old lei. Workers, peasant and historical characters suitable for the communist doctrine appear on the banknotes: the avant la lettre revolutionaries Tudor Vladimirescu (25 lei) and Nicolae Balcescu (100 lei). On the back: the triumph of the industrialization and the mechanization of agriculture. The market economy system is harshly criticized in economy treaties and ridiculed in literary “pieces of work”. Until 1989, money comes to a standstill.
In 1966 R.N.B. (B.N.R.) changes the design of the money and introduces Alexandru Ioan Cuza of the 50 lei paper. Between 1990 and 2003 coins and banknotes are released almost every year. The papers begin at 200 lei (1992 emission, with the face of Grigora Antipa) and reach 1.000.000 lei (2003 emission, with the face of Ioan Luca Caragiale).
In 1999, Romania becomes the first European country to emit money on plastic (polymer). These were the special 2.000 lei banknotes, emitted on the occasion of the total solar eclipse. Until today, Romania is the only country on the Old Continent to use plastic banknotes. Such banknotes are also found in Asia, Australia and Canada. The plastic banknote has many advantages: it is a lot harder to counterfeit than the paper banknote and it takes longer for it to deteriorate. After introducing the plastic banknotes, Romania has not registered any professional forgery.
sursa: Terra Magazin

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