MONEY CIRCULATION IN BULGARIA AFFER THE LIBERATION FROM THE TURKISH SLAVERY
have her own national unit of currency in the first years after the Liberation.
Together with the rest of gold Turkish liras, silver medjidias, beshlics,
altalacs and etc Hungarian mangers, Austrian fiorins, Deutsche thalers
and marks, Netherlands, Danish and Swedish riksdalers could be found in
circulation in the young state. Besides a lot of silver Russian roubles
went into circulation in the country during the Russian-Turkish war too.
In this wide variety of money the coins dropped out of circulation in
their own countries were spread in Bulgaria and caused an additional mess
at the market.
Because of the long circulation these coins were seriously
erased and it was very difficult to recognize them. So people knew them
only by their size and form and named them direklee, kimlee, Hungarians
and so on.
In order to stop that chaos the young state needed a
National Bank and its own unit of currency.
Thus on the 16-th of December 1878 K. Buh - a manager
of the financial department of the occupying Russian government presented
the project of "The Statute of the Bulgarian National Bank" (Óñòàâú áîãàðñêîãî
íàðîäíîãî áàíêà) to the Russian imperial commissioner in Bulgaria prince
Dondoukov-Korssakov, who ratified it in on the 25-th of January 1879.
What were the motives of Buh for the quickly preparation
of the project for Bulgarian National Bank we could understand from one
of his statements?
"The Liberation of Bulgaria found a confusion of coins
that could exist only in a primitive state where no civilization has ever
But that's not all. Several months have passed after
the Liberation of Bulgaria from Turkish Slavery and the new way of life
is in its full swing all over the country, new unknown sources of wealth
have been found, trade come back to life. This country, generously endowed
by the nature and populated by thrifty and hard-working people will soon
develop its own industry and trade activities.
The birthday of the Bulgarian National Bank (BNB) is
the 25-th of January 1879 when prince Dondoukov-Korssakov signed and ratified
its first statute. According to it the capital of the BNB would run up
to 2 000 000 francs deposited by the state and it was also expected that
the capital would be repaid quadruple owing to the work of the Bank. On
the 4-th of April, 1879 Karbonyor was appointed as a first director of
the Bank. He was a government official in the Financial Department of
the Board of Managers.
The official opening of the BNB was on the 23-th of
May 1879 and prince Dondukov - Korssakov and the members of the Board
of Managers attended it.
The first bank operation was made on the 6-th of June
in the same year when the state deposited 8687043 francs, 2 000 000 of
which should be the capital of the Bank.
Originally the plan was for deposit-trading bank but
in fact in the first years it worked with agricultural and municipal credits.
The first credit operation was accomplished on the 17th of August 1879.
At that time the business accounts of all state institutions
and the state budget were calculated in French francs. The currency of
the countries, which were members of the Latin Monetary Union, was accepted
as an equivalent to the French franc, and for the coins of the rest countries
it was fixed a rate of exchange. Thus for instance one Russian rubles
was exchanged four 4 francs.
The first Bulgarian postage stamps were imprinted in
Russia at the request of prince Dondoukov-Korssakov for the post needs
of the Provisional government. Their prices were marked in francs and
centimes. Even the first experimental Bulgarian cooper coins of 10 centimes
and silver coins of 1 franc were minted. Never mind the Bulgarian State
Emblem was not approved yet it was cut out on their back of the coins.
Test coin 10 santimes - 1880
In the spring of
1879 the first Grand National Assembly was convened to elect the first
Bulgarian prince after the Liberation. Alexander Batenberg, a German prince
and a relative of the Russian Emperor was elected.
Before arriving in Bulgaria Batenberg visited the Russian
Empire and introduced himself to his "suzerain"- the Sultan. On the 26-th
of July 1879 after his arriving in Bulgaria Alexander Batenberg swear
as a Bulgarian prince.
Almost a year later from the 4-th of June 1880 the "Law
for the legal right of coin minting in the principality" came into force.
At last Bulgaria had its own unit of currency - lev, divided into 100
stotinki. The Second Ordinary National Assembly approved this law. There
were some disputes about the appellation of the monetary unit but the
name "lev" (in Bulgarian lev is the old for lion) was adopted with majority.
Much more controversies aroused about the name of the coins whether to
be "stotinka" "santims", "sotnitses" and etc. Finally was approved stotinka.
The only one who disagreed with both designations was
the 26 years old Stephan Stambolov who in 1886 after the abdication of
prince Batenberg became a regent and soon after that a prime minister.
Probably by his order when he was a premier, experimental coins of 10
centimes were minted again. But the lev had already dominated.
Test coin 10 santimes - 1887
According to the monetary law in force from the 4-th
of June1880 all state bargains and money documents and those of the public
institutions and private persons should be already calculated in levs
and stotinki instead of francs and centimes.
The state budget should be voted in the national monetary
Here are some passages from the "Law for the legal right
of coin minting in the principality":
1: The state holds the exclusive right of coin minting. The National
Assembly, at the proposal of the Minister of Finance, determines how much
and of what kind coins should be minted.
3: The Bulgarian coins are gold, silver and cooper. The gold are 20
and 10 levs, the silver - 5, 2,1 levs and 50 stotinki and the copper -
10, 5 and 2 stotinki. Of course the events didn't proceed according to
the law. The first Bulgarian copper coins of 2, 5 and 10 stotinki were
minted in 1881 in England. The silver coins of 1 and 2 levs were minted
in Russia a year later and in 1883 were minted those of 50 stotinki. The
standards of the Latin Monetary Union were adopted for the content of
pure gold and silver the weight and size of the coins. Unfortunately the
gold coins appeared too late - in 1894. The situation in the young state
was still unsteady because of lack of gold.
First bulgarian copper coins
First bulgarian silver coins
The minted copper
coins were to a total value of 2 100 000 levs that means: 15 000 000 coins
of 10 stotinki ; 10 000 000 of 5 stotinki, 5 000 000 of stotinki.
The minted silver coins of 1 and 2 levs and 50 stotinki
were to a total value of 10 000 015 levs.
After 1883 all silver coins went into circulation were
approximately 3 levs per capita. According the Latin Monetary Union the
maximum of the silver coins in circulation had to be 7 levs per capita.
Having in mind that in were still in circulation the monetary units of
the countries from the Latin Union, Turkey, Russia and some other countries,
it was obvious that the money in circulation were enough.
In the same 1883 Turkey dropped out of circulation all
foreign silver coins and a great flow of silver money in Bulgaria. On
the 15-th of November 1884 in order to overtake this situation the Bulgarian
government passed a law with which dropped out of circulation the Romanian
and Serbian silver coins in Bulgaria. A year later in January the rate
of the Russian silver roubles was reduced too. With a law in force from
the 27 th of June 1886 the Russian roubles were completely dropped out
of circulation and within a year they had to be exchanged with Bulgarian
silver coins (money). That's why in 1884 and 1885 in order to conpensate
for the withdrawn foreign currency another silver coins of 5 levs were
minted. They were to total value of 10 000 000 levs. Finally in the second
half of 1887 the Bulgarian money market dropped out of circulation all
foreign silver coins.
The first adopted statute of BNB of 1879 made no provisions
banknote to be issued. After the reformation and with a law passed by
the IV Ordinary National Assembly on the 27-th of January 1885 the BNB
become an issuing institution and a long-term credit bank. The law was
worked out from the Bank manager Ivan Geshov and the Minister of Finance
Petko Karavelov proposes it in the National Assembly.
According to the law the BNB was an independent from
the state institution. The banking capital amounted to 10 000 000 levs
deposited by the state as property of the Bank. The state reserved the
rights only upon 30 % of the pure gain, which built up the state reserve
capital. The Bank activities provided by the law were various but the
most important for us was that the state assigned the exclusive privilege
to BNB of money issuing.
Here are some main articles from the law:
Art. 4 : The BNB holds
the exclusive privilege to issue banknotes… The Bank must always keep
gold coins equal to one third (1/3) of the value of the issued money…
The banknotes will be immediately paid in gold to the bearer…
Art.94 : The Minister
of Finance is the only one who approves the paper for money printing
as well as the native or foreign printing houses where the money to
Art.96 : The signatures of the manager and the teller are printed
on the notes. The signing is made by a special machine in the presence
of the official appointed by the Board of Managers person under the
supervision of the teller.
Art.103 : The ragged
banknotes are exchanged with others or are completely paid in gold
if they are a piece larger than half of the note.
Art.104 : The tellers keep all ragged, dirty or damaged banknote
presented in the bank without being put in circulation anymore.
Art.106 : The damaged notes are pierced by the teller with
the help of a mechanical punch printing upon them the word "invalid
Art.109 : The banknote are burnt out 5 years after they have
been dropped out of circulation in the presence of a committee… A
statement is made about that….
The law says also:
The Bank will issue banknotes of the four categories:
20, 50, 100 and 500 levs.
The Board of Managers of the Bank coordinated with the
Ministry of Finance fixes the form of the banknote as well as their emission
Whether it happened according to the laws or not you
will understand in the part "ISSUES