In early November 1796 Catherine II died after a reign of more than 34 years. Her son Paul who succeeded her, was faced with a number of economic problems, but the most pressing was the decline in value of the paper currency.
The first assignats (paper money) had been issued in 1769 by Catherine II as one way of stretching the always thin financial resources of the Russian Empire. Because the Treasury was invariably unable to balance the budget, due to frequent wars and rebellions of the 1770s and 1780s, the value of the assignats, in terms of the silver ruble, declined only gradually at first but by the mid–1780s the depreciation was increasingly apparent.
As late as 1785 the value of the paper ruble was still as high as 98 kopecks in silver, but this fell to under 90 kopecks by 1790 and as low as 70 kopecks at times during the early 1790s. Despite the best efforts of Paul and his government, the assignats continued to fall in value, until by 1800 each paper ruble was worth about 65 silver kopecks. (The lowest denomination of paper issued prior to 1800 was 5 rubles.)
From the beginning of the Russian paper money it had been the
