Russians Take New U.S. C-Note in Stride

Konstantin Fedosov stepped away from a currency-exchange window on Moscow’s Brestskaya Street on Wednesday and stared at Benjamin Franklin.

America’s elder statesman stared back.

Fedosov was the first to crack a smile.

“It looks sort of funny to me, but I’m certain it’s legal tender,” said the Moscow engineer, clutching a bundle of new $100 bills bearing Franklin’s eerily enlarged, off-center portrait. “If the U.S. government and president promise something, one can be sure they will keep their word . . . not like our leaders in Russia.”

While introduction of the redesigned bill Monday was hardly noticed in the United States, officials had braced for pandemonium in Russia. Much to their relief, Russians are taking the change in stride.

Panic comes easily here. Russians, who hold the largest share of greenbacks outside the U.S., have been robbed more than once by Kremlin currency “reforms” that made older rubles worthless.

With $100 bills now the savings instrument of choice, the U.S. Treasury and the Russian Central Bank created a $1-million campaign to assure Russians that new and old Ben Franklins are equally legit.

The three-month campaign produced 1 million pieces of literature, a hotline taking more than 200 calls a day and a TV blitz that brought U.S. Treasury Secretary Robert E. Rubin far more exposure here than he gets in America. To discourage dumping of old $100 bills, 15 Russian banks that dominate the market were allowed to set a 2% fee for exchanging old bills for new ones.

The effort appears to have worked. There were no long lines at Russian exchange houses Wednesday when the new $100 bills became widely available.

“A dollar will always be a dollar,” said Yuri Skrendo, a trucker from the Siberian city of Irkutsk who comes to Moscow to convert his ruble earnings. “As long as they’re green, you can save them up and not worry.”

Millions of ordinary Russians have what U.S. Ambassador Thomas R. Pickering calls “a tremendous dependence on dollars.” As the ruble has lost 80% of its value since January 1993, circulation of greenbacks here has risen to about $25 billion--more than $400 per family and probably more than the value of all rubles.

Many people who cannot afford safes or security guards carry their money wherever they go--in briefcases or shoulder bags. To lighten the load, Russians buy far more C-notes than any other bill.

In one transaction Wednesday, a man walked into an exchange house on Brestskaya Street with a duffel bag full of rubles and walked out with $20,000.

Others on the street were “shuttle traders,” Russians who commute to foreign countries and buy consumer goods to sell here.

The U.S. Treasury designed the new bills to thwart counterfeiters, and its publicity campaign here is part of a $12-million effort worldwide. That’s a tiny fraction of the $15 billion that officials say the United States earns from circulating its currency abroad, and a good investment to keep it trustworthy.

“We should stay away from self-congratulations at this stage, but . . . thus far the campaign appears to have borne fruit,” Pickering said Wednesday. “So far, so good.”