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Estonia pst 11,
10141 Tallinn

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1940–1989: Liquidation of Eesti Pank and occupation

After the occupation of Estonia in June, Soviet authorities appoint Juhan Vaabel as the so-called Governor of Eesti Pank on 19 July. Estonia’s puppet government gives an order to sell the gold of Estonia deposited in Sweden and England (2.9 and 4.8 tonnes, respectively) to the State Bank of the Soviet Union and to transfer the currency reserve to the account of Eesti Pank in the State Bank of the Soviet Union. Sweden immediately waives the gold and England does so in 1969, but the Soviet Union will never get the gold deposited with the Swiss Bank of International Settlements (3.3 tonnes).

The government instructs that Eesti Pank must grant the State Bank of the Soviet Union 10 million kroons in credit with no interest, which is increased to 20 million kroons in August.

10 October 1940

Eesti Pank is nationalised. The assets and liabilities of the bank are delivered to the State Bank of the Soviet Union and the assets of shareholders are alienated. The bank is reorganised into the Republican Office of the State Bank of the Soviet Union. The position of the Governor is eliminated and Juhan Vaabel is dismissed.

November 1940

The exchanging of kroons and kroon deposits for roubles commences at the exchange rate of 1 kroon = 1.25 roubles, although the actual purchasing power of the kroon is 1 kroon = 8–10 roubles.

August 1941

German troops occupy the continental part of Estonia. The name of Eesti Pank is restored, but it principally operates under the control of the German occupation authorities. The bank manages the turnover of the occupation currency, renders services to local government authorities, etc.

2 January 1943

Eesti Pank is reorganised into a sub-unit of the Gemeinschaftsbank Ostland in Riga under the name of Gemeinschaftsbank Estland.

18 September 1944

Otto Tief’s government is established in the building of Eesti Pank (the former Knighthood Bank at Estonia pst 11, Tallinn). The Minister of Finance of this government is Hugo Pärtelpoeg, one of the senior officials in the bank at the time.

Hugo Pärtelpoeg. Source: Eesti Pank Museum

After the reinstatement of Soviet power, roubles circulate at state-approved prices across the territory of the Soviet Union on a more or less similar basis. On the other hand, economic conditions, incl. centralised supply of goods, differ wildly by region for several reasons. In such a situation it is impossible to use money as a means of regulating the economy. Even funds assigned in the state budget for certain purposes acquire real meaning only when actual amounts of money come with it. The economic power belongs to those dividing specific sums and the currency has no real power.