One birth and three deaths: the leu, 1867–2005

Chapter

c.1600 – 1867

The lion thaler

27.68 g of .750 silver

The Regulation

1831 / 1832, the leu as account

The romanat

1860–1864, stopped by the Porte

Around 1600, more than a hundred kinds of coins circulated in Wallachia and Moldavia: Turkish thalers, Hungarian and Austrian guilders, zloti, Russian carboave, Venetian zecchini. Among them the Dutch lion thaler — the leeuwendaalder — with a rampant lion engraved on the reverse: 27.68 grams of .750 silver, struck for the world's trade, come all the way to our fairs. People called it shortly: leu.

The name stayed after the coin left. The Organic Regulations of 1831 (Wallachia) and 1832 (Moldavia) made “leu” a unit of account: the gold ducat was worth 31 lei 20 parale, and the Austrian silver zwanziger 2 lei 10 parale. The leu lived in ledgers decades before it lived in pockets.

Alexandru Ioan Cuza wanted to strike it: the român or romanat, after the French franc, with a loan of 60 million francs and the Paris mint. The drafts came in a chain — 1860, 1861, 1864 — and fell in a chain: the Porte accepted no coin of its own from a vassal, and Napoleon III wanted no quarrel with the Turks. A five-sutimi pattern, struck in Paris in 1864, never circulated.

One hundred Romanians for an ox.

Ion Heliade Rădulescu and Dionisie Pop Marțian: why the name “român” would not do (translated)

Meanwhile: In Paris, France, Belgium, Italy, Switzerland and Luxembourg found the Latin Monetary Union in 1865, in force from 1 August 1866.

Chapter

1867 – 1914

The law

22 April 1867, Monitorul no. 89

The leu

5 g of silver or 0.3226 g of gold

The rate

1 leu = 1 franc, 1882–1914

The law establishing the new monetary system, voted by the Assembly on 29 March, by the Senate on 14 April and published in Monitorul no. 89 of 22 April 1867, cut the knot: one leu meant 5 grams of .835 silver or 0.3226 grams of .900 gold, divided into 100 bani. The name “leu” is attributed to Cezar Bolliac, and “bani” to Cristian Tell. The first coins — 1, 2, 5 and 10 bronze bani — were struck in England in 1867; the one-ban piece read “banu”.

Then came the 20 lei gold pol (1868, only 200 pieces — a pattern), the State Mint (3 March 1870), the silver 50 bani (“băncuțe”), 1 leu and 2 lei, the mortgage notes under the law of 12 June 1877 — the first paper money, for the Independence War — and the National Bank, under the law of 17 April 1880 (29 April New Style), with a capital of 30 million lei. Foreign gold filled the gaps: the 20 franc Napoleon passed for 20 lei, the Turkish lira for 22.70, the Russian imperial for 20.60 and the English sovereign for 25.22.

The leu clung to the franc for more than thirty years: between 1882 and 1914, one franc changed in Bucharest for 1.000 to 1.018 lei. But market gold cost more than legal gold — the agio — so gold coins hid in strongboxes, and the law of 1890, enforced from 1892, moved the leu to gold alone (the NBR had opposed it). That was the “leul aur”, the golden leu: the strongest of its life.

The emerging difference between the two values, referred to as agio, led to the hoarding of gold coins.

Stoenescu et al. (NBR), OeNB 2008

At the same time, one leu was also asked for the Athenaeum: “Dați un leu pentru Ateneu!” — the campaign, with its accounts, is told by our neighbours.

Meanwhile: In Bucharest, the NBR palace rises between 1884 and 1889, to the plans of the Frenchmen Galleron and Cassien-Bernard.

Chapter

1914 – 1947

Bread

0.27 → 10.00 lei (1914–1929)

The dollar

167.20 lei, 7 February 1929

The press

×2,099, 1935–1947

The war cut the anchor: coin striking ceased in 1914, convertibility was suspended in 1917, the NBR gold left for Moscow in 1916–1917 and never came back, and the monetary unification of 1920 — crowns, rubles, occupation lei — cost 7,079,000,000 lei. Bucharest bread rose from 27 bani in 1914 to 3 lei in 1922 and 10.08 lei in 1926; retail prices had risen nearly 40 times.

The February 1929 stabilization froze the collapse: the new leu was worth 10 milligrams of gold — 32.26 times less than in 1890 — and the dollar was fixed at 167.20 lei (7 February 1929). Then came the crisis, with bread cheapened to 7.30 lei in 1938, and the November 1936 devaluation: the kilogram of gold jumped from 111,111.11 to 153,333.33 lei, and the NBR stock from 11.2 to 15.46 billion.

The Second World War took inflation to the heights: bread at 46 lei in 1944 and 20,000 lei in July 1947; the 100,000 lei coin (1946) and the 5,000,000 lei note (25 June 1947) — the highest nominals in Romanian history. The money in circulation had grown 2,099 times against 1935, and living standards had fallen to one quarter of 1938. The paper leu was living its last weeks.

The Romanian leu thus became the weakest currency in Europe.

Simona-Elena Bălan, on the February 1929 stabilization (translated)

What followed on 15 August 1947 — the great stabilization, 20,000 to 1 — is the mechanism told, figure by figure, by our neighbours.

Meanwhile: In Paris, the Latin Monetary Union dissolves itself on 1 January 1927.

Chapter

1947 – 2005

1952

20–400 to 1, 28 January

1993

256.1% inflation

2005

10,000 to 1, 1 July

The stabilized leu did not live five years: on 28 January 1952 a new reform exchanged it at rates from 20 to 400 to 1, by kind of money — cash, deposits, debts — again without warning. Then came the coins and notes with the RPR arms, and from 1966 with the name of the Socialist Republic of Romania; from 1975 the small change was struck in aluminium. Between 1970 and 1989 the rate was set by law, and foreign currency in private hands was a crime: up to 10 years in prison.

After 1989 prices ran wild: sugar, 20 lei the kilogram in 1989, had reached 500 lei in 1993, the year of 256.1% inflation. The issues poured out — 50,000 lei in 1996, 100,000 in 1998, the 2,000 lei polymer note of the 11 August 1999 eclipse (the first in Europe) — and the zeros: in September 2003 one euro passed 40,000 lei, and the leu was for a while the world's weakest currency unit.

On 1 July 2005, Law 348 of 14 July 2004 cut four zeros: 10,000 old lei for one new leu (RON). Prices were shown double from 1 March 2005 to 30 June 2006, the old notes circulated until 31 December 2006, and the coins until 31 December 2005. The leu was back among Europe's normal currencies — but the language did not forget: even in 2020, a hundred lei was still called “a million”.

In Romania, a kilogram of sugar that cost 20 lei in 1989 now costs 500 lei.

Washington Monthly, December 1993

Meanwhile: In Brussels, Romania joins the European Union on 1 January 2007.