Ruble Decree Continues to Cause Economic Upheaval : Soviet Union: Critics cite paydays with no pay, a loss of savings that could affect shoppers and lost confidence in banks.

MOSCOW —  “First, there was nothing to buy, and now there is no money to buy it with.”

Yuri Zubkov managed an ironic smile, shrugged and added: “In the Soviet Union, this is called economic reform.”

The mood of those around him in a crowd outside a bank in central Moscow was unmistakably angry, however, and there was a bitter sense of betrayal and often a deep rage. The life savings of many were virtually wiped out by governmental decrees this week withdrawing large-denomination bills from circulation and virtually freezing savings accounts for six months.

President Mikhail S. Gorbachev’s twin goals had been to strip the country’s powerful black marketeers of their operating capital, driving as many as possible out of business, and to reduce inflation, which has been running at perhaps 80% a year on the open market.

But so far the blow appears to be falling most heavily on the elderly who traditionally have kept their savings in a drawer, on farmers who believe that banks are for city folks, on emerging entrepreneurs who operate on a cash-and-carry basis and on the middle class which keeps much of its money handy in case there is a once-in-a-lifetime bargain.

“Am I a criminal because I bought a new stereo and sold my old one?” Zubkov, an electrical engineer, asked as he sought to exchange 2,000 rubles, about $3,700 at the official rate of exchange but only $100 on the black market.

So strong are the feelings across the country that Georgy Matiukhin, the chairman of the Russian Federation’s Central Bank, warned that “serious social upheavals are possible” as a result of the monetary reform, and police reported near-riots outside banks in a number of cities.

The economic upheaval, however, was already apparent.

The government’s decision to withdraw 50- and 100-ruble bank notes, the two largest denominations, has dramatized the disintegration of the Soviet economy and the government’s inability to halt it.

So much currency had been printed over the last two years--more than 70 billion rubles worth--that it had become almost worthless. There were nowhere near enough goods to satisfy the demand and the prices of those available was soaring.

Soviet economists are speaking of a “double theft” in which workers were paid with devalued rubles that often were useless to consumers but that have now been effectively confiscated by the government.

At the same time, the principal means of exchange used by the economy’s growing “informal sector”--tightly packed “bricks” of green 50-ruble or brown 100-ruble notes--has been wiped out and with it a large part of the working capital of self-employed businessmen.

The economy as a whole now may be in serious trouble as a result of the measure, critics argued. Matiukhin said that there already have been payless paydays in a number of major cities, that the loss of savings would destroy the market for major consumer purchases and that the overall loss of confidence would result in a massive decline in bank deposits, which in turn would prevent new investment.

“In coming days, a riot will start at the banks,” liberal economist Igor Nit said, predicting a full run on Soviet banks and their effective closure as a result of the measure. “Confidence in the banks has been destroyed. Not a ruble will go in and every ruble will come out until the government totally freezes every account.”

And those who appear to have been hurt the least were the intended targets--the black market dealers who have thrived on the inability of the government to meet the needs of consumers. Anticipating monetary reform, most reportedly had moved their money to 10-ruble notes, switched to U.S. dollars or German marks or invested heavily in goods of all sorts.

“The black marketeers will hardly suffer,” said Prof. Alexei Sergeyev, a prominent conservative economist and leading advocate of monetary reform. “Our Mafiosi have always regarded tenners as the only reliable bills and the same applies to Western buyers of Soviet currency. But ordinary people will suffer beyond doubt--first of all the peasants who have a long tradition of keeping their money at home in large denominations.”

Politically, Gorbachev’s decree was quickly seen as evidence of his shift to the right, attempting to increase government control of the economy rather than move toward greater reliance on the market forces of supply and demand.

“This struggle against the ‘black economy’ increasingly substitutes for the movement toward market relations,” the radical newspaper Komsomolskaya Pravda said. And Sergei Alexashenko, a pro-market economist, told the paper in an interview: “We can view this decree as part of the overall slide to the right by our president.”

To those who found themselves accused of being part of a new bourgeoisie and losing their savings as a result, there were strong elements of Stalinist economics present in the government decree and its assumption that any cash savings beyond a month’s pay, perhaps 270 rubles or roughly $500 at the official exchange rate, must be ill-gotten.

The decree moreover re-establishes “workers’ control” by establishing committees of co-workers to examine everyone’s holdings and organizing teams of tax collectors, KGB agents and fraud squad detectives to investigate those with more than 1,000 rubles in cash.

“A law-governed state does not have the right to make such decisions,” Vazgen Manukian, the prime minister of Armenia, commented in Yerevan. “These are characteristic only of totalitarian socialist countries.”

A new market quickly sprang up at railway stations as speculators, gamblers and others with large-denomination bills paid as much as 20 times the normal fare for train tickets that they hoped to redeem later for cash with travelers willing to take the chance that they will be able to exchange the bank notes once they return home.

And Col. Alexander Gurov, chief of the organized crime branch at the Soviet Interior Ministry, said that the move had “wiped out” an estimated 12 billion rubles in Soviet currency smuggled out of the country.

But police had to double their deployments around the major banks in Moscow and other cities around the country on Thursday as the crowds grew angrier.