The herald., 1896-02-02

"
and lend money. The progress of the
new banks was at first slow. The igno-
rant peasants had but just been eman-
cipated, and, being weil-to-do and jeal-
GUS of their new freedom, they mis-
trusted that the new banks were a
contrivance invented by the notles
to re-establish slavery. An as
sociation was organized by the
efforts of Prince Vassiltchisoff to COM
bat this prejudice by means of public
meetings. This expedient was sue
cessful, and during tie last thirty
years banking institutions have be-
come popular with the Russian people,
| but of course not on scale compar-
| ing with the number of banks in the
United States, when it is considered
that Russia has a population of 100.-
OOOO0O. The rate of interest at which
these popular banks loan money is, on
an average, IL per Cent, and to an
American must seem high, but 1t is not
so in Russia, where the interest charged
on loans to the peasantry is often as
much as 100 per cent.
A writer in the Journal des Econo-
mistes says that "the popular banks of
russia offer better res ults than the
German banks, as the peasants who are
associated as members of popular
banks are we'll acquainted with each
others position, and are therefore able
to appreciate the value of the reasons
assigned in support of the application
for a loan, and to estim ate the security
which the applicant has to Offer" This
inferior development of the industrial
organism, which is so favorable to the
success of the popular banks, has its
evils, but they are attended with obvi-
GUS compensatory benefits.
In review OF the popular banking
institutions of Russia writer in the
American Bankers Magazine says:
''In these views there is considerable
plausibility. 1t appears to us to argue
as if the popular banking system was
incapable of modification, and could
not be liberated from the mechanism
of the unlimited liability, which ntits
it for large communities where people
do not know each other. But this is
an error The italian banks have al
ready cut loose from this obstructive
N mechanism, and their success is maui
festly the result of the reform. If a
like improvement could be adopted in
Germany a new impulse would no
doubt be given to the popular banking
system, which would thus be raised to
the level of the new imperial institu-
tions with their spirit of enterprise.
progress and industrial organization.
There is another aspect in which the
popular banks may be regarded. They
put capital within the reach of skillful,
steady and frugal mechanics. They
thus facilitate the rise of these men
from the ranks Of journeymen, and
their promotion to the ranks of mas
ters and employers of labor. The ten.
dency of modern credit organizations
has been to check this promo
tion. by facilitating the con-
centration of capital in large
masses. Under proper conditions the
popular banks are capable of supplying
an antidote to this industrial evil. II
the workingmen's unions had devoted
part of their large funds during the
last half century to the establishment
in Europe Of popular banks on an en-
lightened system adapted to the
spirit of the age and to the wants Of
each country, some of the difficulties
which surround the questions at issue
between mechanics and their EN- ployers
would long ago have disappeared"
The popular banks in Russia present
trait of the Russian character-con-
servatism and economy-by their large
deposits, remarkable from the contrast
| it shows with the state of banking in
| most if notall Of the continental states
! of Europe. Thus, in the Bank of
of the government are but little more
than two-thirds the discounts and one
fifth of the circulation. The leading
hon nef ho ath nj inn ta1 nj kcl
have even smaller amount OF deposits
circulation. In Russia, on the other
hand, ths deposits exceed the discounts
and advances. The most obvious rea-
son that suggests itself for this pecu.
liarity is that Russia is much less ex-
posed to those dangers of revolution
and invasion which have restricted the
growth of deposit banking in other
continental states.
The Imperial exchange of st. Peters
burg, situated on the eastern point of
Vassileiostroff, is one of the notable
buildings of the Russian capital. 1t
was finished in 1911, from drawings by
the celebrated French architect, NJ.
Tonon, and it was in this building that
the assem- bled merchants chesred for
America and President Cleveland
when the news of his communication
to congress on the Monroe doctrine
was read on the exchange.
To most everyone Russia is an enig-
ma. The peasants and the burghers
show an unbounded patriotism and de-
votion to the imperial family. Even it
they could they would not exchange
the paternal government of the en-
psror for one giving them more liberal
political privileges, and still, side by
side with this contentment and devo-
ton to their rulers, turks the hideous
specter of nihilism, penetrating every
class of the higher educated and intel
ligent Russians.