Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-11-23
RUSSIA'S FINANCIAL CRISIS,
Reckless Speculation and Lack of
CAPITAL Bring Danger.

ST Petersburg Correspondence Of the London Post.
Notwithstanding the reassuring state
ment issued by the minister of finance
some seven weeks ago, the financial posi-
ton in St. Petersburg and Moscow contin-
ues to be by no means satisfactory. Prices
of shares and obligations Of every descrip-
ton have fallen heavily and show no signs
OF recovering. Investigation of the affairs
of the financial houses, to the failure of
Which-though 1t is difficult in such cases
to draw a hard and fast line between cause
and effect-a good deal of the prevailing
depression has been attributed has brought
to light the weakness previously unsus-
pected, of various enterprises connected
with them, and the difficulty of obtaining
ready money to which M de Witte alluded,
has become rapidly accumulated, the bal
ance Of the Imperial Bank, for instance,
having fallen from 800. 100000 rubes on the
18th ultimo to 241 10000 rubles on the Goth.
A comparison of the prices which obtained
on the st. Petersburg bourse at the begin
ming of the year with those quoted this
week proves not only that the fall which
has occurred is serious one, but also
that it has not been confined to any par
ticular class of investment. Russian per
cents have fallen l per cent at the head of
the list municipal loans from per cent
to per cent, the actively dealt In shares
of the commercial banks, the position of
which may be regarded as throwing light
on the general situation, from II to % per
cent; shares of metallurgic and mechani-
cal manufacturing companies from II per
cent to 40 per cent. and railway Companies
20 per cent to % per cent The shares of
naphtha companies. glass manufactures,
tramway and gold mining companies have
fallen in about the same proportion The
Depression in fact, is being felt by almost
every species of joint stock enterprise.
To account for this condition of affairs 1t
is not necessary to look for other explana-
tons than those given by M. de White in
his statement of August 10. 1t is due, he
then maintained, in the first place. to the
state of the money market in other coun-
tries in Europe, whence capital In large
quantities has lately been withdrawn for
Investment in the east, in Africa and in
Australia, with the result that in almost
every country the national funds have
fallen and the official rate Of interest has
| been increased; and, secondly it is due to
transportation and the f1otation of numer-
Gus enterprises wholly out of proportion to
the pecuniary resources of their founders
who. anxious, no doubt, to, take full advan-
tage of the wave of commercial and in
dustrial activity which has recently passed
over Russia, disregarded the warning of
the minister. more than once repeated that
reckless speculation on the stock exchange,
indifferent management and scarcity of
capital could not fail eventually to bring
about disaster. Since the middle of August
the position has, il anything become worse
The rate for three months paper has risen
from 513 per cent to EN- per cent and IT, as
seems not unlikely, the bank rate In Lon
don and other western capitals should
shortly be raised, the scarcity of money
may become still mora pronounced Even If
the outbreak of warlIin South Africa and
the consequent temporary stoppage of a
large proportion of the worlds gold pro-
duction should not sprodyce this effect
| abroad, it is certain THAT locally the de-
| mand for money must for a time increa Sc
| in consequence of the needs of merchants
engaged in the corn trade, who will before
! long be in want Of advances to enable them
| they send abroad and for which thev nat
| urally do not at once receive payment.
Scarcity of money inevitably produces real
| iZations. In the present weak condition. or
| the bourse realization can be effected onIv
| at considerable sacrifice and fresh i'm
| petus is then given to the downward move.
| ment 'N