The Washington times., 1901-07-16
RUssIA's PUBLIC DEBT.

on January l. 1900. says o. +. Austin.
Chief OF the Statistical Bureau of the
Treasury. in pamphlet just issued. en-
titled National Debts of the World
is officially stated as amounting to $3.i9s
CO.. 900.
This total does not include the guar
anteed railway stock. equal to ssa.s7O.oco:
the value of railway bonds of private rail-
way corporations. amounting to s555. SO. 900.
| almost all of which is guaranteed by the
| Government and about SsS6. 10000 of
mortgage bonds issued by the land banks.
| a grand total of over S9tS. 600. The
| enormous Importance of the Government
in the economic life of the nation Is seen
best from the fact that out of total OF
over s50oo.ooo Of all sorts of State securi-
ties and those issued py private, indus
trial, and financial concerns. over 100000
are either public bonds or securities hav-
Ing behind them Government guaranty.
And that this guaranty is not merely
nominal. but quite often becomes effect
i've as far as the State is concerned, the
history of Russian financiering bears
ample testimony.
Russia, then, 1t is seen, holds second
place among the indebted nations Of the
world. While the per capita Indebtedness
| Is smaller than for the majority of the
great Powers. 1t must not be forgotten
that The debt burden, In view of the low
productivity of national labor and the re-
sulting relative poverty of the nation,
must be felt more severly than in other
| more advanced countries.
| About 1890 or rather beginning with
December, 1885, the Russian Government
availing itself Of the relative ease of the
European money markets. succeeded in
| converting the greater part of its out
4 90, i;,r,f A.
8 per cent basis to per cent. 81, and
even 3 per cent basis. The results of this
huge financial operation are seen in the
| fact that whereas in 1887 the average in
tere4t rate en- a total debt of s2,2i2.5 .55l. 900
| was 4-61, about three quarters GO per cent?
! of the debt paying interest at a rate of 5
per cent and higher. the normal rate after
| the conversions becomes per cent. about
| three quarters of all Russian public Sc
curities ,s2 $50 367 900 out OF 50 l97 596 00o be-
| ing now of this type.
These conversions considerably sweiled
the capital amount of the debt. Thus. for
| instance. the nominal value of the per
| cent Bank Obligations and Oriental
| Loans, the conversion of which took
| place in 1894. was over sss53 SIC. 600, while
the corresponding nominal value of the
4 per cent bonds. for which they were
ing thus a net increase OF the public debt
by almost 100000 .oeo 1881. .655. .Oe0). The low
| er interest rates of the new bonds. of
course. reduced correspondingly the an
| nual outlay on the public debt. 1t is es-
timated that, while these operations re-
suited in increasing the capital debt of
the nation by over 500. 900, 600, the econ
omies effected by way of lower interest
payments are not less than s12,0o0,00o per
year.
Another common feature of the recent
conversions is the fact that the former
short-term bonds have been supplanted to
large extent by long-term bonds, run
ming for terms of sixty to eighty-four
years dhe Government by annual draw
ings redeeming at par part of the debt.
the sinking fund set aside for that pur-
pose gradually reducing the debt within
the periods mentioned), or even making
a part of the debt redeemable at its pleas
use-that is. perpetual in the technical
sense.
The purposes for which the amounts
realized from the recent loans were used
can be stated only in general terms. While
part of the net proceeds of these loans
may have been used for military and kin
dred purposes trearmament of the army,
construction of men-of-war. wharfs and
docks). there is no doubt that by far the
greater part has been used for what is
known technically for productive enter
prises. ch.vny the construction of rail-
ways. A closer analysis of the Russian
public debt statement shows that prima
facie railway bonds figure to a consider
able extent lover IS per cent? in the gem
eral total (-.,iiv,6s1,oo out of total Of
S, S,l6i, ,620. .Oe1 in the year 1850.
The total amount of securities foated
by the Russian Government, either for
the purpose of railway building, the buy
ing out of privately owned lines and the
conversion or redemption of railway
bonds until the year 1899, amounted TO
over S,442. 10000 The total railway debt
for that year is given officially as Sl.3l7.-
1873 900. In 1900 this debt stands at about
N.374. 900, 90. 1t should be noted, however.
again in this connection that the Govern
ment guarantees the interest on bonds OF
almost all private lines, the value of
which bonds amounts to about s556. 900. 900.
Another question which requires ex-
animation is that of the foreign holdings.
A glance at the Russian publ:c-debt state
ment shows that the entire debt is divided
into two pretty nearly equal parts-frst.
that part of which both capital and inter-
est are payable either in foreign currency
gold rubles; second, that part of which
both capital and interest are payable in
rubleS, Or to use the corresponding
American term. in 'currency'-that Is, the
gold clause being omitted. This distinc-
ton has no practical value under present
Couultions, as long as the RUSSIAN none
tary system Is maintained a gold basis
and the circulating credit rubles are ex-
changed at par against their gold equiva-
lent The distinction. however. is i'm
portant, historically. as IL comedies pretty
well with the distribution of the Russian
funds between holders within the country
on the one side and foreign holders on
the other. AS a matter of fact. owing 10
the fluctuations to which the Russian
monetary unit was subject until the VIM
ter of 1894, the Russian currency bonds
found but little and intermittent favor
with a small number of German. Dutch.
and French capitalists the foreign in
vestor proper hardly knowing of their
existence Inversely the Russian in
vestor, used to calculate in terms of pa
per currency, found the investment in
gold bonds rather inconvenient for the
very same reason Jast given. In a general
way. then, 1t may be said that no less
than 90 per cent of the Russian debt is
held abroad tS.5S6, AZ, 900 out of a total OF
s.. l99 667 0J0) -
"A relatively small amount only. namely.
"a. 600 rubles. or So per cent of the to-
tai amount payable in gold or foreign
currency, Is held in Russia. On the other
hand, II is equally apparent that of the
i,lio1lS,OU rublcS contracted in currency
Is held In Russia. On the other hand. il is
equally apparent that of the 414O lis 600
rubies contracted in currency the by far
iarser part, over % per cent, is held in
deposit by Russian credit and other finan-
cial institutions
The question as to the geographicaI
distribution of the foreign-h part of
the Russian debt is less easy of answer.
NO dlrect data bearing on the question
such as the value of coupons presented
for redemption at the counters of foreign
banking houses, or the total amount of Sc
curities quoted at the different exchanges,