The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1904-09-14
THE RUSSIAN LOAN.

The announcement that Russia is negotiating with
ca,,nan bankers for a loan of $250000,00o, raises
several interesting questions. Why should kussia
he now confronted with the necessity of raising Sc
large a sum as $250,000000 from the outside mar
ket when it was only few months ago that over
Sl5OOO0.O00 was borrowed in France. The answer
to this question is found not in the enormous cost TO
Russia Of the war it is now wagng but in the enor-
nous volume of its national debt and the extent 10
which this debt is held abroad
The national debt of Russia is more widely dlt-
fused than is the debt of any other nation II IS
approximately 6629,0OO000 rubles or roughly,
$4,000 100000 Most Of this debt is in the form OF
4 per cent loans. In addition, under the policy of
NJ. de Witte Russia has guaranteed the bonds OF
various railroads, and the mortgage bonds OF land
credit institutions The amount OF these guarantees
is somewhat less than $1000O0O,0OO. Ii this IS
counted in the debt it aggregates $43OO,O0O,ooo.
This debt. considering the resources OF Russia, does
not appear unduly large 1t is about the size of the
national debt of Great Britain and considerably
smaller than that of France.
The national debts of Great Britain and France
however, are held largely by home investors The
national debt of Russia the other hand, is widely
diffused. 1t is perfectly safe to say that OF the
$4,000 100000 national debt Of Russia at least $2,
5O0.O0O,OOO is held abroad OF this amount about
81 500 100000 is held in France, perhaps $5OOOOO,-
600 in Germany while the rest is scattered IN other
European markets with trife of about $20,00O0O0
in the United States.
On So, 100000 900 at an average interest rate OF
per cent the annual interest requirements would
amount to $100,000000 Russia has to provide for
the payment of this amount of interest to foreigners
every year. At the opening of the war Russia had
a foreign balance most of which was deposited in
Paris and London, amounting to $S5,690OOO. Out
of this sum Russia had to meet its foreign interest
payments as well as pay for the war supplies which
it purchased mainly from outside markets. The re-
suit was that by the opening week in April the for
egn balance had shrunk to $37 100000 This was
only little more than enough to meet the next quar-
terly interest payments which amounted to $250OO,-
600 The Russian government could have replen-
ished its foreign balances by exporting gold from
It's supply at st. Petersburg but preferred to bor
row money ABROAD anu loaH Ior lhoIe thdh Pl'o,-
100000 was foated in Paris.
This loan largely increased Russia's balances
abroad. Since then one quarterly interest payment
has fallen due and been paid, and another quarterly
interest payment will shortly fall due In addition
large purchases Of war supplies have been made.
The result is that Russia foreign balance has again
begun to dwinde. Russia does not desire to export
gold to replenish its foreign balances as its gold
supply is needed as reserve against its note issues
which have largely increased since the opening of the
war. The result is that Russia has opened negotia-
tions in Germany for loan of 25OOOO,OO0. Unless
the war proves to be most prolonged one Russia
should not be again forced to borrow abroad to re-
plenish its foreign balances.