The sun., 1906-02-02
Russia,s Financial Straits.

Recent reports from Berlin and Paris
concerning Russia's prospect of secur-
ing large foreign loan at an early date
the budget of the empire for 1908, copy
of which ia now before US. That the
statements made in the budget and in
the accompanying comments are trust
worthy so far as they go may be taken
for granted, as they are meant to be in
spected by foreign fnanciers, who have
their own means of verifying facts and
figures.
According to the estimates here set
forth the excess Of ordinary revenue
over ordinary expenditures in the year
1908 will be e,s00, 900 rubles; or, if we
roughly value the ruble at 80 cents,
s5,0OO,0O0 This will manifestly cover
only small fraction of the estimated
extraordinary expenditure during the
current twelvemonth, to be incurred
partly by subsidies to provinces suffer-
ing from bad harvests, and by loans
to the wrecked petroleum industry Of
Baku, but mainly in connection with the
late eRusso-Japanese war. The aggregate
of the extraordinary outlay for these
purposes, including also certain neces-
sary appropriations for the construction
of railways is, in round numbers, 493,-
600, 900 rubles, or about $3.50 600 900. To
meet this demand large foreign loan is
indispensable, but the sum last named
will not suffice, for two reasons: First,
because the gold reserve of the imperial
bank has been during the last three
months seriously depleted, and must be
replenished quickly if the gold standard
is to be maintained; and secondly, be-
cause more than year will be required
to complete the evacuation of Manchu
ria and the replacing of the Russian Army
on peace footing. 1t is therefore about
$400, 00) 900 that Russia needs.
Where can Russia procure it? Not,
apparently. in Berlin, The report that
had agreed to make large loan turns
out to have been unfounded, All that
the MENpELssoHNs have done has been
to make some temporary advances.
They do not intend, we are now informed
to give the st. Petersburg Government
any further pecunary assistance. In
deed, they would probably find it ex-
tremely difficult to do so if there is
ground for the surprising report that
the aggregate sum already invested by
Germans in Russian securities, public
and private, amounts to 81 $50, 900, ,OOO
1t is therefore to France, a much richer
country than Germany, that the Russian
Minister Of Finance, Mr.. j. SH1PoFF,
must turn for aid, though it is possible
that if French financiers should pro-
nounce themselves satisfied with Rus
eias fiscal conditions, present and pro-
spective, they might secure to a certain
extent the cooperation of British and
American banks.
What change in the state of things in
Russia would afford in the eyes of French
fnanciers satisfactory basis Cor an
other large loan? According to the
latest news from Paris the assent of
French bankers to Russa's request for
financial help depends upon the prompti-
tude and thoroughness of the Cars
execution OF the promised internal re-
forms. 1t is pronounced essential not
only that the projected State Duma
should meet speedily, but that it should
be truly representative body and be
invested with control Of the nations
finances. If an assembly thus qualified
to bind the Russian people should pro-
ceed formally to recognize all the ex-
ternal debts contracted by Russia up to
date and should then authorize the pro-
posed additional loan, the French fnan-
ciers would undertake, We are told, TO
furnish s40O, 100000 at the issue price of
90 and interest at per cent
There is no doubt that France speaks
to Russia with the authority Of a pay
master. When the French bankers say