The daily morning journal and courier., 1906-01-12
WAR COST RUSSIA OVER
 A BILLION OF DOLLARS
BUDGET STATEMENT REVEALS THE AMOUNT FOR THE
 FIRST TIME.

The Exact Figure $1,O5O, ,OOO, ,0OO-GOv-
 enrment Must Raise $24O,5OO,OOO by
 Credit Operations to Balance the Es-
 timatcd Receipts and Expenditures
 Count Witte Openly Admits in q
 Statement to the Czar that the Press
 ent Financial Condition of the Elm
 pire is None too Favorable.
 St. Petersburg, Jan. 1.-The budget statement for 1905, which was issued to- night, shows that it will be necessary to raise $24O, 100000 by credit opera tions to balance the estimated re- ceipts and expenditures. The latter in- clude $2O2, 100000 for the liquidation of the expenses of the Russo-Japanese war, the repatriation of the troops in the Far East and the reduction of the army to a peace footing. For the first time the total cost of the war, $1,05O, OOO,O0O, is revealed.
 The credit operations to balance the budget include the recent authorization of OO,OOO,OOO in treasury bonds, $75,- 00O,0OO of which have already been used to renew the Mendelsohn loan and the credit of S160, 100000, which former Fiji nance Minister Kokovsoff is now nego- tiating ill Paris. The primary objects of the latter, the proceeds of which will be retained in Paris, is understood by the Associated Press to be the mainte- nance of the stability of the rouble.
 The budget statement does not dodge the prevailing conditions in Russia. It is pointed out specifically that the re- ceipts from nearly all sources have been sealed down, and. moreover, it is stated that if the disorders in the in- terior do not cease there may be some branches of revenue on which it will be impossible to count.
 The budget also deals frankly with the heavy drain on the gold reserve of the state bank balances abroad, which have fallen $152,5OOO00 in the three mont..s preceding January 1.
 During the last ten days of the year the gold reserve was reduced by $3O,- 5O0,OO0, while the. issue of paper cur rency was increased by $20,000,OOO
 The increase of paper issued, the statement says, was made by the bank in an effort to come to the rescue of the business interests, which were al- most paralyzed, and which had been re- fused loans by private banks, owing to the panicky condition, and to the re- duction of the foreign credits of houses with connections abroad. The state- ment has this to say of the monetary situation:
 Such a state of affairs could not fai to inspire disquieture, for our monetary system was menaced simultaneously by the dirninution of the stock of gold, re sulting from withdrawals which the bank was powerless to prevent, and by the exodus of capital abroad and the increase of paper circulation, the latter being due to the necessities of the in. terior It is permitted, however, tC hope, thanks to the restoration of calm that the causes which influenced the withdrawals of gold will cease and that coin will soon begin to return to thu bank. The amelioration of the situa. tion which is anticipated should soor restore something like normal condi. tions in the interior, revlvify credit ant thus diminish the demand for money for business affairs"
 The statement concludes with the fol. lowing addressed to the emperor whicH was evidently penned by Count Witte
 ''These facts and figures submitted tC your majesty show that the present sit uaJtion of Russian finances is none too favorable. This state of things is tht result of the war and of the troubles which followed. These troubles are o a temporary character, and it is fair tC assume that they will be ameliorated 1T the future. Periods of economic depres sion, history provides, are ordinarily followed by periods of activity ant prosperity Economic agitation multi plies the energy of the ablest and mos enterprising elements of the nation anC arouses the laboring masses to perse were in their work which cannot fail tC hetter the industrial situation of thc country and likewise the finances of tht state Conditions favorable for the ap nearance of a period of fruitful worl mrst be perceived even amidst thC gloom of the present hour. With eacF day the popular conscience must b, awakened more and more to a realiza tton of the true material needs of th, fatherland.
 "The awakening of the social force has q. sure guarantee in the indepen dance granted to the Russian nation b! your august will and in the equalit! hefore the law which has been assured flo all your majestys subjects