'J 5 '^ <^3 ■^■vi-f RUSSIA : ITS TRADE AND COMMERCE RUSSIA : ITS 1 ^ ,^ AND COMMERGfi EDITED BY (JV a JAtlJ^^Cnr"^^ ) ARTHUR RAFFALOVICH ^ _ Russian Privy Councillor Fellow of the Royal Statistical Society President of the Russian Chamber of Commerce of Paris London P. S. KING & SON, LTD. ORCHARD HOUSE, WESTMINSTER 1Q18 PREFATORY NOTE During the visit of a Russian Mission to London in the early da^^s of the war, a conversation took place in the ofhce of Mr. Arthur King, that sanctum of exact and up-to-date information on pohtical and economic questions, between him and the editor of the present work. It was recognized that there were in England a large number of books on Russia, some of them of the highest value, such as the classic work of Sir Mackenzie Wallace,^ and that, in connexion with the several international exhibitions held in England and the United States, publications describing Russia from a commercial, industrial and financial point of view had been issued in the English language by the Russian ^ Wallace, Sir Mackenzie : Russia. l:^e\\' and enlarged edition, 2 vols., 1912. Mention should be made here of a veritable economic encyclopaedia on Russia, prepared by the Department of Trade and Manufactures, Ministry of Finance, Petrograd, for the World's Columbian Exposition at Chicago in 1893, and issued in 5 vols., under the title of The Industries of Russia. The fifth volume of this series was written by the great Russian Geographer, P. P. Semenov, and bore the title Siberia and the Great Siberian Railway. Also La Russie a la fin du ige siecle, \witten in French, and published in connexion with the Paris Universal Exhibition in 1900 ; and an Enghsh translation of the work edited by M. V. I. Kovalevsky, Director of the Depart- ment of Trade and Manufactures at Petrograd, published in connexion with the Glasgow International Exhibition, 190 1. V vi PREFATORY NOTE Ministry of Finance, which at that time inchided the Department of Trade and Manufactures, now a separate Ministry. As they looked over the shelves of a collection of books on contemporary Russia, they agreed that there was need for a new work giving a reliable description of Russia, its agriculture, forests and mines, and stating the resources in raw material that it offers to home trade and what it is capable of putting upon the world's markets. In the sug- gested new work it was considered useful to explain concisely the Russian organization of credit, mone- tary system and financial administration. Their attention was turned to Russia as a former customer of Great Britain, and without going back as far as the sixteenth century and Chancellor's voyage, it was easy to acknowledge all that Russia owed to England as her industrial and commercial teacher and as the purchaser of her raw materials, and to show the advantages which would accrue to the two great Empires, between whom there is no cause of conflict, by more intimate relations founded upon a deeper mutual knowledge. Frorri this conversation between Mr. King and the Editor the idea of a book on Russia originated — an idea warmly welcomed by those competent to ensure its being carried out. The compilation was entrusted to M. Krivelsky, chief editor of the periodical publi- cations of the Russian Ministry of Finance, to whom we owe the collection of articles written by distin- guished Russian specialists on the various economic questions discussed in this volume. This book was ready at the beginning of 191 7, PREFATORY NOTE vii as far as the correcting of proofs, etc. The fateful events of March, 1917, however, delayed comple- tion. Then came the Maximalist coup-de-main with its all-destroying influence, which dehvered to the enemy a Russia degraded, enslaved, parcelled out, bloodstained by civil warfare, and from which security of hfe and property have temporarily disappeared. Nevertheless, a country like Russia cannot exist outside all that represents law and order and respect for public and private contracts. Destructive anarchy destroys itself. Whatever may be the later disposition of Russia, whether centrifugal or centripetal influences will prevail, the partition of its territories cannot be pursued to isolation, or to the restoration of Chinese walls between the different districts — there are too many economic ties for that. With this idea, and considering the mass of information contained in the following pages, the publisher and the editor believe that it will be of interest to let this volume, which the march of events has somewhat outstripped, take its place in the Hbrary of those who seek precise data on the natural wealth of European nations in the first fifteen years of the twentieth century. ARTHUR RAFFALOVICH. Paris, May, 1918. i CONTENTS CHAP. I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII Brief Geographical Sketch . Agriculture ..... Poultry Farming — Fodder Grass . Cultivation of Cotton, Flax, Hemp, Sugar, Beet, Tobacco, Wine, Hops, Fruit Forestry ..... Factories and Workshops Mining and Metallurgy Machine Industry .... Fisheries ..... Internal Transport, Russian Railways, and Inland Waterways Posts, Telegraphs, and Telephones Internal Trade of Russia Foreign Trade of Russia Public Finance Money and Credit Joint Stock Companies . The Drink Question in Russia Canals page I 43 54 88 105 165 200 217 230 261 268 298 329 352 418 429 IX RUSSIA : ITS TRADE AND COMMERCE CHAPTER I Brief Geographical Sketch Area — Boundaries — Rivers — Mountains — Geological Structure — Climate — Vegetation — Fauna — Population — Administrative Divisions. The Russian Empire occupies an area exceeding 22,000,000 square kilometres (8| million English miles), of which 5,740,000 square kilometres (2,200,000 English miles) form the European possessions of Russia (excluding the Caucasus) and 16,500,000 square kilometres (6,300,000 English miles) the Asiatic possessions and the Caucasus The territory of Russia occupies one-sixth of the total continental area of the globe, nearly two-thirds of the area of Europe and a third of the area of Asia. The length of the frontier line embracing the total area of the Empire is 70,000 kilometres (44,000 English miles), roughly divided into 50,000 kilometres (31,000 English miles) of maritime boundary and rather more than 20,000 kilometres (13,000 English miles) of land boundary. Of the maritime boundary 27,000 kilometres (17,000 English miles) belong to the eternally ice-bound Arctic Ocean, which washes the entire northern coast of Russia. Generally speaking, this ocean is accessible for navigation only on the coast-line of European Russia, where the basin of the White Sea cuts deeply into the land. This basin is open during the entire year, though the ice-flov.s which form in the estuary during the months of February and April prevent navigation by large ocean steamers. On the other hand, at the extreme west, where, through the influence of 1 B 2 RUSSIA: ITS TRADE AND COMMERCE. the Gulf Stream, the sea never freezes, the Murman coast, with its numerous natural harbours, affords Russia an outlet to the open sea. During the war a railway has been built from Petrograd in this direction. To the east the coast-line skirts the two polar seas — Bering and Okhotsk — and also for a short distance the Japan Sea, frozen only for about two weeks of the year, and on which lies Vladivostok, Russia's chief port in the Far East. Russia's maritime boundaries in Western Europe are more important. One of these, situated in the north-west of European Russia, belongs also to the Mediterranean basin of the Baltic Sea which cuts pretty deeply into the Russian con- tinent with the two gulfs — Riga and Finland — while the Gulf of Bothnia separates the Russian Empire from the Scandinavian peninsula. With its length of 6,750 kilo- metres, the Baltic coast-line has always been of very great importance for the international relations of Russia, affect- ing principally the ports of Petrograd, Riga, Libau and Windau. But this line has two substantial defects : egress from the Baltic can easily be stopped, and a large part of the coastal waters are covered with ice, at Petrograd for instance, for more than five months. Libau only can be regarded as practically an ice-free port. The Black Sea, which is contiguous to Russia in the south on a coast-line of 4,400 kilometres, freezes during part of the year, and only in that portion of it which most deeply penetrates inland, viz. the Sea of Azov and the Dniester estuary. Among a series of ice-free or almost ice-free ports in this region, Odessa occupies the chief place. Nevertheless, the Black Sea has a very ap- preciable drawback : it represents an almost entirely closed basin connected with European seas only by narrow straits which do not belong to Russia. Finally, the closed Caspian Sea forms part of the Persian boundary, but owing to the absence of the Persian flag it may be regarded wholly as a Russian sea. Forty-hve per cent, of the land boundaries of Russia — BRIEF GEOGRAPHICAL SKETCH. 3 i.e. 9,000 kilometres — are occupied by the Asiatic frontier between Russia and China and Mongolia ; this is the longest of all the international boundaries of the globe. The rest of the land frontier in Asia separates Russia from Afghanis- tan, Persia and Asiatic Turkey. Russia's West European land frontier which separates her from Prussia, Austria and Rumania is intersected, not only by the water routes of the Vistula and the Niemen, with which the entire upper Dnieper water system is con- nected, but also by railways of great international value. The shortest land frontier of Russia is that with the Scan- dinavian States, though in the present war these States play an exceedingly important role in Russia's foreign trade. A large part of the area of Russia is covered by plains which are among the most extensive in the world. They stretch from the Arctic Ocean, although in the southern regions of the Empire there are many lofty and gigantic mountain ranges. On the south-eastern frontier of European Russia, between the Black and Caspian Seas, the Caucasian Range, the highest in Europe, extends as an unbroken ridge for 1,100 versts from W.N.W. to E.S.E. Its crest for a length of 700 kilometres maintains an altitude of more than 3,000 metres, while individual peaks (Elburz, Dykh-Tau, Kazbek) attain a height of 5,630 to 5,045 metres, and feed extensive glaciers. The entire Russian Caucasus, which from its hi^ory and conformation belongs to Asia, is primarily a mountainous country, the principal ranges of which are linked not only with the Caucasus but with the Turkish Antitaurus mountains and the Persian Elborus. The most prominent of the trans-Caucasian mountain groups is the famous conical, volcanic Ararat, rising, far beyond the limits of perpetual snow, to a height of 5,155 metres. The Crimean Yaila, which separates the picturesque southern shore of the Crimea from its steppes, serves as a 'continuation of the Caucasian range beyond the Kertch Straits. Between Europe and Asia, rises the Ural Range, not 4 RUSSIA: ITS TRADE AND COMMERCE. very lofty, but abounding in mineral wealth. From the Arctic Ocean to the Aralo-Caspian depression in which its ramifications are lost, this range covers 1,500 kilometres. To the north it branches off into tWo chains, the Ural proper and Pai-khoi ; to the south into three almost parallel chains slightly diverging from one another. With a maximum altitude of from 1,536 to 1,688 metres (Iremel 1,536, Konchakovsky Stone 1,560, and Tol-pos 1,688 metres), the Urals do not represent any sharp dividing line either for climate, flora or fauna. All the remaining area of European Russia is represented by the great Euro-Russian plain, the highest points of which rarely exceed 350 metres, with an average height of 168 metres. This Euro-Russian plain is richly watered by the rivers which fall into four distinct maritime basins. Into the Caspian Sea falls the most important of European rivers, the Volga. It is 3,200 kilometres long and has a basin of 1,480,000 square kilometres. The Volga serves as the principal navigable artery of European Russia, and in this respect is remarkable for the fact that navigation proceeds for the most part up-stream, and, with the help of the Marinsk system of canals finds a convenient outlet to the sea at the mouth of the Neva. The Ural, which is the longest except one of the European Russian rivers, falls into the Caspian basin, but though 2,300 kilometres long, with a basin of 83,300 square kilometres, it is far more valuable for fishing than for naviga- tion. To the Black Sea basin belongs the Danube, only the delta and lower stream of which enter Russia. To the same basin belongs the third European Russian river, the Dnieper, which, with a length of 1,700 kilometres, possesses a spacious basin of 530,000 square kilometres. Cut off by the Dniester rapids from convenient communication with the Black Sea, the Dniester finds a more suitable outlet for navigation in the Baltic Sea by means of the system of canals connecting it with the Vistula and Niemen, two important Baltic rivers, the mouths of which are situated in Prussian terri- tory. The Don, with a length of 1,600 kilometres, falls into BRIEF GEOGRAPHICAL SKETCH. 5 the inland Sea of Azov and its navigable importance is very limited. Of the Baltic basin rivers, the Western Dvina, belonging wholly to Russia, with a length of 760 kilometres and a basin of less than 83,000 square kilometres, is of some import- ance to navigation, but incomparably less than the Neva, whose spacious basin occupies 183,000 square kilometres and comprises the extensive Lakes of Ladoga and Onega. Flowing out of these lakes, the Neva carries to the Baltic the entire navigation of the Volga system. Two very great water arteries of North Russia fall into the Arctic Ocean. Of these the Northern Dvina, with a length of 1,000 kilometres, has a basin of about 430,000 square kilometres, and with its tributaries served, until the recent construction of the railway to Archangel and Kotlas, as the principal commercial route of the Far North. The Pechora, which falls into the Arctic Ocean in the north-east corner of the Euro-Russian plain, with a length of 1,500 kilometres and a basin of 276,000 kilometres, pos- sesses only local importance for communication in an almost uninhabited region for which it affords an outlet only to the Polar Sea. Asiatic Russia also is bounded on the south and east by lofty mountain ranges. The central position is occupied by the huge system of the Altai-Sayan, the most northerly of the four ranges which have a latitudinal direction and form the backbone of the Asiatic Continent — ^the Altai- Sayan, Tien-shan, Kuen-lun and Himalayas. Over a great part of its length the Altai-Sayan system serves as a bound- ary between Russia, China and Mongolia. It begins in the west with the massive Altai, which is ten times as large as Switzerland. These mountains consist of many ridges which are divided by longitudinal and occasionally by transversal valleys. The ridges separate fanwise, so that the most south-westerly of them in Russian territory runs on a parallel ; the most north-easterly— the Kuznetsk Alatau — stretches almost on the meridian ; and the intermediate 6 RUSSIA: ITS TRADE AND COMMERCE. one— the Salairsk — rich in minerals, proceeds from south- east to north-west. Lake Teletskoe also has a meridional direction. In the pictm-esqueness of its steep shores this lake, although much larger, recalls that of the Four Cantons in Switzerland. The Altai Mountains attain their greatest altitude, 3,350 m.etres, in the Siberian Mont Blanc, Mt. Bielukha, which feeds the wide glaciers of the mountain group of the Katuna Pillars. East of the Altai and in unbroken connexion with the latter, between the meridians of the Teletskoe Lake and the southern extremity of Baikal, stretches the Sayan chain proper, forming over all this distance not only the boundary of Russia and Mongoha but also the outskirts of mountainous Asia. The Sayan range, for a considerable part of its length, consists of two parallel mountain chains, between which lies a very wide valley, the so-called Uriankhai region, strongly gravitating towards Russia and with a large Russian population. To the Sayan system belongs the pri-Baikal elevation with its wide and deep Baikal valley, 780 metres below sea level, and containing some of the greatest fresh water lakes. Mt. Munko-Sardyk, the highest point of the Sayan range, rises beyond the snow line to an altitude of 3,500 metres. East of the meridian of Baikal, the Altai-Sayan system, changing its direction to the north-east, takes the name of the Yablonovy or Stanovoi Range. Beyond the highest point of this range — Mt. Chokondo (2,450 metres) — the Stanovoi Range splits up and forms the trans-Baikal slopes and then extends in the shape of an almost unbroken crest for a distance of about 3,000 versts, serving as a watershed between rivers which flow, on the one hand, into the Sea of Okhotsk and generally into the Pacific, and on the other into the Arctic Ocean. The south-eastern slopes of the range descend rapidly and steeply to the Sea of Okhotsk, while the north-western slopes spread to the Aldan table- land. The summits of the Stanovoi range, altliough higher than the limits of forest vegetation, barely attain a maxi- mum altitude of 2,000 metres and nowhere exceed the snow BRIEF GEOGRAPHICAL SKETCH. 7 line. Opposite Okhotsk, from the other side of the Stanovoi range, the Verkhoyansk range branches off in a north- westerly direction to the Lena delta. East of the Stanovoi range two meridional ranges are deserving of mention. Along the Kamchatka peninsula lies a lofty range forming the backbone of the entire penin- sula. Both on the crest and the eastern slope of this range there are as many as thirty-eight partly extinct and partly active volcanoes, among which the Ichinsk attains a height of 5,160 metres, and the second in height, the Kliuchevsk, 4,810 metres, i.e. higher than Mt. Blanc. In the Utsuri region, along the coast of the Japan Sea, stretches the Sikhota-Alin range, a wide strip covered with rich forest vegetation ; its highest point is 1,500 metres. The western part of the Tienshan range penetrates the confines of Russia, south-west of the Altai-Sayan system. The space between these two magnificent mountain ranges is occupied by comparatively small groups of mountains, with intervening plains ; these have long served as gateways through which the great national migrations have travelled from mountainous Asia into the Kirghiz steppes, the Aralo- Caspian valley, and so to Europe. At the point at which the Tienshan range enters Russia, there is an impressive mountain group consisting of some twenty peaks covered with an unbroken layer of snow, among which towers in solitary splendour the loftiest mountain of the Russian Empire, Khan-Tengri, which attains the colossal height of 7,500 metres. This mountain group, the Tengri-taga, or Mus-taga, feeds numerous glaciers and rivers which flow down from its northern slopes and discharge into the locked lake basins of Central Asia ; such are Balkhash (Hi), Issyk-Kul the Aral Sea (Syr-Daria) and Lob-Nor (Sary-Dzhas). In the wide, longitudinal valley between Tienshan and the Trans-Ilian Alatau, lies Issyk-Kul, one of the most exquisite of mountain lakes, situated at a height of 1,615 metres. Tienshan, at its western extremity, displays a powerful inchnation to break up, partly into parallel, partly into fan-shaped ridges, penetrating far into the Turanian plain. 8 RUSSIA: ITS TRADE AND COMMERCE. South of the most southerly of the Tienshan ramifications, the Altai range, at the extreme west of Kuen-lun, invades Russian Turkestan ; its branches, meeting here the Tienshan Range, enclose the great plain of Chinese Turkestan and separate it from the Russian, so that communication between Chinese and Russian Turkestan is only by means of difficult paths over high mountain passes. At the western end of the Kuen-lun system, where it meets the branches of the Himalayas, one of the highest mountains of the Old World is situated. This is the celebrated Pamir (the Roof of the World is the Indian name), part of which belongs to Russia. The range, which first passes under the name of the Hindu Rush along the frontier of Afghanistan and Russian Bokhara, and afterwards under the name of Kopet-Dag, separates the Persian province of Khorasan from the Russian trans-Caspian province, serves as an extension of the Kuen- lun elevation, to the west of the Pamirs. Kopet-Dag, with a maximum height of 2,700 metres, nowhere reaches the snowline and its passes are easily traversed. To the west and north-west of Asiatic Russia great plains extend that are very little inferior to those of Euro- Russia, and adjoining these is the Aral-Caspian depression, a considerable portion of which lies below sea level. It contains two basins — the Caspian and Aral Seas — perhaps the largest lake basins of the world, and also the smaller, but very important Lake Balkhash. The Caspian Sea, lying 25I metres below sea level, and gradually drying up, is of vast importance to Russia, not merely as an internal basin, connecting the mouth of the Volga with the coast of the Caucasus, Persia and Turkestan, but also on account of the notable wealth of its fisheries in so comparatively limited an area. Into the Aral basin flow two rivers which have no ocean communication. The Amu-Daria (ancient Ox) and Syr-Daria (Yaksart) which rise in the Central Asian mountains. They do not possess much importance for navigation, but they fertilize the country, supplying it with material for artificial irrigation. Between the Caspian and Aral Seas, the small tableland Ust-Urta rises like an island out of the ocean. For the BRIEF GEOGEAPHICAL SKETCH. 9 most part, the Aral-Caspian valley is covered with sandy deserts, which closely resemble, not only in their climatic conditions and physical character, but also in their flora and fauna, the deserts of Arabia and the interior of Northern Africa. Wlierever the soil is firmer and the rivers afford any opportunities of irrigation, fertile oases appear in this desert and some well-watered country immediately at the foot of the mountains. The Kirgiz steppes, to the north- east of the Aral-Caspian valley, are no longer an absolute depression, but are diversified with low groups of mountains and ridges of granite, porphyry and other exuded rocks, and are really only called steppes on account of the almost entire absence of ligneous vegetation. East of the Ural Range extends the illimitable West Siberian plain. Its level scarcely exceeds 100 to 150 metres and no elevation whatever is met with in it. The West Siberian depression is included in the colossal basin of the Obi, and in this basin two vast component branches of the Obi system — the Obi proper and the Irtysh flow together. Whichever one of these rivers be deemed the main branch (accepting as its course either the Katun or the Black Irtysh) v/e get a length of 5,200 metres and a total area for the basin of more than 3,300,000 square kilometres. The well- watered Obi system is very important for navigation, because it represents a waterway which, although it forms a bend inclining to the north, is nevertheless unbroken from Tiumen, not only to Tobolsk but to Tomsk. The water network of the Obi basin communicates moreover with the Yenisei by a system of artificial canals. Outside the limits of the Obi system, the plain reaches the stream of the Yenisei, but beyond this there are low hills, spreading widely along the basins of the right tribu- taries of the Yenisei — the Angara, Podkamennaya and Nizhnaya Tunguska. These ridges are renowned for their wealth of placer gold. The river Yenisei, like the Obi, consists of twin branches — the Angara, which forms the outflow of the great Lake Baikal, and the Yenisei proper. The length of this river (taking either the upper Angara or Selenga as its source) is 5,100 kilometres ; its basin occupies 10 RUSSIA: ITS TRADE AND COMMERCE. an area of 3,000,000 square kilometres, but the upper portion of the basin is outside the boundaries of Russia. The navigable network of the Yenisei possesses almost as many great conveniences as the stream of the Obi, since nowadays in the autumn season vessels sailing via the Matochkin Shar on Novaj^a Zemlya or the Kara Gates, can reach the mouth of the Yenisei, where they take on freight previously prepared for them. The third great river of Siberia is the Lena, falling into the Arctic Ocean. It is 4,600 kilometres long and has a basin of 2,370,000 square kilometres. It also consists of two large branches — the Lena proper and the Allana, which branches in conjunction represent a very long navigable line ; but its mouth which, vmlike the Yenisei and Obi, forms a delta and not a gulf, is still more blocked with ice and inconvenient for maritime traihc than the mouths of the Obi and Yenisei. The fourth great Siberian river, the Amur, takes its origin beyond the Stanovoi Range and belongs to the basin of the Pacific Ocean. Like the other Siberian rivers the Amur consists of two almost equal branches, the Amur proper, which with its upper rivers, the Shilka and Argun, belongs to the Russian Trans-Baikal, and the Sungari, an exclusively Manchurian branch. With a length of 5,000 kilometres the Amur occupies a spacious basin, the greater part of which belongs to Russia. Unfortunately the Amur, like the other gigantic rivers of Siberia, does not possess a convenient outlet to the sea, since its mouth, which inclines far to the north (as much as 53° north latitude), falls into the forbidding Sea of Okhotsk, which is separated from the Japan Sea by the shallow Tatar Straits. The Amur, with its Sungari branch and tributary, the Ussuri, forms a valuable navigable network for Russia's Far East, being connected with Vladivostok by railway. The geological structure of the Russian Empire is very diversified. The entire Euro-Russian plain, in a geological sense, represents a dish-shaped valley, the edge of which is raised only on the border ranges, while the middle is filled for almost its entire length with horizontal layers of pre- BRIEF GEOGRAPHICAL SKETCH. il cipitate formation, stratified one upon the other, beginning from the most ancient, the Cambrian and Silurian, to the tertiary and newest post -tertiary strata. Protoplastic crystalline rocks (gneiss and granite) pene- trate the surface of the Euro-Russian plain in the north- west, in Finland, Russian Lapland, and part of the Olonetz Government, and to the south, in the granite zone which stretches from the Carpathian Mountains to the Donetz ridge and is intersected by the Dnieper at the celebrated Dnieper Rapids. There is considerable variety in the soils of the Euro- Russian plain, but they are principally characterized by the "black earth," so distinctive for its high fertility. Black earth soil girdles the south-eastern half of the Euro- Russian plain with a very wide belt which extends from the borders of Galicia and Rumania to the Southern Urals and comprises a large part of the South-western, Novo- Rossiisk, Little Russian, and Volga provinces and the southern portion of the Ural province. The climate of the northern regions, more especially of north-east Russia and Siberia, is very severe. Near Verkhoyansk in the Yakutsk province, an extreme of cold is reached, with a mean annual temperature of minus 17° and a mean temperature for January of minus 50°. The climate of the Crimea is mild, especially on its southern coast, where, beneath the protection of the mountains, there is hardly any winter. Rains fall here, principally in the winter and early spring, as on the Mediterranean coast. The Trans-Caucasus has an even warmer climate ; part of this region, the Colchis of the ancients, in point of climate greatly resembles the Genoese Riviera. Although the vegetation of the Russian Empire varies largely on account of the great expanse and consequent climatic variations, over extensive areas it is exceedingly uniform. Russia possesses a rich and varied fauna composed of very heterogeneous elements. It will suffice to remind the reader that it comprises, on the one hand, the waiius, Polar bear and reindeer, and on the other the tiger, 12 RUSSIA: ITS TRADE AND COMMERCE. leopard, hyena, bear (Mellivora), ibis, etc. Russia belongs to the four zoogeographical subdivisions of the pale-arctic domain : Euro-Siberian, Mediterranean-maritime, central Asian, and Sino-Himalayan, of which the latter also may be regarded as independent, i.e. a first-class zoogeographical domain, under the style of pale-arctic ; it must also be recognized that the extreme north-east of Siberia with Kamchatka, as regards fauna, constitutes a clearly-marked transition to the non-arctic domain of North America. The inland seas of Russia are not distinguished by any great variety of species, but their abundant supply of fish gives them great industrial importance. In the Baltic, owing to the large admixture of fresh water, the fauna shows a great poverty of type and contains nothing dis- tinctive ; in the gulfs especially the impoverished fauna of the North Sea, mixed with fresh-water forms, is found. The considerable depths of the Black Sea (more than 100 fathoms) are entirely devoid of organic life in conse- quence of fermentation of sulphuretted hydrogen — a catastrophe caused during the cutting of the Bosphorus. The modern fauna of this basin is composed of two elements : (i) forms which have remained intact since the end of the tertiary period, when the Black Sea was isolated from the Mediterranean and formed one basin with the Caspian and Aral Seas (the Sarmatian Sea), and later, an independent basin largely diluted with fresh water ; (2) the very im- poverished fauna of the Mediterranean which has penetrated hither since the formation of the Bosphorus. The Caspian Sea is a remnant of the Sarmatian basin, and forms of tertiary origin predominate in its fauna ; the latter at the same time present a palpable affinity with the Arctic Ocean, which argues in favour of a former geological, if not direct, connexion between these basins. The Aral Sea is a remnant of the same Sarmatian basin, not long separated from the Caspian, as is clearly seen from its fauna, which is even poorer than that of the Caspian. In the latter incidentally the presence of the seal {Phoca caspia) is very characteristic ; seals also breed in the inland waters BRIEF GEOGRAPHICAL SKETCH. 13 of Russia and in the Baltic {Phoca viUdina), Lake Ladoga (Phoca annellata and apparently only accidentally Phoca vitulina), and also in Lake Baikal {Phoca viUdina var). Naturally, with its numerous great rivers, Russia is very rich in fresh-water fish. Thus in European Russia (excluding the Caucasus) we find as many as ninety species merely of fresh-water fish, very unevenly distributed. The rivers of individual basins are characterized by species of fish which are either exclusively inherent to the said basin or predominate therein, according to the history of these basins. Thus the ichthyological fauna of the rivers falling into the Black and Caspian Seas have much in common between them, which is corroborated by the recent direct connexion of these basins. On the contrary, Lake Balkhash, with the rivers falling into it, among its ichthyological fauna does not possess a single form characteristic of the Aral basin ; the fauna of Lake Balkhash has all the characteristic features of the inland central- Asian basins and approximates rather to the basin of Tarim than of Aral ; whereas the fauna of the river Chu, especially its lower stream, has an Aral-Caspian shade. The basin of Lake Baikal contains a distinctive fauna, which testifies to its great antiquity. The wealth of Russia in sturgeon species is very marked : within her boundaries are encountered all species of the Acipenser (sturgeon), of which in Western Europe there is only one. These species in Russia are distributed as follows : the Baltic, one ; the Ponto-Caspian basin, six ; the waters of Siberia, four, of which two are met with in the rivers which fall into the Arctic Ocean and two in the basin of the Amur ; while in Lake Baikal and its tributaries is found one special variety. Over this illimitable expanse of the Russian Empire, described merely in the most general outline, is distributed a population approximately of 180,000,000. This distribu- tion has proceeded extremely unevenly, depending not only upon physical and climatic conditions, but also upon the entire course of historical development of the Russian tribe which is predominant in this population. 14 RUSSIA: ITS TRADE AND COMMERCE. Russia is inhabited by a multitude of tribes — Russians, Turco-Tatars, Poles, Finns, Jews, Lithuanians, Germans, Kartvels (?), Gortsi (?), Armenians, Mongols. Russians to the number of 114,000,000 constitute two- thirds of the population, while in individual geographical portions they form the largest percentage ; in West Siberia (887 per cent.) ; in European Russia proper (80 per cent.) ; in East Siberia (53 per cent.) ; they are in a minority in Central Asia (8-9 per cent.), the pri- Vistula region (Kingdom of Poland), 67 per cent ; and Finland (-2 per cent.). After the Russians come the Turco-Tatar tribes (about 18,500,000), constituting in all io-6 per cent, of the total population of the Empire. The Turco-Tatars are chiefly concentrated in the Central- Asian provinces ; here (in Turkestan and the Steppes provinces) dwell about nine milhon Turco-Tatars, or half their entire population in Russia ; after that they are most numerous in European Russia — seven millions — and in the Caucasus — more than two millions. After the Tatars come the Poles (about eleven millions), constituting 5-8 per cent, of the total population of the Empire. They dwell almost exclusively in European Russia, where they form about 7-5 per cent, of the popula- tion, and especially in the Kingdom of Poland, where they number nine millions, constituting 71 '8 of the total popula- tion. Poles are also encountered in almost all the govern- ments of European Russia, but in very inconsiderable numbers, only the governments of Grodno, Vilna, Kovno, and Volhynia possessing upwards of 5 per cent, of Poles. After the Poles come the Finns, who inhabit the north of European Russia and West Siberia. The Finns number almost eight millions and they form 4 '5 per cent, of the total population. Next in order follow the Jews, who number seven millions. In the pri-Vistula region they constitute about 13-5 per cent., and in all Russia about 3-9 per cent, of the population. In West Russia the percentage of Jews is greater than one- tenth, and at the present time they are met with in all parts of Russia. BRIEF GEOGRAPHICAL SKETCH. 15 After the Jews, the Lithuanian-Lettish tribe numbers more than four milhons ; this tribe inhabits exclusively the north-west of European Russia. In distributing the population of Russia (exclusive of Finland) according to classes, we find, to every thousand inhabitants, 771 peasants, 107 burgesses (mieshchanin) , 66 aliens [inorodets), 23 Cossacks, 15 nobles, 5 clergy, 5 honourable citizens. The Russian Empire is divided at the present time into the following administrative governments and provinces : — European Russia Archangel Kostroma Astrakhan Courland Bessarabia Kursk Vilna Lithuania Vitebsk Minsk Vladimir Mogilev Vologda Moscow Volhynia Nizhegorod Voronezh Novgorod Viatka Olonetz Grcdro Orenburg The Don Cossack Orlov Territory Penza Yckaterinosiav Perm Kazan Petrograd Kaluga Podolia Kiev Poltava Kovno Pskov Kingdom of Poland Warsaw Lublin Kalisz Piotrkow Kielce Plock Lomza Finland : Abo-Bjorneborg Kuopio Wasa Nyland Wiborg St. Michel Riazan Sam.ara Saratov Siml:)irsk Smolensk Tauris Tambov Tver Tula Ufa Kharkov Kherson Kholm Chernigov Esthonia Yaroslav Radom Suwalki Siedlice Tawasthus Uleaborg i6 RUSSIA: ITS TRADE AND COMMERCE. Baku Batum Dagestan Yelisavetpol Kars • Amur Yenisei Transbaikal Irkutsk Kamchatka Caucasus Kuban Kutais Suklium Stavropol Tersk Siberia : Primorsk Sakhalin Tobolsk Tomsk Yakutsk Tiflis Chernomor Erivan Zakatali Steppe provinces Akmolinsk Semipalatinsk Turgaisk Ural Turkestan : Samarkand i Suir-Daria i Trans-Caspian Semiriechie | Ferghana | The Russian Empire also includes the vassal Khans of Bokhara and Khiva in Central Asia. CHAPTER II Agriculture By J. J. Pelferoff In the course of the last ten years, Russian agriculture has displayed an active development of those intensive forms which guarantee lasting progress in this branch of industry. Such progress was facilitated to a great degree by the absence ol foreign and domestic complications, thus per- mitting the people to concentrate upon the organization of agriculture, while the harvests of 1909 and 1910, with resulting high prices in the international market, stimulated the realization of such changes. The reforms in land tenure, introduced since 1906, contributed also to the progress. The work demands still further persistence for its com- plete development ; it would therefore be premature to estimate results at the present time. Nevertheless, in individual regions and directions, the alteration in the forms of agriculture has become so evident and has afforded such appreciable successes, that it is possible to form some idea of the scope of the reorganization. Of special importance is the increase in value of foreign exports. In 1895 the exports of agricultural products amounted to 608 million roubles ; in 1905 to 947 million roubles, and in 1913 to 1,500 million roubles. In 1895 the total value of agricultural products amounted to about four milliards of roubles, while in 1913 the corresponding figures were twelve milliards of roubles. So great a progress, even when allowance is made for the natural growth of agricultural labour, constitutes an undoubted proof that agriculture is a far more profitable industry to-day than hitherto. 17 ' C i8 RUSSIA : ITS TRADE AND COMMERCE. The increase in the productivity of field husbandry which only partially depends upon a larger area under tillage, indicates more intensive culture and the increased use of agricultural implements and machinery. The domestic production and the importation of such machinety rose from 40 million roubles in 1906 to 130 million roubles in 1913. The production of mineral fertilizers increased from 13,500,000 poods in 1906 to 32 million poods in 1913. Nevertheless, domestic production cannot keep pace with the agricultural demands, and, in consequence, the imports of artificial fertilizers are also growing, from 9,400,000 poods in 1907 to 30 million poods in 1913. The forward movement in agriculture affects all classes of land-owners, from the large estate to the peasant's small holding. For the peasantry, the realization of this effort at betterment is facilitated by a growing co-operative movement, and the people are availing themselves of corresponding forms of activity for improving the technique of agriculture and organizing the economic and commercial side of life. The number of agricultural societies grew from 1,000 in 1905 to 4,000 in 1913. Up to 1909 there were about 100 agricultural associations organized principally for the joint sale of the products of husbandry, the acquisition of stock, and for the manufacture of agricultural products. In the past three and a half years 703 associations have been formed, while the increase of loan and savings and credit associations has been upon a still larger scale, viz., from 1,680 in 1905 to 8,000 in January, 1913. Together with small peasant organizations, the number of co-operative societies had, at the beginning of 1912, reached 22,000, while in 191 1 alone 4,200 co-operative societies were founded. With the formation of organizations for purely practical purposes, the essential knowledge for a further advance is also accumulating. Students in agricultural education increased from 9,300 in 1907 to 18,000 in 1913, and there are 2,000 graduates per annum. A still wider circle of persons acquire agricultural knowledge outside the schools at special courses and lectures organized for this purpose. AGRICULTURE. 19 In 1910 there were about 32,000 students attending these courses and 296,000 the lectures, while for the past two years the number of both has continued to grow. Government and the Zemstvo have largely come to the help of the movement and, as far as possible, supplement the efforts of the land workers. Measures of land organiza- tion are clearing away the obstacles in the path of progress ; some of the difficulties are being ameliorated by pecuniary aid, or, where there is lack of experience, by demonstration stations. The Government has developed a system of loans from a fund which exists for the purpose and the expansion of credit banks. The borrowers are principally peasants, who utilize the loans from the fund for the exten- sion of grass land, for irrigation, dairying, etc. Moreover, with the object of further extending credit for the agricul- tural industry, the Government proposes to reorganize the Peasants' Land Bank. The increase of productivity has also claimed attention. During the last five years the State has expended about 11 million roubles upon reclamation, irrigation, strengthening of sandy regions and other agrarian improvements. For a country in which the area of unprofitable land greatly exceeds that under tillage, this expenditure is merely the beginning of further disbursements. Up to the present the principal measures have been concentrated only in those localities (such as Turkestan and the Trans-Caucasus) where the rise of inten- sive culture is creating areas suitable for the cultivation of cotton, fruit and vines. The co-operation of the State is also extended to cottage industries which afford the peasant, in localities with a weakly developed manufactur- ing industry, an outlet for the productive utilization of their leisure. In close collaboration with the Zemstvo and other public organizations, the Government is adopting measures for the improvement of the technique of such industries, and there is sufficient data to show that the village handicrafts occupy no fewer than two million workers, with an annual turn-out of commodities amounting to over 500 million roubles. The problem of regulating the legal tenure of land by 20 RUSSIA: ITS TRADE AND COMMERCE. the peasant has demanded extraordinary efforts on the part of the State, but a solution of this problem is absolutely necessary to the success of the agricultural movement and of the small holdings of the peasants, which constitute the nucleus of agricultural Russia. Beginning in 1906, the land organization of the Govern- ment embraces, at the present time, an area of twenty million dessiatinas. By the end of 1913, the organization of more than a million individual agricultural holdings was effected on this area, and an opportunity thus afforded for the introduction of economic improvements formerly inaccessible under the systems of interspersion of allot- ments ^ and communal ownership. Altogether, in five years some 95 million roubles have been spent on land organization, and the staff of local workers, organizers and surveyors has been brought up to twelve thousand. The influence of this re-organized peasant proprietorship upon the general rise of economic productiveness of the country cannot as yet be estimated, but observations show that there is a definite movement towards special cultures and improvement in crop rotations, in stock, methods of manufacture and forms of land utilization. Finally, as the result of the migration of peasants from Euro- pean Russia, beyond the Urals, over a million dessiatinas of land has been set free and rendered available for the population remaining behind, the emigrants' labour being applied in new districts, with natural resources, hitherto untouched. In the remote Taiga (the Siberian Bush) and the waterless steppes such labour has added 20 million dessiatinas to productive agriculture. The State's total expenditure on emigration for the last five years amounts to 118,500,000 roubles. All these facts bear witness to the awakening of the country and the improvement of agricultural life, and it will be useful to consider some of the branches of agriculture in detail. ' When the fields are divided by strips of land belonging to other proprietors. AGRICULTURE. 21 Grain. — The following table shows the crop of .cereals in millions of poods for three quinquennial periods and the last three years, in 72 governments and provinces of the Empire, according to data supplied by the Central Statistical Bureau : — All cereals Wheat Winter rye Years Winter Spring Oats 1896-9 . 190 1-5 . 1906-10 . I9II-I3 . 3,287 3,857 3,988 3,952 224 343 333 324 470 633 713 682 1,219 1,318 1,223 1,195 700 781 849 790 Although the character of the quinquennial periods varies greatly owing to good or bad harvests, for any given period, these figures show considerable alteration in the size of the harvest of individual cereals, the increase being especially great in Spring wheat and oats — two of the principal exported products. Apparently, under the influence of the export demand, this evolution is also the cause of the redistribution of our grain cultures. There is observable an increase of the wheat area in Russia, at the expense of rye. Thus for the same quinquennial and triennial periods, as above, the fluctuations in the areas of culture of these cereals were as follows : — In thousands of dessiatinas Years All cereals Wheat Rye 1896-1900 1901-1905 . . . I906-1910 1911-1913 . . . 75,243 81,851 86,059 92,500 17,904 21,338 24,038 27,020 26,484 27,384 26,758 27,820 22 RUSSIA: ITS TRADE AND COMMERCE. The ratio of these cereals to the total area and crop of all cereals for the same period is as follows : — Years 1896-19OO 19OI-1905 1909-1910 1911-1913 Fluctuations in the export of cereals, reckoning the agricultural year from August i, were : — Agricultural years Million poods 1907-8 1908-9 1909-10 1910-II . 1911-12 1912-13 . 411-5 553-2 837-0 959-8 545-8 895-4 The reduced figure for 1911-12 was due to the bad harvest of 1911, which affected the figures for export of 1911-12 from the point of view of the agricultural year, but is not shown in the export figures for the calendar year. Fluctua- tions in the export of cereals for a more prolonged period are shown in the following figures for export of all cereals since 1900 : — AGRICULTURE. 23 Years I goo igoi 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 Million poods Million poods 418-8 304-7 466-0 344-1 579-1 432-2 650-4 477-6 647-6 495-3 695.7 566-9 588-9 470-5 467-1 428-1 399-6 375-6 760-7 748-3 847-1 746-1 821-1 735-2 548-5 547-1 647-8 589-9 In spite, however, of this absokite increase in cereal exports from Russia, these exports show, year by year, a relative decrease in comparison with home consumption, owing to the direct growth in the demand of the home consumption and demand, to the progressive industrialization of agriculture and to the relative reduction of the agricultural population. The extent of the benefit accruing to Russia's national economy in recent years from foreign utilization of its crops is evident from a comparison of the export prices for Russian grain in later years. This comparison shows that Russia has not only sold abroad an ever increasing quantity of grain, but has sold it at high prices. If the value of the foreign realization of the crop of 1907-11 be reckoned at the prices for 1900, we may conclude that Russia, thanks to the rise of prices, has received 100 to 150 million roubles more than she would have received for the same quantity of exports at the prices of 1900. This rise, of course, affected not only export prices but grain prices generally on the home markets, and is in the highest degree advantageous to Russian agriculture. If we omit several exceptional years, this favourable revolution in the market becomes evident. Calculating the total value of the harvest at average prices and reckon- 24 RUSSIA : ITS TRADE AND COMMERCE. ing the average years 1891-95 at 100, the growth of the harvest and its value for the later quinquennial periods works out as follows : — Years Crop Price per pood Total value of crop 1891-1895 . . . 100 100 100 1896-1900 109 98 106 1901-1905 . . . 129 105 135 I906-1910 129 133 171 1911-1913 . . . 129-4 138 189 Naturally, such successes in the realization of the harvest depend also upon a favourable state of the market ; but there are governmental measures facilitating the regulation of prices, chiefly export prices, with the object of maintain- ing them and preventing a realization detrimental to agri- culturists. These measures are connected, on the one hand, with continual extension of credit to merchants and agri- culturists on a security of grain, and, on the other hand, with the beginnings of the construction of a regular system of grain elevators. The Milling Industry. — It will scarcely be an exaggeration to say that not a single branch of manufacture is so widely spread in Russia as the milling industry. It is met with in all parts of the country. Modern milling technical knowledge, with the application of small, cheap and con- venient motors (kerosene or gas-generated) assists, to a large extent, in the spread of small mills in which grinding is carried on either for the consumption of large estates or for local requirements. The multiplication of mills of this type is the result of the demand for rapid and cheap milling. Russian milling had begun to acquire industrial importance in the first quarter of the nineteenth century, when perfected technical knowledge of the business began to penetrate into Russia ; but the absence of means of communication, the cost of transport and other conditions retarded its development, and only since the 'fifties, owing to the use of French mill-stone rolling machines, cheap fuel, AGRICULTURE. 25 and the development of means of communication, has the industry really begun to grow. Since the building of railways this growth has been rapid ; the market for the sale of flour, once extended, has created a big industry, and the transition to more intensive systems of agriculture has improved the quality of the grain and thus of the flour. A considerable quantity of capital is engaged in the milling industry, as may be seen from the following table (in thousands of roubles) : — 27 undertakings 1910 30 „ 1911 36 ,, 1912 Capital Resgr^g Stock reserve 30,314 35.678 38,190 1.704 1,666 1.959 Depre- ciation 5.378 5,938 8,421 Profits for j Divi- Distri- dend bution 2,260 4,184 4.003 844 1,339 1,241 Profits for distribution amounted to : in 1910, 7"4 per cent, on capital stock; in 1911 to 11*7 per cent., and in 1912 to I0"4 per cent. During the last three or four years, the excellent harvests and the improved home consumption, largely due to the increased purchasing power of the people, have greatly aided the development of both large and small milling industries. Statistical comparison of the quantity of flour carried by the railways for this period will give an approximate idea of the progress : — In thousands of poods Carried 1907 1908 1909 1910 1911 1912 Wheat flour . Rye flour Bran 145.930 67.054 46,663 259.647 146,547 74,097 43,814 264,458 156,615 81,486 49.399 167,125 76,894 48,557 180,084 75.761 63.657 192,300 80,215 65,800 Total milling freight . 287,500 292,576 319.502 338,315 26 RUSSIA : ITS TRADE AND COMMERCE. In spite, however, of the growth of the home consumption, some of the larger milUng concerns suffer from an over- production of flour in certain districts and a consequent glut in the market.' The manufacturers are not able to export on any extensive scale and are obliged to dispose of their goods in the home market. Here they meet with the serious competition of small mills of the artisan and agricultural type, which, placing their flour amongst the peasant population of the villages and estates close beside their mills, force the larger concerns to dispose of their products in the metropolitan markets and other large centres of population. In the event of the demand not keeping pace with the supply, reduction and occasional suspension of production is thus caused. Foreign trade in milling, as shown by the following table, is increasing : — EXPORTED FROM RUSSIA 1910 1911 1912 1913 Wheat flour .... Rye flour 6,819 5.497 7.352 9.491 6,368 5.996 8,166 6.876 Total wheat and rye flour 12,316 16,843 12,364 15.042 Generally speaking, in comparison with the exports of grain the exports of flour appear insignificant, especially of wheat flour, only about 25 per cent, of the exports of wheat grain. The exports of rye flour reach 17 per cent. Wheat flour is almost exclusively exported to Asiatic countries and to Finland ; its sale to the Western countries of Europe is impeded by the endeavour of these countries to develop their own milling and by the competition of such countries as have already secured part of the market. Rye flour is exported from Russia to Finland, although, until lately, German exporters competed with Russia in this market . AGRICULTURE. 27 In the milling industry, the bye-product, bran, plays a great part. In many mills it constitutes the sole profit, and the state of the flour market frequently depends on the state of the bran market. The entire output of Russian bran is divided between the home and foreign market, 66-5 per cent, being placed on the home market. Fifty- two per cent, of the mills of the Empire export to the foreign market and 48 per cent, distribute their entire output on the home market. Practically all the exported product is sold from European Russia (exclusive of the Ural region, i.e., the Perm and Viatka governments). Foreign countries and the Russian northern region of the butter and cheese manufacture- — the Petrograd, Vologda, Yaroslav, Moscow and other provinces — are wholesale consumers of bran ; here, with the development of dairy- farming, both by private owners and companies (artel), there is always a demand for good nutritious bran fodder for milch cattle. If we take mills with an annual production of bran of over 100,000 poods, of these 18 per cent, avail themselves exclu- sively of the home market, while 82 per cent, export their produce. The larg^est quantity of bran is exported by the southern regions — Novorossiisk, Little Russia, and the South-West — 60 per cent, of the entire exports. Next come the western regions — the Vistula, White Russia, and Lithuanian pro- vinces — 20 per cent. The Central agricultural region and the Middle and Lower Volga share in the total exports from European Russia to the amount of 17-1 per cent., and the Central, Northern, Lake, and Baltic provinces export 2-2 per cent, in the aggregate. Thus the exports of bran proceed almost exclusively from European Russia, and chiefly from the big firms. The intensity of exports decreases from South to North — i.e., from the black Earth grain-growing provinces to the Central and North- Western, and from West to East — in proportion to the distance from the German and Austrian frontiers and the sea. The share in the exports of the Ural region, Siberia, Central 28 RUSSIA: ITS TRADE AND COMMERCE. Asia and the Caucasus is merely about i per cent. The following table gives an idea of the distribution of the output of bran in European Russia in individual districts : — EXPORTS AND HOME SALES OF BRAN ACCORDING TO REGIONS OF EUROPEAN RUSSIA Regional exports in relation to exports of European Russia Export Home Sales Enterprises with produc- tion exceeding 100,000 No. of Mills Output No. of Mills Output No. of MiUs Output Regions Novorossiisk Little Russia South-West Vistula White Russia Lithuania Central- Agricultural Middle-Volga Lower-Volga Industrial Northern Lake Baltic 607% 20% 17-1% 2-2% 70% 64% 50% 29% 55% 71% 27% 15% 30% 36% 50% 71% 45% 29% 73% 85% 93% 70% 67% 67% 58-9% 74% 25% 10% Cattle-breeding. — Cattle-breeding in Russia has been pass- ing through a serious crisis. Confined for many years to primitive forms which were upheld by cheap pasturage, with little other object than the obtaining of manure and animal labour, this industry was formally reduced with the rise of mechanical power when the former abundance of pastur- age became a tradition of the past. Grain culture, under pressure of high prices for cereals, promoted the decrease of pasturage and hay fields, and the up-keep of cattle began to grow more costly and result in a quantitative decline. AGRICULTURE. 29 Years Total quantity of cattle 1901 1906 1908 1911 1912 1913 58,800,000 52,000,000 51,200,000 50,600,000 42,000,000 43,400,000 The reduction was wholly the outcome of the expansion of arable land to the detriment of meadow lands and pasturage, but of late there has been a return to the systems of pasture- grass and field rotation, with an already observable increase in productive cattle-breeding in certain districts. If a comparison be made of the value of cattle, the differ- ence will even be to the advantage of later years. Accord- ing to the Veterinary Department, the value of cattle during the last decade has risen by 25 per cent., while accord- ing to data of the Zemstvos, where the insurance of cattle has been practised, the rise is 35 to 45 per cent. This is confirmed by the revision of average prices by the Ministry of Trade and Industry for the principal markets (in per- centages) : — 1 90 1 1906 1908 191 1 1913 Steppe oxen Russian ,, Steppe cows Russian , , 100 100 100 100 108 89 113 98 125 105 119 105 138 107 125 100 144 no 130 100 The rise in value is an outcome of better breeds of cattle, the Steppe breeds, especially, commanding high prices. The Southern, Volga and Siberian undertakings, while continuing to keep considerable stocks, i.e., from 100 to 140 head per hundred inhabitants, are raising the prices for cattle in accordance with the increased demand in the centres 30 RUSSIA: ITS TRADE AND COMMERCE. of consumption and the reduction of slaughter cattle in the Central and South-Western zones of European Russia. Incidentally, the movement towards dairy-farming in the Russian cattle-breeding industry is fairly permanent, owing to an increased demand for dairy produce, butter in par- ticular, This movement, starting from West Siberia and the North, is steadily spreading westward and southward. The evolution of cattle-breeding materially helps in the develop- ment of agriculture, by extending the area under grass, the rotation of crops and the consumption of bye-products, chiefly bran and oil-cake. Sheep-breeding. — Sheep-breeding, although largely carried on for home consumption, adds much to the nation's wealth and flocks are increasing, in spite of conditions adverse to the breeding of these animals in many parts of Russia. Thus the growth of sheep-breeding for the past five years is as follows : — Number of sheep (in thousands) Years Coarse-wool Fine-wool 1908 1909 1910 1911 1912 1913 75,900 7,000 75,300 6,200 77,200 5,700 78,500 5,100 78,200 4,800 86,100 4,200 The increase of the coarse-wool breeds is, however, not keeping pace with the growth of the population and is thus, relatively, a decline. The decline in merino sheep, bred exclusively for their wool, is rapid and continuous ; it fell throughout European Russia from 15 million head, in 1881, to 2,200,000 head in 1911. In 1880 there were forty-five sheep to every hundred inhabitants of European Russia ; in 1913 there are about thirty per hundred^ — a ratio of one AGRICULTURE. 31 sheep per three persons. This explains the increased cost of sheep : in 1880, the annual revenue from a sheep was reckoned at R. i 17 cop. per capita, and in 1913 at R. i 20 cop. The largest relative decline is observable in regions breeding exclusively for mutton, where the sheep, with the growing cost of its maintenance, does not reimburse its cost ; whereas in regions which breed wholly for the market, or even where part of the produce is consumed by the owner and part goes to market, the revenue-earning capacity of the sheep increases by 25 to 50 per cent., because valuable products — meat and fat — are utilized. Consequently, sheep-breeding, while conjparatively on the decline in the northern and central districts of European Russia, in pro- portion as it moves southward and near to the big con- suming centres, not only maintains its comparatively high volume — from 80 to 100 head to every hundred inhabitants, but is developing in such regions as supply the Moscow, Kiev, and Odessa markets, in the Volga region, the Kirgiz steppes and Siberia, where the income per sheep is from R. i 40 cop. to R. 4 per annum. These districts, however, constitute only 12 per cent, of the total volume of sheep- breeding. Much of the decline may also be attributed to a lack of farming for the modern requirements of life. In Russia, the tendency to breed sheep for wool and tallow depreciates the principal product, mutton, while at the same time raising the cost of producing such tallow and wool. As a result, it appears more advantageous to utilize the pro- ducts of foreign sheep-breeding with a production from 40 to 60 per cent, cheaper than in Russia. Again the absence in Russia of any system of refrigerating or of special refrigerator-trains, deprives the sheep-breeding regions of the opportunity of exporting mutton to the consuming centres, while the high tariffs preclude the delivery of live sheep. As regards wool, the difficulties are got over by periodical auctions, on the model of those in England, Ger- many and Hungary, and their efficacy as a means for the regulation of the trade and the improvement of breeding is unquestionable. 32 RUSSIA: ITS TRADE AND COMMERCE. Swine. — Swine-breeding is an industry which shows no signs of declining, but rather of active development : — Years Total (in thousand head) 1908 1909 • • 1910 1911 1912 1913 11,500 11,900 12,600 13,200 12,900 13,100 These figures are due to a number of favourable conditions in animal breeding, such conditions in their turn being the outcome of the economic re-organization in agriculture. The revolution in dairying, which, as in Denmark and Belgium, is so closely connected with swine-breeding ; the demand for pork and bacon in foreign markets ; finally, the accumulation of residues of grain and oil in regions with an increasing intensive culture, are all factors in profitable swine-breeding. At the present time, there are whole districts in which swine are the chief animals bred, and the financial prosperity of the population points to the success of the industry. The Vistula, the South-West and North-West provinces are the principal purveyors of Russian pork for the Austrian and German markets, having developed an output of up to six million roubles ; the Voronezh, Tambov, and Siberian (Kurgan) provinces are successfully developing the bacon industry, which even in 1908 was entirely unknown in Russia. In 1908 only one Kurgan factory exported bacon, consigning to London 40,000 poods of this commodity ; whereas in 191 1 there were already four such factories registered, with a total output exceeding 500,000 poods to the value of four million roubles. The bacon industry has exerted great influence on local swine-breeding and generally on the economic position of the surrounding population. The highly unprofitable and simple peasant breed of pigs has given place to better AGRICULTURE. 33 breeds ; bran, oil-cake and grain, especially oats and barley, hitherto exported, began to be used for feeding pigs, at prices between 200 and 600 per cent, higher than those on the market. The peasantry, for instance, of the Kozlov region, where the bacon industry is growing as rapidly as that of Kurgan, have begun to grow potatoes and beetroot, thus passing to a more correct system of crop rotation. Special developments have taken place in dairy-farming, with its chief branch, butter making. The carriage of dairy produce on the Russian railways in 1901 amounted to 8,900,000 poods, and in 1915 to 16 million poods, having almost doubled in thirteen years. About half of this comes under the head of butter, principally made in Western Siberia, which is yearly increasing its output from 2,400,000 poods in 1901 to five millions of poods in 1913. In the present instance, the largest demand has come from foreign markets : in 1901, 26,400,000 roubles' worth of butter was exported, and in 1913 80 million roubles' worth. The increase has not only been in quantity but in value. In the course of a decade butter has risen 79 per cent, in quantity and 94 per cent, in value. Dairy-farming has also developed in the North-East region which produces as much as a million poods of dairy produce ; the North-West, Vistula and Baltic principally produce cheese. In the Central and Southern provinces there is also a beginning of dairy- farming, which is raising the quality of the cattle. The farmers who obtain a good sale for their dairy-produce arc beginning to breed improved milch cattle, to expand the area under grass, and to cultivate root-crops, which, by increasing the supply of nitrogenous fodder, raises the productivity of the soil and improves agriculture generally. Moreover, the demand for the more nutritive fodder must inevitably cause an increase of the home demand for bran and oil-cake, thus reducing exports of the same. If at the present time the exports of oil-cake and bran have reached the huge figure of 80 million poods, and latterly the southern and south-western sugar-beet factories and distilleries have begun to export bean-cake, this is only due to the small home consumption, under existing conditions. D 34 RUSSIA: ITS TRADE AND COMMERCE. Only with more intensive cattle breeding, with better organization of distribution and \\ith the introduction of refrigerating plant, can expansion of the home market for these intensive fodders be expected. As regards other branches of cattle-breeding, their success depends principally on the extensive introduction of re- frigerators. The first attempts to develop the trade in bacon testify to the vitalit}^ of this new industry and to the benefit of utilizing the residues in the shape of oil-cake and bran, as well as the more valuable products. Here we cannot help mentioning a highly significant fact, showing (i) the great influence of a firm market on the development of peasant agriculture, and (2) the growth of self-knowledge among the peasantry — a mighty fore- runner of independent action. Up to 1909 the Kozlov- Giiazy region (province of Tambov) represented the usual wilderness as regards cattle-breeding. As in the majority of Russian provinces, there was the same hybrid, " tos- kanka," incapable of yielding even 100 " krushki " ^ of milk per annum, the same hedgehog-like pigs wallowing in the village puddles. In 1909 a company was formed here for curing bacon for the London market. There was now a demand for young pigs of a certain weight. During the first year the business of curing bacon progressed very slowly, owing to the want of suitable pigs. But by 1912 there was already a complete change. Within a radius of from 40 to 60 versts round the bacon-curing factory, the neighbouring villages were completely transformed, both outwardly and economically, and some of them, like the village of Nikiforovka, for instance, had grown into regular towns. There is not a house that does not breed from four to ten swine of some well-known breed, thus earning some R. 100-200 a year ; in order to have better fodder for fattening pigs, many peasants now keep milch cows with a good yield of milk, and, while selling the milk to the nearest dairies at 60-70 cop. per vedro, get buttermilk for their pigs. ^ Twenty-seven gallons. AGRICULTURE. 35 Swine-breeding and dairy-farming are of no less import- ance to the economic well-being of the peasantry in districts where there are sugar works and distilleries. The abund- ance of cheap nitrogenous fodder has taught the peasants to fatten cattle, etc., for the market, and has developed this industry to such an extent that it plays an important part in their budget. Thus, according to the data of the Zemstvos of the south-western and north-western regions " swine-breeding provides for 10-15 per cent, of the peasants' requirements." At the same time mention must be made of the more profitable utilization of highly nutritious fodder for cattle in the southern provinces. Here tens of thousands of oxen, which have first done their work at the numerous farms, are fattened at distilleries and sugar works, and this in- dustry is remunerative not only to distillers and con- fectioners, who sell their waste products at a good price, to the cattle-dealers and middlemen for cattle fattening, but also to the local workers, who act as fatteners, labourers, carters, etc., and purvey fodder, hay, oats and litter. More- over, the peasants themselves have begun to fatten cattle, co-operating for the purpose. One such co-operative society in the village of Belki, Kharkov province, has attained such proportions, that it has begun- to appear quite independently in the Moscow market. The profit of fattening cattle for the market is so apparent that the peasants of that region have introduced other crop rotations, with a predominance of fodder plants. Exportation of Cattle and Meat. — The history of the Russian export trade in cattle and meat is the history of Russo- German barter of the products of cattle-breeding. Russian exporters have tried to make their way to other foreign markets, but in most cases their efforts were fruitless, with the exception of the export of pork to England, but until quite lately, just before the war, the Russian exports of meat were limited principally to Germany, and consisted only of pork. After the successful wars of the second half of the nine- teenth century, the economic prosperity of Germany in- 36 RUSSIA: ITS TRADE AND COMMERCE. creased very considerably, and there was a movement in favour of intensive culture, causing a considerable reduction of the area of land under pasture and hay crops. The demand for the products of cattle-breeding (principally meat) began to grow, considerably exceeding the increase in the available cattle. In short, a trade in cattle was equally desirable both for Russia, the exporter, and Ger- many, the importer, and at first the results of the trade were palpably successful. Russia began to flood the German (chiefly the Prussian) market with cheap but well- flavoured and nutritious meat, and found in this a new means of raising one of her ancient industries. Germany, on the other hand, being enabled to satisfy the growing demand for meat, could easily endure the friction inevitable in a transition from extensive to intensive culture, and thus to retard the rise in cost of the necessaries of life. However, such intercourse was very short-lived. On the one hand, there was the cattle plague which overwhelmed Russia in the 'seventies and 'eighties of last century, and the considerable spread of various kinds of cattle disease, encouraged by the absence of proper veterinary and sanitary organization ; on the other hand, there was the success attending the new trend of German cattle-breeding, enabling Germany to increase both the number and the quality of slaughter cattle. Both these factors caused an abrupt change in Russo-German trade in cattle, and after a series of partial restrictions in regard to the importation of Russian cattle into Germany, in February, 1888, Germany com- pletely closed her frontiers to Russian cattle and meat. In May, 1890, i.e., after two years and three months, the Prussian Government allowed swine to be again imported from Russia, the transports of swine having to be sent via Sosnovitsy and Modrzew, where Prussian frontier veterinary surgeons were to make a preliminary examination of the animals. In January, 1896, under the treaty of 1894, the German Government limited the number of swine imported into Germany to 1,800 per week, and several months after this the figure was reduced to 1,385, and it was required that 250 swine should be driven or carted by road through AGRICULTURE. 37 the borough of Modrzew, and the remainder brought by rail from Sosnovitsy. The growing demand for meat in the German provinces adjacent to the Russian frontier (principally Silesia and Posen) induced the German Government, in making the new treaty of July 15 (28), 1904, to increase the number of imported Russian swine to 2,500 per week, i.e., to 130,000 head per annum. However, not only were the restrictions concerning the importation of swine as severe as ever, but they were increased by a considerable rise in the con- ventional tariff. Under the commercial treaty in force until March i, 1906, Russian swine were liable to an import duty of Mks. 5 per head, irrespective of the weight of the animal. Under the treaty which came into force on March I, 1906, this duty was completely altered, and was fixed at Mks. 4 50 pf. per live hundredweight. Such a tariff formed a considerable charge per head imported, and moreover, the larger the animal, the higher the duty. As a result, the treaty in force before the war was hardly conducive to an increase of our exports, in spite of the increased number of swine allowed to be exported through Sosnovitsy, and the higher price of pork. Although, as regards the products of cattle-breeding, Russia's historical gravitation towards German markets was as considerable as before, it was not so inevitable as it had seemed ten years earlier. The tendency of Russian cattle-breeding towards more intensive forms, which urgently demanded new and capacious markets, and the want of slaughter cattle prevalent in Western Europe, could not but cause a regrouping of the commercial relations which had so naturally arisen. Ten or fifteen years ago the Russian agriculturalist had to reckon with the terms im- posed upon him by the home markets and German agrarians, but of late a way has been found to partial liberation from such thraldom. In spite of the comparatively small amount transported, the rapid development of bacon-curing for the English market has already affected our exports of swine to Germany. Further, if wc take into account the unlimited demand for Russian bacon in the English market, 38 RUSSIA: ITS TRADE AND COMMERCE. and the absence of those vexatious restrictions which have been carried to excess in Germany, it is not difficult to foresee the gravitation of Russian swine-breeders towards the Enghsh market, and the prospects opening up to Rus- sian agricultural industries. This is sliown by the following figures : — ANNUAL EXPORTS TO ENGLAND Years 1,000 poods 1,000 roubles 1902-1905 I906-1910 I911 1912 1913 119-8 204-9 419-0 524-2 718-0 800 1,600 3.800 3.900 5.100 Adding to the above the exports of fresh pork and lard the total exports through Baltic ports will reach 900,000 poods, to the value of about 10 million roubles. The permanency of the growth of our exports of pork is proved by the bacon-curing factories that are being started in the Central and Siberian regions. During three years (1910- 1912) such undertakings were started at Rtistchevo station, Kozlov, Griazy, and the town of Kurgan. The steadiness with which our bacon export trade with England is increas- ing is proved likewise by the output of the oldest bacon- curing concern, i.e., that at Libau, viz., in 1908, 2,421 swine slaughtered ; 1909, 36,061 ; 1910, 69,547 ; 1911, 68,628 ; 1912, 88,199 '> ^^^ 1913. 126,500 ; therefore in five years the output had increased almost five times. In any case, there is every reason to think that the English market will continue to deflect more and more Russian pork from the German market, the more so as the demand for foreign meat is increasing. The prices of pork bought for the English market are the same as those for the German, without the inevitable charges. According to a special Anglo-Russian Convention of AGRICULTURE. 39 1912, England has acknowledged the sufficiency of the Russian veterinary brand, and salt pork for England is allowed to pass without hindrance through Russian Custom houses, and without being examined a second time at British ports. The English market has always attracted the attention of our farmers and cattle-breeders, and many efforts were made by Prince A. G. Stcherbatoff and M. Mekk to start permanent relations with England in regard to the meat export trade. A series of irregularities in the Russian cattle trade, transport and storage, put an end to these attempts, but their failure in no way affected the conviction that, given certain favourable conditions, exports of Russian meat, beef and mutton might attain a colossal figure. In the opinion of Prince Stcherbatoff " the English market is, after all, the only one in the world on which all the attention of Russian farmers and cattle-breeders should be concentrated." He invited the English Professor, Mr. Knoop, to head an expedition to visit Russian cattle- breeding districts, and Mr. Knoop stated that " owing to natural conditions, Russia could attain considerably greater results in regard to meat exports to England, than could America and Australia taken together." These views of a Russian agricultural expert and of an Englishman well acquainted with the meat import trade, have been confirmed by the development of our pork exports to England. It will not, therefore, be surprising if in the near future Russia develops her export trade in beef and mutton. Mr. Soskiss, one of the shareholders of the Union Com- pany, gave it as his opinion that " the cheapness and abundance of these products in Russia, and the proximity of Russia to England, induce English importers to pay special attention to Russia. The conditions are very favourable to such intercourse, the first being the geo- graphical proximity of the two countries. The British Colonies, which at present supply the Mother Country with meat, butter, fruit, etc., are separated from the latter by a voyage of five or six weeks, whereas ships from the Baltic ports can reach England in some three or four days. Under such conditions, the freights will be considerably 40 RUSSIA: ITS TRADE AND COMMERCE. lower, while the produce will arrive in a fresher condition, having undergone cold storage for a shorter period." Mr. Soskiss brings statistical data to prove that Russia is able to produce the necessary quantity of foodstuffs for England. " In Russia, 75 per cent, of the population are engaged in agriculture ; in England, on the contrary, 75 per cent, live in towns, and only 25 per cent, in the country. This clearly shows that Russia can become the chief purveyor of foodstuffs to England, which will offer its manufactures and machinery for the further development of Russia's natural resources." Mr. Soskiss concludes his report by an appeal " to take up the work energetically, with a firm belief in its success, and to secure the enormous market in Russia." The experiments of the Kurgan and Libau export slaughterers in regard to the transportation of slightly salted mutton and fresh veal to the English market have been comparatively successful. Unfortunately, the absence of properly organized transport facilities retards the de- velopment of our export trade. But there is no doubt that, if the English company carries out its plan of the construction of slaughter-houses in the Trans-Volga and Siberian provinces, the gravitation of the Russian meat export trade will be toward England. Even now the South-Western provinces are getting more and more into the hands of the Libau pork slaughterers who provide the more important breeders with pedigree boars. Now that the bacon-curing industry has been started in the Central provinces, they, too, are forsaking the German market. Russian exports to the French meat market have been in existence for many years. In spite of the considerable expenditure on the transport of live sheep from Novoros- siysk to Marseilles, amounting to as much as 18 to 25 frs. per head, wethers yield a net profit of from R. 3 24 cop. to R. 17 38 cop., according to their weight.^ At Marseilles and Teulon Russian mutton came second (in price) after Algerian. * Kusheleff, P. N., " Breeding Sheep lor Mutton." AGRICULTURE. 41 Experience in the export of large cattle through Russian Southern ports (chiefly to the Balkan Peninsula and Malta), to the amount of 10,000 head, leads one to suppose that these exports might be increased to tens of thousands, by extending the trade to French and Italian markets, and already the French and Italian meat dealers have been trying to get into communication with the cattle-breeders of Southern Russia. Experiments have also been made in sending meat from Czenstohowo to Switzerland and the Swiss exporters are buying cattle in the Kharkoff province. All this shows that, as regards the cattle export trade, Russia is not quite so hopelessly tied to the German market as it is generally supposed. Horse-breeding. — In the horse-breeding industry there are no " tendencies to utilization " as in the breeding of sheep, cattle and swine, the aim of the breeder being con- centrated on one object, utilization of the animal's working power. In Russia, the three branches of breeding, racers, saddle-horses, and farm horses, are carried on ; farm horses form 56 per cent, of the total industry, saddle-horses 36 per cent., and racers 9 per cent. In comparison with the breeding in other countries, Russia takes the foremost place, as may be seen from the following statistics : — Russia United States Germany . Austria- Hungary France Great Britain 37,500,000 horses 23,400,000 4,500,000 4,000,000 ,, 3,300,000 2,000,000 Russia is thus almost the sole purveyor of horses to the European market, principally to Germany and England. For the quinquennial period of 1907-1911, the exports were as follows : — 42 RUSSIA : ITS TRADE AND COMMERCE. NUMBER OF HORSES Total Exports Exports to Germany Exports to England . 1907 1908 1909 I910 94,000 62,500 30,000 82,000 52.500 26,500 76,000 50,500 21,000 94,000 68,200 24,500 I9II 98,000 68,000 27,000 The value of these exports rose accordingly : in 1907 horses were exported to the value of R. 8,800,000, and in 191 1 to the value of R. 12,600,000. In spite of this, the general condition of Russian horse- breeding remained unsatisfactory. The successful develop- ment of agriculture, and especially the transition to intensive culture, by increasing the demand for draught animals of a lighter kind, caused a wholesale transition from the employment of oxen to that of horses, especially in districts where machinery was most in use. Mowing machines, reapers, horse-rakes, hoes, potato-sowers, root-extractors, etc., all these require horse traction. Now, the shortage of horses caused by these changes is not onlj^ not covered, but is actually increasing, in consequence of the growing exports of farm-horses to foreign countries. As a result, the prices of horses have risen considerably. For the period of five years, 1908-1912, they have risen 62 per cent., as compared with the prices for the preceding quinquennium. The almost stationary condition of horse-breeding is due to many causes which have arisen in Russia during the past twenty years. The hasty ploughing of free virgin and fallow land, which used to feed thousands of horses, has made it impossible to carry on horse-breeding on so extensive a scale, and has forced the breeders to resort to the more expensive stable-breeding. Subdivision of large estates formerly devoted to horse-breeding, and their increased liquidation of late years, seriously affect the industry. In the outskirts of the Empire, especially in the South-Eastern Khirghiz Steppes, Western Siberia and Turkestan, horse-breeding is also curtailed by the reorganiz- ation of landowning, so that, on all sides, the number of horses is steadily decreasing CHAPTER III Poultry Farming —Fodder Grass Poultry-farming. — As a new branch of agricultural in- dustry, commercial poultry-farming began to gain ground towards the end of the nineteenth century, when a demand for Russian poultry arose in foreign markets. The first experiments in exportation were successful, and since then Russian poultry-farming has become a flourishing agri- cultural industry in certain districts. The output of the different poultry-farming districts is distributed as follows : — Million Roubles. Districts Total output of poultry- farms Ratio of exports to Exports total out- put in per cent. Central (Tambov, Orel, Penza) Southern (Kursk, Kharkov, Voronezh) Little Russian (Poltava, Tchemigov) .... South-Western .... Volga (Kazan, Simbirsk, Nizhni-Novgorod) . Vistula White Russian and Lithu- anian Moscow 60 45 25 25 25 40 25 20 30 15 12 10 10 15 8 I 33 33 48 40 40 37-5 32 5 Other districts, such as the Baltic, Lake, Saratov, Samara, Ufa, Perm, Viatka, Northern, Black Sea and Crimean 43 44 RUSSIA: ITS TRADE AND COMMERCE. provinces, Don Territory, Ciscaucasia, Transcaucasia, etc., have an output ranging from 4 to 7 million roubles each, only a very small part of the produce being exported. The importance of poultry-farmmg in the finances of the popu- lation may be seen from the following figures : — Million roubles Years Total exports of animal produce to foreign countries Including poultry produce 1891-1895 1896-1900 I9OI-1905 I906-1910 1911 . 1912 . 1913 • 72-9 92-2 148-6 203-0 218-2 242-2 217-3 22-3 37-4 59-8 71-9 97-1 100-6 108-2 RATIO OF POULTRY-FARMING TO TOTAL EXPORTS OF ANIMAL PRODUCE Million roubles Years Total exports of animal produce to foreign countries Including poultry produce 1891-1895 I 896-1 900 1901-1905 1906-1910 1911 . 1912 . 1913 • 100 per cent. 100 100 100 100 100 100 31 per cent. 41 -. 40 „ 35 „ 40 37 45 ,. It is noteworthy that the poultry exports for this period show a proportionately greater inciease than the total exports of animal produce. Taking the total exports of animal and poultry produce for the quinquennium of POULTRY FARMING 45 1891-1895 at 100 per cent., the increase in poultry exports for 1896-1900 works out at 163 per cent., that for 1901- 1905 at 268 per cent., that for 1906-1910 at 322 per cent., and for 1913 at 440 per cent. The gradual change from the export of live, to that of killed, poultry, has two advantages. Local poultry fatten- ing is materially assisted by the using up of cheap and nutritious foodstuffs, and when the poultry is sold, its value is divided into the different constituents, flesh, feathers and giblets, thus raising its market value from 12 to 25 per cent. It is significant that, owing to the export of live geese from Russia, certain very profitable undertakings arose in Germany along the Russian frontiers and in some parts of Austria, simply for the purpose of grinding barley and bran for fattening the geese, for the utilization of the down and feathers and for albumen works. Thus Germany, while importing 10 million roubles' worth of live poultry per annum, developed a business with a turnover of nearly 50 million marks. In the localities where poultry-farming is not so widely developed the people are content to sell their produce at the local markets. In those districts, however, if the local markets absorb merely a part of the total output, the rest of the produce is bought up by middlemen — either local inhabitants or agents of large firms. Such districts form about 88 per cent, of the total number. As an importer of Russian poultry produce, Germany takes the first place, drawing imports from 87 per cent, of the provinces ; next comes England (56 per cent.), Austria- Hungary (38 per cent.), France (25 per cent.), Italy (7 per cent.) the United States (4 per cent.), Denmark and Bul- garia I per cent. each). Germany is supplied by nearly all the provinces of European Russia. England imports poultry produce chiefly from the Central Agricultural and Mid-Volga districts, from Little Russia and the South- Western provinces, and from Poland and the Caucasus. AustriaHungary imports from the Western, South- Western, Central Agricultural and Mid- Volga districts by rail, and from the Caucasus by sea. France imports from the 46 RUSSIA: ITS TRADE AND COMMERCE. Central Agricultural, Mid-Volga, in the East, and Little Russia, South-Western and Novorossiysk districts in the South- West. Eggs are exported from the Caucasus through the Black Sea ports. The exports to Italy come from the Novorossiysk districts and from .the Caucasus. Eggs are exported to the United States from the provinces of Tobolsk and Poltava. Denmark receives poultry produce directly from the Tobolsk province, and Bulgaria from Kielce. The total exports of poultry produce are shown below in thousands of roubles). Eggs Poultry- Feather and Years Total Live Dead down 1906. 56,300 7,900 3,600 1,500 69,300 1907. 53.300 6,800 3,800 1,800 65,700 1908. 54.900 6,800 7.500 1,600 67,800 1909. 62,300 7.500 5.200 1,500 76,500 1910. 63,700 8,500 6,200 1,600 80,000 1911. 80,800 7,600 6,800 1,900 97,100 1912. 84,600 9,100 5,100 1,800 100,600 1913. 90,600 9,600 6,600 1,900 108,200 As the above table shows, eggs are the principal exports. Russia's export trade in eggs is of comparatively recent origin. In 1894 our exports amounted to 954,900,000 eggs, whereas now they reach 3,396,859,000 eggs, showing, in ten years, an increase from R. 39,000,000 in 1902 to R. 90,600,000 in 1913. Russian eggs were exported principally to Germany until 1906, but, since 1907, England has taken the first place in our egg export trade. Russia lost her position in the German market owing to Austrian competition, but in 1913 she practically regained it, and now supplies two of the greatest markets for eggs in Europe. Russia also exports eggs to other countries, viz., France, Denmark, Holland, Hungary and Belgium. These countries themselves export large quantities of POULTRY FARMING 47 eggs to European markets, but they have to import foreign eggs for their home consumption. At first sight, this may seem strange, but the explanation is that the eggs exported by the above-mentioned countries, in which poultry-farming is on a very high level, are of prime quality and fetch far better prices than the imported Russian eggs, which are far inferior. EXPORTS OF EGGS (Millions) Years Austria- Hungary Belgium England Germany Holland Denmark 1906 . 6747 71-7 873-0 978-6 87-4 56-8 iq07 641-9 48-2 867-5 850-0 69-2 44-8 igo8 704-1 61-4 894-3 745-4 76-3 24-6 iqoQ 697-6 83-2 I.051-5 895-0 I15-2 36-3 1910 667-3 96-8 1,086-3 866-0 172-0 36-0 1911 793-2 113-4 1,308-2 1,118-7 192-8 78-2 1912 868-6 90-7 1,138-2 1,000-7 174-2 42-3 1913 . . . 910-5 II0-2 1,520-3 1,300-0 190-5 72-7 As regards their consumption of Russian eggs, the import- ing countries may be classed as follows : Great Britain 35 per cent., Germany 30-31 per cent., Austria-Hungary 23 percent., and the other countries 12 per cent. About 48 per cent, of the eggs imported into Germany are of Russian origin ; for Great Britain the figure is 44 per cent., and for Austria- Hungary 93 per cent. The prices of Russian eggs imported by Germany were somewhat higher than in Austria, averag- ing 280 copecks per hundred ; but the increased export of eggs from the centres of production directly to Germany was hampered by the periodical changes made by the German authorities in the railway routes for Russian egg freights, in order to equalize the profits of frontier railway lines. In the first place, this made it necessary to change the railway routes in the interior of Russia, thereby causing 48 RUSSIA: ITS TRADE AND COMMERCE. temporary delay in exportation, and secondly, a deviation from the established route caused an increase in freights, sometimes amounting to as much as R. 90 per railway car. The following table gives a comparison of the average market prices per 1,000 eggs (in roubles and copecks) for the quinquennial period of 1907-1912 : — Russian eggs 1912 1911 1910 1909 1908 1907 Riga, I quality . 30-33 28-89 26-02 26-74 27-20 26-44 „ II „ . . 26-28 24-54 21-05 22-14 23-23 23-30 „ III „ . . 22-54 20-37 17-79 17-65 21-18 21-14 Berlin (Russ.), I quality 31-40 28-61 28-48 31-18 29-02 27-85 London (Russ.), I quality 33-64 30-91 28-34 31-34 31-26 29-49 Danish eggs. 47-70 45-14 43-59 44-22 42-75 — Austrian eggs . 45-0 44-20 43-10 43-80 40-15 ~ Thus Danish and Austrian eggs fetched considerably higher prices than Russian, but it is necessary to bear in mind that about 52 per cent, of "Austrian eggs," and 21 per cent, of " Danish," are of Russian origin. On im- portation into these countries, Russian eggs are carefully sorted, the best being sent to the Enghsh and German markets, while the rejected eggs are sent to the albumen works. The chief importers of Russian poultry, both live and dead, are also England, Germany and, to a certain extent, France. It is observed that, w^hile England and France import only killed poultry, Germany, and to some extent Austria, import both live and killed poultry, preferring the former. Exports of live poultry fed for the market, and their distribution among importing countries, may be seen from the following table : — POULTRY FARMING. 49 Germany Austria-Hungary France Years Geese Other poultry Geese Other poultry ^ Other ^^^^'^ poultry 1906 . 1907 . 1908 . 1909 . 1910 . 1911 . 1912 . 1913 • 6,164 5,162 5,029 5,860 6,452 5,390 6,692 6,870 2,474 2,300 2,224 2,335 2,439 2,542 2,246 2,300 216 214 234 214 299 255 217 212 173 lOI 96 107 342 492 551 568 ■ — 229 — 113 — 70 — 76 — 59 — 38 Exports of killed poultry are distributed as follows Including : Years Total exports (poods) Austria- Great Hungary Britain Germany Den- mark Sweden Fin- land 19OI 476,785 14,262 254,944 173,080 19,712 4,321 8,023 1902 442.399 10,780 236,549 153,069 35,018 2,774 3,374 1903 . 621,337 14,207 330,932 222,231 26,727 4,061 19,802 1904 . 622,394 22,195 431,420 133,614 30,211 2,954 1,783 1905 . 422,766 18,323 ,269,765 108,570 19.585 2,315 1,266 1906 501,187 34,287 192,461 231,464 34,862 2,663 911 1907 . 507,921 28,741 252,998 191,801 25,563 4,320 1,316 1908 583,161 50,684 285,475 204,369 37,186 1,658 520 1909 . 741,342 19,816 ' 447,594 223,805 47,730 1,743 68 1910 733,557 51,739 361,852 263,254 51,095 1,159 276 1911 932,204 48,100 495.836 298,706 56.302 2,096 104 1912 763.382 29,131 347,096 335.977 40,277 1,357 47 1913 • 913,057 45,200 462,752 350,800 52,210 2,000 95 An increase in the demand for Russian poultry is remark- able in all the principal markets of consumption, the greatest proportionate increase being in Austria-Hungary, where imports of Russian poultry rose more than 300 per cent, for the period 1901-1913 ; next comes Denmark, 270 per E 50 RUSSIA: ITS TRADE AND COMMERCE. cent. ; Germany, 105 per cent. ; England, nearly 100 per cent. The increase in the quantity of Russian poultry exports was accompanied by an increase in value : whereas in 1900 the total amount of poultry exports was R. 8,500,000, of which live poultry accounted for R. 6,500,000, in 1913 the total was R. 16,000,000, of which R. 9,500,000 represent live poultry. Thus, in the course of fourteen years, our poultry exports increased by no per cent., the increase in live poultry being 50 per cent, and killed poultry 20 per cent. This latter circumstance may be considered as desirable, as the exporta- tion of live poultry entails considerable expenditure in transport, wholesale loss by death on the way, diminution in weight, losses in valuation in foreign markets, and deprives our country of the profitable industry of fattening poultry for sale, as well as the more profitable disposal of such valuable by-products as feathers and down. Such are the principal branches of industry from which Russian national economy obtains its strength and its resources for further development. These branches of agricultural industry are extending and are constantly producing new commodities. Fodder Grasses. — At present there is a considerable in- crease in sowing fodder grasses for seed, both for home consumption and for export. In 1912 the total area under fodder grass in the fifty provinces of European Russia was over two million dessiatinas, of which 54 per cent, were owned by landlords and 46 per cent, by peasants. In 1901 the total area was 1,600,000 dessiatinas, and the ratio was : landlords 67 per cent, and peasants 33 per cent., showing in twelve years an increase in the total area, an increase in the peasant culture of fodder grass and a decrease in the same proportion in the landlords' area. The demand for Russian fodder grass seeds is growing. There is a large area of land suitable for fodder grasses; the seeds are of good quality, as they are very hardy, adaptable to the soil and yield an abundant harvest. Germany is the chief importer of Russian fodder grass seed of all kinds, the figures given by the German Customs FODDER GRASS. 51 statistics being considerably higher than Russian, as may be seen from the following table (thousands of poods) : — IMPORTS OF SEED INTO GERMANY 1907 igoS 1909 I9IO ! I9II 1912 1913 Clover .... 750 372 540 580 610 630 695 Timothy grass . . | 18 13 10 14 22 25 28 Seradella .... 540 760 810 850 !l,050 1,130 I. .240 Lucerne .... 96 160 350 370 390 415 465 Other grasses 680 810 2,085 900 915 980 1,050 1,210 1 2,084 2,610 2,729 3,052 ! 3.250 3.638 Total fodder grass 1 seeds exported from 1 Russia (1,000 poods) 4,505 3,9^(^ 4451 5,108 5,196 4,362 3,591 Total imports of fodder grass seeds into Germany 3.300 3,100 3.840 3,600 4,000 4.320 ; 4.630 The above figures show how much Germany is interested in the development of Russian exports of fodder grass seeds and the dependence of the German market on Russian growers. There is no doubt that Germany re-sells the seed, principally to England, and chiefly the clover-seed. The country in which grass-sowing has reached its greatest developments is Great Britain, while the country which plays the most prominent part in supplying seed is Russia. Apparently, with the growth of the demand for seed in England, there should be a corresponding increase in Russian exports to the English market. Exports of Russian fodder grass seed to Great Britain are not shown, and the principal imports of fodder grass seed into the United Kingdom are from Germany. 52 RUSSIA : ITS TRADE AND COMMERCE. i,ooo poods 1909 Total imports of fodder ; grass seed into Great | Britain \ 1,850 Including imports into Ger-J many 275 465 | 690 1910 1,930 191 1 2,150 1912 2,410 1913 2,870 810 1,120 In five years Germany's exports to the English market alone had increased to 40 per cent, of the total imports of such commodities into the United Kingdom. According to Dr. Voigt, in German sea-ports the trade in seed has assumed, as it were, the character of a manu- facturing industry : before being sent to the markets of consumption, the imported seed is thoroughly sorted and cleaned in order to give it the appearance of first-class goods. Some firms, at Hamburg and Koenigsberg, whose speci- ality is the re-exportation of fodder grass seed, have attained a high state of perfection, as also in the art of substituting one quality for another ; at the same time, while they get the higher qualities of the best clover principally from Russia, these firms mix them with seeds of lower quality and thus introduce into the seed trade methods of adulteration which lead to the disappearance of the superior qualities. Besides direct business transactions, Germany plays an important part in Russia's seed trade as a country of transit, that is 1,000 Poods 1907 1908 1909 1910 1911 1912 1913 From Russia To Russia . 34-2 30-6 20*4 44-2 36-1 85-0 28-0 90-0 83-0 71-0 85-0 79-0 87-2 88-0 FODDER GRASS. 53 to saJ^ a considerable amount of fodder grass seed goes through Germany both from Russia and into Russia. The principal countries to which Russian seed is trans- ported through Germany are the United States, France and England. CHAPTER IV The Cultivation of Cotton, Flax, Hemp, Sugar, Beet, Tobacco, Wine, Hops, Fruit. By N. Malakhovsky and A. Isenberg Cotton Growing in Russia. — Russia is one of the most important cotton manufacturing countries of Europe, following immediately after England and Germany. About one milliard roubles are sunk in the cotton industry, which gives occupation to over 500,000 people. The difference between the Russian and the English and German industries lies in the fact that Russia herself pro- duces about half of the cotton required by her factories, that she has developed the export of manufactured cotton but very slightly, and that the home demand for these manufactures is still rather limited. It is clear that under these conditions, the cotton industry has every chance of developing. The ability to grow her own cotton not only places Russia in less dependence upon other countries, but, by increasing the purchasing powers of the southern regions of the Em- pire, creates a large home market for the distribution of textile manufactures and other products. Cotton is cultivated in two regions, in Russian Turkestan and Transcaucasia. The first of these two regions yields several times as much cotton as the latter. In Russian Turkestan, that which England and Germany are attempting to do in their colonies by the extension of cotton growing, has already been carried into practice, namely the creation of a market for the manufactures of the metropolis. Russian Turkestan forms the south-western part of the Asiatic possessions of the I2mpire, and is situate between 54 COTTON GROWING. 55 47° 2' and 35° 38' N. and 50° 20' and ^::;' 2c/ E. Its area is equal to that of Austria-Hungary, France, Germany, Holland and Denmark taken together. The surface of Turkestan forms a level plain fringed on the south by mountains which gradually grow higher towards the south- east, reaching their greatest height in the Pamir plateau. The nature of the country's surface facilitates irrigation by means of canals. Rivers rise in the mountains and flow down to the plain, where a large proportion of their water is collected. The irrigation of this region is rendered neces- sary, as the climate over the whole area suffers from a lack of moisture in the air. Cotton growing in Turkestan is not carried on as in the United States of America : there, the cotton is sown where atmospheric conditions may be counted upon for its irriga- tion, but in Russia the plant has to be irrigated by artificial means. Turkestan is, in this respect, much more like Egypt- It is very important that the rainfall should be so small for the time of gathering the cotton, but this circumstance necessitates artificial irrigation which at present limits the area under cultivation to about 4 per cent, of the whole area of Turkestan. The remaining 96 per cent, of the area is as yet desert land. This fact is not due to any poorness of the soil ; those parts which have been irrigated have shown themselves to be very fertile. The soil of Turkestan surpasses even the famous black soil of Russia, especially for the cultivation of lucerne (alfalfa). Owing to the dry climate the Turkestan cotton grower has penetrated farther north than has been the case in the United States. If an imaginary fine be drawn from the most northerly point of cotton cultivation in Central Asia to the United States of America, it will pass through Boston, i.e. 4I degrees above the line of cotton growing in America. On the other hand, as the Russian possessions extend a considerable distance to the south, the area under cotton cultivation in Central Asia is very extensive. In spite of a very hot summer, the winters in Turkestan are cold, so that only annual sub-tropical plants can be cul- 56 RUSSIA: ITS TRADE AND COMMERCE. tivated ; the summer of Turkestan, viewed from the number of cloudless days, closely approximates to that of Cairo. The cultivation of the cotton plant in Turkestan begins in March (old style) and terminates in May ; the harvesting of the cotton begins in August and finishes in Novem- ber During the period of growth of the cotton plant the climate of Central Asia shows the following mean tempera- tures (Celsius) : — Margelan Skobelev Samarkand Askabad April i6-o 13-8 l6'2 May . . 20-6 20-0 23-5 June . . 25-9 23-8 28-0 July . . 27-6 25-5 29-3 August 26-6 22-3 27-2 September 20-4 i8-6 22-4 October . 13-0 II-6 14-8 • The last spring and the first autumn frosts, according to the statistics of the local meteorological observatories, covering the five years 1888-1893. have been observed at the following periods : — Skobelev . March 19-22. Samarkand March 6-22. Askabad . February 17-March 23. October 14-November 11. October 9-November 20. October 13-November 18. Although the beginnings of cotton cultivation in Turkes- tan are lost in the distant past, the introduction there of the American cotton plant dates from the beginning of the nineties of last century. In 1884, after a series of prelimin- ary experiments, the first eight bales of Russian cotton from American seeds were delivered in Moscow. After that, the production and export of cotton gradually increased, until at the present moment it constitutes one-half of the total of Russian industry. During the last three seasons the supplies of Turkestan COTTON GROWING. 57 cotton for Russian cotton mills are expressed by the follow- ing figures (in thousands of poods) : — ■ 1913-14 1912-13 1911-12 Ferghana Territory Samarkand Territory .... Syr-Daria Territory without the Amu-Daria District .... Transcaspian Territory .... Bokhara Region Khiva Region 7,610 953 1,117 869 1,456 659 6,966 806 978 975 1,236 522 7.544 818 941 600 1,092 550 12,664 11,483 11,545 In addition to the above, a large quantity of cotton is used by the local population for their own requirements. The area of the various regions under cotton cultivation is shown by the following figures (in thousands of desia- tines) : — - igcg 1913 Ferghana Territory Samarkand Territory .... Transcaspian Territory .... Syr-Daria Territory 2o8-o 31-2 26-0 31-4 274-8 317 46-5 767 296-8 429-8 The other cotton growing region of Russia — Trans- caucasia — is of less importance, as may be seen from the quantities harvested. The yield of cotton during tJie last three seasons was (in thousands of poods) : — 58 RUSSIA: ITS TRADE AND COMMERCE. Province 1913-14 1912-13 1911-12 Kutais .... Tiflis Erivan .... Elisavetpol . Baku 10,039 59.352 685,783 654,880 171,371 13,402 58,601 690,504 665,680 143.432 17.834 64.654 741,882 731,584 225,881 Total .... 1.581,425 1,571.619 1,781,635 The area under cotton in Transcaucasia is shown in the following figures (in desiatines) : — 1909 1913 Erivan Prov. Elisavetpol Prov. 29,000 14,200 35,000 45,000 Tiflis Prov. Baku Prov. Kutais Prov. 520 5,000 5.600 20,000 850 2,000 Total 50.T70 107,000 The total quantity of cotton supplied to the Russian mills by Turkestan and Transcaucasia and the quantity imported from abroad are shown in the following table in poods :■ — Russian Foreign 1908-9 1909-10 .... I9I0-II .... I9II-I2 .... I9I2-I3 .... I9I3-I4 .... 8,764,015 11,311,546 13,925.532 13,420,394 13,101,092 14,245,000 11,035,000 11,878,000 11,945,000 12,293,000 10,840,000 13,525,000 Passing to the factors which have influenced the develop- ment of the cultivation of cotton in Russia the first is the Government customs duty on foreign cotton. As seen COTTON GROWING. 59 from the following table this customs duty was gradually increased : — Date of Publication of Law Customs Duty 40 cop. gold currency, per pood. 44 »» " >» " 45 >» »» '> » I r. and i r. 35 cop. gold currency, per pood. I r. 20 cop. and i r. 35 cop. gold currency, per pood. I r. 40 cop. and i r. 65 cop. gold currency, per pood. December 26,1892 ; 2 r. 10 cop. gold currency. December 20,1894 i 3 r. 15 cop. July 21, 1900 . I 4 r. 15 cop. per pood net. January 13, 1903 4 r. per pood gross weight. July 5, 1868. . December 22,1878 December 16,1880 June I, 1882. . November 7, 1887 June II, 1891 . Finally from 1915 5 r. 75 cop. per pood. The customs duty which has raised the prices of cotton on the home market has most favourably affected the profits of cotton growing in Central Asia. Another circumstance, tending to advance the cultivation of cotton in the country, was the improvement of com- munications between Central Asia and European Russia. When cotton growing in its present form was first intro- duced, the railway only went as far as Merva on the Caspian Sea, and cotton had to be carried by camels for the remain- ing distance between Merva and the towns of Ferghana. But afterwards the communications began to improve ; in 1899 the railway line to Andijan and Tashkent was opened, and in 1906 traffic was opened along another line — Oren- burg-Tashkent. At the present moment Central Asia is connected with European Russia by two lines : by direct railway (Orenburg-Tashkent) and by a mixed route via the Caspian Sea and the Transcaucasian railway ; a third line to Verny which joins the cotton region to the corn-growing district of the Steppes, is in course of construction. Finally, one of the most important factors, for increasing the interest in cotton cultivation amongst the local popula- 6o RUSSIA: ITS TRADE AND COMMERCE. tion, is the extension of agronomical assistance to the population. The Ministry of Land Organization and Agri- culture has spent large sums on this, and secured tangible results. From the State Treasury there have been assigned in 1915 803,250- roubles for agronomical assistance to the people exclusive of the expenditure on the upkeep of the official staff. A further sum of 280,000 roubles has been set aside by the Zemstvo funds for the same purpose. In addition to the influence of Government measures the effect of the general rise in cotton prices was very great. In Turkestan there are five experimental agricultural stations and five experimental fields. Several of the sta- tions have become well known, especially the Golodno- steppes (Hunger Steppes) Station, where at the present moment Russian emigrants are peopling the desert land of the Hunger Steppes, recently irrigated by a canal con- structed by the Government, and the Turkestan Station, 12 versts from Tashkent. Very important experiments are being made to fertilize the land with oil cakes from cotton seed residues. At the present time about five million poods of oil cakes are being distributed in the locality, and these are being turned into manure for the fer- tilization of the land. This quantity is equivalent to two- thirds of all the oil cakes obtained by the extraction of oil from the cotton seeds, one-third only being exported abroad via the Baltic ports and Batum. There are, in all, twenty seed plantations in the country, These are worked on the co-operative principle of partici- pation by the labourer in a share of the crop. Thus these plantations on State lands serve as schools for the native workers, who are trained to the use of those ploughs and cultivators which are used by the American cotton planter, and the land is not ploughed with the " Sokha " (native Russian plough). During the year 1914, the stations gave out eighteen thousand poods of improved seeds, chiefly the quick ripen- ing Upland " King," and the local kind known as " Kok- chisht." Agriculture is the principal factor in the prosperity of COTTON GROWING. 6i the extensive region of Turkestan where irrigation has been introduced. Possessing a rich and fruitful soil, never experiencing bad harvests for lack of rain, which the irri- gation replaces, Turkestan is thriving and becoming rich on the products of agriculture, or more correctly, of cotton growing, which is the alpha and omega of its life. Cotton growing is bringing money into the country. Other branches of industry have not yet been sufficiently developed. The exploitation of the mineral wealth of the country has as yet not been placed on a sufficiently broad founda- tion. Manufactures have been developed only in connex- ion with certain raw products native to the country, chiefly the extracting and refining of naptha. Generally speaking, the climatic and economic con- ditions and state of the soil of Central Asia have been the factors in developing cotton cultivation to its present dimensions. Nevertheless, the import of American cotton into Russia is not decreasing. The people's demand for cotton materials, though extremely moderate, is increas- ing, and there is no doubt that in time there will be a very much greater demand for cotton in Russia. The home consumption of cotton materials, leaving the small imports and exports out of our calculations, are shown in the following figures : — 1 90 1 Population (in millions) . . . 135 Consumption of cotton material in Russian pounds per head of population 3-6 1905 146 3-4 1910 . 1914 164 4-1 180 4-3 The consumption of 4*1 and 4*3 pounds, which is equiva- lent to 30-32 archines of cahco, is extremely small com- pared with the consumption in Western Europe, where at the end of the last century it was 12 to 13 pounds per head. It follows, therefore, that one of the most important questions for the Russian cotton industry is the fur- 62 RUSSIA: ITS TRADE AND COMMERCE. ther development of home cultivation. It is becoming more and more difficult to reckon on receiving cotton from abroad as the supply of the world's cotton mills wdth the raw material grows increasingly criti- cal. A further increase in production on the land already irrigated can hardly be expected. It is necessary to turn to the prospects which present themselves of irrigating new lands. At the present moment, only about 4 per cent, of the total area is irrigated and cultivated, the rest as yet remaining barren. Government investigations have shown that the area of land which can be irrigated in Turkestan by the existing supplies of water is not less than 4 million desiatines, of which 3 million desiatines are .situate in the cotton-growing regions, and up to one million desia- tines in a region of more northerly but valuable produce. This new Turkestan, the creation of which demands inten- sive labour for not less than twenty to twenty-five years, and the expenditure of more than a milHard roubles, may give the Russian cotton industry as much as 25 million poods of cotton, i.e. twice as much as is at present imported from abroad. The regions suitable for irrigation in the cotton-growing belt are in the basin of two large rivers, the Syr-Daria and the Amu-Daria. In spite of the fact that one of the most cultivated districts lies in the basin formed by the upper reaches of this river, the quantity of available water in the Syr-Daria is very large. The flow of this river could be regulated by building two or three reservoirs in its upper reaches with a total capacity of not less than 300 million cubic sagenes, and it would thus be. possible to water about i| million desiatines of new land. On the basis of actual profits per irrigated desiatine, the use of the water supplies ot the Syr-Daria would give, in the future, an annual net profit of 75 million roubles, which represents 5 per cent, on a capital of i| milliard roubles. In reality, the profit would be very much greater. It is proposed that only 300 thousand desiatines of the additional land under irrigation should be devoted to the cultivation of cotton, consequently COTTON GROWING. 63 the yield of cotton would be about 6 million poods. In the upper and middle courses of this river there is an area of about 900 thousand desiatines of land quite suitable for cotton growing. A still greater volume of water than that of the Syr-Daria is offered by the Amu-Daria, the largest river of Turkestan. By the construction of reservoirs and by reconstructing the irrigation plant in the Khivin oasis not less than 2| to 3 milKon desiatines of land might be watered by this river. The question of attracting private enterprise to the irri- gation of the waste land of Turkestan was raised long ago, but as yet no practical decision has been reached. With regard to the manner and funds by which these Central Asiatic wastes and Steppes should be developed, there are two opposing views. According to one the work of irrigation in this region should be undertaken by and at the expense of the State ; according to the other it is neces- sary to attract private initiative, and private capital. The more correct decision of this question would seem to lie in a wise co-operation of Government and private initiative. In such a tremendous field of enterprise there is room for the one and the other. During 191 2 and 191 3 a Bill was drawn up by the Ministry of Land Organization and Agriculture on the subject of private enterprise for the irrigation of Turkestan, and this Bill is now under examination by the Legislative Chambers, having already been approved by the Agricultural Com- mission of the Imperial Duma. The cultivation of the cotton plant opens out a future to a whole series of allied industries, such as cotton cleaning, oil pressing, etc. Manufactures from cotton seeds in Turkestan have grown very largely during the past fourteen years, though the pro- duction of oil, as a peasant industry, has been practised in the country from an early date. There are at present thirty-two works in the country con- suming 20 million poods of seed, and manufacturing 3 mil- lion poods of cotton oil. This oil is in continual demand and finds an assured sale on the Russian market a;., apart 64 RUSSIA: ITS TRADE AND COMMERCE. from its qualities as a food, it is used for soap-making, etc. A comparatively new use is the lintering of the cotton pod. The short fibre contained in the pod, representing about 20 per cent., and the particles of the inner skin and centre — about 10 per cent. — form an inseparable mass in the pod, which is sold at the same price as the pod itself. As it is, the valuable fibre covering the shell, not only loses in value itself, but makes the pod friable and bulky, lowering its value as fuel, and in this way renders the pod itself of no value. The valuable fibre, on the other hand, lowers its quality as a cattle food, as it has a harmful action on the digestive organs of the cattle, and consequently the pod is rendered valueless as a food. The separation of the pod into its component parts was first begun in the Turkestan region on March 5, 1911, when the ]\Iink lintern separator began working in the Murgab works. The above facts regarding the cultivation of cotton in Russia and the conditions of its development, based on thirty years' experience, show this branch of culture to be firmly established beyond all doubt, for it is founded on its profitableness to the population and its industrial necessity. But in spite of the extensive production of cotton in Russia the import of American cotton remains at its former high level. It is interesting to note that, while the production of cotton in Russia has increased from i,cco,ooo to 14,000,000 poods, the import of foreign cotton has remained at io,oco,g( o poods, and up to the present this quantity has not decreased. There is no need to speak now of the possibility, or desir- ability, of exporting cotton from Russia to the neighbour- ing countries of Europe, for this can only be discussed when Russia may have more cotton than her factories require. But the development of cotton growing to satisfy the demands of the Russian industry alone opens out very wide prospects. Flax Flax is one of the earhest forms of culture in which the FLAX. 65 Slavs were engaged. In the region now occupied by Russia in Europe flax was sown and cloth was made from the fibre as far back as the sixth century B.C. At the time of the founding of the Russian Empire flax was grown by all the tribes which had settled in the low- lands of Eastern Europe. It had not then become an article of barter, but served for home use : oil was made from the seed, and linen from the fibre. Amongst the Lithuanian Lettish tribes the cultivation of flax played an important part even in Pagan times ; but in the early period of Russian history, flax growing was more developed in the districts of Novgorod and Pskov, where it became a true industry and the cultivation was, as at the present time, for the export of fibre. The cultivation of flax is now spread over almost the whole surface of Russia, with this difference, that in the more northerly regions the flax is separated into fibre and seed, whereas in South Russia the seed only is used, the stalk being thrown away and the fibre lost. By grouping the governments of Russia according to the area in each given up to flax growing for the production of fibre we obtain the following list : — Viatka, Pskov, Smolensk, Tver, Lithuania, Perm, Vitebsk, Kostroma, Kovno, Yaroslav, Vladimir, Nijni-Novgorod, Vologda, Novgorod, Petrograd, Grodno, Archangel, Vilna, Kaluga, Courland, Minsk, Moghilev, Moscow, Olonetz, Tobolsk, Tomsk, and Esthonia. The regions of South Russia, in which flax is cultivated for the oil seeds, are excluded from the list, which clearly shows the great importance of flax to Russia. Flax constitute^ a large part of Russian exports, coming next in importance to grain and timber. In Western Europe and America, the linen factories are supplied principally with Russian flax. The total quantities of flax produced in Russia during the five years, I9<'r8-i9i2, were as follows : — 66 RUSSIA: ITS TRADE AND COMMERCE. Area cultivated (Thous. Desiatines) ' Seed Crop (Thous. Poods) Fibre Crop (Thous. Poods) 1908 1909 1910 I911 1912 1,369-2 1. 334-3 1,320-9 1,419-0 1,425-8 32,019-0 35-984-8 31,291-2 34.738-4 37.939-7 48,013-4 32,881-1 29,062-4 31.098-3 45.793-3 The exports of flax abroad during the same period were as follows : — Tinseed Flax Tow and Codilla Quantity (Thous. Poods) Value (Thous. Rbls.) Quantity (Th-us. Poods) Value (Thous. Rbls.) Quantity (Thous. Poods) Value (Thous. Rbls.) 1908 . 1909 . 1910 . 1911 . 1912 . 1913 • 9.383 6,020 8,733 9.831 10,217 6,488 13.915 10,543 19,279 21,270 20,392 9-859 14-513 14.354 13-501 11,897 19-313 16,664 58,157 60,761 67.653 63.844 107,539 86,848 2,360 2,438 2,265 1.883 2,257 1.994 7,109 7,161 6.758 6,549 8,519 7.371 The position occupied by Russia as regards the supply of flax to the markets of the world is similar to that of the United States as regards cotton. Both countries have the monopoly of certain branches of production, and other countries' attempts to defeat this position have not suc- ceeded. * The circumstances under which the cultivation of flax in Russia has been maintained and is being extended (as, for instance, in Siberia) are due to the abundance of undevel- oped land, which, when it is first cleared, is put luider flax. Even in districts which have long been under cultivation, flax cultivation is not readily abandoned, especially since the agricultural experts have found that by sowing clover, FLAX. 67 the reputation of flax for exhausting the soil may be suc- cessfully combated. The Government have latterly made large efforts to make flax growing both more profitable and thereby more inter- esting to the people. The parallel between Russian flax and American cotton cultivation is carried further in the proportion of exports to the quantity worked in the country. In Russia, for instance, only half as much is worked in the country as is exported abroad. The proportions are almost identical as regards American cotton ; but the Americans endeavour in every possible way to develop the manufactures from the raw material in the country, while in Russia the flax industry consumes but a quarter of the total quantity of raw material produced. Such a small development of the Russian flax industry not only excludes the possibility of its carrying any weight on the markets of the world, but even renders it incapable of preventing the imports of linen manufactures into Russia from abroad. According to official statistics the growth in the production during the three years 191G-1912 was the following : — Year Number of iMills Number of Workmen Spindles Jute Spindles (included in previous column) Automatic Looms I910 1911 1912 201 212 230 81,555 83,534 85,464 393,754 406,750 410,007 29,710 31,676 35,836 13,970 14,656 15-425 In this way Russia yields priority of place in the number of spindles both to the United Kingdom and to France. It would seem under these conditions that there are very good future prospects for the further development of the flax industry in Russia, for linen manufactures have a steady sale and will be in still greater demand as the prosperity of the people increases. 68 RUSSIA : ITS TRADE AND COMMERCE. In addition to the ordinary use of the fibre there exists in Russia the manufacture of short fibre — cottonization of flax, — and it has also been made possible to use the waste left from the dressed flax in the manufacture of paper. These branches of the industry are in their infancy, but the cheapness of the raw material which is employed pro- mises great possibilities. Both the Government and the people of Russia are inter- ested in the maintenance and development of flax cultiva- tion. Hemp Russia was the first country to supply hemp to the mar- kets of the world. The Crimean war, by restricting the export of Russian hemp, opened the international market to exotic vegetable fibres such as manilla, sisal, etc., and this fact greatly affected the hemp industry of Russia. In spite of this, hemp is still held to be the best fibre for twine and rope, and therefore continues to command a good market. The plant from which the fibre is obtained grows over a large part of Russia south of 55° N. The principal govern- ments in which hemp is grown are : Orel, Chernigov, Penza, Kursk, Tula, Volhynia, and several governments of Poland. Hemp is grown for its fibre and for the seeds from which oil is extracted. Both products are widely used in Russia, while the fibre is also exported abroad. The cultivation of hemp is practised on small peasant holdings, specially allotted for this purpose. The hemp is not all gathered at once. First the male plant is pulled, and afterwards the female plant when the seed has ripened. The stalk thus obtained is then retted. When dried, the fibre from the male and female plants is crushed, and this operation generally finishes the preparation of the hemp on the farm. The further operations, scutching, combing, etc., usually take place in special scutching yards. The average hemp crop may be reckoned at about 620 poods per desJatin, though under favourable conditions the yield may HEMP. 69 be as much as 1,500 poods. The quantity of fibre is con- siderably less, and is subject to considerable variations due to insuificient care. The extent of the cultivation of hemp in Russia may be seen from the following figures covering the years 1908- 1912 : — 1908 1909 1910 1911 1912 Area cultivated (Thous. Desiatins) 701-1 680-9 669-0 635-2 623-6 Seed Crop (Thous. Poods) 23,080-0 21,699-9 26,843-6 22,309-8 25.375-5 Fibre Crop (Thous. Poods) 28,536-8 18,937-1 18,376-6 16,500-4 24,468-7 The following table shows the exports of hemp, hemp seed, and tow : — Hemp Seed Hemp Hemj ) Tow Quantity Value Quantity Value Quantity Value (Thous. (Thous. (Thous. (Thous. (Thous. (Thous. Poods) Rbls. ) Poods) Rbls.) Poods) Rbls.) 1908 . 1,225 1478 2,952 12,044 903 2,013 1909 . 542 657 2,538 10,551 783 1,883 I9I0 . 329 451 2,217 9.727 727 1,807 I9II . 657 929 3.356 15,890 748 1,682 I9I2 . 703 929 3,166 17,400 774 2,069 I9I3 • 3,248 20,261 878 2,500 In addition to the export of hemp abroad, mention should be made of the very large quantity of hemp yarn, amounting to 5 milhon poods, which is made by the peasants. The peasant hemp-spinners have not had their goods displaced by the machine-made yarn. Machine yarn is produced in very small quantities, whereas hand-made yarn is suppHed 70 RUSSIA: ITS TRADE AND COMMERCE. to both large and small rope-works, and is also exported abroad. Of late experiments have been made in the manufacture of binder twine in Russia to replace the Manilla hemp which has been imported to the value of io,coo,ooo roubles. Satisfactory results have been obtained, and the develop- ment of this business has greatly increased the home demand for hemp. Beet Russia takes the first place among the European coun- tries cultivating sugar beet. In 1913-14, the area under beet cultivation was 647,730 desiatins. Germany comes next with 482,778 desiatins, then follow Austria-Hungary with 389,106 desiatins, and France with 190,022 desiatins. The cultivation in Russia is concentrated in five south- western governments (Kiev, Volhynia, Podolia, Bessarabia, and Kherson), in nine central black-soil governments (Kursk, Poltava, Kharkov, Chernigov, Boronej, Orel, Samara, Tambov, and Tula), and in Poland. Owing to an increased demand for sugar on the home market, the area of beet cultivation has been noticeably extended during the last two decades. The extension, however, has been far from regular : some years have brought a slight increase, even a decrease, in the area sown, other 37ears have been marked by an increase in area of more than 100,000 desia- tins. This increase during the last ten years is as follows : — in 1904-5, 430,297 desiatins ; in 1912-13, 609,443 desia- tins ; in 1913-14, 647,730 desiatins. There is little doubt that Russia could far surpass the sugar production of all the west European countries ; but unfortunately she is behind them in the matter of agri- cultural science. For instance, the beet crop per given area in Western Europe and in Russia is to the disadvan- tage of Russia. The average beet crop in Russia is irregular in character, and there has been no systematic improvement in this respect during the last decade. Quantity of beet in poods per dcsiatin : — BEET. n Russia. Germany . Austria-Hungary France Belgium . Holland . 1904-5 925 1,618 1,283 1,627 1.739 1,623 1912-13 1.139-9 2,023-4 1,891-6 1,946-4 2,009-3 1,952-3 1913-14 1,164-4 2,113-3 1,724-1 1,948-6 1,858-2 1,691-7 One of the reasons for the backwardness of Russian beet culture is to be found in the fact that the soil and climatic conditions of Russia are not so favourable as in Western Europe. This fact has largely tended towards poorer crops in Russia. The second reason is the gradual exhaustion of the soil and the insufficient use of chemical fertihzers. Again, in the Russian methods of beet cultivation, insufficient care in the preparation of the soil, the use of wrong kinds of fertilizer, bad seeds, and many other mistakes must be noted. Much of the decrease in the size of the beet crops in Russia is caused by an increase in the number of peasant planta- tions with a corresponding diminution in the number of plantations belonging to sugar factories. The beet crop from peasant lands is much less than from factory planta- tions, due both to a poorer preparation of the soil and the smallness of these plantations. It is to be hoped that these defects will be removed in course of time by the efforts now being made by the Govern- ment, agricultural institutions and the Russian sugar manufacturers. The Russian sugar manufacturers have done much to improve the cultivation of beet. For many years a series of experimental fields have been in use in Poland and in the south-western region of Russia for the purpose of studying the growth of the beet and methods of cultivation. There are also well-equipped laboratories in Warsaw and Kiev where thorough and systematic investi- gations are made both of the beet and the fertihzer neces- sary for its successful cultivation, and of all products and materials of the sugar industry. In addition to this the All-Russian Society of Sugar Manufacturers have formed an 72 RUSSIA: ITS TRADE AND COMMERCE. entomological station to study methods for the destruction of insects which attack the beet crops. Through such efforts very real and lasting results have been obtained : the quality of the Russian beet has steadily improved during the last twenty years, and is now equal to the level obtaining in Western Europe. The percentage of sugar in the beet in 1890-91 averaged 1372 per cent, throughout the Empire ; by a gradual increase it reached 16 per cent, in 1900-01, and 18-93 per cent, in 1910-11. The same continuous improvement is to be seen in the quality of the beet and in its technical merits ; the former was placed at 80 per cent, in 1890-91, and increased to 83 per cent, in 19C0-01, and to 86-52 per cent, in 1901-11 ; the technical merits were calculated to be 11 per cent, in 1890-91, 14 per cent, in 1900-01, and 16-38 per cent, in 1910-11. It may therefore be concluded that the weak side of the Russian beet industry is the thin crop of beet. This ques- tion is so important that it has left its mark on the Russian sugar industry, for the thin crop of beet per desiatin has to a very great extent depreciated the quality of the beet. Consequently Russia cannot compare with other countries of Europe in the quantity of sugar obtained from a given area by which the quality and qnantity of the crop is regu- lated. During the last ten years the increase in the quan- tity of refined sugar obtained from one desiatin in Russia and in the chief countries of production in Western Europe is shown (in poods of refined sugar per desiatin) in the following table : — Russia. Germany , Austria-Hungary France Belgium . Holland . . . 1904-5 1912-13 1913-14 I2I-3 92-91 146-1 233-4 295-6 301-0 164-0 254-3 238-2 192-8 252-2 225-6 223-6 271-3 247-5 228-4 274-7 223-5 1 The quantity of sugar produced is very small owing to the loss of a considerable percentage of the crop through bad weather. BEET. 73 Whereas the science of beet cultivation is developed poorly the technical part of the sugar manufacture in Russia has been brought to a high degree of perfection, and is but httle behind that of Western Europe. This is seen in the excellent results obtained in Russia as regards the percentage of refined sugar extracted from the beet. The average results secured in Russia as compared with the corresponding data from the chief countries of pro- duction in Western Europe are as follows (in percentages) : — 1913-14 Russia. Germany . Austria- Hungai y France Belgium . Holland , By their successful manufacture, the Russian factories have largely increased the percentage of sugar extracted from the beet during the past twenty to twenty-five years, and have nearly reached the results obtained in Western Europe. Obstacles to a more rapid progress are the small crop per desiatin, or in other words, backwardness in agri- cultural science, and a comparatively small number of manufacturers with higher technical knowledge engaged in the sugar industry. West European works produce sugar very much more cheaply than Russian. This is partly owing to greater technical knowledge, partly to the fact that foreign beet is cheaper than Russian owing to the average crop being heavier. Foreign sugar industries also require considerably less capital than the Russian as they do not require to store in advance all the materials necessary for the manufacture of sugar, these being conveyed to the factories while the manufacture of the sugar is in progress. In Russia, on the other hand, the distance of the factories from railway sta- 74 RUSSIA : ITS TRADE AND COMMERCE. tions, and their dispersion over so vast a territory, makes it necessary to collect all the required materials long before the manufacture of sugar is commenced. Owing to these conditions the factories are obliged to construct all kinds of engineering shops, fully equipped and having large staffs of highly paid engineers and workmen. Before the sugar is obtained the Russian sugar manufacturers are obliged to advance sums to planters, for sowing, digging and carting the crops on their own lands. All this requires a consider- able working capital, which is lent by the banks at dearer rates than in Western Europe. Russian sugar works may be divided into three classes : granulating works, producing white granulated sugar ; granulating and refining works, which produce refined as well as granulated sugar, and refineries only. The works producing white granulated sugar in 1 913-14 numbered 294. Of these 47 had refineries attached. The number of refineries, pure and simple, numbered 20. The quantity of beet used in the production of sugar during the past decade is expressed in poods in the following table : — Total Crop of Beet. 1904-5 394.518,671 I912-13 .... 692,912,900 I913-I4 .... 752,838,100 Quantity used for Sugar. 393,107,881 635,605,800 746,574,400 In all the beet-producing countries of Europe 3,387,983,300 poods of beet were used in 1 913-14 ; the quantity used in France was 350,290,700 poods, in Austria-Hungary 670,853,600 poods, in Germany 1,020,500,000 poods. In this respect Russia occupies second place amongst European countries. As regards the production of white sugar in 1913-14 Russia likewise took second place ; in certain less favourable years Austria-Hungary has come second. Dur- ing the last ten years the growth in the production of white BEET. 75 sugar in Russia, as compared with the production in the principal west European countries, has been as follows (in poods) : — Russia. Germany . Austria-Hungary France Belgium . Holland . 1904-5 51,091,840 88,673,876 48,394.350 33,752,520 9.377,523 7,499.340 1912-13 1913-14 75,400,942 148,280,100 104,398,700 52,753,400 16,392,200 17.358,100 93,510,861 145.303,800 92,687,700 42,878,000 12,418,400 12,478,800 The total stock of sugar (in poods) in Russia, counting the quantity produced from the beet and the unused surplus from the preceding year, has been in recent years : — 1904-5 1912-13 1913-14 Surplus from the pre- ceding year 26,632,298 39,016,301 21,982,641 Production of sugar from beet 51,091,840 75,400,942 93,510,861 Total quantity of sugar. 77,724,133 144,417,243 ^15.693.502 Sold on the home market 51,771,996 82,156,306 84.474.345 Destroyed for various reasons .... 109,651 — 143.549 Exported abroad 11,430,173 10,278,296 8,511,510 Stock in hand at the end of the year 14,412,318 21,982,641 22,263,298 By the laws of November 20, 1895, and May 12, 1903, the annual production of sugar in Russia is regulated. The Ministry of Finance determines the normal production for each year, which embraces (i) the quantity of sugar required to meet the demand of the home market, (2) the maximum market prices, (3) a stated quantity of sugar in reserve which may be put on the market only by permission of the Ministry of Finance when the market prices exceed the 76 RUSSIA: ITS TRADE AND COMMERCE. maximum fixed by the Ministry of Finance, (4) the amount of the average export to Finland and Persia. All sugar produced in excess of this " normal production " is classified under the heading of so-called free reserves which the sugar manufacturers may export abroad if they wish. In spite of the fact that these free reserves are sometimes very con- siderable, exports of Russian sugar to the markets of the world, especially to the British market, are very limited, chiefly under the influence and to the advantage of the German sugar manufacturers : by the international Brus- sels Sugar Convention a limit was determined above which Russian sugar was not allowed to be exported to foreign markets.^ How low was this hmit, as compared with the total production, may be seen from the following figures representing the exports while Russia was a signatory to the Convention : — ■ Total Exports. By European Frontiers By Asiatic Frontiers 1907-8 1908-9 1909-10 I9I0-II I9II-I2 I9I2-I3 . . . . •. 17,768,312 16,233,949 5.397.872 19,952,377 31,652,787 10,278,296 13,694,006 12,319,843 1,715,695 14.831,339 26,022,302 4.593,144 4.074,306 3,914,106 3,682,177 5,121,038 5,630,485 5,685,152 Tobacco Growing Amongst the tobacco-growing countries, Russia is third in importance, following the United States and the West ^ Article 2" of the Brussels Convention granted to Russia for the four annual periods between i September, 1909, and 23 August, 1913, the right to export 200,000 tons; this right was maintained for the five periods between i September, I913, and August, 1918. The contracting po\vers, owing to exceptional cir- cumstances, a shortage of sugar and a considerable rise in price in the world's markets, agreed to Russia exporting an extra amo-..nt : 1911-12, 150,000 tons ; 1612-13,50,000 tons; 191 3-14, 50,000 tons. TOBACCO GROWING. n Indies. Owing to the varied climatic conditions of the vast Empire, high-grade tobaccos are grown from both Turkish seed (yellow and cigarette) and from American seed (dark and cigar), as well as low-grade tobaccos, so- called " bakoun," " makhorka " and shvitsent." The land sown with high-grade tobacco during the last few years has been about 45-55 per cent, of the total area of the tobacco plantations. Statistics of tobacco growing in Russia during recent years are given in the following table : — Number of Planta- tions Total Area in Desiatins Tobacco Crop (in Poods) High Grade Low Grade Total 1903 . 1911 . 1912 . 489.265 365.634 317,604 65,088 74,208 65,826 2,349,772 2,428,172 1.835,965 3.819.370 5.288,754 5,535.282 6,169,142 7,716,926 7.371.247 Transcaucasia and the southern part of Russia are the principal regions where high-grade tobaccos are grown. Of the districts engaged in the cultivation on a large scale of the lower-grade tobaccos — " bakoun," makhorka " and " shvitsent " — mention should be made of the districts of Little Russia and the neighbouring nine governments of the central black-soil region. " Makhorka " is the most widely used low-grade tobacco in Russia. It has a comparatively good flavour and this, with its cheapness, has made it popular with the poorer classes. Russian "makhorka" has a well-deserved reputa- tion, not only on the Russian market but outside Russia as well. It is exported to Egypt and comes back to Russia as foreign cigars. The weak part of its cultivation is the insufficient capital invested in the business. Most of the tobacco produced in Russia is manufactured in Russian factories ; but a very considerable and increas- ing proportion is exported abroad. Some of the Russian tobacco factories arc very large. 78 RUSSIA : ITS TRADE AND COMMERCE. chiefly those belonging to joint-stock companies. The average output is not very high ; in 191 1 the production was but 11,000 poods of manufactured tobacco from the ordinary factories, and 38,600 poods from the " makhorka " factories. The total number of work-people engaged in the tobacco industry in 1911 was 30,886, or an average of 131 to each factory. The technical equipment of the factories leaves much to be desired, although considerable improve- ments have been made during the last few years in replacing hand labour by machinery. For example, during the last ten years the number of mechanically driven machines in the ordinary factories has increased from 50 to 106, while the number of hand-power machines has diminished from 463 to 224, or by more than half ; in the " makhorka " factories and in the " makhorka " sections of the ordinary factories the number of hand-power mortars, grind-stones, and other apparatus has decreased in ten years from 399 to 385, while horse and steam-driven grinding machines and other apparatus have increased during the same period from 522 to 766. From 9 to 10 per cent, of the tobacco produced in Russia is exported abroad. Tobacco is usually exported in the leaf. Cut tobacco and snuff are exported in very small quantities. Tobacco in leaf form is exported principally to Finland ; France, which is a ready buyer on account of the tobacco monopoly ; Austria-Hungary, which imports it for the same purpose ; and Germany. More than 75 per cent, of the total exports of leaf tobacco in 1911 were sent to these countries. The total export of leaf tobacco in 1 91 1 was 636,000 poods, valued at 4,268,000 roubles, of which 27 per cent, was sent to Finland, 20 per cent, to Ger- many, 23 per cent, to France, and 7 per cent, to Austria- Hungary. The balance was exported to other countries. Attention has recently been called to the growing export of Sukhum leaf tobacco to Egypt and Turkey in Asia. The tobacco sent to these two places is chiefly high-grade from Turkish seed — -Samsun and Trapizond. The increased export of Russian tobacco is the result of a good quahty product which has been well sorted and selected, whereby FRUIT GROWING. 79 it is well able to compete wich Turkish and Greek tobaccos The export of Batum leaf tobacco — Trapizond — to Egypt has also increased for the same reasons. Sukhum mer- chants are arranging for the export of leaf tobacco to America, but are meeting with difficulties from the Ameri- can Tobacco Trust. Cut tobacco is chiefly exported to China, Finland, Persia, Germany and Austria-Hungary. In addition to leaf and cut tobacco Russian cigarettes and cigars, which well merit their excellent reputation, are also exported abroad. The export of tobacco manufacturers during the quin- quennial 1906-1910, expressed in poods, includes about 40,000 poods of cigarettes and 1,000 poods of cigars. The principal markets for the sale of cigarettes are : Finland, Holland, Germany, England, and China. Of the total export of 640 million poods (?) (40,000 poods?) of cigarettes in 1911, 41 per cent, were exported to China, 27 per cent, to Finland, 12 per cent, to Holland, 11 per cent, to Germany, and about 2 per cent, to England. The export of cigars is subject to considerable fluctuation, and is of no general importance ; the principal demand for cigars comes from Germany. Fruit Growing The nature of fruit cultivation and degree of its develop- ment in Russia is directly dependent upon the varied soils, climatic conditions, means of communication, proximity to railway centres, etc. Favourable conditions over a wide belt of country along the western frontier of Russia have rendered this region particularly prominent for fruit cul- tivation and a very high perfection has been attained. The district is made up of the Baltic Provinces, the Vistula region and the South-Western, or Trans-Dnieper, region. In the Baltic district the fruits chiefly grown are apples and cherries ; pears and plums are of somewhat secondary importance. In this region there are also many kinds of fruit of foreign origin. In the Vistula region apples and pears predominate, though the cultivation of the best kinds 8o RUSSIA: ITS TRADE AND COMMERCE of foreign cherries and plums is carried on in certain parts. Amongst the apples, the English Pippin, Calvilles and many foreign kinds of Rennets are widely grown. The South- Western, or Trans-Dnieper, region is one of the richest parts of European Russia for fruit growing. Here, especially in the governments of Bessarabia and Podolia, the best kinds of foreign fruit are successfully cul- tivated. Among apples these include the white wintei Calville, Rosemarie, Napoleon, London Pippin, golden Pearmains, etc. Of pears there are the Duchess of An- gouleme, the winter Dekanka, the Royal, William, etc. Plums include various varieties of the Reine Claude, while peaches, apricots, and cherries are also grown. The art of fruit cultivation in this region has been brought to a very high level of perfection ; many proprietors here have given themselves seriously to fruit farming and look after their orchards in exemplary fashion. Gardeners take advantage of the numerous foreign varieties and cultivate them through- out the district. In many parts, this region might be called the kingdom of stone fruit, especially plums, and might well supply the foreign market with fine big Hungarians, both fresh and preserved. The export of preserved apri- cots might likewise be organized. To the east of this wide belt of the fruit region there is a large area with soil which is unsui-ted for fruit growing. This is followed by the immense Moscow region, the centre of the northern fruit belt, which covers seven governments. The apple is the principal fruit of this region, though certain kinds of pears and cherries are also grown. Vladimir and Maloyaroslav cherries enjoy wide popularity throughout Russia. Further, along the whole course of the central Volga from Nijni-Novgorod, and, in places, as far down as Astrachan, fruit growing is extensively practised on the narrow up- lands on the right bank. Local kinds of dessert apples, pears and cherries are cultivated, and occasionally, large strawberry plantations are met with. From the Crimea, the principal Russian markets are sup- plied with the best apples and pears. Crimean fruit growers FRUIT GROWING. 8i have also sent a few experimental lots of apples to the Lon- don and other foreign markets with entirely satisfactory results. There is no doubt that the export of Crimean fruit, especially apples, has a wide future before it, for this fruit, both in quahty and appearance, can satisfy the most exact- ing and varied tastes of foreign consumers. The principal firms of Moscow and Petrograd compete against each other in the purchase of large quantities of apples, pears, nuts, and dessert grapes, while the large demand for Crimean fruit is further strengthened by the increasing output of the preserving factories. In the Crimea the following are the chief kinds of apples grown : Sary-sinap, Candille-sinap, Orleans Rennet, Golden Pearmains, English Rennet, red and white Cal- ville, Canadian Rennet, Champagne Rennet, white and red Rosmarie ; William, Marie Louise, Duchesse, Beurre, autumn Dekanka, Cure, Ferdinand, Saint-Germain, and several other kinds of pears. Peaches, apricots, and plums are also successfully grown in the Crimean orchards, but are of minor importance. The Crimea also supplies the home markets with large quantities of almonds and walnuts which might be exported successfully, if a little more enterprise were shown. In the Caucasus, fruit cultivation is not at all uniform, owing to the fact that natural conditions vary very much in the different localities. The cultivation of fruit is par- ticularly developed in the Black Sea region, where varied and valuable fruit trees and shrubs grow in profusion — ■ apples, the choicest kinds of pears, cherries, peaches, apri- cots, almonds, plums, oranges, lemons, walnuts, chestnuts, pomegranates, etc. Fruit growing is also widely practised in many parts of the Caspian region. Transcaucasia is able to produce the best kinds of foreign fruit with great success, such as the following kinds of apples : white winter Cal- ville, yellow and red autumn Calville, Canadian Rennet, the grey Muscat, and saffron Rennets, the Golden Pearmain, and many others. Pears include the winter Dekanka, Duchesse, Woodland Beauty, Beurre, and others. Euro- pean apples and pears when grown here attain to a great size and are of excellent flavour. G 83 RUSSIA: ITS TRADE AND COMMERCE. During the last decade Turkestan has come to the front amongst Russian fruit-growing centres by reason of the excellence of its fruit. With its exceptional climatic con- ditions, Turkestan may safely be called the home of the fruit tree, so rapid is the growth of all kinds of plants. Young cuttings begin to yield fruit by the third and fourth year, and by the fifth and sixth years good crops are obtained. Pear trees in Turkestan yield from three to six poods of fruit, and apple trees from four to ten and even twelve poods. When Turkestan became a Russian possession, amateur gardeners took up the question of fruit growing and placed its cultivation on a rational foundation. They began to grow the very best kinds of southern fruit. The construc- tion of the Tashkent Railway gave the cultivation a further incentive. Turkestan now possesses such favourable con- ditions for growing the best kinds of fruit, that it is able to compete not only with other parts of Russia, but with foreign countries. First amongst the commercial kinds of Turkestan fruit are the following apples : white Calville, white Rosemarie, yellow Belle Fleur, Candille-sinap. In addition the following kinds of \vinter-apples are cultivated: red Calville, Rennet; of autumn apples there are the Golden Pearmain and Napoleon ; of summer Rennets there are the Landsberger and Golden Grime ; and of spring apples — the Baumann Rennet. The best kinds of pears are : sum- mer — Marie Louise, William, Josephine ; autumn — bonne Louise d'Avranche, Passe Colmar ; autumn and winter — Duchesse Imperiale, Duchcsse d'Angouleme, Beurre, Dill. More than fifty different kinds of apples and pears are grown in Turkestan. Turkestan fruit has become well known throughout Russia, during the last few years its fame has gone abroad ; at one of the last international exhibitions of fruit growing, the exhibits of Oberdik Rennet, Beurre Dille, Aport, tliC Vernen and Kattakourgan gra])e " Bomba " attracted the attention of fruit specialists by their size, weight and beautiful colouring. Hop Growing The cultivation of hops began to assume large propor- HOP GROWING. 83 tions in Russia about twenty-five years ago, and has now become an important part of agriculture in Poland, in Vol- hynia, and in the so-called " Guslits " region. In all there are about 9,000 desiatins in Russia under hop cultivation from which, on an average, 400,000 poods of hops are ob- tained. There are two kinds of hop cultivation in Russia : the old non-cultivated Russian hops, and the new cultivated kinds of Western Europe, which are used in up-to-date breweries. The cultivation of hops is distributed through the various regions in the following manner (in thousands of poods) : — Best Foreign Hops Inferior Russian Hops District District Volhynia . Podolia .... Guslits .... Central .... 250 40 20 5 315 Kostroma . Guslits. Kazan. Viatka. . . . Belostock . Souzdal 30 15 15 15 5 5 85 Volhynia is the most important hop-growing district. The hop was introduced into Volhynia by the Czech colon- ists, who had cuttings from the Bohemian plants sent to them from their native country. The principal kinds now grown are red Saaz, from Bohemia and Bavaria, and Goldings from England. The oldest hop-growing region where the cultivation of Russian plants has been practised since early times is the so-called " Guslits," comprising the governments of Mos- cow, Vladimir, and Riazan. A large proportion of the hops grown in Russia are used in Russian breweries. The best kinds are exported abroad, whence a certain proportion return to Russia, marked as being of foreign origin, 84 RUSSIA: ITS TRADE AND COMMERCE. The Russian brewing industry consumes about i3,cco poods of Russian hops, and about 40,000 poods of imported hops. The annual export of the best Russian hops amounts to about 30,000 poods. Vine Growing and the Manufacture of Wine The cultivation of grapes and the manufacture of wine are on a low level in Russia, and, in spite of their importance to the agricultural status of the southern districts, they are far from commanding the whole of the home market. During the quinquennial period of 1906-1910, 542,000 poods of foreign wines, valued at 10,784,000 roubles, were imported into Russia. The wine comes chiefly from France and Germany, and large quantities of grapes and raisins are also imported into Russia. Russian wine export is very small, both in quantity and value ; during the five years, 1906-1910, the average export was 23,000 poods, valued at 443,000 roubles. The total area of land in Russia devoted to the cultivation of the vine is about 230,000 desiatins, while, according to the statistics for 1913, 100,890 desiatins are situated in the southern governments, 25,600 desiatins in the Northern Caucasus, 8o,6co desiatins in Transcaucasia, and about 20,000 desiatins in Turkestan. Amongst the southern governments with a well-established vine-growing industry, Bessarabia with its 6i,oco desiatins of vines, the govern- ment of Taurida with 11,720 desiatins, the government of Kherson with 16,230 desiatins, and the Don Cossack Terri- tory with 10,080 desiatins, stand out prominently. In Transcaucasia the principal wine-manufacturing centres are the government of Kutais with 18,190 desiatins of vines, and the government of Tiflis with 21, coo desiatins. The most important vine-growing and wine-producing regions of Russia are the government of Taurida (Crimea), Transcaucasia and Bessarabia ; of secondary importance are the Don Cossack Territory, the government of Astrachan, the Northern Caucasus, and the Transcaspian region. In the Crimea the cultivation of the best foreign grapes has been brought to a high state of perfection ; the principal VINE GROWING AND WINE MAKING. 85 kinds are the Muscat, then follow Cabernet, petit Verdot and Merlot, S'Emilion, pedro-ximenes, pinot blanc, gris, pinot franc, Lourvede, Sercial di Madeira ; during the last ten years the Grenache, Mausac noir, and Kachetinsk, have been widely cultivated for red wine as they bear large quantities of fruit rich in colour and tannin. The kinds more usually grown in the orchards of the colonists are : Concours, Alicante, S'Emilion, Pinot, Chasselas, and Muscats. South coast wines are considered the best of the Crimean wines ; they possess all those qualities which constitute a good wine, i.e. strength, body, quantity of alcohol, aroma, improve with keeping, and can be trans- ported without losing in quality. The liqueur wines of the south coast are held to be the best of their kind, and have attracted the attention of experts at international exhibi- tions in London, Paris, Vienna, and in the United States. The white table-wines of the south coast are noted for their strength and powerful aroma. Red wines are of very high quality, but are somewhat over harsh, contain rather too much alcohol, and not sufficient acid. In addition to the numerous kinds of dessert and local grapes of Bessarabia, foreign grapes for making wine are also cultivated, chiefly in Southern Bessarabia, such as malbec, cabernet-sauvignon, merlot, St. Emilion, sauvignon blanc, enassalar, Riesling, etc. There is great variation in the Bessarabian wines, but the majority of them belong to a class of table-wine similar in taste to the French, while in some parts they approximate to the Rhine wines. In some of the southern parts of Bessarabia where the soil is sandy a light agreeable wine is produced which, by keeping, be- comes slightly aromatic and fairly strong. Most of the wine of the large wine-growers, having their own cellars, contains from 10 to 12, and in some years as much as 14" 5 degrees of alcohol ; the peasant-made wine contains from 7*5 to 10 degrees of alcohol. It may be said that Bessarabian wine, both in view of the percentage of alcohol, acidity, the quantity of volatile acids and the amount of glycerine and extractives, has every chance of becoming a valuable pro- duct of high quality. 86 RUSSIA : ITS TRADE AND COMMERCE. • Vine cultivation in the Caucasian region may be divided into two main divisions — the Northern Caucasus and Trans- caucasia, in which there is a great difference both as regards the methods and extent of cultivation, and its importance to the inhabitants. In both these cases priority belongs to Transcaucasia. The methods of vine cultivation and wine manufacture are, however, still rather primitive even in Transcaucasia, and this fact is reflected in low produc- tiveness and the comparative dearness of manufacture. The numerous kinds of grapes, the close proximity of the plantations, the absence of any sorting of the grapes and maturing, all tend to prevent the manufacture of definite kinds of local wines. Although in places wine of high quality is produced, most of the Caucasian wines satisfy tastes that are not too exacting. The best of the Trans- caucasian wines are the Kakhatinsk ; they are agreeable in taste, with a good bouquet, but are rough and of insufficient acidity. Imeretinsk wines are of a different kind : they contain a comparatively small quantity of sugar, are very sharp, but not rough. When prepared according to Euro- pean methods they produce a light wine. The home of the finer Caucasian wines is the Western Caucasus, or more correctly, a small district at the western end of the Black Sea coast or the districts around Novorossiisk and Gelend- jik. Of the wines grown here the best known is Riesling. A competitive wine is St. Emilion. Mention should also be made of Aligonte, which is an excellent kind of table-wine, Kaberne, Portugalka, which is known by the name of " Bur- gundy." Kaberne and Portugalka are the characteristic wines of the neighbourhood. In the district of Novorossiisk is the Crown estate of Abrau, well known for its excellently equipped wine-manufacturing establishment. Its fame is due to the preparation there of the finest dry wines and " Abrau-Durseau " champagne, equal to some of the good makes of French champagne. A very large quantity of the wine produced in the Cau- casus is consumed by the growers themselves, a con- siderable amount is placed on the home markets, while part of the grapes and must, and also the bad wines, are VINE GROWING AND WINE MAKING. 87 used in some districts (Transcaucasia) for the production of spirit. The manufacture of wine is not equally important for all the wine-producing districts of Transcaucasia ; in those districts where the sale of wine is difficult owing to distances from the market centres and the absence of suitable communication, distillation of spirit forms the chief outlet for the vine growers ; in other parts this is but a side issue for utilizing the refuse of wine-making. • CHAPTER V Forestry By H. Kasperowicz The forests of the vast expanses of Russia are of the most varied description, both as to the number of species of tree which they contain and as to their value and importance to the district population. Up to the present, no exact esti- mate of the area covered by forests has been made, but about the year 1912, the extent of forest land in European Russia, Asiatic Russia and the Caucasus was estimated at 305 millions, of desiatins. The State is the principal owner of forests and such forests are administered by the Forest Department. In the area described above as forest land, enormous stretches of " Tun- dras," bogs, lakes and rivers are comprised, as well as the actual woodland. Properly speaking, the extent of true forest land is, according to the Forest Administration, only about 170 millions of desiatins. It is distributed as follows (in desia- tins : — Region European Russia European Russia minus the five northern Go- vernments The five northern Governments . The kingdom of Poland The Caucasus Asiatic Russia . General Surface 1911 105,809,720 13.502,313 70,675,273 612,960 4.379.847 228,540,062 1912 105,947,192 13.545.303 70,769,659 614,872 4.746,934 194,409,293 88 Net Forest Land 1911 85.638,300 10,804,188 58,248,120 564.474 2,962,102 86,112,107 1912 84.249.234 10,827,675 57,835,661 561,936 2,962,724 91,910,292 FORESTRY. 89 The highest percentage of productive forest land is in European Russia, where it occupies an area of 80 per cent, of the total ; Poland is particularly remarkable in this respect. The five northern Governments are less favoured, as are also the Caucasus and Siberia. The area of these regions is about 30 per cent, of the total. All the forests fall into two characteristic groups. The forests of the north and north-east of European Russia, those of Siberia and the mountains of the Caucasus belong to the first group. These are forests, more or less dense, interspersed occa- sionally by cultivated tracts of land. Usually, however, they form expanses of what might almost be called virgin forest, with bogs and lakes, where cultivation is practically unknown. This kind of forest is rarely met with in other parts of Europe. The forests of the second group are "already consider- ably diminished, and the clearing is rapidly continuing in' order to supply the ever-increasing needs of the home market and foreign exportation. The forests of the Russian Empire abound particularly in conifers, though in certain districts, and under certain climatic conditions, groupings of conifers and leaf-bearing trees are to be found. There are about forty known kinds of conifers in a wild state growing to a considerable height, of which the most common in Russia is the fir-tree. Whole plantations in which no tree of any other species is met with are of common occurrence. It flourishes particularly in the north, forests of fir-trees being practically non-existent in the southern half of Russia. There the fir is only met with among other kinds of trees. Siberia and the Caucasus have special kinds of fir-trees. Next in importance, as to the surface which it occupies, but taking first place in forest economy, is the common pine. It grows farther south than the fir-tree. In some regions, in Siberia for instance, and in certain parts of the Urals, a particular kind of pine known as the Siberian cedar is found, remarkable not so much for its wood as for its fruit, which is called the cedar-nut. The existence of 90 RUSSIA: ITS TRADE AND COMMERCE. these trees in the forests of Siberia forms one of the most important branches of local industry, and is the source of considerable revenues to the population. In the Crimea, in addition to the common pine, there is a species called the Crimean pine. In the Caucasus the pine has no economic importance ; the species found here is the maritime pine [Pinus maritimus). Among the pine and other species the birch, one of the most common of leaf-bearing trees in the forests of Russia and Siberia, is to be found. Some neighbourhoods show whole plantations of this species without the admixture of any other. The aspen is also very common and is met with in separate groups or growing among other kinds. During the last few decades, the space covered by the aspen has greatly increased. Birch and aspen very often grow on the ground formerly occupied by ancient forests, which have either been cut down or destroyed by fire. They flourish on the sites of fir forests in the north, of oak forests in the south and on ground formerly occupied by pine forests, etc. The oak, on the contrary, is much less common, and occurs more frequently in the south of Russia, where it forms forests in conjunction with other species. In European Russia the common oak predominates • but special kinds of oak grow in the Crimea, the Caucasus and in Siberia. Among the other trees found in Russia are the larch, generally growing in company with the fir, the beech, the alder, the linden, the elm, the witch elm, the ash, the maple, the plane, the birch bark, etc. In the Caucasus grows the Caucasian palm, known as the " Samshita," which is greatly valued ; there also is found the walnut, on which knots, or excrescences, attaining some- times a diameter of from two to three archines, are often formed. Similar excrescences commonly occur on the birch ; the wood of which these are composed is of a parti- cular texture and is extremely pliable. It is used in the manufacture of many articles of joinery, which are known in Russia and abroad as articles of Carelian birchwood. FORESTRY. 91 The following table shows the distribution of the forests of European Russia according to their ownership. The table is given in desiatins and on the percentage of the general forest surface. The proportion of forests in Euro- pean Russia is 337 per cent, of the total, and the forests are chiefly situated in the northern parts, such as the North Baltic, the Ural mining district and the Upper Volga. General Appanage State of Private Peasant Various Region Forest Surface Forests Imperial Family Owners Owners Others Northern 61,974.045 57. 499.3532. 151. 871 954.827 1,280,561 87.433 district 100 92-8 3-5 1-5 2-1 o-i North 13.065,838 5,466,562 859,608 4.934.959 1.496,697 308,012 Baltic 100 41-8 6-6 37-8 II-4 2-4 South Baltic 5,102,897 722,007 8,211 4,106,250 182,431 83,968 River 2,191.195 712,172 115.843 1.328,799 24,747 9.634 Niemen 100 32-5 5-3 60-7 I-I 0-4 Rivers Dnieper 9,065,482 1,444,949 73.448 6,618,334 571.676 357.075 and 100 i6-o 0-8 73-0 6-3 3-9 Dniester Kingdom of Po- 2.I77.152 722,296 203 1,122,340 211,778 120,535 land 100 33-19 o-oi 5i'i6 9-7 5-5 Ural mining district 22,294,745 10,730,420 171,989 6,995,680 3,277,044 1,119,612 ICO 48-1 0-8 31-4 147 5-9 Upper 11,526.195 5,499,884 668,823 3.781,334 1,457.709 98,445 Volga 100 45-8 4-9 38-1 9-6 1-9 Middle 4.631.859 2,122,883 225,894 1.765.275 444.035 73.722 Volga 100 47-7 1 6-0 32-8 12-6 0-9 Lower 3.675.704 742,820 918,385 1,157.055 770.013 68,840 Volga 100 20-2 25-0 31-5 20-9 2-4 Central Pro- 6,015,704 1.460,733! 72.582 3.187.718 1.101,736 192,935 vinces 100 24-3 1-2 53-0 i8-3 3-2 Total . 141,720,225 87,124,079 5.286,857 35,952,571 10,818.427 253.829 From the table it will be seen that about two-thirds of the European Russian forests belong to the State, which is also the principal owner in other forest districts. Forests under private ownership form about a quarter of the total and pre- dominate in the districts of the Southern Baltic, the rivers Dnieper and Dniester, the river Niemen and in Poland. 92 RUSSIA: ITS TRADE AND COMMERCE. The State forests, on account of their numerical superi- ority, are very important in regard to the export timber trade, which is substantially increasing. From the northern provinces, timber is exported through the ports of the White Sea, principally to Great Britain. In 1912, the general area under forest and the area suitable for timber growth was, in thousands of desiatins : — Provinces „ , . ; Suitable for Timber General Area ! ^^^^^^ Archangel .... Vologda .... 43,157 29,018 30,385 27,024 72,175 75,409 The rich country of Setchera lies in this area. It has so far been very little explored, and must certainly possess other sources of wealth than those already known and developed. The principal kinds of trees in this part of the country arc the pine and the fir. In the east, the larch, the fir and the cedar may be found, and in certain neighbourhoods the birch, the aspen and the alder flourish. Conifers of large dimen- sions, however, are diminishing in number as the forests are thinned. In this district, the forests suffer greatly from fires, whicirare diificult to cope with owing to the sparse number of the inhabitants. The small population consti- tutes an obstacle to the fuller development of the forest riches in these northern districts. The delivery of timber from this area is very limited ; every year immense quanti- ties of wood remain which are put to no use whatever. The following table indicates in cubic sagencs the amount of unfelled timber (the principal article of trade) which was marked out for sale in 191 2, and the amount which was actually sold : — FORESTRY. 93 Governments Designated for Export Actually Exported Archangel. Vologda .... 1,706,751 731,960 526,903 406,443 One of the reasons why so Httle timber is exported from North Russia is the absence of roads and means of transport. The Government of Olonetz belongs also to the northern area, for all the timber from this Government is exported through the ports of the White Sea, except a small propor- tion which is sent through the new port of Petrograd. In the regions of the Ural (Governments of Perm, Oufa, and Orenburg) forests of pine and fir are the most common. In certain districts the Epica, or white fir, grows with the common fir ; there are also forests of cedars. The oak flourishes in the Government of Oufa and in part of the Government of Orenburg. In spite of the continuous fell- ing of the last few years, this area still possesses vast ex- panses of practically virgin forest, up to the present very little explored. In 1912, the State forests in the mining district of the Urals were distributed as follows : — Governments Total Area Area Suitable for Forest Growth Perm Oufa Orenburg .... 9,027,128 416,336 208,244 8,112,548 379.265 254.942 The timber from these forests which is destined for ex- port is sent partly through the ports of the White Sea and partly through the new port of Petrograd. The forests of the Caucasus are chiefly disposed, in groups, between the mountains, in the central districts, and partly in small tracts on the borders of the Caspian Sea. The Middle Kura is wooded along the whole length of its banks. 94 RUSSIA: ITS TRADE AND COMMERCE. In the locality which is called the Little Caucasus, the Armenian heights, etc., forests of considerable importance occur round the base of the mountains and in the passes. Farther on is the great forest to the north of Lake Concha, and to the east that of the province of Elizabethpol. These present the characteristics of mountain forests. In the west of the Caucasus the forests are disposed in uninterrupted stretches which extend to the seashore. In general, the forests of the Caucasus have in area of 67 millions of desiatins. The extent of the State forests in 1912 was 4,746,934 desiatins, including 2,962,724 desiatins suitable for the growth of timber for commercial purposes. The following provinces of the Caucasus are the richest in forests : — Favourable Irovinces and Districts Total Area for Com- merce Province of Batum 570.305 258,900 Province of Elizabethpol 637.214 403.238 Province of Cuban 569,266 322,758 Province of Kutais . 318,976 181,197 District of Soukhoum 324.203 166,744 District of Terskaya . 346.679 281,874 District of Tiflis and Zakatalski 823,078 548,814 District of the Black Sea . 418,831 345.315 Among the mountain trees of the Caucasus the most common is the beech : it occupies 25 per cent, of the total forest area. These forests contain a great quantity of wood suitable for joinery. The oak, which ranks second in importance, occupies in the Caucasus 167 per cent, of the total area. The local oak can be used for building material as for carpentry, irrespective of special kinds. Next to the oak ranks the wych-elm. It occupies 12-8 per cent, of the total area. The wood of this tree is suitable FORESTRY 95 for carpentry, but locally it is used principally as firewood. The pine covers 8-i per cent, of the total area ; the fir 6-6 per cent., and other kinds of fir 6 per cent. In addition to the above species, juniper, birch, elm, alder, maple, ash, lime, poplar, willow, chestnut, hazel, box, Hgnum vitae, mountain ash, pear, apple, etc., are found. All these kinds have a household importance. Altogether the total amount of timber from the State forests in the Caucasus destined for sale was 640,362 cubic sagenes, and of this amount only 159,674 cubic sagenes was actually delivered, representing 24-8 per cent, of the quantity marked. The timber of the Caucasian forests is chiefly used for local needs, although a certain amount is exported through Batum, Novorossisk and other ports. Large quantities of wood, however, owing to the absence of roads and to transport difficulties, are never utilized at all. Siberia is very rich in forests. The approximate area at the disposition of the Government is 194,409,293 desia- tins, including 91,910,292 desiatins of specially favourable land. The four provinces of Siberia, Tobolsk, Tomsk, Yenis- siesk, Irkutsk, and the eastern districts beyond Lake Baikal, Yakoutsk, Amursk and Primorsk, are the richest in forests, and present an immense reserve of standing timber. The forests of Siberia are noted for the number of species which they contain. Conifers are represented by the pine, larch, cedar, fir, and white fir ; leaf-bearing trees, by the birch, aspen, alder, linden and poplar. Farther on, in the forests of Amur, new kinds appear, such as the Mongolian oak, different varieties of the maple, linden and ash, the walmit and the cork tree. The area of the forests may be estimated as follows (in desiatins) : — 96 RUSSIA: ITS TRADE AND COMMERCE Provinces and Districts Total Area Favourable for Forestry District of the Amur .... 34,841,000 11,992,500 Province of Yenissiesk . 8,956,265 7,987,080 District of Trans-Baikal 17,999,000 2,102,000 Province of Irkutsk. 8,812,987 6,367,138 Province of Primorsk . 34,454,620 21,967,550 Province of Tobolsk 63,036,505 16,780,808 Province of Tomsk . 11,518.499 4,457.487 The administration of the Siberian and other forests in Asiatic Russia is very imperfect, even in those which have been explored and partly organized. Accumulations of vegetable detritus, which has lain there for centuries, give to a Siberian forest a decayed and wild aspect, and add much to the danger of forest fires. The supply of wood from Siberia is therefore proportionately diminished and great quantities remain unutilized. Here again, difficulties of transport, added to lack of initiative on the part of the tim- ber merchants, shortage of capital, etc., are factors which prevent the development of the trade to its full extent. In 1 912, the Government had marked out for sale in Siberia 4,705,695 cubic sagenes of standing timber — not a large amount if the extent of the forests be considered. The amount actually sold was only 500,339 cubic sagenes, about II -12 per cent, of the amount originally intended for sale. Forest industries and the timber trade in Russia arc, on the whole, very little developed in comparison with those of other countries. The report for 191 3 of the Ministry of Trade, which is concerned with the activity of about 80 per cent, of the number of workmen employed, and with the same percent- age of commercial value gives an idea of the condition of the trade. Sav/mills and factories engaged in woodwork in European Russia sold, in 1912 , as follows (in thousands of roubles) : — FORESTRY. 97 Industries Sawmills Veneer (cut and stuck) Articles in veneer .... Carpentry, joinery and furniture Flooring and carpentered wood for building purposes Carving and joinery Wooden pins for shoemaking Matches and match boxes. Tubs and barrels Boxes Objects in cork .... Religious images and figures Pianos, organs, harmoniums, etc. Birch brooms, bast, laths, scant lings, soaked bast, etc. . Wheels and other articles . Milled bark Other varieties of articles igio 93,205 3,938 2,185 6,124 3,772 1,225 138 • 456 1,070 2,533 7,518 56 2,425 209 126 7 269 191 1 Total 125,962 107,545 4,795 2,396 8,048 5,374 1,331 119 445 1,583 2,629 8,383 90 2,851 192 154 II 392 1912 126,108 7,085 2,473 8,798 6,720 1395 133 553 1,959 2,952 8,527 58 3,130 159 170 12 417 150 ,300 174,643 The real production, however, of the veneering works is double the amount indicated by the figures in the table, sawing and veneering works forming a highly developed part of Russian industry. Capital to the amount of 40 million roubles is engaged in the sawing industry alone and only from 10 to 12 millions in other trades. Carpentry and joinery are important industries ; they have made great progress during the last few years and have absorbed a considerable amount of capital. In the Russian timber trade the predominant type of enterprise is that of the single individual with a small capital. This is especially the case in the production of articles of wood, known as " Kustarny work," a branch of industry which is highly developed. It consists of the manufacture of wooden cups, bowls, spoons, etc., and supplies merchandise throughout Russia, of the value of at least 100 million roubles. H 98 RUSSIA: ITS TRADE AND COMMERCE. Timber working has made great progress during the last ten years, but is not, in general, fully developed. The in- dustry is of the greatest importance in European Russia, where the most recent figures show : — ■ Year Number of Factories Number of Workmen 19II 1912 2,196 2,358 112-5 (thousands) 124-2 This number is distributed between tl:e districts of tie north and that of the Ural mining district, as follows : — Northern district : — 191 1 1912 .... Ural mining district :- 1911 .... 1912 .... Sawmills and Veneering Industry Other Industries Number of Factories 48 53 49 44 Number of Workmen 15,006 17,920 3,084 2,060 Number of Factories Number of Workmen 57 lOI 193 226 Forest industries have developed in a more marked man- ner in the northern district, particularly in the province of Arkangelsk. In this region the annual production of the sawmills is as high as 30 millions of roubles, but such figures are insignificant when the total area of the forests is considered. Such factories as exist in this district produce for the most part planks, boards, rods, pegs, bungs and rivets, principally for the export trade. The production of cellulose and wood pulp is represented in the north of Russia by a unique but flourishing enterprise, named the " Sokol." The further development of the industry would p. obably have great chances of success. FORESTRY. 99 The manufacture of tar from vegetable substances is little developed. In the mining district of the Urals forest industries are relatively less developed. Those which work at preparing wood have made progress only during the last few years, progress which is due to the affluence of capital from abroad. In spite of the superabundance of the necessary raw material in this region only a limited amount of wood pulp is produced. Part of the forest products of this district are consumed locally ; the rest are dispatched to the mar- kets of Siberia, Turkestan and Boukhara. During the last few years the export of forest produce has augmented, particularly large timber, which is dispatched through the seaports to foreign markets. Industries for the preparation of wood are little developed in the Caucasus ; wood here is generally used for heating, and it is only during the last few years that a greater pro- portion has been adapted to other purposes. Planks from the different kinds of conifers are even brought here from European Russia. Wood-working industries are better developed in the pro- vince of Tifiis, where there are over twenty factories pre- paring different materials for building. Flooring, veneer, and planks are also prepared in other places, particularly in the province of Kutais, but these industries exist only to supply local needs. The beech, grown locally, is much more used now than formerly for the production of pegs, bungs and rivets, and also in a lesser degree for railway sleepers ; these are generally made of oak and are ex- ported. In Siberia, where small industries abound, the riches of the forests are still less turned to profit. The growth of the towns and other inhabited neighbourhoods near the railways have caused an augmented demand for forest pro- duce. Latterly many great commerical enterprises, based on the profitable working of forests, are constantly appear- ing ; their chief production is building materials, pegs, bungs, rivets, box wood and other merchandise necessary for the local mining and fishing industries. 100 RUSSIA: ITS TRADE AND COMMERCE. At the same time the timber industry is increasing for the purpose of exportation, and veneer and flooring are made of the more valuable kinds of wood. Siberian commercial enterprises have, until lately, been but insignificant, both with regard to the capital engaged and the number of factories, and those which have adapted themselves to the necessities of the export trade have shown the greatest development. In this respect the district of the Amur deserves special notice. In general, trade with foreign countries holds a very im- portant place in the total forest industry of Russia, and is still on the increase. In the total wood trade of Russia, which amounts to 650 to 700 millions of roubles, export trade was, in 191 3, according to official reports, valued at 165 millions of roubles, and according to private reports much greater, not less, in fact, than 200 millions of roubles. One may judge of the export of wood from Russia by the following table : — Years Amount in Thousands of Poods Value in Thousands of Roubles 1891-1895. . . . 19OI-1905. . . . I906-191O. 1911 1912 1913 242,368 379.149 416,914 428,045 468,812 42,532 65,865 116,412 142,368 153,380 164,930 The demand for Russian wood products has greatly augmented during the last ten years, and this augmentation comprises the export of tree trunks as well as of wood which has undergone a process of levelhng and preparing. During the last few years the principal buyers of wood from Russia have been Great Britain and Germany. They have taken 70 to 75 per cent, of the total export. A great quantity of wood is also exported to Holland, France and Belgium, but the export trade which has shown the greatest development is that from Russia to Great Britain. In 1913 it was more than four times as great as FORESTRY. 10 I in 1891, and this increase was made at the expense of Ger- many. The distribution of the exports from the various districts of Russia are shown below (in thousands of poods) : — Total exports In this number : On the European fron- tier of Russia. The district of the White Sea The region of the Baltic Sea The Russo-Prussian re- gion The Austro-Russian re- gion Asia — Black Sea Commerce with Finland Asiatic frontier . Green Wood 1912 1913 190-8 188-5 I7-I 69-1 94-0 7-4 1-3 o-i 2-3 223-9 220-8 20-6 95-9 96-6 6-9 ,0-6 0-2 3-1 Prepared Wood 1912 1913 237-3 239-9 2352 237-5 55-9 67-5 139-2 I28-I 29-4 29-2 4-3 5-3 0-4 2-1 3-4 9-2 0-3 2-3 Total of Foiest Produce Amount in per cent of Total Exports 428-1 428-7 73-0 208-3 123-4 II-7 6-6 0-5 4-4 99-0 17-6 48-6 28-8 2-7 1-2 o-i I-O Amount in per cent, of Total Exports 468-3 458-3 88-1 224-0 125-8 10-3 9-8 0-5 5-4 988 19-0 48-3 27-1 2-2 2-1 O-I 1-2 Besides timber from the sawmills Russia exports, up to the present, great quantities of green wood, the destination of which is generally the different countries of the Russo- Prussian districts and the Baltic Sea. In 1913, the export of green wood from the district of the Baltic increased con- siderably, and was specially noticeable in the wood used for the fabrication of matches and paper, principally exported to Germany. In 191 3, as well as in the preceding years, great quantities of different kinds of beams and traverses of high quality were exported to that country. The exports to Great Britain which have shown the greatest increase during the last ten years are those of wooden cylinders, rollers, beams and supports for use in mines. The export of fire- wood has also greatly increased during the last few years. The export of tree trunks from Russia to Great Britain and Germany during the last five years is shown by the following figures : — 102 RUSSIA: ITS TRADE AND COMMERCE. Total in Thousands of Roubles Export of Green Wood (trunks) Year To Great Britain To Germany (In per cent, of the total export) 1891-1895 . . I9OI-1905 . . I906-I910 . 1911 .... 1912 .... 1913 .... 8,801 16,659 34.557 40.833 42.443 52,859 II-3 9-8 14-2 20-4 25-4 17-1 77-4 697 59-2 487 55-9 467 It is only during the last few years that the export of tree-trunks to Great Britain has shown any increase, and comparing the amount exported to Great Britain between the years 1891 to 1895, we find that it has diminished. In the export trade of Russia, however, planks and boards occupy the first place ; they constitute 45 per cent, of ex- ported forest produce, and 60 per cent, of the total value. The greatest amount of prepared wood, above all, of planks, is dispatched from the districts of the Baltic and the White Sea. Most of it goes to Great Britain. The following table (in thousands of roubles) will give an idea of the importance to Russia of the two countries, Great Britain and Germany, with regard to the export trade in planks and boards : — Years Total To Great Britain To Germany (Per cent, of total exports) 1891-1895 . . 26,527 54-8 20-3 1901-1905 . . 1906-1910 . 1911 .... 40,086 67.685 86749 59-0 52-1 56-8 14-3 i8-4 17-6 1912 .... 1913 .... 93,979 96,434 55-9 537 i6-8 13-5 FORESTRY. 103 The considerable development of the exportation from Russia of wooden rivets, pegs, bungs, and matchwood must also be noted. Great quantities of these articles of merchandise are dispatched to Great Britain. Russia supplies England with whole timber, levelled and prepared wood, and above all with planks and boards. With regard to whole timber and prepared wood, however, Russia has a serious rival in German}/, which also exports timber of Russian origin to England. In the matter of planks and boards, Russia furnishes as much as all other countries taken together. English statistics for foreign trade furnish ample information on this subject. In the market for chemically prepared wood pulp Russia's export trade is almost exclusively confined to Finland. Wood pulp and cellulose are chiefly exported to Great Britain by the Scandinavian countries, which, as is well known, import the wood for the manufacture of cellulose from Russia. In Norway a group of trading companies exist using almost exclusively raw material from Russia. Germany also, and in a far greater degree, employs raw material from Russia, which she exports in the form of wood pulp to England. The participation of Russia in the production of wood pulp is, for the time being, insignificant. Russia exports to England a small quantity of furniture and various articles of woodwork. But the importation by England of these articles from Norway and Sweden, and particularly from Germany, has continuously increased during the last few years. The future of the timber trade in Russia may be summed up as follows. In certain circum- stances, for example the construction of railways for the transport of timber, and means of transport in general, timber may obtain access not only to the interior of Russia, but to foreign markets, where it is so much in demand. To this end a considerable amount of capital is needed, and the increase of such capital as has been invested in the develop- ment of forestry in Russia during the last few years, is a proof of the many advantages of this commerce. The profitable use of the virgin forests of Russia is 104 RUSSIA : ITS TRADE AND COMMERCE. particularly interesting insomuch as it comprises the development of other sources of wealth, hitherto untouched. It is almost unnecessary to say that wood, in itself, forms the basis of many industries which are little developed in Russia. Among such industries there is the manufacture of all kinds of wooden articles which, up to the present, have been made by Germany for exportation abroad, chiefly to Great Britain. The possibility of obtaining a sufficiently large quantity of wood pulp and cellulose for the making of paper, etc., has an equally great importance for foreign manufacturers. The veneering industry, which has so rapidly developed in Russia, owing to the participation in Russian enterprises of foreign capital, in particular of British capital, leads us to believe that other timber industries will attract the atten- tion of foreign capitalists. It is above all in the production of wood pulp and cellu- lose that an augmentation of enterprise is particularly desirable in view of the fact that these industries have a great future before them. From all countries there comes an incessant and ever-growing demand for paper, and the supply of this demand, in its turn, calls for more and more capital. Apart from the north of European Russia, atten- tion is particularly directed to Siberia, which is so rich in conifers and other species necessary for the fabrication of wood pulp. This is most important at the present time, when the American demand for cellulose and wood pulp is becoming more and more pressing. CHAPTER VI Factories and Workshops By V. Varzar Russia entered upon the development of her industries later than the other countries of Europe, as a result of many conditions pecuhar to the country. Such are the com- parative isolation of the majority of the population in dis- tricts far removed from one another because of unsatis- factory communications and the modest requirements of a people for the most part engaged in agriculture, who are satisfied with articles of their own manufacture for their household and farm requirements. The home market for manufactured goods contributed very little to the develop- ment of industry on any large scale. Each household pre- pared the necessary flax and woollen stuffs for articles of apparel, made ropes and agricultural implements, sent their leather and sheepskins to be tanned at the nearest available places, and tried to cut down purchases to a mini- mum and restrict requirements to those which could be satisfied by household labour. Under such conditions Russia of the seventeenth and even eighteenth centuries was a country of widely developed handicrafts and agri- culture. The activities of the big landowners (noblemen) differed very httle from those of the peasants. Each, in so far as his means would permit, endeavoured to have his own workshops, blacksmiths', carpenters' and weaving shops and distilleries, preparing various articles of food (preserves, cordials), clothes, household goods, furniture, vehicles, tools and building materials, and thus to create a self- supporting homestead. Foreign goods, which were expen- sive and out of the reach of most of the people, were re- garded in the light of a luxury. Buying and selHng, o\ving to the poor means of communi- 105 ]o6 RUSSIA: ITS TRADE AND COMMERCE. cation, were very difficult, and did not yield sufficiently good results to warrant the establishment of large factories requiring much labour, machinery and fuel. Again, the recruitment of labour, at that period, would have been very difficult owing to the system of serfdom. Later on, during the eighteenth century and the beginning of the nineteenth, with improvements in the conditions of transport and widen- ing of selling powers, these landowners' workshops fre- quently grew into large works and became the pioneers in the development of industries. An exception to the general rule was provided by those branches of manufacture which supply Government require- ments, that is, equip the Army and Navy. The Govern- ment, by means of protective measures, created its own factories for the working of metals, manufacture of arma- ments, or, by granting concessions, as in the Urals, in every way assured and simplified the creation and development of large enterprises for mining of iron ore, the working of metals, the manufacture of cloth, sails, cables, etc. These institutions served as a basis for the later development of such branches of industry. In the second half of the nineteenth century, the condi- tions throughout the country suffered a great change : the emancipation of the peasants, in 1861, resulted in a plentiful supply of labour, especially in central Russia, where farming on a small scale yielded but meagre profits. The construc- tion of railways and the improving of steam transport on the waterways, linking up the outlying districts with the centre of the country, so drawing together raw materials, fuel and labour, made it possible to build factories to meet the country's needs. Finally, the protective system of import duties firmly established in the nineties, the rapid increase in the output of fuel (coal and naphtha) — this basic requirement of industry — taken together with the quick growth of the railway system, all gave a powerful impetus to factories and workshops. The following table shows in figures the activities of fac- tories and workshops from the beginning of the second half of the nineteenth century. Here we have set forth in FACTORIES AND WORKSHOPS. 107 approximate periods of ten years the number of duly regis- tered factories, the number of men employed and their output according to the cost of the products and articles on the spot, after deduction of excise on those goods liable thereto : — Year Number of Factories and Workshops Workmen in Thousands Annual Output in Millions of Ivoubles. 1850 9483 3177 1 66-0 1863 16,659 419-6 351-8 1870 26,377 745-8 500-1 1879 34-774 861 -0 1,290-3 1890 32,254 1,424-8 1,502-6 I goo 38,141 2,373-4 3,438-9 1908 39.866 2,679-6 4,908-6 1912 . . . 29,965 2,931-3 5.738-1 To appreciate properly the figures in this table we must bear in mind that the information here given is far from covering all enterprises of an industrial nature ; it com- prises only factories, workshops and mines, in the narrow sense in which Russian legislature and statistics understand these words, that is, factories employing about fifteen men or less, enterprises equipped with engines or special chemical apparatus, such as distilleries, dyeing and chemical works, etc., which distinguish them from artisans' workshops and shops exclusively employing hand labour. In order to illustrate this question further, take the figures for 1908, when the Imperial Taxing Authorities assessed for the trading tax ^ in all 450,017 different industrial enter- prises having an annual turnover of 8,993 million roubles ; if we take the number of factories and workshops existing in 1908, it appears that they represented only 8 per cent, of the whole number, but were responsible for more than half of the trading turnover of the country and were Hable for the State trade tax. From the figures set forth in the above table, it appears * Small artisan and peasant shops are not assessed for this tax. io8 RUSSIA: ITS TRADE AND COMMERCE that during the first twenty years from 1850, there was but insignificant progress in the development of industry. This is undoubtedly connected with the slow development of the railway system (about 2,oco versts up to 1862) and the insignificant supply of mineral fuel (about 20 milhon poods). During the ensuing twenty years, 1870-1890, a marked development is recorded, and in 1890, there were already twenty-five thousand versts of railway being worked, the coal output had risen to 400 million and that of naphtha to 250 million poods. An especially notable increase in the figures is shown in the last two decades — 1890— 1912 ; whilst the growth in the total number of enterprises was unimportant, the increase in the number of workmen em- ployed and the value of the goods manufactured was almost doubled during each of the mentioned periods. This rapid rate of growth is undoubtedly to be explained by the strictly protective duties and the trade conventions concluded during that time, the rapid increase in the length of railways working ^ and the great increase in mineral fuel under- takings. 2 The concentration and growing productiveness of labour is further illustrated in the figures given below and drawn from Russian Industrial Statistics. Average Number Average Annual Year of Workmen per Output of each Workshop Workman in Roubles 1850 51 320 1863 25 838 1870 28 670 1879 25 1.498 1890 44 1,006 1 900 62 1,831 1908 67 1,830 I912 . 98 1.957 1 In 1890, 27 thousand versts ; in 1900, 49 thousand versts ; in 1 91 3, 65 thousand versts. ^ In 1890, about a milliard poods of coal and 300 million poods of naphtha were produced, and in 1912, more than 1,900 milliard poods of coal and 565 million poods of naphtha. FACTORIES AND WORKSHOPS. 109 Thus, during the sixty years, the average number of work- men has almost doubled and the individual output per workman has grown sixfold. It should, however, be re- marked that with the emancipation of peasants in 1850— 1863, the number of workers in each shop was reduced by half, whilst the productiveness of their labour, thanks to technical innovations, was doubled. The rapid growth in manufacture was nevertheless far from sufficient for the growing demands of the country. In spite of high duties, side by side with growth of home pro- ducts, an increase is to be noted in the foreign imports, chiefly of finished articles and of some raw materials of which the home supply was deficient, cotton, metals, wool, etc. The figures are : — 1890 1900 1908 1912 In millions of Roubles Goods manufactured with- in the country . Imported from abroad . 1,502-6 453-0 3.438-9 626-3 4,908-6 912-6 5.738-1 1,171-7 High prices ruled and created favourable conditions for the development of industry. To a certain extent, Russia was isolated from the influence of the world's markets, and the movements in prices of some manufactured articles and metals often changed within the country independently of quotations abroad. A good harvest or a drought had greater influence on prices and the conditions of the textile industry than a crisis in the world's cotton markets ; an increase or decrease in orders for the Government or the railways had more influence on the prices and activities of the metallurgical industry than a crisis in the American or German metal trade. For the contemporary condition of Russian industry, we may quote iigures for 1912, though these are far from being no RUSSIA: ITS TRADE AND COMMERCE. (s^Iqno^I jo spuEsnoq^ ui) "013 'aouBjnsui 's30UBA\oiic SinSpoi CO yt- M o^ f^' o O O M 01 0\ 0\ M Q Q Q M CO ■^- o o Cx 'pTB [BOTpam — ii3m>iJo^ ;o jnoAC J III sjiiauiABj (sajqnoy jo sptiBsnoqi in) -oja 'sjiBdaj Tt- ^- ro ■+ O CO 0\ N M 00 M '^uamaSBUBiu 'd33>i-dn o ob ■+ '^1 00 o >0 00 00 lO o. 'sasimajd — 9jnpEjniiBj\[ (^ rl M ■o VO f) o JO sasuadxg [Bjauaf) -laqjo O op M ro ^> o O^.OO ro M M (s3[qnoy JO spuBsnoqj ui) C\ ro^O "Jn G^ -t CO M CO V CO jnoqBi joj sju9UiXbj ib}o'x O <^ >-i t\ ON lO M CO On M Hi M M r-i M o "+■ 00 p M ;^ 9 o (saiqnoy jo N CO M ro w MD ^ -t- CO CO ^ spuBsnoqj ui) pn j; jo ;so3 CO -1- r| U-) lO M 00 t^ M a\ op txop w op ir, (saiqnoa Jo spiiBsnoqj iii) S[bu3;bi\[ a\bh jo jso3 CO l>v r) ro vO ob o On o vb ^-00 M O 01 0< . 01 b CO CO O M ro i-O C^ tx Y": 01 CO o 0) ('d'H JO spuBsnoq} ui) J9MO(J 3Ul§U3 CO 0^ IT) M ON O On f-. tv l-l CO 01 01 CO b 0\ CO 00 t>, -1- (V-, CO tx yf-
(jO;V\
0) ON CO O O
M -^ ro ON CO
CO
CI
00
00 LT! c.| I'o
-r O, 01 CO
0) M
M
in
>0 t^ i_0 CO lO
O
tx ON M -^
9^
(saiqnoH jo spuBsnoqj
CO M !>, V 01
'O -f CO On u"^
00
O "^ V M
CO M Tf tX
vO
ui) indjno Jo aniBA
On in
CO
^ ^1
IX
O tx tx lo -1-
ON
M vO txO
O
co CO tx tx CO
lO
lO.CO M ix
CO
sauojoBj; jo jaquin>i
O-. 0__ ri
5-00
18-90
14-30
Moscow- Vindau-R\ umsk
100
10-00
II-OO
15-50
Moscow-Kazan
100
28-15
27-55
28-45
Moscow- Kiev- Voroncj
20
31-00
43-50
62-60
South-Eastern
187-50
15-28
16-32
16-50
Riazan-Ural ....
100 1
■ — ■
37-80
According to statistics compiled by the Audit Ministry the
group of private railways : Bogoslovskiy, Bielgorod-Sunisk,
Vladikavkaz, Lodz, Moscow- Vindau- Rybinsk, Moscow- Ka-
zan, Moscow- Kiev-Voronej, North Don, Troitzky, South-
Eastern and extensions, the Warsaw and Lodz electric
roads and Moscow and First Company realized in 191 2 a
net income of Rs. 120,234,549, that is, more than 85 per
cent, of the net income of all existing private companies.
1 In January 1912 the Warsaw-Vienna Railway was transferred to the
Government.
R
242 RUSSIA: ITS TRADE AND COMMERCE.
Of this sum 120 million roubles was absorbed in obligatory
payments on bonds, loans and the guaranteed shares, and
payment for leases of Government lines. Of the remaining
Rs. 59,196,455, Rs. 17,073,693 went as dividends to share-
holders. If to this sum we add the dividends of the Eisk
railways, not included in the above schedule, and the guar-
anteed dividends of the Lodz, Moscow- Kazan, Moscow-
Kiev- Voronej and Riazan-Ural Railways — amounting in all
to Rs. 1,907,429, the aggregate amount of dividends paid to
shareholders of private railways in 191 2 was Rs. 18,991,122,
which represents i6-8 per cent, of the nominal share capital
of the corresponding companies.
The building of a branch line and short distance feeder
is almost commercially impossible as an independent rail-
way enterprise ; the payment of interest, redemption of
capital and working expenses of such a line requires sums
which cannot be earned on freight and passenger traffic
over a short line. On the other hand the construction of
such branch lines is very useful and necessary, and in 1887
a special and original method of constructing such exten-
sions and feeders was adopted.
A private contractor — in the majority of cases, the owner
of some commercial enterprise directly interested in the
la^dng down of the line — furnishes the necessary capital for
building it. This is carried out either by contractors under
the supervision of the railway to which the branch will be
linked up, or, as is more frequently the case, the road to
which it is to be joined itself builds the branch line.
On completion, the branch line immediately becom.es the
property of, and is worked by, the owner of the main hne
with which the extension is connected. The main feature
of this method of building extensions is the manner in which
the expenses are met. The line linked with the branch
retains from the receipts for the transport of goods over
the extension and main line i/i25th of a copeck per
pood and vcrst — an amount necessary to cover working
expenses. The balance of the net receipts is made over to
the builder in repayment of the cost of the extension with
addition to such cost of 4 per cent, interest on the aggregate
INTERNAL TRANSPORT. 243
disbursements. The cost of such hues is usually quickly
realized — in from three to four years at most — and it is
only in exceptional cases, where extensions of more than
usual length are laid down, that the repayment of the build-
ing capital is extended over a longer period. Thus, the
extension is built, so to speak, for the advantage of the
receipts to be derived from the additional freight which
finds its wa}^ to the trunk line, thanks to the laying down of
the branch. This method of building has been long applied
to the branch lines of the State Railways. The system is,
however, unsuitable for long distance lines, and, owing to
the scarcity of Russian railways, and the scattered popula-
tion, there is a pressing need of branches and feeders of much
greater length. Such branch lines cannot be constructed
as independent enterprises, and the Government lacks the
large resources necessary to build them. This has resulted
in the recent formation of a railway company — to the bonds
of which a guarantee on special conditions has been granted —
having for its chief purpose the construction of railways for
general use, such roads being intended to serve the State
railways as feeders and connecting lines which will eventually
increase the amount of traffic dealt with. The lines are
transferred on their completion to the main line with which
they are linked up, the chief condition being the refund of
their cost from the traffic returns. Receipts from these
new lines are gauged by the cost of transport of freight not
only along the extensions themselves, but over the main line
which they serve. The difference in their financial organiz-
ation lies in the fact that the income calculated in this
manner — after deducting the necessary amounts to cover
expenses of the main lines in transporting the goods, and
expenses and payments due on the capital of the branch
line itself — is not turned over to the company as refund of
the cost of construction of the branch line, but is split up
between the company and the Government proportionately
to the run of the freight over the branch line and the State
line to which it is linked up.
The result of this method is that the extensions and
branch lines are not transferred to State ownership at the
244 RUSSIA: ITS TRADE AND COMMERCE.
time when the State has refunded the cost of construction,
but only at the expiration of the term fixed in the Statutes
and against purchase on the basis of the Hne's earning
powers.
The present organization of railway affairs in Russia and
the Government's control and supervision of the railways
arose out of the fundamental reforms carried through a
period of ten years beginning in the middle of the eighties.
Trade and commerce regulations which formerly allowed
freedom of action and mutual competition to private cor-
porations in connexion with the construction and working
of lines ceded to them, gradually yielded to the constant
assistance and co-operation of the State, the railways bene-
fiting by the systematic management from one centre. The
recognition of these principles of public management resulted
in a restriction of private interests and freedom of contrac-
tors wherever such dispositions disagreed with the interests
of the State. At the present time railway matters in Russia
are subject to definite Governmental regulations and control
in all stages, and in all departments, as for instance, pro-
posed lines, realization of the necessary capital, building
separate lines in given directions, financial matters, dis-
position of the net income, fixing of tariffs for the transport
of goods and passengers, etc.
The control of railwaj/s is divided between three Depart-
ments, the Ministries of Ways of Communication, Finance
and State Control (Audit Ministry). The Ministry of Ways
of Communication has to see that on the conipletion of the
railway, and before its opening for traffic, an inspection of
the work and equipment is made, and to assure themselves
that the construction has been carried out with due care
and is in accordance with the projects ratified.
After this the company assumes the obligation of keeping
the line in proper order and dealing with the trafiic with
due regard to the safety, convenience and uninterrupted
movements of passengers and freight. Whilst, in general,
the res})onsibility for the management of the company is
with the Board of Direction, the Statutes always provide
that the Ministry of Ways of Communication and Finance
INTERNAL TRANSPORi. 245
may at any time delegate special officials to examine and
check the books of the company, and the accounts of the
building and working sections, in order to have effective
control of the actual receipts and disbursements. Such
officials have also to satisfy themselves that the disburse-
ments were made in accordance with the duly confirmed
estimates. If the Minister of Ways of Communication
finds that any actions of the management, or the agents of
the railway, are opposed to the interests of society and the
State, the guilty party, no matter what position he may be
holding with the company, is liable to instant dismissal,
on notification from the Ministry.
The supervision of the Department of State Control
(Audit) is not restricted to payments for work and con-
tracts authorized and carried out in accordance with the
valuation estimates ; it is charged with the duty of seeing
that the Railway Direction, local and central, takes all pos-
sible measures to ensure that the work and contracts in
connection with the building of the railway be carried out
on advantageous and economical conditions. Further, the
State Control (Audit Ministry) is definitely charged with
the functions of controlling the working of railways which
have already been opened for traffic.
The Ministry of Finance has extremely wide powers of
control and supervision over the railway companies in fin-
ancial matters, and especially in relation to the adoption
of railway tariffs. All financial operations of private rail-
ways come under its control — both the realization of the
capital, its disbursement for building work and all financial
questions connected with the working of the line. The dis-
posal of the net income and payment of dividends to share-
holders, are also subject to this control. The functions of
the Ministry of Finance under the Act of March 8, 1898, in
regard to the supervision of railway tariffs merit special
attention. In order to cope with the whole matter the
Ministry inaugurated a special Tariff Institution known as
the " Railway Department — Tariff Committee and Advisory
Board on Tariff Matters." This Department is charged
with the preliminary examination of tariff questions and the
246 RUSSIA: ITS TRADE AND COMMERCE.
clerical work, and only decides questions of minor import-
ance. The great bulk of the business is concentrated upon
the Tariff Committee, which comprises three members from
the Ministry of Finance, one of whom is the chairman, two
members from the Ministry of Commerce and Industry, and
one member each from the Ministries of Ways of Communica-
tion, Agriculture and Land Organization and Interior and
State Control (Audit Ministry). The Advisory Board on tariff
questions decides only a few general questions and such
matters connected with tariffs wliich for some reason have
been referred to it by the Tariff Commiittee. The Advisory
Board has a great number of members (besides representa-
tives of almost all the Ministries there are also representa-
tives of various branches of industry and of private railways) ;
it meets comparatively rarely ; its importance in comparison
with other tariff institutions is of less significance.
The powers of tariff institutions in regard to supervision
of rates are defined by the following provisions of the Act
of March 8, 1889. According to Art 2 of this law, the
Government reserves to itself the right to control the fixing
of tariffs, with a view to protecting the interests of the
people, of trade and industry and the public funds. It is
evident that this provision alone opens up wide possibihties
in the way of the Government intervention in tariff questions.
However, further provisions of the same broaden these limits
beyond the negative problem of protecting the category of
interests just mentioned, giving the Government the
right to proffer its assistance and co-operation. For
instance. Article 8 provides that the Governmental De-
partments, Public Institutions and Associations directly
interested in economic questions have the right to lodge
propositions as to the introduction of new or the changing of
existing tariffs, and the Railway Department is called upon to
frame tariff proposals in accordance with the aims of Govern-
mental supervision of tariffs, and for the satisfaction of the
demands of the public, the trade circles and the earnings of
the railways themselves. Again, Article 12 provides that deci-
sions arrived at by Government Tariff Institutions on tariff
questions are binding upon the railways. Finally, by an Act
INTERNAL TRANSPORT. 247
of August 12, 1899, it is provided that if any separate railway
or congress of representatives of railways fail to present
figures as to tariffs within a prescribed term, or do not pub-
lish tariff proposals or tariffs which have been confirmed, and
which the Ministry of Finance finds are necessary in the
interests of trade, the pubhc or the Government, fresh
tariffs are drawn up by the Railway Department and are
duly pubhshed in the " Collection of Laws and Enactments
of the Government " as obligatory upon the railways.
Thus, since 1889, the question of tariffs on Russian rail-
ways — both on State and private lines- — is wholly within the
jurisdiction of the Government. It is true that the railways
participate to a great extent in the working out of rates. In
fact the general Tariff Congress of the representatives of
railways, at which representatives of the country's trade
and industry have the right of expressing their views, '
is the body to which almost all tariff questions of any im-
portance must unquestionably be submitted for examination
in the first instance. But although preliminary examina-
tion of questions by the Railway Tariff Congress has been
found to be very useful, the resolutions of the Congress, even
when unanimous, have only an advisory significance, and
do not in any manner commit the Government Tariff In-
stitutions in deciding such questions. The role of railways
in working out and fixing tariffs is therefore limited to lodg-
ing the proposals of interested and competent organizations.
The wide powers granted to the Government by the Act
of March 8, 1889, were applied in the first place to carry out
a radical reform of everything concerning the tariffs on our
railways which, up to that time, had been suffering from just
such disorders and defects as were experienced in other
European countries, and were gradually remo\'ed by the legis-
lative chambers of such countries. The only difference was
that the reform and consolidation of tariffs required in
France and Germany, for instance, about twenty years'
labour to accomplish, whilst in Russia similar results were
obtained in four and a half years. In 1893 all of the Russian
railways adopted a general tariff for goods transported by fast
and slow freielit where there arc direct communications
248 RUSSIA: ITS TRADE AND COMMERCE.
This tariii also applied to local communications, and con-
tains about eighty schedules covering various classes of
freight. All the schedules have the character of difieren-
tial tariffs under which title we, in Russia, understand only-
such tariffs which provide that the single charge per pood
and verst be reduced with increase in distance. The so-
called table tariffs showing total payment for transport
between stations mentioned in the tables, are applied in com-
paratively rare cases, and even then only in connexion with
exceptional tariffs, which, it should be noted, often take the
form of the tariff schedules which are applied to the trans-
port over definitely limited distances. The General tariff
is applied on Russian railways for transport of goods be-
tween all the stations of the railway system, both for direct
and for local communications ; such transport may be car-
ried out not only by the shortest routes, for which, under
the system of tariff schedules, the transport charges are the
cheapest, but by round-about routes with the same charges
for the greater distance actually covered. As a result the
stations of the Russian railway system are not only in direct
communication with one another, but also have direct
tariffs, as the transport payments are calculated by the cor-
responding schedules for the aggregate run over the whole
of the lines forming the route from station of dispatch to
station of final destination.
Up to 1889 there was sharp competition between Russian
railway companies for goods trafhc, resulting in great losses
not only to the railway companies themselves but to the
Government which had guaranteed a definite norm of in-
come to the railways. It also caused great harm to trade
and industry as the tariffs were not the same for different
districts and even for some forwarding agents. The trans-
fer of the management of railway tariff affairs to the Govern-
ment in 1889, at which time special rules against railway
competition were issued, resulted in stopping competition
altogether in so far as it relates to reducing and changing
tariff. At the present time, competition between the rail-
ways — for the most part between the State-owned railways
and those in private hands — takes the form of affording
INTERNAL TRANSPORT. 249
shippers of goods various conveniences and privileges as
regards rapidity of delivery, placing special rolling stock
at their disposal, charges for holding goods at the stations
of dispatch and destination, granting of loans on the security
of the goods, and carrying out of instructions in regard to
the sale of such goods, etc. The railways in their efforts to
secure the goods traffic often overstepped the limits of fair
competition, and at present further measures are being
taken to regulate all competition on the roads.
Tariffs in Russia follow the general principle of lixing
rates in accordance with the value which the transport of
goods may have for the owner, i.e. on the ability of the
goods to support more or less significant charges, or, as they
express it in America, " what the traffic will bear." This
capacity to support transport charges is determined by a
series of objective symptoms governed by the nature and
value of the goods to be transported, the conditions of
transport (whether by fast or slow freight, quantity of goods
transported, kind of rolling stock necessary, etc.) and in
the technical specialities of the roads over which the goods
are run. But, with us in Russia, as in other countries, the
transport charges are not the only factor in determining
railway rates.
In adopting tariff rates the combined interests of com-
merce, industry and the population must be taken into
consideration. To a large extent the rates depend entirely
on the discretionary examination of the tariff institutions
and, in consequence, Russian railway tariffs directly de-
pend upon the character and tendency of her economic
policy. They are, in many cases, determined by the neces-
sity of protecting home industries against imported goods,
of facilitating the export of the country's products, develop-
ment of the trade of given districts and regulation of com-
petition between different districts and branches of trade.
Reference must also be made to the so-called " privilege "
tariii's which aim at satisfying certain important require-
ments (colonization, aiding districts suffering from effects
of crop famine, furnishing farmers with fertihzing manure,
seed, etc. etc. ) by means of reductions in the general tariff
250 RUSSIA: ITS TRADE AND COMMERCE.
rates. There are very many such tariffs in Russia. In
general, the Government, since it has undertaken the fixing
of railway rates, has not only extended protection to the
interests of trade, but have regarded railway tariffs as one
of the most important means of affording actual support to
all the interests just mentioned.
The Government does not, nevertheless, ignore the influ-
ence of tariff rates on the earnings of the railways and the
financial results of such enterprises. There have been
many cases in which financial considerations and require-
ments served as basis for fixing tariffs and rates. For in-
stance, the war having made it necessary to increase the
free resources of the Treasury, the Government has taken
in hand and will carry out a general re-examination of all
railway tariffs. This does not mean only the " protection "
of Government interests, but that the railways must con-
tribute larger sums tov/ards the general expenses of the
Empire.
It is proposed to introduce the new tariffs in the near
future, and simultaneously stop the collection of the tempor-
ary war tax on goods transported by the railways. The
charges for transport, as compared with present rates, will
be considerably increased over short and average distances,
in the majority of cases up to 1000-1,200 versts, whilst,
with a view to increasing freight movement, there will be a
significant decrease for long distances. With the introduc-
tion of these new tariffs the relation of cost of transport on
Russian railways, as compared with foreign tariffs, will
suffer great change. In view of the present revision of
tariffs not having yet been completed and, further, the
imminent change in existing tariffs, it seems proper to re-
strict ourselves to the above general remarks without giving
figures as to tarii^' rates fixed for Russian railways.
The Russian Government, backed by public opinion, arc
strongly determined to push as much as possible the con-
struction of new lines of railway, considering them as the
best means to economical progress and national wealth. A
very large programme of public works has been prepared by
the Ministry of Communications ; it covers 50,000 versts
INTERNAL TRANSPORT. 251
of new lines, of which 30,000 ought to be taken'in hand
as soon as war is over and executed in a few years. It
depends 01 the financial help Russia could find.
At the beginning of September, 1915, there had been
authorized for the State Railways and already taken in
hand the construction of 5,296 versts, at a price of 630.7
millions R. Among those lines being built we find the
Amour Railway, 1,974 versts, 330 millions, of which 1,358
versts from Kouenga to Blagovestchensk are already
worked, Grischino Rovno 867 versts, no millions R. ;
Petrozavodsk Kola, 1,077 versts, 82 millions R. ; the
transformation of the section Archangel Vologda, 595
versts, 24 millions R. 454 versts were authorized at a cost
of 53 millions.
The construction of 2,718 versts (Tiflis Vladicaucase,
104 millions R., for 171 versts, Toula Baranovitchi, 98
millions R., for 820 versts; Moscow Donetz (coal roads),
900 versts for 108 millions) were projected. Altogether 8,468
versts, for 1,076 millions R. Part of the amount has already
been spent, but the work of most of the lines has been post-
poned. As far as the lines belonging to private companies,
already in existence are concerned, the construction of 1,127
versts, to cost 96 millions, has been authorized, besides
branches of 138 versts. Since the war, no concession has
been granted. But there exist projects for 6,437 versts at a
price of 563 millions which have received a favourable
advice of the new Railways Committee,^ to whom other
lines are to be submitted for 7,996 versts. ^
Notwithstanding the war and overcoming difficulties
of several kinds, soil, cHmate, dearth of labour, the Russian
Government has achieved at the end of 1916 a really glorious
feat of engineering : the railway which constitutes the most
northerly line of tSe world has been given over to traffic.
1 White Sea Railway (Nadejda Archangel), 1,500 versts ;
Liza Kharkoff, 900 ; Saratoff Kamenolomni, 830 ; Kama Petchora,
378.
^ Olga Mantourovo, 100 versts ; Khiva line, 1,725 ; Oural
Caspienne, 500 ; Petrugrad Krassnoufinsk, 1,610 ; Lena, 1,000,
etc.
252 RUSSIA: ITS TRADE AND COMMERCE.
It is the " Mourman line," which has its terminal on a
coast washed by the warmth of the Gulf Stream on the
Arctic Ocean. The terminus is Kola ; the Une has a length
of 1,400 kilometres. The work was divided into four
branches : 350 kilometres from Petrograd to Petrozavodsk,
finished during 1915 ; 360 kilometres, Petrozavodsk-Soroka,
finished March, 1915 ; 400 kilometres, Soroka-Kandalachka,
finished autumn, 1916 ; 290 kilometres, Kandalachka-Kola
(now Port Romanof) which had been finished earlier.
The difficulties to be overcome were enormous : the
country had very few inhabitants, no local labour. It
was necessary to collect labourers from Norway, from
Canada, from all parts of Russia up to 30,000, to whom
were added 10,000 prisoners of war (Tepeques, Slovaks,
Ruthenians). It was necessary to carry through virgin
forests the food and the material. The soil offered great diffi-
culties, there were swamps and marshes, many inland seas,
snow and ice, and frozen ground.
The new railway duplicates the Archangel road. It
will be of very great usefulness during the war, and when
peace is re-established it will open to trade vast countries
covered with forests, with unknown wealth.
INLAND WATERWAYS
The total length of rivers, lakes and canals of European
Russia, including the Caucasus but excluding the eight Fin-
nish governments, serving as means of communication is
232,139 versts, of which the navigable routes are 176,788
versts, or 76-2 per cent, of the whole length.
These inland waterways are distributed as follows (see
table on next page), according to the sea basins with which
they are connected.
INTERNAL TRANSPORT.
253
Names of sea and river
Total
length of
rivers,
lakes and
canals
Navigable for float-
ing timber
For
Navigable
for
rafting
Total
navigable
for timber
Singly
In rafts
vessels ^^ ^^^^
j directions
and
vessels
Basin of Caspian Sea .
Basin of Black and
85.307
16,443 19.451
7,209 17,412
60,515
Azov Seas .
Basin of Baltic Sea .
Basin of Arctic Ocean
35.934
54.136
3.880 7,955
22,911 10,588
2,033 9.623
2,58i| 7.388
23.491
43.468
with White Sea .
56,622
28,708 10,914
1,478 8,086
49,186
Separate sections of
waterways not in-
cluded in maritime
basins ....
Total internal water-
140
30
98
128
ways of European
Russia (without Fin-
land) ....
232,139
71.942
48.938
13,301 42,607
176,988
The above figures show that the navigable waterways for
rafting and for vessels in European Russia (exclusive of
Finland) amount to 134,181 versts, or 75-9 per cent,
of all the inland navigable waterways. Of these, 120,880
versts are suitable for floating timber, being 71,942 versts
floating the logs singly, and 48,938 for timber rafts.
On the remaining extent of the navigable portion of rivers
and lakes freight-laden vessels are also able to ply. This
total length amounts to 13,302 versts, or 9-9 per cent.
Waterways on which navigation is conducted in both direc-
tions total 42,607 versts, i.e., 24-1 per cent, of their total
extent. Steamer traffic is conducted over a stretch of
31,267 versts, or 17-7 per cent. ; but, if passenger traffic only
be reckoned, the figures must be reduced to 24,030 versts,
or 13-6 per cent, of the navigable waterways.
The table also shows the extent of canals with lakes and
sluiced sections of rivers, i.e. artificial w'aterways, the total
length of which does not exceed 3,855 versts, or 2-3 per cent.
of the total length of waterways.
The importance of the river basins of individual seas of
navigation and rafting depends, to a certain extent, on the
254 RUSSIA: ITS TRADE AND COMMERCE.
total length of inland waterways. In this respect, the most
important is the Caspian Sea, with river, rafting and navi-
gation routes forming a third of all the available waterways
of European Russia. The river basins of the Arctic Ocean,
comprising the White Sea and the Baltic Sea, occupy the
second place, being one-fourth of the total extent of rafting
and navigable waterways ; the basins of the Black Sea and
Sea of Azov occupy about one-seventh of the total
extent.
Comparing the steamer traffic in the same river basins,
the Caspian Sea Basin gives 44 per cent, of navigable water-
way ; the Black vSea and Sea of Azov 26 per cent., and the
Baltic Sea and Arctic Ocean 30 per cent, of the total length
in European Russia. The great river Volga, with its
tributaries, comprises almost a third of the Russian inland
navigable and rafting waterways, and 44 per cent, of the
total length available for steamer traffic. Another third
belongs to the three great rivers, the Northern Dvina, Dnie-
per, and Neva, with their lakes. These four river basins,
constituting two-thirds of the total length of the rivers,
lakes, and canals of European Russia, and also of their
rafting and navigable portions, comprise three-fourths of
the extent available for steam navigation. The remaining
third of the total length of rafting and navigable waterways,
and a fourth of the extent available for steamer traffic
belong to the no rivers and lakes at present registered in
European Russia, including the Don, the Western Dvina,
Niemen, Narova (with the Tchudovo and Pskov Lakes),
the Pechora, Onega, etc.
The following thirteen rivers of European Russia are
more than a thousand versts in length :
INTERNAL TRANSPORT.
255
Name
Volga
Kama.
Oka .
Bielaya
Vyatka
Northern Dvina
(with Sukhona)
Vychegda
Dnieper
Desna .
Don .
Ural .
Kura ,
Petchora
Total
length
3.463
1,883
1.425
1,287
1,170
1,230
1,060
2,140
1,105
1,860
2,290
1,220
1,600
Including
Rafting
Navigable
Including
Navigable
for
steamers
114
322
n
554
427-
75
205
249
313
927
354
199
3.349
i>474
1,256
712
413
1,230
890
1,876
806
1.309
15
459
1,373
3,048
1.474
1,126
712
1,230
629
1,863
784
1,309
15
295
1.338
Statistics for the waterways of Asiatic Russia are neither
accurate nor complete at the present time ; they merely
concern the m.ore important navigable rivers and lakes and
do not extend to rivers and lakes which might be utilized.
Total
length of
rivers,
lakes and
canals
Navigable
Vessels
Navigable
in both
directions
Total
Name of basins
Singly
Rafts
and
navigable
Arctic ....
Behring Sea .
Basin of Kam-
tchatka rivers .
Okhotsk Sea .
Japan Sea
Aral Sea . . '.
97.858
1,080
580
21,496
1,185
8,175
3.781
926
587
1,091
30,756
540
475
7,624
462
2,277
156
112
34.043
440
7,762
78
3.083
70.857
980
475
16,468
111
4.636
Total in Asiatic
Russia .
130.374
6,385
39,857
2,545
•
45,406
94.193
These figures, however, in view of the absence of precise
256 RUSSIA: ITS TRADE AND COMMERCE.
investigation, cannot serve as indications of the actual
possible development of Asiatic Russian waten\^ays.
The artificial improvement of water communications,
though extensively applied in several river basins of Euro-
pean Russia, has hardly touched Siberia and Central Asia.
The river basin of the Obi occupies the foremost place in
Asiatic Russia. It is utilized for timber floating and navi-
gation for a stretch of 32,735 versts, constituting almost
33 per cent, of the total available waterways of Trans-Ural
Russia. The second place is assigned to the Yenesei, with
Lake Baikal-19,838 versts, or 21 per cent. Then follow
the Amur (15 per cent)., the Lena (12 per cent.), and finally
the Kara (84 versts) and the Olyutera (80 versts).
The cargo carried on the inland water^vays of Russia for
the last few years is as follows (in millions of pouds) : —
Basins
1912
Volga .
Neva . .
North Dvina
Dnieper .
\V. Dvina .
Niemen .
Vistula .
Don . . .
S. Bug . .
Dniester .
Windau .
Treider-Aa .
Narova .
Onega
1,297
422
175
314
148
150
51
31
15
10
12
II
39
28
Total for waterways of
European Russia
()l)i
Yenesei
Amur
Total for Asiatic Russia
Total for the Empire .
92
II
76
179
2,882
1911
igio
1,492
419
202
315
172
135
41
44
22
16
10
10
43
1,356
383
148
294
158
127
42
59
25
10
39
21
2,943 2,663
92 75
II II
52 53
155 139
3,098 2,802
1909
1,358
378
150
265
136
129
3
47
25
9
39
14
1,143
364
133
247
120
76
3
38
18
9
43
12
2,552
69
II
29
109
2,661
2,205
7d>
II
32
116
2,321
INTERNAL TRANSPORT.
257
Steamer traffic is greatest on the Obi, the Lena being next
in available length, but the deserted shores of this river
and the sparse population of the adjacent locahties render
the traffic of very small importance. The Amur and the
Yenesei follow the Lena, the Aru-Darya having the least
available length for steamer navigation.
Russia's meagre development of canal communication is
partly due to the scattered population of the country, which
is sufficiently well served by such natural routes as rivers
and lakes, but chiefly to the entire absence of private initia-
tive in canal construction.
The latest inventory, made in 1906, shows 3,897 steamers
plying on all the river basins of European Russia, with
engines totalling 192,284 h.p. and 23,175 other vessels with
a total freight capacity of 786,000,000 poods.
For the basins of Asiatic Russia, the figures are 420
steamers with engines of 25,240 h.p. and 800 other vessels
with a total freight capacity of 25,700,000 poods. The
original cost of the river steam fleet of European Russia
amounted to 153,200,000 roubles, and of other vessels,
71,500,000 roubles, while in Asiatic Russia the corresponding
figures were 24,800,000 roubles and 9,400,000 roubles re-
spectively.
Steamers are distributed as follows :—
European
Russia
Asiatic
Russia
Passenger 461
Freight and Passenger 475
Freight 123
Tug and Tug and Passenger . . . 2,443
Touring (?) 23
Official 368
Ferries j 4
II
63
6
274
66
According to its carrying capacity the entire river fleet of
the Empire is divided as follows : —
S
258 RUSSIA: ITS TRADE AND COMMERCE.
1
European Russia 1
Asiatic Russia
Steam
Other
Steam
Other
vessels
vessels
Less than i,ooo p. .
1.723
150
From 1,000-5,000 p.
1.324
— ■
159
264
,, 5,000-10,000 p.
463
8,368
53
10,000-20,000 p. .
—
4,037
99
,, 20,000-30,000 p. .
—
3,731
58
161
,, 30,000-50,000 p. .
—
2,919
95
More than 50,000 p.
~
4,102
181
Length of service of all vessels is as follows
European Russia
Asiatic
Russia
Steam
vessels
other
Steam
vessels
other
More than 5 years .
From 5-10 years.
From 10-20 ,, . .
More than 20 j^ears
Number of years unknown
1.574
1,001
1,248
74
14.923
5,466
2,359
395
30
155
158
76
31
259
276
211
35
^9
The kind of fuel chiefly used in the Russian river fleet
may be judged from the following figures showing quantity
consumed in one year : —
Wood (cubic sazhones) .
Coal (thousands of poods) .
Liquid fuel (thousands of poods)
Asiatic
Russia
INTERNAL TRANSPORT. 259
Existing conditions of water transport in Russia leave
much to be desired, but they would be considerably im-
proved by the elimination of several fundamental defects
in the business of haulage. Chief of these is a lack of uni-
formity in the system of waterways, the disconnectedness
of som.e of the river systems and the absence of modern
requiremxcnts in others.
The immediate result of this state of things is a large and
burdensome expenditure incurred both on account of the
constant necessity of unloading from_ the railway to the
water, and vice versa, and the impossibility of utilizing,
in some cases the advantages offered by a water route,
especially for long haulage.
Present war-time circumstances have suspended the
energetic work of the Ministry of Ways of Communication
in the improvement of inland waterv.'ays, especially in a
scheme for uniting the river basins of the Don and the Volga
and providing the Donetz coal basin \\ith cheap water
transport.
The Russian merchant fleet consists of 1,044 steamers
with a nett displacement of 513,000 registered tons, 59
motor vessels with a nett displacement of 13,000 registered
tons, and 2,597 sailing vessels with a nett displacement of
257,000 registered tons. Thus the steam fleet comprises
28-2 per cent, of the total quantity and 65-5 per cent, of the
nett displacement of the vessels of the entire mercantile
fleet ; the motor fleet comprises i-6 per cent, and 1-7 per
cent., and the sailing vessel fleet 70-2 per cent, and 32-8 per
cent, respectively.
Out of the entire steam fleet of Russia, 75-7per cent, of
the steamers and 86-4 per cent, of the total tonnage have
been built in foreign yards. England builds the largest
number, the gross tonnage being 517,804 registered tons.
Germany comes next with 76,674 registered tons, Sweden
third (54,242 registered tons) ; Denmark fourth (28,050
registered tons) ; Austria-Hungary fifth (25,167 registered
tons) ; Belgium sixth (12,625 registered tons) ; Italy
seventh (10,450 registered tons), etc.
As regards number, England comes first with 388 steaniers,
26o RUSSIA: ITS TRADE AND COMMERCE.
Sweden 135, Germany 114, Anstria-Hungary 64, Denmark
20, Belgium 13, Holland 12, Norway and China 10
steamers each.
Engines for the Russian merchant fleet are mostly built
abroad ; only 233 steamers, or 22-3 per cent, of the total,
possess engines built in Russia. Of that number only 167
steamers are fitted with engines constructed at Russian
shops, the balance being made in Finland.
The saiHng fleet is principally built in Russia; 2,521,
or 97 per cent, of the vessels, are built at Russian yards,
including 11 vessels built in Finland ; only 76 sailing vessels,
with a displacement of 8,603 registered tons, have been
built abroad.
Comparing the tonnage of the Russian mercantile fleet
with that of the world, we find it is merely 2 per cent, of
the total. This is primarily attributable to the absence
of any established shipbuilding industry and to the general
insufficiency of capital. The enhstment of foreign capital
in the Russian sea-faring industry is, moreover, greatly
hampered by the law of June 6, 1904, concerning the right
of navigation under the national flag.
During the navigation season of 191 2 5,037 Russian vessels
of 2,955 tons displacement entered Russian ports, and
10,197 foreign vessels of 10,890 tons displacement. Of these
ships 2,055 Russian, of 960,000 tons displacement, or 46 per
cent, of the total, and 5,030 foreign vessels of 6,211 tons
displacement, or 49 per cent, of the total, entered without
cargo.
In 1 912, 5,170 Russian vessels of 2,988,000 tons displace-
ment and 10,176 foreign vessels of 10,876,800 tons displace-
ment cleared from Russian ports, while 17 per cent, of the
total quantity did not obtain cargo in Russia, viz., 1,648
Russian vessels of 637,300 tons displacement and 1,396
foreign vessels of "1,324,800 tons displacement.
CHAPTER Xi
Posts, Telegraph and Telephones
The postal, telegraphic and telephone services in Russia
are administered by the State ; in a few cases only the
direction of these means of communication is transferred to
the Zemstvos, to municipal authorities or to private com-
panies. The State administration of these services is
vested in the Chief Board of Posts and Telegraphs, included
in the Ministry of the Interior.
The Empire is divided into twenty-nine postal and tele-
graphic districts, two or three governments being allotted to
each district. There are 7,351 post offices under the Post
and Telegraph Department, divided as follows : — ■
Postal and Telegraph Offices . . . 4,584
Post Offices ...... 2,517
Telegraph Offices . . . . .250
There are also auxiliary offices doing postal business on a
small scale. Such auxiliary offices are opened under Volost
boards and at railway/ stations, where, for a small remunera-
tion (from 100 to 240 roubles a year) volost headmen — or
writers — and station-masters undertake the sale of stamps
and the acceptance and issue of ordinary, registered, and a
certain number of insured mail packets ; there are 2,536
of such auxiliary offices under volost boards, and 636 at
railway stations. In addition, post offices of the simplest
type, existing only for the sale of stamps, for the acceptance
and issue of ordinary, and occasionally registered, mail
matter, have been opened under 1,714 volost boards and at
3,739 railway stations.
Auxiliary post offices are also opened at horse postal
stations, rural credit banks, shops and other private estab-
lishments. These are for ordinary and registered mail
261
262 RUSSIA: ITS TRADE AND COMMERCE.
matter. There are 36,252 post boxes throughout the
Empire.
Auxiliary telegraph branches are principally found at
military telegraph stations, frontier guard posts, light-
houses, etc. Of these there are 261.
A Zemstvo has the right to establish postal communica-
tion for general use in all localities which are not served by
the Government post.
All railways possess their own telegraph lines for their
requirements, and such lines are only under the supervision
of the Minister of the Interior. At 4,374 railway stations,
private telegrams are accepted at the regulation tariff.
Large concessions for the working of the telegraph have
been granted to two private telegraph companies. The
Great Northern Telegraph Company maintains telegraphic
communication with Sweden — by the line Petrograd —
Neustadt — Geteberg ; with Denmark by the line Petrograd
— Libau — Frederitsia ; with Japan by the line Petrograd —
Vladivostok — Nagasaki, and with China by the line Petro-
grad — Irkutsk — Kiakhta — Peking.
The Indo-European Telegraph Company possesses in
Russia its own line running from Alexandrovsk — on the
western frontier — through Warsaw, Odessa, Tifiis, to Julfa
on the Persian frontier, and beyond to Tabriz and Teheran ;
the same company operates the Odessa-Constantinople
cable at Odessa.
The Government only controls a part of the telephone
system ; most of the urban telephone systems, including
the larger ones at Moscow, Petrograd, Warsaw etc., are
worked by the municipal authorities or by private com-
panies.
Telephonic communication in rural localities is organized
and operated on concession principles by the Zemstvos or
companies of local land-owners.
Many railways, as also the Military and Naval Depart-
ments, have their own telephone communication for their
requirements.
The development of postal intercourse in Russia may
be judged by the following table.
POSTS, TELEGRAPH AND TELEPHONES. 263
Total of mails conveyed in 191 3
Ordinary letters
Postcards
Circulars :
With business documents
With samples of goods
With printed matter .
Registered :
Letters
Other despatches
Letters with declared value
(For a total value of
Money Orders :
B}^ post
By telegraph
(For a total value of
Parcels :
With declared \-alue .
(For a total value of
Without value .
Periodical publications .
Out of this total the following were foreign despatches :
1,329,928,602
467,193,281
17,481,195
20,737,127
235,063,185
87,021,197
8,773,162
5.742,614
6,970,609,650 roubles)
49,341,293
1,468,818
2,561,335.287 roubles)
6,980,455
530,077,569 roubles)
12,982,681
537,403,889
Ordinarj^ letters
Postcards .
Circulars :
With business docu-
ments
With samples of
goods
With printed matter
Registered :
Letters .
Other despatches .
Letters with declared
value .
(For a total value of
Money orders .
(For a total value of
Parcels with declared
value .
(For a total value of
Parcels without \-alue
Periodical publications
(copies)
Despatches. Received.
02,616,561 . . 87,793,455
26,439,868 . . 38,510,092
718,816 . . 1,756,420
2,750,150 . . 3,867,161
16,972,100 . . 37.520,575
4,044,987 . . 5.629,827
631,008 . . 1,300,481
258,304 . . 491,202
44,314,961 roubles 75,171,042 roubles)
899,196 .. 1,311,594
25,103,913 roubles 52,049,371 roubles)
231,377 .. 1,028,544
15,411,116 roubles 22,758,223 roubles)
151,720 . . 2,904,360
3,478,185 . . 23,093,197
264 RUSSIA : ITS TRADE AND COMMERCE.
Owing to the comparatively poorly developed railway
system, there are still many districts in Russia in which
the post is carried by horses ; the total length of such postal
roads is 64,670 versts ; upon these roads 4,271 postal relay
stations are maintained, with 27,382 horses.
In remote regions, owing to the absence of other means
of communication, the post horses also convey passengers.
In 1913, 4,206,858 horses were sent out with the mails and
2,617,594 horses with passengers. In several localities of
the Archangel government and of East Siberia the mails
are carried by reindeer, and in the extreme North-East (for
example, across the Tatar Straits over the ice to Sakhalin)
by dogs.
In summer, during the season of navigation, the mails are
carried on the large rivers — the Volga, Kama, North Dvina,
etc., by steamer, on board of which postal branches are
opened which conduct all kinds of business ; such postal
communication on board steamers is established on the
White, Caspian, and Black Seas, and along the coasts of
the Pacific Ocean. In remote localities of the north of
Russia on rivers of secondary importance, in the absence of
available roads during the summer, the mail is always
conveyed by boat.
The mail is received one and more times a day at 8,114
places in the Empire ; six times a week in 268 ; five times
in 167 ; four times in 233 ; three places receive the mail
forty-eight times a year ; eight places twenty-four times ;
one place sixteen times ; six places twelve times ; and one
place only six times a year ; five postal points have mail
exchange only five times a year.
House delivery of ordinary and registered postal des-
patches is carried on in all towns and the larger rural
localities.
The total length of telegraph lines of the Post and Tele-
graph Department amounts to 198,855 versts, of which
63,593 versts are on the poles of the railway telegraph lines ;
the length of the latter is 79,506 versts ; moreover there are
449 versts of lines of special designation. The total length
of wires of the Post and Telegraph Department amounts
POSTS, TELEGRAPH AND TELEPHONES. 265
to 533,596 versts, of which 226,460 versts are suspended
from railway telegraph poles ; the total length of the wires
of the railway telegraph is 219,623 versts.
For the transmission of messages there are more than
9,000 apparatus of the Morse Simplex description, 22 of the
Morse Duplex, 639 of the Hughes Simplex, 22 of the Hughes
Duplex ; 57 of the dual, and 65 of the quadruple Bodeau ;
52 of the Wheatstone Simplex and 67 of the Wheatstone
Duplex, three of the Murray and one apparatus of, the
Siemens system ; there are also 25 sounding apparatus, 824
telephonic, nine phonophores and 210 sounders. Besides
the Russian language telegrams are accepted in English,
French, Finnish, and Swedish ; but the acceptance of
telegrams in foreign languages is established only in those
institutions where there is necessity for the same.
There are 2,365 offices accepting such telegrams.
The conveyance of telegramis for 191 3 is shown by the
following figures :
Inland despatched ;
From institutions of the Post and Telegraph
Departments ..... 40,709,431
From railway stations .... 9.730,315
International :
Despatched ...... 2,749,624
Received . . . . . . 3,421,235
Transit telegrams, inland and foreign . . 163,372,884
(Including foreign in transit) . . . 770,051
In view of the colossal distances of the Empire and its
special geographical features, wireless telegraphy in Russia
acquires exceptional importance, replacing as it does land
telegraph lines and cables where their construction and up-
keep would offer insuperable obstacles. The first wireless
stations for common use were constructed in 1910 ; at the
present time the Post and Telegraph Department controls
twenty wireless stations which are subdivided into five
groups ; the power of these stations is designated in kilo-
wats, while the first figure in brackets indicates the primary
power and the second the power in antenna.
I . Far Eastern group : Petropavlovsk on Kamtchatka (8) 5 ;
Nikolaevsk-on-the-Amur (8) ; Okhotsk (12) 7-5 ; Nayakhan
266 RUSSIA: ITS TRADE AND COMMERCE.
(12) 7.5 ; Anadyr (12) 7-5 ; and Kerb (in the Amur province)
(1-5) I-
2. Baltic Sea group : Riga (1-5) i ; Runo Island in the
Gulf of Riga (075) 0-5 ; Revel (1-5) i ; Libau (1-5) i.
3. Arctic Ocean group : Archangel (14) 8 ; Yugorsky
Shar (on the shores of the Straits) (12) 7-5 ; Vaigatch Island
(1-5) I ; Mare Sale (1-5) 1.
4. Caspian Sea group : Petrovsk (1-5) i ; Alexandrovsky
Fort (1-5) I ; Astrakhan roadstead (075) 0-5.
5. Black Sea group : Taganrog (1-5) i ; Taganrog Road-
stead (075) 0-5 ; Novo Rosiisk (1-5) i.
Wireless telegrams transmitted by means of these stations
and beyond over the wires of the pan-Imperial telegraph
system are charged according to the established inland
tariff.
The number of words conveyed by the wireless stations
in 1914 amounted in round figures to 5,600,000.
There are besides some seventy wireless stations on
vessels sailing under the Russian flag.
On January i, 1914, the Post and Telegraph Department
was operating 173 urban telephone systems with a total
of 76,978 apparatus. There are 221 urban concession
systems with 194,193 apparatus.
Outside the towns there are 150 zemstvo district telephone
systems, three zemstvo government systems and eleven
systems exploited by local Cossack bodies ; the apparatus
of all these systems totals 11,214.
In Russia there are seven inter-urban telephone lines :
(i) Moscow- Petrograd ; (2) Moscow-Kharkov ; (3), Pctro-
grad-Helsingfors ; (4), Tiflis-Baku ; (5) Petrograd-Revel ;
(6) Moscow-Nizhni-Novgorod with a branch to Ivanovo-
Vosnesensk ; (7) Kharkov-Bakhmut-Yekaterinoslav.
Besides the public telephonic communications, there are
90 systems for private use with 23,507 apparatus, of which
14,939 belong to railways and the remaining 8,568 to other
institutions and individuals.
Savings bank business is transacted at all postal and
postal and telegraphic ofiices. On January i, 191 5, the
number of savings banks was 5,970, of which six are working
POSTS, TELEGRAPH AND TELEPHONES. 267
independently, while the remainder are branch offices of
the nearest State Savings Banks of the Ministry of Finance.
The operations of these banks for 1914 are shown in the
following figures (in thousands of roubles) :
Balance on Jan. i, 191 5
Deposits
D e posits
In
In
accepted
paid out
cash
securities
In 6 independent
banks . . 14.649
12,976
17351
2,573
In 5,694 branch
offices . . 317.883
274,771
482,763
38,890
CHAPTER XII
The Internal Trade of Russia
By J. BooKSHPAN ■
I. Formation of the Home Markets
The formation of a market in Russia, using the term
" market " in its economic sense, dates from the beginning
of railway construction and the reforms of 1861 which led
to the emancipation of the peasants. These two events
gave a great impetus to the development of Russian
trade.
The peasants, emancipated from serfdom to a wage-earn-
ing condition, and obliged now to pay rent, were forced to
find a quick sale for their produce and so made their appear-
ance on the markets.
On the other hand, the process of drawing agriculture into
the circle of exchange was facilitated by the construction of
railways for purposes of trade which began in the sixties.
This growth of the railways enabled the peasants to take
their place in the markets without the large trading capital,
the necessity for which had arisen from the centralization of
markets and the large scale upon which the landowners
traded. Thanks to the railways the markets were decen-
tralized and farmers were placed in a position to dispose of
their produce on the spot. In place of large trading capital,
small buyers or commission agents appeared, bringing in
their wake bank credit, which financed and so lent support
to this decejitralized grain trade.
The history of the development of Russian trade in these
268
THE INTERNAL TRADE OF RUSSL\. 269
first phases is, as a matter of fact, the history' of the grain
trade, for parallel with the growth of the market for agricul-
tural produce a development of the trade in industrial
products was recorded. The evolution of the grain trade is
clearly illustrative of the general conditions underlying
commerce in Russia and its development. The growth of
railways had a great influence on the whole subsequent
development of the grain trade. In the beginning the home
markets played the chief role ; the exports were compara-
tively insignificant.
The ever growing railway system linked up the seaports
and foreign countries, with the result that much grain was
diverted from the home market.. It is only fair to add that
the latter was not remarkable for its importance ; the whole
supply of grain could not be disposed of, and great quanti-
ties were available for export. An enormous extent of
land remained uncultivated. The railways infused life into
these rural districts ; grain cultivation w^as increased and the
produce from this new area was sent to the seaports. The
purchasing of grain on railway stations came into vogue ;
here, small station traders, having but very limited capital
at their disposal, had their place of meeting. The trade in
grain was reorganized on a commission basis ; the dis-
counting of railway documents by banks was introduced ;
the small purchasers needed credit for the purpose of making
quick turn-overs and the only manner in which such credit
could be obtained was by discounting the railway freight
bills. It is true that the Banks in taking up these railway
documents introduced some negative features ; they had
no means of assuring themselves that the grain was clean,
nor could they satisfy themselves as to its quality, or take
proper measures for its storage. However, as a result of
these operations, the total trading turn-over in grain in-
creased and there was a growth in the exports abroad.
This process did not pursue its course in all parts with equal
rapidity. In the districts far distant from the frontiers
and ports, principally in Eastern Russia (on the Rivers
Volga, Ivama, Viatka and Bielaia), the distinguishing fea-
tures of the former cumbersome centraHzed grain trade were
270 RUSSIA : ITS TRADE AND COMMERCE.
retained. But the railways drew one district after another
into an ever-widening circle of financial credit transactions
and enabled the small exporters to obtain the predominating
position on the markets, and to replace the former big
dealers or " labozniks."
The economic policy of the Russian Government helped
the growth of export activities in connexion with agricul-
tural produce. Dijverential tarius with reduced pood-
verst rates were introduced for the transport of grain to
ports. This railway policy was dictated by the necessity
for adjusting Russia's trade balance, maintaining the value
of the Russian rouble and preparing the ground for reform
of the currency. Valuable results were the outcome of
influencing the market for agricultural produce, forcing the
development of exports and bringing Russia into touch
with the world markets. The steady growth of grain
exports is seen from the following table :■ — ■
Year
Net crop of
former years
Exports
Percentage of
net yield
exported
In thousands of quarters
I 870/1-4/5 . . .
1875/6-79/80 . .
I 880/1-4/5 . . .
1885/6-89/90 . .
1890/1-4/5 . . .
1895/6-7/8 • • •
184-032
178-622
196-468
211-527
288-517
245-775
22-483
32-185
33-441
46-585
50-345
56-228
12-2
i8-o
17-0
22-0
22-0
22-9
From the later nineties, symptoms of progress and changes
may be noted in Russian trade. The fundamental change
in the grain trade during the last ten years, is the evolution
in the relations of the home and foreign markets. The growth
of towns and of industry created a vigorous demand for
grain ; home trade in grain grew, exports fell, and finally a
demand arose for manufactured goods. The large market
THE INTERNAL TRADE OF RUSSIA. 271
for these goods and the growing trade of the rural districts
were the results of the same factors, viz., railway construc-
tion, bank, credit and monetary reforms. The adoption of
the gold standard in 1897 gave stability to home trade
which had been sufering from too large an issue of paper
money.
However elementary the role played by railways in the
development of trade, in Russia it has been stupendous ;
railways, in view of the enormous distances and the great
areas over which the population is dispersed, continue to be
the chief stimulus of commercial life.
An increase in total amount of trade went side by side
with the growth of the railway systems, as may be seen
from the following figures showing the amount of freight
handled annually by the railways for 1895-1913 : —
Amount transported
Year
Thousands of poods
per verst of railway
system (in thousands
of poods)
1895 ....
2,593.542
78-9
1896 .
2,746,823
76-3
18.97 •
2,954,112
799
1898 .
3.277.196
84-3
1899 .
3,697,628
85-8
1900 .
3.958,385
82-9
190I
3.99I.183
80 -0
1902
4,173,000
8o-i
1903
4.559-336
86-1
1904
! 4.569.541
85-1
i9«5
4,216,427
767
1906
4.915.902
85-8
1907
5,200,219
877
1908
5.247.756
87-5
1909
5,619,590
93-4
1910
6,058,740
loo-o
1911
6,810,188
110-9
1 912
7,109,718
II47
1913 . . . .
7,981,019
1
1277
2 72 RUSSIA : ITS TRADE AND COMMERCE.
An analysis of the freight returns works out as follows : —
Iron, Cast
Grain
Coal
Timber
Iron and
Steel manu-
Year
factures
In millions of poods
1903 ....
I-OII
823
373
85
1904.
989
834
356
n
1905 .
967
782
323
67
1906 .
1-079
971
370
72
1907 .
1-030
I-II4
414
78
1908 .
982
I-I29
432
1^
1909.
1-252
I-IOO
490
^7
1910 .
1-270
1-089
560
105
1911 .
1-282
1-297
627
115
1912 .
1-200
1-464
647
135
1913 •
1-297
1-709
731
145
1903
1904
1905
1906
1907
1908
1909
I9I0
I9II
I9I2
I9I3
Year
Sugar
Textile
manu-
factures
Cotton
Agri-
cultural
ma-
chinery
85
40-1
26-3
12-9
82
37-5
26-6
13-2
75
387
22-4
12-9
98
43-1
30-1
14-2
99
417
27-4
i6-i
103
41-6
29-5
18-3
107
47.4
29-3
21-6
115
477
27-2
24-5
127
507
33-8
27-7
133
52-5
35-9
29-9
137
54-5
35-3
347
other
ma-
chinery
12 -6'
12-6
II-8
13-0
13-8
i6-3
16-7
20-7
25-5
27-0
31-5
The movement of merchandise, which has considerably
outstripped the growth of the railway system itself, is char-
acterized by a predomination of three categories of freight,
wliich comprise more than one quarter of the whole freight
THE INTERNAL TRADE OF RUSSIA.
273
handled, viz., timber, coal, and grain products. It is
remarkable, however, that the relative importance of the
grain carried in relation to the total amount of transported
goods is falling ; this reduction is explained by the steady
growth in the volume of manufactured goods dealt with. For
instance, the percentage of the general total of merchandise
handled which falls under the head of cereals is as follows : — ■
Year
Percentage
1903. .
22-2
1904.
217
1905.
23-0
1906.
22-0
1907
19-8
1908
187
1909
21-9
I9I0
21-0
I9II
i8-8
I9I2
16-9
I9I3 •
•
i6-3
Simultaneously with the growth in railway freights de-
velopments in the navigation of the inland waterways caused
an increase in the number of postal packages, both increases
being in direct proportion to the development of commerce.
Progress in railway passenger service wrought a funda-
mental change in Russian trade. Commercial travellers
appeared on the scene, purchases of goods were made direct
from industrial and distributing centres (Moscow, Lodz) ;
agencies furnishing information regarding the standing of
commercial houses were established, and the centre of
gravity of trade was shifted.
In former times distribution in Russian trade was ham-
pered by the great distances separating the various districts.
Traders had to make long journeys for the purpose of bar-
tering their goods and making settlements to regular places
of meeting which within the limits of a given locality are
known in Russia as " forzhki," "places of barter," or
Bazaars, and, when devoted to wholesale trade and serving
274 RUSSIA : ITS TRADE AND COMMERCE.
more extensive regions, as " Fairs." The Fairs in the major-
ity of cases were estabhshed at points on the banks of
rivers, or where high roads met, and thus served as centres
of distribution. These Fairs have gradually adapted them-
selves to the special demands made upon them and were
so arranged that traders could go from one Fair to another.
The huge dimensions of the country and the comparative
lack of railways, especially in the East, have retained for
the Fairs of Russia an importance up to this day.
They have even grown in number ; in 1868 there were
6,500, in 1894 16,604, s-iid according to latest statistics there
are as many as 29,808 at the present time. Improvements
in Russian trade and its ever-growing world significance
have established the Western European " exchange "
which, springing up alongside the Fairs and in part re-
placing them, effects the bulk of the country's commercial
transactions.
It is unfortunately impossible to determine by statistics
the Russian trade turn-over and the amount of capital
engaged in it, as up to the present statistics of Russian trade
do not exist. Some data as to enterprises, their number and
dimensions, may be found in the information gathered in
connexion with the levying of trade taxes. The total num-
ber of such enterprises can be ascertained from the number
of trading licences taken out. Movements in all trading
enterprises, including those at Fairs, for the period 1899-
191 2 are shown in the table on page 274.
In 1 91 2 the total number of trading enterprises
had increased, in comparison with 1899, to the ex-
tent of 367*3 thousands or 43 per cent. This growth has
been continuous during the last fifteen years, with the ex-
ception of the years 1905 and 1906 when the number appre-
ciably decreased.
If we consider classified trade returns the following table
shows the movements of trade under five heads ; the
first and second represent large and medium-sized enter-
prises, the third small traders, the fourth the smallest
trading houses, and the fifth pedlars and hawkers. To
make the picture more complete we have included Fair
THE INTERNAL TRADE OF RUSSIA.
275
Year
Number of Trading
Licences issued
Percentage increase ( -|- )
or Decrease ( — ) in the
number of Licences in
(in thousands)
comparison with 1 899
1899 ....
853-8
—
1900
861-9
-1- i-o
I90I
874-4
+ 2-4
1902
877-7
+ 2-8
1903
886-7
+ 3-9
1904
898-6
+ 5-3
1905
^192-9
+ 4-6
1906
871-2
+ 2-0
1907
916-3
+ 7-3
1908
955-6
+ 11-9
1909
1,076-0
+ 26-0
I91O
1,130-4
+ 33-5
191I
1,177-6
+ 37-9
1912
i,22r.-i
+ 43-0
enterprises, that is, those which take out hcences for the
right of trading at Fairs : —
NUMBER OF LICENCES FOR TRADING ENTERPRISES.
Actual
number
Actual
Actual
Actual
Actual
number
of
licences
Actual
number
of
licences
of
number
number
number
Years
licences
of licences
of licences
of licences
in
m
in
m
cate-
gory
7,697
category
category
category
category
31,811
category
1899
149,665
428,028
228,056
8,571
1900
7,897
144,913
430,656
240,631
29,927
7,905
190 1
7,774
141,905
440,035
248,024
29,052
7.593
1902
7,759
137,857
451,180
245,546
27,986
7,378
1903
7,921
139,575
461,789
241,293
28,662
7,507
1904
7>934
139,078
458,865
257,819
27,535
7,365
1905
7,755
134,265
463,726
257445
23,351
6,368
1906
7,082
129,580
458,081
249,709
21,070
5,691
1907
7,153
132,982
483,356
266,307
20,419
6,086
1908
7,423
139,270
498,397
283,238
20,904
6,337
1909
7,990
153,338
549-467
329,931
28,658
6,646
1910
8,462
158,397
576,480
350,637
29,707
6,705
I91I
9,407
171,166
599,028
360,721
30,594
6,683
I912
10,175
178,381
632,595
373,689
30,059
6,259
276 RUSSIA: ITS TRADE AND COMMERCE.
The number of wholesale dealers has made considerable
growth during recent years, although fifteen years ago a
falling off in their number was recorded. The medium-
sized and small enterprises of the second, third and fourth
categories are also growing in number. The development
of other forms of trading at the Fairs — a point to which we
shall refer when discussing the Fairs themselves — ^has brought
about a diminution in trading at Fairs, shown by the lesser
number of licences granted. Trade development and reorgan-
ization of the markets takes the form of a greater concen-
tration of trading enterprises in the hands of a few. Trading
capital, supported by credit, banks and exchanges, organizes
the markets and organizes itself. Joint Stock Companies,
S3mdicates, Stores and commission agents make their appear-
ance in the trading world. The table which follows shows the
growth of these centralized industries and their share capital :
Number of
Capital in
Year
Joint Stock
thousands of
Companies
roubles
1907
93
106,148
1908
99
116,088
Trading Companies
1909
114
123,100
I9IO
119
129,460
191I
1907
7
148,264
2,900
1908
7
2,775
Syndicates for Sale of
1909
10
4.230
Products ....
i9ro
9
4,200
1911
9
4.500
1912
1907
9
4.500
10
20,720
1908
II
21,206
Trading Premises and
1909
13
23.569
Stores
1910
13
23,678
1911
17
27.445
1912
19
30,162
THE INTERNAL TRADE OF RUSSIA.
77
The rapid growth of share capital and of the business
done in the various branches of trade may be seen from the
following approximate figures :—
Years
Number of
enterprises
Share capital in
thousands of
roubles
Traders in Mineral Fuel
1903
1910
1912
7
7
8
9.530
10,759
17,820
Traders in Iron Wares .
1903
1910
1912
13
20
23
6,950
10,655
14,130
Traders in textile manu-
facture and Dry
Goods
1903
1910
1912
16
40
59
16,900
51.985
70,480
Traders in Colonial
Produce ....
1903
1910
1912
9
II
18,100
22,400
Traders in Vai ious
Lines ....
1910
1912
16
23
10,480
14.990
The development of large Joint Stock Companies in
Russia is of comparatively recent date, and involves great
changes in the organization of Russian markets. The
prices of goods, which used to be subject to considerable
fluctuations in different districts, have begun during the
last ten years to become more uniform. The capture of a
market is now associated with the active co-operation of
commercial firms, with advertising on a larger scale, sending
out of commercial travellers and generous credit. The
home markets have increased in dimensions. All these
developments of the trade of the country in the shape of
increased circulation of goods, company promotion, arrange-
278 RUSSIA: ITS TRADE AND COMMERCE.
ments for credit and general trading conditions have had
their effect upon the agricultural market. As we have
seen, in the beginning, the agricultural market was the
determining factor in the economic life of Russia ; during
recent years, on the contrary, Russian agriculture has greatly
depended on the conditions governing the town market.
It is very difficult to estimate exactly the extent to which
agriculture in Russia is dependent on home demands and on
foreign markets. In regard to grain the more rapid growth
of the home market can be noted fairly clearly. In con-
nexion with other products of agriculture and cattle-breed-
ing, this growth is still more apparent. The relation of the
home to the foreign market in recent years will be seen
from the following figures based upon an analysis of railway
transport : —
Export traffic
Internal traffic
Average
In millions
of poods
Percentage
of total
traffic
In millions
of poods
Percentage
of total
traffic
I 896-1 900 .
1901-1905 . .
1906-1910 .
1911 ....
1912 ....
318-0
416-8
463-0
545-1
473-1
55-3
569
51-6
53-4
48-6
257-0
327-9
437-5
475-8
495-4
447
44-1
48-4
46-6
51-2
Fifteen years ago, exports were in excess of home trade ;
to-day, the home exceeds the export trade, the home
markets consuming more than half the supply, and this
increased importance is principally to be ascribed to the de-
velopment of industry. If Russian industry continues to
develop even at the same rate as it has done in the past,
there is every reason to suppose that, in time, agriculture will
no longer yield this surplus. Russia, it may be, will reach,
though less rapidly, and on a smaller scale, the stage through
which the United States is passing at present, when, owing to
the rapid growth of the home market, the exports of grain fall.
The development of the home market is also important
THE INTERNAL TRADE OF RUSSIA. 279
to Russia because of her dependence on imports. This
dependence has been already appreciably weakened by the
creation of a large market in the towns, principally the capi-
tals, for meat, fish, game and butter.
2. The Fairs of Russia
The kind of trade transacted at fairs is very typical of
Russia. Until quite recently they afforded the best indica-
tion of Russia's economic position.
They clearly reflect for instance the great extent to which
Russian trade is dependent on the harvest ; the slightest
delay or misfortune on account of bad weather in harvest-
ing immediately affects the trading operations at the fairs.
They are held at all times of the year, the summer, spring
and winter fairs having each their own distinguishing features.
It is true that since the development of the railway sys-
tem and the better organization of roads and waterways,
there have been improved forms of trade and the business
of the fairs has diminished. They are still, however, of
very considerable importance at the present day, as many
as 29,808 fairs being held in the Russian Empire at 9,215
difierent places.
The goods actually brought for sale to the fairs during
the year were valued at i ,226,031 thousands of roubles, the
actual sales amounting to 826,588 thousands of roubles.
Most of the fairs cover the trading activities of a few
villages and have only local significance. These local fairs
often last from one to three days, whereas the bigger
fairs continue as long as six weeks (Nijne-Novgorod), and
even extend over several months, as, for instance, the fair
in the Barter Court in Orenburg, which lasts six months.
Not only a steady increase in the number of fairs we
could notice, but in some cases the development of this form
of trading has become more intensive, that is, some of the
larger fairs which serve whole regions have increased their
importance. Bearing in mind that, in Western Europe,
where new methods of trading are highly specialized, the form
of trading typified by the fair has not altogether dis-
28o RUSSIA: ITS TRADE AND COMMERCE.
appeared (for instance, the London Auctions and the Leip-
zig Fair), it is not surprising that in Russia, which is some-
what backward in economic development, the fairs for the
time being retain their relatively large significance. They
remain, despite the fact that the system of payments in kind
is dying out, that currency is being placed on a proper basis,
and that the credit system is being organized. It is true that
the fairs are passing through a slight evolution ; trading on
the basis of " booked orders " and samples as practised in
Western Europe is steadily increasing. The following table
gives some figures as to the transactions at the bigger fairs : —
Approximate amount of
Name
When hckl
transactions (in roubles)
Place
Total value
of goods y
Total value
brought to
sold
the fairs
Nijne-Nov-
Makarev .
15 July- 10 Sept.
300,000,000
250,000,000
gorod
Irbit (Perm.
Irbit . . .
25 Jan. -I March
25,785,000
21,108,000
Govt.)
'■
Charkoff .
Krestchensk .
6 Jan.-3 Feb.
14,430,600
7,215,300
"
Provod .
2nd and 3rd
weeks after
Easter
24,952,400
12,476,200
"
Troitz . .
8th and gth
weeks after
Easter
21,744,000
10,872,000
jf ' '
Uspensk .
15 Aug.-i Sept.
17,888,900
8,944,400
Pokrov .
1-15 October
14,430,600
7,215,300
Kieff" . '. '.
Contract .
I Feb. -I March
—
—
Orenburg
Mienovninsk.
I June-i Novr.
20,000,000
15,000,000
(Barter Court)
Menzelinsk
Zimniaia .
26 Dec. -12 Jan.
7,078,800
5,272,600
(Ufa Govt.)
Archangel
Margaritinsk.
I Sept. -I Oct.
5,000,000
4,000,000
Ilinka (Don
Nikolsk .
9-15 May
5,100,000
2,030,000
Region)
Gomel .
Novogodnia .
1-7 January
4,500,000
2,400,000
Kuiandy
Kuiandin.sk-
I June-i July
4,832,500
3,650,600
(Semipalat-
Gotov
insk Region,
KarkalDist.)
Tiumen (To-
Ilinsk.
5-20 June
7,286,300
5,299,700
bolsk Govt.)
Kozmode-
Liesnaia .
25 May-25 June
2,500,000
1,500,000
miansk
(Kazan Govt.)
THE INTERNAL TRADE OF RUSSIA. 281
Goods sold at the fairs are not confined to the products
of large factories alone, but include also articles made by
the peasant craftsman and home worker, and the prepon-
derance of one or other line of goods depends on the peculiari-
ties of the given region. For instance, in northern parts
(Archangel, Olonetz and Vologda Governments) fish and
furs predominate ; in the Lake district (Petrograd, Pskoff and
Novgorod Governments), flax ; in Siberia furs, raw pro-
ducts and cattle ; in the south wool and cattle ; in the
central agricultural region (Voronej, Kursk, Orlov, Toula
Riazan, Tambov and Penza Governments) we find the horse
trade in most evidence, and in the Vistula district hops,
poultry, etc.
The Fair of Irbit, notwithstanding the fact of the Siberian
Railway, continues as an important centre of exchange
between European Russia and Asia. In 191 4 the amount
of goods brought to the Irbit Fair represented a value of
22-8 milhon roubles, as against 24 million roubles in 1913.
The falling off is caused by several firms finding it sufficient
now to be represented by commission agents with samples.
Still, the fair continues to hold a prominent place in the
trading world, especially in connexion with the chief line of
goods handled, that is — furs. During the last few years
the fur trade has fluctuated between 75 and 8 million
roubles, and this fair has acquired a world-wide repute.
The attempts of some buyers to purchase furs direct from
small traders in distant parts of Siberia and to have these
furs sent direct to Moscow, without using the Irbit Fair as a
go-between, have been unsuccessful, and this centre is still
known to fur traders as the " mirror of the fur market."
Trading in other goods at the Irbit Fair rather tends to-
wards a system of sale by samples. Textiles, groceries and
drugs are fast disappearing from the fair altogether.
In 1 91 4 manufactured goods were brought here to the
value of 5-8 million roubles, of which 4-3 million roubles
worth were sold ; there was an especially brisk trade in
peasants' cloth.
Traders at the Irbit Fair are served by banks, which ha\e
their branches at all the important fair centres. Credit
282 RUSSIA : ITS TRADE AND COMMERCE.
is to be obtained only at the larger fairs, but in general
it may be considered as non-existent, the purchases being
made for cash.
Banking operations at the Irbit Fair reach very consider-
able dimensions ; the bills discounted alone amounting to
an average of 5-9 million roubles during the last few years
Below we give figures on this point : —
Total amount of
Year
bills discounted
igoi ....
3357-5
1902
3.362-8
1903
3.955-1
1904
4.877-3
1905
3.039-0
1906
3.025-8
1907
4.235-1
1908
5.174-2
1909
4,786-2
I91O
6,849-7
191I
8,806-9
1912
7.999-4
1913 ....
5.302-4
The Kieff Fair is one at which contracts are entered into,
whilst the Srietensk Fair is one chiefly devoted to retail trade.
At the latter there is a great demand for hand-made " kus-
tarny," cheap jewellery, dry goods, fish products, Caucasian
specialities, carriages etc. There is also business done in
manufactured goods of the cheaper kinds, principally calico,
red fustian and cheap woollens.
At the Kieff Fair, the sugar factories and refineries make
their contracts. The annual business in sugar amounts to
about 4,000,000 poods ; the business of the refineries takes
the form of arrangements by which the right of placing
sugar on the home markets — a right which is limited in
Russia by Government regulation of the production for home
consumption — is transferred and ceded by one contracting
party to another.
THE INTERNAL TRADE OF RUSSIA. 283
At the Kieff Contract Fair a place is also reserved for
grain, and there is a certain amount of trade in timber and
wood materials.
At the big fairs in Kharkoff we find, side by side with
agricultural products and cattle, textile goods, leather, dry
goods and wool. At the Krestchensk Fair alone the textile
manufactures sold in 1914 represented a value of 5-2 million
roubles, the total suppHes at the fair being valued at 7-1
million roubles. Undressed leather offered and sold at the
fair had a value of 2-3 million roubles ; dry goods were
offered to the value of 1-4 milHon roubles, of which Rs.
816,000 worth was disposed of ; the value of the wool was
Rs. 983,000, of which Rs. 306,000 was sold.
" Barter Fair " in Orenburg is a trading centre of quite
original character attended by merchants representing the
numerous tribes of Eastern Russia. It comprises a tre-
mendous collection of all kinds of raw materials, leather,
sheep-skins, wool, horses' tails and manes, goat hair, and
to some extent furs and Turkestan cotton. This fair
receives large consignments of cattle, augumented on their
way by small lots purchased at local cattle fairs. They
are chiefly sold for slaughter. The undressed leather is
taken for the Kazan and Viatka tanneries, and at the same
time great quantities are purchased for the Nijne-Novgorod
Fair.
The Nijne-Novgorod Fair has been held since 181 7 and
continues to this day as the most important of Russian
trading centres. To it journey each year merchants from
all parts of Russia, Central Asia and Persia. Here the prob-
able volume of business to be transacted in the course of
the year is taken into account ; here, prospects and probable
conditions of future trade are considered ; the general con-
ditions of other enterprises are discussed and estimates
made of their competing powers, this point being of special
importance to small and medium-sized businesses which
cannot afford many agents. It is true that for various
classes of merchandise — iron, cotton, tea, sugar — it has
become but a wide local market and no longer fixes trade
done by the whole country in these goods. Nevertheless,
284 RUSSIA: ITS TRADE AND COMMERCE.
the mere fact that the transactions are estimated at 250
milHon roubles makes it an object of consideration on the
part of the commercial world. As to the volume of business
transacted at the Nijne-Novgorod Fair, we can draw con-
clusions from the operations of the banks.
The discounting of bills by all the banks working at the
fair amounted in thousands of roubles to- —
In 1908
28,611
„ 1909
35,574
,, 1910
45.921
,, 1911
49,227
„ 1912
49,656
,. 1913 •
51,240
„ 1914
43,021
The falling ofi in discount operations in 191 4 is explained
as the opening of the fair coincided with the outbreak of war.
Other banking operations at the Nijne-Novgorod Fair
are expressed in the following figures :■ —
Deposits to Current Accounts
Paid from Current Accounts .
Paid against Drafts
Received for Drafts
The total transactions at the fair, during a series of years,
can be seen from the following figures (in millions of
roubles) : —
I9I3
1914
In thousands
of roubles
131,678 . .
138,512
128,568 . .
132,885
47,471 . .
39,676
82,377 • •
77,206
I 867-1876
I 877-1 886
I 887-1896
I 897-1906
1908
1909
1910
1911
1912
136
175
163
146
194
189
199
190
195
Thus, during recent years, the trading at the fair attained
to as high a figure as 250 million roubles and for several
years past has not shown any tendency to fall. They flue-
THE INTERNAL TRADE OF RUSSIA. 285
tuate from year to year in sympathy with the harvest, on
which, to a great extent, the purchasing power of the Rus--
sian people depends, but in general the transactions repre-
sent a comparatively stable norm which falls and rises only
within narrow limits. The prospects of the Nijne-Novgorod
Fair are determined each year as soon as the results of
the harvest are known. The fair is also an export market,
merchandise being despatched to Eastern countries as well
as to Western Europe and America. The most prominent
place at the Nijne-Novgorod Fair is held by textile manu-
factures which are brought exclusively for home markets.
Trading in these goods generally begins before any other
business is done at the fair.
At the Nijne-Novgorod Fair furs there are purchased for
the markets of Western Europe.
There is great variety in the hardware sold at the fair.
It represents necessary articles of everyday use for the
peasant population, small articles of cast-iron, sieves,
samovars, Church regalia, etc.
The iron market has long since lost its former importance.
At present it is only of a local character, as traders in distant
regions no longer buy iron at the fair, but receive it direct
from the manufacturers.
It is interesting to note the influence of the war on the
business transacted at the fair. On the very day on which
the Nijne-Novgorod fair hoisted its flag, Austria-Hungary
declared war on Serbia. The mobilization and the sus-
pending of acceptance of private freight by the railways were
a great blow to the fair. An immediate stop was put to all
dealings, trade was paralysed. However, the paralysis
was not of long duration. In a few days trade revived.
The waterways on the shores of which the fair is held were
of great assistance — Nijne-Novgorod lying at the junction
of two rivers, the Volga and Oxa, and in the immediate
neighbourhood of the Kama, which unites it with far-re-
moved centres of production and consumption. This is
the great advantage of the Nijne-Novgorod Fair over the
Moscow trading centre, which was, for a short time, isolated
in consequence of the diiliculties put in the way of the
286 RUSSIA : ITS TRADE AND COMMERCE.
transport of private goods over the railways. Another
factor favourable to the market is its distance from Western
Russia, which has suffered most from the war, and its close
connexion with the Eastern markets, which retained their
purchasing power. Finally, the good harvest in the Eas-
tern areas of Russia — Siberia, Central Asia and the Cau-
casus — also enabled the fair to overcome the influence of the
war.
As regards the future of this fair, it is beyond doubt that
the laying down of new railways, the Siberian Trunk Line,
the increase in the number of commercial travellers, com-
mission agents, co-operative societies, and the development
of postal-telegraphic facilities, all work to reduce the amount
of goods sent to the fair. Large firms, which now fix prices
in accordance with the general state of business, ignore the
fair and address themselves to the commercial travellers or
deal direct with the manufacturers ; the growing form of
co-operative trading also, to some extent, influences the
dealings at the fair. For instance, the greater part of the
purchases by the Moscow Union of Consumers are made
direct from industrial centres, although in 191 3 this
organization also purchased goods at the fair to the ex-
tent of 1^ million roubles.
On the other hand, the market is visited by merchants
from far-distant points, comparatively small traders, who
have not at their disposal the latest facilities or the services
of middlemen. The manufacturers cannot possibly ignore
this great number of small purchasers and must thcMTfore
retain their connexion with the fair.
Exchanges
Russian exchanges, in contrast to those of Western
Europe, are not only places for bargaining (markets), but,
in consequence of the Russian system of social organization,
have the supplementary functions which, in the West,
belong to chambers of commerce.
They have been created in Russia not so much with the
direct aim of pushing trade, as of the demand felt for or-
THE INTERNAL TRADE OF RUSSIA. 287
ganization and representation of trade interests. This pecu-
liarity of Russian exchanges, unknown in Western Europe,
is deeply engrained in the habits of Russian trading circles.
In Russia, the work of Exchanges is regulated by
the Statutes of Trade legislation. Their supervision
is vested in the Ministry of Trade and Industry. The
only exception is the Securities Department of the Petrograd
Stock Exchange which comes under the jurisdiction of the
Ministry of Finance.
The exchange "public" embraces all those who visit
the exchanges, but not all visitors to an exchange are mem-
bers of the " Exchange," which is a corporation ; to become
a member several conditions have to be satisfied : —
The payment of an annual subscription.
Candidates for membership must be engaged in trade or
agriculture or be acting as the duly appointed repre-
sentatives of such activities, of joint-stock companies,
societies and trading companies.
The Exchange Association in conjunction with the Ex-
change Committee, which is appointed for the direct super-
vision of all matters pertaining to the exchange, have with-
in their jurisdiction all institutions and persons connected
with the exchange. The powers of the exchange in Russia
are autonomous and govern both the internal and external
relations of the exchange.
The organization of Russian exchanges and their methods
of doing business are still in process of development, but
are gradually approximating to those of Western Europe.
The real development in Russia began in the sixties of the
nineteenth century. The first exchange in Russia, opened
by Peter the Great in Petrograd in 1703, was the only one
of its kind for many years. In 1763 a second exchange
was founded in Odessa ; in 181 6 a third in Warsaw ; in
1842 and 1848 two other exchanges began operations on
the Volga, viz. at Rybinsk and Nijne-Novgorod. In the
sixties, however, their number considerably increased (to
six), and the seventies and eighties also registered an increase
of six. At the present moment Russia possesses about 100
exchanges.
288 RUSSIA: ITS TRADE AND COMMERCE.
Trade on the Russian exchanges is chiefly in flour and
agricultural products. There are also exchanges for timber
and wood products (Archangel, Minsk and Riga), fish and
fruit (Astrakhan and Tzaritzyn), naphtha products (Baku
and Batoum), cotton and silk cocoons (Kokand), gold
bullion (Ekaterinburg), sugar (Kieff), flax (Pskoff) and
wool (Simbirsk.)
Russian exchanges deal not only with samples but with
goods of a " definite type, class or origin," and in goods
corresponding to the " standard established by the ex-
change." Business is also done in goods which are subject
to prehminary " examination and approval " by the pur-
chasers, that is, in goods which do not come within the
sense of " exchange " goods as the word " exchange " is un-
derstood in Western Europe and America, and the offering
of which on exchange has no sense. Further, just as on
foreign exchanges, Russian exchanges distinguish goods on
sight and futures, but " term contracts " are not yet met
with. Unity of contract, of which mention is often made in
the rules of foreign markets, is as yet unknown in Russia.
The statutes of our exchanges are absolutely void of any
provisions as regards dates for filling contracts in connexion
with " futures " ; no mention is made of any medio or ulti-
mo ; further, on Russian exchanges there can be no liquida-
tion of term contracts. Attached to the exchanges are
brokers, experts, sorters, arbiters and quotations committee.
Brokers on the Russian exchange are middlemen. They
bring a purchaser and seller together, or they conclude bar-
gains themselves, on authorization.
Each exchange has a fixed number of brokers, the number
being established in the order laid down in the Statutes of
the Exchanges. The Institution of Brokers includes not
only ordinary brokers, but ship-brokers, marine insurance
brokers, averagers, exchange notaries and auctioneers.
The exchange notaries appear for unfulfilled brokers'
agreements, and auctioneers arrange for the public sale of
goods on the exchange.
Experts are attached to each large exchange. For instance,
there are special staffs of experts attached to the Odessa.
THE INTERNAL TRADE OF RUSSIA. 289
Libau and Kalashnikoff (Petrograd) exchanges. The hst
of experts is drawn up by the Exchange Committee from
among the brokers, from the commercial men who are mem-
bers of the exchange, and other competent persons, on reso-
lution being passed by general meeting of the members of
exchange.
Sorters officially certify the quality of merchandise for
export, and are elected by the merchants whose goods are
subject to inspection and possible rejection.
Arbitration Committees for settling disputes and mis-
understandings which may arise in the course of fulfilling
bargains concluded " on Exchange " consist of a certain
number of members elected annually by general meeting of
the Exchange Committee. In Russia Arbitration Com-
mittees exist in Odessa, Libau, Riga and at the Kalashni-
koff Grain Exchange.
At the present time the instructions drawn up for the
Arbitration Committee lie under the very great disabilit}' of
their decisions not being obhgatory.
Quotation Committees formed of members of the ex-
change are elected by this institution. They are under the
presidency of one of the members of the Exchange Com-
mittee, who is in turn elected by the latter, and one of the
senior exchange brokers must participate. The duties of the
Quotation Committee are the drawing up of a quotation
sheet on the basis of information received daily from the
brokers after the closing of the exchange.
The exchanges have their central representation in the
form of the " Council of the Congress of Representatives
of Exchange Trading and Agriculture," chosen at the Con-
gress by the representatives of exchange committees with
the participation of other commercial organizations. At
these meetings questions of a general economic character
affecting the existing interests of trade and commerce are
also discussed. So, for instance, at the extraordinary Pan-
Russian Congress of Representatives of Exchange Trading
and Agriculture, which was held in Petrograd from the 5th
to the nth of April, 191 5, there were discussed, amongst
others, the following important questions of State interest :
V
^90 RUSSIA : ITS TRADE AND COMMERCE.
the question of the foreign exchanges in relation to prices
of merchandise and the external trade of Russia, the requisi-
tion of merchandise for the needs of the Army and Fleet, the
fixing of prices by Obligatory Orders, measures for develop-
ing the export and import trade of Russia through ports of
the White Sea, the transfer to Russia of the fair trade which
is carried on abroad in Russian products, measures for re-
placing in our markets manufactured goods of German and
Austrian origin by the Russian manufactures and those of
the Powers in friendly relations with her.
Syndicates
Trade in metallurgical and some chemical products is
in the hands of special syndicates for the regulation of
their sale.
Of the largest syndicates we may mention the following :
(i) "Produgol " ; (2) " Prodameta " ; (3) Provoloka " ; (4)
" Krovlia " ; (5) " Mied " ; (6) " Prodvagon " ; (7) " The
Agreement of Locomotive Builders " ; (8) " Drojki " ; (g)
" The Settlement Bureau of Super-Phosphate Works of the
Vistula Region " ; (10) " Agreement of the Manufacturers of
Sulphuric Acid in the Vistula Region."
Of these syndicates, seven exist in the form of joint
stock companie's which conclude contracts with their share-
holders as to the exclusive right of selling their goods.
The " Agreement of Locomotive Builders " was organized
in the form of a " Council of Representatives " temporarily,
until such time as the Statutes of the " Association for
Trading in the Manufactures of Russian Locomotive Build-
ing Works " was confirmed. Syndicates Nos. g and 10
have fixed agreements as to granting to each works a
definite share in the total sales and as to the formation of
a " Settlement Bureau " from among the representatives of
the works, for settling accounts in connexion with the sales
made under this agreement. The cost of transport, the
supplies, discounts and loss on credit are shared between the
works proportionately to the amount of their sales, but the
prices and other conditions of sale arc fixed by the works
themselves.
THE INTERNAL TRADE OF RUSSIA. 291
The metallurgical industry, created by means of a whole
series of protective measures (the system of premiums on
output of rails and locomotives) and supported by Govern-
ment contracts, established itself on a firm footing after
the construction following the great demand for rail-
roads.
With the passing of the period of feverish railway build-
ing and system of " premiums," Russian metallurgy was
faced with the necessity of meeting the demands of factories,
towns and the general public.
Since that time the position of Russian towns has changed
for the better and the peasants' requirements in the way of
ironware has increased ; the growing and flourishing machine
industry in Russia requires cast and assorted iron. Finally,
iron is at the present day being more widely used for building
purposes and " \\'ooden Russia " is disappearing ; the market
for metallurgical products has been firmly established and
is at the present time quite important.
In former times, when the chief supplies of iron came from
the Urals, the trading centre for these products was the
Nijne-Novgorod Fair. In the sixties the fair was the cen-
tral metallurgical market of Russia, almost all the iron and
copper of the Urals and a great part of the products of the
Moscow district, being sold there. To-day, however, it has
only a local signiiicance as a market. The Zemstvos occu-
pied themselves, until quite recentl}^ with the sale of iron
and the supply of roof iron and agricultural machinery to
the people on one or two years' credit. But this service
is not organized on a commercial basis, the village stores are
financially weak and, notwithstanding their number (about
400), cannot be a significant factor in the home sale of metal-
lurgical products. The supply of these articles has now
been concentrated in the hands of the two above-mentioned
syndicates, " Prodameta " and " Krovha."
The Company for the sale of products of Russian metal-
lurgical works, popularly known in Russia under the title
of " Prodameta," was formed in 1902 with the object, as
the Statutes state, " of trading in cast-iron, steel, iron and in
general, all kinds of articles of the metallurgical industr}^,
292 RUSSIA: ITS TRADE AND COMMERCE.
both on its own account and on the ba.sis of instructions."
At first it occupied itself with the sale of sheet iron, this
being followed by the sale of the chief . market product —
assorted iron.
The relations between the " Prodameta " and its agents,
that is, the works which transfer to it the right of sale, can
be described as follows : —
Each agent enters into a contract with the Company
" Prodameta " by which it transfers to, the latter, on com-
mission basis, the exclusive right of selling a given product
in the Russian Empire and acquires the right to a certain
part — preliminarily agreed upon — of the orders received
by the Company, calculated on the scale of production and
sales of the given product before the contract was entered
into with the Company. The average basic price is cal-
culated on the total receipts and the total sales for all the
agents (or works) supplying the given class of products.
On the basis of this average price, the sum due as pa3^ment
by the " agent " in favour of the Company or by the Com-
pany in favour of the " agent " is arrived at.
Each " agent " is a shareholder of the Company, and dur-
ing the whole period of existence of the contract relations,
such agent has not the right, without permission on the part
of the company, either to transfer or to sell his shares. If
a new agent enters the Company, the existing agents are
obliged to cede to him a certain nimiber of the shares. In
case of cancellation or non-renewal of a contract, the agent
concerned is obliged to cede his shares to the remaining
agents of the Company.
The agents of the " Prodameta " are enterprises occupied
in the production of all kinds of iron goods ; the Syndicate
at the present time sells sheet-iron girders, wide bars,
longitudinal sleepers, fish plates, axles, assorted iron of
all denominations, and rails. It counts amongst its
members ironworks in the south, in Poland, the Baltic
Provinces, Central Russia Volga region, and even in the
Urals.
During the last few years the " Prodameta " Company
has booked the following orders (in thousands of po^ds) : —
THE INTERNAL TRADE OF RUSSIA. 293
1911. ....... 106,887
1912. ....... 117,890
1913- • 147.679
1914 114.556
The Company does not participate m the export of rails
abroad ; this export is regulated by an International Syndi-
cate, which is managed from London.
The second large organization of the syndicate type is
the Joint Stock Company " Krovlia," in which Ural pro-
ducers of roof iron participate exclusively. This Syndicate
is made up of the following works : Alapaevsky, Kamsky,
Stroganovsky, Verch-Isetsky, Shuvalovsky, Bieloretzky,
Demidovsky and Kyshtymsky, and is a general commission
agent for those participating in the association. The whole
of the iron turned out by the works is placed at the disposal
of the Company and sold by it independently, in its own
name, there being paid to the works for the merchandise
sold not less than " the direct basic prices," agreed on in
advance, and fixed by a council consisting of repre-
sentatives of all the participating works. The sales
are divided between the works in proportion to the extent
to which they participate in the total sales according to
contract.
The " Krovlia " Company does not play such an import-
ant role in the iron markets of the Empire as the " Proda-
meta," and its importance in relation to its outside firms
is less.
The " Produgol," which has united in a common agree-
ment 60 to 65 per cent, of the output of the Donetz Basin,
is a very important factor in regulating the Russian coal
jnarket. The stimulus towards uniting the coal-mining
companies of South Russia, who have not the right to issue
bonds and are largely financed by foreign banks, was given
in 1 901 and 1903, when coal prices fell.
Notwithstanding abuses on the part of syndicates, which
are the subject of frequent unfavourable comment, their
value in countries which are poor in private capital must be
recognized.
294 RUSSIA: ITS TRADE AND COMMERCE.
Banks in Russian Trade
The financing of trade in Russia is in the hands of
" general " banks. We use the word " general " in view of
the fact that there have been repeated attempts to estab-
lish special banks in Russia : grain, sugar, milling trade
and others. The grain bank was on the point of reaHzation,
and had for its chief object the placing of Russian grain on
the international grain market, with which it is united by
numerous middlemen and commission agents, for the most
part Germans.
The general financing of the grain trade is facilitated in
Russia by the great importance attached to railway freight
bills, which have won popularity as bankers' warrants, that
is, documents which can be pledged with banks. Owing
to the fact that bankers began to issue loans on a la,rge scale
against such documents (as much as 80 to 90 per cent.) the
grain trade has been democratized and a great number of
small firms created.
Banking commission operations have also developed ;
the banks began to receive important lines of goods for sale
on commission. Their participation in such dealings, how-
ever, has been protested against by traders, who point out
that such transactions are not authorized by the statutes
of the banks.
Eor instance, at one of the Pan-Russian Congresses of
Representatives of Exchanges, the following resolution was
put : I. Banks are forsaking the original object for which
they were incorporated- — the financing of trade and industry,
and arc endeavouring to acquire the right to trade on their
own account. Such activities on the part of banks are not
authorized by the law, and are being developed at the ex-
pense of deposits and capital of third persons, which money
was placed at the disposal of the banks for other purposes.
2. The continuation of their activities in this direction will
deprive the banks of their position as institutions lending
support to trade, and make of them competitors, which will
have regrettable results as it threatens the stability of the
markets and will surely disorganize trade.
THE INTERNAL TRADE OF RUSSIA. 295
During the deliberations of the members of the Congress
of Representatives of Exchanges and Agriculture on April
6, 1910, the representatives of the banks furnished ex-
planations with regard to their commission activities. They
recognized the participation of banks in trading transac-
tions, but affirmed that the charge brought against them
had not its origin in a desire to protect the interests of the
State, but was calculated to serve the interests of commer-
cial circles which were dissatisfied with the competition on
the part of the banks. There is no ground, as one of the
representatives put it, to accuse the banks of having de-
tracted from the prosperity of Russia ; on the contrary,
they have aided in creating the present satisfactory condi-
tions. It is well known that numerous competitors ensure
benefit to certain classes of the population, let us say land-
owners and agriculturists. Formerly business was in the
hands of a few dozen, or perhaps a hundred merchants, who,
enjoying a monopoly, fixed their own prices, but at present
the competitors number thousands and the State can only
reap an advantage thereby.
It is beyond doubt that banks as competitors deprive
certain firms and persons of profits, and influence the pros-
perity of separate groups and regions. For Petrograd and
Moscow, which have many large merchants, this has not
the importance that it has in the South, where exporters
often do not fulfil their obligations. The southern branches
of banks admitted to one of the representatives at the meet-
ing in question, that they do not work on their own account
but on instructions from third parties. If, for instance,
an order is received from Italy for a given number of
poods, the grain is purchased, the freight guaranteed and
the grain shipped. On this point we have grounds for
supposing that this business is not purely of a com-
mission nature but that the bank purchases for its own
account.
Any control of banks in this direction is very difficult. The
point is that a commission agent is always responsible to
third parties, but no one knows whose interests he repre-
sents.
296 RUSSIA: ITS TRADE AND COMMERCE.
The internal trade of Russia has not yet been sufficiently
studied, but it is clear that its successful development and
prosperity are dependent on the carrying through of meas-
ures fundamentally aifecting present methods and calculated
to improve its conditions, a proper organization of the
formation of joint-stock companies, and the passing by
the legislature of laws carrying out projected reforms. But
with these difficulties which stand in the wa}^ of Russian
trade, and the dearth of capital to develop the productive
forces in a degree corresponding to Russia's natural re-
sources, and the requirements of her population of 180
millions, we must recognize the fact that Russian trading
circles have not yet adapted themselves to the needs of the
present day. The Russian merchant is not endowed with
the spirit of enterprise which is necessary for the develop-
ment of present-day trade. He is hindered by lack of know-
ledge and by the habit of looking to the (iovernment for
support and guidance. Under the old methods, Russia
attained its present system of trade — small sales but sure
profits — whilst economic requirements have created a new
type of trade, based on large turn-overs and small profits.
The war will undoubtedly give a fillip to Russian com-
mercial men by intensifying their activities. The move-
ment to free Russian markets from (ierman goods, which
began with the outbreak of war, will result in the creation
of a national trade and industry, and in placing on the mar-
ket larger quantities of the products of countries friendly to
Russia. Such countries must, on their side, display some
initiative. English, French and other merchants who desire
to take advantage of our markets, after they have been
freed of the Germans, must adopt the methods of doing
business with which the Germans have developed their
foreign trade. The attention of English, French, Belgian
and other merchants must especially be directed to the
proper ecpiipment of commission agents, the study of local
conditions and the possibility of meeting those conditions in
the way of quality and price, to the prompt and careful
execution of orders received, and particularly to the granting
of more favourable credit conditions.
THE INTERNAL TRADE OF RUSSIA. 297
In this respect, the report of the British Consul in Batoum
published — February 11, 191 5 — in the Journal of the
Board of Trade, No. 950, is of special interest. He states
that, in the opinion of local trading circles, the sending of
samples of English goods is useless, as the traders have be-
come accustomed to frequent visits by German commercial
travellers, who explain in detail the qualities and advan-
tages of their goods. It is his opinion that English mer-
chants should sendcommercial travellers, speaking Russian,
to study local markets.
CHAPTER XIII
The Foreign Trade of Russia
By M. Soboleff
The development of her foreign trade has ahvays been a
matter of vital concern to Russia. She has seen therein,
not only a means of supplying herself with goods not pro-
duced in her own country, but of selling her own surplus
abroad. During the period of the supremacy of Kieff, trade
was organized between the Slavs and Constantinople, with
the Khazars in the region of the lower course of the Volga,
the Don and the Kuban, and with the Bulgarians who lived
along the middle part of the Volga and the Kanra. In those
early days, before the eleventh century, the Slavs who in-
habited the extensive plain of Eastern Europe exchanged
their raw produce, furs, wax, leather and hone}^ for manu-
factures of precious metals and stones, spices, wine, incense,
silk, woollen and cotton fabrics.
Somewhat later, in the twelfth century, the Russians began
to trade with the (icrmans, chiefly with the Hanseatic
League. The centre of Cierman trade was Novgorod, where
a special building, a so-called " Dvor," was erected for the
stocks of foreign goods, and as a dwelling-place for the for-
eign merchants. Here the Germans brought cloth, wine,
salt, metals and metal manufactures, and the people of Nov-
gorod sold furs, flax, wax, honey, hops, leather, timber and
tar to them. For several centuries the exchange of Russia's
raw ])roducc for foreign manufactures and articles not pro-
298
THE FOREIGN TRADE OF RUSSIA. 299
duced in Russia was entirely concentrated in Novgorod,
but trade could not be developed to any great extent as it
depended upon the inland waterways and roads. A great need
was felt for a sea route, and the first attempt to trade with
Russia by sea was made by the English in the sixteenth cen-
tury, when a route was opened via the Arctic Ocean and the
White Sea. In the middle of the sixteenth century a com-
pany was formed in England " for the search of the North-
east Passage to India." In 1553 this company equipped
an expedition of three vessels under the command of Sir
Hugh Willoughby and Richard Chancellor. A storm scat-
tered the vessels, but one ship under the command of Chan-
cellor was saved, entered the White Sea, and reached the
Russian coast. Chancellor told the inhabitants that he
had been sent by the King of England, Edward VI, with
presents to the Russian Tzar, and with a proposal to estab-
lish commercial relations. He went to Moscow and was
received in audience by the Tzar, John IV, to whom he
handed a letter from his King. The letter stated that
" God had bestowed on men the desire to hold intercourse
with each other. Our fathers," it continued, " gave most
hospitable reception and showed the greatest gratitude to
all who came on friendly terms to them from far and near.
More especially is it desirable to act thus towards traders
who travel over the world, sail over the seas and traverse
the deserts in order to bring to distant countries useful arti-
cles from their own country, and to take back from there
whatever they are in need of. . . . One country requires
the help of another, a nation needs the goods of other na-
tions, whereby friendship and mutual assistance is estab-
lished between peoples." The letter further asked for
permission and assistance to be given to the English mer-
chants to travel through Russia, and promised the same help
to Russian subjects in England.
John IV received the English merchants very graciously ;
he saw in this new route an easy way to communicate with
Western Europe, especially acceptable as at that time the
way through Poland was extremely difficult. He gave
the English vessels permission to bring goods to Russia
300 RUSSIA: ITS TRADE AND COMMERCE.
and to trade there, and asked that representatives might
be sent from England to draw up trading regulations.
In 1 555 Chancellor again j ourneyed to Moscow by the White
Sea, and received from the Tzar permission to trade freely
in all goods throughout the whole of Russia. In March,
1556, the Governor of Vologda, Nepeia, was sent as ambassa-
dor to England, and arrived there in 1557 after many mis-
fortunes. Nepeia obtained from the English Government
permission for Russian merchants to go to England and to
trade without paying duty. Several houses in London were
allotted to these Russian merchants for themselves and their
goods. In 1567 Jenkinson succeeded in obtaining from
John IV the monopoly for the London Trading Company to
trade with Russia by way of the White Sea. The company
obtained the right to erect special trading establishments
in Moscow, and to establish warehouses in other towns. In
1584 the port of Archangel was founded on the coast of the
White Sea, and most of the sea-borne trade was concentrated
there.
Such was the origin of Anglo-Russian trade.
Simultaneously with the establishment of trade via the
White Sea Russia was able, by the capture of Narva in 1558,
to trade with the countries of Western Europe by the Gulf
of Finland and the Baltic. In 1581 Russia was obliged to
give up Narva to Sweden, and this route was closed to Rus-
sian trade with Europe.
John IV wished to take advantage of the commercial re-
lations with England for the purpose of concluding a political
alliance, but England did not wish to quarrel with Poland
and Sweden, who were at that time Russia's chief enemies,
and John's proposals were declined.
As a result, England was deprived in 1574 of her monopoly
with Russia. Nevertheless trade continued to flourish and
develop. The English had offices and warehouses in Mos-
cow, Novgorod, Vologda, Kholmogory and Archangel.
They brought to Russia cloth, silk fabrics, haberdashery,
metals, sugar and paper, and imported from Russia furs,
leather, flax, hemp, rope, tallow, blubber, timber, pitch and
tar.
THE FOREIGN TRADE OF RUSSIA.
301
In the eighteenth century the English merchants lost the
right of free trade with Russia, and their goods were sub-
jected to a customs duty, on equal terms with those of
other foreigners. In spite of this the English continued
to play a very important part in the foreign trade of
Russia.
After this Russia continued her attempts to reach the
sea and thereby secure a cheap and easy means of com-
municating with foreign countries. The conquest of the
Baltic coastline by Peter the Great at the beginning of the
eighteenth century established a sea-borne trade with Wes-
tern Europe by a more direct route. A series of seaport
trading towns sprang up : Petersburg, Riga, Revel, Narva,
Wiborg. During the reign of Catherine II Russia obtained
access to the Black Sea and the Sea of Azov, and by the
treaty of Kainardji with Turkey in 1774 Russia acquired
Export
Import
Turnover
Year
In
millions of rouble
JS
1742-45 • • .
4-9
3-9
9
1763-65
12
9-3
21-3
1786-90
28-3
22-3
50-6
1802-07
63
51-5
II4-5
1812-20
208-2
147-2
355-4
1821-30
2l8-I
191-1
409-2
1831-40
251-1
207-1
458-2
1841-50
97-8
85-9
183-7
1851-60
129-3
119-2
248-5
1861-70
222-7
225-9
448-6
1871-80
454-8
488-2
943-0
1881-90
622-2
471-8
1,094-0
1891-900
659-8 ^
535-4
1,195-2
1900-10
1,073-1
887-4
1,960-5
I91I
I.59I-4
1,161-7
2.753-1
I912 .
1,518-8 :
1,171-8
2,690-6
1913 •
1,520-1
1,374-0
2,894-1
I914 .
956-1
1,098-0
2,054-1
I915 .
397-2
1,114-0
1,511-2
302 RUSSIA : ITS TRADE AND COMMERCE.
the ports of Azov, Taganrog Kertch, Enikale, and Kin-
burn.
Once firmly established on the Baltic and Black Seas,
Russia's foreign trade grew rapidly. The increase in the
turnover is shown on page 300.
It is interesting to note the comparative rate of growth
during the nineteenth century. Tabulating in periods of
twenty-five years, the following averages (in millions of
roubles) are arrived at : —
Increase on
Year
Export
Import
Total
the first
25 years
1800-24 .
64-1
48-2
II2-3
100
.1825-49 • • •
II2-I
100 -I
212-2
189
1850-74 . . .
261-4
263-9
525-3
467
1875-99 . . .
596-1
495-9
1,092-0
972
1900-13 .
1,148-4
943-4
2,091-8
1765
Foreign trade during the second half of the nineteenth
century was 89 per cent, greater than that of the first
half.
The turnover of the third quarter was 148 per cent,
greater than that of the second quarter ; the turnover of
the fourth quarter 108 per cent, greater than that of the
third, while the turnover during the beginning of the twen-
tieth century was 192 per cent, greater than during the last
quarter of the nineteenth. Thus the beginning of the twen-
tieth century marks the most intensive growth of Russian
foreign trade, and displays Russia in flourishing commercial
relations with foreign countries.
During the last hundred years, a great change has taken
place in the nature of Russian imports and exports. The
proportion per cent, of the various groups of goods
imported and exported was as follows : —
THE FOREIGN TRADE OF RUSSIA.
^03
Imports
Exports
I 802-04
1896-98 1908-12
1 802-04
1896-98
1908-12
Food Stuffs
39-0
17-3
19-1
19-4
58-2
6o-8
Raw Materials and
partly manufac-
tured Articles ,
24-0
527
48-5
70-1
35-5
33-1
Animals ....
1-8
0-6
0-9
2-1
2-3
17
Manufactures .
35-2
29-4
31-4
8-4
4-0
4-4
At the beginning of the twentieth century, raw material
constituted the largest exports, but at the present moment,
food stuffs, chiefly grain, occupy the first place.
The principal imports at the beginning of the nineteenth
century were food stuffs (colonial produce) and manufac-
tures. At the present time the chief imports are raw
materials and partly manufactured goods, and after these,
finished manufactures.
During the first half of the nineteenth century foreign
trade was chiefly sea-borne, but afterwards, with the con-
struction of railways and the increasing trade relations with
Germany, much of it, especiall}^ imports, was carried over-
land.
The overland trade of Russia stands in the following pro-
portions (percentages) to the total foreign trade of Russia :—
Years
Exp<
:irt
Import
1802-
-04 ... .
12 per
cent.
22 per
cent.
184I-
-50 ....
i8-5
,,
25-5
,,
1871-
-80 ....
29-5
,,
39
,,
1881-
-90 ... .
27-5
,,
43-5
,,
1909-
-13 ... .
27-1
"
53-8
"
In the overland trade the Austro-German frontier is of
chief importance ; in the sea-borne trade exports are divided
304 RUSSIA: ITS TRADE AND COMMERCE.
between the Black Sea and the Baltic, while imports come
principally via the Baltic.^
Variations in the sea-borne trade may be seen from the
following table : —
Exports
1846-50
White Sea . . . 5-6
Baltic . . . . 60 -6
Black Sea and Sea of
Azov .... 33-1
Caspian Sea . . 0-7
Pacific Ocean . . —
1896-99
1-9
38-6
57-3
2-2
1911-13
2-9
44-9
49-5
2-4
0-3
Imports
1846-50
• 0-5
83-7
13-5
2-3
1896-99 1911-13
0-5
68-7
27-5
3-3
0-8
69-2
15-7
3-8
10-5
^ The war lias brought great changes, by closing the outlet
through the Baltic and the Black Sea and the Austro-German
frontier ; it has intensified enormously the imports of war material
through Archangel and Vladivostok and through Scandinavia.
Following figures are interesting : —
Million Roubles.
European frontier
Black Sea and Caucasus
Asiatic Frontier .
Trade with Finland
Exports
Imports
1,232-8
132-9
99-2
55-3
1914
1915
706-1 181 -3 1,146-3
104-3 — I 18-3
90- 83-3 j 153-5
55-7 132-6 ; 56-0
854-3
22-4
158-9
62-4
429-1
1-4
439-8
243-7
During the war, export has been greatly restricted, imports
have maintained themselves.
Million Roubles.
Imports
Exports
1913
1914
1915
1913
1914
1915
Food Stuffs
Raw materials
Manufactures .
Animals ....
163-0
622-5
431-9
3-1
120-9
472-0
343-8
2-4
25-6
297-3
300-4
0-9
807-2
550-3
30-4
33-0
492-1
339-1
22-0
12-9
1 69- 1
130-6
1 4- 1
0-0
1,220-5
939-1
674-2
1,420-9
866-1
331-8
THE FOREICxN TRADE OF RUSSIA.
305
The following table shows the number of vessels which
arrived in Russian ports from abroad :• —
1802
1850
1900
1913
Tonnage
551.272
i>233,350
8,679,000
16,478,000
Since the beginning of the present century the predomin-
ance of England in the carrying trade of Russia has been
somewhat diminished by the increasing share of Swedish,
Norwegian and Russian vessels.
The comparative tonnage of vessels of various national-
ities which entered Russian ports is given in the following
table :—
Nationality
1802
1850
1900
1913
British 367
Russian 6-2
German 27-2
Swedish and Norwegian. 8-o
Danish '^•2
Italian —
French 1 0-5
36-4
36-5
267
I5-I
II-8
17-5
«-5
12-8
137
3-4
8-5
13-6
i-o
9-8
6-8
5-4
4-5
4-4
1-8
3-0
27
At the present time, some Russian traders are greatly in
favour of rendering Russia completely independent of
foreign markets.
The supporters of this independence believe that Russia
can already develop her industries sufficiently to supply the
home markets with agricultural produce and to furnish
consumers with all the requisite manufactures. This point
of view pre-supposes a state of ai^airs nothing short of Uto-
pian. No matter how rapidly our manufacturing industries
are developing they would be unable either to consume the
3o6 RUSSIA: ITS TRADE AND COMMERCE.
surplus products of agriculture or to cover the home demand
for manufactures. There is no doubt that the interests of
Russian agriculture require the greatest possible develop-
ment of our industry. But in order to create an industry
capable of supplying the home market, it is necessary to
have capital to invest in industries, qualilied business
management and skilled labour. To bring about these
conditions will take some time.
Russia requires many goods which are not produced in
the country or are produced only in small quantities. Her
climate precludes the production of commodities such as
tea, coffee, cocoa, spices, jute, rubber, etc., and cotton, wool,
many metals, chemicals, dyes and machinery can only
be produced in limited quantities.
Owing to the scarcity of capital in Russia, imports cannot
be paid out of the revenue received from capital invested
abroad — the only source of payment for imports is a corre-
sponding export of Russian products.
As the Russian home market does not dispose of the enor-
mous quantity of home produce, the urgent need for export
arises. For this reason Russia exports grain, bran, oil-cakes,
hides, butter, eggs, sugar, cattle, pigs, wool, spirit, kerosene,
hemp, timber, peltry, caviare, bristles, platinum, etc.,
etc.
A highly developed export trade makes it possible for
Russia to solve the problem of her balance sheet in a more
or less satisfactory manner. She has not only to pay for her
imports and the interest on foreign loans (up to 300 million
roubles amortisement), but she has other obligations to
meet — the services of foreign vessels for the transport of
goods to and from her ports and the expenses of Russian
agents abroad. If the value of Russian exports docs not
cover all these payments, Russia is in danger of her gold
going abroad.
The only means of avoiding this danger to the money
market is the attraction of foreign capital in the form of
State and municipal loans and for investment in Russian
industrial concerns.
The latest commercial policy of Russia which rules the
THE FOREIGN TRADE OF RUSSIA. 307
foreign trade is subjected to certain guiding principles.
First of all, as we have shown, the Government is interested
in securing a satisfactory balance sheet, either by excess of
exports over imports or by the reduction of imports conse-
quent upon the levy of a high customs duty. In order to
increase exports, varied and complicated measures of fin-
ancial policy are necessary and the alternative course is
much the easier. The Russian Government has resorted to
it more than once, the most obvious instance being at the
end of 1876 when the law required the payment of customs
duty in gold currency at its nominal value instead of in
paper money. This was equivalent to an increase of the
customs duty of about 50 per cent., as the market price of a
gold rouble was i rouble 48 cop. to i rouble 50 cop. of paper
money. The law of 1876 was introduced as a means of
stopping the growing influx of foreign merchandise.
With the same object laws were passed at the end of last
century increasing the amount of the customs duty. But
the only effect of lessening imports was to restrict the pur-
chase of home products by foreign countries and it seemed
more desirable to increase exports. By this method new
openings for Russian produce on the international markets
arise and an impulse is especially given to agriculture.
Another influence upon the customs policy of Russia is
the condition of the State Treasury. In its search for
additional sources of State Revenue, the I\linistry of Finance
has long turned its attention to the taxation of articles of
consumption.
Russia has a customs tariff with 218 paragraphs, many
of which are subdivided, so that the total number of tariff
rates amount to over a thousand. A number of customs
duties have a purely fiscal character, as they neither serve
to develop or support any home industry. Several of them
yield a very considerable revenue. The duty on tea yielded
in 1 91 3 73 million roubles, rice over three millions, oranges
and lemons 6-3 millions, coffee 4I miUions, butter and
gutta-percha over one million, olive oil one million.
Other customs duties are protective, but bring in revenue
at the same time, as the import of the goods on which this
3o8 RUSSIA: ITS TRADE AND COMMERCE.
duty is levied does not diminish but often increases. Such
products are cotton, coal, coke, many metals and metal
manufactures, machinery and so forth. The result is a.
steady growth in the customs revenue shown as follows :
In 1822 .
157 million
In 1880.
104-9 niillion
roubles.
roubles.
In 1840 .
417
In 1900 .
• 2097
In i860 .
49-9
In 1910 .
. 318-6 „
In 1913 . . 377"i million roubles.
The third principle actuating the customs policy of Russia
is the protection of home industries. The Russian customs
tariff is applied to the protection of a large proportion of
home industries, beginning with agriculture and mining and
ending with manufactures, such as machinery, musical in-
struments, etc. The history of the customs policy of the last
quarter of the nineteenth century shows cases of a high
protective tariff being introduced for branches of industry
which were only in their infancy or even on the point of
starting ; for instance, in 1886, a duty of this kind was put
upon super-phosphates and in 1887, on hops.
Protection in Russia has been gradually increasing. By
expressing it in terms proportionate to the value of the goods
imported, this proportion stood in 1853 at 33 per cent.;
under the influence of the lower customs duties in the tariffs
of 1850, 1857 and 1868, it dropped in 1870 to 13 per cent.,
while from 1876, when the higher customs duty was renewed,
the proportion began to rise steadily. In 1880 it stood at
16 per cent. ; in 1890 at 287 per cent., in 1900 at 32-5 per
cent., and in 1913 at 28 per cent.
Comparing the rates of imi)ort duty in Russia with those
of other countries, it appears that customs duties arc highest
in Russia.
In 1 91 2 the duly on imports into the United Kingdom
constituted 57 per cent, of their value, into Austria-Hun-
gary 7-5 per cent., Germany 8-4 per cent., France 8-2 pei
cent., Italy 9-8 per cent., the United States 18-5 per cent.,
and Russia 28 2 per cent.
The fiscal element of the Russian customs tariff is most
The foreign trade of russia. 309
clearly seen in the high duty on food-stufis which is levied
for financial rather than protective purposes. In 1898-1902
■the percentage of duty formed 85 per cent, of the value of
the imports, in 1903-1907 88 per cent., and in 1908-1912 71
per cent. A higher rate of duty on this class of goods is
only to be obser\'ed in the United Kingdom where customs
duties are in general levied for purely fiscal purposes (viz.
100 per cent, in 191 2 as compared with by per cent, in
Russia).
A characteristic peculiarity of the Russian customs tariff
is the high duty on raw materials and partly manufactured
articles. Until the eighties of the nineteenth century the
duty on raw materials was very low as the Government was
trying to develop the manufacturing industries and wished
to supply raw materials for these industries as cheaply as
possible. The chief argument put forward by the Finance
Ministry in favour of high customs duties was that with
the introduction of steam transport by land and sea, the
expenses of transport of bulky raw materials had so much
decreased that they ceased to have the efxcct of protecting
home manufactures from foreign competition. Gradually
the customs policy of Russia extended its protection to coal,
cotton, wool,. wood pulp, ores, iron, steel, copper and other
metals, whereby home productions were greatly encouraged.
The customs duty on raw materials and on partly manu-
factured goods is considerably higher in Russia than in
other countries. The amount of the customs duty on these
imports in relation to the value of the goods stood at an
average of 30 per cent, in Russia between 1898-1902, at
27 per cent, between 1903-1907, at 24 per cent, between
1908-1912, and at 22 per cent, in 1912, whereas in Germany
in 1 91 2 it stood at 3 per cent., in France 3 per cent., and in
the United Kingdom o-i per cent. If certain articles are
taken separately then the high rate of duty becomes more
apparent : on thin sheet iron, 106 per cent., on thick sheet
iron, 78 per cent., on steel bars and shaped steel, 79 per
cent., on pig iron in bars and scrap, 58 per cent., on copper
in pigs and ingots, 43 per cent., on raw cotton, 39 per cent.,
on raw jute, 30 per cent, (figures for 191 3).
310 RUSSIA: ITS TRADE AND COMMERCE.
Trade of Russia with Foreign Countries
The share of different countries in the foreign trade of
Russia is not equal and has undergone considerable changes
in the course of time. Their participation in Russian
foreign trade is given in the following table : —
1
1846-1848 1896-]
[898 1908-
912
1913
H-l
'^
! -
HH
. !
. '
"3 ??
c
a
2-^
i 2-^
3 0x1
•S-S
^
a; ' 3
0) 1 --c
u
■^ 3
^
l-l
^^
^ i Sp:i
Ph ^^
Ph
§«
Oh
United Kingdom
96-5
33-6 260-9
20-0 437-8
17-9
440-8
15-2
Germany .
32-8
II-4 370-3
28-4 836-5
34-2
1105-8
38-2
France
28-3
9-8 88-6
6-8 139-3
5-7
157-9
5-4
China.
19-4
67 46-1
3-5 105-4
4-3
115-6
3-9
Holland . . .
17-6
6-1 84-0
6-4 181-7
7-4
198-8
6-9
Italy ....
12-0
4-2j 51-0
3-9 70-7
2-9
906
31
Austria-Hungary
107
371 591
4-5 91-4
3-7
lOI-O
3-5
United States .
8-9
3-1 57-0
4-4 91-4
3-7
93-3
3-2
The table deserves most careful analysis, how changes
have occurred in the trade relations in almost all the coun-
tries. The most important fact is that at the beginning of
the present century, Germany, in her trade relations with
Russia, occupied the predominating place. This was de-
trimental to the United Kingdom which had the principal
share in Russian foreign trade up to the end of last century
and also to other countries (France, Italy, Austria-Hungary
and the United States). Germany succeeded in eclipsing all
other countries, and possessed about two-fifths of Russian
foreign trade. At the same time, the United Kingdom,
which up to the middle of the nineteenth century had two-
thirds of Russia's foreign trade in her hands, has now but
one-sixth, although the absolute totals of Anglo-Russian
trade have increased four and a lialf times.
Of all the countries which play a part of any importance
in the foreign trade of Russia, China and Holland only have
THE FOREIGN TRADE OF RUSSIA. 311
retained their relative positions, which, however, are small.
China owes this chiefly to her tea trade, and Holland to her
position as broker for certain kinds of colonial produce and
other goods.
The dominating position of Germany has given rise to
a lively discussion in the Russian press during the last few
years of the so-called " German influence," and the necessity
for Russia to free her foreign trade from this one-sided in-
fluence. The war has clearly shown to the Russian people
and the Russian Government the fruits of this peaceful con-
quest by the Germans of the Russian market and Russian
trade : Russia was placed thereby in a most difflcult position
in the matter of obtaining a large number of manufactures
hitherto supplied by Germany. These goods had to be
sought for on other markets, such as the United Kingdom,
France, Sweden, Denmark, Japan and the United States,
and to be heavily paid for.
An analysis of the details of Russian foreign trade, taking
exports and imports separately, shows with great clearness
the economic dependence of Russia on Germany, in the
matter of imports. During the years 1908-1912 Germany's
share of our imports was 41 -6 per cent., and in 1913 47-5
per cent., that is to say, almost half of the foreign goods
imported into Russia were German. It is true a certain
portion of these goods were merely resold by Germany (coffee,
cotton, dressed hides, and certain metals), but this fact does
not in any way diminish the importance of the astonishing
proportions given above.
In the years 1908-1912 the United Kingdom exported to
Russia 13-4 per cent, of the value of Russian imports, and
in 1913 only 12-3 per cent., yet the United Kingdom occupies
the next place after Germany in the matter of imports.
Imports from other countries were insignificant (from i to
6 per cent.). Germany's share in Russian exports is some-
what less.
In the years 1 908-1 91 2 exports from Russia to Germany
constituted 286 per cent., and in 1913 29-8 per cent.
Exports to the United Kingdom during these periods were
21-3 and 17-6 per cent, of the total. Holland took 11 -8
312 RUSSIA: ITS TRADE AND COMMERCE.
per cent, of Russian exports in 1908-12 and 117 per
cent, in 1913. The expansion of trade relations with
the AlHed countries will be a most important part of the
modern commercial policy of Russia. The " rapproche-
ment " is to the interests of both parties. It is important
to Russia that her exports should not be sent principally to
one country ; by supplying the markets of a number of differ-
ent countries she can retain greater economic freedom and
obtain better prices. ^
It is also desirable for the above-named countries that
they should find in Russia a market for their manufactured
and partly manufactured goods, and it is much more to
the advantage of these countries to receive Russian goods
direct from Russia and to avoid the costly brokerage of
Germany.
1 The following figures give the trade with several foreign coun-
tries : —
Million Roubles.
England
France .
Sweden .
Roumania .
United States
Norway
Denmark .
Italy . . .
Holland
Germany .
Belgium
Austria- H iingary
Turkey
Spain .
Egypt . . .
Exports
1913
267
lOI
I I
22
14
6
36
74-8
177
453
64
63
39
9
1914
56
6
13
8
5
18
40
95
249
49
39
14
7
4
150
17
5
3
3
0-4
0-4
0-2
O
Imports
170
56
•16
I
74
ID
13
16
24
643
8
34
17
6
6
1914
167
43
II
. 2
77
7
7
15
19
419
5
23
9
4
7
228
29
54
I
151
6
7
8
8
23
0-6
I
06
0-8
0-2
There has been no import from Germany and Austria. The
figures of 1915 relate to goods taken out of customs warehouses.
In 1913, Germany imported 53 per cent, of the total imports,
in 1915 the first place was taken by England, the United States,
Sweden. Through Vladivostok passed in eleven months over 261
million roubles.
THE FOREIGN TRADE OF RUSSIA. 313
The problem of developing such trade connexions is not,
however, so easy as it might seem at first sight. At the
present moment, of course, the Russian market is free from
the influx of German goods and is in need of many imported
articles. But this lack of imports cannot mechanically be
filled up by goods from other countries. In order to sell
Russian goods in other countries than Germany, a certain
commercial organization is necessary without which the
most ardent and best wishes will remain without results.
The example of Germany itself must be followed. We
know how cleverly commercial organization was established
in Germany, by what skilful means the Germans succeeded
in securing new markets for their merchandise and in driving
out their competitors.
The methods of Germany must be thoroughly examined
and the reasons found why the Germans steadily oust the
English and other nations from the markets of Russia, China,
Turkey, Africa, etc. These methods must be adopted by
those who wish not merely to fill up vacant gaps left at the
present time by the war, but to estabhsh their position after
it. Otherwise those prophets who assert that, after the war,
the Germans will soon occupy the same commercial position
and capture the same markets, may be proved right.
Many causes helped the Germans to push the English out
of the Russian market. There was first the German com-
mercial organization. German manufacturers and exporters
established an army of travellers who systematically visited
old and new markets, entered into commercial dealings with
the local traders and even directly with the consumers,
showed samples of their goods, pointing out their superiority
and advantages, concluded sales, and in this way found
outlets for the goods of the firms the}/ represented. The
presence of German commercial travellers became a matter
of every day occurrence throughout the Russian Empire.
You met them in the capitals, in the south of European
Russia, in the Urals, in the Caucasus, and in Siberia. They
found their way everywhere, and by direct personal relations
created a demand for German trade. Up to the present the
English have made hardly any use of this important and
314 RUSSIA: ITS TRADE AND COMMERCE.
perfected weapon for the capture of trade markets. They
stick to the old custom of remaining at home and waiting
till customers come to them. Such a policy might be pos-
sible as long as the English had command of the world's
markets and had no competitors.
Now, the world's markets are an arena, of a hotly contested
fight among many competitors, in which the winner is
he who shows the greatest amount of skill and energy in
obtaining customers.
If the English wish to be successful, they should make use
of the method by which the Germans succeeded.
Another important point is to adapt goods to the tastes,
customs and fancies of the local inhabitants. Investigators
such as Williams, Aubert, Blondel and others have shown
how the Germans have succeeded by studying the tastes of
the consumers and by adapting the appearance, colour, em-
bellishment, packing, sizes, etc., of their goods to these tastes.
The Germans find out what kinds of goods are required by
and will please the consumers of a particular district.
On several occasions Germany has sent special expeditions,
of a scientific character to China, the Balkan Peninsula,
Africa etc., to study the local markets and conditions of
trade (amount and length of credit, buying seasons, etc.),
and to collect samples. Cierman manufacturers and mer-
chants took advantage of the results of these expeditions ;
they sent the goods that were in demand to these foreign
markets and effected their sale according to the local customs
and conditions.
Further, commercial museums, formed by the Government,
and public organizations, export unions, and sample museums
of exported goods created by private individuals, served the
same object of giving information to (jcrman manufacturers
and merchants. The former, being public organizations,
gave wide publicity to the samples of goods which are found
on the various markets of the world, indicating prices, cost of
transport, customs duty, etc. The latter, having private
interests in view, displayed samples of the goods of their
members in order to extend their sale in a certain market,
and also acted as intermediaries between German manu-
THE FOREIGN TRADE OF RUSSIA. 315
facturers and foreign buyers. Again, an enormous amount
of information about the requirements of various markets is
collected by these commercial travellers who go all over the
world on behalf of German firms.
They become acquainted with market conditions, with the
climate and soil of the country, with the tastes and habits
of the people, with the conditions of transport and credit,
with the customs tariffs, with the solvency of the people,
and with the goods which up to then have been used, with
those supplied by their competitors ; on the basis of this
information they show the manufacturers what kind of goods
should be supplied, in what form, what kind of weight,
packing, colour, price, etc.
German manufacturers pay great attention to the appear-
ance, colour and other qualities of the articles in question,
and immediately adapt their manufactures to market condi-
tions. This explains the readiness with which German goods
are bought almost ever3/where. In Russia, the Germans have
most carefully complied with the market requirements and
supply their goods accordingly, with labels in Russian.
Advertising is also largely resorted to. German sellers
distribute on a large scale illustrated price lists, printed in
the language of the locality and provided with local weights,
measures and prices. Large firms literally overwhelm their
customers with price lists and catalogues.
They make use of the local papers for the regular insertion
of advertisements of their goods, and advertise by means of
posters in public places, along the railways, etc.
Amongst the general public this causes the names of
German goods to be fixed in the minds of the people, and
buyers become interested. Unfortunately, English manu-
facturers and exporters hardly make any use at all in Russia
of this powerful weapon of modern commerce.
One of the defects of the English export trade to Russia is
the too limited application of credit. The English are
accustomed to deal either on a cash basis, or against an
assured and sound credit to well-known and reliable firms.
The Germans have long understood that one of the principal
means of opening up sales on a new market is liberal and
3l6 RUSSIA : ITS TRADE AND COMMERCE.
advantageous credit. The local purchaser, attracted by tlie
possibility of receiving goods without having to pay cash,
but on credit for a small interest and for a long term (say
from nine to twelve months), takes goods which he would
not otherwise have done. Once he has taken the goods the
merchant in his turn does everything in his power to sell
them to his customers. In this way German goods become
firmly established on the market. German sellers when
giving credit, inquire into the solvency of their clients either
through their commercial travellers or through special
inquiry agencies. They do not act blindly, but are guided
by certain concrete information. They reckon that by
granting very extensive credit, a certain percentage of unpaid
debts will be more than covered by the profits accruing from
highly developed commercial operations.
Present day sales in Russia depend entirely on credit,
without which it is impossible to do business. English
manufacturers and exporters should reckon with this fact,
and the same applies to English banks, which up to the
present have looked upon credit operations in Russia with
too much reserve. English banks wish to handle first-class
bills only, and show great caution in discounting. On the
other hand the capture of a market requires a certain
amount of dash, some risk and disregard for routine. When
crediting Russian customers it is necessary to bear in mind
that the length of commercial credit in Russia is not the
same as in England. In Russia the wheel of commerce
turns more slowly than in England, trade turnover takes a
longer time, especially trade in the depths of the provinces
and on the outskirts of the Empire. Here the usual credit
is from six to nine months, though a credit from twelve to
fifteen months is also met with. Of course Russian mer-
chants should in their turn do all in their power to improve
the state of the bill market and the conditions of credit, and
special ei'iorts in this direction should be made by the Russian
banks.
P'inally, another important factor which is necessary for
successful sale of merchandise in Russia, is cheapness of
goods. German manufactures maintain their hold on the
THE FOREIGN TRADE OF RUSSIA.
517
market through their cheapness. Good quahty but dear
manufactures can only be purchased by the well-to-do
classes and such purchasers are not numerous. For the
general mass of consumers, especially in comparatively poor
countries, such as Russia, cheapness is of primary import-
ance, and not the finish of the goods, or their outward
appearance. It is more important for the general mass of
the Russian purchasing public to be able to buy cheap
woollen German cloth rather than the high quality but dear
English cloth. The latter has a sale in Russia only amongst
the wealthier classes, and does not find its way at all to the
general public, as they have not the means to buy it. In
the same way a large variety of cheap German metal goods
have a ready sale in Russia.
English manufacturers should give serious attention to
the cheapening of articles exported to Russia. This could
be attained by simplifying the finish and by using a cheaper
quality of raw material in so far as this is possible without
detriment to the goods. This cheapening need not be so very
difficult as it has not to be carried very far. IManufactured
articles are in general dearer in Russia than in Western
Europe, and to assure a successful sale of English manufac-
tures it would be sufficient if, with the customs duty, they
worked out slightly cheaper than home manufactures.
An analysis of the more important items in the foreign
trade of Russia and of the prospects which open out before
commercial exchange between England and Russia is not
devoid of interest.
The most important article of Russian export is grain.
By taking all kinds of grain, including leguminous plants of
the bean family, flour, meal, rice, bran, etc.,. the exports
amounted to : —
Years
JMillions of
Poods
1903-1907
1908-I912
1913 . .
612
678
651
Millions of
Roubles
490
634
595
Percentage of
Total Exports
47
45
39
3i8 RUSSIA : ITS TRADE AND COMMERCE.
The exports of grain to the principal foreign countries are
as follows : —
1893-
1898- 1903-
1908-
1893-
1898- 1 1903-
1908-
1897
1902 1907
1912
1897
1902
1907
1912
Millions of Poods
Percentage
Total Exports .
523
454
612
678
100
, IOC
100
100
Exports to —
Germany .
83
95
136
216
15-9
20-9
22-2
31-9
United Kingdom
I3«
92
133
104
26-4
20-3
21-7
15-3
Holland . . .
67
77
112
136
12-8
17-0
18.3
20-1
Italy ....
36
41
53
48
6-9
9-0
8-7
7-1
France
49
38
41
■43
9-4
8-4
6-7
6-3
Belgium .
18
10
17
19
3-4
2-2
2-8
2-8
Until the end of the nineteenth century the United King-
dom was the largest importer of grain from Russia, but was
gradually surpassed by Germany. The position of Germany
was further strengthened by the fact that part of the grain
exported by Russia to Holland is sent from that countr}^
to Western Germany. A peculiar fact is that the actual
quantity of grain exported to the United Kingdom has
remained of recent years at about the same level, and only
dropped suddenly in 191 2 and 191 3 (to 63 and 58 million
poods) . Exports to Germany on the contrary have increased
greatly, both absolutely and relatively.
Rye has a very small share in Russian exports at the
present time (in 1903-1907 — 63 million poods annually, or
ten per cent, of the exports ; in 1908-1912 an average of 37
millions, or 5-4 per cent, of exports). Exports of rye con-
stitute about 3 to 5 per cent, of the total amount harvested.
The most important grain export is wheat, which amounted
during 1 903-1 907 to an average of 238 million poods (39
per cent, of the total grain exports), and during 1 908-1 91 2
to 236 million poods (35 per cent, of exports). The principal
purchaser of Russian wheat has been the United Kingdom
(during 1 903-1 709 — 22-5 per cent, of the total wheat exports,
and during 1908-1912—19-5 per cent.). Holland bought
1 8-6 and 12-6 per cent, in the same periods, Italy 21 and
THE FOREIGN TRADE OF RUSSIA. 319
i8'8 per cent., France 12*6 and 12-2 per cent., and Germany
6 and 8 "5 per cent.
Although Russia has maintained the amount of wheat
actually exported to the United Kingdom, its relative
importance has declined before the growth of the exports to
the Argentine, the United States, Canada, and the East
Indies. A certain influence on the Anglo-Russian wheat
trade has been brought about by the conditions of sale in
England, such as the adjustment of reductions on the
difference between the consignment of wheat and the sealed
sample and the regulations of the courts of arbitration. In
the interests of both countries it would be well to simplify
the formalities of grain contracts and to give all possible
facilities to the export of Russian wheat.
Barley ranks second in importance and during the years
1 903-1 907 was exported, on an average, to the amount of
143 million poods annually (23 per cent, of the grain exports),
and between 1 908-1 91 2 to the amount of 211 million poods
(31 per cent.). Here Germany figures as the principal
purchaser (up to one-half of the total quantit}' of exported
barley), the barley being chiefly required for cattle food.
The United Kingdom also takes a fairly large and steady
supply of barley (between 1 883-1 887 — 22 million poods
annually, 1 898-1 902 — 22-2 million poods, 1 908-1 91 2 — 22-7
million poods), which, however, forms a decreasing propor-
tion of the total quantity of exported barley (between
1883-1887 — 51 per cent., 1898-1902 — 26-7 per cent., 1908-
1912 — 10-8 per cent.). Russia still holds the first place
amongst countries suppl^/ing barley to the English market,
and supplied more than one-third of the total imports of
barley into the United Kingdom between 1908 and 191 2.
Between 1 903-1 907 the annual exports of oats averaged
27 million poods (10-9 per cent, of the total exports), and
between 1908-1912 — 65 million poods (9-6 per cent.). The
largest exports are to the United Kingdom — between 1903-
1907 on an average of 29-2 million poods annually (43 per
cent, of the total exports), and between 1 908-1 91 2- — 19
milHon poods (29-2 per cent.), while exports to Holland
were 15 and 19 millions, and to Germany 9 and 10 million
320 RUSSIA: ITS TRADE AND COMMERCE.
poods. Of recent years the East Indies have become
competitors of Russia in supplying oats to the United
Kingdom, having sent 167 milUon poods between 1 908-1 91 2
against 18 5 milHon poods supphed by Russia.
Serious attention should be given by interested circles in
Russia to a development of the export of wheat and oats
to the United Kingdom, for the English market is a large
one, and has a tendency to increase with the growth of the
population.
Of other exported food-stuffs butter and eggs deserve
attention, as their commercial importance has greatly
increased of recent years. Whereas in the eighties of the
nineteenth century Russia exported 2 to 3 million roubles
worth of butter, by 1902 the exports amounted to 28-5
million roubles, and in 1913 to 71 "6 millions (4,763,000
poods). Russia exported 11 to 12 million roubles worth of
eggs towards the end of the eighties, and in 1902 — 38*6
million roubles worth, and in 191 3 — 90-6 million roubles
worth (3,572 million eggs).
About half of the Russian butter is sent to the United
Kingdom, followed by Germany and Denmark. A third
of the export of eggs goes to the United Kingdom, about a
quarter to Austria-Hungary and the same amount to
Germany. The United Kingdom is an inexhaustible
market for these products. Russia supplies but 13 per cent,
of its consumption of butter, and half of its consumption of
eggs. Denmark and Australia are the principal suppliers of
butter to the United Kingdom. The capacities of Russia
as a butter-producing country are very great and promise a
further development. It is only necessary to study more
Note.— -The Economist of September 9, 1916, has a most impor-
tant article on " Our Need of Prussian Produce." It .shows that
it is not only for wheat that England may hope to look in the near
future. Russia has been the chief source of the supply of imported
eggs. She was second only to Denmark in supplying us with butter,
and almost half of our imports of wood and timber were drawn
from Russia in 1913. In 1913, Russia sold 38 million pounds worth
of food and raw materials to England. The average for ten years
(1903-1912) in million cwts. of wheat was 20 millions from Argen-
tina, 17-75 from India, 17-3 from Russia, 16-5 from the United
States, 13-25 from Canada, 9-05 from Australia.
THE FOREIGN TRADE OF RUSSIA. 321
carefully the requirements of the English butter market,
to bring the methods of production in conformity with it, to
improve the conditions of cold storage during transport by
rail and sea, and to remove the superfluous intermediary
operations of certain countries.
The export of pork from Russia has good prospects. Very
good conditions exist in Russia for the production of bacon,
one of the national dishes of England. However, up to the
present this export covers but 3 per cent, of the imports
into the United Kingdom, which amount to between 16
and 17 million poods. This import has been covered so far
by Denmark and the United States.
Exports of live stock from Russia include a large number
of horses (106,820 in 1913, valued at 13-9 million roubles),
pigs (110,000, valued at 87 million roubles), geese (6-9
milhons, valued at 7-8 million roubles). The major portion
goes to Germany, though the United Kingdom is a good
market, purchasing from Russia nearly one-half of the
number of horses imported, and more than one-third of the
imported poultry and game, both alive and dead.
Sugar is an important export, though it fluctuates greatly
from year to year (from 6 million poods in 1906, and 9
millions in 191 3, to 27 million poods in 1911, and 23 million
poods in 1 91 2). In some years the exports of sugar to the
United Kingdom have attained large dimensions (8-9 million
poods in 1912, and 127 million poods in 1911).
The importance of the export of raw materials in the
general exports of Russia is inclined to drop, although it
still forms now over one-third of the total exports.
Timber is the chief raw material exported in the form of
wood for building purposes, matchwood, staves, etc., and
these exports in 191 3 amounted to 165 million roubles (at
the end of the nineteenth century between 50 and 60 million
roubles). Of this quantity two-thirds are shipped to the
United Kingdom, where Russian timber takes pride of place,
one-quarter to Germany, and smaller quantities to Holland,
France, and Belgium. According to English statistics
about half of the round and hewn wood, sawn wood and
staves are imported from Russia, and about half of the
Y
322 RUSSIA: ITS TRADE AND COMMERCE.
prepared wood from the United States. In this way the
timber market is held by Russia, and it is to be hoped that
the Russian timber industry will be developed, and that the
enormous wealth of timber in northern European Russia
and in Siberia will be made use of to increase the export of
timber to the United Kingdom and 'other countries of
Europe.
Petroleum products (kerosene, petrol, lubricating oils,
etc.) were exported in 191 3 to the value of 50 milHon
roubles and 58 million poods in quantity (the average for
the years 1 904-1 91 3 was 56-5 million poods). The largest
export of these products goes to the United Kingdom
(one-fifth of the total Russian exports), and somewhat
less to Turkey and Germany. The only competitor of
Russia in this branch of trade is the United States.
Flax occupies an important position in Russian exports,
the quantity exported being about 127 million poods (the
average for the years 1 904-1 91 3), valued at 68 milHon
roubles. In 191 3, 16 -6 million poods were exported, valued
at 86-8 million roubles. Russia is the largest supplier to
the flax markets of the world. About 30 per cent, of the
total export is shipped to the United Kingdom, and con-
stitutes three-quarters of the flax imported into England.
Seeds are exported from Russia to the amount of 17 to
18 million poods (average for the years 1 904-1 91 3), valued
at about 30 million roubles. About a half goes to Germany
and only one-fourth to the United Kingdom. Linseed and
rape-seed make up the bulk of the exports. England
receives more seeds from the Argentine and the East Indies
than from Russia.
The export of oil cakes is valued at 30 million roubles
(36 million poods) for the years 1 904-1 91 3, of which two-
fifths went to Germany, and about one-third to Denmark.
About one-tenth of the Russian export is sent to the United
Kingdom, amounting to one-fifth of the English imports.
The United States export more to England than Russia.
Finally, mention should be made of the export of hides,
almost exclusively undressed, to the value of between 23
and 24 million roubles (for the years 1 904-1 91 3) with big
THE FOREIGN TRADE OF RUSSIA. 323
fluctuations annually. In 191 3 exports amounted to 37
million roubles ; in 191 2 to 48 million roubles. Two-fifths
of the export go to Germany, and one-fifth to the United
Kingdom.
The remaining articles of export (peltry, bristles, wool,
manganese ore, platinum) are of less importance, and
therefore we will not refer to them in detail.
Amongst the imports which might well be supplied by
the United Kingdom to Russia are machinery and apparatus.
Their import has grown rapidly in connexion with the
increased demand on the part of the home industries.
During the years 1 903-1 907 the average imports stood at
60-5 million roubles, during 190 8-1 91 2 — 118 million roubles,
and in 191 3 — 169 million roubles. Germany is the principal
exporter of machinery to Russia, sending her about two-
thirds of the total imports, while the United Kingdom
follows next, but a long way behind Germany, with one-
sixth of Russian imports. Particularly important condi-
tions for the successful sale of English manu^'actures are
cheapness and adaptability to the conditions of Russian
industry. At the present moment the United Kingdom
is ahead of other countries only in the matter of exporting
complex threshing machines and steam ploughs (to the
sum of 586,000 roubles in 191 3), complex steam threshers
(339»ooo roubles), and complex agricultural machinery
(738,000 roubles), and in the export of other machinery
yields to Germany, and is also behind the United States in
the export of certain kinds of agricultural machinery.
Coal and coke form an important part of Russian imports.
In spite of rich deposits of coal in Russia and a rapidly
increasing output, Russia is obliged to order larger and
larger quantities from abroad for the requirements of her
manufacturing industries. Between 1 903-1 907 the average
per year import of coal was 214 million poods, and that of
coke 30 million poods, between 1 908-1 91 2 — 270 million
poods of coal and 33 million poods of coke, and in 1913—
474 million poods of coal and 59 million poods of coke
(valued at 87-5 miUion roubles). Half of this quantity
came from the United Kingdom and two-fifths from Gcr
324 RUSSIA: ITS TRADE AND COMMERCE.
many. Owing to the high quahty of EngUsh coal and the
facihty of sea transport the Enghsh are able to supply this
product to Russia on a very large scale.
Russia imports a great quantity of metal manufactures,
mostly of iron and steel, followed by copper, sheet-iron,
wire, instruments, etc. The total value of this class of
imports averaged 45 million roubles between 1908 and
1912, and reached 60 million roubles in 1913. Here Ger-
many also takes the first place. EngUsh manufacturers
would do well, however, to pay attention to the Russian
market, which is a large one.
For success detailed knowledge of the requirements of
Russia is necessary, and ability to supply comparatively
cheap goods which could be within the reach of the mass of
the people.
The Russian market offers a good sale for woollen yarns
(over half a milHon poods, valued at 19 to 22 million roubles)
and woollen manufactures (valued at 16 to 17 million roubles).
More than half of these goods are suppHed by Germany
owing to the cheapness of her manufactures, which find
their way amongst the poorer classes. About two-fifths
of Russia's imported woollen yarns and only from one-sixth
to one-seventh part of the imports of woollen manufactures
come from the United Kingdom.
The United Kingdom might also extend the sale to
Russia of colonial products which up to the present has
been chiefly in the hands of Germany, who has cieated
centres in Hamburg and other towns for commerce in
coffee, cocoa, resin, rubber, spices, Chili saltpetre, cotton,
and wool. Coffee imports into Russia amount to between
8 and 9 million roubles, more than half coming through
(lermany and only 7 per cent, through the United King-
dom ; imports of cocoa are valued at 2 1 to 3 milHon roubles,
two-thirds coming through Germany and one-tenth through
the United Kingdom ; resin — 4 to 5 million roubles (about
half from Germany) ; rubber and gutta-percha — 35 to 40
million roubles, one-third coming through Germany, one-
quarter through the United Kingdom, although in 1913
onothird came through the United Kingdom and only a
THE FOREIGN TRADE OF RUSSIA. 325
quarter through Germany ; spices — 4 to 5 milhon roubles,
half through Germany, and one-eighth through the United
Kingdom ; saltpetre — 4 to 5 million roubles, two-thirds
through Germany; cotton — 115 to 120 million roubles, in
quantity 11 to 12 million poods, one-half from the United
States, over one-fourth through Germany, and only 10 per
cent, through the United Kingdom ; wool — up to 3 million
poods, valued at 50 to 60 million roubles, one-third through
Germany, and only 7 to 8 per cent, through the United
Kingdom.
The reciprocal needs of Russia and the United Kingdom
are apparent. Up to the present time the commercial skill
and organizing capacity of the Germans have enabled them
to take the first place in the foreign trade of Russia. The
present political situation requires that the Allies should
put forward their utmost efforts to extend their trade
relations with each other and to reduce Germany to a
position of lesser importance.
There arises, however, the question of the basis upon
which the extension of trade relations between the United
Kingdom and Russia may be founded. Up to 1894, Russia
strictly adhered to one commercial customs tariff and gave
no country preferential treatment.
In 1892, the conclusion by Germany of numerous com-
mercial treaties by which she lowered her customs duty on
grain imported from the countries concerned, placed Russia
at a disadvantage for the sale of her grain and caused her
to pay a higher duty than her competitors.
Consequently, after much hesitation and discussion,
Russia also began to make commercial treaties on the basis
of a conventional tariff. In 1893 Russia made a treaty with
France, in 1894 with Germany, Austro-Hungary and Italy,
in 1895 with Portugal. Russia had two rates of customs
duty : one, the higher, or general tariff, as it was named, in
1893, and the other, the lower, according to commercial
treaties. By treaty with Portugal Russia's concessions only
affected two articles of the tariff, whereas Portugal conceded
fifteen. In the treaty with Germany, on the other hand,
the concessions made by Russia affected eighty-eight articles,
326 RUSSIA: ITS TRADE AND COMMERCE.
many of which were subdivided, while Germany Hmited her
preferential treatment to thirty-two articles.
An important factor of the new commercial policy of
Russia was that all customs concessions made by Russia
in her treaties with Germany, France, Austro-Hungary, etc.,
were automatically extended to all other countries with
which Russia had concluded a so-called most favoured
nation treaty. A treaty of this nature was concluded in
1859 (12 January, new style) between Russia and the
United Kingdom. According to paragraph 10 both con-
tracting parties undertook that the subjects of one country
should have all the privileges, advantages, and benefits in
the other country which were then given or might in the
future be given to the subjects of any other power. By
this arrangement the duty on goods of the United Kingdom
when imported into Russia was levied not according to the
general tariif, but by the conventional and more favourable
tariff. The United Kingdom by this treaty of a general
nature with Russia obtains all the advantages of a most
favoured nation treaty.
Between 1904 and 1906, the commercial treaties concluded
with Germany, France and other countries, were renewed
for a further period, but with important alterations. Ger-
many raised the duty on foreign grain and Russia imposed
higher duties on a number of German manufactures. Almost
all the other countries with most favoured nation treatment
continued to reap the advantages offered by the conven-
tional tariffs. This continued until the present European
war, which rendered void all commercial treaties between
belligerents, and when the treaty between Russia and
Germany ceased to exist, the grounds on which English and
other goods paid a lower rate disappeared. At the present
moment only the conventional tariffs concluded with France,
Portugal and Italy remain ; but these affect a comparatively
small number of articles and refer to goods in which the
respective countries are particularly interested. As a result
the duty imposed on English goods imported into Russia
has considerably increased, a fact which impedes EngHsh
exports.
THE FOREIGN TRADE OF RUSSIA. 327
The radical change which the war has caused in the
pohtical aspect of Europe makes it necessary to re-
examine the principles governing the commercial policy
of Europe.
There is an urgent need for the economic isolation
of Germany, who has laid claim to universal domina-
tion of the civilized world. The ties existing between the
countries at war against the Austro-German Alliance must
be extended and strengthened. This makes it necessary to
re-examine the principles of most favoured nation treat-
ment and introduce a series of limitations. In Russia at
any rate there is apparently a tendency in favour of such
restrictions.
On the other hand it is often dilhcult to create close
commercial relations by merely restricting the principle of
most favoured nation treatment.
The United Kingdom is a free-trade country — permitting
the import of goods from all countries duty free, while
Russia is a protectionist country with high customs duties.
If Russia grants the United Kingdom preferential tariff
rates, what can the United Kingdom give Russia in return ?
Nothing beyond the right to import duty free on an equality
with other countries, i.e. from the economic point of view —
nothing at all. In this way the political situation makes it
necessary that Great Britain should thoroughly review the
principles of her commercial policy and reconstruct them on
the basis of reciprocal concessions and preference.
Russia is undoubtedly interested in developing and
strengthening her trade relations with the United Kingdom.
She will willingly grant English goods preferential customs
treatment, for which she must receive corresponding treat-
ment for the sale of her products in England. At the same
time the United Kingdom will have to face the necessity of
establishing some kind of barrier to the import of German
goods.
The great events of which mankind is a witness to-day
are giving birth to tremendous social and economic problems
and are rousing Europe to a reconstruction of many prin-
ciples which have served in the past. But we do not doubt
328 RUSSIA: ITS TRADE AND COMMERCE.
that, in spite of all the difficulties which surround these
problems, the civihzed countries at war against German
aggression will find within themselves the necessary force
to pave a way for their future welfare.
CHAPTER XIV
Public Finance
By Professor M. Bogolepoff
The Russian fiscal system dates from the Budget reforms
of 1862, which were part of the whole reform movement
following the liberation of the serfs. The first Budget
drawn up on the new basis was that of 1863. The 1913
Budget (the last " peace " Budget) began the second half
century in the history of modern Russian finance.
The most characteristic future in the development of State
finance during this period was the steady increase in the
amount of the Budget. The following figures show the
annual totals of the ordinary and extraordinary State
expenditure —
Years
1863
1870
1880
i8go
1900
1905
igro
1911
1912
1913
Million roubles
563
793
1.056
1,889
3.204
2.596
2.845
3.171
3,382
In fifty years the Budget had increased by 681-9 per cent.,
the average annual increase being 59 million roubles.
The increase in the Budget was naturally great in years
329
330 RUSSIA: ITS TRADE AND COMMERCE.
of war, for instance, in 1905. But even in the years of
peace following the Russo-Japanese war the growth of the
Russian ]3udget was exceptional :■ —
I9II
. by R. 249,000,000 or 9-6 per cent.
I9I2
325,000,000 ,, 11-4
I9I3
211,000,000 ,, 67
The peace Budget of 1913 exceeded the war Budget of
1905.
Chief among the causes of this rapid growth is the develop-
ment of State undertakings, such as State railways and the
Government spirit monopoly. The Russian Budget in-
cludes the gross revenues and expenditure of State under-
takings. Therefore any extension of such undertakings,
or the introduction of new ones, always entails an increase
in the figures of the Budget, which is, to a certain extent,
purely formal.
But the growth of the Russian Budget was due to other
factors, such as increase of population, extensions of the
political frontiers, increased military expenditure, growth
of national prosperity, and, of late years, a specially large
expenditure for improvements of culture, etc.
This may well be seen in the period 1903-1913, when the
Budget did not include Government undertakings, and
when, in the first half of the decade, the Budget increased
in consequence of war expenditure, and in the second half
in consequence of expenditure on land reforms, public
education, etc.
The Russian Budget is drawn up according to the so-called
ministerial system, i.e., almost the whole bulk of the
expenditure is distributed among the separate Ministries,
and only the National Debt and the fund for unforeseen
expenditure are included under separate heads. With such
a distribution of State expenditure there is no possibility
of exactly ascertaining the expenditure on any particular
requirement of the State ; for instance, the expenditure on
national education is spread over the estimates of many
Ministries. Since the institution of the Duma, the Ministry
of Finance gives supplen.enlary tables showing the dis-
PUBLIC FINANCE.
531
tribution of ordinary State expenditure according to
particular requirements.
The following table shows this distribution for IUC3 and
1913-
1. General administration
2. National debt
3. Army and Navy .
4. Productive expendi-
ture
5. State under Laivings
1903
Million
roubles
327-4
2887
466-3
2137
5869
Per-
centage
17-4
15-3
248
31-2
1913
Million Per-
roubles centage
5030
402-8
8i6-5
519-2
828-5
16-4
13-1
26-6
16-9
27-0
Total 1883-0 I —
3070-0
The total of ordinary State expenditure shows an increase
of 63 per cent. ; expenditure under the first head increased
by 54 per cent., that under the second by 39 per cent., the
third by 75 per cent., the fourth by 143 per cent., and
the fifth by 41 per cent. Owing to the unequal increase
in the different heads of expenditure, their relative
position in the Budgets of 1903 and 1913 gradually changed.
The expenditure in the Russian Budget is divided under
two heads, viz., ordinary and extraordinary.
Extraordinary expenditure includes the construction and
installation of new railways, expenditure on war or national
disaster, the redemption of State loans before their due date,
and the expropriation of various undertakings.
The disbursements for 1903-1913 were as follows : —
Million roubles
Russo-Japanese War .... 2,442^
Construction of railways .... 763
• By adding the R. 566,000,000 disbursed on the redemption
of short-term securities issued to cover war expenditure, and
R. 8,000,000 for working expenses of the loans issued for the
same purpose, the above figure (2,442 millions) will amount to
R. 3,016,000,000.
332 RUSSIA: ITS TRADE AND COMMERCE.
Million roubles.
Expropriation of railway lines . . 32
Other railway expenditure ... 91
Construction of ports .... 24
State Defence ..... 455
Military expeditions to China and Persia . 20
Redemption of loans before date . . 199
Expenditure entailed by bad harvests . 403
Miscellaneous expenditure ... 47
Total 4,476
Deducting from the above figure the R. 2,462,000,000
spent for the Russo-Japanese War and the expeditions to
China and Persia, it will be seen that in time of peace the
extraordinary expenditure of the decade amounted
to R. 2,014,000,000, of w^hich R. 1,412,000,000 (70-1 per
cent.) was covered by the excess of ordinary revenue over
ordinary expenditure.
The ordinary (or regular) State revenue covered not only
the ordinary expenditure, but also yielded a con-
siderable amoynt for extraordinary expenditure. This
fund was formed by the excess of ordinary revenue over
ordinary expenditure, and was transferred to the so-called
free balance of the Treasury. The free balance likewise
included the unexpended remainders from extraordinary
revenue. In 1910 the excess of ordinary revenue over
ordinary expenditure amounted to R. 324,700,000 ; in 1911
it was R. 438,100,000 ; in 1912, R. 402,600,000 ; and in
1913, R. 341,400,000. The continuous excess of ordinary
revenue over ordinary expenditure was partly the result
of a deliberate fiscal policy, for the purpose of covering
extraordinary expenditure, and partly the result of the
unrestricted growth of revenue. The development of the
ordinary State revenue of Russia may be seen from
the following figures : —
Ordinary Revenue (Million Roubles)
(+) or (-) as against preceding year
1900 ..... 1,704 . . —
1901 1,799 . 95
1902 ..... 1,808 . . I
PUBLIC FINANCE.
33:
2,031
. 126
2,018
• -I3
2,024
. 6
2,271
. 247
2,342
• 71
2,417
• 75
2,526
. 109
2.781
• 255
2,951
. 170
3,105
• 154
3,417
. 312
1903 .
1904 .
1905 .
1906 .
1907 .
1908 .
1909 .
1910 .
1911 .
1912 .
1913 •
For the above period the average annual increase of
ordinary revenue was R. i22,ooo,cco ; in reality, for the
years when there was war, the growth of revenue was greatly
reduced, and even ceased, and it is only of late years that
it has again shown an impetus.
Before discussing the causes of the growth of ordinary
revenue, it is necessary to examine its composition and the
degree of increase in the receipts under different heads.
The State revenue of Russia is divided as follows :- -
1903
1912
Million roubles
Direct taxes ....
Indirect taxes
Duties
Royalties
Property and funds be-
longing to the State .
Land redemption receipts
Miscellaneous receipts .
135
440
107
607
571
89
83
Per cent.
6-6
217
5-2
299
28-1
4.4
4-1
243
650
199
943
937
132
Per cent.
7-8
209
6-4
30-4
302
4-3
Total 2,032
100-0
3.105
loo-o
This table shows that, during the period considered, the
alterations in State revenue were inconsiderable. On the
whole, the Budget developed on the old lines, owing to the
absence of any essential reforms in taxation. The chief
334 RUSSIA: ITS TRADE AND COMMERCE.
items of the Budget were Royalties (with the Spirit Mono-
poly at their head), Property and Funds belonging to the
State (with such important returns as railway receipts) and
indirect taxes.
Altliough all the groups of revenue have approximately
kept their old relative positions during the decade, the
amount of increase of the separate sources of revenue was
very unequal : some increased more rapidly than others,
so that, in order to retain their former relative position,
unequal efforts were made in the case of particular sources
of revenue. The table shows this amount and percentage
for 1903-1913.
Increase
Million
roubles
Percentage
Direct taxes .
Indirect taxes
Duties ....
Royalties ....
State property .
Miscellaneous receipts
Total Budget
Per cent.
108
80
210
47
92
86
336
55
366
64
49
59
1,073
52
The Russian system of direct taxation is a combination of
taxes assessed on separate sources of revenue, such as land,
industries, houses, capital, etc., without direct reference to
the owners or possessors. Under modern conditions such
a system is no longer sufficiently elastic, nor is it profitable
from a fiscal point of view. Of late years the system has
undergone considerable improvement, e.g., certain taxes,
such as those upon trade and industries, have been amended
and have partially become an income-tax.
In other taxes, such as the house tax, for instance, the
system of assessing the " whole apportioned tax " (so called)
has been replaced by ascertaining the real quota of taxation,
the " rated tax."
PUBLIC FINANCE.
335
In spite of such improvements, a reconstruction of direct
taxation has been considered necessary, and great prominence
has been given to the idea of introducing an income tax as
the basis of direct taxation. The Government has drawn
up and presented to the Duma a Bill embodying these
proposals, but in view of the present state of war it
has been laid before the legislative assemblies for their
consideration.
Direct taxes in Russia include : Land taxes levied on
private land ; a tax on buildings in towns and boroughs ;
a hearth tax in the boroughs and villages of Poland ; a
kibitka (or tent) tax in the Steppes provinces ; rent on
land from the reserves of State land allotted in perpetuity
to emigrants ; the State inhabited house tax ; the tax on
commerce and industries, and the tax on interest on capital.
The tax on industries is divided into the following groups :
The principal industrial tax (licences) ; supplementary tax
on undertakings obliged to publish balance-sheets, being
a tax on the capital and on the net profits ; supplementary
tax on undertakings not obliged to publish balance-sheets,
consisting of a licence duty and a percentage tax on excess
profits above a certain fixed hmit. The tax on the interest
on capital is levied on income derived from securities,
deposits and accounts current in banks, and, for the duration
of the war, on private mortgages. The movement of direct
taxes may be seen from the following figures : —
1903 1909 1913
Million roubles
Taxes on land and other real es-
tate ; rents and other receipts
from real estate ....
Tax on commerce and iiidustries.
Tax on pecuniary capital .
49
67
17
71
104
23
87
150
35
Total
133
198 272
336 RUSSIA : ITS TRADE AND COMMERCE.
In the above table the growth of the tax on industries
is very striking, and is in close connexion with the rapid
industrialization of Russia, and the accelerated growth of
Russian commerce of late years. In estimating the
direct Imperial taxation in Russia, it must be borne in
mind that in this country the system of zemstvo and
municipal local finance, as well as that of volost and rural
finance, is based on the same sources as Imperial direct
taxation. For this very reason the Government must
exercise great caution in direct taxation, and this explains
why for numy years the Government has not introduced
any new real taxes, and has abolished some of these, e.g.,
land redemption for allotments made to peasants on the
emancipation of the serfs.
The second category of taxes in the Russian Budget
consists of excise duties on articles of popular consumption.
Excise duty is levied on spirits used in the manufacture of
vodka liqueurs and in varnish factories, on spirits distilled
from grapes and fruit, on beer and mead, and on yeast. In
this group, the excise on vodka liqueurs and on beer is the
most important item. The other excise duties are those
on tobacco and tobacco manufactures of Russian origin,
on cigarette tubes and cigarette paper, on sugar, petroleum,
and matches.
The receipts from such taxes are as follows ; —
1903
1909 1913
Million roubles
Excise on spirits, beer, mead, and
yeast
Tobacco excise
Excise on cigarette tubes .
Excise on sugar
Excise on petroleum products
Excise on matches
34
49
75
32
8
40 53
45 ! 78
3-5 4-8
107 149
41 48
17 1 20
Total
189
265
353
PUBLIC FINANCE. 337
These revenue receipts have a tendency to increase very
rapidly, as they are levied on articles widely consumed, and
the productivity of the taxes increases with the growth of
the population. The growth of towns in Russia also causes
an increase in the consumption of excisable articles. More-
over, with the development of railways and of national
prosperity, excisable articles find every year a wider market.
Excise duty is also levied on articles which are produced
in abundance in Russia, and which do not suffer from foreign
competition.
In the classification of the Russian Budget, indirect taxes
include Customs revenue receipts, among which there are
duties of purely fiscal character, such as the duty on tea.
But Customs duties are principally protective. Customs
revenue is chiefly dependent on two principal factors : the
rate of the Customs duty and the growth of imports. Of
late years, Russia's foreign imports reached an enormous
figure, which had its effect on the Customs revenue. In
IQ03 the "Customs receipts amounted to R. 242,000,000,
in 1909 they rose to R. 274,000,000, and in 1913 to
R. 353,000,000.
In the Russian Budget there is also a separate category
of taxation revenue, viz., " duties," which include revenue
stamp duties, law costs, registration fees, death duties,
duties on the transfer of property, port dues on ships and
cargoes, duty on lire insurance, and a series of minor receipts.
Under this head the special tax on passenger fares, and on
freight carried in passenger trains is also included. These
duties have yielded a considerable revenue. As regards
its importance in the Budget, this group is somewhat like
that of direct taxes. This importance of duties in the
Russian Budget is largely due to the fact that the increase
of such revenue is organically connected with the circulation
of commodities and the whole trend of economic hfe.
The recent rapid development in the commercial and
industrial life of the country has caused a natural increase
in revenue from duties, at times artificially induced by a
rise in the rates of duty. The revenue from duties has
become one of the indicators of the country's economic
z
338 RUSSIA: ITS TRADE AND COMMERCE.
position, and to a certain extent replaces an income tax.
The following table shows the growth of revenue from
duties : —
Revenue stamps and registration
ieei ....
Transfers of property . .
Port dues on ships and cargoes
On passengers and freights
Insurance duties
Miscellaneous duties
Total 107
The next place in the Budget is taken by the important
item of royalties, which include the revenue from Mining,
the Mint, Post Offtce, Telegraphs and Telephones, and the
Government Spirit Monopoly receipts. The revenue
from the Mining tax plays an insignificant part in the
Budget. It consists of inconsiderable receipts on pig-iron
and copper produced at so-called " possession works."
Until 1902, the special duty on the output of gold (now
abolished) used to be included under this head. The Mint
revenue is derived from the coinage of gold and silver. In
Russia the postal and telegraph services are under Govern-
ment management.
Telephones are partly in the hands of the Government
and partly in the hands of municipalities and joint-stock
companies. Before the outbreak of the present war, the
postal, telegraph and telephone receipts reflected the
animation in the economic life of the country and its business
transactions.
The revenue from the Government Spirit Monopoly,
(prior to the war) reached about a milliard roubles. In the
PUBLIC FINANCE.
339
present book a special article is devoted to this Government
undertaking.
The following table shows the revenue obtained from
royalties of late years : —
1903
1909
1913
Million roubles
Mining revenue
Mint
Postal revenue
Telegraph and telephone revenue.
Spirit monopoly
0-3
5-5
37-0
21-0
542-0
008 0-6
7-0 5-0
580 79-0
300 41-0
719-0 899-0
Total
605-8
814-08 1024-6
All the above revenue, with the exception of Mining, is
entered in the Budget in the form of gross receipts, so that
the net revenue will, of course, be less than these figures.
Thus, for instance, the postal, telegraph and telephone
receipts for 1913 amounted to R. 120,000,000, the expenses
of collecting this revenue amounted to R. 80,000,000, and
the net revenue from this Government undertaking w^as
R. 40,000,000.
The next important State revenue is that derived from
property and funds belonging to the State. The Russian
Government has an enormous amount of land, fisheries,
etc., at its disposal. State land abounds in natural wealth.
This land is usually leased to private persons and institutions,
and the remainder is the revenue of the State. State
property includes land let on lease, oil-fields, gold-mines
salt and mineral springs, collieries, fisheries, sealing ground:-?
and other aquatic industries, etc. This group also includes
the State revenue from an enormous forest area. The State
obtains revenue from its forests, partly by the sale of stand- ,
ing timber, and partly by the sale of wood fuel, lumber, and
other working timber. Forest meadows are leased for mow-
340 RUSSIA : ITS TRADE AND COMMERCE.
ing. The revenue from forests is rapidly growing. The
Government is now paying special attention to the organi-
zation of forests, and the increase of revenue from that
source. In 1912 the expenditure on the organization of
forests was about 14 million roubles, and in 191 3 over 15
miUions. The subjoined table shows the condition of State
forests : —
Regions
Area of
State forests
(1,000 dessiatinas)
1912
Revenue per dessiatina
Total
area
Available
area
Total area
Available area
Five northern pro-
vinces .
Ten Vistula pro
vinces .
Other European
provinces .
Siberia
Far East
Central Asia.
Caucasus .
94,402
615
12,930
110,383
73.195
10,831
4.747
73.421
562
10,266
37.694
36,261
7.955
2,963
R. 11-50 kop.
R. 12-05
R. 3-23 ..
R. 0-0-27 ,,
R. 0-0-5I ,,
R. 0-5-92 ,,
R. 0-8-00 ,,
R. I 4-50 kop.
R. 13-19 ..
R. 4-07 ..
R. 0-0-81 ,,
R. 0-1-03 ..
R. 0-8-07 ..
R. 0-13-0 ,,
Total . .
305,103 169,122
—
—
Average revenue for Empire = 20 kop.
36 kop.
The Russian State is not only the owner of enormous
forests, but possesses also a vast network of railways, part of
which was built by the State itself, and part expropriated
by the State from joint-stock companies. The State rail-
ways comprise lines both commercial and of a purely
strategic character. The State has also built railways which
did not promise any profits in the near future, but which
carried civilization and culture into the distant regions of
Russia, and therefore the fiscal importance of Russian
State railways is conditional.
For a long time this State undertaking resulted in annual
deficits ; State railways have only lately begun to yield any
revenue. On January i, 1914, the Russian railroads covered
63,693 versts, of which 44,613 versts (70 per cent.) were in
PUBLIC FINANCE. 341
the hands of the State. In 1913 the State railways yielded
a revenue of R. 813,383,000, while the expenditure thereon
amounted to R. 499,041,000. The net receipts therefore work
out at R. 314,342,000, and the coefticient of exploitation for
European Russia at 57 "66 per cent., and for Asiatic Russia
at 82 •15 per cent.
Besides the revenue from the actual State railways, the
State participates by certain agreements in the receipts of
joint-stock railway companies, many of these roads haying
been built with money either borrowed under Government
guarantee or advanced from the Treasury. With the
gradual increase in the net revenue of joint-stock railways,
which are all for purely commercial purposes, the share of
the State in their profits increases.
The State owns a number of mills and works, which work
partly for the Government and partly for the open market.
For instance, there are State mines, printing offices, stud
farms, collieries, peat briquette works, powder-mills, etc.
State revenue is also obtained from the Securities and Bank-
notes Printing Office, where, amongst other things, the
shares, bonds, coupons, etc., of joint-stock companies are
printed. Further, the State receives revenue from interest
on its capital and from the operations of State banks. The
most important of these latter is the State Bank of Russia
(the bank of issue), which has of late yielded over'
R. 30,000,000 net revenue.
Many State revenue receipts are only reimbursements
to the Treasury of previous advances and reimbursable
expenditure. Of a similar nature is the revenue received
by the State in the form of subventions to the Treasury
or in reimbursement of Treasury expenditure on the main-
tenance of certain institutions which, by law, have to be
provided for from other sources.
The movement of all these revenue receipts may be seen
from the table next page.
Besides the above-mentioned revenue, there are sundry
incidental receipts, e.g., the postponed war indemnity from
China (R. 9,500,000 per annum), and, up to 1910, an indem-
nity paid by Turkey.
342 RUSSIA: ITS TRADE AND COMMERCE.
Rents and leases
Forests
State railways
State mills and works ....
Interest on funds and banking
operations
Share of the State in profits of
joint-stock railways
Annuities from railway companies
Reimbursement of loans and ad-
vances
Total
Such, in its general features, is the constitution of the
revenue in the Russian Budget. In round figures, the total
ordinary revenue of Russia for 1913 amounted to R.
3,417,000,000, of which R. 1,213,000,000 was derived from
taxation, and R. 2,204,000,000 from other sources.
Beginning from the late 'eighties of the last century, the
-Ordinary Budget used always to be balanced without a
deficit, and there was frequently a surplus of ordinary
revenue. But it was otherwise with the Extraordinary
Budget. Russia is a country still young in culture ; its
economic system, which for a long time was founded almost
exclusively on agriculture, has within living memory been
acquiring a new basis — a combination of agriculture and
industry. Current life presents a multitude of essential
problems, for the solution of which considerable immediate
outlays, for the construction of railways and ports, and the
creation of a powerful State defence are required. Russia,
having gone through a long period of expansion of geo-
graphical frontiers, has now entered the stage of internal
organization, w^hich entails an increase both of ordinary
and extraordinary expenditure, the most important being
PUBLIC FINANCE.
343
that on railway construction and State defence. All over
the world it is the custom to cover non-recurrent extra-
ordinary expenditure by extraordinary resources, i.e., loans.
Russia, more than ary other country, has tried to cover a
considerable part of the extraordinary expenditure from
ordinary revenue receipts. This was done, for instance, in
the case of railway construction, in order that the increase
of the National Debt (placed on foreign money markets)
might be as small as possible. Until the middle of the
last century, Russian Government loans were issued prin-
cipally to cover war expenditure and deficits in the Budget.
From the middle of the century the National Debt began to
increase rapidly, principally for the purpose of attracting
capital for the construction of railways. Since the end of
the eighteenth century, when Russia contracted her first
foreign loan in Holland, until the eve of the great war,
Russia borrowed (both by home and foreign loans) a total
of about 15 milliard roubles, of which half has been duly
amortized. The movement of the National Debt of late
years is shown below : —
At January i
Mill
ion roubles
1900 ....
6,220
1905 ....
7,081
I9IO ....
9.054
I9II ....
9,014
I912 ....
8.957
I913 . .* . .
8,858 ■
I914 ....
8,811
This table shows that after a great rise in indebtedness,
caused by the Russo-Japanese War, Russia did her
utmost to reduce her debt, at the expense of her ordinary
revenue. Of course, in this respect Russia could not attain
such brilliant results as England did after the Boer War —
Russia being poorer in national revenue than England, and
continuing to extend her State railways — but the trend of
National Debt policy was the same in Russia as in England.
As regards the extraordinary Budget, it is the expenditure
that shows the greatest steadiness : there is always some
urgent requirement that must be satisfied. But in regard
344 RUSSIA: ITS TRADE AND COMMERCE.
to extraordinary resources no such steadiness is observable.
During the last few decades Russia covered a part of her
extraordinary expenditure with the unappropriated balance
of the ordinary revenue. These balances were subject to
considerable annual fluctuations, in dependence on the
general condition of the Budget and the trend of current
financial policy. The other principal sources of extra-
ordinary revenue are Government loans.
The total indebtedness of Russia, as a result of financing
the extraordinary Budget, has reached nine milhon roubles,
as has already been mentioned. This represents various
Government loans. During the last few decades, since the
creation of 4 per cent. Rentes, the consohdation of the
Russian National Debt has begun ; but, even now, the
composition of the Russian National Debt is still very
heterogeneous, as the following table for 1913 will show : —
. , . , , Number
Denomination of loan ^^ ^^^^^
Amount
Ratio to
(million
total
roubles)
(per cent.)
6 per cent 2
38-4
0-4
5
10
1,569-6
17-7
4h ..
4
775-3
8-8
4
45
5.5303
62-7
3 ny ..
I
. 82-4
0-9
3i ,r
I
141-9
1-6
3
9
486-9
5-5
Perpetual deposits
—
66-2
07
Exchequer biUs .
• •
150-5
8,8417
17
Total —
100
The prevailing type of Government loan is 4 per cent, on
Government railways.
Five per cents, have generally been issued by Russia for
war purposes.
As regards the term of redemption, Russian loans may.
PUBLIC FINANCE. 345
be divided into three groups, viz. : short-term, long-term,
and those not redeemable at any fixed date. Short-term
loans are of two kinds : (i) Treasury bonds, issued for a
term ranging from three months to a year, in bills of not
less than R. 500 ; and (2) Exchequer bills, issued for a term
of eight years and four years, in bills of not less than R. 50.
During the war, bills of smaller value (R. 25) have been intro-
duced. These bills bring in 4 and 36 per cent. , and the State
Bank and Treasury receive these bills at their nominal value
in all payments. Long-term loans are issued for various
terms, specified in the law concerning the loan. In loans
not redeemable at any fixed date, known as rentes, the
Government does not bind itself to repay the capital, but
reserves the right of redemption at any time it chooses.
Russian State loans are issued in two currencies : Russian
and foreign, according to the market where the loan is
placed. Sometimes the rate of exchange for various
countries is indicated in the loan. All the loans may be
divided according to the currency of issue. Loans con-
tracted prior to the currency reform of 1897 were issued in
metallic roubles, equal to one-tenth of an imperial ; after
that reform, they were issued in rorubles equal to one-fifteenth
of an imperial. On January i, 1914, loans of the first
kind amounted to R. 2,857,000,000, and of the second,
R- 5.953.000,000.
Government loans are divided into home and foreign.
Often the very appellation of "foreign" is fixed by the
law of issue, though sometimes this is not done. The report
of the Audit Ministry stated that on January i, 1912,
Russia had R. 2,728,000,000 worth of foreign loans, and
R. 4,586,000,000 of home loans.
Roughly speaking, such a division of loans is a sufficiently
correct indication of the actual disposition of the Russian
National Debt. But in reality, a certain amount of home
loans is placed in foreign markets, and a certain amount of
foreign loans finds its way back to Russia. All Russian
Government loans have a Stock Exchange value, as they
are in circulation on Russian bourses. Moreover, a whole
series of particular loans are quoted by foreign Stock Ex-
346 RUSSIA: ITS TRADE AND COMMERCE.
changes, e.g., Paris, London, Amsterdam, Brussels, New
York, Berlin, Vienna, etc.
The war has seriously affected Russian State finances, and
has brought about a great change in the general character
of the Budget. According to the regulations in force in
Russia, " extraordinary assignments, over and above the
Estimates, for war requirements and for special preparations
preceding the war, are made to all departments, by Imperial
prerogatives as by law appointed " (art. 117 of the Funda-
mental Laws). In virtue of these laws, war expenditure in
Russia is provided for outside the Budget, and is published
for general information on the conclusion of the war. There-
fore during a war the Russian Budget does not include any
direct war expenditure, and remains a " peace " Budget,
the effects of the war being noticeable only in the form of
interest on war loans, and (indirectly) in the reduction of
State revenue, or its increase in consequence of the rise in
the rates of existing taxation, or the introduction of new
taxes. But this great war has placed before the Budget a
special problem that is only incidentally connected with the
war : namely, on the outbreak of hostilities in July, 1914,
the Government sale of spirits ceased, and the trade in other
spirituous liquors was prohibited. This measure at once
deprived the Budget of the colossal revenue derived from
spirits and beer. In the Budget for 1914 the Spirit Mono-
poly revenue was estimated at R. 936,000,000, while in the
Budget for 1915 this was reduced to R. 144,000,000.
In order to cover the deficit caused by the cessation of the
sale of spirituous liquors, the Government raised the rates
of a series of existing taxes, duties, and tariffs. Among
direct taxes, there has been a rise in those on real estate in
towns (with the exception of Poland) from 6 per cent, to
8 per cent, of the net profits on real estate ; the kibitka (or
tent) tax on nomads has been raised from R. 4 and 6 to
R. 8 ; there has been a 50 per cent, rise in the principal tax
on commerce and industries, as well as a rise in the supple-
mentary tax on undertakings obliged to publish balance-
sheets ; the other kinds of industrial taxation have been
increased, and certain undertakings hitherto free from
PUBLIC FINANCE. 347
taxation (e.g., cinematographs) are now taxed ; the in-
habited house tax has been raised 50 per cent. Among
indirect taxes, the excise duty on pressed yeast has been
raised (from 20 to 32 copecks per pound) ; the tax on cigarette
tubes and matches has been raised ico per cent., on sugar—
from R. 175 to R. 2 per pood, on petroleum products from
60 cop. to 90 cop. ; the excise on spirits has been raised
(from II cop. to 20 cop. per degree of pure alcohol), that on
beer from R. 1-45-270 to R. 49 per pood of malt in
the mash-tubs. The excise duty on mahorka (coarse tobacco)
is raised from 9 cop. to 24 cop. per pound ; the duty on
smoking tobacco is raised from 37 cop. — R. 2*50 to 50 cop. —
R. 4 per pound.
A new 25 per cent, duty on all passenger fares and luggage
has been introduced, while freights, carried in both goods
and passenger trains have been subjected to serious charges.
A duty on home-grown cotton has been introduced (R.
2-50 per pood), and the revenue stamp and Customs duiies
have been raised.
In 1 915, a new tax was levied on persons exempted from
conscription. Postal and telegraph rates have been raised,
and a R. 10 tax levied on telephones. As a result of all
these measures, it is estimated that there will be an increase
of over R. 500,000,000 in the revenue receipts.
In 1916 some new taxes were introduced and some of the
existing ones again increased. The most important act
was the introduction of the income tax, which is to be
levied on private incomes exceeding 850 roubles per year.
The income tax takes the form of a progressive assessment
of personal incomes and it wiU come into force from 1917.
It is anticipated that it will yield at least 130 million roubles,
but there are sufficient reasons for assuming that the actual
yield of the income tax will considerably exceed the ex-
pected figures. In the same year (1916) was introduced a
tax on war profits of trade undertakings for 1916-1917
and on increased appointments for personal trade occupa-
tions for the same years. A sum of 55 million roubles is
expected as a result of this tax. In 1916 the excise on
tobacco was increased, which means an additional revenue
348 RUSSIA: ITS TRADE AND COMMERCE.
of 90 million roubles ; that on sugar was increased from
2 roubles to 280 roubles per pood, an addition of about
60 million roubles. The customs duty on tea was also
increased and this ought to give additional revenue of
23 million roubles. As the aggregate result of the tax
reforms of 1916 there is expected an increase of revenue of
360-400 million roubles. Taking into consideration the
successful influx of state revenues in 1916, it is permissible
to think that the above tax reforms will more than justify
the hopes placed on them. It can be stated with full
satisfaction that the loss caused to the state budget by the
abolition of the state sale of spirits is now finally compen-
sated for by the increasing income from other taxes. The
state taxes ought to yield a revenue of 2,107 million roubles
within 1 917. In this amount there is included no revenue
from alcohol at all. The amount of revenue anticipated for
1913 was 1,245 niillion roubles. This figure included the
revenues from taxation of beer and some alcoholic beverages
which did not form state monopolies.
In 1914, part of the war expenditure was covered (to the
extent of R. 180,000,000) by the unexpended remainders
of the ordinary assignments to the Ministry of the Marine.
Then, by the Law of July 27, 1914, the State Bank was
authorized to discount the short-term securities of the
Treasury to an amount in accordance with the requirements
of the period of hostilities. These short-term securities
have formed the basis of war finances, and are issued for
three, six, nine and twelve months.
By the Ukase of October 10, 1916, the total of Treasury
bonds in circulation must not exceed 12,000 million roubles.
Part of the issues are designed for the substitution of pre-
ceding issues.
Short-term Treasury securities were also issued in foreign
currency, viz., pounds sterling, for discount abroad. There
were three issues : under the Ukase of October 6, 1914, and
December 26, 1914, to the amount of £52,000,000, and under
the Ukase of June 10, 1915, ;£5o,ooo,ooo, and September
9> £30,000,000, making a total of £132,000,000. By the
Ukase of March 13, 1915, the INlinister of Finance was
PUBLIC FINANCE. 349
authorized to raise Frs. 625,000,000 in France. By the
Ukases, April 16, October 9, 1915 and June i and October
22, 1916, the Minister of Finance was authorized to
raise in foreign currency F. 925 milhon roubles.
In both France and England the Russian securities were
discounted on the same terms as the securities of the respec-
tive Governments. In England the securities were issued
for one year. The Russian securities were issued in Russian
currency at 5 per cent., and were discounted principally at
the State Bank, but R. 400,000,000 of them were disposed
of at joint-stock banks. The Treasury bonds were issued
in denominations of R. 1,000,000, R. 500,000, R. 100,000,
R 50,000, R 25,000, R 10,000 and R 5,000.
Added to this there were R. 200,000,000 of securities
issued under the Ukase of April 16, 1915, for discount in
foreign money markets, not only for war expenditure, but
in order to obtain the necessary foreign bills of exchange
for international settlements.
By the Ukase of October 9, 1915, Treasury bonds, issued
under the Ukases of October 6, 1914, December 26, 1914, and
June 10, 1915 (to the total amount of R. 102,000,000), were
extended, while by the Ukase of October 9, 1915, the
Ministry of Finance was authorized to issue Treasury bonds
in Enghsh, French, and American currency, to the amount
of R. 5,500,000,000.
Three Ukases, August 22, 1914, March 27, 1915, and
August 14, 1915, authorized the issue of Exchequer bills.
The first issue was for R. 300,000,000, the second for
R. 300,000,000, and the third for R. 250,000,000. By
this means, R. 850,000,000 were obtained for war purposes.
The bills were issued at R. 50, R. ico, and R. 500, and in
, the last issues there were also bills at R. 25.
These bills have been placed on the open market ; they
bear 4 per cent, interest and are free of coupon tax.
Russia was the first of the belligerent countries to issue
long-term Government loans to cover war expenditure.
On October 3, 1914, a 5 per cent, loan of R. 500,000,000
was issued, free of tax in perpetuity. This loan was issued
for a term of forty-nine years, the amortization to begin from
350 RUSSIA: ITS TRADE AND COMMERCE.
November i, 1916. It was issued in bonds of R. 50, R. 100,
R. 200, R. 500, R. 1,000, R. 5,000.
Bonds of R. 50 were a novelty in Russia and had no great
success. An association of joint-stock commercial banks
was formed for the realization of the loan, which was disposed
of at 94 per 100. As in previous loans, much of the realiza-
tion was done by the State Bank and State savings banks.
The loan was open for public subscription, and attracted
large masses of the people who had previously purchased
securities through banks, and had stood aloof from public
issues.
The second credit operation in the home money market
was carried out in 1915, when, by the Ukase of February 6,
a new 5 per cent, loan for R. 500,000,000 was issued, on the
same terms as that of 1914. This second loan is to be
redeemed in forty-nine years, beginning from 1916.
Under the Ukase of April 24, 1915, the second loan of
1915 was issued, being the third since the outbreak of war.
This amounted to R. 1,000,000,000, a figure never before
attained in the Russian home money market. The terms
of this loan were as follows : Until May i, i()2i, the interest
on the loan will be 5I per cent. ; after that date the loan
will be automatically converted to one of 5 per cent., the
holders having the right to demand the return of their
capital, should they not agree to such conversion. The
amortization of the loan is to begin at May i, 192 1, the
annual assignments for this purpose being 0'i32ir)i per
cent, of the nominal capital. All the above-mentioned loans
are issued quite free of coupon tax.
Under the Ukase of October 28, 191 5, a loan of
1915 was issued to the amount of R. i,ooo,ooo,oco,
under the following conditions : the loan is issued for s^
term of ten years, with interest at 5|- per cent. ; it was
realized by public subscription, at the rate of 95 per 100,
and has been a great success. Under the Ukase of February
10, 1916, a loan was issued to the amount of R. 2.000.000,000,
and finally under the Ukase of October 10, 191 6, a fresh
loan to the amount of R. 3,000,000,000 (on the same terms
as the war loan of 1915).
PUBLIC FINANCE. 351
Up to the end of October, 1916, i.e. during the whole
time of the present war, there were issued loans —
At home market to the amount of 20.8 million roubles.
,, foreign ,, ,, ,, 9.4
Total 30 '2 million roubles.
There is no doubt that the war, and likewise the abolition
of the liquor revenue, throws a heavy financial burden upon
Russia.
The future of Russian finance is now in direct dependence
on the rapid development of Russia's mighty and inex-
haustible productive forces, which will enable her to survive
this unparalleled war, and to counteract its evil effects.^
' Notwithstanding the war calamities, the elasticity of Russian
resources has already shown itself ; the first six months of 1917
have given to the Treasury satisfactory receipts. The ordinary
receipts for 1917 were estimated at 3,998 million roubles, an
excess of 966 millions above the estimate of 191G. 573 million
roubles of this excess coine from the old taxation, and new taxes
are estimated to yield 393 million roubles.
CHAPTER XV
Money and Credit
By V. A. MuKOSEYEv
The present organization of the Russian money market
and of the Russian credit system is of quite recent origin,
dating no further back than the nineties of last century.
And this is quite natural. For a developed system of
credit and an efficient mechanism for regulating the supply
of, and demand for, money presuppose a comparatively
high stage of economic development, and it is only within
the last twenty or thirty years that Russia has fully satisfied
this condition. On the one hand the reform of the currency,
the strengthening of the position of the State Bank in the
money market, the growth of capital and its mobilization ;
on the other the considerable extension of the railway
system, the great increase in the postal and telegraphic
services, the enormous development of trade and industry
and the growth of towns — in short all the factors which
provided a sound foundation on which to build up the
present organization of money and of credit in Russia —
are of quite recent date.
In Russia, as in other countries, it was the transition
from old economic conditions to the new capitalistic forms
which resulted in money and credit affairs being efficiently
organized. The continuous development of capitalistic
relations called for the creation of a stable currency and of
an elastic system of credit, and after these had been set
up provided them with the requisites for their maintenance
and further growth.
352
MONEY AND CREDIT. 353
Adopting this point of view, we may consider the recent
history of the money and credit system in Russia as com-
mencing with the currency reform of 1897. Russia then
possessed all the conditions necessary to ensure the success
of such a reform. The economic hfe of the country could
no longer be contained within its geographical boundaries,
and had got into touch with the world market, but was
severely handicapped by the fluctuations in the Russian
monetary standard. The economic needs of the country
had become more complex and a more efficient money
mechanism was required for their satisfaction. Russia
first of all obtained a stable currency on a gold basis. A
central bank of note issue, a stream of foreign capital,
and a properly organized money market appeared soon
after. The new institutions in their turn promoted and
stimulated the process of economic development to which
they owed their origin.
The currency reform was the result of general economic
development. The foundation of a central bank on the
other hand was merely the inevitable consequence of the
already existing economic relations. A central bank was
required in order that it might regulate the reformed currency
by means of note issue, but this necessity for the exist-
ence of a central bank was determined beforehand by the
organization of the economic life of the country, by the
co-ordination and unification of the individual branches
of that life into a single national economy.
At the time, however, when the gold standard and a
central bank came into being the money market was still
weak and ill organized. Economic Russia was in a period
of transition and was undergoing a process of organic
reconstruction. In such periods there is always a great
demand for money and capital, which are then chiefly
obtained from abroad, since the home money market is
in such circumstances still ill-equipped to meet the demands
made upon it and is indeed only beginning to take shape.
It is for this reason that foreign capital — chiefly French,
Belgian and German, partly also British and Dutch — •
exercised so great an influence on the economic life oi
A A
354 RUSSIA: ITS TRADE AND COMMERCE.
Russia at the end of the nineties of last century and in the
first few years of the twentieth century. The adoption
of a gold standard had established a firm connexion between
Russia and the foreign market for capital, and this foreign
capital began to pour into Russia. According to one
estimate the investments of foreign capital in Russia
amounted in 1893, i.e. before the fixing of the rouble
exchange, to 2| million roubles, in 1897, the year of the
currency reform, to 80 million roubles, and in 1898 to 130
million roubles, without taking into account money put
at the disposal of the Russian market for short periods.
The Russian money market afforded great opportunities
for short period investment, but even more capital was
attracted for long period investment in productive under-
takings — railways, industrial and commercial ventures, etc.
By the beginning of the present century, Russia was in
possession of a fully established monetary and credit system
corresponding to the country's extended and complicated
demands.
The number of banks increased ; they mobilized the
country's financial resources which had, up to that time,
been in the hands of private individuals and businesses, and
placed all that capital upon the money market. The
capacity of the latter increased extraordinarily. At the
same time the position of the State Bank was much strength-
ened, and its huge supplies of gold provided supplem entary
resources as well as allowing direct operations for short-
term credit. These two factors weakened the dependence
of the money market upon foreign influence to a consider-
able degree. Seventy-five per cent, of the large demands
for capital to meet the growing needs of the population
were met by the home market and discount at times stood
lower than in Germany and Austria-Hungary. Moreover,
the Russian market was repeatedly able to extend help
to the German market.
The essential elements of the l^ussian money market are : —
(i) The currency, as in other advanced countries, is
based upon the gold standard, with free coinage of gold,
limited coinage of silver and copper.
MONEY AND CREDIT. 355
(2) The issue of bank-notes is regulated by a law very
similar to Sir Robert Peel's Act of 1S44, and is carried out
by the State Bank. Before the present war, the gold
guarantee for notes issued ordinarily exceeded 100 per cent.,
and even reached 170 per cent. ; in fact, these notes were
rather warrants on gold than typical bank-notes. Possessing
a monopoly for the issue of notes and concentrating in itself
all the national monetary reserves, the State Bank was
naturally the supreme organ of the money market in the
same sense as the Bank of England is for the English money
market. Private credit institutions, chiefly joint-stock
banks, serve as the fundamental nucleus of the money
market in Russia, as in all other economically developed
countries ; there are also numerous mutual, co-operative,
and municipal banks and banking houses.
These institutions, together with the State Bank, operate
in the sphere of short-term commercial and partly indus-
trial credit of the country, and undertake all ordinary bank
operations. Long-term credit is supplied by special institu-
tions — two State land banks, a series of joint-stock land
banks, and a considerable number of mutual societies.
They accept immovables as security, paying the borrower
in mortgage bonds issued by the various institutions them-
selves and at their face value. Pawnbrokers' establish-
ments are, for the most part, either joint-stock, municipal,
or partly State institutions.
For the supply of credit to wide circles of the rural popu-
lation there are small special co-operative banks, the
number of which has grown extraordinarily in recent years ;
these banks, which obtain their resources from deposits and
governmental loans, serve exclusively the interests of the
small peasantry, for whom they are of great importance.
There are State Savings Banks for the people which are
widespread.
In general, the formal construction of the Rus-
sian monetary system may be considered entirely
satisfactory. Less satisfactory is its actual econo-
mic effect upon the country, for, under present conditions,
the Russian system cannot dispense with the aid of
356 RUSSIA: ITS TRADE AND COMMERCE.
foreign capital. This fact has determined the course of
the credit poHcy of Russia.
11.
During the last two centuries, Russian currency has
constantly incurred changes. Until the beginning of the
second half of the eighteenth century, copper money pre-
dominated, silver and gold being only partly used. In
1768, the so-called " assignats " were issued for the first
time. They could be exchanged for metal at banks especi-
ally established for that purpose ; but in 1787 this exchange
operation was discontinued. Subsequent attempts were
made in 1810 to establish silver monometallism, but were
unsuccessful, being frustrated by the events of the Napo-
leonic wars. In 1843 the assignats were replaced by state
credit notes convertible into silver, 3I assignat roubles
being for the purpose of this operation taken as equal to one
silver rouble. The Crimean war, which began in 1853 and
lasted three years, required enormous financial sacrifices
from Russia ; in consequence of these circumstances
the currency suffered disorganization, and in 1858 the
exchange of notes was suspended.
In 1862, the Government revived that exchange, but, as
the exchange fund was too small, the exchange was again
suspended, in 1863. Further attempts in the same direc-
tion were cut short by the Russo-Turkish war.
At the end of the 'eighties, the Government adopted a
series of very energetic measures with the object of creating
conditions for a transition to a gold standard, and on this
occasion these endeavours were crowned with entire success,
which found its chief expression in a considerable accumula-
tion of gold. On December 12, 1895, the State Bank fixed the
rate of exchange at i roub. 50 kop. paper for i roub. in gold ;
this special measure was sanctiojied by an Imperial order on
August 8, i8g6, which fixed the rate for an indefinite period,
while on January 3, 1897, an Imperial Ukase finally fixed the
rouble note at the above-mentioned ratio of 1-50 : 1'oo. On
the basis of the Ukase of August 29, 1897, a law was passed
permitting the issue of bank-notes by the State Bank only
MONEY AND CREDIT. 357
for strictly commercial purposes and on condition that the
amount of bank-notes, not guaranteed by gold, should not
exceed the sum of 300,000,000 roubles. Bank-notes issued
above that amount were to have a gold guarantee of rouble
per rouble.
In the first balance-sheet of the State Bank published
after the promulgation of that law, gold was entered at
1,132,000,000 roubles. Bank-notes issued by the State
Bank have the following imprint, which guarantees their
exchange and circulation 'on a par with gold coin (Law of
November 14, 1897) : " The State Bank exchanges credit
notes, i.e., bank-notes for gold coin without limitation of
amount (i rouble = one-fifteenth of an imperial and
contains 17,424 dolias of pure gold). The law of August
29, 1897, operated without interruption till July 27,
1914, when, owing to the outbreak of the world war, the
exchange of bank-notes for gold was temporarily sus-
pended.
The present currency in Russia is regulated by the terms
of the Coinage Statute, issued on June 7, 1899, i.e., soon
after the introduction of the gold standard. The funda-
mental features of this law are the following. The basic
monetary unit (standard money) of the Russian State is
the rouble, which contains 17,424 dolias of pure gold.
In the laws of August 29, 1897, and November 14, 1897,
on which the reforms in the issue of notes were based, the
old terminology is preserved, so that the juridical designation
of the bank-notes created by these laws remains as before—
" State credit notes " ; the latter in fact differ very little
from bank-notes in the precise meaning of the word, and
are such according to the sense of the law. Therefore, for
the sake of simplicity and clearness, we call the credit notes
issued by the State Bank " bank-notes."
Gold coins contain 90 per cent, of fine gold, the limits
of deviation from the normal (the so-called remedium,
being fixed at y,/,,,, ; it is coined in denominations of 15 r.,
10 r., 7 r. 50 k., and 5 r., and is legal tender to an unlimited
amount. Free coinage forms the connecting link which
establishes and maintains almost unbroken the corre-
358 RUSSIA : ITS TRADE AND COMMERCE.
spondence between the face value of the coin and its value
as metal.
The Bureau of the Mint accepts pure gold at the rate
price of 5 r. 50-350/363 k. per zolotnik, or 52839669 roubles
for I Russian pound = 1290-3 roubles per kilogramme.
Every owner of an ingot has the right to convert it into
coin, paying for coinage 42 r. 31^ k. per poud.
Silver and copper money circulate in the capacity of
subsidiary coins. From an exchange point of view, that
money depends upon the standard money unit and has no
free coinage, its value being fixed by the gold coin.
There are two groups of silver coin — bank and token
money. Bank coin is struck from high-grade silver, con-
tains nine-tenths of pure metal and denominations of i r.,
50 k., and 25 k. ; its compulsory acceptance in payment
by private persons is limited to the sum of 25 r. Token
silver money contains five-tenths of pure silver, and is
struck in denominations of 20, 15, 10, and 5 kopeks ; copper
money is struck in 5, 3, 2, i, I, and J kopek pieces at the
rate of 50 r. from a poud of copper. The compulsory
acceptance of both silver and copper token coin is limited
to the amount of 3 r. for each payment. The Treasury
accepts these coins in payment for any amount, except for
customs duties. The quantity of silver coin in circulation
must not exceed an average of three roubles per inhabitant
— a standard which must be regarded as sufficiently
low.
No limits have been made for the issue of copper coin,
the character of which hinders its extensive circulation.
It is issued, when required, under legislative enactments
framed for this purpose.
The whole Russian money system is thus constructed
on a gold basis. Only for this one metal is a connexion
between the face value and metallic value established, but
all other forms of money are subject to gold which, so to
speak, solders them into a single unified money S3^stem.
The quantity of monetary tokens in circulation since the
introduction of the gold standard is shown in the following
figures (in millions of roubles) : —
MONEY AND CREDIT
359
1
Full-price
On Jan. i
: Bank-notes
i
1
1076-9
Gold
Bank
Silver Coin
Total
1897 :
360
299
II33-8
1898 .
901-0
147-8
78-9
II27-7
1899 .
661-8
451-4
I2I-5
1234-7
1900
491-2
641-3
1453
1277-8
1901
555-0
682-1
145-7
1382-8
1902
542-4
694-2
140-3
1376-9
1903 .
553-5
731-9
137-5
1422-9
1904 .
578-4
774-8
133-2
1486-4
1905 .
853-7
638-6
123-0
1660-3
1906
1207-5
873-8
133-4
2178-7
1907 .
1194-6
641-9
119-8
1956-3
1908
1154-7
622-4
II9-6
1896-7
1909 .
1087 -I
651-1
IIO-5
1758-7
1910
II73-8
580-9
112-5
1867-2
1911
1234-5
641-7
115-9
1992-I
1912
1326-5
655-8
117-6
2099-9
1913 •
1494-8
628-7
120-5
2244-0
1914 .
1664-7
494-2
122-7
2281-6
From these figures it appears that from 1897 to 1914 the
quantity of monetary tokens in circulation increased by
I0I-3 per cent., i.e., more than doubled.
But the growth would have been greater if during recent
years measures had not been taken to counteract the
demand for money by instituting transfer and clearing
operations. In this connexion may be mentioned : —
1. The opening of banking operations in the branches
of the State Treasury which nowadays have a very large
turn over in transfers and in bills of exchange which have
to be sent to other towns for payment,
2. The introduction since 1906 of postal orders every-
where for any amount.
3. The organization at the principal commercial and
industrial centres of clearing houses which now handle by
means of cross liquidations of payments and settlements
on current accounts about 25-30 milliards of roubles a year.
4. The creation of a special clearing house for the railways.
36() RUSSIA: ITS TRADE AND COMMERCE.
5. The opening of operations of special current
accounts which now yield an annual turnover of about
30 milliard roubles.
It is important to note that of late years the quantity
of coin circulating in the country has declined in comparison
with the circulation of bank-notes.
On Jan, i
Distribution of monetary tokens in
circulation (in per cent.)
Total
1906
1907
1908
1909
I9IO
I9II
I912
I913
I914
Bank-notes
Gold
Silver
55-4
38-5
6-1
loo-o
6l-I
32-8
6-1
loo-o
60-9
32-8
6-3
100 -0
6i-8
31-9
6-3
loo-o
62-9
311
6-0
lOO-O
62-0
322
5-8
100 -0
63-2
31-2
5-6
loo-o
66-6
28-0
5-4
lOO-O
, 72-9
217
5-4
lOO-O
This phenomenon is not exclusive to Russia. It has been
observed in other countries, for example, in Germany and
Belgium, as the well-known authority Charles A. Conant
recently pointed out in the Journal of Political Economy.
The lessened circulation of gold coin has been caused by
the necessity of its concentration in the central bank of
issue, partly with a view to substituting as far as possible
small notes for the coined metal, partly in view of the
clearly disclosed instability of the political stains quo of
Europe, especially after the Morocco crisis of 1910. The
State Bank's policy of accumulating gold yielded important
results, for the outbreak of the present war found the Bank
in possession of a very large gold reserve.
III.
The Russian State Bank, unlike many European central
banks of note-issue has no shareholders, is a State institution
directly subordinate to the Minister of Finance. Many
have considered this a weak point in the present organi-
MONEY AND CREDIT. 361
zation of the State Bank, holding that the joint-stock form
would make it more independent of the Government in its
note-issue policy. In a certain sense such critics are right,
but the question is one of opinion rather than of fact.
The Bank of England in the eighteenth century, the
Austro-Hungarian Bank in the nineteenth, and latterly the
Bank of Spain, have shown that under certain conditions
the joint-stock form of administration of a bank is far
from being a guarantee against active influence on the part
of the Government upon the issue of bank-notes, especially
if such issue appreciably swells the shareholders' profits.
The Russian State Bank arose in i860 ^ from the former
State Commercial Bank, founded in 1817. At the time of
its establishment it was the only institution giving short-
term credit. Its capital, however, was small (16 million
roubles) and it was also burdened with liabilities connected
with the liquidation of earher State credit estabhshments :
the Loan Bank, founded in 1754 ; the Deposit Banks,
founded in 1772, and Boards of Public Charity, founded
in 1775 and abolished in i860.
The payment of interest and refund of capital to the
clients of these institutions were imposed upon the State
Bank, so that it was unable to engage extensively in com-
mercial credit operations. True, it was greatly helped in
this connexion by the private deposits which it attracted
because of the high interest offered (4 to 4I per cent.).
But the State Bank possessed but few branches and had to
expend such large sums from its resources upon State
Treasury requirements that it was not in a position to
effect large loan and discount operations, even with the help
of the deposits.
On the other hand, it was not a bank of issue in the direct
sense of the word, because it possessed no right of emission
and assumed no obligations or responsibility whatever with
regard to the notes issued. Thqi issue of notes was actually
effected on the basis of an obsolete law of June i, 1843, by
the State Printing Ofhce, and was carried out solely on the
demand of the Government. The notes issued and their
1 The Statute was instituted May 31, i860.
362 RUSSIA : ITS TRADE AND COMMERCE.
exchange fund were entered, however, in a special section of
the balance-sheet of the bank, and that part of them which
was not secured by the fund was reckoned as a debt of the
Exchequer. Thus the problem of providing extensive
commercial credit for the country proved to be beyond the
powers of the State Bank ; the solution followed only on
the institution of joint-stock banks, which after 1864
developed with extraordinary rapidity. The Bank was
equally powerless to act as a bank of issue because the
currency was as yet unorganized.
The tremendous work of the State Bank in the liquidation
of the old accounts of the Treasury was completed between
1880-1885. From that time it was relieved from the
necessity of financing the Government upon any large scale,
and had an opportunity to undertake a series of measures
directed to the expansion of active commercial operations,
and also to make preliminary attempts to create favourable
conditions for a transition to the exchange of notes.
The interest was lowered on fixed deposits (five and ten
years) from 4-|- per cent, and 4 per cent, to 4 per cent, and 3
percent., and on termless deposits from 3 per cent, to i per
cent., while current accounts on which the Bank had paid
fluctuated by between i and 3 per cent, it now ceased to
pay any interest at all. The Bank's own capital grew.
Years
1863-
7
1868-
-72
1873-
77
1878-
-82
1883-
7
1888-
-92
1893-
7
Disbursements
of the Bank
(in millions of
Roubles)
On ac-
count of
Treasury
1697
i6o-o
Il6-2
867
58-6
6o-i
13-9
Com-
mercial
59-8
79-2
1368
215-8
216-4
243-5
3243
Exchange
Fund
Private
deposits
Capital
(millions
(millions
of
Roubles)
of
Roubles)
Roubles)
20-6
1647
18-4
141-4
176-6
22-3
213-4
223-6
24-0
174-5
2409
27-8
I7I-5
285-1
28-2
22I-I
246-1
28-5
409-9
239-8
38-9
Debt of
Exchequer
on ac-
count of
credit
notes
(millions
of
Roubles)
570-2
576-0
6255
9425
783-8
742-1
597-8
MONEY AND CREDIT. 363
Between 1879 and i88q, its branches grew from 53 to 89,
established in the more important commercial and indus-
trial centres.
The debts of the State Exchequer, which formerly had
burdened the Bank, tended to decrease ; the issue of notes
almost ceased, and the gold stocks, thanks to special pur-
chases and loans, grew appreciably.
This state of affairs allowed the State Bank to acquire
a predominant position on the money market as a central
bank directing and controlhng all the credit and financial
relations of the country. In accordance with the law of
June 6, 1894, ^ ^^6W statute of the Bank was issued amend-
ing that of i860.
These alterations, however, had no organic character
and chiefly concerned the higher supervision, the form of
administration, the facilitation of several previously per-
mitted commercial operations, etc.
It was only the currency reforms of 1897 which con-
verted it into a central bank in the proper sense of the
word by making it the principal bank of note-issue in Russia.
The reform of the currency on the basis of the gold stan-
dard automatically imposed upon the State Bank the
operation of exchange. At the beginning of this operation,
i.e., September 8, 1897, the quantity of notes in circulation
had reached 1,068,800,000 roubles, while the entire stock of
gold belonging to both the Bank and the Exchequer,
reckoned in terms of the new currency unit, amounted to
1,131,700,000 roubles. To carry out the exchange of notes
(1,068,800,000 roubles) the Treasury transferred to the State
Bank 862,500,000 roubles of gold, in consequence of which
the debt of the Exchequer on account of notes fell to
206,300,000 roubles. By the Ukases of December 13, 1897,
and December 18, 1898, this debt was further decreased to
100,000,000 roubles by payment to the State Bank of
31,300,000 roubles and 75,000,000 roubles from the free
resources of the Exchequer. The Ukase of December 24,
1899, again curtailed the Exchequer's debt to the Bank by
50,000,000 roubles, on account of the extraordinary expendi-
tures of the Budget of 1899, while by the Ukase of April 28,
364 RUSSIA : ITS TRADE AND COMMERCE.
igoo, this debt was finally redeemed. Since then the notes
of the State Bank have been real bank-notes convertible
on demand into gold and bullion and issued on the basis
of short-term banking operations.
Turning to the present position of the State Bank, it
should be noted that in the Russian money market it
occupies first place both as credit institution and as a bank
of issue. It supplies money in three ways : —
(i) Direct credit as expressed in the carrying-out of
ordinary banking operations with the public ; (2) opening
of intermediary credits through railways, zemstvos, small
co-operative banks, etc. ; (3) giving credit to private
institutions in the form of rediscounting bills of exchange
by opening special current accounts against deposit of bills
and by granting short-term easily realizable advances,
usually on securities.
The State Bank in its capacity as a bank granting short-
term credit carries out banking operations of all kinds and
on a very large scale.
In this respect it differs little from private banks with
which, until lately, it competed on the money market, and
partly continues this competition still. If, however,
the historical conditions under which banking has developed
in Russia helped the State Bank to occupy first place as
a source of direct credit, such conditions, for example, as
the considerable number of provincial branches of the State
Bank, the trust reposed in that bank by the public, and the
policy of attracting deposits which it has adopted — recent
economic conditions are inexorable, gradually transforming
the State Bank into a " bank for banks."
For this we see at work the general economic law which
has determined the character of operation of all central
banks of issue in Europe. Beginning from the middle of
the first decade of the twentieth century together with
the growth of private banking estabhshments and the
rapid accumulation of capital, the State Bank begins to
play a relatively less important part in the domain of direct
credit, while its credits to other banks and to intermediary
institutions assume greater importance. This process
MONEY AND CREDIT.
365
of evolution of the State Bank has not yet terminated, for
in spite of the very large growth of the resources of the
money market, the needs of current business transactions
cannot yet be met without active support of the State
Bank. In addition the State Bank has to fulfil functions
which are scarcely compatible with those of a central bank
of issue and which involve extension of the commercial
operations of the Bank : the grant of loans to small co-
operative banks, the development of loans on goods, indus-
trial loans, organisation of the Russian grain elevators
system, etc., etc. Thus, at the present time, the State Bank,
although it has lost predominance in regard to direct credit,
continues to hold an important position and is not materially
affected by its increased credits to private banking estab-
lishments.
The State Bank derives the funds required for its opera-
tions mainly from its deposits and from the exercise of its
right of note-issue. Its own capital is not large — 50,000,000
roubles and 5,000,000 roubles of reserve.
The large amount of deposits is a characteristic
feature which distinguishes the position of the State Bank
from other European banks of issue.
Deposits in the Central Banks of Europe (average)
Russian
Bank of
Banque dc
Reich s-
Oesterr.
Years
State Bank
England
France
bank
Ungar.
(mil. of
(mil. /
(mil.
(mill.
Bank
roubles)
sterL)
frcs.)
marks)
(mill, kr.)
1903 .
6907
50-1
634-1
553-7
I57-I
1904 .
764-4
49-8
790-4
534-8
177-5
1905 .
586-2
54-1
860-9
585-2
197-3
1906 .
522-6
53-9
866-9
575-7
187-7
1907 .
556-3
53-8
768-8
579-2
229-1
1908 .
601-5
53-2
7293
649-3
173-9
1909 .
669-8
54-3
891-2
722-4
191-5
1910 .
773-2
54-8
778-5
648-7
211-4
1911 .
941-4
55-5
832-5
653-2
218-2
1912 .
1038-8
59-6
95I-I
718-2
2396
1913 •
1115-0
55-0
943-0
668-0
231-0
366 RUSSIA: ITS TRADE AND COMMERCE
Possessing so large an amount of working capital on
the shape of deposits, the State Bank has been able to con-
duct its business without straining its right to issue bank-
notes.
Unutilized Average Right of Issue in Various European
Banks
Russian
Bank of
Banque de
Reichs-
Oesterr.
yr
State Bank
England
France
bank
Ungar.
\ GBlTS
(mil. of
(mil. £
1 (mil.
(mil.
Bank
roubles)
sterl.)
1 frcs. ) \
marks)
(mil. kr.)
1903 .
522-2
23-8
1 ■ i
694-2
136-8
300-6
1904 .
527-6
24-6
719-0
153-5
262-2
1905 .
389-8
25-0
590-8
153-5
259-6
1906 .
193-5
23-5
1046-5
34-4
II2-8
1907 .
312-5
24-3
988-4
58-2
6-7
1908 .
378-7
26-8
i 9447
57-5
41-1
1909 .
471-3
26-6
I 77^-^
61-3
100-9
1910
550-7
27-1
543-8
10-6
23-4
I9II .
486-9
28-0
561-4
II3-3
50-4
I9I2 .
442-4
28-4
; 1471-8
54-7
98-2
I9I3 .
369-0
27-0
II33-0
i
18-0
220-0
It is evident from the foregoing that the Russian State
Bank avails itself less of its right of issue than other large
European banks. Under normal conditions its power of
further issue is greater than that possessed by other
banks, though the Banque de France is an exception,
its reserve right of issue for the term under review
having been raised twice — by the Law of February 11,
1906, from 5,000,000,000 francs to 5,800,000,000 francs, and
by the Law of December 29, 1911, from 5,800,000,000
francs to 6,800,000,000 francs. In consequence of this, in
1912 the reserve right of issue of the Banque de France
exceeded the right of issue of the Russian State Bank by
20 per cent., and in 1913 by 15 per cent. The very large
total of the deposits has imposed, however, a no less heavy
liability on the Bank over and above the obligation to
MONEY AND CREDIT. 367
redeem its notes, especially when one bears in mind that the
bulk of the deposits were those of the Exchequer and other
public bodies.
Average Deposits in Central Banks of Issue in Europe ^
Private
Public
Name of Bank
1903-7
1908-12
1913
1903-7
1908-12
1 91 3
Russian State
Bank (mil.
rbls.) . .
95-0
1322
183-4
525-5
672-7
931-6
Bank of Eng-
land (mil. ■£
sterl.) . .
42-6
42-8
42-0
9-7
12-7
130
Banque de
France (mil.
frcs.) . . .
566-1
6497
680-0
218-1
168-8
263-0
Under complications of various kinds, political more
especially, public deposits might suddenly be called up,
and so deprive the State Bank of the larger part of its
working capital usually involved in current commercial
operations, and inasmuch as its liabihties with regard to
its deposits are without any gold cover, they can only be
met by the issue of bank-notes. Furthermore, the nature
of the commercial operations undertaken by the Bank
does not fully correspond to the policy of a bank of issue,
which demands that the bill portfolio should be elastic
and should consist of short-term material, in the sense of
elasticity and brevity of discount term.
In the case of the banks of issue of France and Germany,
the average duration of bill discounts ranges from 15 to
20 days, whereas in the case of the State Bank it averages
43- 68 days ; in the former case the discounting of bills of
exchange constitutes about 70 to go per cent, of all com-
1 The Reichsbank and the Austro-Hungarian Bank give their
deposits jointly, without dividing them into private and public.
368 RUSSIA: ITS TRADE AND COMMERCE.
mercial operations ; in the case of the State Bank the
proportion is only 50 per cent.
In view of these circumstances it may be concluded that
under normal and peaceful economical and pohtical
conditions, the Bank, in order to maintain its
position, has had to endeavour to increase its gold reserve
by issuing small notes in order to withdraw gold from circu-
lation, the Bank's right of note-issue has rather the char-
acter of an extraordinary resource than of one which is
constantly brought into play. Moreover in times of stress
and disturbance this right is on the face of things insufficient
to meet the calls which are made upon it, since the deposits
subject to immediate withdrawal exceed the Bank's total
right of fiduciary issue. We might refer, too, in this con-
nexion to the inelasticity of the Bank's bill portfolio (during
the Russo-Japanese War of 1904-5, and the international
political complications of 1910-13), and also its inability
to attract private deposits by offering a high rate of in-
terest, for instance during the political crisis of 1905-7.^
In presence of a catastrophe such as the present war it
has proved impossible to avoid the necessity of expanding
the right of issue fixed by the Law of August 29, 1897,
and even of suspending the exchange of bank notes for coin.
In general the defects of the State Bank's organization in
respect of note-issue are in a sense analogous to those of
Sir Robert Peel's Bank Act. Sir Inglis Palgrave's words
regarding the Bank of England that " the pressure is
enhanced by the requirements of the Bank Acts of 1844-45"-
are also perfectly applicable to the Russian State Bank.
The above sufficiently explains why under normal con-
1 Interest on current accounts in the State Bank has fluctuated
within the following limits : From May 31, i860, to April 15, 1875,
3 per cent. ; from April 16, 1875, to April 3, 1886, i per cent. ;
from April 4, 1886, to May 18, 1886, 2 per cent. ; from May 19, 1886,
to June 31, 1886, I per cent. ; from June i, 1886, to July 31, 1895,
o per cent. ; from August i, 1895, to April 16, 1899, 1-2 per cent. ;
from April 17, 1899, to January 31, 1906, o per cent. ; from Febru-
ary I, 1906, to April 29, 1908, 2 per cent. ; from May i, 1908, to
the present time, o per cent. The payment of interest on deposits
was abolished on August i, 19 10.
" Falgrave, Bank Rate and the Money Market, p. 139, London, 1903.
MONEY AND CREDIT.
369
Table showing the Position of the State Bank's Note-
issue (VEARLY averages)
Gold!
Note cir.
Right of
further
issue
Gold
cover
for bank-
Ratio (gold
and silver)
to liabili-
Years
(mil.
(mil.
notes
issued (in
ties (bank-
roubles)
roubles)
roubles)
notes and
per cent.)
deposits (in
.
per cent.)
1903 .
802-1
579-9
5222
138-3
69-5
1904 .
9363
708-7
527-6
132-1
699
1905 .
1073-0
983-2
389-8
109-0
72-0
1906 .
1057-8
1164-3
193-5
90-9
65-8
1907 .
II93-5
ii8i-o
3125
lOI-I
72-1
IQ08 .
1171-0
1092-3
378-7
107-2
73-3
1909 .
12980
1126-7
431-3
115-2
76-7
I91O .
1431-6
1080-9
550-7
I2I-2
77-2
I9II
1453-8
1266-9
486-9
114-8
68-4
I912 .
1522-6
1380-2
442-4
II0-3
65-9
I913 •
1619-1
1550-1
3690
104-5
63-4
ditions the State Bank's commercial operations and the
general position of the money market find comparatively
little reflection in the note-issue of the Rank.
1 The gold fund of the State Bank is composed of : {a) Gold in
Russia: in coin, ingots, and assignments of the Mining Boards ; (b) gold
abroad on current account with foreign bankers. The ratio between
these two items for the last few years has been as follows (in millions
of roubles) : — ■
.
Gold (on an average)
In Russia
728-8
819-4
888-8
806-6
937-4
1019-4
1131-1
12 19-3
1262-0
1299-0
1 43 1 -8
Abroad
1903
1904
1905
1906
1907
1908
1909
1910
I9II
I9I2
1913
74-3
1 16-9
184-2
251-2
256-1
151-6
166-9
212-3
191-8
223-6
178-3
B B
370 RUSSIA: ITS TRADE AND COMMERCE.
The gold abroad serves exclusively for the regulation of
foreign payments and settlements by means of the purchase
and sale, as dictated by circumstances, may require, of foreign
bills. Such measures prevent sharp fluctuations of the
rate of exchange and the necessity of shipping gold abroad
to meet heavy foreign obligations. For States with a large
foreign indebtedness, for example Russia and Austria, this
policy is necessary to supplement the note-issue policy of
the central Banks. Only once during the period covered
by the above table has the State Bank exercised its right
of fiduciary issue, and then by no means fully. This occurred
in the troubled year of 1906 when the unutilized right of
issue sank to 193 '5 million roubles. During the rest of
this period the right of fiduciary issue (300 million roubles)
was not used at all.
Of late, although the gold reserve has been doubled, the
ratio of cash to liabilities has fallen and has to a certain
extent affected the metal cover for the notes.
The ratio of gold to notes is thus very high in the case
of the Russian State Bank, higher indeed than for all other
banks with the exception of the Bank of England. The
Gold Security for Bank-notes and ratio of Cash to Lia-
bilities AT the Central Banks of Issue (average per cent.)
Russiar
State
Bank of
Banque do
Oesterr
Ungar.
Bank
England
France
Bank
>.'&
1
>.S
>'i '
>■'£
^S
Years
'C o
oJ&
3 t=
■ c
5 9
.0 S
'C 2
3 ?
J
3 T
.2-"
w a
3^
ll
25
ll'
0!^
f
u
u
u
00
° U
^ s
C u
"2
00
00
119-1
00
74-4
1903
138-3
69-5
43-5
57-8
72-8
52-1
52-3
53-3
1904
132-1
69-9
12 I -6
44-0
60-0
72-6
52-9
53-3
73-4
82-8
1905
109-0
72-0
123-8
43-0
64-8
75-1
55-8
53-1
72-9
81-6
1906
90-9
65-8
117-5
41-0
6i-8
71-1
48-6
48-3
66-9
75-7
1907
lOI-I
72-1
I20-5
42-1
56-2
65-8
42-9
46-0
62-8
70-0
1908
107-2
73-3
I29-I
45-6
63-3
71-2
51-5
51-0
64-2
73-9
1909
II5-2
76-7
I28-I
44-8
71-4
75-7
50-4
49-4
70-0
78-6
19IO
I2I-2
77-2
130-7
44*4
65-3
71-2
48-4
50-7
67-1
74-4
19II
114-8
68-4
133-4
45-4
61-2
66-5
49-7
52-5
62-0
68-7
1912
I 10-3
65-9
134-6
43-8
60-8
64-1
49-4
50-8
57-2
63-1
I913
104-5
63-4
130-6
44-9
59-0
6o-i
54-5
53-7
54-3
59-3
MONEY AND CREDIT. 371
ratio of cash to liabilities approximates to that of the Bank
of France, but in view of the peculiar character of the
deposits and the inelasticity of the Bank's bill portfoHo, this
ratio is undoubtedly low and bears heavily on the position
of the State Bank as a bank of issue. The active work of
the Bank is conducted on the basis of the antiquated pro-
visions of the Statute of 1894, issued three years before the
currency reform. The Bank discounts commercial bills
of exchange, local as well as those payable in other towns,
provided with two signatures and running for terms up to
six months, comparatively rarely up to nine and twelve
months. About 50 per cent, of the bills discounted are
one to three month bills, 40 per cent, three to six months.
Discount operations are extended also to securities, coupons,
etc. Further, the Bank grants loans of various terms and
designations — industrial, agricultural, on bonds and on
goods. On security — ^principally State bonds, securities
bearing interest guaranteed by the State and mortgages — ■
loans are granted up to nine months, or the Bank opens a
special current account. Loan operations on goods take the
form of pledging agricultural and industrial products for
terms up to nine months (for metals, fifteen months) ; the
Bank also grants loans on the security of different com-
mercial documents, for example, bills of lading, railway
duplicates, etc., their term being specified at three months.
The State Bank also extends special loans to agricul-
turists, industrial undertakings, and in some cases to artisans
and small traders, on bills with one signature for a term
up to twenty-four months, with security of movable or
immovable property, or a guarantee from other persons
already enjoying credit. Such loans must be, however,
secured by the pledge of real or personal estate or by guaran-
tees given by other persons of standing. The credit which
the Bank opens for industrial undertakings, in particular,
are not, for the most part, granted in the way described.
The terms depend on individual circumstances and in each
particular case ratified by the Minister of Finance. The State
Bank also gives credit to small agriculturists, farmers,
handicraftsmen, artisans, etc., through the medium of the
372 RUSSIA: ITS TRADE AND COMMERCE.
zemstvos, railways, or private and public credit banks,
granting loans within the limits of the security put up by
the final borrowers, and under rules issued by the Minister
of Finance in agreement with other Ministries supervising
the institutions receiving credit. Another form of indirect
credit is granting of loans on the security of goods en route
or intended for transport. Somewhat similar is the issue
of loans to small co-operative banks which provide credit
for the population of country districts. Such loans are
issued on the security of biUs for periods up to twelve
months. The Bank also has the right to extend credit
to zemstvos and municipalities, although, in actual fact,
operations of this kind occur but rarely. Irrespective of
these different kinds of credit, the State Bank has, since
1911, undertaken the construction of a large number of grain
elevators for the improvement of the corn trade of the
country. Grain stored in these elevators may be pledged
at the Bank.
Loans, Bills, Etc.
>>
uj"'-; en
13 tn
CO ^
tisa
her
iari
rt '-*_)
§
CO
-i^
1-. P +J 13
>-.
1 6
CO
l-c
a
G
■'2
all credi
tutions
•ists or a
of agric
y, and
interme
7a
H
13
^
4^ a;
6
H
CO
3
CO J2
3 S^ S
H
m
13
On se(
and gc
o-S
H
agricu]
purch
machi
vances
94-2
38-8
-S
8-7
1903
225-6
41-4
183-1
408-7
1904
218-9
lOI-O
41-I
39-0
9-1
190-2
409-1
1905
185-4
124-7
42-3
36-6
—
11-2
2148
400-2
1906
224-3
168-9
5I-I
33-4
—
10-7
264-1
488-4
1907
213-3
I53-I
44-6
31-9
—
ii-i
240-7
454-0
1908
220-2
125-2
46-2
30-5
—
15-1
217-0
419-2
1909
224-0
94-3
50-5
28-7
4-0
13-1
190-6
414-6
I9IO
2329
85-0
74-6
21-9
23-7
12-4
217-0
449-9
I9II
352-5
142-4
lOI-O ;
14-6
307
12-5
301-2
627-7
I9I2
424-3
145-6
96-3
i6-6
52-4
14-6
325-5
749-8
I9I3
519-8
184-1
105-6
14-2
82-4
19-1
405-3
925-9
MONEY AND CREDIT.
373
The development of the commercial operations of the
State Bank is shown below (bank balances on an average
for the year, in millions of roubles) : —
Excluding the years 1904-5, which were characterized
by extraordinary events (the Russo-Japanese War and a
domestic policital crisis), the loan and discount operations
of the State Bank had a tendency towards extension. From
1903 to 1913 discounts increased by 130 per cent., and
advances by 121 per cent., whereas the total growth of loan
and discount operations for this period is 126 per cent.
This figure undoubtedly indicates a very extensive
development, but the question arises whether this growth
has been evoked by the extension of the direct activity of
the Bank with the public or by the increased demands
made upon it as upon a central bank by various organs of
the money market. This question may be answered by
an analysis of the loan and discount operations of the Bank
in recent years.
Sums paid out in connection with Loan and Discount
Operations of the State Bank (in millions of roubles) : —
1909
1910
1911
1912
3533
96
27
1326
1913
To private banks .
To small credit institutions
(small co-operative banks)
To other intermediaries .
Direct payments
1004
25
14
873
1930
37
15
1050
3210
50
34
1250
4530
153
35
1448
Total ....
Percentage ratio to amount
of all payments —
To private banks
Direct payments
Others
1916
54-2
45-5
0-3
3033
633
34-4
2-1
4544
707
27-5
1-8
4982
70-8
267
27
6166
73-4
235
31
Total ....
1000
1000
1000
100 -0 J
1
100 -0
The centre of gravity of these enormous payments has
been shifted to the private banks, showing that the domain
374 RUSSIA: ITS TRADE AND COMMERCE
of direct credit, though growing absolutely, shows a sharp
decline relatively. From this example it may be seen how
the State Bank is undergoing evolution from an ordinary
banking institution into a central reservoir for the money
market.
This process of evolution is, however, given a peculiar
stamp by the economic conditions of a rapidly developing
country. During recent -years, which have been years of
great and general growth for economic Russia, the State
Bank has had to provide direct commercial credit on a
greater scale than any other central bank of issue in Europe.
And this increase in the activity of the State Bank in the
realm of commercial credit took place alongside a very
great increase in the resources of the money market.
Total sums paid out by Central Banks of issue in con-
nection with credit operations (on an average) : —
!
Russian
Bank of
Banque de '
France
Reichs-
Oesterr.
^, State Bank
^"^'''^ (mil.
England
(mil. £
bank
(mil.
Ungar.
Bank
roubles) ^
sterl.)
I lliXX. li ^-O . 1
marks)
(mil. kr.)
1903 . .
470-5
62-7
j
4305-8
1084-6
870-4
1904
473-2
60-7
4281-0 i
1084-0
936-8
1905
476-1
65-3
4409-3
II76-I
949-4
1906
594-1
66-9
4661-2
1-298-1
1122-4
1907
568-1
66-0
4811-6
1408-1
1271-6
1908
554-7
62-7
4855-3 '
1363-2
II57-I
1909
513-9
64-0
5082-9
1448-7
1118-7
1910
547-0
64-1
5197-0
1395 -I
1209-1
1911
785-4
63-8
5238-6
1387-7
1439-6
1912
895-2
67-2
5328-2
1522-6
1591-3
1913
1051-4
64-0
5667-0
1525-0
1690
From 1903-
13 in-
crease .
123-6%
2-0%
31-6%
40-4%
^4-3%
It is evident that, under existing economic conditions in
^ Loan and discount operations (including debts of State pawn-
shops, broking establishments, rediscounts, renewed loans, and pro-
tested bills) and securities belonging to the Bank and acquired on
commission.
MONEY AND CREDIT.
375
Russia, the State Bank will for long have to continue to
play an important part in supporting the credit organiza-
tion of the country, and not merely, as is the case with
most central banks in highly capitalistic countries, as a
clearing house for all kinds of settlements and as keeper
of the national reserves, but as an active credit institution
which makes good the weakness and shortcomings of the
Russian money market.
The discount rates of the State Bank were regulated by
the provisions of the Statute of 1894 in the following way.
A minimum rate w^as laid down for short term bills up to
three months, while for longer bills this rate rose i per cent,
for six-months bills, i4 per cent, for nine-months bills and
24 per cent, for twelve-months bills. On August 26, 1910,
these increases were diminished by 4 per cent., so that
when the rate for three-months bills stood at 44 per cent.,
six-months bills were discounted at 5 per cent., nine-months
at 54 per cent., and twelve-months at 64 per cent.
On March 3, 1912, a further change was effected
Official Discount Rate of the State Bank
Year
Highest
Lowest
Average
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906 . . . . .
1907
1908
1909
19IO
1911
1912
1913
5
6
7
6
54
5
44
54
7
8
74
7
54
44
44
6
6
44
44
44
54
5
44
44
44
54
64
7
54
44
44
44
44
6
4-65
4-83
5-35
5-53
519
4-54
4-50
5-41
5-68
7-28
7-12
5-93
4-95
450
4-50
5 -06
6 00
]y6 RUSSIA: ITS TRADE AND COMMERCE.
whereby the rates were equalized for three- and six-
months bills ; for nine- months the rate was raised
by ^ per cent., and for twelve-months i| per cent. Since
this change led to lengthening of the average term of the
bills by the Bank, the former gradation of interest propor-
tionate to the length of the term was again restored on July
15, 1914.
As already stated, the liabihties of the State Bank,
without taking into account the issue of bank-notes, are
chiefly composed of deposits by the Treasury and others.
According to the law of April 29, 1896, the entire ready
money of the Exchequer is included in the working resources
of the State Bank. If again the ready money at the disposal
of the Exchequer should be insufficient for current payments
the sums which it requires are in turn taken from the Bank's
working resources ; from this point of view the State Bank
is the cashier of the State, the trustee of its money, while
the Exchequer is the Bank's agent. By the law of June 6,
1894, the Exchequer is charged with the conduct of simple
banking operations on account of the Bank. All the sums
of money received by the State Bank from the Exchequer
are divided into two groups : (i) General current account
of the Department of the State Exchequer, and (2) Special
resources and deposits. For the past five years the average
balance of these amounts was as follows (in millions of
roubles) : — .
Current account of
the Department of
State Exchequer
1909 ! 170-8
1910 244-2
1911 438-8
1912 475-5
1913 547-6
Special means and
deposits
216-6
257-3
285-3
311-6
327-8
Moreover, the liabilities of the State Bank include taxes
on the earnings of railways, customs duties, part of the
MONEY AND CREDIT. 377
ready money of savings banks, etc. The Bank also manages
foreign operations of the Treasury, pays coupons, exchanges
Hsts of State loans, keeps Treasury securities, etc. All the
assets of the Treasury on current account in the State Bank
are free of interest ; on the other hand, the Treasur\^ does
not pay the State Bank any remuneration for its functions
as cashier.
Private deposits and current accounts, which formerly
ran to large amounts, have in recent years shown a great
falling off, as a result of interest no longer being paid on
such sums. At the same time, however, there has been
a noticeable development of conditional current accounts
(account-giro), introduced in 1895 and reformed in 1900.
This form of current account is designed to form a basis
for the clearing-house operations of the Bank. The system is
one of individual accounts with a fixed minimum balance
which bears no interest (not less than 300 roubles) ; all
settlements are affected by means of cheques and orders
drawn by one of the participants in the giro-account in
favour of another. Such operations are conducted gratis
by the State Bank.
Average Balance (Millions of Roubles)
Simple
Deposits current
account
Conditional
current
account
1909 567 927 I IIO-O
1910 57-4 59-0 1147
1911 447 43-6 1127
1912 363 184.1
1913 320 177.3
Among other deposits of the State Banlc, reference must
be made to the current account of State and private rail-
ways (for mutual settlement in connexion with the handling
of through trafic). This operation was introduced in 1893
with the object of economizing the use of ready mone}' in
settlements of railways between themselves.
]y8 RUSSIA: ITS TRADE AND COMMERCE.
Average Balance in Millions of Roubles
1 909 1910 1911 1912
1913
Account of section for
railway settlements . 23-0 40-6 36-3 31-3 30-3
The other items on the liability side of the State Bank's
accounts are book-keeper's entries and comprise unpaid
money orders, interest due on various sums, etc., etc.
The profit of the State Bank is naturally included in
the revenue of the Treasury.
Profit of the State Bank (Millions of Roubles)
Deducted for
revenue of
Treasury
1903
1904
1905
1906
1907
1908
1909
1910
I911
1912
1913
10-2
II-2
16-4
i8-5
22-2
20-5
^73
24-5
24-8
31-2
40-1
At the beginning of the year 1914 the State Bank com-
prised the following institutions : —
Offices
Branches, ist class
2nd ,,
3rd „
,, temporary
Agencies at elevators
Settlement sections
Exchequer offices discharg
operations .
IV.
10
18
56
47
6
9
45
ng banking
-191
791
-982
Private banks began to develop in Russia in the second
half of the nineteenth century. Till then all banking
MONEY AND CREDIT. 379
operations were in the hands of the old Government banks,
and when these were abohshed (by the Law of May 31,
i860) their functions were transferred to the newly-created
State Bank which, however, as we have seen, could fulfil
its task only very incompletely. At the same time, owing
to the abolition of serfdom (in 1861), economic hfe of the
country entered upon a phase of industrial and commercial
activity which laid the foundations of the capitaHstic regime
in Russia. The need of credit institutions, already felt,
now acquired an acute character. Under this pressure the
Government changed its view and adopted a pohcy of en-
couraging all private initiative in the organization of joint-
stock credit banks.
To what extent at this time the Government gave its
assistance may be seen from the fact that the State Bank
provided part of the capital for the first joint-stock com-
mercial bank, by taking up 40,000 shares of this bank,
amounting to a million roubles, and renounced in favour
of the other shareholders its right to dividend during the
first ten years so long as the dividend did not exceed 5
per cent.
The following figures will show the demand for private,
banks.
In 1864, one joint-stock commercial bank was formed ;
in 1866, one ; in 1868, two ; in 1869, three ; in 1870, five ;
in 1871, twelve ; in 1872, ten ; in 1873, six. In ten years
the number of banks increased from one to thirty-nine.
The organization of commercial banks, which coincided
with the economic rebuilding of the country after the
reforms of 1861, terminated early in the 'seventies of the
nineteenth century. By then the economic Ufe of the
country afforded a soHd basis for banking activity, and the
further development of that activity depended in consider-
able measure on the fact and nature of Russian economic
growth.
The latest epoch of the banking business in Russia is
closely connected with the general improvement in the
economic condition of the country which began in the
second half of 1909. This period of economic growth is
380 RUSSIA: ITS TRADE AND COMMERCE.
remarkable for the extent and variety of the results
achieved.
Banks of short-term credit acquired, at this time, very
great importance, both as institutions entrusted with vast
amounts of capital and as a great organizing force actively
influencing the whole economic life of the country. The
growth of joint-stock banks is shown in the following
table : —
Y
ears. Banks
Branches
Total
1874-1883
... 36
42
78
1884-1893
... 34
49
83
I 894-1 903
• • . 37
212
249
On Januai
•V I—
1904
. • • yj
278
315
1905
... 35
295
330
1906
• • . 35
327
362
1907
... 35
339
374
1908
... 35
363
398
1909
... 34
409
443
1910
... 31
492
523
1911
... 33
643
676
1912
... 34
691
725
1913
... 45
732
m
1914
. • • , 47
1
743
790
By the growth of these banks, capital was mobilized and
the Umits and the capacity of the money market extended.
The increase in the number of such banks, especially in
the provinces, brought new circles of the population into
the sphere of credit relations, and the new field thus opened
up afforded ample opportunity for productive work on the
part of the banks.
The following table shows the development of banking
operations (in millions of roubles) : —
MONEY AND CREDIT.
381
Assets
Invest-
Advances and discount
>
Advances
Years
hand and
(Securi-
Bills
Against
Corres-
at
ties be-
Against
Merchan-
pondents
Bankers
longmg
Govern-
dise and
to banks)
dis-
counted
ment
stocks
and other
securities
docu-
ments of
title to
merchan-
dise
1874-1883 .
43-2
26-0
177-0
106-5
"•5
295-0
9I-I
1884-1893 .
39-8
42-2
155-8
156-9
I4-I
326-8
119-4
1 894-1 903 .
55-2
86-0
339-9
249-1
46-5
365-5
240-9
On Jan. i —
1904 . .
74-6
109-3
631-2
258-3
94-2
983-7
282-8
1905 . .
104-8
107-9
633-2
250-5
I IO-9
999-0
314-9
1906 .
86-8
100-7
555-3
288-8
134-3
978-5
351-3
1907 . .
84-4
106-7
549-2
285-1
143-2
977-5
356-0
1908 .
77-7
107-5
612-4
286-2
173-7
1072-3
363-4
1909 . .
92-1
114-1
715-8
286-5
194-6
1 196-9
418-9
Car
ital
Deposits
Re-dis-
count
(at
Years
spondents
Capital
Reserve
Deposits
Current
State
.
fully paid
fund
6-4
accounts
Total
245-0
Bank)
25-4
1874-188
^ . 98-2
1 29- 1
I15-9
75-7
1884-189
^ . 109-2
21-8
103-9
148-2
252-1
28-4
1218
1894-190
3 - 167-9
65-8
184-8
262-8
447-6
61-3
273-6
On Jan. i
—
b
1904
• 194-3
74-5
264-6
457-5
722-1
71-3
402-6
1905
192-6
77-3
254-4
521-2
775-6
52-4
439-1
1906
• 193-6
79-1
214-2
457-2
671-4
161-9
435-2
1907
2II-I
84-8
217-0
543-9
760-9
68-1
434-1
1908
• 235-5
87-7
239-8
578-3
818-1
93-1
443-7
1909
• 232-1
89-9
290-1
686-7
976-8
85-1
498-4
1910
. 236-6
95-5
334-0
928-2
1262-2
58-0
529-1
1911
• 305-5
136-7
422-9
1252-1
1675-0
202 -I
782-6
1912
- 384-1
176-1
528-9
1288-4
1817-3
275-0
986-3
1913
• 518-2
222-7
657-7
1635-6
2293-3
329-9
1208-9
1914
• 585-0
251-5
752-9
1786-1
2539-0
334-7
1458-1
From 190
4 to
I9r4inc
rease 201%
240%
1 88 0/0
302%
251%
371%
261%
The above figures indicate the extraordinary progress made
by joint-stock banks in recent years. This progress would
of course have been impossible had it not been based on
382 RUSSIA: ITS TRADE AND COMMERCE.
corresponding progress in the general economic life of the
country. Concurrently with ordinary business, Russian
joint-stock commercial banks engage in certain of the
operations which in England are usually left to Financial
Syndicates, Finance Companies, or Trusts. This is due
to perfectly natural causes. The Russian public is generally
very little interested in industrial shares as a firm investment
for capital, so that a newly-created joint-stock industrial
undertaking must necessarily seek support in the banks
which concentrate all the free available means of the well-
to-do portion of the population. The financing of industry
offering great advantages to the banks, although, under
certain conditions, it is not unattended with risk. By no
means all Russian banks engage in it, in fact only some
big Petrograd banks devote themselves to such work.
The activity of joint-stock commercial banks in Russia
is regulated by the provisions of a general Credit Statute,
which, however, does not embrace all aspects of banking
work. Before 1872, the bank statutes were ratified by
special legislation on every new occasion for each individual
bank. By the Law of May 31, 1872, the rules regulating the
establishment of new banks were made uniform as regards
the size of the capital-stock (up to 500,000 roubles), the
value of the share coupons of 250 roubles, the conduct
of discount operations, the acquisition of real estate,
the publicity of reports, and administrative supervision.
This procedure was subsequently altered and supplemented
by the Law of April 5, 1883, but operation of that law
was not extended to previously established banks.
Most of the Russian banks were founded before 1880.
The substance of the Law of April 5, 1883, is as follows.
The minimum amount of capital-stock required for the
estabhshment of a joint-stock bank is fixed at 5,000,000
roubles, half of which is paid on subscription to the shares
and the other half within six months of the closing of the
subscription list. The number of founders must not be less
than five. Cash in hand, together with sums on current
account in the State Bank, must cover at least 10 per cent,
of the liabilities. The ratio of Uabilities to the bank's
MONEY AND CREDIT. 383
own capital — ordinary and reserve — must not exceed 5:1.
Credit given to an individual client must not, as a rule,
exceed one-tenth of the ordinary-stock, open credit, the so-
called credit en hlanc, one-tenth of the ordinary-stock and
reserve capital, on condition of its being covered within
thirty days. When the profit exceeds 10 per cent., half
of it is transferred to reserves.
Administrative posts may not be held simultaneously in
several banks. At shareholders' general meetings no one
person may exercise more than one-tenth of the total voting
power represented at the meeting. Government inspection
of a bank may be held at the request of the shareholders.
Monthly statements and a yearly report must be published
by the bank. These provisions are now applied to all
newly-established banks. The Credit Lyonnais is the only
foreign bank permitted to operate in Russia, and this by
a special Law of June 14, 1891.
The so-called societies of mutual credit are also prominent
in the task of providing short-term credit. These co-operative
banks have multiplied during recent years, and serve chiefly
middle and lower classes of the urban population. They
form a series of groups, only formally united. For example,
certain societies of mutual credit in Moscow and Pctro-
grad, possessing enormous resources and conducting business
upon a solid foundation, closely resemble large joint-stock
banks; others which form the majority, operate in the
provinces, with limited means, and grant credit on sums
of even less than 100 roubles to their members, for the
most part small shopkeepers and artisans unable to
obtain credit in the banks. The first society of mutual
credit was founded on March 17, 1864 ; at the beginning of
1914 they numbered 1,108. According to the Law of May
31, 1872, the working capital of these societies consists of
members' fees in cash in the proportion of 10 per cent, of
the amount of credit opened for each member. This capital
serves as security for the operations of the societies. Respon-
sibility for the said operations is determined by the obliga-
tions assumed by the members on account of their credits
opened to them. A society of mutual credit transacts all
384 RUSSIA : ITS TRADE AND COMMERCE.
ordinary banking operations of short-term credit. The
growth of these societies for the last few years is shown by
the following figures : —
On Jan. i
No. of societies
No. of members
1900
1910
19IJ
1912
1913
1914
117
467
604
776
932
1,108
83.431
267,107
371.585
501,821
589.322
634.355
The growth of the banking operations of these societies
has been correspondingly rapid, as shown by the following
figures (in millions of roubles) : —
Assets
1
Advances
Invest-
On Jan. i
Notice
22-3
At call
54-5
ments
1900 .
8-0
127-6
9-2
19IO .
49-3
2743
17-1
79-6
17-8
1911 .
556
3809
20-3
1083
i8-6
1912 .
577
505-4
26-5
155-9
20-5
1913 . .
61 -8
583-4
26-0
184-4
2I-I
1914 . .
62-2
579-0
27-7
206 -8
21-2
Liabilities
On Jan.
Capital
I (fully paid and
Deposits
Borrowings
•(Re-discount)
reserve fund)
1900 .
. . ' 38-0
168-3
1
14-9
I9IO .
• • 73-5
3295
28-1
I9II .
. . 93-8
405-6
60 -0
I912 .
■ • 119-7
487-4
126-6
I913 • ■
142-1
545-1
159-7
I914 . .
. . 150-9
595-4
157-7
MONEY AND CREDIT.
385
In dealing with the institutions of commercial credit,
mention must be made of municipal banks.
These exist chiefly in towns with poorly developed trade,
where they are the sole credit institutions. The first of
these banks was founded on October 29, 1809 '< by January i,
1914, there were 319 of them. At the present time the
activity of municipal banks is regulated by the Laws of
April 26, 1883, and January 13, 1912, by which the mini-
mum capital of such a bank is fixed at 10,000 roubles, while
the total liabiUties must not be more than ten times the
total ordinary-stock and reserve capital.
These banks not only give short-term credit but grant
loans to municipalities and zemstvos and also on security
of real estate. They also do pawnbroking business. Data
concerning the activity of municipal banks are given below
(in millions of roubles) : —
Assets
Liabilities
On
Cash
Capital
Jan. I
(fully
Dis-
Ad-
Invest-
paid and
De-
Borrow-
accounts
at banks
counts
vances
ments
reserve
fund)
posits
ings
1900
II-5
70-3
45-8
I4-I
389
84-1
0-4
I910
20-3
79-5
73-2
17-0
51-6
128-6
2-2
I91I
25-5
89-3
767
17-2
53-5
146-3
2-6
1912
265
105-8
83-3
17-8
55-5
I66-I
4-5
1913
25-5
117-1
93-6
17-7
577
183-5
51
1914
23-0
1
126-1
io6-2
17-8
597
198-4
8-0
Rural districts are supplied with credit by special popular
co-operative banks of various names but grouped under the
general head of small credit institutions. These advance
money to the rural population, to individuals and also to
groups of individuals for periods up to twelve months on
personal or against material security or against sureties
of third parties, and, if the bank has long term deposits,
for periods up to five years against material or personal
c C
386 RUSSIA: ITS TRADE AND COMMERCE.
securit}/. Co-operative banks also undertake inter-
mediary operations in the sale and purchase of goods
for their clients. They receive part of their working
capital in the form of subsidies from the Treasury and part
from deposits and loans. The members of such institutions
have a mutual liability for their obligations. Their
operations are regulated by the Law of June i, 1895.
Of recent years, the extension of credit by the State Bank
to such small co-operative banks, the grant of subsidies to
them from the savings banks, both as contributions to
their capital and for the construction of grain elevators,
depots, etc., have immensely -strengthened their position.
Their number has greatly increased, and their previously
disconnected efforts have been united by the foundation
of the Moscow People's Bank. This bank which started
business in April, 1912, is now their central credit institution.
Operations of small credit banks are shown in the follow-
ing figures :• —
Institutions and
participants
Operations (millions of roubles)
On
Jan. I
No. of
institu-
tions
No. of
partici-
pants
(thou-
sands)
Advances
Own
resources
Deposits
Borrow-
ings
1910 .
1911 .
1912 .
1913 .
1914 .
9-978
11,567
13,627
15,979
17,933
4,644
5,578
7,095
9,008
10,678
213-0
279-2
389-8
5247
673-0
75-0
87-0
1090
130-0
1577
144-2
198-8
284-7
365-0
466-0
24-9
377
58-9
105-4
128-0
Long-term credit. In a predominantly agricultural country
like Russia, where urban civiHzation is not of long standing
long-term credit is very important, providing owners of
real estate with the capital required for estate improvements
and for the development of town lots.
Long-term credit operations are conducted by 56 institu-
MONEY AND CREDIT.
387
tions, of which two are of the type of State banks for particu-
lar classes (the Nobility's and Peasants' Land Banks), one a
zemstvo, andten joint- stock banks, the remainder belonging
chiefly to the co-operative banks of land and property owners.
This credit is usually realized in the form of land mortgage
to the bank for a term mostly up to 43 years 6 months —
66 years 6 months, mortgage on buildings, gardens, etc.,
for a term of 14 years 6 months,. 18 years 7 months, and
26 years 9 months. The mortgaged real estate is valued
on the basis of existing prices, and loans are to the mort-
gager to the amount of 60 per cent, of the estimated value ;
in the case of co-operative banks the proportion is raised to
75 per cent, if the mortgaged immovable is allowed. Pay-
ment of loans is usually made in 4I per cent, debentures,
these always finding a ready sale.
Latterly, owing to the rise in the price of land, resulting
from the growth of the urban population and the high
price of cereals, long-term credit operations have been
greatly extended. The figures below show the development
of the indebtedness of extra-urban and urban real^ estate
(in millions of roubles) : —
Extra-urban
Years
real estate
(land-owner-
ship)
Urban
real estate
Total
1870-1879
3537
218-5
572-2
1880-1889 . . .
776-5
416-1
1192-6
1890-1899
1246-4
620-6
1867-0
I 900-1 909
21237
II68-6
3392-3
On January i —
1910 ....
2773-1
1265-2
4038-3
1911 ....
30517
13937
4445-4
1912 ....
3300-2
1496-8
47970
1913 ....
3478-8
1642-6
5I2I-2
The Law of June 26, 1912, founded, as a State establish-
ment, the Zemstvo and Urban Credit Bank, the object of
which is to make loans to zemstvos and towns and to carry
388 RUSSIA: ITS TRADE AND COMMERCE.
through the realization of zemstvo and urban debenture
loans ; by the same law the right is granted to joint-stock
land banks to issue loans to zemstvos and towns without
mortgage security. Up to January i, 1917, the Bank had
issued long-term loans to municipalities for 26,351,000
roubles, and short-term loans for 8,376,000 roubles ; to
zemstvos, long-term loans for 15,480,000 roubles, and short-
term loans for 16, c 82,000 roubles.
Chattel credit in Russia is served by a series of pawnshops,
of which two are national, eighteen joint-stock, and 105 muni-
cipal. State pawnshops operate principally with pledges
and storage of valuables ; chattel credit in the broad sense
of the word is provided by joint-stock and municipal pawn-
shops. General data about the operations of pawnshops
are given below (in millions of roubles) : —
On Jan. i
Advances
Capital (fully
paid and
reserve fund)
Borrowings
1900
19IO
191I
I912
1913
I914
28-1
53-8
54-4
587
637
68-2
19-8
317
35-2
40-5
43-8
46-9
I2-I
34-3
30-3
39-5
39-4
44-4
In conclusion we must mention the savings banks. These
were founded in Russia by the Law of October 16, 1862,
but, owing to the general economic conditions of the country
at that time, they did very little business. With the growth
of commercial life came the growth of these banks. Per-
ceptible increases in deposits began in 1890-1900.
A new Law issued on June i, 1895, substantially simplified
the opening of new banks, and at the same time offered the
depositor many important conveniences which greatly
facihated operations.
MONEY AND CREDIT.
3«9
No. of
savings banks
No. of savings
Balance of
On ]i
in. I
banks books (in
thousands)
money deposits
(mil. roubles)
1870 .
64
67
4-8
1880 . .
75
97
7-6
1890 .
" 871
638
III-3
1900 .
4781
3.145
608 -3
19IO .
7.051
6,940
1282-9
191I .
7.3^5
7.436
1396-8
I912 .
7.705
7.973
1503-0
I913 .
8,005
8,455
1594-9
I914 .
•
8,553
8-992
1685-4
According to the statute, the maximum hmit for any
single depositor is 1,000 roubles, and for hypothetical
persons 3,000 roubles ; amounts in excess of these limits
are converted into securities. Nevertheless, by a regulation
of the Council of Ministers sanctioned by the Emperor on
June 7, 1915, the Minister of Finance is empowered to
authorize individual savings banks to accept deposits
without restriction of amount. Depositors may purchase
securities on account of their deposits through the banks
which deal with such securities free of charge.
Savings bank deposits in securities are shown below :—
On Jan. i
No. of bank
books (thousands)
Balance of deposits
in securities
(mil. roubles)
1910
1911
1912
I913
1914
189
193
200
211
231
279
287
300
318
349
As a rule the savings banks pay 3-6 per cent, on deposits.
By the Law of May 30, 1905, life insurance business was
added to deposit operations. Until recently savings banks
390 RUSSIA: ITS TRADE AND COMMERCE.
deposits were invested in securities, chiefly State funds,
mortgages, and railway loans guaranteed by the Govern-
ment. Under the Law of June 21, 1910, several changes
were introduced : 10 per cent, of the annual increase in
deposits is allotted to small credit institutions in the form
of loans for long periods (up to twenty years), as contribu-
tions to the ordinary capital of such institutions, and also
for shorter periods, if used for the purchase of stock (periods
up to three years) or for estate improvements (periods up
to five years).
V
Progress in the domain of banking and credit in
Russia has resulted in the creation of a national money
market. The Russian money market regarded as an
important independent financial system is a product of
recent economic development. Only recently has it acquired
the characteiistics of the rich foreign money markets. Up
to the end of the nineteenth century, the Russian market
had difficulty in meeting even the limited demand for
money on the part of current business, and was of almost
no importance as a market for capital. All loans of any
importance were concluded abroad. Indeed, even now,
notwithstanding an extraordinary growth of resources, the
Russian money market is comparatively small. Owing to
the low average level of material well-being the accumula-
tion of capital is a slow process. By no means all classes
of the population have been brought within the sphere of
credit relations. Again, the number of banks and savings-
banks, although it has increased very considerably in
recent years, is yet insufficient when compared with the
size and population of the gigantic Russian Empire. The
following figures give the growth of capital and
savings : —
MONEY AND CREDIT.
391
I. Savings (Millions of Roubles)
Deposits aiK
i current
accounts in credit institutions and savings
banks in —
At
end of
vear ,
S
at
Jomt-
stock
^ com-
Mutual
credit
Muni- ' Small
cipal .credit
Savings
Total
Growth
( + ) or
decrease
B
an
mercial
socie-
banks
institu-
banks
(-)for
banks
ties
tions
year
1900 I
6^
5 536
178
97
662
1,641
. .
1901 I
8^
t 545
180
98
—
723
1,730
89
1902 2
5;
613
198
102
—
784
1.954
4-224
1903 2
35
722
216
107
— ■
860
2,136
+ 182
1904 2
5^
) 77^
215
109
—
911
2,266
4-130
1905 2
6.
[ 671
191
108
• — ■
831
2,065
-201
1906 . 2
4S
) 761
203
109
—
1.035
2,357
4-292
1907 ' 2
3]
[ 818
229
1 10
95
I-I49
2,632
+ ^75
1908 2
IC
> 976
271
115
113
1,207
2,892
4-260
1909 2
7-
} 1,262
329
129
144
1,283
3,421
4- 52^'
1 910 2
6
[ 1,675
406
146
199
1.397
4,084
4-665
I9H 2
5^
i 1,817
487
166
285
1-503
4,516
+ 432
I912 2
6(
) 2,293
545
183
365
1.595
5-247
4-740
I913 2
6^
J 2,539
595
198 466
1,685
5.746
4-499
II.
L
^lOUNT OF
Secur
ITIES (MiLLIC
)Ns OF Roubles)
Secun
ti
es distnb
uted i
ti this countr
y:-^
At end
Governme
Stocks an
other secu
nt
d
ri-
J
a
tlortgages
issued by
oint stock
nd public
Total
Growth (-f )
or decrease
of year
ties guarant
by the
Governme
3,212
eed
nt
m
tut
t
utual insti-
ionsof long-
grm credit
(— ) for year
1900
1,903
5-II5
I9OI
3,382
1,960
5.342.
4- 227
1902
3-434
2,070
5,504
4- 162
1903
3,563
2,157
5,720
4- 216
1904
3.912
2,230
6,142
+ 442
1905
4,462
2,252
6,714
, + 572
1906
4,739
2,247
6,986
+ 272
1907
4,906
2,229
7,135
; + 149
1908
5,151
2,257
7,408
+ 273
1909
5-354
2,356
7,710
4- 302
191O
5,505
2,565
8,070
4- 360
I9II
5.782
2,793
8,575
+ 505
I912
6,027
2,956
8,983
+ 408
I913
6,238
3,142
1
9.380
+ 397
Registered in the credit institutions of the country.
392 RUSSIA: ITS TRADE AND COMMERCE.
III. Capital of Joint-stock Enterprises (Mill. Roubles)
Capital of commercial and industrial enterprises and
railway companies : —
,
Commercial and industrial undertakings
At end
of
year
Ordi-
nary
Deben-
tures
Total
Joint-
stock
railway
companies
Total
capital
Growth
( + )or
decrease
{-)for
year
1900
1,742
199
1,941
144
2,055
I9OI
1,899
211
2,120
116
2,236
+ 181
1902
1.990
233
2,223
116
2,339
+ 103
1903
2,016
233
2,249*
116
2,365
+ 26
1904
2,134
233
2,367
116
2,483
+ 118
1905
2,391
309
2,700
116
2,816
—
1906
2,517
323
2,840
116
2,956
+ 140
1907
2,635
318
2,953
116
3,069
+ 113
1908
2,774
321
3,095
132
3.227
+ 158
1909
2,819
323
3,142
139
3.287
+ 54
I9IO
2,999
319
3,315
140
3.458
+ 177
I91I
3,301
341
3,642
~
~
The above tables clearly show that the growth of capital
and of savings in Russia has in recent years been extremely
rapid. This rapid growth is closely connected with the
increase in the funds at the disposal of the Russian money
market, in which the current, mobile resources of the
country are concentrated. To make our picture more
complete we include in the following table the capital
belonging to the banks themselves.
Thanks to this growth of resources, the Russian
money market has been able to solve many important
national economic problems. In recent years Russia
has obtained enormous sums from her home money
MONEY AND CREDIT.
393
market and national development has been based mainly
on national capital.
Funds at disposal of the Russian Money Market (Mill.
Roubles)
Private credit
institutions
(Joint-stock
companies,
banks, mutual
credit institu-
tions and
municipal
banks)
State Bank
Total
Total
At
end
of
year
De-
posits
(not in-
Capital eluding
[Govern-
ment
j money)
Own
capital
De-
posits
Growth
for
year
Own
capital
De-
posits
1900
190I
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
354
356
344
363
365
371
395
412
424
456
589
736
941
1,047
811
822
913
1,042
1,099
969
1,073
1,157
1-363
I-719
2,227
2,470
3,011
3,332
55 168
55 184
55 257
55 231
55 255
55 264
55 249
55 231
55 210
55 274
55 261
55 258
55 266
55 i 263
409
411
399
418
420
427
450
467
479
511
644
791
996
1,102
979
1,060
1,170
1,273
1,354
1,233
1,322
1,388
1,573
1-993
2,488
2,728
3,277
3,595
1,388
I-471
1-569
1,691
1,774
1,660
1,772
1.855
2,052
2,504
3,122
3,519
4,273
4.697
+ 83
+ 98
+ 122
+ 83
-114
+ 112
+ 83
+ 197
+ 452
+ 618
+393
+754
+424
In contradistinction, however, to the wealthy markets of
Western Europe, short-term investments are still the most im-
portant part of the Russian market. National capital cannot
yet meet all the national needs, to say nothing of foreign in-
vestments. This state of affairs is due to two causes — to
the comparative slowness of the process of capital-building
and to the increased demands for capital in consequence
of continued extensive internal economic development.
The outlays of the Russian money market in short-term
investments are given below.
394 RtfSSIA: ITS TRADE AND COMMERCE.
Balance on account of Active (Asset) Operations of the
State Bank, of Private Commercial Banks, Societies
of Mutual Credit and Municipal Banks (Mill. Rbls.)
1
Advances against
security of merchandise
Growth
for year
On Jan. i
Discount
and documents of
title to merchandise
Total
upon short-term
investments
Lgo8
1,164
819
1.983
1909
1,268
811
2,079
+ 96
I9IO
1444
942
2,386
+ 307
I9II
1,889
1,461
3.350
+ 963
I912
2,353
^^m
4,126
+ 776
1913
2,693
2,074
4.763
+ 637
I914
2,878
2,313
5.I9I
+ 488
The above figures do not include the outlay of private
banking houses and numerous small credit institutions.
A guide to the capacity of the Russian capital market
may be found in the issues of securities, the data for which
are available only for the following years : —
New Issues of Russian
Securities (Mill, of Rbls.)
In Russia
Abroad
Total
Per
cent.
Per
cent.
Per
cent.
1908 .
645-2
65-9
254-4
34-1
899-6
100
1909 . . .
449-8
79-3
345-5
20-7
795-3
100
1910 .
713-8
1T1
205-1
22-3
918-9
100
1911 .
980-3
56-6
256-0
43-4
1236-3
lOO-O
1912 .
868-0
71-7
448-3
28-3
1316-3
lOO-O
Total for five
years .
3657-1
70-8
1509-3
29-2
5166-4
loo-o
Average for
year .
731-4
70-8
301-8
29-2
1033-2
loo-o
For the period under review the money market met the
home demand with fresh capital of from 450,000,000 roubles
MONEY AND CREDIT. 395
to 980,000,000 roubles annually, or, on an average, 731,000,000
roubles a year, i.e., more than two-thirds of all the Russian
issues.
This supply of capital is considerable, especially if we
remember that previously Russia may be said to have had
practically no money market of her own. Nevertheless,
even in recent years, about one-third of Russian issues
have been placed abroad, thus giving rise to an influx of
foreign capital. The direct consequence of the extensive
use of foreign capital has been large foreign indebtedness.
Russia's national debt, and in particular her foreign in-
debtedness are greater than those of most other Great
Powers.
In Russia discount and loan rates are higher than in
wealthier countries : the insufficiency of the home supply
of capital and the consequent necessity of attracting capital
from abroad compel high rates of interest to be maintained.
During the past five years the discount rate in London has
touched i^ per cent., and in Paris to i| ; while in Petro-
grad it has only fallen to 4^ per cent. On the Russian
money market, by reason of its comparative unimportance
in the realm of international finance, by reason, further,
of the imperfection of its mechanism of payment and settle-
ment, and of the fact that the demand for money almost
invariably exceeds the supply, fluctuations of the discount
rate are reduced to a minimum. The rate is affected only
by economic causes of a general national character and
by movements influencing the international money market
as a whole. The maximum increase of the discount rate
in Russia is observed in the autumn and winter months,
when there is a very big demand for money for the handling
of the harvest of corn, cotton, and beet.
The repayment of that money, owing to material defects
in the payment and settlement system, takes place very
slowly and ends only in March. In spring the market
is very well supplied with money, and at that time the
discount rate falls to its lowest point. It remains at a
reduced level approximately until July, i.e., till the
Nizhni-Novgorod Fair Settlements at the Fair make great
396 RUSSIA: ITS TRADE AND COMMERCE.
demands : the discounting of market bills alone exceeds
50,000,000 roubles. From this moment the tendency to
an increase in the cost of money begins to make itself
felt, and is particularly strong from the middle of
September to the middle of October. High discount
rates are maintained till December, and then, gradually
falling, reach their lowest level during the spring months.
In addition to these causes the Russian discount rate
is affected by the state of the foreign discount markets.
The cheapness of money abroad enables the Russian money
market to make extensive use of foreign credits, to increase
its resources by borrowing for short periods on the rich
Western European money markets. If the discount rate
is low on these markets, more use is made of foreign
money, if it is high, then the amount of short-
term indebtedness to the foreign money markets is
reduced ; and both conditions, of course, influence the
level of the discount rate in Russia. When cheap foreign
money is being freely used, the private discount rate on
the Russian market declines without reference to the
official discount of the State Bank ; when the supply of
foreign credit is restricted, the rate rises very often
reaching, and occasionally even exceeding, the Bank rate.
Hence the state of foreign money and discount markets is
of very great importance for the Russian money market.
Thus a rise in the discount rate in Paris, where an enormous
quantity of Russian bonds is held, or in London, the centre
of international financial settlement operations, almost
always compels Russia to raise her discount rate corre-
spondingly.
The discount rate in Russia is also affected by the
predominance of six- or nine-month bills over shorter-term
bills, by the distance between the centres of economic lite
of the country, the vastness of the country as a whole,
the lack of communication, the preponderance of raw
material in the export trade, the insufficient organization
of commercial inquiry bureaux, defects in commercial
legislation, etc.
Private discount in Russia is entirely unregistered. Data
MONEY AND CREDIT.
397
regarding the movement of official discount rate of the
State Bank are given above.
The rate of interest on capital in Russia, as in every other
country is subject to considerable fluctuations, varying in
different geographical regions and according to the nature
of investment. Its minimum, determined by the return
of capital invested in fundamental forms of State debt,
fluctuates about 4 per cent. ; money invested in other
securities, on which a fixed rate of interest is paid on the
par value, for example, various kinds of mortgages, give
about 4I per cent.-4j per cent. ; the capitalization of
solid dividend stock, for example, bank shares, fluctuates
approximately about 6 to 6| per cent., i.e., the rate of
interest on capital invested in solid private enterprises con-
stitutes in Russia, on an average, not less than 6-6| per cent.
For the facilitation of payments and settlements the
Russian home market possesses special institutions — clear-
ing houses — attached to the large branches of the State
Bank. Their operations during recent years are shown
below (milhons of roubles) : —
Settled
by
Per-
Claims
trans-
centage
No. of
presented
Met by
fers
of
Total
No. of
bran-
for
counter
from
claims
trans-
partici-
ches
payment
claims
one
met by
actions
pants
current counter
a/c to
claims
another
1900
3
2,811
1,954
857
69-4
5,622
48
I90I
3
2,975
2,026
948
68-1
5,949
48
1902
3
3,624
2.507
1,116
69-0
7>247
51
1903
5
4,770
3.432
1,338
71-9
9,540
64
1904
5
5,449
3.986
1,463
73-1
10,898
75
1905
5
6,337
4,528
1,809
71-5
12,674
77
1906
5
5.999
4,363
1.635
727
11,997
73
1907
10
6,697
4,916
1,781
73-4
13.394
122
1908
16
8,422
6,007
2,415
7^-3
16,844
184
1909
24
9,885
7,003
2,881
70-8
19,769
230
I9I0
27
13,434
9,525
3,909
70-9
26,868
277
I9II
32
15,409
10,773
4,636
70-0
30,818
326
I9I2
40
19,855
14.414
5,442
726
39.711
402
I9I3
45
21,431
15,426
6,005
71-9
42,863
430
398 RUSSIA: ITS TRADE AND COMMERCE.
In view of Russia's heavy foreign indebtedness, the
regulation of foreign payments is chiefly effected by the
aid of special measures, by a policy of regulation of the
foreign exchanges. Large sums are required to meet
obligations in foreign countries. In order to avoid con-
stant shipment of gold and prevent disorganization of the
exchanges, which is always possible under such conditions,
the Russian Ministry of Finance maintains a gold fund
abroad, which serves as a constant source for foreign pay-
ments. This Russian foreign gold fund is kept on current
account with foreign bankers and in foreign branches of
Russian banks. Part of it belongs to the State Bank, part
to the Treasury. The total amount of this gold and its
distribution according to countries was as follows, on
January i, 19 14, (millions of roubles) : —
r ranee ....
Germany . . .
England ....
Holland ....
• 431
• 103
. 46
8
Other countries.
6
594
The actual method of utilizing this gold fund is as follows.
In autumn, when there is a brisk export of corn, large
numbers of the bills of exchange in foreign currency, given
by foreign purchasers in payment for Russian grain, are
bought up. In addition to these purchases the Ministry
of Finance also acquires loans — chiefly debenture stock —
floated by Russian railway companies on foreign markets.
The Ministry takes over the proceeds of these loans in foreign
currency, and itself pays the railway companies in roubles.
Altogether the foreign gold fund is a very important part
of Russia's mechanism for effecting foreign settlements.
Thanks to this fund, the possibility of a marked rise in the
exchanges and consequent efflux of gold to foreign countries
is held in check by the fact that a stock of foreign currency
is always available.
In this connexion the so-called " report " oj)eration of
MONEY AND CREDIT. 399
the State Bank is also of great importance. This opera-
tion consists in the State Bank buying foreign currency
(bills, cheques, etc.), from private banks and industrial
undertakings for a certain number of roubles. At the
same time the Bank promises to repay the same sum in
foreign currency at a fixed date upon repayment to the
Bank of the same sum in roubles. The " report " opera-
tion thus in effect insures the rate of exchange and allows
foreign banks to open credits to Russian banks and indus-
trial undertakiags without any risk of loss arising from
variations in tlie rate of exchange. Apart from the " re-
port " operation, the State Bank also engages in the pur-
chase and sale of foreign bills and cheques (in foreign cur-
rency) at its Petrograd, Moscow, Warsaw, Odessa, and
Riga branches. It deals both in bills actually on the
market and also in bills for delivery at a stipulated period
in the future. The Bank buys short bills (not over three
months), cheques on sight. It also purchases bills paid in
to the account of Russian exporters by foreign purchasers
at the agencies of the Bank abroad, and gives the exporters
the right to receive the equivalent in roubles at any of the
branches of the Bank. The State Bank further sells bills
{papier fait, and drawn on foreign correspondents of the
Bank), cheques, foreign currency from the amounts stand-
ing to the Bank's credit abroad, foreign bank-«o/^s, etc.,
and also grants credits secured by bills drawn on its own
correspondents (the term of such bills not exceeding six
months) .
These measures facilitate Russian settlements with foreign
countries and strengthen the position of the Russian money
market.
The principal market for stocks and shares in Russia is
the Petrograd Stock Exchange, followed in importance by
the Moscow Exchange, and to a less degree by the Exchanges
of Warsaw, Riga, Odessa, Kiev, and Kharkov. The Petrograd
Stock Exchange was founded in 1703, but it was in 1900
that it was organized for stock and foreign exchange business,
as a section of the general Bourse. It is now regulated by
the rules of January 10, 1901, and is made up of : —
400 RUSSIA: ITS TRADE AND COMMERCE.
1. Actual members consisting of representatives of banks,
who pay a member's fee of 200 roubles a year.
2. Regular visitors possessing business certificates of
the first category in Petrograd, who also pay 200 roubles
yearly.
3. Guests with the right of visiting the Exchange only
on the recommendation of actual members.
The actual controllers of the Stock Exchange are those
who form the Council of Administration, chosen from the
actual members. This Council supervises the quotation
committee, which also includes representatives of the
Ministry of Finance, the Institute of Brokers, etc.
Regular visitors may only attend general meetings of
the Stock Exchange, and can only do business through
brokers. For actual members, on the other hand, brokers'
services are not compulsory. The stockbrokers must be
recognized by the Ministry of Finance, and are obliged to
deposit a security of 15,000 roubles, besides being sworn in.
Brokers are forbidden to deal on their own account. For
their participation in the stock and foreign exchange transac-
tions they receive a commission at rates sanctioned by the
Minister of Finance, viz. : for transactions in stocks,
y\y per cent, of the amount of the transaction from both
the seller and purchaser ; for transactions in shares of low
value, not less than 15 kopeks per share from both parties ;
for discount of accepted foreign bills of exchange, according
to the term, from 3^,- per cent, to | per cent, from the dis-
counter and the seller of the credit liabilities ; for transac-
tions in foreign drafts and cheques, j\, per cent, from the
seller.
In practice, the scale of commissions is not strictly
applied.
On the Petrograd Stock Exchange the rules of November
10, 1907, regulate transactions in stock on hand and for
delivery at a stipulated date. Such transactions for future
delivery are, however, very different from the analogous
" dealings in futures " on other European exchanges.
They are without some of the essential elements of " fu-
tures " and their settlement, contrary to foreign practice,
MONEY AND CREDIT. 401
takes place directly between the parties themselves without
the intervention of an intermediary institution. The result
of the absence of real dealing in futures on the Russian
Stock Exchange has been to affect prejudicially the extent
and stability of the business done. At the beginning of
1914 this defect was to be eliminated by the introduction
of genuine future transactions on the Petrograd Stock
Exchange.
On business days the quotation committee draws up
an official Stock Exchange bulletin which is published in
Russian and French. Besides information about the state
of discount and transactions in foreign exchange, the bulletin
gives data (i) regarding the nominal (face) value of stock,
dates of payment of coupons of loans bearing a fixed rate
of interest, dividends on shares during the last three years
and the working-years of industrial undertakings (2) prices
for extensive as well as for small transactions, buyers' and
sellers' prices at the closing of the Exchange and official
closing prices. The absence of single quotations is a defect
of the Petrograd Stock Exchange bulletin. Admission of
securities to quotation on the Exchange takes place in
accordance with the rules of September 5, 1902. According
to these rules Government stock and securities backed by
a Government guarantee are admitted to quotation on an
order to that effect from the Minister of Finance. Munici-
pal loans, mortgage bonds of private and mutual long-term
credit institutions, and all kinds of industrial .and com-
mercial shares and debentures are admitted by resolution
of the Exchange Council. In this case documents relating
to the origin and activities of the undertakings in question
— statutes, balance-sheets, reports, etc., etc., have to be
laid before the Council. The minimum amount of a stock
to be quoted on the Exchange is usually fixed at 500,000
roubles at par. The usual denominations of shares are
100 and 250 roubles, while 1,000-rouble shares are not
infrequent.
The nominal (par) value of securities quoted on the Petro-
grad Stock Exchange amounted on January i, 1913. to
over seventeen milliards of roubles.
DD
402 RUSSIA: ITS TRADE AND COMMERCE.
The distribution of these securities was as follows (in
millions of roubles) : —
I. With Fixed Interest.
Loans :
State and State railways
8.623
Private railways . . . .
1,574
Municipal . . . . .
240
Mortgages :
State land banks . . . .
2,061
Joint-stock land banks ,
1775
Co-operative land banks
1,161
Debentures :
Joint-stock commercial and indus-
trial enterprises
98
II. Stocks and Shares.
Steamship Companies ...
48
Insurance and transport companies
54
Railways .....
114
Commercial banks
452
Land banks, . . ...
88
Pawnshops ,
II
Distilleries and breweries
II
Colliery and mining enterprises
46
Petroleum undertakings
94
Glass ......
15
Cement . . . . .
18
Metal and mechanical .
• 297
Manufacturing ....
. 83
Water, gas, and electricity .
52
Various .....
122
Total ..... 17,037
The total number of securities dealt in at that time
amounted to 618, of which 323 were loans and mortgages
and 295 shares.
To complete our picture we give figures showing the
number and total par value of Russian securities quoted
abroad on January i, 1915 {sec page 403).
VI.
The war has ver}^ deeply affected the money markets of
many countries, and that of Russia among them. At the
present moment, however, this influence cannot be exactly
MONEY AND CREDIT.
40:
Fixed
interest
stocks
and Share
Total
Amount
Amount
Amount
No.
(mil.
roubles)
No.
(mil.
roubles)
No.
(mil.
roubles)
Paris
69
7^905
71
642
140
8.547
London .
44
5.775
79
268
123
6,043
Brussels .
75
5.443
66
317
141
5.760
Amsterdam .
92
8.502
7
105
99
8,607
Berlin
75
6,443
35
376
no
6,824
appreciated. On the eve of the war there had been a
great industrial boom in Russia, inevitably accompanied
by large imports of foreign goods and a strong demand for
money and capital. These two causes had unfavourably
affected the rate of exchange, thus compelling the State
Bank to keep the discount rate at a high level. Owing to
the exhaustion of the home market and the dearness of
money abroad, it was difficult even at that time to satisfy
the demand. In consequence Russia's balance of foreign
indebtedness showed in 1913 a considerable debit, v/liich
unfavourably affected the rate of exchange of the rouble
and compelled the State Bank to keep the discount rate
at a high level. Even then it was difficult to meet the
increased demand for money and capital, for the resources
of the home money market were exhausted and it was
impossible to make extensive use of foreign credits owing
to the dearness of money abroad. 1914 brought no change.
It is true that the slackening of the trade boom in the world
market made it easier to obtain foreign credits, but the
pohtical complications of the spring of 191 4 and Russia's
less favourable balance of trade did not allow the Russian
money market to attain normal conditions. Under such
circumstances, the declaration of war could not fail to
result in financial disturbance. The declaration of war on
July 19 (old style) everywhere put the whole money and
credit system out of gear, and at times the disturbance even
assumed the form of a panic.
404 RUSSIA: ITS TRADE AND COMMERCE.
The alarm which took possession of the international
money market soon after the famous Austrian ultimatum
to Serbia spread to Russia and there as everywhere else
led to the Stock Exchange becoming demoraUzed. As the
hopes of a peaceful solution of the points at issue between
the Great Powers gradually faded away Stock Exchange
business collapsed. Large numbers of solid securities fell
with a rush, engendering panic and universal depression.
On July i6 (old style), following the example of the Vienna
and Brussels Stock Exchanges, the Petrograd Stock Exchange
was closed for an indefinite time, by order of the Ministry
of Finance, and the rest of the Russian exchanges followed
suit. Public feeling in Russia eagerly desired peace, and
sincerely believed in the possibiUty of a European settle-
ment without recourse to arms. Thus although the
political crisis which preceded the war lasted a fort-
night, its outcome — the war — came as a complete sur-
prise to the Russian money market. Exaggerated fears
of the German menace to the capital and more especi-
ally to the frontier regions immediately arose. Moreover,
owing to mobihzation, demand for money sprang up every-
where. At this acute moment, however, the assets of the
Russian banks were far from liquid and the closing of the
Stock Exchange deprived them of the possibility of strength-
ening their cash reserve by the sale of securities. Many
banks somewhat lost their heads and in most cases greatly
curtailed their operations, a step which was all the more
natural since the moratorium declared on July 20 affected
a large number of governments (provinces) and left the
banks no hope of a speedy release of sums invested in dis-
counting operations running to many millions of roubles.^
1 By the Ukase of July 20 (August 2) holders of bills of exchange
were granted the right, in the event of non-payment, to postpone
protest of bills without loss of the bills' validity. Subsequently the
Ukase of July 25 (August 7) established a moratorium which post-
poned till September 25 (October 8) payment on account of bills
drawn before the war in the western and southern governments.
The Ukase of November 11 (24) restricted the moratorium to ten
governments, but a general moratorium was left in force for the
theatre of war.
MONEY AND CREDIT. 405
The result of this was a whole number of difficulties, a
pessimistic view of the general financial position and a panic
which affected chiefly the districts adjoining the actual
theatre of war. This panic was, however, short lived, lasting
little more than a week. A very important part in allajdng
the fears of the market was played by the popularity of
the war amongst the people, for the Russian people speedily
became convinced that the war was being waged in a
righteous cause and that the issue would be certain victory
for Russia. Great Britain's active adherence to the
Russo-French Alliance materially aided in the restoration
of confidence.
The State Bank gave great help to the market. By
rapidly opening credit to private banking institutions it
averted the crisis which had begun. How great was this
help will appear from the fact that from July 16 (29) to
August I (14) the indebtedness of joint-stock banks to
the State Bank rose from 179,000,000 roubles to 564,000,000
roubles (+ 385,000,000 roubles), i.e., it absorbed more than
half of the issues of bank-notes effected at that time.
Evidently, under such circumstances, the position of the
State Bank as the central organ of the Russian money
market was subjected to serious trials. While supporting
the market, the Bank was obliged not only to return big
sums on current account belonging to the State, but also
to give to the latter the financial aid indispensable under
such critical conditions.
The position was further complicated by an acute shortage
of foreign exchange material in consequence of the almost
complete stoppage of Russian export and the moratoria
declared in some countries for bank deposits. The latter
circumstance made it impossible for the State Bank to
withdraw the money it had lodged on current account with
its foreign correspondents. Hence arose the necessit}^ of
immediately expanding the Bank's right of note issue, at
the same time suspending the convertibility of the Bank's
notes, and this was done by the Law of July 27, 1914.
Thanks to the Uberal assistance of the State Bank the
disturbance of the Russian money market was not of long
4o6 RUSSIA: ITS TRADE AND COMMERCE.
duration. The deposits which had been withdrawn began
to lind their way back to the banks in the second half of
August, and by September the money market had quietened
down. It was not, however, until October that the state
of the market allowed of the flotation of a war loan, and
even then the loan was a comparatively small one (500
million roubles). Up till then, since it was impossible to
carry out any extensive credit operations in the money
markets of Allied countries, Russia's war expenditure was
covered in the' following ways : —
(i) By utilizing the free cash resources of the State
Treasury (514 milHon roubles).
(2) By the issue of 4 per cent. Treasury Bonds (300
million roubles). Such bonds may be regarded as interest-
bearing money and find a wide market in capitalist circles.
(3) By the issue of 5 per cent, short-period Treasury
Bills (400 million roubles). Such Bills are discounted for
the most part by the State Bank and only in a minor degree
by the joint-stock banks.
Thus even the first three months of the war showed
fairly clearly that for the money market the assistance of
the State Bank was merely temporary. On the other
hand, the assistance afforded by the Bank to the State,
though at first not extensive, was found, in view of the
slight capital resources of the home market and of the
impossibility of borrowing any considerable sums abroad,
to assume very considerable dimensions and further to
become permanent. It was further clear that under such
conditions the rouble exchange, left to look after itself and
deprived of all means of external support, became subject
to chance demoralizing factors which exercised an effect
on the actual rate of exchange quite independent of the
actual strength of the position of Russian currency.
On the basis of these facts there naturally developed
the present system of financing the war in Russia, a system
which has given the Russian money market and the Russian
currency system a distinct character of their own during
the war.
Since the system in question is entirely based on State
MONEY AND CREDIT.
407
credit the chief place in it is occupied by war loans. The
enormous war expenditure, however, has of necessity forced
such loans to be issued with extreme rapidity and has
strained the whole credit and money resources of the nation.
Hence in Russia's system of war finance, along with the
usual form of loans, a large and ever-growing share has
been played by the issue of paper money.
Russia's credit operations up to the present may be
summarized as follows. The long-period loans floated in
the home market are shown in the following table : —
Per
cent.
Issue
price
Amount of
loan (in mill.
roubles)
October 3, 1914
February 6, 1915 ....
April 24, 1915
October 28, 1915 ....
February 10, 1916 . .
October 10, 1916 ....
5
5
5i
5i
5i
5i
94
94
99
95
95
95
500
500
1,000
1,000
2,000
3,000
Total
8,000
Four-year Treasury Bonds, which are issued in denom-
inations ranging down to 25 roubles and which are
accepted in payment at all branches of the Treasury,
have been placed on the home market in the following
amounts : — •
Per
cent.
Price of
issue
Amount
issued (in
mill,
roubles)
August 22, 1914
March 27, 1915 . .
August 14, 1915
4
4
4
100
100
100
300
300
250
Total
850
4o8 RUSSIA: ITS TRADE AND COMMERCE.
Further, the method of utilizing paper money issue has
involved the issue of 5 per cent, short-term Treasury Bills,
which are usually discounted at the State Bank. The
amount issued was at first very small but afterwards greatly
increased. The following table shows the Hmit fixed for
the total issue at various periods.
Maximum fixed for issue
(in mill, roubles)
I2th Issue — August 26, 1915 . . 4,000
13th Issue — December 30, 1915 . . 6,000
14th Issue — June i, 1916 . . . 9,000
15th Issue — October 10, 1916 . . 12,000 — 12,000 ^
The credit operations carried out in the home market
during the war may thus be summarized as follows : —
Long period loans ..... 8,000
Treasury Bonds ..... 850
Treasury Bills ...... 12,000 ^
Total . . . . . . 20,850
In addition, Russia, in order to obtain resources for the
payment of orders placed abroad, has obtained considerable
credits on foreign money markets. By virtue of a series
of Ukases credit operations abroad are allowed for effectua-
tion to the following amounts : —
October 6, 1914 . £12 million
December 22, 1914 . £^0
June 10, 1915 . ^50 ,,
September 9, 1915 . £30
£132 million
March 13, 1915 .... 625 million francs
April 16, 1915 . 200 million roubles
October 9, 1915 . 5,500
June I, 1916 . 225
October 22, 1916 . 2,000
7)925 million roubles
Total ..... 9,410 million roubles
^ At the beginning of December (1916) the actual issue amounted
to 9,125 million roubles, of which 6,236 million roubles were dis-
counted at the State Bank and 2,889 naillion roubles on the open
market.
MONEY AND CREDIT.
409
The total amount to which the Ministry of Finance is
entitled to reaUze loans at home and abroad thus amounts
to the gigantic sum of over 30,000 million roubles.
Internal
External
Russian War Loans
20,850 million roubles
. 9410 „
Total .... 30,260 million roubles
These thousands of millions of roubles have been used
to cover the similarly gigantic expenditure on the war.
The following table shows Russian war expenditure.
Russian War Expenditure
(Preliminary data) (in millions of roubles)
Including
Per Quarter
Total
expenditure
abroad
III Quarter, 1914
950
■ ■
IV
1.247
82
I Quarter, 1915 .
1,598
247
II
1,668
359
III „
2,201
275
IV „
2,808
1,037
I Quarter, 1916
2,757
915
II
3.322
707
III „
3,628
1,351
The Russian currency system has undergone deep changes
during the war, due chiefly to the increasing issue of paper
money for the discounting of Treasury Bills at the State
Bank, to the fall in the rate of exchange of the rouble on
foreign markets, and to the token-money crisis.
In consequence of the increasing demands made by
the discounting of Treasury Bills at the State Bank the
Bank's right of note issue has repeatedly been expanded,
as will be seen from the following table (figures in milhon
roubles') : — ■
410 RUSSIA: ITS TRADE AND COMMERCE.
Expansion of State Bank's Fiduciary Issue
By Law of July 27, 1914 (Decree of July 23, 1914), from 300
million roubles to 1,500 million roubles.
By Law of March 17, 1915, to 2,500 million roubles.
By Law of August 22, 1915, to 3,500 million roubles.
By Law of August 29, 1916, to 5,500 million roubles.
In order to reduce the demands made by the discounting
of Treasury Bills on the State Bank's note issue it was
announced on October 13, 1915, that Bills were to be placed
also with private capitaHsts (the joint stock banks had
even before that date taken over a certain proportion of
the BiUs). This measure was to a certain extent successful.
The desire to increase the Bank's gold reserve has found
expression in various measures — in the prohibition of the
export of gold (September 14, 1915), in the withdrawal
of gold coin from circulation (beginning with July, 1915),
in offering foreign currency at par rates in exchange for
gold coin (from May 19, 1915, to January i, 1916), and
also in the fixing of a premium on gold paid into the Treasury,
the premium amounting to 45 per cent. (January 14, 1916).
Further a portion of the sum raised by means of foreign
loans was, beginning from November, 1915, placed to the
credit of the State Bank, thus increasing the Bank's foreign
resources. ^
In the course of last year Russia experienced a token-
money crisis, which came to a head in Petrograd on August
17, 1915, and was afterwards felt in other districts more
or less connected with the theatre of war and in direct
contact with the stream of refugees from Poland and the
western provinces. The acute shortage of token money
1 In terms of an agreement conchided between the Russian and
the British Governments Russia has exported the following amounts
of gold to Great Britain as cover for credits opened to her in that
country.
End of October, 1914 . 75-3 milUon roubles (;^8 milUon)
Middle of May, 1915 . 94-5 ,, ,, (;^io million)
Middle of November, 1916 94-5 ,, ,, (;^io million)
Total . . . 2643 miUion roubles (^28 million)
MONEY AND CREDIT.
411
was relieved by the issue of stamp money (small change
in the form of stamps of the denominations of 20, 15, and
10 kopecks) (September 28, 1915), and Treasury notes or
tokens of 50, 5, 3, 2, and i kopeck.
The effect of the war on the activity of the State Bank
may be seen from the following table, based on the weekly
returns published by the Bank (figures in milHons of
roubles).
t"^ ^1A
Discounts and
Loans
Liold.
advances
to the
Current
Bank
Note
State on
security
account
of the
circu-
Ad-
of
State
Tn
lation
vances
Trea-
Ex-
J.11
Russia
Abroad
Total
Total
against
securi-
ties
sury
Bills
chequer
I9I4
Jan. I
1,518
170
1,688
1,665
1,604
201
—
608
July I
1,600
144
1,744
1,630
774
116
—
491
July 16
1,604
141
1,745
1,633
777
129
—
514
July 23
1,602
116
1,718
1,860
1,012
217
—
531
Aug. I
1,605
117
1,722
2,321
I,2Q2
252
—
518
Sept. I
1,612
178
1,790
2,554
1,198
212
175
231
Dec. I
1,533
215
1,768
2,846
1,162
258
473
211
1915
Jan. I
1,558
170
1,728
3,030
1,117
253
657
230
Mar. I
1,568
140
1,708
3,152
945
201
1,130
202
June I
1,574
124
r,698
3,477
1,236
601
1,573
491
Sept. I
1,589
52
1,641
4,211
1.235
616
2,423
212
Dec. I
1,607
228
1,835
5,201
1,375
775
3,289
203
1916
Jan. I
1,613
648
2,261
5,622
1,231
632
3.232
271
Mar. I
1,624
946
2,570
5-899
937
407
3,894
209
June r
1,540
1,494
3-034
6,380
1,184
686
3,679
264
Sept. I
1,552
2,055
3,607
7,122
1.246
447
4.420
207
Oct. I
1,554
2,055
3,609
7,587
970
399
5,144
202
Nov. I
1,560
2,055
3,615
8,083
433
504
6,202
212
Nov. 23
1.465
2,150
3,615
8,305
856
520
6,014
215
The chief features of the Russian money market during
the war are caution in the granting of credit, a reduction
412 RUSSIA : ITS TRADE AND COMMERCE.
in the amount of discount material (bills), a serious rise in
the rouble rates of foreign currency, and the authority of
State credit over investments. The reserve which the
money market displays has been in evidence ever since the
early days of the war. War circumstances have not been
in favour of a return to the usual methods of granting
credit. Again the disorganization of goods transport and
the disappearance of stocks (of goods) in consuming centres
have led to a great reduction in credit transactions, i.e.
business is now being conducted almost exclusively on
cash terms. The provinces which used to buy goods from
wholesale dealers in Petrograd and Moscow and pay for
them six to nine months later now pays cash in advance.
The quantity of commercial bills of exchange has thus
been greatly reduced. The occupation of the manufacturing
districts of Poland has also contributed to the shortage of
commercial discount material, for business in these districts
was for the most part carried on by means of commercial
bills.
Reduction in the Amount of Discount Material on the
Market
Approximate Figures
End of 1914 . . . . .10 per cent.
I9I5 50 M
,, 1916 . . . . . 70 ,,
The holding back of supply and the lessening of demand
have in their turn limited the requirements of the market
in respect of capital seeking short-period investment, have
increased the resources available for long-period investment,
and have caused the market rate of discount to fall. The
official discount rate of the State Bank which was raised
on July 15, 1914, from ^\ per cent, to 6 per cent, has since
then remained at the latter figure. The fluctuations in
the private (market) rate during the war may be seen from
the following table (figures represent rate per cent.) : —
1914
1915
191
January
. 6
54
5l
Februar\- .
• 5
5f
• 51
March " .
. . 51 .
• 5i .
• 51
April
. . 5i .
6
• 5i
MONEY AND CREDIT.
413
1914
191 5
1916
Mav . . . -Si
6
• 5f
June
51 •
6
• 51
July.
51-8* .
6
• 51
August
7f •
• 61 .
5f
September
7i •
6
• 51
October
6| .
• 5-1 .
• 5^
November
61
• 5-1 •
5f
December
6i .
• 51
54
The market discount rate in Russia during the war is
in considerable measure determined by the investment of
the resources of the joint stock banks in the discounting of
5 per cent. Treasury Bills, which so to speak compensate
the lack of ordinary discount material. If we further bear
in mind that the free resources of the market have been
mobilized for the flotation of the War Loans, it becomes
evident that the Russian money market, Hke the money
markets of other belligerent nations, now serves ends quite
different from those of peace time and has become simply
an instrument of State credit.
Below will be found data regarding the work of com-
mercial banks during the war (figures in millions of roubles)'
Cash
and
Securi-
ties
~
current
Dis-
Ad-
belong-
De-
Re-dis-
accounts
counts
vances
ing to
posits
counts
in
the
banks
203
banks
Jan. I, 1914
1,546
1,615
314
2,539
335
July I. „
220
1.798
1,482
394
2,808
196
Sept. I, ,,
250
1,817
1,473
435
2,674
448
Dec. I, ,,
303
1,698
1,491
523
2,794
388
Jan. I, 1915
339
1,667
1,523
486
2,873
363
Mar. I, „
305
1.738
1,520
506
3,082
279
June I, ,,
260
1,739
1,491
550
3,308
399
Sept. I, ,,
327
1,896
1,497
408
3,557
433
Dec. I, ,,
293
1,968
1,995
743
3.726
512
Jan. I, 1916
395
1,967
1.749
690
3,931
432
Mar. I, ,,
335
1.738
1,738
697
3,082
279
June I, ,,
376
2,315
1,776
767
4,786
334
Aug. I, „
434
2,724
1,892
727
5,357
267
^ The most recent date for which figures are available.
414 RUSSIA: ITS TRADE AND COMMERCE.
One of the characteristic features of the activity of
institutions granting short-term credit has been the growth
of deposits during the war. The State Bank and the State
Savings Banks show a particularly large increase, as may
be seen from the following table of deposits (figures in
milhon roubles) : —
Private credit
institutions —
joint stock
banks, mutual
state
Bank
state
credit institu-
Savings
Total
j tions, munici-
Banks
1 pal banks ]
(preliminary
data)
Jan. I. 1914 . .
3,218
239
1,685
5.442
July I, „
3.607
238
1,704
5.549
Nov. I, ,,
i 3.427
443
1,721
5.591
Dec. I, ,,
: 3,434
420
1.745
5.599
Jan. I, 1915
4.538
438
1.835
5.811
July I, „
4.053
745
2.135
6,933
Nov. I, ,,
4.165
885
2,336
7.386
Dec. I, ,,
4,160
878
2,378
7,416
Jan. I, 1916
4.342
948
2,375
7.765
July I, „
5.731
1.313
3.043
10,087
Oct. I, „
6,809
1,441
3.458
11,711
Nov. I, „ . .
7,106
1.497
3.598
12,201
Increase on Nov. i,
1916, as compared
with Nov. I, 1915 2,941
612
I,2C2
4,815
The shortage of foreign exchange material which had
been felt even before the war assumed after the outbreak
of hostilities, when exports almost entirely ceased, the
dimensions of a positive famine, and this very seriously
affected the rate of exchange of the rouble.
It was, however, impossible to remove this state of affairs
or even to lessen its prejudicial effects, since foreign indebted-
ness increased owing to extensive imports, mainly of war
material. On the other hand the supply of foreign exchange
MONEY AND CREDIT.
415
material was almost a negligible quantity. The only way
out of this situation was the conclusion of loans abroad.
These, however, could not under the circumstances be very
large, and their proceeds barely sufficed to cover payments
in respect of war orders placed in foreign countries. The
small supplies of bills which were in existence before the
outbreak of war were quickly used up, and later the rate
of exchange of the rouble showed a considerable and steadily
increasing agio.
With a view to counteracting this tendency a special
department was set up on January 25, 1916, in the Credit
Chancellery of the Ministry of Finance. This new depart-
ment was given the task of exercising actual control over
transactions in foreign exchange material and of fixing
rates of exchange for payments to be made in the chief
foreign markets — Allied and neutral. At first this Foreign
Settlements Department was successful in its efforts to
stop the fall in the rouble exchange rate, since its assistance
rendered it possible considerably to counteract the influence
of demoralizing factors which had affected the rouble rate.
Later, however, it played a less important part, chiefly owing
to the abundant supplies of Russian exchange constantly
offered on Allied and neutral markets.
On London {£ sterling)
On Paris (francs)
On Berlin (marks)
Average, Highest
Lowest
Average Highest
Lowest
Average
Highest
Lowest
1909 .
1
94-77
95-55
93-90
37-63 38-04
37-33
46-31
4643
46-00
1910 .
94-57 1
94-80
94-30
37-47
37-57
37-37
46-30
46-30
46-08
191 1 .
94-63
94-85
94-37
37-46
37-71
37-30
46-23
46-30
46-16
1912 .
94-68
95-25
.94-57
37-58
37-80
37-20
46-32
46-51
46-17
1913 •
I9I4—
Jan.
95-04
95-52
94-45
37-62
37-77
37-39
46-41
46-61
46-27
94-85
95-22
94-57
37-63
37-71
37-65
46-32
46-41
46-22
Feb.
94-84
95-05
94-67
37-62
37-69
37-58
46-39
46-50
46-47
March
95-01
95-10
94-97
37-72
37-79
37-66
46-47
46-50
46-40
April
95-35
95-62
95-10
37-90
38-00
37-79
46-57
46-65
46-47
May-
95-74
95-90
95-45
38-01
38-09
37-87
46-68
46-78
46-53
June
95-72 95-92
95-45
38-02
38-11
37-90
46-68
46-73
46-58
July
1-15
96-07
96-85
95-72
38-18
38-55
38-01
1
46-77
47-00
46-71
4i6 RUSSIA: ITS TRADE AND COMMERCE.
The fluctuations of the rate of exchange of the rouble
before and during the war are shown in the following table : —
Roubles for /"lo
Roubles
in francs and francs
n roubles
In London
In Paris
for
— francs
100 R.
In
Petrograd
In
kopecks
Petrograd
I franc
(Settle-
(Foreign
ments De-
Settle-
Highest
Lowest
partment
quotations
Highest
Lowest
ments
Depart-
ment
quota-
tions)
I9I4
From Jan. i-July 15
96-85
94-57
—
265i
254
—
,, July 15-Dec. 31
125
1 10
— ■
240
205
. —
1915
,, Jan. i-Dec. 31
161I
I49i
—
240
169
—
1916
January
163I
153-1-
159-152
181
168
57-54i
February
151
150^
152-149
185
181
54-53
March
157
i5oi
149
192
182
52i
April
156
1502
149
184
178!
53-52i
May
. 157
155
149
180
I76i
53
June
I55f
155I:
149
1 86 J
178
53
July .
I57i
i55f
149-144
i84i
177
53
August .
1 56!
135-139
144
202
177
53-5 1 i
September
I52i
I45i
144
I94i
180
52
October .
161A
I53i
144
i88i
171
52
November
1 62 J
154
144
178^
167
52
So considerable a fall in the rate of exchange of the
rouble was naturally felt as a hardship both by Russian
exporters and by foreign, more particularly by British
importers. None the less, very few attempts have been
made to deal with the disorganized state of the exchange.
British banks in a few cases have opened draft credits for
Russian banks of good standing, the settlement with regard
to such credits to be effected at a rate of exchange which
is to be fixed on the first day after the re-opening of Petro-
grad Stock Exchange. Such operations, however, have
for the most part been carried out on a comparatively
slight scale. The Treasury could meet only a small pro-
portion of the demands made by private importers
for foreign currency. The result has been that prices of
MONEY AND CREDIT. 417
imported goods have risen very considerably and consumers
have in consequence had to pay enormous additional sums.
In this connexion one may note the Imperial Decree of
November 15, 1914, which regulates payments to foreign
countries, the aim being to protect the national mone}^
market. The Decree imposes the following prohibitions : —
(i) It is forbidden to make payments or send securities
of any kind.
(2) It is forbidden to export mioney, securities, silver,
gold, and platinum to the amount of more than 500 roubles
for each person.
An Order issued by the Minister of Finance on March
26, 1915, interpreted the second prohibition as permitting
the free export of cheques, transfers and letters of credit,
payable abroad without any restrictions as to the sums
involved. ^
The Russian Ministry of Finance negotiated with the Bank of
France the loan of 500 milhon francs, to be repaid within a year
after the war, in gold or in francs, without interest. The proceeds
of the loan were used to repay to the French market debts con-
tracted by banks or merchants and industrial enterprises who
were not able to find bills of exchange to repay their creditors.
The loan was made to the Russian State Bank under guarantee of
the Russian State. The contract was signed in February, 191 5,
by the Governor of the Banque de France and M. Arthur Raffa-
lovich, financial attache to the Russian Embassy.
E E
CHAPTER XVI
Joint Stock Companies
By a. Kahan-Shabsay
The existing laws as to Joint Stock Companies and partner-
ships ^ have been evolved from the Law of December 6,
1836, which has remained without change up to the present
time. However, as the Statutes ^ of Joint Stock Companies
are confirmed by the Government and become valid only
on the notification of Imperial consent, a special legislation
has been created in connexion with Companies, which has
become almost an integral part of the general law.
This special legislation takes the form of Statutes of
separate Companies, which not only supplement, but in
many respects change the aspect of and abrogate the general
law.
In this connexion, it is necessary to consider separate
Statutes, as most of these contain a series of resolutions
which are not in agreement with the general law upon the
same subjects. In each set of Statutes there is a reference
to the general law, but it may be affirmed that this law, which
takes the form of an explanatory memorandum on the
regulations for Joint Stock Companies, drawn up as far
back as 1872, exists on paper only. As a matter of fact,
there arc, at present, no general company regulations in
Russia. This is certainly true as regards the statutes of
1 Articles 2126-2198, Vol. X, Part I, Civil Laws ; Arts. 63, 64,
77, 78, Vol. XI, Part II, Trading Statutes.
* Statutes are the articles of association sanctioned by the Im-
perial authority.
418
JOINT STOCK COMPANIES. 419
individual companies, but the order in which they are
confirmed shows greater uniformity, although practice
has introduced quite appreciable digressions from the
procedure established by the out-of-date law. The uni-
formity in the order of forming Joint Stock Companies
was the source from which sprang the diversity in the
provisions of the Statutes themselves. Each of the Govern-
ment Departments to which the Statutes are referred for
examination, in the endeavour to include in the Statutes
of newly formed Companies the greatest possible number
of safeguarding conditions, introduces various regulations
largely dictated by experience of the practical working of
Statutes confirmed earlier.
Having adopted the general principle that no Joint
Stock Company can be founded without special sanction
of the Government (Article 2140, Vol. X., Part I), the law
established an exception in connexion with the formation
of Joint Stock Banks having a foundation capital of not
more than five million roubles. Joint Stock Rural Banks
and private Pawn Shops. The Statutes of these credit
institutions are confirm.ed by the direct authority of the
Minister of Finance when they are in agreem.ent with the
text of the Imperially confirmed Statutes of the Warsaw
Discount Bank, of the Azoff-Don Commercial Bank
and with the Statutes of the Charkoff, Petrograd-
Toula and the Poltava Joint Stock Land Banks, and of
the Company for mortgage of property in Petrograd and
the private Pawn Shops of Petrograd and Odessa. All
other Joint Stock Companies, from the largest to the
smallest, cannot be formed without Imperial sanction.
Requests for permission to form Joint Stock Companies
are sent for examination to the Ministry within whose
competency falls the object for which the Company is to
be formed (Article 2189). In the majority of cases this
means the Ministry of Trade and Industry ; but the Statutes
of Joint Stock Companies, whose activities are to be directed
to municipal services, or the exploitation of electrical or
building enterprises, are examined by the Ministry of In-
terior, while Statutes relating to credit operations are sent
420 RUSSIA: ITS TRADE x\ND COMMERCE.
up for examination to the Ministrj^ of Finance. As, how-
ever, the great majority of Statutes are lodged for examina-
tion with the Ministry of Trade and Industry, we shall
restrict ourselves to setting forth the practice established
in that Ministry, which has a special " Joint Stock
Department."
To the petition for confirmation of the Statutes of a
newly formed company, there is attached the project of
the Statutes themselves, duly signed by the promoters,
and a so-called explanatory memorandum. The latter
must contain an exposition of the grounds on which the
financial and commercial calculations of the promoters
are based. Although the law makes the reservation that
the sanction for the formation of a Company does not carry
with it the Government's guarantee of the success of the
enterprise itself (Article 2142), the same law establishes
(Article 2131) that Joint Stock Companies are formed
" In the interests of the political economy of the Empire,"
and would seem to impose upon the Government the duty
of examining the extent to which each projected Joint
Stock Company corresponds to the "Interests of the Empire's
political economy." However, as neither the law nor the
Ministry require from the promoters any proof of correct-
ness in their calculations as to the success of the enterprise,
the presentation of the explanatory memorandum has been
transformed into a pure formality which has no influence
on the final decision.
At the present time the Statutes themselves do not
demand much attention or examination on the part of the
Ministry, as in the great majority of cases they arc an
exact copy of Statutes already confirmed. Just as in
England the adoption of normal Statutes by a Joint Stock
Company (Table A, law of 1908) relieves the promoters
of the necessity of drawing up Articles of Association, so
in Russia the lodging with the petition of proposed Statutes
which are copies of those already confirmed will, in most
cases, assure the success of the petition. In so far as the
projected Statutes of a newly incor^^orated Joint Stock
Company do not contain any digressions from the law
JOINT STOCK COMPANIES. 421
established by practice, the procedure of examining the
proposals in the Joint Stock Department is reduced to
making a report to the Ministry of Interior, without which
no Statutes can be confirmed. In this case, about six
months elapse from the time of lodging the petition to the
final confirmation of the Statutes. If the proposed Statutes
do not represent an exact copy of Statutes which have
been previously confirnicd, the procedure of the Ministry
is somewhat complicated and sometimes delayed.
The law requires that the Ministry shall include in the
projected Statutes such changes as it renders necessary,
but only after notifying the promoters (Art. 2196) or their
lawyers ; if the promoters are not agreeable to making
the suggested corrections, the projected Statutes are returned
to them unconfirmed. This necessitates the promoters
being summoned to the Ministry to give explanations of
each change, however small, and they, or their lawyers,
must appear for such negotiations. Questions which are
especially the subject of negotiations between the Ministry
and company promoters are —
I. The definite title derived from the article of commerce
or nature of the enterprise which the law requires in the
case of every Joint Stock Company (Art. 2 141). The law
requires (Art. 2193) that the Ministry examining the pro-
ject shall take into consideration whether " the special
conditions proposed to be included in the project do not
violate the legal rights of third parties " ; as the adoption
of a given title may undoubtedly affect the rights of third
parties, the Ministry has first of all to consider the title of
the new Company. In spite of the exact sense of Article
2148, the titles of Russian Joint Stock Companies are
often taken, without regard to the above provisions, names
of private individuals, of the founders or of the late owners
of the enterprise which is to be transferred to the Company
being frequently chosen (for instance, Bros. K. & S. Popov) ;
more recently the adoption of titles with wide meanings, such
as " Naphtha," " Copper," etc. has found special favour.
While not raising any objection to such digressions from
the law — frequently called forth by necessity, and dictated
422 RUSSIA: ITS TRADE AND COMMERCE.
by the interests of business — the Ministry assures itself
that tlie titles of newly incorporated Companies clearly
distinguish them from all other existing Joint Stock Com-
panies, in order to avoid unfair competition.
2. The law contains no reference to the persons or the
number of the promoters, but in referring always to the
promoters in the plural, would seem to assume that a
Joint Stock Company cannot be formed by a single person
and, in one case, indirectly establishes a minimum of two
persons (Art. 2166, § 8, Vol. X, Part II). In connexion
with Joint Stock Commercial Banks the law specifically
establishes a minimum of 5 founders (Article 17, Div. 10,
Vol. XI Credit Statutes). In the remaining cases, owing
to the absence of provisions in the law to the contrary, the
Ministry very seldom raises objections to confirmation
of Statutes on account of the number of promoters, and
side by side with Companies, such as the Tifiis Commercial
Bank, where the projected Statutes were signed by thirty-
four promoters, companies are met with in Russia which
have been formed by a single person, for instance, the
Nevsky Refinery Works.
As regards the promoters themselves, the law makes
one restriction only, namely, Joint Stock Companies formed
for the navigation of the Caspian Sea must be formed
exclusively of Russian citizens. In regard to full partner-
ships and trust partnerships, practice has established
their right to found Joint Stock Companies (see, for instance,
the Statutes of the Petrograd International Commercial
Bank, Warsaw Discount Bank and many others.)
The negative position taken by the Ministry as to the
right of companies to assume the responsibilities of founders,
is dictated partly by legal considerations. A limited
liability Joint Stock Company cannot act as a promoter,
but this assumption is open to dispute, as the law places
no responsibility on the founders, except in the case of
bankruptcy of one to whom the keeping of the books
or the recording of the share transactions had been entrusted,
and who may be guilty, while carrying out these duties, of
any improper action. The legal aspect in such cases
JOINT STOCK COMPANIES. 423
plays an exceedingly second rate role. A far greater danger
— if we recognize the right of Joint Stock Companies to
act as founders — is the possibility of the foundation of
such Companies having for their sole and exclusive purpose
the promotion of other Joint Stock Companies, that is,
so-called " Financing Companies " or " Company Promoting
Banks."
In this respect. Joint Stock Companies as a general
rule are not recognized as having the right to form share
Companies, nor even the right to participate in other Joint
Stock Companies. The inclusion in the Statutes of this
point is generally accompanied by great difficulties, but
in practice there have been cases where such rights have
been granted to Joint Stock Companies (see, for instance,
the Statutes of the Electro-Transmission Company, having
a basic capital of six million roubles).
3. The law lays down no general rule restricting the
amount of capital stock of newly incorporated Joint Stock
Companies. Restrictions in this direction have only been
established in the case of Insurance Companies, which are
granted the right to carry on one or more forms of insurance
operations conditional on their paying into the State Bank
a guaranteed capital of not less than Rs. 500,000 (Article
22001, Vol. X, Part I.) for each branch of insurance with
which they are occupied and for Joint Stock Banks, of
which the capital must amount to not less than Rs. 500,000
(Article 6, Div. X, Vol. II Credit Statute). The law
does not restrict the nominal value of the shares. In
practice, however, it is very rarely that the Statutes of
Joint Stock Companies with small capitals are confirmed.
The number of the Companies with capital of less than
Rs. 100,000 does not attain to ten. In practice, the rather
high minimum of Rs. 100 has been adopted as the nominal
value of shares ; shares of lower denomination are only
permitted in rare cases.
4. However, the above-mentioned questions are by no
means those of most vital importance in the negotiations
between the Ministry and the promoters. Business life
has adapted itself to the restrictions placed on the pro-
424 RUSSIA: ITS TRADE AND COM]\IERCE.
meters, and such restrictions no longer influence the pro-
gress of the formation of Joint Stock Companies. Of far
greater significance are the restrictions inserted in the
Statutes in connexion with existing legislation in Russia
regarding Jews and foreigners. In view of the legal pro-
hibition of ownership by Jews of real estate outside the
precincts of towns, and forced by pressure of necessity to
allow in practice the issue of shares to bearer (a practice
which the law does not sanction), the Government has
extended these restricting laws to all Joint Stock Companies
with shares to bearer and, gradually, there has appeared
in the Statutes of almost every newly incorporated Joint
Stock Company a provision against the Company acquiring
" as its own property or on lease, or using real estate, in
places where the acquisition of same is prohibited by law to
foreigners or persons of the Jewish faith."
If the ownership of real estate outside the Jewish pale
is a necessary condition to the forming of the Com.pany,
the Ministry fixes in each given case the maximum area
which the Company is allowed to acquire. In such cases,
the Ministry requires the insertion in the Statutes of a
supplementary provision to the effect that the Directors
and Managers of the real estate of the Company situated
in the prohibited areas must not be persons of the Jewish
faith.
Later on, measures were initiated for removing Jews
from the Boards of Directors of newly formed Companies,
and a provision began to appear in the Statutes according
to which the majority of the Directors, and one out of every
two Directors, must be of other than the Jewish faith, also
that a Jewish- candidate for the post of Director may only
replace another Director who is a Jew. The Chairman
may not be a Jew.^
The latest measure in this direction. May, 1914, fixes
the maximum areas of real estate which different categories
of Joint Stock Companies are permitted to hold.
The projected Statutes of the Company, after examina-
1 Those restrictions have been abolished according to decrees
of the Provisional Government.
JOINT STOCK COMPANIES. 425
tion and correction at the Ministry in agreement with the
founders, are either sent up, together with the conclusions
of the Ministry, for further decision by the Council of Minis-
ters — where formal permission only to found the Company
is required — or is directed to the proper legislative quarters
when an exception to the existing laws is required. In
both cases, the Statutes are sent up for Imperial confirma-
tion ; on receipt of confirmation, the Statutes of the Com-
pany are again signed by the founders and are pubhshed
in the Collection of Laws and Enactments of the Govern-
ment " (Part II).
The confirmation of the Statutes of the Company does
not mean that it has been properly incorporated ; according
to the law (Article 2175, Vol. X, Part I) the capital must
first be guaranteed. This may consist not only of cash in
return for the shares, but also of property or so-called
deposits in material, that is, property or real estate, repre-
senting the assets of the partnerships or having a com-
mercial value. Further, in heu of property transferred
to the Company, the owner may receive shares of the
Company at their nominal value to an extent mutually
agreed upon between him and the first general meeting of
the shareholders.
Article 2165, Vol. X, Part I, extends to the founders
the right to set aside for their own benefit not more than one-
fifth of the total number of shares which it is proposed to
issue ; by Article 2166, the remaining shares must be
allotted by way of public subscription. Practice, however,
has long since disposed of this out of date restriction, and
in recent Statutes the founders are released from the obliga-
tion of applying to the public, but the whole of the shares
mentioned in the Statutes must be divided between the
founders, and persons assisting them, by mutual agreement.
This means that, in Russia, the successive, as also the
simultaneous, formation of Companies is permitted, the
latter being unknown in English Company Law. In the
first instance, the promoters do not undertake to appeal for
public subscription, unless this is found necessary. Only
a few of the Statutes provide that, if the whole of the shares
426 RUSSIA: ITS TRADE AND COMMERCE.
arc not divided between the promoters and persons assisting
them, those which remain unallotted after publication of
the Statutes shall be offered for pubhc subscription, at
not less than six months ; further, contrary to the Enghsh
law of 1908 (Article 80), neither the law nor the Statutes
demand the publication of a prospectus explaining the chief
objects of the Company.
The Statutes establish a term of not more than six months
from date of their publication during which the foundation
capital must be obtained. Within this period there must
be paid not less than 40 per cent, of the nominal value of
each share with the exception of those which it is proposed
to issue against property transferred to the Company.
In this connexion, Ministers may authorize the prolongation
of the term for reahzing the foundation capital, but not on
more than three occasions for each enterprise, and, with
the condition that such extensions must not in any case
exceed six months. Publication of each extension granted
is made in the " Collection of Laws and Enactments of the
Government."
The money received for the shares is paid in by the pro-
moters to the State Bank, where it remains at the disposition
of the Board of Direction of the Company. Later on,
after a certificate showing that the first call on the shares
has been received has been presented to the corresponding
Ministry, the Company begins its operations. If this
requirement is not observed, the Company " is considered
as not having been incorporated " and the money paid for
the shares is returned to the proper parties. The dates
and amounts of the subsequent calls arc fixed by resolution
of the general meeting, as and when necessary, with the
restriction that the payment of the whole amount due on
each share be made within two years from the day the
Company began operations (in some Statutes, only one
year). In case of non-observation of this requirement,
the Committee is obliged to liquidate its affairs.
Both the original payment on the shares and all later
payments are noted on the temporary certificates issued
to the shareholders, which certificates must be nominal ;
JOINT STOCK COMPANIES. 427
on the last payment being made, the temporary certificates
are replaced by the shares. If any owner of a temporary
certificate fails to pay the amount due in the proper time,
the temporary certificate is cancelled at the expiration of a
term of grace of thirty days, of which advertisement is
made, and is replaced by a new one which is sold by the
Board of the Direction of the Company ; the balance of
the sums realized, after covering the unpaid balance with
late interest, and also the expenses of Management, is
delivered to the late owner of the cancelled certificate.
This provision has been included in the Statutes in place-
of the extremely severe provisions of the law, by which
an individual who fails to make any of the payments within
the periods fixed loses the right to receive the shares, and
the whole amount paid becomes the absolute property of
the Company, which has the right to replace the cancelled
shares by the new issues.
From a comparison of Article 2175, Vol. X, Part I and
the above mentioned provision of Statutes, which provides
that the Company is considered as not founded unless within
the period fixed in the Statutes there be presented to the
appropriate Ministry a certificate to the effect that the
whole of the foundation capital or the first call on the shares
has been received at the State Bank. It might be inferred
that in Russian legislation. Companies can only be con-
sidered as finally formed, that is, as having received the
right to transact business, from the moment of the presenta-
tion of the necessary certificate. But the Company cannot
be considered as existing in the absence of the organs by
which it operates ; and as, according to the law, the election
of the organs of a Company (Board of Direction, Re visional
Committee) is carried out at the first General Meeting of
the shareholders called by the founders on receipt from
the State Bank of the mentioned certificate, the final act
in the process of formation of a Joint Stock Company must
be considered, not the receipt of the foundation capital,
but the election of the first Board of Direction and the
members of the Re visional Committee.
The order of the formation of Russian Joint Stock Com-
428 RUSSIA: ITS TRADE AND COMMERCE.
panics has been recognized as unsatisfactory for some time
past ; the revision of existing company laws has been con-
sidered by innumerable Government Commissions since
1866, but not a single one of the projects worked out by
them has ever received confirmation.
The project submitted to the Imperial Duma in October,
19 13, introduces the method of formation of Joint Stock
Companies by simple registration, and, in many respects,
reforms the out-of-date law affecting such companies.
CHAPTER XVII
The Drink Question in Russia
By M. I. Friedmann
There are many ancient records of the propensity of the
Russian people for strong drink. An unknown Greek writer
in the ancient annals puts into the mouth of Prince Vladi-
mir the following words : " Russia's delight is drink. Russia
cannot exist without it." Priests and foreigners constantly
noted the wide diffusion of drunkenness. Father Theo-
dosius, of Petchersk, describes the people " some crawling
on their knees, not being able to stand upon their feet ;
others wallowing in the mud and filth, ready to give up the
ghost at any moment."
In the lirst half of the tenth century, the Arab Ibn Fozlan
reported of the Russians : " They are given to the drinking
of wine in a senseless manner, and drink it for entire days
and nights ; it often happens that they die with the glass
in their hands." At that time the Russians drank beer,
mead, and foreign wines. Vodka made its appearance, it
is thought, considerably later ; its distillation began only
in the sixteenth century, and was marked by a still greater
increase of inebriety.
Fletcher writes of our ancestors : " When beginning to
eat they usually drink a goblet or small cup of vodka,
then drink nothing till the end of the meal ; after it they
drink continuously, kissing each other at each draught, so
that after dinner it is impossible to talk to them about
anything, and finally they all betake themselves to the
429
430 RUSSIA: ITS TRADE AND COMMERCE.
benches to sleep. It is a very usual thing for them to
make themselves intoxicated every day in the week.
Their principal beverage is mead, but the poorer people
drink vodka and a weak drink called kvas."
Marzheret arrives at a very unflattering conclusion about
the Russians of that epoch. " A simple people," he says,
" extremely given to intoxication. Men, women, boys and
girls are infected with the vice of drunkenness to an inor-
dinate degree. The clergy are no improvement upon the
laity, but occasionally surpass them."
In the first half of the seventeenth century, the Memoirs
of Olearius state : " During our stay in Moscow, liquor-
houses or taverns were open everywhere, and everybody who
wished entered and drank vodka for his money ; with such
facilities, the common people would bring all they earned
to the tavern and sit there so long that, having drunk all
their earnings, they would take the clothes from their backs,
even to their shirts, and leave them in pawn for vodka,
returning home as naked as when they were born."
The same author reports that " the vice of drunkenness
is spread among the Russian people, alike among the clergy
and the laity, the higher and the lower classes, among men
and women, old and young, to such an extent that if in the
streets one sees drunkards rolling in the mire it excites no
attention, but is regarded as the most ordinary phenomenon."
In the seventeenth century, also, George Krizhanitch
laments the same condition of things : " About our drunk-
enness it is sad to speak. You might travel all over the
world and not find anywhere such abominable, hideous and
terrible drunkenness as there is here in Russia."
Drunkenness is an ancient evil manifested among
various peoples from the early centuries. St. Augus-
tine in the fourth century preached against drunken-
ness in North Africa with all the heat and indignation of a
modern apostle of temperance. St. Boniface, of the Saxon
race, wrote to the Archbishop of Canterbury in the eighth
century : " They report that in our dioceses the vice of
drunkenness is far too widely spread. This evil is peculiar
to the heathen and to our race. Neither the Franks, the
THE DRINK QUESTION IN RUSSIA. 431
Gauls, the Lombards, the Romans, nor the Greeks are given
to it."
Shakespeare even confirms this conclusion. " In Eng-
land," says lago, " they are very great in drink."
The EngUsh historian, Lecky, says of the eighteenth
century : " The passion for tippling gin seemed to have
infected the masses of the population and grew with the
rapidity and force of an epidemic." In a word, we wish to
note the indisputable fact that " Merry England " was also
not remarkable for sobriety.
Things were not much different in Germany. Two ■
authorities will suffice here. Martin Luther, in 1541, writes :
" Unhappily all Germany is tainted with drunkenness ; we
preach and cry out against it, but this does not avail . . .
every country must have its devil . . . our German devil
is in a good keg of wine and its name is drunkenness." " We
Germans," says Melanchthon, " drink away our property, our
health, and the Heavenly Kingdom itself."
Alcoholism is not a national phenomenon developed in
and destroying any particular country. It is a universal
evil demanding the application, with the united strength
of mankind, of measures for its repression.
Custom and national conditions have created in each
country distinctive forms of consumption of spirituous
liquors and special methods of their abuse. This naturally
calls for special measures adapted to local conditions. In
this sense it is possible and proper to speak about the drink
question and the struggle with drunkenness in Russia.
The total quantity of vodka drunk in Russia is extra-
ordinarily great. In 1913, during the last year of the opera-
tion of the Monopoly, 105,000,000 vedro (vedro = 270
gallons) of 40 per cent, vodka were sold, and in the shape of
methylated spirit about 5,000,000 vedro on a basis of 40
per cent, vodka were manufactured. Nevertheless the con-
sumption per capita of the population was inconsiderable ;
it constituted a total of o-66 vedro a year, i.e., at the rate
of y-; ^,ths of a vedro a month.
It was by no means all the people wlio drank vodka—
probably only adult males able to consume strong Hquors.
432 RUSSIA: ITS TRADE AND COMMERCE.
But it is difficult to estimate the dimensions of actual con-
sumption. It is only possible to affirm that the consump-
tion per capita in Russia is less than in the majority of Euro-
pean countries and that it has increased of late years. In
any list of countries arranged according to their consump-
tion of spirit, Russia occupies one of the lowest places.
In 1900-5, the total consumption of alcohol of all forms
in Russia amounted to 2-65 litres (of absolute spirit) ; in
France, 22-42 ; in Belgium, 12-97 5 i^ Great Britain and
Ireland, 10-84; ^^ Germany, 9-54. Even if we take vodka
alone, its consumption for the above period was equivalent
to 2-47 litres of waterless spirit : in France, 3-54 ; in Great
Britain, 2-3 ; in Germany, 4-1 litres.
Thus in Russia comparatively little is drunk on an aver-
age, although of late years the consumption of vodka has
not fallen as in many European States, but has increased.
According to official data, the consumption of vodka per
capita in 1889 was 0-57 vedro ; in 1899, 0-56 vedro ; in
1904, 0-54 vedro ; in 1909, 0-58 ; in 1910, o-6o ; in 1911, 0-60 ;
in 1912, 0-62 ; in 1913, 0-66 vedro.
If it were possible to judge the degree of development of
alcoholism by these figures, Russia might be proud of her
sobriety. But both in our own country and abroad, a convic-
tion exists that intemperance in Russia is not less but greater
than in the neighbouring European States, and unfortu-
nately this is an undoubted fact. The character of consump-
tion in Russia must therefore be materially different from
what it is in other countries. In Russia the regular consump-
tion of spirituous liquors, which is possibly quite as harmful
as rare but intensive drinking, is comparatively small.
As a rule, the Russian peasant dispenses with vodka. But
on the occasion of weddings, funerals, christenings, public
holidays, and on the completion of bargains in towns or at
fairs, the peasant deems it his duty, in fulfilment of a cus-
tom sanctified by centuries, to drink as much as his purse
permits, having in view the attainment of complete intoxi-
cation.
Town workmen are more subject to temptation because
they receive money wages, are surrounded by public-houses
THE DRINK QUESTION IN RUSSIA 433
and have more frequent holiday's. For long intervals the
peasant never sees any money at all.
The town workman drinks oftener than the peasant, but
also generally prolongs the pleasure until intoxicated, and
is not content with the regular consumption of small quanti-
ties. Possibly in a physiological sense the results of hard
occasional drinking and constant regular tippling are the
same, but, from the social standpoint, a very material differ-
ence exists between the two forms of consumption. The
man who drinks a great deal but does not make himself
drunk is less harmful and dangerous to those about him
than the man who loses his reason and may, in a condition
of complete intoxication, do great injury to himself, his
family, and others.
From the social point of view, therefore, Russian alcohol-
ism represents a greater and more harmful vice than the
West European, in so far of course as the latter really does
bear the character of constant moderate consumption, which
by no means always corresponds to actual fact.
No precise investigation of the extent of drunkenness
among various classes of the Russian population has been
made ; nor do we know the forms of alcoholism peculiar to
any class. Much of the information collected through a
general inquiry is of necessity subjective in character, but
possesses, nevertheless, a certain importance in our estimate
of Russian aicoholism.
As above stated, drinking customs are sharply divergent
in town and country. In the towns, the workmen drink,
but also the intellectual workers. In the Russian provinces,
card-playing and drinking have hitherto been unbecomingly
manifested, and not even the comparatively enlightened
portion of society had heard anything about temperance
until recent years.
Country correspondents of the Vladimir Zemstvo, when
questioned as to which classes drink the most, replied :
" The rich drink, as well as the poor ; the gentleman drinks,
the merchant drinks, the fool drinks, and the person of
superior intelligence."
Unhappily the consumption of vodka is growing among
F F
434 RUSSIA: ITS TRADE AND COMMERCE.
women, and even children. To the question in what cases
do the people most frequently drink, the same universal
reply is given. " My neighbour came along drunk," writes
a peasant. " I asked, ' Why have you been drinking ? ' He
answered, ' From grief — a horse has died.' I ask another,
' Why are you drunk ? ' He replied, ' From joy — my wife
has given birth to a son.' Hence ' the muzhik drinks from
grief, he drinks from joy, he drinks from plenty, he drinks
at a meeting, and cannot make any bargain without the aid
of drinking." The principal motive of drunkenness is given
thus : " The life of our people is dull and monotonous.
Eternal work, work, and nothing with which to relieve the
mind from work ; there are no recreations ; this dull exist-
ence hangs heavily upon people, literally the heart is
empty." A peasant writes : " Man must have work, rest,
and recreation — one to replace the other. There is very
much of the first, very little of the second, and absolutely
nothing of the third except drunkenness."
These statements were made in 1910. Somewhat earlier
the Alexander Society of Temperance made an investigation
by examining the rural clergy. The picture drawn is, on
the whole, a sad one, giving details of the spread of alco-
holism in the country among the intelligent classes and the
clergy.
A peasant in reply to an inquiry of the Kostroma Zem-
stvo rightly replied : " In the country there is no recreation ;
mental interests are but few. Liquor is a pleasure. It is
clear a man cannot always work, work, work. To get drunk
is our recreation, although it is a senseless one." When the
sale of vodka was forbidden, " many former drunkards
began to gamble with cards."
It is not only the native Russian population that is sub-
ject to the vice. In the Baltic region, for instance, tho
public-house works terrible havoc among the Letts and
Esthonians. A report made to the first Congress on the
drink question says : " Without God, without Church,
without masters, the rural inhabitant of the Baltic region
could manage to exist, but on no account without the pot-
house." His acquaintance with drink begins from the
THE DRINK QUESTION IN RUSSIA. 435
tenderest age, from the moment of christening. The public-
house is the meeting-place of pastors and communicants,
brides and bridegrooms ; here workmen seek for work,
sweethearts are trysted and wives betrayed ; here quarrels,
murders, and gambling occur ; here criminals are hidden.
Naturally those who frequent the pot-house spend their
time in the incessant consumption of strong liquor.
According to statistics regarding the Petrograd working
men (igo8), the average expenditure on strong drink is
27-28 per cent, of the expenditure on food. Other informa-
tion, referring also to the Petrograd workmen, shows the
expenditure on vodka to be 13 per cent, of the total income.
An inquiry among the Baku workmen gives also an outlay
of 12-16 per cent, of the family budget on spirituous liquors.
Various reasons are given for the passion. Some com-
plain of the burden of work and unduly long hours, others
of the general conditions of life, others of bad food and lack
of places where men may meet and exchange ideas. One
man blames his own ignorance, another cannot free himself
from the drinking habit, but most of the workmen assign
the evil to the results of hard work unaccompanied bv suit-
able rest and sensible relaxation, to the ennui, monotony
and greyness of their lives.
There is no sense in arguing as to whether povertv is the
consequence or the cause of alcoholism. It is quite clear
that if the people did not expend such huge sums on drink
(more than a milliard roubles a year), their well-being
might be improved. Bad food leads to vodka ; but if
the workman did not drink vodka he could increase his
expenditure on food a quarter or a third and be better
nourished.
Besides the huge losses in money must be placed the
injury to health. One need not be a temperance fanatic,
attributing all ailments to the use of alcohol, in order to
recognize the extreme danger of drunkenness both for the
drunkard and for his descendants.
Alcoholism leads to the increase of crime and the degrada-
tion of manners and customs, especially in manufacturing
villages, where the bad effect of factory life vividly asserts
436 RUSSIA: ITS TRADE AND COMMERCE.
itself, and has not the restraining influence of the poHce, as
in the towns. In 1913, Dr. Korovin drew a harrowing
picture of the alcohoHzation of the population of the Mos-
cow Government and the influence of drunkenness upon
crime. " In the villages," says this observer, " quarrels
and knife-play are perpetual ; people beat and kill
each other for trifles, even without any visible cause.
Life is held cheap ; if a quarrel arises you may expect
it to end in murder, especially on festival days. The
village youths are full of this morbid passion for mischief.
One grows weary of seeing how the young men of neighbour-
ing villages, when visiting each other, arrange fights and
quarrels ; similarly it is quite an ordinary thing for work-
men to fight to the death." Here is a picture of a village
situated on the highroad : " There are five flourishing tea-
shops which do a roaring trade in vodka ; a wine-cellar-
liquor and State wineshop ; of the thirty-four houses com-
prising the entire village, fifteen are tap-houses, so that
there is no shortage of vodka. All these places are con-
stantly visited, not only by men, but also by women, and even
children. In this village you will not find a single news-
paper ; no books are read ; and yet there are many literate
people, and there is a passable library at the school. On
the other hand, the people of all ages are interested in gam-
bling as well as alcohol. Gambling goes on day and night in
the teashops and tap-houses ; the play is high, the stakes
sometimes running to tens of roubles. The winner must
stand treat, and all the money is usually spent on drink till
nothing is left. There are fights almost daily ; nobody can
pass on account of the village bullies ; even strangers run
the risk of being ill-treated for no reason whatever. An
agricultural society, whicli had been started with difliculty,
recruited membership of from ten to fifteen persons."
From the foregoing it is clear how tremendous the curse
of intemperance has been for many centuries in Russia.
The question may naturally be put : " Is it possible that
the State and sound public opinion have not recognized
the necessity of fighting alcoholism ; is it possible they have
remained indifferent to the spiritual and physical destruction
THE DRINK QUESTION IN RUSSIA. 437
of the people ? " Of course not. Both the Government
and the spiritual leaders have adopted many measures for
the reduction of liquor consumption, some working by
example and others by penalties and the regulation of the
drink trade. As early as the middle of the seventeenth
century laws were made restricting the trade in vodka.
They were more drastic than those of the well-known
Gothenburg system.
Only one liquor establishment was allowed in each town ;
nobody was allowed to buy more than one tankard ; it was
forbidden to spend time in drinking-houses, or to play cards
or throw dice there. On the occasion of the great fete of
the Assumption the sale of vodka was prohibited on Sun-
days ; during the Christmas and St. Peter's day, trade was
not allowed on Wednesdays and Fridays. Priests and
monks were not admitted to bars, and vodka was not sold to
them. Wine was not given on credit. Hours of trade were
restricted even on weekdays. Outside the towns, drink
establishments were not permitted everywhere ; only in the
large villages, and only one in each.
Unfortunately both these and other later restrictive
measures were only temporary and did not yield any material
benefit. In Russia, as in many other European States,
the Treasury very early interested itself actively in the
revenue from the consumption of spirituous liquors, and
being in almost incessant need of money feared to enter into
resolute conflict with intemperance lest it should affect the
revenue from the excise. Moreover, as a rule conflict with
popular passions does not yield particularly good results
even when strictly and resolutely conducted. Nevertheless,
in establishing a system of taxation, the State endeavours
to find one which, while producing a fiscal revenue, promotes
at the same time the sobering of the population.
In Russia, from the very beginning of the taxation of
spirit, a State monopoly has exsted, sometimes embracing
only the trade in vodka, at others extending its operation
to the distillation of spirit, and the State either traded it-
self in vodka or leased out the trade to others. This con-
tinued up to the 'sixties of last century, the leasing system
438 RUSSIA : ITS TRADE AND COMMERCE.
predominating. After the emancipation of the peasantry
it was decided, in order to place a restriction upon the de-
moralization of the population by the owners of the leases,
to adopt the ordinary excise system. Happy results were
anticipated from free competition at this time, when hopes
were entertained that liberal principles would be applied
to the administration of economic measures ; it was thought
that vodka would be cheap, good, and accessible, and that
the exploitation of the people by publicans would become
a thing of the past. Various restrictions of the drink traffic
were issued, but in thirty years the State again reverted to
a change in the system of taxation and the form of regula-
tion of the drink trade. In effecting the liquor monopoly
in the 'nineties of last century the State intended, with the
help of the transfer of the vodka trade to the Treasury, not
only to increase the revenue but by degrees to transform it.
At that time everywhere people looked upon alcoholism
as the consequence of immoderate consumption of liquors
of bad quality, and believed that purified alcohol, used
regularly in small doses, but not to the point of intoxication,
would not lead to special harm.
From the fiscal standpoint the monopoly justified itself.
The receipts from the liquor traffic grew and latterly attained
to enormous sums. The gross revenue from the liquor
monopoly from the year of its extension to 1904 amounted
to 547,000,000 roubles ; in 1909 to 719,000,000 roubles ;
in 1913-14 to 899,000,000 roubles ; while according to the
Budget for 1914 the sum estimated was 936,000,000 roubles.
If expenses are deducted from these sums, we get a net
revenue equivalent in 1904 to 380,000,000 roubles ; in
1909 to 522,000,000 roubles ; and in 1913-14 to 644,000,000
roubles.
In a calculation of all tlie Treasury receipts from strong
drink, the excise on beer, vodka, and the customs duties on
imported wines, spirits, and beer must be added. In addi-
tion to the monopoly and customs duties, the tax on liquor
in 1913 yielded 54,000,000 roubles, and the customs tax on
spirituous liquors about 7,500,000 roubles (1912). Conse-
quently the total received by the Treasury from liquors
THE DRINK QUESTION IN RUSSIA. 439
containing alcohol exceeded 700,000,000 roubles annually,
which constitutes about one-third of the net budget of the
Russian State.
The figures prove more convincingly and more eloquently
than long speeches how great was the interest of the State
in the receipts from beverages containing alcohol, and,
therefore, in their consumption by the people. That is why
the State authority looked, so to speak, with half an eye at
the fact that the monoply had not led to the anticipated
results in temperance, and for some time took no steps to-
wards the correction of the ancient evil.
The fact is that, although the sale of spirituous liquor in
the State liquor-shops proceeded more or less in the desired
order : the hours of trade were restricted ; the shopman was
not interested in enticement of purchasers ; consumption
on the premises was prohibited, as also the sale to children,
intoxicated persons, or on credit or in return for articles
pledged. Nevertheless the drinking habits did not im-
prove, either in the country or in the town.
It appeared that pure vodka produces as befuddling and
destructive an effect as the adulterated variety. It would
be incorrect to deny that the " dramshop hell," as it was
called in the past, has disappeared, but without speaking
of the Baltic pothouse — the typical dramshop before the
monopoly period — it has not infrequently happened that
secret taverns and public-houses, illegally trading in vodka,
have taken the place of the former dramshop. Moreover,
the domestic consumption, as far as it goes, has also exerted
a pernicious influence in the sense of accustoming certain
members of the family, such as women and children, to the
use of vodka. Again, a considerable number of drunkards
were now forced upon the street and the sight of them has
had a corrupting example upon those who formerly held
aloof from drunkenness.
Illicit trade, which does not restrict its clients either in the
matter of hours or other limitations, has spread inordi-
nately, as all country residents and town workmen testify,
and as is now officially admitted. In the country many
women and girls earn money by this illicit trade in vodka,
440 RUSSIA: ITS TRADE AND COMMERCE.
not to mention teashops, small stores, and regular illegal
dramshops. Some state that this trade is not conducted on
credit, and is not accompanied by abuses, whereas others,
on the contrary, affirm that the illicit sale affords oppor-
tunity to pawn linen, harness, clothing, and bread, in return
for drink, and that the secret dramshops are dens of vice.
In any case the State liquor-shop, under such conditions,
ceases to be the sole source for the acquisition of vodka ;
it gives rise to numerous secret places of unregulated traffic
without supervision on the part of the authorities, and is con-
verted into a wholesale depot from which illicit dealers may
obtain vodka for retail sale. In the opinion of a very well-
informed author, in the government of Penza, which he
investigated, one-fifth of the turnover of the liquor-shops is
on account of illicit trade, and in the district not less than
half.
.It thus appears that the liquor monopoly has by no means
led to the sobering of Russia. The role of the trusteeships
for national temperance, which arose with the introduction
of the monopoly, has also been very small. These trustee-
ships or guardians consisted of officials and lacked the public
element, although at the beginning this was enlisted in the
organization of tea-houses, lectures, popular recreations, etc.
The trusteeships languished, without doing either good or
harm, with the exception of the metropolitan ones, which
occupied themselves in the organization of theatrical and
other recreations, less for the working population than for
minor officials and less wealthy residents. According to the
admission of the Imperial Council, these recreations were by
no means always of a suitable character. Recognizing that
concern for the people's sobriety could not devolve upon
the Ministry of Finance, seeing that its natural task was,
not to curtail but to increase the State revenue, the Imperial
Council declared itself in favour of the abolition of the trus-
teeships and the transfer of the v/ork for the sobering of the
population to the cities and zemstvos. But this occurred
on the eve of the closing of the monoply and the discontinua-
tion of all trade in vodka, and therefore had no practical
application.
THE DRINK QUESTION IN RUSSIA. 441
In public circles, the agitation against drunkenness found
but few influential supporters until the convocation of the
legislative institutions. As soon as the latter embarked
upon legislative work, with the session of the third Duma,
the hopes and plans of the temperance reformers found a
response. In 1907 a proposal from thirty-one members
respecting measures for fighting against intemperance was
introduced. The projected measures resolved themselves
into a plan to invest the village communes with the power
to prohibit trade in spirituous liquors on their lands, to the
increase of the size of the utensil in which vodka was sold
from the State liquor shops, from .jl^^ to ^,\, of a
vedro, and to reduction of the hours of trade. The Duma
recognized that these measures were insufficient, and that
more radical reforms were indispensable, but deemed it
desirable for the time being to go no farther.
Corresponding Bills were drafted by a special Duma
Committee for the suppression of alcohoUsm, and by the
Ministry of Finance. One of the fundamental points of the
Bill was to prevent the illegal sale of vodka, for which pur-
pose it was proposed to offer a reward for the discovery of
illicit trade and to increase the penalities for those found
guilty of this offence. Further, the Bill prohibited all trade
in vodka at railway stations, wharves, and on private per-
sons' estates in a district (uyszd). Adult wives and mothers
of householders are allowed at village meetings to vote for
or against the continuation of the sale of vodka. Consump-
tion on the premises in public-houses is prohibited and only
allowed in hotels and restaurants.
At the end of the session of 19 lo-ii, the Bill, with imma-
terial amendments, was adopted by the Duma and brought
before the Imperial Council.
At the end of 191 1 the Imperial Council sent the Bill to a
special committee, where it was discussed for a fairly long
time, and only in January, 1914, submitted to the decision
of the general assembly of the Imperial Council.
It is curious to note that it was here that the speeches were
made upon the necessity for resolute action for the eradica-
tion of intemperance, which led to a change in the policy of
442 RUSSIA: ITS TRADE AND COMMERCE.
the Government in relation to alcoholism. This occurred
notwithstanding the fact that, as the representative of the
Upper House observed in his report, the Imperial Duma
was inclined to measures of restriction in regard to the
consumption of spirituous liquors, while the commission
of the Imperial Council wished to fight only against
drunkenness. The commission of the Imperial Council
sounded a warning against impulsiveness in the business
of fighting vodka ; it advised caution and deliberation.
But the House heard quite other speeches from very
influential members. Thus, Count Witte, under whose
regime the liquor monopoly was achieved, declared that
" the object of reform, the reduction of intemperance,
had retired into the background, and that the influx of
money to the Treasury from the people by means of the
drink monopoly had stepped to the fore." Count Witte
expressed small faith in the operation of the proposed law,
and considered it necessary to abolish the interest of the
Treasury in the further growth of the drink revenue, fixing
this revenue at the amount of the previous year, and devot-
ing the remainder to the conflict with intemperance.^
Count Tolstoy drew a terrible picture. " The country has
been transformed into a nightmare of drunkenness," he said.
" All drink. Adults drink, women drink, youths drink,
while children dwelling amid this fetid atmosphere of drunken
debauchery follow the example of their parents." " The
people are perishing both physically and morally."
Prince Golitsyn-Muravlin emphasized the national danger
of alcohol. " I speak about the great and glorious Russian
people, about that people who under the most arduous con-
ditions of conflict with nature have created a great State,
about that people to whom neither Batyjat at Kiev, Sapyega
at Lavra, Karl at Narva, nor Napoleon at Moscow could
bring final ruin, but who are being sapped and devoured by
a more dangerous internal enemy. In the course of later
^ This idea was expressed much earlier by the author of this article,
both in the Press and at a sitting of the Committee for suppression
of alcoholism formed by the Society for the Protection of National
Health on February 27 (March 12), 1908.
THE DRINK QUESTION IN RUSSIA. 443
decades we have been slipping downwards on vodka — on
vodka and champagne." " In strong drink not only Rus-
sian money but Russian labour and Russian dignity are
drowned."
Happily Russia bestirred herself, and to the Imperial
Duma belongs the honour of the initiative in this good work.
The Bill was finally passed with certain amendments and
again transferred to the Imperial Duma, as by that time
the labours of the Third Duma had terminated and the
Fourth Duma had been assembled. But interest in the
project declined because other and more important events
than the abolition of alcoholism had occurred.
Under the direct impression of the debates in the Imperial
Duma the President of the Council of Ministers, and former
Minister of Finance, V. N. Kokovtsov, resigned, and P. L.
Barck was appointed. In the Imperial Rescript addressed
to the present Minister of Finance specific mention was made
of the necessity for radical reforms in financial and general
economic policy for the sobering of the population in parti-
cular. This was on January 30 (February 12), 19 14. On
June 9 (22) the new Minister of Finance, in giving an ex-
planation of the Budget in the Imperial Council, dwelt upon
the drink question. He noted that efforts were being
made for the closing of liquor establishments and that the
Minister of Finance was ready to meet these efforts half-way,
by adopting measures to ensure that the closing of places
of lawful trade should not be accompanied by the develop-
ment of illicit sale and distillation. The Minister reported
that he had given categorical instructions to give effect to
all concerning lawful resolutions of village meetings on
close or prohibit of the liquor trade. From the beginning
of the year till May i, 811 of such resolutions were passed,
while 208 shops had already been shut down. The Govern-
ment proposed to raise the price of vodka from 8 r. 40 c.
to 12 r. for inferior quality, and from 10 r. to 16 r. for the
higher quality, presuming that the increase of the price
would lead to a reduction of consumption. Further, the
Government had in view a gradual decrease of the number
of public-houses, the prohibition of sale on certain holidays
444 RUSSIA: ITS TRADE AND COMMERCE.
and festivals, also on days of the muster of recruits ; the
restriction of hours of trading on weekdays and on the eve
of Church holidays ; the severer prosecution of illicit trade
by the police, in co-operation with the excise officials and
co-operative societies ; the support of public and private
initiative in the struggle with intemperance, etc.
In this manner urgent measures were taken in the struggle
with alcoholism. It is interesting to note that the Minister
of Finance at that time gave a warning. " It behoves us
to beware of being carried away," he pointed out. " Suc-
cess in the struggle with intemperance can only be attained
with great deliberation, with complete co-ordination of the
measures of various departments and the harmonious sup-
port of society and the legislative institutions."
Soon after the war began. On the announcement of
mobilization on July 17 (30) trade in strong drink was
stopped. At first it was proposed to prohibit the trade
until after the formation and dispatch of reserve troops ;
then the term of prohibition was extended, and on August
22 (September 4) a regulation followed forbidding the sale of
vodka till the end of the war.
By a circular dated October 13 (26), 1914, permission
was granted to trade in wine and beer, but at the same time
the power was given to city councils, zemstvos, and village
communes to prohibit in their territories all trade in liquor,
and of this the local organizations widely availed them-
selves. In 1914 petitions for the permanent suspension of the
traffic in strong drink were received from 219 towns, 443
zemstvos ; and till the end. of the war the trade was sus-
pended in 124 towns and 52 zemstvos. It may be said that
at the present time there are very few places where the legal
trade in any strong drink whatever is carried on. In this
manner Russia became suddenly sober. And this experi-
ment is deemed so far successful that we have the word of
His Majesty the Emperor for the abolition of the State trade
in vodka for ever. More than this, there is ground for
hoping for the entire discontinuation not only of the State
but of private sale of vodka after the war as well.
It may be asked : What arc the results of temperance ;
THE DRINK QUESTION IN RUSSIA. 445
what unfavourable and dangerous influences manifested
themselves on the sudden introduction of absolute temper-
ance ? Is it advisable to continue this regime further, or
to return to the old order after the war, with certain restric-
tions ?
We have not at our disposal any precise data, but here
are some facts for judgment on the results of suspension of
the vodka trade. First of all, mobiHzation passed off with
rare tranquillity and order, whereas in the Japanese war
things were very bad in this respect : the calling-up of
recruits was accompanied by scenes of ugly violence and
fighting. Furthermore, from the country come blessings,
which are repeated by the working population of the towns.
From Penza government a peasant writes : " After the
closing of the hquor-shops the disposition of the people
improved, the poorest persons began to wear boots, and
have an extra copek in their pockets."
From Kostroma government correspondents of the
zemstvo narrate amazing facts. For example, a peasant
of one village had led an intemperate life, abandoned his
home, leaving his wife and four children without any help ;
they lived in such poverty that they had nothing to wear
and were starving. When the sale of liquor was suspended
this peasant returned home, and " became the father of
his children and a good head of the household ; he now has
bought a horse and a cow ; all of the family are clothed and
shod, and their life has entirely changed." From the same
government they write about the special delight of the
women on account of temperance. " There has never been
on earth such a festival as that now among the women,"
declares one correspondent. " The women literally bloom,
inasmuch as they are tranquil and live without fear of their
drunken husbands," reports another. A town working
man answers a question : " For God's sake, I pray and beg
for the stoppage of all strong drink and beer, which brings
evil worse than wine, for ever, for all eternity. I would
rather consent to pay a tax if only the trade in wine and beer
can be suspended. I pray on my knees before the people
who can tear up this curse of humanity by the root. When
446 RUSSIA: ITS TRADE AND COMMERCE.
I drank I felt both weakness, melancholy, and incapacity
for work. I was quite bhnd, but now I work without
glasses ; my health is hke that of a cathedral bell : I feel
as though I had been born again. My family are tranquil,
always in good health ; they keep chickens, ducks. The
heart rejoices from peaceful sentiment. I pray for those
who closed the State liquor-shops." A peasant reports
the feehng of the country : " Robbery, debauchery, and
fights have ceased ; on festival days now the congregation
in the church has doubled ; the children no longer see their
fathers misconducting themselves ; they have become much
better morally, and may God bless the man who bethought
himself of undertaking this sacred task." A blacksmith
writes : "I have always saved money in m}^ pocket now,
and there is plenty of it ; my wife has become merry, and
has ceased to be afraid of me."
Similar testimony from peasants and working men is
received from all quarters. Evidences that the productive
labour of the workmen has appreciably risen, thanks to
increased punctuality, conscientiousness, etc., prove the
improved capacity of sober people. The Ministry of Trade
and Industry and the Moscow Association of Mill and Fac-
tory Owners have made two interesting investigations into
the question. Their reports showed that the employees
had become more punctual, worked more carefully,
without omitting days after holidays and pay davs ; they
earned more than before, and spent their earnings upon
actual requirements. " Working men, formerly incorrigible
drunkards," it is reported from a mill in Vladimir govern-
ment, " are now of best repute ; they are well dressed, clean,
and the image and likeness of God has begun to glow in
them." " The workmen are dressed and shod ; they have
begun to send more to the country or deposit more in the
savings banks," is reported from a Moscow factory. At-
tempts of various kinds have' been made to reckon how far
a reduction has taken place in the fires from which Russia
suffers so much ; how far crime and the quantity of suicides
have lessened. But all statistics of this description suffer
greatly from lack of precision, inasmuch as the immense
' THE DRINK QUESTION IN RUSSIA. 447
number of men summoned to the war cannot be taken
into account.
It is equally inaccurate to explain the growth of savings
in the banks merely by the prohibition of vodka. Of course,
sober people save more, but in the joint-stock banks deposits
also have appreciably increased, the cause of which must
be deemed principall}^ the increase in currency issued for
the needs of the war, and the slackening of trade, and con-
sequently the curtailment of advantageous investment for
capital.
However, independently of statistics, it is possible to
regard as proved the tremendous ameliorative influence of
the prohibition of spirituous liquors on the health, well-
being, and mental condition of the Russian people ; it will
suffice to remember how the results of drunkenness were
described in order clearly to imagine what the abolition
of the drink traffic is leading to. Here, however, we en-
counter doubt as to whether sobriety has actually super-
vened ; substitutes for vodka in the shape of methylated
spirit, varnish, refined lacquer, and eau-de-Cologne are
poisoning some of the population and destroying its health.
The question is asked : How great is this evil ?
The illicit distillation of spirituous liquors and their secret
preparation from varnish and methylated spirit do occur.
But it must not be supposed that this consumption can
have so wide a diffusion as the former alcoholism which
required upwards of 100,000,000 vedros. If the police and
local authorities will strictly keep down the illicit distillation
of spirits, it cannot assume any threatening dimensions.
Both public opinion and the Government clearly recog-
nize the necessity of giving the people, now weaned from
vodka, something positive in its place. Proposals have
been made for increased education after school age, and the
establishment of a large number of People's Palaces, similar
to Toynbee Hall, where amid comfortable surroundings the
workman and peasant may rest, have tea, hear music, read
a paper or book and look at the cinematograph. It may
be said : " This has already been tried by the trusteeships
on national temperance, and proved to be impracticable,"
448 RUSSIA: ITS TRADE AND COMMERCE.
but Russia's civilization has advanced far beyond the times
of the Hquor monopoly.
These palaces will be organized by the zemstvos, the towns,
the co-operative societies, which have so largely developed
among us, and by workmen's unions. This will no longer
be an official or private philanthropy, but a really national
affair.
In the absence of legal trade in vodka, and with the re-
striction of illicit traffic, we may assume that those semi-
diseased dregs of the people whom no public reform could
restore will give themselves up to drunkenness. This is a
strong reason for the continued prohibition after the war
of the sale of vodka at least.
There have been exaggerated apprehensions concerning
the prejudicial effects of this measure upon agriculture and
upon the distiUing industry.
The liquor monopoly abolished the class of those who
traded in vodka ; there remained dealers in wine and beer,
distillers, brewers, and wine-growers. The war has made it
impossible for them to defend their trade interests with
much energy, while after the war the distillers at least will
consent, for the sake of the interests of the nation as a whole,
to discontinue their manufacture, and to adapt their agri-
culture to the new conditions, insisting only upon a certain
compensation for the losses sustained in consequence of the
changed attitude of the State towards distilling.
It is much more difficult to declare definitely in favour
of the prohibition of beer and wine after the war. Without
entering into the question of the comparative evils of vodka,
wine, and beer, if suitable measures be taken to control the
strength of wine and beer, the time, place and form of sale,
and the preservation of wine from adulteration, these
liquors, while prohibited in the country, may not prove a
very great evil in the towns, serving as substitutes for the
more pernicious vodka.
Despairing of complete temperance, we should be dis-
posed to allow, on such restrictive conditions, the sale of
wine and beer in the towns after the war.
In any case, so far as it is possible to judge after a year's
THE DRINK QUESTION IN RUSSIA. 449
experience, the absolute prohibition of spirituous hquors is
far more easily and simply realizable in practice than many
convinced opponents formerly thought. Although the
measure is not wholly effective, although it is not free from
defects which accompany all human work, it may never-
theless be said that the social experiment of compulsory
sobering of a country with a population of 180,000,000 has
given satisfactory results. It will, of course, be difficult to
keep up the present enthusiasm evoked by the war, when
millions of men, accustomed to drink, return from the front.
The prospect of a loss by the State of a source of revenue
which yields over 700,000,000 roubles annually is not so
terrible as it might appear. It is obvious that a sober
population can produce with greater ease not only this
sum, but a far more considerable one.
Moreover, the revision of the system of taxation, the in-
troduction of new taxes, and thC; increase of those in opera-
tion, are in any case inevitable in order to pay off the war
loans now being contracted.
In Russia it is clearly recognized by all that the financial
question can only be settled by the development of the
productive forces of the country. The fundamental pro-
blem is the working of natural resources, the proper utiliza-
tion of economic forces and opportunities of the heretofore
slumbering Russia. And this problem will be incomparably
easier of realization by a sober population, which not only
keeps its money but preserves its physical and moral well-
being.
INDEX
Administrative Governments,
list of, 15
Agricultural Banks, 19, 385, 419
Agricultural Co-operative Asso-
ciations, 18
Agricultural Machinery :
British, openings for, ^z^
Oil Engines, Russian require-
ments, 205
Russian Manufacture of, 210
Russian Market, Statistical
Table, 213
Agriculture :
General Condit ons and Pro-
spects, J-j et s-^q.
Government Assistance for, 60
Alcoholism, see Drink Question
Alexander Society of Temper-
ance, 434
Amur River, 10
Anthracite, Supply in Donetz
Coalfields, 174, 178
Antimony Beds, 167
Aral Sea, 7, 8
Arbitration Committees of Rus-
sian Exchanges, 289
Area of Russian Empire, i
Army Expenditure, 331
Asbestos, Supply of, 170
Asphalt Beds, 170
Automobiles :
Imports of, 202, 206
Market for, Tables, 216
Russian Manufacture, 206
Azoff-Don Commercial Bank, 419
Azov, Sea of, 5
Bacon and Pork Exports, ^^i, 34,
37. 3^1
Baikal Valley, 6
Baku Oilfiekls, 179, 180
Balkash, Lake, 7, 8
Baltic Basin, Pilchard Fishing in,
222
Baltic Region :
Forestry and Timber Trade,
91, 102
Fruit growing, 79
Banking System, 354 et seq.
Agricultural Banks, 19,385,419
Central Banks of Europe, De-
posits, Table, 365, 367
Currency Reforms, 270, 271,
353 et seq.
Current Accounts, fluctuations
of interest, 368 note
Discount Rates of State Bank,
Table, 375
Gold Reserves of State Bank,
369 note, 370
Irbit Fair, Banking operations
at, 282
Municipal Banks, 385
Nijne-Novgorod Fair, 284
Private Banks, Institution of,
379 et seq.
Savings Banks, 388 et seq.
Trade financing by Banks, 294
Bank-notes, Right of Issue, 366,
368 et seq.
Barck, P. L. 443
Barley Imports, 319
Beet Sugar Production 70 et seq.
Bessarabia :
Fruit Cultivation, 80
Vine Growing, 84
Bismuth, Supply of, 168
Bogolepoff, M., 329
Bookshpan, J., 268
Boot-making, Output of Fac-
tories, etc., 141, 142
Boundaries, Land and Maritime,
I et seq.
Bran, Output and Exports of,
27, 28, },j,
Bricks, Manufacture of. Output
and numbers employed in,
139, 140
451
45-2
INDEX.
British-Russian Trade :
Agricultural Machinery, 323
Coal, 323
Developments in, 323 et seq.
English Trade Methods criti-
cized, 315, 316
Origin of, 299, 300
Russian Exports to British
Markets, 37, 40, 45, 47
Timber, 100 et seq.
Budget :
DistributicMi of State Expendi-
ture under, 330
Growth of Russian Budgets,
329 et seq.
Butter and Cheese Exports, i},,
320, 321
Canal Communications, 252 et
seq.
Canned Fish, 227
Capital :
Foreign, attracting to Russia,
236
Growth of Share Capital, Sta-
tistics, 276, 277
Joint-Stock Enterprises, Capi-
tal of. Table, 392
Railway Building, Capital for,
236 et seq.
Cargoes carried on Inland Water-
ways, Table, 256
Caspian Sea, 4, 8, 12
Caspian- Volga Basin, Fisheries
of, 220
Catherine H, 301
Cattle :
Breeding, 28, 34
Exports, 35, 41
Caucasus :
Coal Production, 177
Copper Production, 187
Forestry in, 8q, 90, 93, 94
Fruit Cultivation, 81
Machinery Requirements, 205
Vine Growing, 86
Caviare Industry, 227, 228
Cellulose and Wood Pulp Indus-
try, 103, 104, 136
Cement Manufacture, Output and
number employed, 139, 140
Chancellor, Richard, 299
Charcoal, 193, 194
Charkoff Joint Stock Land Bank,
419
Cheese and Butter Exports, 33,
320
Child Labour in Factories, Re-
strictions, 146, 147
Chinese Trade with Russia, 310,
3 I.I
Chromium, Supply of, 168
Clearing-Houses, Operations of,
397
Climate, 11
Coal :
British Exports to Russia, 323
Caucasus, Coal Production in,
177
Dombrovo Coalfields, Produc-
tion and Output, 175
Donetz Coalfields, see that title
Growth of Production, 124
Output of Coal, Tables, 172
Surveys of Coalfields, 166
Cobalt, Supply of, 167
Cocoa Imports, 324
Cod Fisheries, 223
Coffee Imports, 324
Coke, British Exports to Russia,
323
Commercial Travellers, introduc-
tion of, 273
Company Regulations, 418 e^ seq.
Conant, Charles A., 360
" Concession " policy for con-
struction of privately-
owned Railways, 231, 236
Conscription, Exempted men
taxed, 347
Contracts between Employers
and Workmen, 150, 151
Co-operative Agricultural Asso-
ciations, 18
Co-operative Rural Banks, 385
Copper Industry, 184, et seq.
Cost of Production, Tables, 114,
121-123
Cottage Industries, 19
Cotton Growing, 54 et seq.
Customs Duty on Foreign
Cotton, 59. 347
INDEX.
453
Cottonization of Flax, 68
Credit operations of the State
Bank, 374
Credit System of Russia, 352
Crimea :
Forest Trees of, 90
Fruit Cultivation in, 80 "
Vine Growing, 84
Currency Refonns, 353 et seq.
Effect on Trade Development,
270, 271
Customs Duties, 307 et seq., 325,
337
Cotton, 59
English goods first subject to,
301
General Policy in relation to,
106, 307
Machine Building, effect of
protective tariff upon, 200,
208
Vodka, Beer and Wines, 438
Dairy Farming, Development of,
27 et seq., 33
Dangerous Trades, Legislative
Enactments, 147
Danube River, 4
Discount Rates of State Bank,
375
Discounting of Bills, European
and Russian Banks com-
pared, 367
Dividends of Privately-owned
Railways, 241
Dombrovo Coalfields, 175
Donetz Coalfields :
Anthracite from, 174
Coking By-products, value of,
175
Production and Output, 1 74
Dnieper River, 4
Dniester River, 4
Drink Question in Russia, 429 et
seq.
Customs Duties on Beer and
Spirits, 438
Government Spirit Monopoly,
336. 338. 347
Taxes, Rise in, owing to
Liquor Prohibition, 346
Drojki Syndicate, 291
Dvina River, 5
Education, Agricultural, Statis-
tics of, 18
Egg Exports, 46, 320
Eisk Railway, 242
Emancipation of Peasants, 1861,
106, 109, 268
Engines :
Engines and Parts used in
Russia, 1910-12, Table, 215
Oil Engines, Demand for, 205
Type and Distribution of, 126,
127
English Markets, Russia as pur-
veyor to, 37, 40, 45, 47
English Trade Methods in Rus-
sia, 315
Euro-Russian Plain, 4
Exchanges, Powers and Func-
tions of, 286 et seq.
Exchequer Bills, 349
Excise Duties, Table of, 336
Experimental Agricultural Sta-
tions for Cotton Growing, 60
Exports :
Agricultural Products, 17
Anthacite, 174
Bacon and Pork, 32, 34, 321
Bran, 27, 28, 33
Butter and Cheese, 33, 320, 321
Cattle, 35, 41
Caviare, 228
Cereals, Tables, 22, 23
Eggs, 46, 320
English Markets, Table of Ex-
ports to, 38
Fish, 218
Flax, 65, 66, 322
Flour, 26
Fodder Grass Seeds, 50, 51
Furniture and Wooden Ar-
ticles, 103
Geese, 321
Grain, 22, 23, 270, 317, 318
Hemp and Hemp Seed, 69
Hides, 322
Home and Foreign Exports,
relation between. Table, 278
Hops, 84
454
INDEX.
Exports {contd.) :
Horses, 321
Imports and Exports, Table,
Manganese Ore, 323
Meat, 35
Money, Export prohibited in
War time, 417
Oats, 22, 23, 319
Oil-Cake, 33, 322
Petroleum Products, 322
Platinum, 189, 323
Poultry, 44 et seq., 321
Rye, 22, 23, 318
Sea-borne Trade, Table, 304
Seeds, 322
Sugar, 75, 76
Swine, 36, 321
Timber, 92, 100, 321
Tobacco, 78, 79
Wine, 84
Wood Pulp, 103
Wool, 323
Factories and Workshops :
Child Labour, Restrictions,
146, 147
Factory Inspectors, Appoint-
ment of, 146
General Review of System, 105,
et seq.
" Fairs " of Russia, History of,
272 et seq., 279
Fauna of Russia, 1 1
Fines imposed on workmen, 153
Fish Exports, 218
Fisheries, 12 et seq., 217 et seq.
Flax :
Cultivation of, 64
Development of Manufacture,
134. 135
Exports, 65, 66, 322
Flour :
Exports, 26
Milling Industry, Statistics of, 24
Fodder Grass Seeds, Exports, 50,
51
Food Production :
Factory Output, 116
Number of Workmen employed
in, 116
Foreign Settlements Department,
415
Forestry, 88 et seq.
Exports of Timber, 92, 100,
321
Fuel, use of Timber as, 122
State Forests, Revenue from,
339. 340
Freight Returns, Tables, 271, 272
Freshwater Fisheries, 13
Friedmann, M. 429
Frontier Line, Length of, i
Fruit Cultivation, 79 et seq.
Fuel :
Coal, see that title
Cost of, in Manufacture, 12?
Factories, Consumption by,
124
Mineral Fuel, Insufficiency of,
108
Prices, Comparative Table, 126
Timber used as, 122
Fur Trade :
Irbit Fair, 281
Nijne-Novgorod, 285
Furniture Exports, 103
Gas Engines, Demand for, 203
Geography of Russia, i et seq.
Geological Committee, Work of,
166, 174, 180, 189
Geology of Russia, 10 et seq.
German-Russian Trade :
Automobiles, 206
Cattle and Swine, 36
Gravitation of Russian Ex-
ports to Germany, 36, 37
Imports and Exports, 311
Machinery, 202
Organization of, 296, 298, 311,
3^5
Poultry, 45
Glass Manufacture, 139, 140
Gold Mining 9, 190 et seq.
Gold Reserves of State Bank,
369 note, 370
Gold Standard, Adoption of, 271,
353. 356
Golitzin-Muravlin, Prince, 442
Government Railways :
Cost of Construction, 234
INDEX.
455
Government Railways {contd.) :
" Moiirman Line," 252
Revenue from, 340, 341
State Ownership, 231
Grain Trade :
Crops, Statistics of, 21
Development of, 269
Exchanges, 288
Exports, Z2, 23, 270, 317, 318
Mining Industry, Statistics of.
Prices, 23, 24
Graphite, Supply of, 169
Grass Seeds, Exports of, 50, 51
Great Britain, see British
Great Northern Telegraph Com-
pany, 262
Grozny Oilfields, 179, iSi
" Guslits " Hop-Growing Re-
gion, 83
Handicrafts :
Cottage Industries, 19
Furniture and Wood-work, 138
Output, 120
Stimulation of, 19
Hematite, Red and Brown, dis-
tribution of, 171, T72
Hemp :
Cultivation, 68 et seq.
Exports, 69
Manufacture, 134, T35
Herring Industry, 220
Hides, Export of, 323
Holland's Trade with Russia,
310, 311
Hop Cultivation, 82 et seq.
Horses :
Breeding, 41, 42
Exports, 321
Hours of Labour in Factories,
146 et seq.
Imports :
Agricultural Machinery, t8,
202
Automobiles, 202, 206
Coal, 323
Cocoa, 324
Coffee, 324
Customs Duties, see that title
Imports [coiitd.) :
Dyeing Materials, i r3
Exports and Imports, Table,
303
Iron and Steel, 198
Lead and Zinc, 187
Machines and Machine Tools,
113, 202, 203, 209, 212,
214, 3-^3
Metals and Metal Manufac-
turers, 112, 324
Resin, 324
Rolling Stock and Rails, 2^8
Rubber and Gutta-percha, 324
Saltpetre, 325
Sea-borne Trade, 304
Spices, 325
Tanning Extracts, 113
Textile Materials, 112
Wines, 84
Income Tax, introduction of, 347
India-rubber Works, 145
Indo-European Telegraph Co.,
262
Inland Waterways, 252 et seq.
Insurance and Sick Benefit for
Workmen, Legislation, 146,
158 *
Irbit Fair, 281
Iron Industry :
Consumption per Capita, 197,
198
Development of, 192
Manufacture, 196, 197, 199
Ores, Supply of, 171
Prodameta and Krovlia Syn-
dicates, 290 et seq.
Pyrites, 168
Iron and Steel Imports, 198
Irtysh River", 9
Isenberg, A., 54
Issyk-Kul Lake, 7
Japan, Sea of, 10
Jews as Directors of Joint Stock
Companies, 424
Joint Stock Companies :
Growth of, Statistics, 2 76
History of, 418 et seq.
Syndicates for Special Sales,
290
456
INDEX.
Joint Stock Trade Banks :
Institution of, 379 et seq.
War Activities of, 413
Kahan-Shabsay, A., 118
Kasperovicz, H., 88
Kharkoff Fair, 283
Kieff Fair, 282
Knoop, Professor, 39
Kokotsov, V. N., 443
" Kolodka," 226
Korzukhin, J. A., 165
Krestchensk Fair, 283
Krovlia Iron and Steel Syndicate,
290, 291, 293
Kusheleff, P. N., 40 note
Kustarny Work, 97, 282
Kyshtin Copper Corporation, t 85
Labour :
Contracts, 150, 151
Factory Laws, 146 6 < seq.
Insurance of Workmen, 146,
158
Mechanicians, demand for, 208
Statistics, 107 et seq., 129
Strikes, 145, 146, 154, 155
Wages, 120, 159
Women's Factory Workers, see
that title
Workmen's Compensation, 146,
156
Land, see Agriculture
Land Banks, 19, 385, 4 9
Land Tenure, 19
Lead Industry, 187
Lead and Zinc Imports, 187
Leather Industry :
Exports, 298
Factories, Output, 141, 142, 143
Fairs, Sale of Leather at, 283
Tanning Extracts, Imports, 113
Leipzig Fair, 280
Lena River, 10
Licences, Trading, 274, 275
Lime Manufacture, 139
Liquor Trade, see Drink Question
Live Stock Expoits, 321
Loans :
Agricultural Loan Funds, 19
State Loans, 344, 345, 371
War Loans, 349, 406
"Loco-Factory" Prices, 119, 121
Locomotive Builders Agreement
Syndicate, 290
Lodz Railway, 241
London Auctions, 280
Machinery :
Agricultural, see that title
British Manufactures, open-
ings for. 323
Imports of Machines and
Machine Tools, 113, 202,
203, 209, 211, 212, 214,323
Industry, 200 et seq.
Requirements in various Dis-
tricts, 205, 210
Statistics of Manufacture, 201,
210
Malakhovsky, N. 54
Manganese Ore, 167, 323
Manufactures, Classification
Tables, no, 112, 114, 115
Matches, Excise Duties, 336
Meat Exports, 35
Mechanical Engines, Type and
distribution of, 126, 127
Mekk, M. 39
Merchant Shipping, Statistics of
259
Metallurgy :
Imports of Metals and Metal
Manufactures, 112, 324
Mining, see that title
Syndicates for Metallurgical
Products, 290
Mica, Supply of, 1 70
Mied Syndicate, 290
Mineral Waters, Russian Springs,
170
Mining :
Boards, 166
Coal, see that title
Gold Mining, 9, 190 et seq.
Output, 116
Rights, 165
Royalties, 338, 339
Russian Mines, general account
of, 167 et seq.
Syndicates, 290
Women's Labour prohibited,
147
INDEX.
457
Mining {contd.) :
Workmen Employed, ii6
See also Names of different
Minerals
Molybdena, Supply of, i68
Money :
Export prohibitions, 417
Russian Monetary System, 352
et seq.
Mountain Ranges, 3, 5, 6
Mourman Railroad, 252
Moscow-Kazan Railway, 241
Moscow-Kiev- Varony Railway,
241
Moscow People's Bank, 386
Moscow Region, Coalfields of,
176
Moscow Stock Exchange, 399
Moscow-Vindau-Rybinsk Rail-
way, 241
Mukoseyev, V. A., 352
Municipal Banks, 385
Murman Coast Fisheries, 222
Naphtha Engines, Demand for,
205
Naphtha Refineries :
Growth of Production, 124
Output, Number of Workmen
Employed, 117
National Debt, 331, 343, 344
Navy :
Expenditure upon, 331
Shipbuilding "^^ards. Output
of, 116
Neva River, 5
Nickel Ores, 167
Niemen River, 4
Nijne-Novgorod Fair, 283, 395
Early German Trade, 298
Exchange, 287
Nikolae-Pavdino Platinum Co.,
189
Oats :
Crops, Statistics of, 2 1
Exports, Tables, 22, 23, 319
Obi River, 9
Odessa Exchange, 287
Oil and Cotton Seed Manufac-
ture, 63
Exports of Oil Cakes, 33, 322
Oilfields, 178 et seq.
Okhotsk, Sea of, 6, 10
Orenburg " Barter " Fair, 283
Overtime in Factories, Limita-
tion of, 149
Palgrave, Sir Inglis, 368
Paper Mills :
Development of, 136, 137
Output and Number of Work-
men Employed, 117
Pawnbroking Business, Statis-
tics of, 355, 385, 388, 419
Peasants, Emancipation of , 1861,
106, 109, 26S
Peasants' Land Bank, 1 9, 387,4 1 9
Peasant Proprietorship, 20
Pechora River, 5
Peel, Sir Robert, 368
Pelferoff, J. J., 17, 217
People's Palaces, 447
Peter the Great, 301
Petrograd Exchange, 287, 399 et
seq.
Petrograd-Toula Joint Stock
Land Bank, 419
Petroleum Industry, 178 et seq.
Petroleum Products :
Excise Duties, 336, 347
Exports, 322
Pig Iron :
Manufacture, Tables, 196, 197
Mining of, 192, 194
Pigs :
Breeding, 32
Exports, 36, 321
Pilchard Industry, 222
Plains of Russia, 8, 9
" Plast," 226
Platinum Industry, 188
Podolia, Fruit growing in, 80
Poland :
Coal Production, 175
Forests of, 89
Iron Production, 195
Zinc Output, 188
Poltava Joint Stock Land Bank,
419
Population, 13
Pork and Bacon Exports, 32, 34,
321
458
INDEX.
Possession Rights, 193
Postal and Telegraph Services :
Development of, 261 et seq.
Revenue, 338, 339
Rise in Rates, 347
Poultry-farming, 43 et seq.
Precious Stones, 169
Prices :
Cattle, 29
Eggs, 47
Fuel, Comparative Table, 126
Independent movement of,
109
"Loco-factory," 119, 121
Printing Trades, Output, Num-
bers employed, 136
Privately-owned Railways :
Capital invested in. Table 234
Concessions, mode of issuing,
236
Cost of Construction, 234
Dividends earned by, 241
Government Redemption of,
237 et seq.
Prodameta Syndicate, 290, 291
Produgol Syndicate, 290, 293
Prodvagon Syndicate, 290
Protection, see Customs Duties
Provinces, List of, 15
Provoloka Syndicate, 290
Public Finance, 329 et seq.
Pumps, Imports of, 202
Quicksilver Ores, 167
Railways :
Branch Line Feeders, 242
Capital for building, 236 et seq.
Competition between Com-
panies, 248
Control of, 244
Expenditure, Rapid Growth
of, 330
Fares, effect on Railway deve-
lopment on, 286
Government Railways, see that
title
Privately-owned, see that title
Programme of New Construc-
tion, 250, 251
Railways {coiitd.):
Receipts, Working Expenses
and Income Table, 233, 234
Rolling Stock and Railways,
Imports of, 238
Statutes, 237 et seq.
Subsidies, 235
Tariffs, Control and Regulation
of, 245
Telegraph, Lines of, 262
Traffic handled, Tables, 233,
271, 272
Trade development dependent
on, 268 et seq.
Raw Materials :
Import Duties, 309
Machinery Manufacture, high
cost of materials, 207
Refrigerating Machinery for Fish,
229
Resin, Imports of, 324
Revenue Tables, 332, 333, 334
Riazau-Ural Railway, 241
Rivers, 4 et seq.
Fish Species, 13
Navigable Waterways, 252 et
seq.
River Fleet of Russia, 257
Rouble, Fluctuations before and
during War, Table, 416
Royalties, Revenue from, 338, 339
Rubber and Gutta-percha Im-
ports, 324
" Russia " Leather, 283
Russo-Japanese War, 1904-05,
368
Cost of, 331, 332
Rybinsk Exchange, 287
Rye :
Crops, Statistics of, 21
Exports, Tables, 22, 23, 318
Sailing Ships of Russia, Statis-
tics, 259, 260
Salt Mines, 168
Salting and Curing of Fish, 226,
228
Saltpetre Imports, 325
Savin, N. N., 200
Savings Banks, 2G6, 335, 388 et
seq.
INDEX.
459
Sea Trading Routes, English
first opening, 304
Seaborne Trade Exports, Table,
304
Securities :
Discounting, 348
New Issue, Table, 394
Value and distribution of,
1 91 3, Table, 401, 402
Seeds, Exports, 322
Semga, 222, 226
Settlement Bureau of Super-
phosphate Works, Vistula
Region, Syndicate, 290
Sewing Machines, Imports, 202
Sheep-breeding, 30
Shops — Factory Shops, 152
Siberia :
Coal-mining, 177
Forests, 89, 95
Goldfields, 190
Iron Production, 195
Rivers, 9, 10
Salt Supply, 168
Timber Trade, 99
Shipping :
Carrying Trade, Number and
Tonnage of Vessels, 305
Inland Waterways, Steamer
Traffic, 252 et seq.
Merchant Fleet, Statisfcs of,
259
Silk Manufacture, Output, 133,
134
Small Holdings, 20
Soap Works, Output and Num-
ber of Employees, 141, 142
Soboleff, M., 298
Soda, Sulphate of, 169
Soils of Russia, 1 1
Soskiss, M., 39
South Eastern Railway 241
Spirits :
Excise Duties, 336, 347
Government Monopoly, Rev-
enue from, 338
Liquor Restrictions, see Drink
Question
Refining Works, Output of
Labour, 1 1 9
Spices, Imports, 325
Srietensk Fair, 282
State Bank :
Branches and Offjcrf;, 378
Cu'rent Accounts (Accounts-
giro) 377
Gold Reserves of State Bank,
369, 37"
Historical Account of, 360, 361
Liabilities, 376
Opening of War 1914, State
Bank's position, 405
Operations of, 354, 355, 357 ct
seq., 363 et seq.
" Report " operations, 398
War, Effect of, on, 411
State Forests, 91
State Property and Funds, Rev-
enue from, 339
State Ownership of Railways,
^31
Statutes of Joint Stock Com-
panies, 418, et seq.
Railway Statutes, 237 et seq.
Stcherbatoff, Prince, 39
Stearine and Tallow Works 141,
142
Steel :
Imports, 198
Manufactured, 199
Stock Exchanges, 399 et seq.
Position at opening of War
1 914, 403 et seq.
Strikes 145, 146, 154, 155
Sturgeon and Caviare Industry,
221, 227
Sugar :
Exports, 76, 321
Production, 70 et seq.
Refineries, Kieff Fair Trade,
282
Sulphur, Supply of, 169
Sulphuric Acid, Vistula Region
Syndicate, 290
Swine Breeding, 32
Swine Exports, 36, 321
Syndicates, 290
Tallow and Stearine Works, 141,
142
Tanning Extracts, Imports of,
113
460
INDEX.
Tar Manufacture, 99
Tariffs, see Customs Duties
Taxation System, 334 et seq.
New Taxes introduced through
War, 347
Rise in, owing to Liquor Pro-
hibition, 235, 346
Trading Taxes, 107
Telegraph and Telephone Ser-
vices, 261 et seq., 338, 339,
347
Teletskoe, Lake, 6
Tenure of Land, 19
Textile Industry :
Hours of Labour, 146, 149
Machinery Imports for, 203
Output and number of Em-
ployees, no, 114, 118, 123,
131. 132
Strikes, frequency of, 155
Textile Materials, Imports, 112
Thermal Engines :
Home Manufacture, 2(^4, 214
Imports, 202
Tiflis Woodworking Trade, 99
Timber :
Exports, 321
Fuel, Timber used as, 122
State Forests, Revenue from,
339, 340
Trees of Russia, 89 et seq.
Tin Mines, 167
Tobacco :
Cultivation, 76
Excise Duties, 336, 347
Exports, 78, 79
Trade :
Banks, position of, 294
British-Russian, see that title
Carrying Trade, Number and
Tonnage of Vessels, 305
Commercial Travellers, intro-
duction of, 273
Exchanges, Powers and Func-
tions, of 286 et seq.
Fairs, 273 et seq.
Freight Returns, Tables, 271,
272
German-Russian, see that title
Grain Trade, Development of,
269 et seq.
Trade {covtd.) :
Holland, Russian Trade with,
310, 311
Joint Stock Companies, see
that title
Overland Trade, Table, 303
Railway Construction stimula-
ting, 271
Syndicates, 290
Turn-over Increase 1742-1915,
301, 302
Trading Tax, 107
Transcaucasia :
Cotton Growing, 57
Tobacco Cultivation, 77
Treasury Bills, discounting, 409
et seq.
Tribes of Russia, 14
Tsar John IV, 299
Turbines, Demand for, 205
Truck and Deductions, 152
Turkestan :
Coal Mining, 177
Cotton Growing, 54, 60, 61
Fruit Cultivation, 82
Irrigation Needs, 62
Machinery Requirements, 205
Oilfields of, 183
Under-sized Fish, Restrictions as
to, 221
United States of America :
Agricultural Machinery Ex-
ports, 204
Automobile Exports, 206
Ural Regions :
Coalfields, 176
Copper Production, 186
Forests, 91, 93
Iron Ore Production, 179, 192
Mineral Products of, 168
Oilfields, 182
Ural River, 4
Vanadium, Supply of, 168
Varzar, V., 105
Vegetation of Russia, 1 1
Village Handicrafts, 19
Vine Growing, 84 et seq.
Vistula River, 4
Vladikavkaz Railway, 241
INDEX.
461
" Vobla," 221
Vodka :
Consumption belore War, 431
et seq.
Customs Duties, 438
State Monopoly, 437
Voigh, Dr., 52
Volga Region, Forests, 91
Volga River, 4
Volhynia, Hop Cultivation in, 83
Wages :
Increase in relation to Pro-
ductiveness, 120
Legislative Enactments, 150 et
seq.
Statistics of, 159
War Expenditure, 409
War Loans, 349, 406
Warsaw Discount Bank,
Warsaw Exchange, 287
Warsaw-Vienna Railway,
Wheat :
Crops, Statistics of, 21
Exports, Tables, 22, 23, 318
Willoughby, Sir Hugh, 299
419
Wine Manufacture, 84
Wireless Telegraphy, 265
Witte, Count, 442
Wolfram, Supply of, 168
Women Factory Workers :
Regulations for, 146 et seq.
Statistics of, 163
Wages, 163, 164
Women's Labour in Mines, pro-
hibited, 147
Wood Pulp Exports, 103
Wood-working Trade, 96, 117
Wool Auctions, 31
Wool Trade, Output, Cost of Pro-
duction, etc., 132, 134
Woollen Yarns and Manufac-
tures, Russian Demand for,
324
Workmen's Compensation,
156
146,
241 Yenisei River, 9, 10
Zemstvo and Urban Credit Bank,
387
Zinc Industry, 187
Prinled by P. S. King & Son, Ltd.. Orchard House. WeMminster, S.W.
Royal 8vo. Cloth. 450 pages. 12s. net. Inland Postage, 9(1,
Postage Abroad, Is.
A PRACTICAL GUIDE FOR
RUSSIAN CONSULAR OFFICERS
And All Persons having Relations with Russia.
SECOND EDITION— REVISED AND AMPLIFIED.
By BARON A. HEYKING, D.C.L.,
Imperial Russian Consul -General in London.
This work, besides covering the whole ground of the Consular Service,
contains detailed information as to the legal position of foreigners in Russia,
both in general and in particular, as regards certain branches of industry
and commerce, with instructions as to the most important Customs Regu-
lations. Many points of detail arising in the everyday business of the
Consulates are not provided for in the written laws and regulations, but
are, nevertheless, satisfactorily disposed of in accordance with the unwritten
law of custom. Thus, the work is a combination of theoretical knowledge
and of practical experience acquired during twenty-eight years of State
service at the Russian Foreign Office and at different Consular posts.
Contents : — Part I (15 Chapters). Consular Duties in General— Staff — Office. Part II (5
Chapters). Supervision of Commerce and Shipping. Part III (3 Chapters). Sanitary Matters.
Part IV (12 Chapters). Documents. Part V (24 Chapters). .Assistance to Russian Subjects. Part
VI (21 Chapters). Duties connected with Vessels sailing under the Russian Merchant Flag. Part
VII (14 Chapters). Duties connected with the Russian Imperial Navy. Part \'III (7 Chapters).
Consular Fees. Part IX (11 Chapters). Instructions as to Russian Customs Regulations. Part
X (6 Chapters). Legal Position of Foreigners in Russia. Part XI (10 Chapters). Legal Position
of Foreigners in Russia with regard to Particular Branches of Commerce and Industry. Part
XII. Legal Position of Russian Subjects in Great Britain. Part XIII. A Plea for Consular
Conventions. Part XIV. Maritime \'ocabulary of Nautical Expressions commonly used.
Appendices. Alphabetical Index.
The Times. — " It covers so much ground and is ;-,upplemented by so much
other legal information, including a chapter on the legal position of for-
eigners in Russia, that every one who has dealings with Russia will un-
doubtedly hnd in it something which will afford him help and guidance."
Russia. — " Should be included in every reference library, public or
private."
Librarian. — " Of great value to the student of Russian Sociology."
P. S. KING & SON, LTD., Orchard House, Westminster
WAR FINANCE
BY
J. SHIELD NICHOLSON, M.A., Sc.D.
PROFESSOK OF POLITICAL ECONOMY IN THE UNIVERSITY OF EDINBURGH.
Demy 8vo. Cloth. 10s. 6d. net. Inland Postage, 9d.
Scotsman. — " ... of permanent \alue as a contemporary record and
criticism of war finance under unprecedented conditions. The tone is in
the main critical. Ahnost from the beginning of the war Professor Nichol-
son has inveighed with all the power of his great command of economic
theory and economic history, assisted by his gifts for popular exposition,
against the financial errors of successive Governments and the financial
carelessness and inconsequent conduct of a spendthrift public, demoralized
by the war bonus system. ]\Iany of the earlier judgments have already
been justified by the course of events."
Glasgow Herald . — " . . . the lofty spirit and deep conviction of the writer
make the articles here reprinted the most inspiring and thought provoking
pages of economic criticism we have read since the war started."
CENTRAL EUROPE
DR. FRIEDRICH NAUMANN,
MEMBER OF THE REICHSTAG.
Translated from the German into English by' MRS. C. M.
MEREDITH .
\\'ith an Introduction by
SIR WILLIAM ASHLEY, M.A.,
professor of COMMERCE, AND DEAN OF THE FACULTY OF COMMERCE IN THE
university OF BIRMINGHAM.
Demy 8vo. Cloth. About 350 pages. 8s. 6d. net. Inland Postage, 6d.
Extracted from Sir William Ashley's Introduction.
The author of this book is probably the most widely read political writer
in Germany, and this work is far and away the most important book that
has appeared in Germany since the war began. It expresses hopes already
deeply rooted in many German minds, and sets out a systematic scheme for
an organized Central Europe as one of the world Powers of the future.
The first question which English readers will ask as to Dr. Naumann's
present political vision is its chances of realisation. That vision may be
described as a loosely federal combination for purposes of offence and
defence, military and economic, consisting primarily of the German Empire
and the Dual Monarchy, but also including the Balkan States and Turkey,
together with all the neutral States — Rumania, Greece, the Scandinavian
Kingdoms, and Holland- — that can be drawn within its embrace. He
rightly feels that the one thing essential from his point of view is to bring
about the permanent association of Austria-Hungary and Germany, and
to that issue he de\otes all his argumentative power.
P. S. RING & SON, LTD., Orchard House, Westminster
THE FUTURE OF OUR AGRICULTURE
By Henry \\'. Wolff, Author of " Co-operation in Agriculture."
Honorary Adviser to the Irish Agricultural Organisation Society, one
of the Founders of the British Agricultural Society, and of the Agri-
cultural Organisation Society, igoo. Demy 8vo. Cloth. 125. 6d.
net. Inland Postage, gd.
Westminster Gazette. — " Mr. Wolff is a diffuse and discursive writer, but besides knowing his
subject from a to z, both at home and abroad, he knows how to make it interesting. His is a
thoroughly human and ' live ' book. . . . His keys to the future are Education — Organisation —
Co-operation."
RURAL RECONSTRUCTION IN IRELAND
By Lionel Smith Gordon, M.A., Assistant Secretary, Irish Agri-
cultural Organization Society : and Laurence C. Staples, A.M.,
sometime Parker Travelling Fellow, Harvard University. Demy 8vo.
Cloth. 8s. 6d. net. Inland Postage, 6d.
The Times. — " The first complete account of the rise and growth of the co-operative movement
in Ireland, and it will be heartily welcomed by all who take an interest in one of the most remark-
able economic and social movements of our time ... it is thorough and comprehensive, and
as such is to be read — and kept — as a permanent record, as essential for a correct knowledge
of Irish conditions as Thom's Directory."
COMMERCE AND THE EMPIRE : 1914
AND AFTER
By Edward Pulsford. Member Senate, Commonwealth of Australia,
igoi-igio. Demy 8vo. Cloth js. 6d. net. Inland Postage, dd.'i
New Witness. — " Senator Pulsford is an .Australian free-trader whose utterances merit careful
attention. Some of the points brought out are undoubtedly striking — for example, the cumulative
effect of the world's restrictive tariffs, and the little accomplished in the direction of reciprocal
preference between the Colonies. . . . The question is now one demanding the most earnest
consideration free from all the prejudices and predilections, as Britain's fiscal policy will be one
of the great points in the Peace Conference — when it comes."
SPUN YARNS OF A NAVAL OFFICER
. By Albert R. Wonham, Captain, Royal Navy. Demy 8vo. Cloth
12 illustrative plates, ids. 6d. net. Inland postage, gd. A volume
dedicated to Admiral Sir John Jellicoe, and entertaining to all ad-
mirers of the British Navy.
A STUDY OF INDUSTRIAL FLUCTUATION
By Dennis H. Robertson, M.A., Fellow of Trinity College, Cam-
bridge. Demy 8vo. Cloth, 8s. 6d. net. Inland Postage, 6d.
Economist. — " Altogether an exceedingly able and sound piece of work, distinguished by strong
common sense and great logical acuteness. It should be carefully studied by all those in anyway
concerned with the great problem of the future — the re-organization of industry after the war."
GOLD PRICES AND THE WITWATERS-
RAND
By R. A. Lehfeldt, Professor of Economics at the South African
School of Mines and Technology, Johannesburg. Crown 8vo. Cloth.
5s. net. Inland Postage, 6d.
P.S. RI NG & SON, LTD., Orchard HouscWcstminstcr
9 "? /I ^ -
^ X :it O I •
AA 000 996 773