Russia’s Finances

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We have repeatedly pointed out that the autocratic government is more and more confused over its financial affairs (tricks would be an apter word, I think). It is increasingly obvious that a financial collapse is inevitable. Here is an interesting confirmation of this. The Berlin correspondent of the London Economist, one of the most influential organs of the European financial barons, reported on October 11 as follows:

“A representative of the Mendelssohn Bank has been in St. Peters burg this week to take part in the negotiations between the Russian Government and French bankers for the much-heralded new Russian loan. According to apparently authentic statements given out here, the amount to be raised will be about £75,000,000 [about 700 million rubles], of which France is to take about half, while the rest is to be offered in Germany, Holland, England, and the United States. It is also stated that a large part of the issue is to be devoted to taking up the Treasury notes placed in France and Germany during the war.

That Russia should appeal to the money markets at just this juncture, when all the great centres are under unusual pressure, is taken as striking evidence of its financial straits. One version of the story, however, has it that only a small part of the sum above mentioned is to be offered for subscription now, while the rest will be raised later, presumably early next year. But this only increases the unfavourable impression as to the urgency of Russia’s needs. That there is no enthusiasm in Germany for a Russian loan just at this moment goes without saying. Not only the condition of the money market here, but, more than all, the continuance of political turmoil in Russia, and the visible weakening, not to say breakdown, of Governmental authority there, are facts that are being weighed in Germany in a manner that augurs ill for the forthcoming subscription.”