Should this loan prove a success it will be followed by another of equal amount.
Finally, Prof. Migoulin proposes to obtain about 200,000,000 rubles by selling 4 per cent. Government bonds in fifty-ruble denominations. This loan, too, will be equipped with the winners at the annual draw for the redemption.
The first of the proposed loans will be realized soon. The Government has decided to obtain 500,000,000 rubles at 5 per cent. This new loan will increase the present debt of the Russian Government of 8,838,000,000 rubles ($4,500,000,000) to 9,338,000,000 rubles. Russia has to pay 370,000,000 rubles annually for the interest on her debts. About one-half of her indebtedness is due to railroad building and to other more or less productive expenditures. But the other half of her indebtedness has been spent on armaments, wars, and other unproductive items.
Russia's new budget is about 3,500,000,000 rubles ($1,800,000,000.) The interest on the new loan will increase this budget only 6 per cent. But this new loan increases again her unproductive debt and places a heavy burden upon the taxpayer for whom the Government has prepared many "surprises" this year.
The possibilities of internal loans are not very great. During the first month of the war about 380,000,000 rubles of savings were withdrawn from the banks. Of this sum only 76,000,000 were redeposited later when the first excitement had passed. The rest of the money evidently was either used up for production, for consumption, or for private storing of ready cash. How much of this money will come forth to buy the various short-time loans no one is able to tell beforehand. But the big manufacturing interests are craving for foreign gold loans, not for internal paper money loans.
How Russian Manufacturers Feel
[Digested from Russkia Vedomosti, No. 266, Nov. 18, (Dec. 1,) 1914, P. 6.]
THE manufacturers of war supplies are making large profits through the war. All they need is Government advances to buy their raw material. The Government permits them to borrow from the State bank upon Government orders for war supplies. The only difficulty lies in the extent of the credit. The Government would not permit borrowing more than one-third of the amount of its orders, while the manufacturers are asking for two-fifths.
The manufacturers who are using imported raw material and are working for the private consumer are suffering heavily from the war. The lack of coal, of hides, of wool and of cotton is threatening Russian industry with a crisis. There is a great want of hydroscopic (absorbent) cotton, since the only factory for this product was in Poland (City of Zgerzc) and has been destroyed. Lack of dyestuffs and other chemicals is hampering many other industries. The importation of tea and coffee has been curtailed considerably.