Her Economic Past and ,l*atare By DR. JOSEPH M, GOLDSTEIN 0/ tniitic.ii iTcr tirtd Infiu. ■ly at the Moy.cnu> tnxHluW^' •■''' 'hf. I Jnivfrrsitf of Mtiscotif Puh}it»h<«f by ..THE RUSSIAN rNFORM ATiON BimEAU K 335- a^axmll Ittiucraita Eibtarg Strata, Sfeui ^ark BOUGHT WITH THE INCOME OF THE SAGE ENDOWMENT FUND THE GIFT OF HENRY W. SAGE 1891 "The date shows when this volume was taken. To renew this book cony the call No. and give to the librarian. HOME USE RULES ... J [)ii.^ AU Books subject to recall *' '' ^ ■ AU borrowers must regis^ .n.pPj -8 1931 ter in the library to borrow^ y tW 'J books for home use. ■ All hooks must be re- 1 ^ , « u ' ^^\\ turned at end of college |jf_W--* ' year for inspection and repairs. * iiPR S 1QR4HS Limited books must be .".':..„ ."....'.?.?.7.... ...•?. returned within the four week limit and not renewed. Students must return all books before leaving town. — ..____^,..,,^^ Officers should arrange for ^]^^^]]^7rr?. ' ''"' return of books wanted during their absence from town. Volumes of periodicals and of pamphlets are held in the library as much as ; possible. For special pur- poses they are given out for 11 limited time- Borrowers should not use their library privileges for the benefit of other persons. Books of special value and gift books, when the giver wishes it, are not allowed to circulate. Headers are asked tore- port all cases of books '" marked or mutilated. Do not deface books by marks and writing. Cornell University Library HC335 .G59 Russia, her economic pas*,,?"|?,,,MV,!i? *'^ olin 3 1924 030 025 930 Overs Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030025930 RUSSIA Her Economic Past and Future By DR. JOSEPH M. GOLDSTEIN Professor of Political Economy at the Moscow Institute of Commerce and Industry and of the University of Moscow Published by THE RUSSIAN INFORMATION BUREAU|IN THE U. S. WOOLWORTH BUILDING NEW YORK CITY > Copyright, 1919 Rassian Information Bureau New York Introduction The author of this book, Dr. Joseph M. Goldstein, Professor of Political Economy at the Moscow Institute of Commerce and Industry and of the Uni- versity of Moscow, came to this country, delegated by the University of Moscow, to study the problems of trade relations between the United States and Russia and the possibilities for American-Rus- sian financial and commercial coopera- tion. Prof. Goldstein is considered, in Rus- sia and throughout Europe, one of the foremost authorities on problems of for- eign trade, commercial treaties, trusts and syndicates. The prospect of peace has to a certain degree revived interest in Russia and in the Russian market among American business-men. How- ever, this interest is still insufficient con- sidering the importance of the possible American-Russian trade and financial cooperation, which, if properly devel- oped, may prove of great benefit to both countries. Prof. Goldstein's book, pre- senting the economic past of Russia, and the great possibilities in her eco- nomic future, appears, therefore, very timely. Bolshevism, with its wild experiments in Russia's political, cultural and eco- nomic life, with all the misfortune and destruction it has brought Russia, nat- urally scares and disappoints many who were previously sincerely interested in Russia. This disappointment should not becloud the proper perspective neces- sary for an understanding of the Rus- sian problem as it stands to-day. The rule of the Bolsheviki cannot but be tem- porary. This faction, with its naive po- litical and economic experiments, will disappear as soon as the instinct for self- preservation reasserts itself throughout Russia, as soon as Russia recovers from her grave wounds. Young, full of latent power, she is passing through a period of utmost disorganization known to every country that has passed from tyranny to free, democratic develop- ment. With the disappearance of the Bolsheviki, transportation will be rees- tablished, the banks will be reopened, the financial system will recuperate, the management of industries will be placed in the skilled hands of the industrial class. Russia's present economic situation is analogous with the situation of the United States after the Civil War, and the future economic development of Russia will be similar to the economic development of this country. Four ele- ments combined made possible the de- velopment of the United States. The first element was its youth, energetic and eager for work. The second was the natural resources of the country. The third, the principles of democracy, which recognize for everybody a definite amount of right and give everybody his chance. The fourth was the foreign capital which flowed into the United States after the Civil War, and made it possible for the American people to develop the natural resources of the country. Two of these elements we, Rus- sians, have always possessed. We may say that we have always pos- sessed a talented people, a people with great latent power, a people which, under the strain of the most unfortunate national history, produced a wonderful culture. On the other hand, we possess almost endless and priceless natural re- sources. Two years ago the third ele- ment was born — Democracy, with its creative spirit. There is always trouble in the beginning of the life of every Democracy, but in the long run it is a blessing for a country. It has been a blessing for the United States. It will prove a blessing for Russia. As soon as Russia finds herself — and she will find herself before long — she will need foreign capital for her develop- ment just as the United States needed it half a century ago. Russia's eyes turn to the United States. The United States is so developed industrially because the natural resources of the country for the last fifty years have been united with the creative power of foreign capital. As soon as normal conditions are reestab- lished it will be Russia's turn. During the War the United States, from a nation-debtor, has become a nation- creditor. It will be of benefit to both countries if American capital will take the same part in Russia's industrial de- velopment that foreign capital once took in the development of this country. At this moment practically all busi- ness relations between the United States and Russia are at a standstill. This should not discourage American busi- ness interests. The American financial interests must prepare for financing Russia's industries, the American trade interests must prepare for future trade with Russia. The time will come — and it may come very suddenly — when everyone who is prepared will be richly rewarded. As soon as Europe comes to peace and normal conditions are reestablished in Russia, a feverish upbuilding movement will start all over Europe, and Rus- sia will lead this movement. She will build railroads, highways, develop her natural resources, build up industries and trade, which will bring her to the foremost ranks of the civilized nations. The United States is designated by his- tory to participate in this upbuilding of the young democratic nation. Every business-man in this country should be prepared for his future activities -in Rus- sia, so that the two sister democracies may be fully benefited by this possible and, under the circumstances, necessary cooperation. A. J. SACK Director of the Russian Informatiort Bureau in the U. S. Tune 1, 1919. Foreword I dedicate this work to the great nation which has, during the past 35 to 40 years, succeeded not only in surpassing the indi- vidual national wealth of England, France and Germany, countries with thousand- year-old civilizations, but has created wealth almost equalling their combined total. I believe that the great American democracy whose labor was so vastly as- sisted in its productivity by investments of capital from old Europe, will now raise the banner of economic progress in the Near and Far East, and will find in the limitless natural resources of Russia a new and wide field for its fabulous energy, initiative and ability in subordinating nature to the genius of men. Russia is at present passing through very violent internal changes, and should I suc- ceed in awakening interest in my country among the readers of this book, I will feel fully repaid for my labors. DR. JOSEPH M. GOLDSTEIN CHAPTER I. Russia's Economic Development and the Old Regime WHEN the War started, Russia was just at the beginning of a period of important develop- ment. The following" are the basic facts : Russia, covering almost one-sixth of the total land area of the globe, had, ex- clusive of present Poland and Finland, with over 160,000,000 population*, a rail- road mileage not much in excess of that of Canada with a population of about 8,000,000. Another fact that illustrates Russia's immature economic development is the small number of joint stock companies engaged in her industries. The total capital represented in Russia's industrial and commercial joint stock companiesf before the Revolution was about 2 bil- lion dollars, approximately one-ninth of the capital invested in common and pre- ferred stock, bonds, etc., of the railroads of the United States. A still more striking example is the fact that the total stock and bond capital of all Russian industrial and commercial corporationsf, at the beginning of the War, just exceeded the stock and bond capital of one American concern, — the United States Steel Corporation. How insignificant was the capital in- vested in Russia in joint stock compa- nies maybe seen from the fact that, when the War started, the paid-up capital of all Russian industrial and commercial corporations, with Russia's population * For statistics of population see p. 99. t Exclusive of railroads and banks. of 180,000,000, was less than 2 billion dollars, whereas the paid-up capital of such enterprises in England, a country with a population of 45,000,000, amounted to 12 billion dollars, exclusive of the enormous capital invested in Eng- lish railway companies. The number of joint stock companies in Russia barely reached 2,000, while England had more than 56,000. One of the principal causes of such stagnation was the restriction caused by the innumerable regulations which the old bureaucratic regime placed on the free investment of capital in joint stock companies. Another important factor was that until very recently the political relations between Russia and England were far from friendly. England's capital was always the most energetic and forward- looking in the development of the pro- ductive resources in almost every part of the world, having contributed materi- ally towards the construction of the rail- way systems and of a large number of industrial and commercial enterprises in the United States, Canada, Australia, Argentine, Asia, Africa, etc., etc. But the relations between England and Rus- sia having made it imperative for Eng- land constantly to consider the safety of India, England naturally did not supply Russia with capital, as the growth of Russia's productive forces would have enhanced her political power and pres- tige. RUSSIA— HER ECONOMIC PAST AND FUTURE Appoximafe Value of Russias Ac^riculfural Proafucf/on (In Mil/ions of Roubles) 1910 1895 Approxim - 9 - 8 (ZEMSTWOS) '^20- ZOYears ►0 - 7 - 6 -20 136 s c 1863-I88Z in: 1893-1902 - 5 16 -1000 ~ 10- BYears 1903-1907 1885-1892 1.6 - 4 - 3 -10 593 — 1 SYears ^0 1875-1882 "09 - 2 2 \ — 1 54 ^ 260 C\ - K8-186Z «ci 1865-1872 1838-1862 M. - 1 — n 0.9 1 1 \j Ci- cvi U «? — Wl ro • — t — CJ • — 1 — CJ '-0 o — o o — o o ~ 52 <5^ CO 2? £9 2i 0> ^ CTi CTi CO rO Diagram No. 2 10 RUSSIA — HER ECONOMIC PAST AND FUTURE Government, as well as the Zemstvos,* have only in recent years understood that substantial subsidies are indispens- able to insure the development of the productive forces of the country. The average annual budget of the Board of Agriculture, as shown in dia- gram No. 2, gives the following expen- ditures. Years 1838-1862. . . .about 0.3 million roubles 1903-1907.... " 4 1908-1912.... " 12 The number of technical advisers and instructors employed by the Board of Agriculture and the Zemstvos very greatly increased, as shown in the same diagram. A very important factor in the growth of Russian agriculture during recent years was the constantly increas- ing number of various agricultural as- sociations and co-operative societies, due to a more liberal governmental pol- icy in that Department. As shown in diagram No. 3, from January 1, 1909, Number of Aofriculiureil Associaiions (At i-he bei^inninc) of J9I4) 5000 -, 4000- 3.000 - 2000- 1.000 4.685 Creci+ed dfter Join. 1,1909 2961 Creoi+ed 1902-1907 1215 (Zl.Zjo) Created before 1902 = 1 443 0.5%) Number of Agriculiurcfl Cooperative SocieHes (Af the beginning of 1914) 1254 106 90 Creoi+eol 1913 269 Creoi+ed 1910-1912 7fe9 Created BOl-Oi ICrewtec before 1902 1500 ■1000 500 Number of Aqriculturctl Cooperpiiive Societies '^J -20u) o n" -18"^ - 16 a - PIG lf>ON -I4S . « o — ■* -\^l s: 5- ■* i« n^ 9 -I0^- - 8c t\j - 6 - 4 - 2 "- oj CO oo oj c^J rj ' O^ O^ O^ C> O^ S. 5}Sl Diagram No. 4 CHAPTER II. Cultivation of Grain- Foodstuffs and Russia's Role in the World Market — Cattle Raising — Industrial Production — National Wealth — Comparison with Other Countries, Especially with the United States. IN showing the progress of Russian agriculture, as represented by its chief product, grain, we draw atten- tion to the figures in diagram No. 5, which illustrates the increase for con- secutive three-year periods from 1895- 1897 to 1910-1912. The annual produc- tion grew in 18 years from 3.1 billion to 4.4 billion poods, an increase of approxi- mately 42%. The first section of this diagram shows also that the increase in the average yield applied to lands owned Annua/ Yielo/ of Grcf/ns in 50 Total ProducHon of e^ll Grcrins Governments of Europecin Russ/er in Ru ss/cT*** 54 n 52- (1661-70 — 1900-1910) E4 (Annual Ave rag es) 50- LANDS OWNED** V ^ 48- PEASANT LANDS* . %f^so/^l^ 47 4(0- C44- 4S ' 4.4 C42 - 4-40- 59 -r£. 4.1 _4-5 .5 38- (0 3S - u)34- xa. 37 7, 7 3.6 o o a w. . 33 3.5 aj32- 31 3.1 Cf- -3 o ^30- 29 ^26- (u2^- (0 0-24- c 22- «20- -2 - ■^ 16- — le - ;_ Ol4- CO 12- ' ' \ r '0~ ^ § § 5 S <0 ^ 1-^ <2, 5 CM - 1 ^ f 8- 5 ^ 'O OS (S^ 00 ^ 00 ■ — (& - 4 - i 1 1 1 1 t 1 1 ^ t $5 1 S9 ^ ^ $ -20 ^45- 40- ^ o — cJro^ m tsr— oodo— cvJ m cv) m o in o N Cl O O) <3) doooooooooo — — — CTl — O O — — 5) 'l-workinq shops. «o c> c> 2 ^ Diagram No. 8 ISl RUSSIA \4S Annual Avercxye Wheat Yi'elc^ -for 7 tht Period of 1301 - 1910 (In ** Pooc/s" per Dessiafina) 6Z SEKVIA 5< SPAIN BULGARIA 62 16 1 TA LY HUNGARY 1 ROUMAN 1* 19 AUSTRIA 8S FRANCE 90 B s n £ D E N 12 6E R MA N Y HO GREAT BRITAIN MS HOLLAND 155 BELGIUM yS7 DENMARK (leOI-OS) < 1 1 1 1 1 1 I ) 25 SO 75 100 125 130 175 totaled only 53,000,000 roubles, in both 1911 and 1912, the imports of agricultural machinery and im- plements greatly exceeded these sums. The same may be stated concerning the manufacture of agricultural machinery and im- plements in Russia itself. From 1895 to 1912 the manufacture of these products increased 5^ times. Under the influence of compar- atively low freight rates on the railroads, the activity of the Zemstvos, and the gradually ris- ing standards in public instruc- tion, the use of agricultural ma- chinery began to spread over the Diagram No. 9 16 RUSSIA — HER ECONOMIC PAST AND FUTURE Annua/ Average Yield of Whecff per Acre in Bus tie Is (1907 -1913) 25n M 20- <0 ^■* ^ ^ ^ 15- ^ '^ 1 1 fN ^ ^" ^ Q -^ 10- i 5 1 -J ^0 i < 5- 5 1 ^ § 1 5 A (t: ■^ (Q X o 1; " 1300- ^ 1200 - .° 1100- - 1000 - - 900 5: 600 700 £ 600 500 400 300 200 100 CORN 2100 Crops in Russia (Pinc!l in the Uniied Sicties (Annual Averages for the Years 1911- li) POTATOES 1268 RYE oo oo oo oo 955 oo OO oo oo OO oo oo oo oo oo O oo oo oo oo oo oo oo oo oo oo 57 oo oo nxEQ oo 594 148 181 UNITED STATES OATS BARLEY WHEAT 1154 1051 727 FLAXSEED Z4.5 21. d 78 Total of all mentioned Crops (In Millions of Bushels) 5153 4691 oo O O o o o o o o oo o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o O O O O O O O O O Co o o o o o o o o o o • o O O O o o o o oo o o o o O o o o o O O o o o o o o o o o o oo o o o o o o o o o o o o o o o o o o o o o Total Acrea^ uneven all metrtioheol Crops 209 300 260 2^0^ 240 j; 220 u 200^ 160 t^ 160 ^ 140 I-I20 I 100 o 60"=: 60 z: 40^ 20- "-L- Diagram No. 11 RUSSIA— HER ECONOMIC PAST AND FUTURE 17 in many parts of Russia is much richer than the soil of the majority of the countries of Europe, all of which, to- gether, have hardly as great a belt of "black soil" as European Russia has. In comparing Russia with her most important competitors in the world's market, we find (diagram No. 10) that they all have higher yields per acre than Russia, — Canada's average yield of wheat per acre being almost twice that of Russia. The figures showing the average pro- duction of the most important grains and of potatoes in the United States and in Russia are given in diagram No. 11. These figures show that, notwithstand- ing the fact that Russia had under cul- tivation an area about 23 per cent greater than that of the United States, To-f-af Value of Ac^riculfurctl Proc^uc-hs in Russiof c^nc^ i-he Unii-ec^ S-hcPftes for fhe Year 1910''^ Value of A(^r!culfuroil Production per Capii'Ct of Rural"^^ cijo Population o 225-1 200- 175- 150- 125- 100 75 50- 25- 200 30 JZL ^Nof including fisheries and foresis. ^*for the United States "urban" population indudes all incorporated places havin<^ 2500 or more inhabitanis. Total populaition exclusive of "urban" is named in America " rural" population . In Russia many places having 5000 or more inhabitants, frecfuently are classified as '^ rural " districts. To make a fair comparison ihe actual "rural" population of Russia was therefore reduced by about 5 percent. Diagram No. 12 18 RUSSIA —HER ECONOMIC PAST AND FUTURE NUMBER OF CATTLE (6 Sheep or 3 Hoqs c?ire fcptken as being ec^uivalenf to I Mecici of Caff /e) 5670 6320 \4600 PER 1000 OF POPULATION 3G60 PER 1000 HECTARES UNDER WHEAT, RYE, BARLEY, OATS, CORN AND POTATOES ]\ 300 960 I- z LU < < < Q < < z 1- z UJ < < a. < < i Q UJ < (0 Z 1- o LO Z (- cn <. z: ZD a 3 < 2 -) o z> cr < < o D or Diagram No. 13 the total average crop of all these prod- ucts in the latter country was fully 10 per cent higher than in Russia. This striking backwardness in Rus- sia's agricultural productivity is shown still more clearly in dia- gram No. 12, in which is given data concerning the total value of agricultural products in Russia and in the United States, as well as the value of agricultural products, per capita, of population in both coun- tries. At the time that the an- nual per capita value of agricultural products was $30 in Russia, it was about $200 in the United States, almost seven times greater. One of the chief causes of such low productivity of agriculture in Russia ap- pears to be, in addition to limited application of agri- cultural machinery, the negligible amount of live stock per capita, as well as per unit of cultivated acre- age. The figures in dia- gram No. 13 show that, while for every 1000 inhab- itants in Argentine there are 5320 head of cattle, and in Australia 4600, Russia has only 390 head of cattle per 1000 inhabitants, i. e., about : 14 times less than in Argentine 12 times less than in Australia 2y2 times less than in Canada. 2J4 times less than in the U. S. When it is considered that the live 770 RUSSIA — HER ECONOMIC PAST AND FUTURE 19 stock belonging to the peasantry in Russia is of inferior quality and weight, the difference in iavor of the other countries will appear still more strik- ing. Since there was practi- cally no use of artificial fertilizers in Russia, this small number of cattle was one of the principal causes which hindered the prog- ress of Russian farming and agriculture. What bright prospects there are in store for Rus- sia may be easily seen from diagram No. 14, which shows that, of the entire land area of Russia, there 700-1 675- 650- 625 "« 600 » 575 ^ 550 Z 525 5 500- » 450- u 425- Q 400- 375- V 350 o J25 300 275- " 250- - 200 Z 150- f 126 100 75- 50- 25- Total Area and Area unaler Culfivafion in various parts of Russia in /9/Z I \ cuLriVATED AREA ^^^.UNCULTIVATED AREA 6411 1,965.6 BOS 6 44I.S ^4i.O 5? 202.8 IZI.Z 5.2% 102.5 il p Diagram No. 14 75-] 70- es- 60 a> o H 50 ^45H 40 ^35-1 o ■f 30 '£ 25-1 c20 15 10 H 5 Production of Iron Ore, Pig Iron c^nd Oil ( Annual Averages for the Years 1912- 1915) IRON ORE 61.7 \1%1\rU5S/A UNITED STATES IRON ORE 0.62 6.9 OOOO oooo OOOO oooo oooo qoo o PI 6 IRON 10.9 OIL 4.4 oo oo oo o o "POO 29 9.2 OO OO OOOO OOOO oo OO OOOO qOOo o.os o o oo o o PIG IRON 0.315 0.75 0.7 0.&5 hO.G ^ -0.55 c o -Q5 ^ -0.45 f -0.4 0.35 0.025 0.05 Diagram No. 15 20 RUSSIA — HER ECONOMIC PAST AND FUTURE was under cultivation in 1912: In European Russia. 17.5% In the Caucasus. . . .20.3% In Turkestan 1.9% In Steppes provinces 1.3% In Western Siberia . 1.0% In Eastern Siberia. . 0.1% Throughout Russia. 5.2% Thus 95% of Russia's land area was uncultivated, and this points unmis- takably to the immense possibilities latent in that country for cattle raising, and farming as well. If only one-fifth of Russia's land were made adaptable for cultivation, through reclamation, ir- rigation, well-directed colonization and the construction of railroads and other means of communication, Russia's pro- duction would increase at least four- fold. 38- o 34- COTTON INDUSTRY (Yeorr 1915) - 52- 50.53 •^30- 28- : C20- 0.5/ - 24- TT ^n ^22- - -c20- - .E^ia- co IG - ~ o 12- i 10- 3.95 - ^ 8- ooo - 1 6- z 4- 2- 000 ooo ooo 000 OOO 0.05 OOO ooo OOO - UN/TED STATES r0.50 045^ 0.40 g- 0.35 -0,50 CD 0.25^ 0.20 '^ 0.15 o 0.10 I E 0.05 z Proipfucfion of Copper, Lecfd ctn(pl Zinc (Annua/ Averaqes for the Years 1912 -1913) RUSSIA \UNITED STATES Diagram No. 16 ooo ooo RUSSIA 20 19- 18 n 16 CO 15 ,,12 o II in n o 10- 9 8- 7- (o- 5 4 3- 2 Diagram No. 17 COTTON PRODUCTION (Annuel! Average for the Yecjrs 19/2-/9/3) /5.9 0./42 /.O lo o o |0 o o 0.006 0.20 0.19 0.18 •o.n ■0.16 ■0.15 C ■0.14± 0.13 g- ■0,12 u 1-0. II 0.10 ^ ■0.09 ^ ■0.08 ^ •0.07 ^ ■0.06 c ■0.05 "^ -0.04 ■0.03 ■0.02 ■0.01 RUSSIA —HER ECONOMIC PAST AND FUTURE 21 Yet, no matter how great Russia's backwardness may be in the field of ag- riculture in comparison with the pro- ductivity of the United States and its extensive system of land cultivation, comparison becomes still less favorable ■ to Russia when applied to her indus- trial developments. By comparing the total production of coal, pig iron, cop- per, lead, zinc, oil and cotton in the United States and Russia, as well as the total horse-power developed in the industries of these countries, we find (see diagrams Nos. 15,16,17,18), that the per capita output of these products was : For coal 27 " iron ore 12 " pig iron 12 " oil 6 " copper 30 " zinc 47 times greater in the United States than in Russia. The same unfavorable proportion holds good in relation to the other products mentioned above, particularly lead and cotton, as well as other metals and minerals, on the extensive produc- tion of which is based the economic de- velopment of a civilized country. How small, in comparison with the United States, is the value of Russia's industrial products is shown in diagram No. 19. It barely reached 160 dollars per capita in Russia in 1909, while in the United States, the average, per capita, amounted to approximately 2280 dol- lars, — 14 times greater. The direct result of such low produc- tivity in Russian agriculture, as well as in her industry, is that Russia has re- o o o ooo RUSSIA UNITED STATES 600 550H 500- co C450- o ^400 C.-350 o 300 in §250 ^150 - 100 Proofuc+ion of Coal (Annual Averaae for the Years I9I2-I9I5) 5.12 502 0.19 G.O 5.5 5.0 - z < y: cc UJ < a. to CD Q O Q Q LU Z < UJ UJ O Z < cc 0) Diagram No. 20 CHAPTER III. Foreign Trade and Merchant Marine — Items of Russia's Exports and Imports — Grain Elevators — Comparisons with Other Countries. THE most striking phenomenon which arrests attention upon an examination of Russia's foreign trade is the shifting of the main volume of her foreign transactions from Eng- land to Germany, as shown in diagram No. 21. These figures prove that, whereas in the middle of the last century- England's share in Russia's commerce was twice the size of Germany's, before the War Germany's share was four times greater than that of England. Eng/ 1 1 1 1 / / / / / / jMPi >5^ / ^ .i* ■** X f / ^ / / Russias Foreign Traofe OOOOOOOOO O — — <3^ Diagram No. 22 RUSSIA— HER ECONOMIC PAST AND FUTURE 27 Russia's Foreign Traide wii-h various Court fries (1909 I9IS) Diagram No. 23 1550 1500 1450 1400 1350 1500 1250 1200 1150- 1100- 1050 1000 950 900 650 600 750 700- 650 600 H 550 500 450 400 550 300 250 H 200 150 100 H 50- 0- Russia's imporfs 1544 a n al Expo r f s A N N u A L EXPO/? TS 555 ooo oo o ooo ooo ooo ooo OOO ooo oo o oo o ooo oo o ooo oo o ooo □ /90I - 1903 19 a -1913 693 544 280 ooo ooo O O o O O o Oo O Oo o oo Ooo OOP 18 il _CLU'fflii^^- 76 "^ I 875 OOO o oo O Oo Ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo o oo ooo ooo ooo ooo ooo ooo ooo ooo ooo oo ooo ooo ANNUAL I M P f( T S 218 123 ooo o oo ooo 553 592 Ooo O Oo oo ooo ooo Ooo OqO Ooo ooo Ooo Ooo Ooo ooo ooo 300 ooo ooo ooo 412 170 5.0 14.0 FOODSTUFFS CRUDE AND UNFINISHED MATERIALS ANIMALS MANUFACTURES READY FOR CONSUMPTION TOTAL EXPORTS o o o ooo Ooo Ooo Ooo FOODSTUFFS CRUDE AND UNFINISHED MATERIALS ANIMALS MANUFACTURES READY FOR CONSUMmON 1236 625 ooo ooo 000 ooo ooo ooo ooo Ooo O OO O 00 Odo Ooo o oo OOO ooo ooo o oo Ooo TOTAL IMPORTS Diagram No. 24 28 RUSSIA — HER ECONOMIC PAST AND FUTURE sent in full the actual size of Germany's share, as a considerable part of the trade was directed both, to and from Germany, through Holland, Belgium and Denmark.* The bulk of Russia's exports and im- ports consisted (diagram No.25), princi- pally, of raw materials and foodstuffs, of which grain products alone made up 43 per cent of the entire exports for the five-year period of 1909-1913. Among the other products of export, the most notable were timber, eggs, butter, flax, hemp, etc. Russia's imports consisted chiefly of cotton, wool, machinery, tools and appliances, metals and metal prod- ucts. In speaking of the development of Russian foreign trade, it is important *For further information on this matter see the author's "America's Opportunities for Trade and Investment in Russia," New York, 1919. to point out the fact that under the in- efficient and backward policies of the old regime a group of countries, though only recently entering the world mar- ket, have to a considerable extent caught up with Russia. It is sufficient to give in this connection the following facts relating to the foreign trade of Russia, Canada, Argentine and Japan: Years Participation in World Trade Russia Canada Argentine Japan 1890 3.5% 1.2% 1.3% 0.6% 1896-1900 3.4% 1.5% 1.2% 1.0% 1901-1905 3.3% 1.8% 1.5% 1.3% 1906-1910 3.2% 1.8% 2.0% 1.4% 1911-1913 3.6% 2.0% 2.0% 1.5% By comparing the shares of partici- pation in the world's trade of Canada, Argentine and Japan, it appears that in 1890 Russia's share was larger than their combined trade. During the five- f Arf/c/es of Russia's (1909 - 1913) Exports 'b-y \food stuffs I ,5n// \.\\ °' / / ^ 'c- ^ XVEGETABLE § As r^f'^c'^^ \ ORIGIN / — / / ^ ^ ^ . . ''°^^^fA/rs'^ f Annual \tA\^' ^■^^■6^ /Averaqe Impor+sV- — 1 1136.9 U^y, COTTON L Million Roubles/ 0/0.3) Diagram No. 25 RUSSIA— HER ECONOMIC PAST AND FUTURE 29 year period of 1896-1900, however, Rus- sia's portion amounted to 3.4% of the total, whereas the combined share of these countries rose to 3.7%. In the course of the following two five-year periods, Russia's share suffered a still Russlas 5xpor-ts o-T Grains for Years 1895/ 96 - /9/2//5^ (Annual Averages) the 800-1 700- 400 300- 200- 100- JN MILL/ONS OF IN MILLIONS OF — POODS ROUBLES — ^-s <3^ 00 ^ k^ C^ ^ <^ '-^ "^ ^>. ^ ^ ^ ^ ^ cs^ ^ 1 1 1 1 1 1 "~<; •\ ^^ ^^ ^^ \ § ^ ^ ^ ^ § ^ ^ 1 > ^ LO ^ 1 1 -^ ^ 1 «0 5 a^ ^^ 5i ii; ^ 50 5 ^ ^ Years endirK^ Augusi- 51. Diagram No. 26 30 RUSSIA— HER ECONOMIC PAST AND FUTURE further decline, while the share of the above mentioned countries increased materially. During the three years, 1911 to 1913, Russia's participation grew somewhat and rose again to the level o£ 1890; but the combined participation in the world market of Canada, Argentine and Japan increased still faster, so that their share in the world's trade was at that time about one and two-thirds times larger than Russia's.* In passing to a discussion of the principal item among Russia's exports, grain, we draw attention to the analy- sis of the development of this branch of her foreign trade in diagrams Nos. 26 and 27. Both in respect to quantity and value, the grain exports showed growth, though far from equal in all products. The biggest progress was made in the export of barley, oilcake and bran,t whereas the increase in the exportation *During the War Japan and, particularly, Canada, have made, as is well known, extremely large gains in their foreign trade. fThere has been considerable discussion concerning the desirability of the exportation of these products, since they are necessary for the breeding of cattle in Russia itself, and, furthermore, the small number of cattle, together with the very infrequent use of artificial fertilizers, has hindered the development of the agri- cultural productivity of the country. Russia's 300-T Expor-hs or Grains , OiJcoike c^ncp/ Brorn (Annual Avehages) 0/L CAKE BRAN "^250- WHE ^'[^ BARLEY / / / 3 O O K^ — CO K^ J> o — — — — — 3 C> <5> O O 5} Diagram No. 30 Whecptt Jm ports inio the Uni+e/om from Russia, Arqentina, Australia and Canac^a (In Millions of Cwts.) Diagram No. 31 34 RUSSIA — HER ECONOMIC PAST AND FUTURE 350-1 500- 250- 200- 150- 100- 50- 332 Corn Exporis from Russicpt cpinc^ Arqeni-ina (In Millions of "Pooo/s") RUSSIA 16% -90 1891-95 1896-1900 1901-05 1906-10 Diagram No. 32 of the great efforts Russia must make to improve her agricultural outfit, her live stock, her selection of seeds, the application of artificial fertilizers and the building of grain elevators. How backward Russia is in this last respect may be shown by the fact that while the total capacity of Canada's grain eleva- tors reached 194 million bushels in 1916- tXhis includes the capacity of elevators constructed by the Russian State Bank. Unfortunately, the old Government constantly postponed the construction of a system of State-owned grain elevators, as well as hin- dered the construction of privately-owned terminals, fearing that these latter would unfavorably influence the prices of grain obtained by the great land owners. As a result, Russia remained without either a State or a private system of elevators. 1917, the elevators of Russia could hold no more than 30 million bushels at that time.f When the railway mileage and the average yields of the grain harvests of these countries are taken into account, the difference in favor of Canada (see diagram No. 35) is still more pro- nounced. To afiford Russia an opportunity for a fair competition in the World Market, it will be necessary to construct, during the next ten years, a system of grain ele- vators, including 10,000 with a capacity of 10,000 to 25,000 bushels, and some dozens of larger terminals. Under the RUSSIA —HER ECONOMIC PAST AND FUTURE 35 present high cost of labor and materials, the construction of such a system of grain elevators, including the necessary expenditures for sidings, etc., etc., would amount to at least $400,000,000. To the small dimensions of the Rus- sian export trade and also to the in- eflficient policies of the old regime must *While other countries have been constantly increas- ing the size of the vessels of their Merchant Marine, constructing or buying vessels of over 10,000 tons, Russia, before the War, had no vessel of this tonnage. This was, in part, due to the fact that the great majority of Russian ports, because of their insufficient depth, as well as the insufficient depth of their sea-channels were unable to accommodate vessels of this size. The same unfavorable situation existed with refer- ence to the speed of the majority of ships in the Russian Merchant Marine. be attributed the fact that Russia's merchant marine occupied, as seen from diagram No. 36, one of the last places among the marines of the cultured na- tions. Even such small countries as Nor- way, Sweden and Holland had larger commercial fleets than such a great power as Russia. If the quality and size of the vessels of her merchant ma- rine are further taken into account, Rus- sia's position in this respect was one of the most insignificant in the world.* One of the most important causes of the un- developed condition of the Russian mer chant marine was the lack of direct lines 03 f/ax^seec^ Exports from (Jn Millions Russia (?in _i u. o 3 1 1 <^ 5< < z hS in < coz tn a =>D D < Diagram No. il Exports per Capifcpf (in Roubles) 104 . '06 i-90 1906-10 I9ll-Ii RUSSIA i-eo 1906-10 I9ll-li 1885-90 1906-10 1911-15 1886-90 1906-10 1911- IJ CANADA ARGENTINA AUSTRALIA rieo 140 120 100 60 60 40 20 Diagram No. 38 CHAPTER IV. Canals and Inland Waters — Comparison with Other Countries — Proposed New Canal and River Im- provements — Expenditures for Construction. THE first canals in Russia were be- gun by Peter the Great (Ladoga Canal). Although the total length of all the inland waters in Russia now reaches about 200,000 miles, the length of all Russian canals and improved rivers reaches barely 1100 miles, of which last fignre the canals themselves make up only about 550 miles. Russia has, in all, eight so-called inland water-systems. Three of these, the Mariinskaya, the Tikhvinskaya and the Vishni-Volotskaya, connect the Caspian and the Baltic Seas by means of the \"oIga and the Neva. The Canal of Duke Alexander of Wurttemberg con- nects the North Dvina with the Mariin- skaya System, that is to say, the White Sea with the Caspian and Baltic Seas. The Dnieper-Bug system, the Oginsky Canal and the Berezina system connect the Black Sea with the Baltic. The Dnie- per-Bug system connects these seas by means of the Vistula, the Oginsky Canal by means of the Nieman, and the Bere- zina system by means of the Western Dvina. The Augustovskaya system con- *The connection between the Ob and the Yenissei consists of the tributary of the Ob, the Ket, for a length of 235 miles, and the rivers Ozernaya, Lomo- vataya, Yazevaya and the Great Lake, which all belong to the basin of the Ob. From this point the canal begins, followed by the rivers, the Little and the Great Kas, belonging to the basin of the Yenissei. The Ob-Yenissei Canal was constructed very poorly. It permits the passage of ships with a maximum length of 70 feet and a draught of not more than 35^2 feet. But on the Yenissei and Ob, many ships from 140 to 280 feet in length, and with a draught of considerably over 3^2 feet, are now in use. Such ships, whose number is constantly increasing, cannot, consequently, pass through the Ob-Yenissei Canal. nects the Vistula with the Niemen. In addition, a very small canal, of some five miles, connects the Ob and the Yenissei.* Since 1860, almost nothing has been done in Russia for the improvement of the canals, for the Government feared that the canals and rivers would become dangerous competitors of the railways, and thus reduce their profits. In view of this, the Government did not care to grant any serious aid for the improve- ment of Russia's inland waterways. What aid the Government did give was quite insufficient eren to keep such canals, as already existed, in good work- ing condition. In view of this, not only were the waterways not improved, but often indeed fell into disrepair. Some canals, for example, the Kama-Vichegda waterway (Ekaterininsky Canal) fell absolutely into ruin, and the equipment was almost destroyed. To show how little the old regime understood the significance of the fact that Russia had first place in the world so far as waterways were concerned, and could therefore use the richness of this natural endowment for the develop- ment of her resources, may be seen from the fact that, from 1909 to 1917, on the whole system of internal waterways the Government spent, in all, $28,000,000, that is, about $4,000,000 annually. For immense Siberia, with its innumerable 40 RUSSIA —HER ECONOMIC PAST AND FUTURE waterways, for these eight years, only $250,000 per year was spent. How insignificant were the sums spent for this purpose in Russia, com- pared with the expenses for the same purpose in other countries, may be seen from diagrams Nos. 39 and 40, in the first of which is shown, by per cents, the pro- portion of canals and improved rivers to the total length of all navigable inland waters, and in the second the expenses per mile of navigable waterways in different European countries and Russia. By spending the moderate sum of $350,000,- 000 the length of navigable inland water- ways in Russia could easily be doubled, bringing the pre-war length of Russian waterways to 70,000 miles. Fearing, as has been said, the lowering of the income from the railways, the Russian Govern- ment spent from 1909 to 1917 only about $100 per mile, taking into consideration navigable rivers, or about $16 per mile if we consider the total length of Russian waterways. France spent about $1250 and Germany still more, about $17.50. As far as separate rivers are con- cerned, the expenditure of Russia was still more insignificant. It is sufficient to refer to diagram No. 40, which shows that when Russia spent $150 per mile on the river Don, one of her most important rivers, flowing through coal and mining regions, Germany ex- pended on the Rhine $20,400, and France on the Rhone, about $24,000 per mile. How backward Russia was in respect to the improvements of inland water- 100 ■] -40 -36 90 Canals and improved Rivers Expenses for the Impro vemen ts -36 60 in Percentage of f/ie Total of the Inland Waters -32 Navigable Inlctnd Wafers (In 1000 Dollars ■ per fi/le) -30 +.10- -28 ^60- 24 -26 -24 0) 55 20.4 -22 o50 44 -20 I- 41 /^.? ■18 n,40- -16 f\ 15.1 rl4 30 so- 24 18 •12 ■10 - 8 lo- 12 n 3.(3 'A r^ 0.15 - 6 - 4 ■ 2 5 g u. z ^ ^ <^ < a. ^ < tj <■ ~ Q 0^< UJ UJ lij _j -J z Z o y ^-55 w z uj a z CO UJ < Cu _i o < a -1 b wz in UJ 2 O Z CC liJ Id z 53 X LLl Ll. yj CD D rfl o CI to o / n 1 \ ^^ \ / 50- 0-^ <<3 5i * -2£ c A * Preliminary Data. Diagram No. 46 52 RUSSIA— HER ECONOMIC PAST AND FUTURE In speaking of Russia's backwardness in the field of railway construction, which is responsible for the slow de- velopment of the whole country and of Russian exports in particular, it is necessary to draw attention to the di- rectly opposite policy of Russia's most dangerous competitor in the world mar- ket in the exportation of agricultural products — namely, Canada. As seen from diagram No. 47, beginning with 1911, the annual increase of steam rail- road mileage, in operation, was much greater in Canada than in Russia. The total increase of Russia's mileage during the four years before the War amounted to 2,600 miles, whereas the increase of Canada's mileage was three and one- half times greater. Russia's backwardness is shown in an even greater degree when the rolling stock of these two countries is com- pared (See diagrams No. 48 and 49). It needs only be said in this respect that Canada, with a population of 8 millions, had, at the beginning of the War, only slightly less freight carrying capacity than Russia with its 180 millions. When we consider that the rolling stock of Canada was, in the main, new, and there- fore required much less repairing than Russia's, which was, in the main, old, hard-used rolling stock, the freight car- rying capacity of the railroads of these countries, at the beginning of the War, may be taken as about equal. The necessity of intensified railroad construction together with the improve- ment of the rolling stock was recom- mended by numerous governmental commissions, working on these ques- tions, even before the War. Partic- ularly insistent on the extension of 5000 4500- 4000- 3500 .3000- 2500 .2000- 1500 1000- 500 47d7 Annual Increase of Steam Railroad Hi/eaae in Operation, in /Russia anc^ Canaaa HH RUSSIA I I CANADA 2577 Ii21 1491 1901-10 1911 1912 1913 1914 *For Canac^a Fiscal Years 1311-12, 1912-13 etc Diagram No. 47 railway mileage was the Commission under General Petrov, which found it imperative that Russia build within the next decade over 18,000 miles of new trunk lines and about 7,000 miles of branch or feeder lines. Another Com- RUSSIA —HER ECONOMIC PAST AND FUTURE 53 Rol linc^ Stock O'T Rciilways in Russia anc?! Ccrnac^cpi eoo-i 500- (0 C400 (0 3 300 o x: •-200 100- NUMBER OF FREIGHT CARS RUSSIA ^ g CM Xi; ^« \- t<^ ^ vs> Cvj •^ ^> -^ 1 k^ -VS vs ^ CM '«^ »^ f<^ □ CARS OWNED BY RUSSIAN STATE RAILWAYS CARS OWNED BY RUSSIAN PRIVATE RAILWAYS CANADA CM CM N ooo ooo ooo ooo ooo ooo 00 CVJ o — <5^ O *<5i O OOo ooo OOO ooo ooo Ooo ooo ooo oo o 20£ TOTAL CARRYING CAPACITV OF FREIGHT CARS' r500 RUSSIA CANADA -400 10 o o CL 300 o en -200 o -100 E c * to CM * ■0 '^Fiscal years enolin(^ June 50. '^'^Approximate Daivi. Diagram mission, which worked somewhat later, in the early part of 1914, under the direction of the Ministry of Finance, also advocated the construction of 18,- 000 miles of new railroads, 8,500 of which were to be begun in 1915. But the endless friction between the various governmental departments, which was so characteristic of the old regime, stood in the way of the realiza- tion of even these "modest" plans, as ex- perts called them. No advance was ever No. 48 made beyond the frequent appointments of new consultative bodies which merely repeated or slightly modified the plans of the preceding commissions. To this category belongs the Consultative Board created in 1916 by the Ministry of Ways and Communications, under the chairmanship of the Assistant Minister, I. N. Borisov. This new body called attention to the need of increasing the mileage of the railroads and auxiliary branches operating in the Donetz Min- 54 RUSSIA — HER ECONOMIC PAST AND FUTURE eral Basin and to the construction of a number of new railways to this Basin, in order to stimulate a more rapid devel- opment of the coal and metallurgical industries in that region. To aid the mining industry of the Urals, and to regulate the heavy traiBc of the Si- berian freight, which was growing at the rate of 20% annually, the Commis- sion insisted on the construction of a second track in Siberia, or of a new trunk line between the main centers of Russia and Central Asia. The Commis- sion, thereupon, came to the conclusion that without a number of new and pow- erful trunk lines, equipped for heavy and continuous transportation, the reg- ular exchange of freight between the most important centers would become more and more impaired, until it would seriously interfere with the economic development of the whole country. It is very important to note that this Commission, which submitted its report to the Government of the old regime, came to the conclusion that the Carryin<^ C(Prpctci-t-y of Freic^hf Cars in Russia etnd Ccinc^c^a (1912 -19/3) |g8g RUSSIA p^or^o,T^ 1 \CANADA 50- 45- PER niLE OF LINES IN OPERATION u)40 - 1-16 en ■^35- -14 § a.25- -12" -10 o O O 20 - c 15 - O O OO o o o oo o o o o o o o o o o o - 8 « " 10 - 5 - - (Nj o o o o o o O O O o O O O O o • in X -2 1- c {o o o o '- Diagram No. 49 annual new mileage to be built during the five-year term, 1917-1921, inclu- sive, should amount to 4,150 miles, and for the next five-year period, to 1,400 miles annually, without count- ing strategic railway lines. The total increase of Russia's mileage for the ten years from 1917 to 1926 was to amount to 28 or 30 thousand miles. If this plan is realized, Russia will have by 1927 a railroad mileage of 70,000 or 75,000 miles, i. e., three and one-half times less than the mileage of the United States in 1914. But even if the modest plans prepared by the Borisov Commission were carried out fully, the average number of miles per 10,000 population or per 1,000 square miles of territory would still be somewhat lower in Russia than in such an economically backward country as Austria-Hungary. On a basis of 75,000 miles of railroads Russia would have, in 1927, 4.5 miles of railroad per 10,000 population, and 9.4 miles of railroad per 1,000 square miles of territory. Austria-Hungary had in 1914, 5.7 miles of railroad per 10,000 population, and 11.2 miles of railroad per 1,000 square miles of terri- tory. In order to raise, by 1927, the mileage per 10,000 of population and per 1,000 square miles of area to the level of Austria Hungary's' in 1914, Russia would, therefore, have to increase her mileage to about 95,000 miles, i. e., to build an additional 50,000 miles in- stead of 28,000, recommended by the Borisov Commission. As regards the expenditures neces- sary to carry out these plans, so modest in comparison with Russia's insistent needs, the Borisov Commission calcu- SERDOBOL ) VOLOGDA SKOV/ VIATKA ^ 'KOSTROMA ,•*: '••. ^"/'"\ K"» X'il''^^-"" '■■■9-\ ?:-/../¥•... y" ^ERM ,^. TURGAN . 55 SIMBIRSK TROITSK •' --^ lOREL h^ TAMBOV;.\Jp^HS^ KOVEL ORENBURG >.••' ROVNC URALSK 5C-- V =SKOV> 'T~ — . V>6ooo-o-0-o 9? »• KURGAN J 55 ^:?; 'h TVER ^ W) NIJNI- ♦• r% NOVGOROD VILNA ••-• TROITSK ••.. SIMBIRSK «i !%-*'!^ / TAMBOV ;>^TpENSA -50 ^O. S', KOVEL ROVNC ORENBURG >.••' 5C- L-' '% c^ URALSK M^^°!^5 ) ^ r^^^ S? KH/i -45 KAMENETZ- O" PODOLSK —• L E G E N D-— Rciilroctds under Construcfion in I9ie • • • • • Rciilrocids planned for Consiruci--^ ion in 1917-1921 ' Railroads planned for Con- s+Tucfion 1922-1926 Slrafecjicoil RtTiilroads planned for Cons-t-rucfion ^i'<^A ARAL5K0VE U. • • •••, ASTRAKHAN® <^ %,: ) 'V 40- 15 RUSSIA — HER ECONOMIC PAST AND FUTURE 55 lated, in accordance with costs prevail- ing at that time, that an appropriation of not less than one and a half billion dollars would be required to complete the first part of the program, from 1917 to 1921. At present cost of construc- tion, however, this sum would have to be increased, for the first five years, to two and a half, if not three billion dol- lars, and for the entire decade, to at least four billion dollars. When it is considered that the railroad system of Russia, during the War, and under the stress of the Revolution, fell into a state of almost total dilapidation, there is no question that it now needs a thor- ough overhauling and repairing. In view of this, the total expenses for rail- road construction and repairing would considerably exceed five billion dollars. In addition to these undertakings it will be necessary, in order to bring Russia's railroad system into proper working condition, to make enormous investments for the increasing and re- pairing of its completely worn-out roll- ing stock. The increase of Russia's mileage, during the next decade, to 70,- 000 or 75,000 miles will necessitate the purchase of at least 400,000 new freight cars, including 20,000 or 25,000 refrig- erators, not less than 15,000 new loco- motives, and at least 30,000 to 35,000 passenger cars of various classes. These purchases will require approximately the following sums : 400,000 freight cars, with a carrying capacity of 1,200, 2,400 or more poods at $2,000 per car, on the average $800,000,000 15,000 locomotives at $45,- 000 to $50,000 each .... 700,000,000 Passenger cars, newest types, at $12,000 to $15,- 000 each 450,000,000 *A freight car would require, annually, an aver-, age of from $50 to $60; a locomotive, not less than $3,500 to $4,000 annually; and a passenger car, about $1,000 to $1,200, each year, for repair expenses. $1,950,000,000 Besides this, there will be required, during the next ten years, not less than $1,600,000,000 to keep the rolling stock in proper repair.* The sum total, there- fore, for all items of rolling stock which would insure proper functioning of Rus- sia's railroads would amount to at least $3,500,000,000. The location of the railroads, project- ed by the Borisov Commission, is shown on the accompanying map. In speaking of intensified railroad construction, it is important to state that, according to expert calculations, each new railroad-mile in Russia re- quires for building about 200 tons of metal, five-eighths of which is for the rail, and the remainder for other pur- poses. For the construction of 4,000 to 5,000 miles of railways, annually, Rus- sia will require, together with supplies of metal for new rolling stock, replace- ment of rails on the old roads, repairs of the old rolling stock, bridges, etc., etc., about 2,000,000 tons of iron and steel. In order to satisfy these de- mands, the metallurgical industry of Russia will have to increase its produc- tivity at least 50%. To accomplish this, Russian steel and iron plants, in view of probably very high prices for raw 56 RUSSIA — HER ECONOMIC PAST AND FUTURE materials, labor and other products, will to raise the productivity of the coal have to expend, for a number of years mines, to increase the production of to come, not less than $600,000,000. coke, the output of iron and manganese This will not include, of course, the ores, as well as all other products neces- correspondingly large expenses required sary for railroad construction. CHAPTER VII. Natural Resources Minerals: Basin of Donetz — The Ural Region — The Caucasus — Siberia. Forests — Furs and Hides — Fishing — Fruit, Rice and Tea — Silk — Flax — Cotton — Wool. THE natural resources of Russia In the Donetz Basin there are also are distributed very unevenly. extensive factories for the manufacture The central section of European of chemical products, — soda, acids, am- Russia is comparatively poor in miner- moniac salts, heavy oils, coal-tars, etc., als. Furthermore, such minerals as are etc, found there, particularly the coal and Though, under a more enlightened iron, are not of high grade. economic policy, other regions of Russia Almost all important deposits, partic- would, undoubtedly, play a correspond- ularly of high-grade minerals, are found ingly more important role, none the less, in the outlying regions of European Rus- in the next ten years, the region of the sia: in the Basin of the Donetz and on Donetz and its environs will probably the Kerch Peninsula, in the Urals and be, as before the War, the most produc- their environs, in the Caucasus and in tive section of Russia. In the first place, the White Sea region, or in the various both the development of this region as parts of Siberia. well as the working of its deposits of Basin of the Donetz. minerals is a comparatively recent mat- Up to the present, the most productive ter, and in the second place, there are, region, that which has supplied Russia even now, immense quantities of prac- with the most important minerals, has tically unexplored deposits. In this con- been the Basin of the Donetz, with the nection, it is sufficient to point out that territory adjoining it along the shores of coal and other minerals are constantly the Azov Sea. being discovered in numerous new To show the significance of the Donetz places, and furthermore, that the esti- Basin it is sufficient to quote the follow- mated extent of the deposits of various ing figures, giving the production of minerals existing there is constantly coal, coke, iron ore, iron, manganese and growing. The iron ore deposits, for ex- salt, for the years 1912 and 1913, for that ample, in the Krivoi-Rog district are at region, and also the average annual pro- present estimated to amount to 200,000,- duction of all Russia : 000 metric tons, while only some years Production Production ^^^^y ^g^e estimated at 50,000,000 Production in the in the "&"> J in Russia Donetz Basin* Donetz Basin tO 100,000,000 tOnS. In addition, CUOr- Metric tons Metric tons % of total . . Coal 34,000,000 23,000,000 about 70% mous quantities of various iron ores Coke 4,200,000 4,200,000 " fioofo u. t,pp„ found in some dozen Iron ore ...... 8,900,000 6,300,000 " 71% "^^^^ '^^^^ lounu m bumc uu^cu Pig iron 4,400.000 3,000,000 " 57% Q^her places in the Kerch Peninsula, Iron and steel. 3,900,000 2,200,000 " 33% '"-"^' pia«.v,o , Salt 610,000 190,000 " 33% of which the surveyed portion alone Manganese* ... ^— ^ " 30% ^mOUntS tO at Icast 1,000,000,000 JSXw/r'^cokfXal^^ metric tons. This region is particu- small quantities in Eastern Siberia. j^j-jy ^g^ located, for it is near the t Average for 1911 and 1912. -' ' 58 RUSSIA— HER ECONOMIC PAST AND FUTURE sea, thus permitting cheap freights to both inland and foreign markets. The Ural Region Iron In addition to the resources of the Basin of the Donetz, which adjoins the Black and Azov Seas, immense natural resources also exist in the Ural region. Up to the present the Ural iron indus- try has developed slowly, because of the lack of a good metallurgical coke. Of the total production of iron ore in Russia, the Urals furnished, in the years 1912 and 1913, about 29%, of the total production of coal in Russia 3.2% * of the total production of pig iron 20%, of the total production of iron and steel about 17%. t Now that coal fit for the production of coke, and with a very small percentage of sulphur, has been found in the Basin of the Kuznetsk, the future of the iron industry of the Urals may be looked upon as extremely promis- ing, provided that the region be sup- plied with sufficient rail and waterway facilities. What splendid promise there is in this respect in the Urals may be seen from the fact that only one mountain, Magnitnaya, in the southern portion of this region (government of Orenburg), has resources of over 100,000,000 tons of magnetite ore. First-class ore is *One type of iron, the production of which was very highly developed in the Urals, was that of sheet iron for roofing. Of the total output of this product in Russia, the Urals furnished about 60 per cent. fThe coal production of the Urals was rapidly growing, as may be seen from the following data: Years Production 1910 43,000,000 poods 1911 42,400,000 " 1912 57,500,000 " 1913 73,500,000 " 1914 84,200,000 " found in enormous quantities in the dis- trict of Zlatoust. Still larger deposits of iron ore exist in the middle and north Ural region. The single mountain of Blagodat has, for example, resources of over 100,000,000 tons of magnetite. The district where the Alapaev Works are located has also resources of over lOO,- 000,000 tons of iron ores. Immense re- sources of iron ore have also been dis- covered in the Nijni-Tagil district, and in the district of Bogoslov. To sum- marize, the surveyed resources of high grade iron ores in the Ural region amount, according to statements of Professor Bogdanovich, to at least 500,- 000,000 tons, but, as a matter of fact, these resources must be really much greater, as immense tracts have not yet been explored. All the important metallurgical spe- cialists in Russia are of the opinion that upon changing from wood fuel to coke, the productivity of the iron-works of the Urals will be, in a relatively short time, at least doubled. Up to the pres- ent time, there have existed in the Ural iron, district some eighty blast-furnaces, with a total annual capacity of about 1,000,000 tons of pig iron, while the Donetz Basin, with some forty-seven blast-furnaces, has produced about 2.6 million tons, The producing capacity of the Ural furnaces was, therefore, at a much lower level. Copper The Ural region has had to render up first place, as far as iron is concerned, to the Basin of the Donetz. But, in cop- per, on the other hand, the Urals rank first among all Russian copper produc- ing locaHties. On the average, the Urals RUSSIA — HER ECONOMIC PAST AND FUTURE 59 have supplied in recent years over 1,- 000,000 poods (about 17,000 metric tons) of copper, i.e., half of the total production of all Russia. Copper is obtained there from sulphur ores, which are constantly being found in new localities. The most important copper producing works are those of Kishtim, which supplied, in 1913, about 486,760 poods (8,000 metric tons), or about one-half of the total production of the Urals, and about one- fourth of the total production of Russia. The second place was taken by the Bogoslov plants, which produced, dur- ing the same year, about 249,360 poods (about 4,100 metric tons), that is, about 507^ of the production of the Kishtim, 25% of the total production of the Urals, and about 12% of the total pro- duction of Russia. World's Annual Average Prooluction of Platinum, in Troy Ounces (1912 - 1914) Diagram No. 50 Other Mineral Resources Still further, the Ural region is one of the most important localities in Russia for the production of precious metals, and especially platinum. As far as this last metal is concerned, Russia has al- most a world-monopoly. Out of the average annual world production, from 1912 to 1914, of 280,000 troy ounces, Russia's share was, as may be seen from diagram No. 50, over 94%. One country only, British Columbia, was a relatively important competitor, with a production of about 5% of the total production throughout the world. During the last few years platinum was found in the Urals in many new localities; but the War has hindered the development of this industry, as it was almost impossible to get sufficient dredging machinery, as well as other Worlc^'s Annual Averaqe Proeluciion of Gold, in milions of Dollars (1910 -1915) Diagram No. 51 60 RUSSIA — HER ECONOMIC PAST AND FUTURE implements necessary for working up these deposits. As far as gold is concerned, the an- nual average production from 1910 to 1913, as may be seen from diagram No, 51, amounted in value to about $30,000,- 000, that is, about one-fifteenth of the total world production. Of this gold, the share of the Urals, for the years 1912 and 1913, amounted to nearly 20%. In this connection, it is necessary to state that the methods of working in the mines, not only in the Urals but also in the remainder of Rus- sia, are usually most primitive, so that, with better methods of working them, the share of the Urals in the world's output would be incomparably greater, as a remarkably large number of rich gold lodes, shown on the accompanying map, have been worked, if at all, by very wasteful methods. As regards silver, although the main deposits are located in the Altai region (Siberia), the greater part, before the War, was produced by the Urals. Thus, for example, in the year 1912, the Urals produced about 666 poods of silver, the *The four old oil fields in Baku, which were, for- merly, almost the only sources for the supply of oil in Russia, are now beginning to show signs of exhaus- tion. But in other fields, the production of oil is rap- idly increasing, as may be seen from the following data : OIL PRODUCTION In millions of poods Years Binagadi Sourakhani Sviatoi Grozni Emba 1910 9 10.4 1.4 74.0 — 1911 7 19.7 2.6 75.2 — 1912 10 31.4 3.3 65.4 1.0 1913 14.6 39.7 4.7 73.7 7.0 1914 21.9 51.3 6.0 98.4 16.5 Furthermore, oil is produced, at present, on the island of Cheleken, in Maikop, in Ferghana, in Trans-Caspia (near the Caspian Sea and the Trans-Caspian railway), in Sakhalin. Extensive oil-fields are located between the Caspian Sea and the Urals. Oil is also found near Ekaterino- dar, Samara, Taman, in Oukhta, etc., etc. Caucasus some 257 poods, while the production of Siberia was almost neg- ligible. One other source of wealth of the Urals must be mentioned, — large de- posits of pyrites, asbestos, marble, phos- phate rock, graphite, materials for the manufacture of high-grade cement, as well as important deposits of coal, peat, salt, lead, mica, manganese, mercury, nickel, chromic ores, etc., etc. In addi- tion, there are deposits of semi-precious stones and rare metals, such as osmium, irridium, molybdenum, etc., etc. The Caucasus. The Caucasus should undoubtedly be mentioned as one of the richest parts of Russia. In addition to the large naphtha industry, which has won for itself an important place in the world market,* the Caucasus has one of the very largest deposits of manganese and copper ore, as well as deposits of silver and lead ores. To show the important role which the Caucasus has played in the realm of Russian natural economy, the following data are sufficient. The share of the Caucasus, in the total of each of the products listed below, was: Products. Averages for 1912 and 1913 Naphtha about 85% Copper Ore Copper Manganese ore Silver and lead ores, Lead Silver 31% 30% 70% 56% 96% 24% ,1 3M ALEXANDROVSKo PETROGRAD SOROKAc \B A R E N T SEA A R C T I C SARCHANGEL OCEAN ^West Taimur Pen. East Taimur Pen., <§S^^^ ^vG^ ^ KIEV o M ODESSA g^ MOSCOW! ▲ ^NOVGOROD^ Sop ?KASAN PERM oa ■vS- -\oTURUKHANSK \6r Gf*. Gr Gr ■7DV A'^(^ YAKUTSK! 5 £ >^ 1/0 K H O T S K vo ROSTOV SARATOV a. ,/ / •^ ^ BAKUi iNfi A. UFA PORENBURG OKHJVA TASHKEND <5 -^TOBOLSK OMSK yeniseiskV TOMSK L Cs ^A.^G 6 L , St/^ G> \^^^ / S G « ^i. "^-^ IRKUTSIO*® \G Gr G V i + i m G ^' * ^ ^ G v^7g' -"^^^ '%yy. 'S'A- \^1'^%. ^((i .,^ ^UlA '^rt^ "%. M N I / ■- %QKAND ^ ^4^ G G^H^St. ^ LEGEND A = Iron •= Cooil B = Oif St = Salt Gr= Graphite C = Copper * = Radium G = Gold T = Tin L= Ore containing Lead, Silver or Zinc M= McPint^anese S = Pyrites Q= Ouicksilver A = Asbestos P= Platinum :•: = Phosphate Rock m>y Sea and the Urals. Oil is also found near Ekaterino- dar, Samara, Taman, in Oukhta, etc., etc. Silver 24% RUSSIA — HER ECONOMIC PAST AND FUTURE 61 As far as manganese ore is concerned, which is one of the most important of the resources of the Caucasus, the ex- port of this product, before the War, was greater than from any other coun- try in the world, as is shown in diagram No. 52. How rapidly the exports of manganese grew is evident from dia- gram No. 53, which shows that from 1904-1906 to 1913 their volume increased two and a half times. The exports of manganese from Rus- sia, in the years 1911 to 1913, totalled 924,000 metric tons. This was notice- ably more than the total of exports of the same product from British India and Brazil, which countries take second and third place, after Russia, in respect to the quantity of this product exported. Almost all the high-grade manganese exported from Russia came from the Caucasus, and particularly from the region of Chiaturi. As for copper, the Caucasus produced, on the average, for the years 1912 and 1913, 600,000 poods. Of this quantity, over one-third (231,500 poods) was pro- duced in 1913, by the Akhtal-Caucasian Industrial and Metallurgical Corpora- tion, and not much less (over 203,000 poods) by the Caucasus Copper Indus- trial Company. In addition to all the above, the Cau- casus region is also famous for the pro- duction of silk, for its fruits, which have been especially developed during the last few years, for its excellent tea plan- tations, and, finally, for its medicinal waters, watering places and bathing beaches, which, if properly developed. might make the Caucasus, with its nat- ural beauty, far exceeding that of Swit- zerland, Italy or Norway, and with its climatic conditions, one of the most im- portant watering-places and beaches for all Europe. Central Section of Russia. The resources in iron of the govern- ments of Vologda, Arkhangel, Olonetz, Kostroma, Perm, Novgorod, Moscow, Tver, Tula, Kaluga, Riazan, Vladimir, Nijni-Novgorod, Tambov, Voronezh, Vitebsk and Pskov, far exceeded one billion tons, although these deposits are not of so high a grade as those of the Urals and other parts of Russia. AnnucPtI Averc^cye Expor+s of Mc^n0(Pinese Ore from i-fie mos-f- impori-(Pin-h Mc^nc^cptnese Producing Coun+ries (1911 - 1915) JOOO- 1 900- 6^800- o 700- CM (»- 600- o 500- 1 400- ^ 300- % 200- '^ 100- ~ V2. i K i Diagram No. 52 62 RUSSIA — HER ECONOMIC PAST AND FUTURE The same is true of the deposits of coal existing in the governments of Moscow and Riazan and other governments of Central Russia. Only during recent years, owing to the shortage of fuel, has the working of these deposits been in- creased. This coal, as experience showed, together with the turf, might undoubtedly be very profitably utilized by central electric power stations, which, affording a supply of cheap energy, would give an impetus for the further development, in these regions, of various branches of in- dustry, especially those producing fin- ished goods. In this connection it must be stated that Central Russia is the most important region for the production of cotton goods, woolen stuffs, silk fabrics, linens, perfumery, rubber goods, ma- chinery and fine steel products, electric apparatus and implements, pottery and glass wares, cement, beet sugar, etc., etc. (See page 93). In the north-eastern, northern and north-western parts of this region great quantities of flax are grown, of which product Russia was one of the main ex- porting countries. (See page 73.) Siberia As regards Siberia, her natural re- sources are concentrated, for the most part, in the Altai Mountains,* in the (Trans-Baikal** territory) districts of Nerchinsk and Barguzinsk, in Ferghana, in the Yakutsk province, in the Mari- time province and on the Island of Sakh- alin. The coal beds of Siberia are located at comparatively short distances from each other, along the entire length of the Siberian Railroad. Many deposits of coal are found in different parts of the Maritime province as well, and on the Sakhalin, in the Altai Mountains, in Ferghana and in various parts of the Yakutsk province. Excellent coal is also found in the Kuznetsk mines, south of Tomsk, which are far richer than those Annual Exporfs of Man<^<^ne5 e Ore from Russia R *South-Eastern section of the government of Tomsk. **The Baikal is one of tlie greatest basins of fresh water in the world. It has about 30,000 square versts (13,100 square miles) of surface, with a length of about 400 miles, and a width of 17 to 47 miles. «Ci > 30 .2 f-20 £ 10 c Diagram No. S3 RUSSIA — HER ECONOMIC PAST AND FUTURE 63 of the Donetz Basin. Very rich beds are also found in the region of the Angerski mines (Tomsk Government), in the region of the Cheremchovski mines (Irkutsk Government), and in the region of the Suchanski mines (Mari- time province). The coal output in these sections was grow^ing slowly before the War, because industry in general was almost undeveloped in Siberia, and the export of coal to the Urals and other parts of Russia was almost impossible, owing to the lack of railroads, highways and waterways. What has been said concerning coal applies also to the iron deposits in the Minusinsk district, to many places in the Irkutsk government, in the Trans- Baikal region, in the Amour region (the basin of the Zeia), in the Ussuri region, in the Maritime province (near the Gulf of Olga), in the Altai district, in the Ya- kutsk region, etc., etc. As far as gold is concerned, out of the average production of 3,635 poods, for the years immediately preceding the War (1912 and 1913), the share of Si- beria was about 3,000 poods, i. e., about 80%. Enormous deposits the value of which it is possible to judge from the reports of specialists, exist in the Vitim district (Irkutsk government), in the Trans-Baikal region (Nerchinsk and Barguzinsk districts), in numerous places in the province of Yakutsk, par- ticularly along the Lena and the Aldan rivers, in the Amour region (Zeisky and Bureinsky districts), in the Maritime ♦Zinc ores, to an amount of over 1,000,000 poods, an- nually, were mined before the War, near the Bay of Tutikhe. They were exported to Europe. **In the Trans-Baikal are found acquamarines, Ceryls of all colors, tourmalines, topaz, rock-crystal, etc., etc. Furthermore there are found, in, many places in Siberia, especially in the Altai Mountains, jasper, lapis-lazuli, etc., etc. province (south and southwest from Nikolaevsk, and nothwest and northeast from Vladivostok), in the Altai district, in many places in the Minusinsk and Yenissei districts, in Turkestan, in the Kirgees prairies, etc., etc. Ores with a large percentage of silver, zinc and lead occur in the Trans-Baikal region, in the Maritime province* and in various places in the government of Tomsk, etc., etc. Up to the present, in view of the unenlightened policy of the old regime, and lack of ways of com- munication, they have not been utilized, as is evident from previously given data (see page 20.). This characteristic lack of development holds true not only of Siberia, but of Russia as a whole. Tin, according to the reports of many specialists, exists in very rich deposits in the region between Chita and Man- churia. Particularly well known are the deposits on the Onon River, near the rail- way station of Oloviannaya. Furthermore, in the Trans-Baikal region, not far from the Borzia railroad station, there are very rich beds of Wolfram ores. Throughout all Siberia, there are also rich deposits of copper and pyrites. Copper is found in great quantities in the Minusinsk district, in many places of the regions of Akmolinsk and Semipala- tinsk, in the section between Tashkent and Kokand, around the Nerchinsk, etc., etc. Besides this, there are in Siberia rich deposits of graphite, phosphate rock, mercuric ores, chromic ores, sul- phur, salt, asphalt, materials for high- grade cement, asbestos, mica, antimony, amber, semi-precious stones (district of Nerchinsk**) rare metals (radium, va- nadium, uranium). 64 RUSSIA— HER ECONOMIC PAST AND FUTURE Great natural resources exist also in the region between the Baltic and the White Seas, from Petrograd to Onega Bay. Throughout all this region there are immense forests of fir and pine, suitable for ships and ships' masts. In the interior, often cropping to the sur- face, there lie deposits of iron and cop- per ore, gypsum and alabaster. On the shores of the lakes there are quantities of first-class quartz sand, suitable for the manufacture of glass. Huge areas abound in strata of excellent marble, in other places there are beds of coal, and to the northwest is found naphtha. While speaking of the character of the natural wealth of Russia, and in particular of Siberia, it is necessary to note here that really scientific investi- gation of the resources of Russia has been begun, properly speaking, only in recent years. Very large districts in the Caucasus, in the Urals, the White Sea region, Turkestan and Siberia have not yet been surveyed, but for their reputed wealth we have authoritative statements of experts. How necessary it is that these rich natural resources be subjected to an ade- quate and scientific investigation will be quite evident from the following consid- eration : In the Yakutsk region, accord- ing to the frequently quoted reports of Bosenko, there are immense resources of coal, iron, gold, amber, various semi- precious stones, marble, etc. Only in very recent years have 65 deposits of coal, 50 of iron, 41 of marble and 27 of gold been discovered. A number of authorities long ago pointed out that for the stimulation of interest in the development of the inex- haustible wealth of Russia, the Govern- ment should offer rewards in propor- tion to the value of the mine discovered, the quantity and quality of minerals, their location, etc., etc. If the subsidies were sufficient to balance the expenses of those who, de- voting .themselves to this work, found satisfactory deposits of various min- erals, the development of Russia's nat- ural resources would receive an excellent stimulus. These deposits, without doubt, would be rapidly worked up, particular- ly if the experts in the service of the Government should help those engaged in exploration. It is to be hoped in consequence that the new Government will proceed in this direction, which will assist in bringing into Russia energetic specialists as well as foreign capital. FORESTS Possibly one of the most important sources of Russia's wealth are her im- mense forests. The total area covered by these forests (including unsurveyed areas) is about 1,170,000,000 dessiatines,\ that is, about 3,150,000,000 acres. Of this total, 142,000,000 dessiatines (about 383,000,000 acres) are located in the 51 governments of European Russia, about 5,000,000 dessiatines (about 13,500,000 acres) in the Caucasus, and about 20,- 000,000 dessiatines (about 54,000,000 acres) in Central Asia. As far as Si- beria is concerned, it has about 204,000,- 000 dessiatines (about 551,000,000 acres) RUSSIA— HER ECONOMIC PAST AND FUTURE 65 ^rea under forests in Russia Total Cfbout 1,170, 000,000 Dessiafines 1100-1 1000- 900- (U f 800 4- cs 'w 700 (D Q GOO o c o 500- 400- 300-1 - 200- 100- i Jo k ? ^^ «0 S o a; * J (CENTRAl** ASIA (19.6) '[(CAUCASUS^* \ (4.9) i *Not, including Poland and Finland. ** National Forests only. Diagram No. 54 66 RUSSIA— HER ECONOMIC PAST AND FUTURE surveyed,* and about 800,000,000 dessia- tines (about 2,160,000,000 acres) abso- lutely unexplored. As regards the distribution of forest areas in different regions of European Russia and Siberia, the data is given as far as surveyed forests are concerned, in diagram No. 54. The most important of the forest areas of European Russia are located in the Government of Arkhangel (40.7% of the total forest area in European Russia), in the Government of Vologda (27.1%), in the Government of Perm (8.5%), in the Government of Olonetz (6.2%), and in the Government of Viat- ka (4.2%). In Siberia the greatest area of sur- veyed forest is located in the Gov- ernment of Tobol (30.9% of the total surveyed forest area in Siberia), in the Maritime province (17%), in the Gov- ernment of Tomsk (16.9%), in the Amour province (16%), and in the Trans-Baikal province (8.8%). How immense is Siberia's w^ealth in forests may be seen from diagram No. 55, in which the forest areas of Russia are compared with those of the United States and Canada. It shows clearly, that the United States and Canada to- gether possess about one-third as great a forest area as that of the total of Russia. The role the timber exports played *One of the newest publications of the Ministry of Agriculture, issued in 1914, gave the area of surveyed forests in Siberia as 270000,000 dessiatines (about 731,- 000,000 acres), out of which 240,000,000 dessiantines (about 650,000,000 acres were state owned forests — 15,000,000 (about 40,500,000 acres) were crown for- ests, and 15,000,000 dessiatines (about 40,500,000 acres) belonged to the Cossacks. As this publication states, the majority of Siberian forests consist of foliage-bearing trees, but there are also immense areas covered by very high-grade cedar, fir, pine and spruce forests, mostly unexplored. in Russia in the last decade is shown by diagram No. 56. From the data given there, it may be readily seen that the timber exports from Russia were rapid- ly growing, the total increase during the decade of 1904 to 1913 representing a growth in value from 73,2 to 164,9 million roubles, that is, about 125%. In speaking of the growth of Russian timber exports, it is very important to state that, while in Russia they were rising year by year, in the United States different conditions obtained. Under the influence of the constantly growing demand for timber, the United States, from the beginning of the XXth cen- tury, has shown a considerable excess of imports over exports, which, ever increasing, surpassed, in 1917, $240,000,- 000 (see diagram No. 57). It may be, in this way, that the Russian forests will serve as a very important source for the supply of various valuable products for American industries. This may be seen from the fact that Russia's forests give her the ability to export, with few exceptions, almost all the varieties of timber demanded by the world markets, in large quantities. In this respect, it needs only be mentioned that enormous areas in Russia are cov- ered by high-grade varieties of cedar, fir, oak, pine, spruce, etc., etc. Besides this, vast forest areas supply splendid material for the production of wood pulp and matches. A large demand for Russia's timber would surely result in a betterment of her financial conditions. It is sufficient to state, in this respect, that before the War, the net income which the Govern- ment received from the state owned for- ests in European Russia did not exceed RUSSIA —HER ECONOMIC PAST AND FUTURE 67 12 cents per acre, i.e., fifty to a hundred times less than in more developed countries. In Asiatic Russia the net income amounted to one- tenth of a cent per acre. How poorly the Forest Survey was organized in Siberia may be seen from the fact that the budget for 1914 gave, for this pur- pose, a sum covering only the salaries and mainte- nance of 583 persons. Among this number were 35 forest-inspectors, 220 foresters, 68 assistants arrd 258 rangers, with 170 addi- tional persons for the in- vestigation of unexplored forest areas, making a total of 753 persons for an area of several billions of acres of forest area. Timber Area in Coun fries possessino; most importani- Foresf- Reserves the *Nof including Poland \ t rl60 CM ^ CD CM CM I— r^ K^ ^ ■~^ in -160 11 -140^ 8.2 107. \in. o -120 Q^ cv, ^A -100 tt- ^ ^ o 1^ r^ -80 «, - £0 § - 40 .- > ic^ va N- !^ Vi^ c^ ^^ '^1 H^ i; <^^ r>, *s^ *.^ *^^ *wi ■^ ^.^ V ^' - 20 c c^ CVl cs^ (S^ Cft ^ — r.'x / ^ / V / v^ \ h / ^ \ "» V oooooo— -— — — oooooo — — — — — o Diagram No. 58 80 RUSSIA— HER ECONOMIC PAST AND FUTURE In looking over these figures, we ob- serve that the prices of the majority of industrial securities, as well as of the majority of the stocks of banks and railroads, have risen, during the last few years, to a much higher level than in the period succeeding the Russo- Japanese war. It is important to note, along with this, that the Russian banks, as well as the Russian Bourse, sufifered heavily, during the years just preceding the War, owing to the detrimental ef- fects of the Balkan wars and the storm- clouds of the approaching world-con- flagration. But for these factors, the average quotations of Russian stocks would have reached an even higher level during the last few years. How fast new capital was pouring into stock enterprises in Russia may be seen from diagrams Nos. 59, 60, 61, 62. The first of these diagrams shows the number of new joint stock companies for the four years which preceded the War — 1910-1913. Each year the number of new stock companies in Russian indus- try and trade has grown rapidly. The same may be said concerning the capital of the new stock companies. Diagram No. 60 shows what propor- tion of Russian securities. Governmental and private, were placed in foreign and Russian markets respectively. In looking over this diagram, we find that during the last few years, with the exception of 1906, the value of these securities, placed in Russia, was considerably greater than that of those placed abroad. For several years, such as 1907, 1908, 1910, 1911, etc., it will be noticed that the total value of the securities placed abroad was many times less than the value of securities placed, for the same years, in Russia itself. Diagram No. 61 shows the capital stock of commercial banks, industrial and trade enterprises, the stock and bonds capital of the railroads and the stock and debentures issued in foreign markets, as well as in Russia, by the above mentioned enterprises. Diagram No. 62 gives the same infor- mation for new issues of securities by industrial and trade companies, as well as for securities issued by commercial and land banks in Russia. From this diagram it may be seen that the pro- portion of such securities held by Rus- sians has considerably increased, and that each year the share of Russian holders has been greater than that of foreigners. It is important to note also that the total value of securities, placed both in Rus- sia and abroad, has grown very rapidly, which is convincing proof that both Rus- sian and foreign capital have begun to take an increasing interest in the eco- nomic development of Russia. Number of New Russian Inc^us+rlal anc^ Commercial Corporations anc^ f-he/r Paid-up Coipi-hoil I 1 NUMBER OF NEW CORPORATIONS \ PAID -UP CAPITAL «300-] o275- ■•^250- o225- ^^oo- o 175- j 150- ;|l25- 1 75- l 50- % 25- O — W ro Cl o C3^ O o o g O — £J 6> O C> O Diagram No. 62 RUSSIA — HER ECONOMIC PAST AND FUTURE 83 ous Russian banks from 1904 to 1914. Upon examining the figures in dia- gram No. 63 we observe that, whereas the deposits in the State Bank remained almost at the same level during these years, the deposits in the small credit banks, municipal banks and mutual credit banks increased almost three- fold. The same proportion holds true for the increase of deposits in the com- mercial banks. Out of the total amount of deposits in the banks throughout the country (approximately four billion roubles), two-thirds were held by the private commercial banks. Similar conditions were observed even after the War began, as shown by diagram No. 64. In examining the fig- ures given in this diagram, we find that the total amount of deposits in Russian commercial banks grew, from May 1, 1915, to May 1, 1917, from 3,210,000,000 to 7,754,000,000 roubles, i. e., it increased two and a half times. Diagram No. 65 shows the assets and liabilities of Russian commercial banks on January 1, 1904, and July 1, 1913, In reviewing this data, we find that the main activities of these banks were the discounting of bills, and advancing loans on various securities. In the last section of the diagram there are given figures concerning the number of branch offices of Russian joint stock commercial banks. Regardless of all ob- stacles placed in the way of the develop- ment of these banks by the old regime, they expanded, and the number of their branch offices was constantly increasing. Thus, for instance, from 1904 to 1907, the number of such branches in- creased by 37, from 1907 to 1910 by 132, and from 1910 to 1913 by 164. Notwithstanding this notable growth, it is necessary to remark that the total number of branches of these commercial banks in Russia, as well as the number of parent banks, was ex- tremely small, when calculated on the basis of the population of Russia. It is Increase in Deposits in Russian Banks oooooo — — — — — llllllllll SMALL CREDIT BANKS g| MUNICIPAL BANKS MUTUAL CREDIT BANKS COMMERCIAL BANKS STATE BANK OF RUSSIA Diagram No. 63 84 RUSSIA — HER ECONOMIC PAST AND FUTURE sufficient to compare with Russia, in this respect, the Dominion of Canada, which had in 1916, with a population of about eight million, 22 chartered banks with 3,309 branch offices. Among those banks, the following had the largest number of branches : Number of Branches Canadian Bank of Commerce .... 376 Royal Bank of Canada 371 Union Bank of Canada 304 Banque Nationale 222 Merchants' Bank of Canada 202 Bank of Nova Scotia 190 Bank of Montreal 182 The first two of these banks, the Canadian Bank of Commerce and the Royal Bank of Canada, alone, had more branch offices than 42 Russian joint stock commercial banks taken together, though the capital stock of these Rus- sian banks exceeded, in 1916, the capital stock of these two Canadian banks 15 times. The comparison between the Russian joint stock commercial banks and the Capital ana/ Deposifs in the Commercial Bank^ Of Russia aooo- {On May l?f) DEPOSITS 7.754 100 Q - «) if 0.000- x> D O ^ 5.000- ^ ^ fi "^ W- ° 4000- in -^ §3.000- ^ aooo- CAPITAL c 1.000- -^ ^ v^ I\ 1^ 5 5 0> 0-i ~— ^Jolnt Stock Banks only. The Mai number of such banks in Russia an.ounlecpl lo 41-in 1915 to 42- in 1916 anc^ fo 50-in 1917. Diagram No. 64 6200 6000 5600 5600 5400 5200 5000 4800 " 4600 .5! 4400 -^ 4200 2 4000- OL 3800 3600 t,- 3400- o 3200- 3000 ■n 2800- c 2600- o 2400 - 2200- - 2000- ■f 1800- 1600 c 1400- - 1200- 1000- aoo- 600- 400- 200- 13 1743 72S io5 Sfa-temen f If §1 995 2S5 """I ' So 85 of Cono/itton 58ZZ IZBZ 250 154 I 525 iiO_ /247 of Commercial Banks'* ■i J«n.l=t 1904 I I July lit 1913 L 1 A B I L I T I E S 765 505 §1 i! 1500 of 509 5822 Joint Stock Companies Only. 954 Number of Branch- offices of the Russian Commercial Banks* 457 105 80O 700 600 500 400 ■300 200 100 ■0 Diagram No. 65 RUSSIA — HER ECONOMIC PAST AND FUTURE 85 Canadian banks becomes still more in- teresting when the populations of these two countries are taken into considera- tion. In Canada, there is a branch office of a chartered bank for every 2,400 of population, whereas in Russia only one branch office is found for every 250,000 of population, i. e., less than one-hun- dredth of Canada's rate. These figures prove with striking clearness the pres- ent weakness of banking in Russia, and show likewise the excellent opportuni- ties that await foreign capital in the field of Russian banking. Undeveloped as banking was in Russia, these commercial banks were, none the less, paying, during the years that preceded the War, very high dividends, often as much as 20 to 30 roubles or even more per share of stock, with a par value of 250 roubles. Such divi- dends were being paid notwithstanding the fact that the capital stock of these banks was constantly being increased, and notwithstanding, also, the very conservative policy of Russian com- mercial banks in declaring dividends. In general, only a small part of their actual profits were distributed to share owners, as shown by the fact that out of 174 million roubles earned by these banks in 1913, the dividends distributed amounted only to 62.4 mil- lion roubles. In speaking of the role of the joint stock commercial banks in the economic life of Russia, it is also necessary to point out that the number of big banks in that country has hitherto been very small. Thus, for instance, as late as 1915, Russia, with a population of 180 million, had the following number of big banks: No. of Paid-Up Capital Banks From 5 to 10 Million Dollars. . 10 " 10 " 15 (( 5 " 15 " 20 " ti 1 " 20 " 25 ti 3 " 25 " 30 " (I 3 Total 22 Canada, with a population of 8 mil- lion, had, in 1916, the following number of chartered banks with more than 5 million dollars of paid-up capital, each: No. of Paid-Up Capital From 5 to 10 Million Dollars " 10 " 15 Over 15 " Banks 6 2 1 Total. Moreover, the reserve funds of the Canadian chartered banks, which amounted to $113,383,000, exceeded their paid-up capital, whereas the re- serve and other funds of the 42 Russian joint stock commercial banks did not amount to one-half of their paid-up capital. The average of the combined paid-up and reserve capitals of the Rus- sian and Canadian banks was approxi- mately the same,- — about 10 million dol- lars. In view of such a comparatively weak development of banking in Russia be- fore the War, there is no doubt that, af- ter normal conditions are restored, bank- ing will develop there extensively. First, because the existing commercial banks will extend their operations through- out Russia as well as abroad; and, sec- ondly, because foreign banks will open 86 RUSSIA — HER ECONOMIC PAST AND FUTURE branch offices in the most important Russian industrial and trade centers, in order to improve their control over the increasing exports and for the better safeguarding of their investments. A beginning in this direction was already made before the War, and was con- tinued during the War, when a number of foreign banks, American among them, opened branches in Russia, in addition to a large number of special new foreign banks, such as the Russian- English Bank, the Russian - French Bank, the Russian-Holland Bank, etc., etc. In speaking of the splendid outlook for the banking business in Russia, and the high earning power of the majority of the banking institutions, it is neces- sary to consider the opinions widely circulated among the general public to the effect that the Bolshevist upheaval must inevitably lead to the bankruptcy of all Russian private banking institu- tions. That this opinion is wrong can at once be seen from the fact that the only harm that the Bolsheviki could have inflicted upon the commercial banks would have been the confiscation of the ready cash which, at the time of the coup d'etat, was found in the vaults. These cash funds, however, were quite negligible in amount. Thus, for in- stance, on May 1, 1917, all the cash on hand in all the Russian joint stock com- mercial banks amounted to hardly 183 million roubles. The actual losses suf- fered by these banks from the Bolshe- vist confiscation, which occurred several months later, were even smaller, for, after their victory, the Bolsheviki con- tinued to pay out to depositors on cur- rent accounts, in the beginning, at the rate of 650 roubles, and later, at 1,000 roubles per month. Besides, they also paid out very large sums from current accounts when these went for the pay- ment of workers' wages, clerks' sal- aries, etc., in various industrial plants. Thus, the cash losses of the private commercial banks were considerably offset by the payments made by the Bolsheviki upon current accounts of the private banks from the funds of the State Bank. Moreover, a number of the branch offices of these commercial banks were located in Siberia, in the North, and in many other sections of Russia, which either were under the rule of the Bol- sheviki for a brief time only, or were not subjected to it at all. Finally, we must not lose sight of the fact that the depreciation of the rouble to almost nothing, which is inevitable if the Bolsheviki remain in power even a few months longer, will reduce the liabil- ities of the banks to a negligible sum, whereas their assets, which consist, in large measure, of controlling blocks of stock in important industrial enterprises which own valuable mines, oil lands and vast tracts of timber lands, are bound to increase immensely in value. The banks received their deposits at a time when the rouble was worth from 100 to 50 kopecks in gold.* For this money the banks have purchased various securities in Russia and abroad. Now, when the exchange rate of Russian paper money is very low, the banks, in meeting their liabilities, can discharge them all by liquidating only a small portion of their undepreciated Russian or foreign hold- * The latter was the exchange rate when the Bol- sheviki seized the power. Average Nef Profiis ctnc^ Dividenc^s for the YecPirs 1911 most Im po ricf ni Russian Ind usi- ri es 12 m f-he UJ Ol— oo <- a: z o LU o /Z7 2'i:7 [^ < o X a; UJ z: oc UJ UJ(— CO 01 con 2^^ ^ /■^5 ^ W.5 fM, RESERVES SINKING FUND BONDS 17 29.1 2.5 2.& o _ .1 14 9.1 1.4 4.4 0.5 to9 50-1 •^40- c <^30- o ^20 //3 26 50.3 8.5 25.3 4.1 CL , e1<5 n 12.6 1.7 3.6 1-3 OO 02 /^(? ■'65^ /3.<5 "Ml 123 50- _40H a> ^20 H o >- cc .1— Qi 1- -"uJ ,1— lO <, r -ito -> o z 3S o 5g /5.^ ^2:4 12 33.0 75 20.2 3.6 (5.3 t^ Oo ;o Q. en UJ QQ CO UJ UJ f- I- o Q. e.e ^A 22.8 ^ IZ.8 16.4 ■Ml 15.5 56 140.0 18.3 271 39.5 -J 6> % _IC1 UJ 2&7.0 62.0 102.3 214 sy 7 27.8 3.7 7.5 2.9 ujp 38 32.5 5.6 13.9 0.5 00 DCUJ 0_<|-; d;uj 14.4 20.7 ■Ml 3 75 2.2 42 13 CO UJ a: CO Q 2/2 23.7 ''9.H VI3.T>\ l/"Z(9^ /53 32 171 241 555.0 14 95.8 3.6 1576 96.1 WHOLESALE _jf2 ^ cn x2 Ol- yo 72./ k21:J 21 870 3.8 128 16 6 ii 5 <:^ cDq: UJ2: UJ — CO 73.(3 149 165.0 31.5 87.7 0.5 eg 777 mi 9.6 ^ (S? '5?> 15.6 €9\ Numbers show fhe (Pfyerage net profits in percent- 0(^e ofttie total stock and bonipl capital 1911-13 n.§- 21.2 34 09 9 7.35 1.8 0.96 51 573 49 3.0 6.6 22 52.7 II 1 1.0 27 19.0 1.3 eg Ol — CS^-L. Numbers show the diviGlenols paialforthe years 19 11-11 in percentage of common stock Diagram No. 66 RUSSIA— HER ECONOMIC PAST AND FUTURE 87 ings. The remaining assets will, thus, become unencumbered profits in their possession. It is clear, therefore, that those who speak of the inevitable bankruptcy of the private commercial banks of Rus- sia display unfamiliarity with the situa- tion of the Russian banks and, partic- ularly, with the fact that the larger commercial banks have, directly or in- directly, controlled, in recent years, about two-thirds of the bigger indus- trial enterprises in Russia. In considering this point we must re- fer to the question of Russian currency. In this direction it must be admitted that Bolshevism has unconsciously ren- dered a good service to Russia, namely, by printing unlimited amounts of paper currency, it has made it inevitable that the rouble will become absolutely worth- less. If the Bolsheviki remain in power a few months longer and continue to print paper money at the same rate as hither- to, Russia, when freed from the Bolshe- viki, is likely to have one of the best currencies in Europe. To achieve this the new Government will have to nego- tiate a foreign loan of some billion or billion and a half dollars, and secure it either by a certain mileage of State rail- roads, or by a large area of State-owned forests. Having obtained such a loan, the Gov- ♦It must be acknowledged that some of the joint stock companies incurred losses. For 1,650 joint stock companies, for which available data exists, the total of dividends paid, in 1911, for example, to share-holders, amounted to 212 million roubles, and the losses to IS mlllfon roubles. If we take into consideration the aver- age dividends of all Russian joint stock companies, taken together, they will be decreased, by these losses, by one-third to one-half per cent. But this reduction is almost negligible compared with the increase which would result if we took into account the effect of the above-mentioned watering of cap- ital by new stock issues. ernment will be able to issue a corre- sponding amount of notes on a gold basis. * * * The causes of the rapid influx of for- eign and Russian capital into Russian industries and trades, in the years im- mediately preceding the War, are shown in diagram No. 66, which gives the average dividends and net profits of the most important Russian industries and trades for the years 1911 to 1913, as far as joint stock companies are con- cerned. From the data given in this diagram, it may be seen that, regardless of the constant watering of capital caused by frequent new issues of shares, the annual average dividend, paid by many enterprises of various industries, was much higher than 8 or 9 per cent. If we compare the net profits of these industries with the amount of their paid-up capital and bonds, taken togeth- er, the proportion would be still higher. In this respect, it is sufficient to state that in many of Russia's industries the proportion of net profits to the amount of paid-up capital and bonds, taken to- gether, was over 15 to 20 per cent, reach- ing, in some cases, — as in the rubber in- dustry, more than 30 per cent.* This comparatively high level of net profits in various industries, on the one hand, as well as the excessively cautious policy of the majority of the Russian joint stock companies, striving, as may be seen from the accompanying dia- gram, to acquire large reserves and sinking funds, on the other hand, are doubtless the main causes of the above mentioned immense influx, during re- cent years, of Russian as well as foreign capital into Russian trade and industry. 88 RUSSIA — HER ECONOMIC PAST AND FUTURE In considering the question of invest- ments of foreign capital in Russian in- dustry, we cannot pass over the fact that, in certain cases, these investments were followed by considerable losses, re- gardless of the fact that general condi- tions were unquestionably very favor- able for the upbuilding, in this or other industries, of a number of new, very profitable enterprises. These failures are, in the great ma- jority of cases, due to the fact that for- eign capitalists, when starting new enterprises, instead of coming to agree- ment with reputable Russian firms well posted in that particular branch of pro- duction, or with prominent Russian banks which have been financing the given industry for many years, preferred to work independently. Without famil- iarity with local conditions of production and marketing, and often falling into the unscrupulous hands of dishonest promoters, whose sole aim was to swindle them, such investors were bound to meet, frequently, with disappoint- ments. Americans who intend to invest cap- ital in Russian industry should take par- ticularly into account these disastrous experiences. For only if they deal with large and reputable Russian enterprises and well-known capitalists, or with the Russian banks which are financing the in- dustry in question and are familiar with its conditions as well as the problems of marketing the products, may they be confident that the new enterprise will be placed on a firm footing and the invested capital will be safe. CHAPTER IX Conclusion — Russia's Needs — Expenditures Required for the Next Ten Years — Economic and Financial Cooperation between Russia and the Allies Having traced the course of develop- ment of the various branches of indus- try in Russia, we come unavoidably to the conclusion that, although the devel- opment in that country has been much slower than in many other countries, particularly in comparison with Ameri- ca, none the less the country has prog- ressed. When the War began, Russia, living up to the obligations which she had taken upon herself, gave, for the benefit of the general cause, the lives arid health of millions of her sons, as well as the resources of the country and her citi- zens. Although almost beggared, Rus- sia bore expenses no less great than the richest countries. As a result of this unswerving loyalty to the obligations which Russia took upon herself, poor, exhausted by suf- fering and hunger, she underwent the Bolshevik catastrophy, brought about, as is well known, to a great degree, by the German General Staff. What the War failed to do in the way of decreasing productive work in Rus- sia, Bolshevik nationalization and social- ization succeeded in doing. Productive ♦Regardless of what has been said before con- cerning the poverty of the population of Russia, her budget rose, within the decade preceding the War, frorS about $1,000,000,000 to about $1,700,000,000. This increase was due, it must be regretted, only m a very small part to expenditures for increasmg the pro- ductive capacity of the nation, for the old regime, as we have seen, did not understand such problems. The sums, extorted from the people, were spent in enormous quantities for the upkeep of the Army and Navy which were consecrated, after War was declared, completely to the cause of the Allies and helped them to save Paris, Calais, Verdun North Italy, and other important military places, the cap- ture of which by Germany would have brought her a decisive victory. . , i r i.u By these expenditures directed to the cause of the Allies, Russia's economic future was sacrificed. activity in agriculture diminished and that of industry was almost entirely done away with. To exist without producing is impos- sible for even the richest country. The accumulated wealth of Russia, which we have seen to be a poor country in this respect, is too insignificant to enable the Bolshevik government to continue long in power. It will not be long, therefore, before a stable government will be reestab- lished in the country, and the Russian people, under a new and stronger gov- ernment, provided that it has been im- bued by the Allies with their democratic traditions, will again arise as a mighty nation. When that moment arrives, the Allies, in order, on the one hand, to secure the return of interest on their old loans and, on the other hand, to prevent Russia from again becoming a German colony, will have to take the most decisive meas- ures for the upbuilding of the productive forces of the country. It is clear that only in this way will the comparatively undeveloped country of Russia be able to avoid both the possibility of new Bol- shevik disasters, dangerous alike to her and to her Allies, and also economic and political affiliation with Germany, which might, in the future, lead to a greater and still more horrible war. In order to raise her economic produc- tivity to the level of even so backward a country as Austria-Hungary was before the War, Russia will have to expend, in the next ten years, the following sums: 90 RUSSIA— HER ECONOMIC PAST AND FUTURE Expenditures Required for the Next Ten Years New Railroads — Ten years at about 3,500 to 4,000 miles per year. Total, 35,000 to 40,000 miles at $150,000 per mile $ 5,500,000,000 New locomotives, new freight and passenger cars, repair of the old locomotives and cars 3,500,000,000 Street railways, subways, pavement of towns and cities, etc., etc 3,000,000,000 Public roads 1,500,000,000 Inland river and canal improvements 4,000,000,000 Improvements of ports 1,000,000,000 Telephone and telegraph 1,000,000,000 Grain elevators 400,000,000 Mercantile Marine 200,000,000 Irrigation and drainage 500,000,000 Water supply, sewerage and other hygieric improvements in towns and cities 2,000,000,000 Central electric light and power stations 2,000,000,000 Public Schools (7,500 primary and secondary schools in towns and cities, at a cost of $60,000 to $100,000 each; and 100,000 rural schools, at a cost of $10,000 to $20,000* each 2,000,000,000 Improvements in agricultural machinery: 16,000,000 farms at $25 per year 4,000,000,000 Improvements in cattle, poultry, stalls for cattle, etc. : 16,000,000 farms, at $25 per year 4,000,000,000 Colonization of the eastern provinces of European Russia, Turkestan, Siberia, including houses, water-supply, etc 1,000,000,000 An adequate survey of the forests, local railways for the development of forestry, mining, and other natural resources 500,000,000 Improvements in machinery in existing factories, mines, etc., and building new factories, mines, etc. : Coal and coke, peat, iron and steel production 2,000,000,000 Oil industry 500,000,000 Manufacture of agricultural, electrical and other machinery and implements 1,000,000,000 Ship-building 100,000,000 Cotton industry 300,000,000 Wool industry 150,000,000 Flax, hemp and jute industry 100,000,000 Silk industry 100,000,000 * This would include expenditures for libraries, science equipments, materials, etc., etc. RUSSIA— HER ECONOMIC PAST AND FUTURE 91 Expenditures Required for the Next Ten Years (Continued) Lumber industry 500,000,000 Gold, silver, platinum, copper, lead, zinc and other metals 400,000,000 Cement and lime 200,000,000 Fertilizers 150,000,000 Beet-sugar industry 100,000,000 Butter, cheese, condensed milk, oleomargarine, slaughtering and meat-packing, ice-plants, canning and preserving fish and fruits, confectionery, etc., etc 1,500,000,000 Tobacco, breweries, mineral waters, etc 400,000,000 Rubber industry 150,000,000 Brick and tile, pottery, glass, etc 300,000,000 Chemicals, drugs, dyestuffs, soap, perfumery, etc., etc 1,500,000,000 Leather, shoes, etc 300,000,000 Paper, wood pulp, etc 300,000,000 Printing 300,000,000 Miscellaneous industries (automobiles, trucks, aeroplanes, phono- graphs, photographic materials, etc., e tc. ) 2,000,000,000 Total $12,350,000,000 Improvements in conditions of dwellings, $5 per year and per capita. 8,000,000,000 Grand Total $56,450,000,000 Judging from the experience of the With the assistance of these great years preceding the War, it may be democracies, the Russian people, accus- hoped that Russia herself will produce tomed to servile submission and indo- about half this sum. lence, will soon develop in themselves Part of this money could be raised by the qualities of the Anglo-Saxon race- internal loans, and a part obtained from 1°^^ ^^' consistent work, mitiative and , 1 , T .1 1 i.i. the energy to attam to self-set ideals, the regular budget. In the latter con- ^-^ , r , j i r . '^ . , 1 1 .1 T. love of personal freedom, and love tor nection, it must be noted that the Rus- . ^ ' , . , . their own great country, sian budget must be increased, after or- ^^^^ ^^^ immense latent resources of der IS restored, at least 2, if not 2/2 ^^^j^. ^^^^^^y ^^1 open to the Russian times, compared with the amount be- people, who have shown such great abili- fore the War. ^y -^^ ^]^g g^j-^g g^j^^j sciences, a way to ma- The remainder should be furnished terial success, to leisure and culture, and by the Allies, and among them, in the will make them, in cooperation with the first rank, the United States and Great Allies, one of the upholders of Civiliza- Britain. tion. RUSSIA— HER ECONOMIC PAST AND FUTURE 93 Locations of the Chief Industries in Russia* The following table gives an alphabetic finding-list of the main industries of Russia and the governments in which the most important plants and factories, en- gaged in these industries, are located : PRODUCTS: Cement Chemicals Clothing Cotton Electrical Glass Iron and Steel Products, etc. Leather, Boots and Shoes Linen** GOVERNMENTS: Volhynia, Riazan, Moscow, Novgorod, Petrograd, Don Cossacks Territory, Ekaterinoslav, Kaluga, Livonia, Esthonia, Saratov, Sim- birsk, Perm, Ufa, Kherson, Black Sea. Moscow, Petrograd, Kherson, Vladimir, Kharkov, Ekaterinoslav, - Kiev, Kostroma, Curland, Livonia, Yaroslav, Perm, Don Cossacks Territory, Samara, Kazan. Moscow, Riazan, Petrograd, Novgorod, Kazan. Moscow, Vladimir, Riazan, Kaluga, Kostroma, Smolensk, Petro- grad, Moghilev, Tula, Penza, Simbirsk, Tver, Saratov, Nijni-Novgo- rod, Curland, Esthonia, Livonia, Tambov, Yaroslav. Petrograd, Moscow, Livonia, Esthonia, Kiev, Kharkov, Crimea, Voronezh, Nijni-Novgorod, Yaroslav, Kherson. Moscow, Vladimir, Vilna, Vitebsk, Vologda, Volhynia, Viatka, Eka- terinoslav, Kazan, Kaluga, Kiev, Curland, Livonia, Minsk, Nijni- Novgorod, Novgorod, Orel, Penza, Perm, Riazan, Petrograd, Smolensk, Kharkov, Tver. Moscow, Petrograd, Tula, Kharkov, Kiev, Ekaterinoslav, Perm, Vladimir, Don Cossacks Territory, Kaluga, Curland, Livonia, Nijni- Novgorod, Olonetz, Orenburg, Samara, Saratov, Ufa, Kherson, Viatka, Tver, Tambov, Voronezh, Kutais, Esthonia. Vilna, Grodno, Kovno, Minsk, Petrograd, Moscow, Tver, Viatka, Kazan, Kursk, Kaluga, Tambov, Perm, Vitebsk, Don Cossacks Ter- ritory, Livonia, Kherson, Tchernigov, Kiev, Nijni-Novgorod, Orel, Perm, Orenburg, Simbirsk, and many regions of Asiatic Russia. Vladimir (40), Kostroma (24), Moscow (13), Yaroslav (9), Livo- nia (4), Perm (3), Petrograd (2), Pskov (2), Curland (2), Nijni- Novgorod (2), Tver (1), Vitebsk (1), Vologda (1), Viatka (1), Grodno (1), Astrakhan (1), Kazan (1), Kovno (1), Riazan (1), Samara (1), Kharkov (1), Esthonia (1), etc. ♦Industries concerned with the production of raw materials discussed in the text, such as coal, copper, iron-mining, etc., are not listed here. **Figures in parenthesis represent the number of larger factories, as given by the Association of Linen Manufacturers. ^4 RUSSIA — HER ECONOMIC PAST AND FUTURE Chief Industries— Conmued PRODUCTS: Machinery Pulp, Cellulose, Paper and Card-Board Perfumery and Cosmetics Pottery Rubber Ship-building (Sea and River-going) Silk Sugar (Beet) Tobacco Manufacturing Wool GOVERNMENTS : Moscow, Petrograd, Kiev, Kharkov, Kherson, Tula, Baku, Ekater- inoslav, Grodno, Curland, Esthonia, Livonia, Minsk, Nijni-Novgo- rod, Don Cossacks Territory, Vladimir, Viatka, Orel, Samara, Sara- tov, Tambov, Crimea, Vilna, Volhynia, Tver, Voronezh, Perm, Omsk, Tomsk, Irkutsk, Vladivostok, Yaroslav, Ufa. Vilna, Vitebsk, Vologda, Volhynia, Kaluga, Kovno, Curland, Livo- nia, Esthonia, Vladimir, Viatka, Grodno, Don Cossacks Territory, Kiev, Kostroma, Moghilev, Minsk, Nijni-Novgorod, Novgorod, Olonetz, Orel, Penza, Perm, Kherson, Tchernigov, Yaroslav, Petro- grad, Tver, Tomsk. Moscow, Petrograd. Volhynia, Viatka, Kaluga, Moscow, Petrograd, Poltava, Novgorod, Smolensk, Tver, Kostroma, Nijni-Novgorod, Orel, Perm, Kiev, Livonia, Moghilev, Kharkov, Yaroslav. Petrograd, Moscow, Livonia. Petrograd, Kherson (Nicolaev, Odessa), Crimea, Esthonia, Livonia, Arkhangel, Ribinsk, Moscow, Nijni-Novgorod, Saratov, Astrakhan, Perm, Curland, Vladivostok. Moscow, Vladimir, Petrograd, Elisavetpol, Grodno. The Southern, South-Westefn and Central Russia. Petrograd, Moscow, Kiev, Crimea, Smolensk, Poltava, Curland, Tambov, Bessarabia, Vilna, Volhynia, Grodno, Livonia, Orel, Podolia, Kharkov, Don Cossacks Territory, Saratov, Minsk, Yaro- slav, Transcaucasian region. Moscow, Vladimir, Tver, Petrograd, Nijni-Novgorod, Kaluga, Kos- troma, Penza, Grodno, Podolia, Viatka, Simbirsk, Tambov, Samara, Kazan, Saratov, Riazan, Ufa, Perm, Kursk, Tchernigov, Yaroslav, Esthonia, Livonia. The War has forced many of the Russian industries to seek new locations, due to the German invasion of the western section of the country, and has, thus, greatly strengthened the trend of many industries toward the Volga. If the development of railways and canals, discussed in pre- vious chapters, is accomplished, the region of the Volga will undoubtedly become one of the most important industrial centers of Russia. | t More or less exact statistics concerning the dis- tribution of the various Russian industries, in the different parts of the country, as well as the statistics concerning the changes which have taken place in recent decades, with reference to the trend of the industries toward the East, are absolutely unobtain- able, since there has been but one census, that of 1897, which was very badly organized, as % of the population was illiterate. The old Government spent, annually, many hun- dred millions for absolutely useless purposes, but was not able to find, even once, after 1897, some 20 or 25 million dollars to finance a census, such as have been taken, more or less regularly, in the United States, the United Kingdom, Germany and almost all civilized countries. One of the first necessities for the new Govern- ment, after order is restored, must be, therefore, the organization of an adequate Census Bureau, which will furnish, regularly, exact statistics concerning the population, agriculture, industries, etc. Without this the new Government would have no solid basis for its economic and financial policy. How Germany Was Able to Dominate the World Market A CHANGE is now coming over the economic life of the United States. Whereas, before the War, the in- dustryof this country was concerned almost entirely with the domestic market, she must now become a serious competitor in the World Markets. This economic revo- lution is intensified by the fact that, after the conclusion of peace, from two to three million soldiers, who were in trade and industry before the War, must return to business at a time when their places have been taken b)^ others, who also cannot be turned away without serious disorder. To this must be added the fact of the enormous increase of the productive ca- pacity of the country, which was fos- tered by the rapid increase in the em- ployment of all kinds of machinery, which is so characteristic of American production. In my opinion, there is no mistake in saying that, from the begin- ning of the European War, the product- ive capacity of the United States has in- creased at least from 30 to 35%. Unaccustomed to trade in a World Market, with which she is unfamiliar, * Before the War "A.-E.-G." controlled a capital of at least half a billion dollars and manufactured at its numerous plants in Berlin, Frankfort-on-Main, Hennigsdorf, Vienna, Riga, Milan, etc., the follow- ing products: railroad supplies, high-tension wire, apparatus and supplies, small and large dynamos and other electric machinery, electric locomotives, arc lamps, supply materials. circuit-breakers and switches, integrating meters, typewriters, fans and ventilators, measuring instruments, electric clocks, electrical naval instruments and apparatus, turbo- generators, wires and cables, incandescent lamps, various porcelain insulatory materials, varnishes, heating apparatus, flying machines, nuts, all kinds of instruments, railroad signaling devices, machinery for printing railroad tickets, electric welding outfits, machinery for tempering steel and other metals, ozonat- ing plants, searchlights, etc. and feeling that the domestic market has become too limited fpr her increased productive forces, American Industry is, at present, in a period of indecision and doubt. At such a time it would be inter- esting for American manufacturers to become acquainted with the system which gave to Germany the possibility, within the last two decades, of attaining to one of the first places in the World Trade. The most characteristic phenomenon in this direction was the economic policy of the large German electrical concern, AUgemeine Elektrizitats - Gesellschaft, which, like a monster octopus with thou- sands of tentacles, encircled the whole universe and, assisted by the power- ful German Banks, and in alliance with two or three other concerns, more or less closely united with these banks, created an organization permitting her to be omniscient of all matters pertain- ing to the World Market. From the official list prepared by the AUgemeine Elektrizitats Gesellschraft, which is in my possession, the accom- panying diagram was prepared, show- ing the expansion of the branches of the "A.-E.-G." throughout the whole world. From this diagram it may be seen that, irrespective of the fact that it had possession of various plants, instal- lation-bureaus, sales-bureaus, stations, etc., etc., in almost all the large cities of Germany (in all about 180 German cities)*, it had also innumerable 96 RUSSIA— HER ECONOMIC PAST AND FUTURE branches in almost all important com- mercial centers throughout the world, — e.g., In Europe — Austria-Hungary, in thir- ty cities ; Italy, in ten cities ; England, in seven cities; Spain, in seven cities; Bel- gium, in six cities; Sweden, in six cities; France, in five cities; Norway, in five cities; Switzerland, in four cities; Rou- mania, in three cities; Holland, in two cities; Portugal, in two cities; Denmark, in one city; Turkey (European), in one city; Greece, in one city. In Asia — China (including Manchu- ria), in twelve cities; Japan (including Korea and Formosa), in ten cities; Sing- apore, one office; Java, two offices; In- dia, in two cities; Siam, in one city; Tur- key (Asiatic), in one city. In Australia — In four cities. In North America — In one city. In South and Central America — Mex- ico, in one city; Cuba, in one city; Bra- zil, in three cities; Argentine, in one t With regard to various other enterprises with which the "A.-E.-G." of Berlin, according to its own statements, was in close contact, besides the Bank fiir Elektrische Unternehmungen in Ziirich, the fol- lowing concerns must be especially mentioned: (1) A. E. G. Lahmeyer Werke, with a capital of 50,000,000 marks; (2) Deutsch-Ueberseeische Elek- trizitats-Gesellschaft, with a capital up to 1913 of 230,000,000 marks; (3) Gesellschaft fiir Elektrische Unternehmungen, in Berlin, with a capital in 1912 of 105,000,000 marks; (4) British Thomson-Houst,on Company, in London; (5) Compagnie Francaise Thomson-Houston, in Paris; (6) Societe Financiere de Transport et d'Enterprises Industrielles, in Brus- sels; (7) Societe Generale Beige d'Enterprises Elec- triques, in Brussels, etc. In addition to corporations with which the "A.-E.-G." of Berlin was closely asso- ciated, the following factories were established in Russia with her direct help: (1) a branch of the Berlin firm of A. Guttman; (2) a branch of the Ger- man concern of Koerting Brothers; (3) an electrical company in Warsaw; (4) the Associated Cable Works in Petrograd; (S) the so-called Company of the year 1886, in Moscow. The last-mentioned or- ganization was under the auspices of the "A.-E.-G." through the intermediary of the Bank fiir Elektrische Unternehmungen in Ztirich, which, according to the official information of the "A.-E.-G.," was closely affiliated with that company but, in reality, was com- pletely in its hands. This bank helped the "A.-E.-G." to borrow money from Switzerland, France, Bel- gium and other countries. city; Chile, in one city; Peru, in one city; Uruguay, in one city; Ecuador, in one city; Guatemala, in one city; Costa Rica, in one city. In Africa — Egypt, in two cities; Transvaal, in two cities. The same may be said with regard to Russia, where the "A.-E.-G." of Berlin maintained its branches, plants, installa- tion bureaus, electrical stations, etc., in the following cities: Petrograd, Mos- cow, Riga, Kharkov, Kiev, Odessa, Warsaw, Lodz, Sosnovitzi, Samara, Ros- tov-on-Don, Ekaterinoslav, Baku, Eka- terinburg, Irkutsk, Omsk, Vladivostok, Tashkent, Helsingf ors, Viborg and Abo. In this manner, as may be seen from the adjoining diagram, with the exception of North America, where by agreement the field was left to Americans, there ex- isted practically no important city or large commercial and industrial center in the whole world, in which the "A.-E.- G." of Berlin had no branch.f Just before the War broke out the paid-up capital of the "A.-E.-G." of Ber- lin amounted to 155,000,000 marks, the reserves and other funds to 93,000,000 marks, and the bond issues to 180,000,- 000 marks.J The Germans have created organiza- tions, in connection with other industries, similar to the A.-E.^-G., for cornering the Markets of the World, both in general, and in particular, in Russia. To compete successfully with such or- ganizations, backed by the most promi- nent and best organized banks in the world, such as the Deutsche Bank, Discontogesellschaft, Dresdner Bank, Darmstadter Bank, Schaaffhausenscher Bankverein, National Bank fiir Deutsch- t All figures not including companies under the control of the "A.-E.-G." L ,GUONy/SEViLLf »^ o \- UJ h- 0) UJ 1 o -J LiJ zee changchowV/nanking' AFRICA HENNIGSDORFER TERRAIN & HAFEN G. BERLIN CHINA AUSTRALIA AUTOMOBIL BETRIEBS A.G. BERLIN IMUKDEN, VTSINGCHOWE AUT06E5ELLSCHAFT BERLIN KRAFTMASCHINEN GES, BERLIN AMPERE GES BITTERFELD CAPITE A.G BENRAT GEBR.K0RT1N6 A.G, LINDEN COELNER INDUSTRIE-WERKE COELN RHEINISCHE TAXAMETER FAHRGESELLSCHAFT COLN UNITED CABLE WORKS PETROGRAD The A. E.G. besides the pcirtici potion in the c?!bove mentioned concerns hc?!S had cTK^reements with another German World concern +he SIEMENS-HALSKE-SCHUCKERJ a 9» Reprinted from the Elearical World, March 8, 1919. RUSSIA — HER ECONOMIC PAST AND FUTURE ■97 land, Berliner Handelsgesellschaft, Bleichroder, Delbriick, Leo & Company, etc., with a combined paid-up capital, be- fore the War, of over $320,000,000, re- * In these sums are not included the paid-up cap- ital, reserve funds and deposits of smaller, but often very important banking corporations controlled by the above-mentioned principal German banks. For instance, the Deutsche Bank controls the following banking corporations: Deutsche - Ueberseeische Bank, Deutsch Ostafricanische Bank, Deutsche Ve- reinsbank in Frankfort-on-Main, Essener Kredit- Anstalt, Hannoversche Bank, Mecklenburger Hypo- thek- und Wechselbank, Nieder-Lausitzer Bank, Oldenburger Spar- und Leihbank, Pfalzische Bank, Privatbank in Gotha, Rheinische Kreditbank, Schles- ischer Bankverin, Wurttembergische Vereinsbank, Deutsche Treuhandels-Gesellschaft, Markische Bank, etc. serves and other funds of about $120,000,- 000 and deposits of more than $1,250,000,- 000,* the American industries must be backed by special agreements of the big- gest banks in the United States. It seems to me, should the latter not back the American industries, the effort of the United States to become a serious competitor in the World Market will end in a series of severe disappoint- ments. 98 RUSSIA— HER ECONOMIC PAST AND FUTURE COMPARATIVE TABLE SHOWING THE TOTAL AREA, POPULATION, ACREAGE UNDER CULTIVATION, AND PRAIRIES AND PASTURES IN THE MAIN DIVISIONS OF RUSSIA IN 1914 European Russia .. (51 Governments) Caucasus Central Asia Siberia Poland Finland Population (in millions) 131,8 13,2 11,3 10,4 12,2 3,3 Area in Square Acreage under Versts Cultivation (in millions) (in dessiatines) 4,25 78,8 0,41 9,1 3,11 5,5 11,00 7,6 0,10 5,3 0,29 1,7 Prairies and Pastures (in dessiatines) 22,2 1,5 4,2 6,4 0,86 0,86 TABLE SHOWING THE AREA, URBAN AND RURAL POPULATION, AND THE DEN- SITY OF POPULATION OF THE MAIN REGIONS OF RUSSIA Central Agricultural'. Central Volga^ Lower Volga-^ New Russia"* The South-West5 Little Russia'' Industrial Region'' White Russia* Lithuania? Lake Region" The Baltic" Ural Region" North Region'^ North Caucasus'-* Trans-Caucasus''' Turkestan"* West Siberia''' Ost-Siberia'* Area in Square Versts 262,300 360,100 506,600 354,600 144,700 137,800 261,000 210,100 117,900 293,600 81,000 425,000 1,095,400 195,000 217,123 1,164,000 4,961,000 6,035,000 Population Urban 1,579,000 1,611,000 764,000 3,044,000 1,707,000 1,337,000 2,976,000 1,178,000 1,029,000 2,631,000 1,045,000 433,000 163,000 570,000 1,390,000 1,107,000 826,000 518,000 Population Rural 16,566 000 14,000,000 6,835,000 13,133,000 11,650,000 9,170,000 10,100,000 8,639,000 6,108,000 4,219,000 2,058,000 7,712,000 2,115,000 5,149,000 6,120,000 4,848,000 7,279,000 1,825,000 Inhabitants Per Square Verst 69,1 43,3 15,0 45,6 92,4 76,2 50,0 46,7 60,5 23,3 38,2 19,1 2,0 29,3 34,5 5,1 1,6 0,4 Rural Inhabitants Per Square Verst 63,1 38,9 13,0 37,4 80,4 66,5 38,6 41,1 51,8 14,3 25,4 18,1 1,9 26,4 28,1 4,1 1,4 0,3 ' Governments of Kursk, Orel, Tula, Riazan, Tambov and Voronezh. ^Governments of Saratov, Simbirsk, Penza, Kazan, Nijni-Novgorod and Ufa. 3 Governments of Samara, Orenburg and Astrakhan. 4 Governments of Bessarabia, Kherson, Crimea, Ekaterinoslav, Don Cossacks Territory. 5 Governments of Podolia, Kiev and Volhynia. •S Governments of Kharkov, Tchernigov and Poltava. 7 Governments of Vladimir, Moscow, Kaluga, Tver, Yaroslav and Kostroma. * Governments of Moghilev, Minsk, Vitebsk and Smolensk. 9 Governments of Vilna, Kovno, Grodno and Kholm. "> Governments of Livonia, Curland and Esthonia. " Governments of Viatka and Perm, '^ Governments of Vologda and Arkhangel. /J Territories of the Cossacks of the Kouban and Terek, and Government of Stavrol. '4 Governments of Baku, Black Sea, Tiflis, Erivan, Elisavetpol, Koutais, Provinces of Batum, Dages- tan, Kars, Zakatal and Sukhum, ■^5 Territory of the Cossacks of the Ural, Provinces of Turgai, Semipalatinsk, Akmolinsk and Semirechensk. '6 Provinces of Syr-Daria, Ferghana, Samarkand and Trans-Caspian. '7 Governments of Yenissei, Irkutsk, Tobolsk and Tomsk. '* Provinces of Trans-Baikal, Yakutsk, Amour, Sakhalin, Kamchatka and Maritime Province. RUSSIA — HER ECONOMIC PAST AND FUTURE 99 Comparative Table of Russian and American Measures 1 dessiatine = 2.705 acres 1 rouble in gold = 51.46 cents 1 pood ^ 40 Russian pounds =: 36.1 American pounds 1 verst = 0.663 miles 1 square verst ^ 0.44 square miles 1 short ton = 55.38 Russian poods ^ 2000 American pounds 1 acre = 0.37 dessiatines 1 dollar = 1.94 roubles in gold 1 metric ton = 61 Russian poods = 2204.7 American pounds 1 mile = 1.508 versts 1 square mile = 2.27 square versts 1 long ton = 62.03 Russian poods = 2240 American pounds Note: The author takes pleasure in acknowledging with thanks the able assistance of Mr. Daniel B. Leary in the translation of this book. Contents Page Introduction by A. J. Sack, Director of the Russian Information Bureau in theU. S ." 3 Foreword by the Author 5 Chapter I. Russia's Economic De- velopment and the Old Regime .... 7 Chapter II. Cultivation of Grain- Foodstuffs and Russia's Role in the World Market — Cattle Raising — Production of Coal, Iron, Oil, Copper, Lead, Zinc, Cotton, etc. — National Wealth — Comparison v^ith Other Countries, Especially with the United States 13 Chapter III. Foreign Trade and Merchant Marine — Items of Rus- sia's Exports and Imports — Grain Elevators — Comparisons with Other Countries 25 Chapter IV. Canals and Inland Waters — Comparison with Other Countries — Proposed New Canal and River Improvements — Ex- penditures for Construction 39 Chapter V. Ports — Their Trade — Comparison with Other Countries — Expenditures for Improvements. 45 Chapter VI. Railroads — Their In- come — Proposed New Lines — Necessary Expenditures for Con- struction and Rolling Stock 49 Chapter VII. Natural Resources — Minerals : Basin of the Donetz — ^The Page Ural Region — - The Caucasus — Siberia. — Other Resources: Forests — Timber Exports — Furs — Hides — Fishing — Fruit, Rice and Tea — Silk — Flax — Cotton — Wool 57 Chapter VIII.. .Russia's Banks — Banking and the Economic Devel- opment of the Country — Divi- dends and Profits in Various In- dustries — Bolshevism and Russia's Banks and Industries — Past and Future of Foreign Capital in Rus- sian Banking and Industries 79 Chapter IX. Conclusion — Russia's Needs — lExpenditures Required for the Next Ten Years — Eco- nomic and Financial Cooperation between Russia and the Allies — America's Great Opportunities in Russia's Reconstruction . . . .„ 89 Locations of the Chief Industries in Russia 93 How Germany Was Able to Domi- nate the World Market 95 Comparative Table Showing the Total Area, Population, Acreage under Cultivation, and Prairies and Pastures in the Main Divi- sions of Russia in 1914 98 Table Showing the Area, Urban and Rural Population, and the Density of Population of the Main Divi- sions of Russia 98 Comparative Table of Russian and American Measures 99 INDEX m PAGE Area, Total, and under cultivation in Russia 19, 20,98 Area, Total, and under cultivation in Russia 19, 20 Asbestos 60 Associations, Agricultural, number of 10 Banks, Russian, and Bolshevism 86 Banks, Russian, capital of 85 Banks, Russian, their capital compared with that of Canada's 85 Banks, Russian, deposits 83 Banks, Russian, dividends of 85 Banks, Russian, number of branches compared with those of Canada 84 Barley, Russia's exports 30 Bran, Russia's exports 30 Canals and Waterways in Russia; Govern- ment's expenditures 39 Canals and Waterways in Russia; Govern- ment's program for improvements 41 Canals and W^aterways ; Russia's expenditures compared with those in other countries . . 40 Canals and Waterways in Siberia 41, 42 Capital, English in Russia 81, 82 Capital, French and Belgian 9 Capital, influx into Russian industries and trades, causes of 87 Capital investments, dangers 88 Cattle, number of, in Russia and other coun- tries 18 Chromic ores 60, 63 Coal deposits in Central Russia 62 Coal production in Russia M, 57 Coal, Russia's production compared with that of other countries 43 Coal, Russia's production compared with that of the United States 21, 43 ♦This index includes references to maps and dia- grams. The statistical data from which the diagrams are constructed, as well as the statistical data used in the text, are taken from official reports, both Russian and foreign. The diagrams, with the exception of some half dozen taken from official reports, are from previous publications and lectures of the author. Books of ref- erence are not referred to, owing to the fact that they are, for the most part, in Russian, and in many caees, at present, inaccessible. PAGE Coke, Russia's production of 57 Copper ore production in the Caucasus 60 Copper production in the Caucasus 60 Copper production in Russia 11, 58, 59 Copper production in the Urals 59 Cooperative Societies, Agricultural, number of 10 Corn, Russia's exports compared with those of Argentine 34 Corporations in Russia 80 Corporations, Russian, capital of 81 Cotton cultivation 74 Cotton exports from Central Asia 75 Cotton industry, number of spindles in Rus- , sia and the United States 20 Cotton, Russia's part in the World production 76 Cotton production in Russia, necessary im- provements and expenditures 76 Cotton, Russia's production compared with that of the United States 20 Cotton, Russian and foreign used in Russian factories 75 Crops in Russia and in the United States .... 16 Currency, Russian, and Bolshevism 87 Electric power stations in Russia, horse- power and necessary expenditures. . .42, 43 Expenditure of the Russian Ministry of Agri- culture for agricultural improvements . 9, 10 Expenditure of the Zemstvos for Agricul- tural improvements 9, 10 Exports from Russia, articles 28, 47 Exports from Russia 26, 27 Exports per capita, Russia's compared with those of other countries 36,, 38 Flax-fibre exports from Russia 73 Flax-fibre production in Russia 72, 73, 74 Flaxseed exports, Russia's compared with those of Argentine 35 Fish exports and imports 70 Fishing in Russia 69 Fruit-growing in Russia 70 Forests in the Caucasus 65 Forests in Central Asia 65 I N D EX — Continued PAGE Forest in European Russia 64, 65, 66, 67 Forest in Siberia 64, 65, 66, 67 Furs, exports from Russia 67, 68 Germany's methods of dominating the World markets 95, 96, 97 Gold deposits in Siberia 63 Gold production in Russia 59 Grains, exports from Russia 29, 30 Grain elevators in Russia compared with those in Canada 34, 37 Grain elevators, necessary expenditures in Russia 35 Grains, production in Russia 13, 14 Graphite 60 Graphite, deposits in Siberia 63 Horse-power used in Russia and the United States 21 Imports, Russian, England's and Germany's share in 25 Imports into Russia 26, 27 Imports into Russia, articles 28 Imports into Russia under Russian and for- eign flags 37 Iron and steel production, Russia's 57, 58 Iron deposits in Central Russia 61 Iron industry, necessary improvements in. . . . 55 Iron ore deposits in Siberia 62 Iron ore deposits in the Urals 58 Iron ore production in Russia 11, 57 Iron ore, Russia's production, and comparison with the United States 19 Joint stock companies, England 7 Joint stock companies in Russia 7 Lead production in the Caucasus 60 Lead, Russia's production, and comparison with the United States 20 Locations of the chief industries 93, 94 Manganese exports from Russia 62 Manganese exports from Russia compared with those of other countries 61 Manganese ore production in the Caucasus. . 60 Manganese production, Donetz Basin 57 Measures, Russian and American equivalents. 99 Melon growing in Russia 71 PAGE Merchant Marine, Russia's, compared with that of other countries 35, Z7 Mercuric ores in the Urals 60 Mercuric ores in Siberia 63 Mica 60 Natural resources. Basin of Donetz 57 Natural resources, Ural Regiop 58 Natural resources, Siberia 63 Needs, Russia's, and expenditures required 89, 90, 91 Nickel 60 Oil-cake, Russia's exports 30 Oil, production in Russia 11, 60 Oil, Russia's production, compared with that of the United States 19 Oats, Russia's exports 30 Oats, Russia's exports compared with those of Argentine 33, 36 Phosphate rock 60 Platinum, production in Russia 59 Population of Russia, density 98 Population of Russia, Urban and Rural 98 Pig-iron, production in Russia 11, 57 Pig-iron, Russia's production, compared with that of the United States 19 Ports, Odessa, its rank in World trade 45 Ports, Petrograd, its rank in World trade .... 45 Ports in Russia 45 Ports in Russia compared with those of other countries 46, 47 Railroads, rolling stock, necessary expendi- tures for improvements 55 Railroads, Russia's compared with those of the United States 49 Railroads, Russia's, passengers carried and freight hauled 51 Railroads in Russia, program for improve- ments 54 Railroads, increase in Russia, compared with that of Canada 52 Railroads in Russia, length of lines under con- struction by government and private cor- porations 50 Railroads in Russia, necessary new lines and expenditures 55 I N D EX — Continued PAGE Railroads, payments of the private owned rail- roads to the government 50 Rare metals in Siberia 63 Rice growing in Russia 71 Rivers in Siberia 42 Rye, Russia's exports 30 Salt production, Russia's 57 Securities, Russian, new issues 81 Semi-precious stones in the Urals 60 Semi-precious stones in Siberia 63 Sheep, number of, in Russia 76, 77 Sheep, number of, in Russia compared with that of other countries 76 Silk, raw, pro Juction in Russia 72 Silver and lead ores 60 Silver production in the Caucasus 60 Silver production in the Urals bO Stock quotations in Russia 79 Tea-growing in Russia 71 Timber areas in Russia compared with those of the United States and Canada 67 Timber, excess of imports in the United States 68 Timber exports from Russia 66, 67, 68 Trade, World, participation in, of most im- portant competitors of Russia 28, 30 Trade, World, Russia's participation in . . . 28, 30 PAGE Value of agricultural products in Russia and the United States 22 Value of the agricultui-al products, per capita, in Russia and the United States 18 Value of the industrial products of Russia and the United States 22 Watermelon growing in Russia 71 Waterways, Russia's 39 Wealth, National, of Russia and other coun- tries 23 Wheat, average yield in Russia and other countries 15, 16 Wheat, average yield per capita 31 Wheat, Russia's exports 30 Wheat, Russia's exports compared with those of Argentine and Canada 31, 32, 33 Wheat, Russia's imports into the United King- dom compared with those of Argentine, Australia and Canada 3 J Wool industry in Russia 77 Wool, exports to Europe and North America . 77 Zinc, Russia's production of, and comparison with that of the United States 20 By the Same Author Problems of Population in France. Petrograd, 1903. Inquiry Concerning the Causes of the Decline in the Importation of Russian Wheat to England. Petrograd, 1903. Statistics and Their Bearing on Present Society. Petrograd, 1904. (Published in Russian, French and German.)* The Real and Apparent Causes of the Static Condition of Popula- tion in France. Munchen, 1898. The Problems of Population and Industrial Development in France. Berlin, Guttentag, 1900. Germany's Future in the Light of the Agrarian Agitation. Miinchen, 1898. Industrial Freedom in Its Different Aspects. Ziirich^ 1901. The Past and Present Condition of Germany's Soda Industry. Stuttgart, 1895. Industrial Development and Wealth. Stuttgart, Cotta, 1897. Syndicates and Trusts in Relation to Present Political Economy. Moscow, 1907. Same, 2nd, revised and augmented edition. Part 1, Moscow, 1912. The Russian-German Commercial Treaty and the Problems of Russia. Moscow, 1912. The Russian-German Commercial Treaty; or Shall Russia be a German Colony? 1st edition, Moscow, 1912. 2nd revised and augmented edition. Moscow, 1915. Political Economy in Its Practical Aspects. 2nd, revised and aug- mented edition. Part 1, 18 lectures. Moscow, 1913. Does Russia Offer a Field for the Development of Trusts and Syndicates? Moscow, 1913. The Russian Coal Syndicate and the Crisis in Fuel. Moscow, 1913. The Panama Canal, the Decline in the Price of Grain, the War and Russian Commercial Treaties. 3rd, revised and aug- mented edition. Moscow, 1915. The War, German Syndicates, Russian Exports and Russian Com- mercial Treaties. 3rd, revised and augmented edition. Mos- cow, 1915. The German Yoke and the War for Freedom. Moscow, 1915. Is Our Industry Threatened with Destruction? Moscow, 1918. America's Opportunities for Trade and Investment in Russia. New York, 1919, Russian Information Bureau.