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• A History of Banking In Great Britain;
• Chapter I.: Banking In England.
• Section I.: A Record of Beginnings.
• Section II.: Foundation of the Bank of England.
• Section III.: An Era of National Development.
• Section IV.: State of the Irish Currency.
• Section V.: Failure of Currency Reform—inflation and Reaction.
• Section VI.: The Committee On Banking of 1840.
• Section VII.: On the Bank Acts of 1844 and 1845.
• Section VIII.: Commercial Crises.
• Section IX.: Monetary Panics.
• Section X.: General Conclusion.
• Chapter II.: Banking In Scotland.
• Chapter III.: The Theory and Mechanism of Banking.
• Chapter IV.: Definitions of Economic Terms.
• Chapter V.: The Theory of Value.
• Section I.
• Section II.
• Section III.
• Chapter VI.: The Theory of Credit.
• Section I.
• Section II.
• Banking In Russia.
• Chapter I.: The Early Stages of Money and Credit.
• Section I.: Prefatory.
• Section II.: Introduction of Paper Money.
• Section III.: Financial Reconstruction Under Alexander II. And the Founding of the State Bank.
• Chapter II.: Methods and Operations of the State Bank.
• Chapter III.: Banking Vicissitudes From 1862 to 1875.
• Chapter IV.: The Eastern War Period.
• Chapter V.: Private Banks.
• Chapter VI.: The Bourse.
• Chapter VII.: The Precious Metals.
• Chapter VIII.: Foreign Exchanges.
• Chapter IX.: The Debt and Finances of Russia.
• History of Savings-banks In the United States.
• I.
• II.
• III.
• IV.
• V.

CHAPTER VII.

THE PRECIOUS METALS.

STATISTICS running back over any considerable length of time are always to be received with caution, and this is particularly true of Russian statistics, because the official publications of the country date back only about thirty years; and of all Russian statistics, those relating to the production of the precious metals and to dealings in them are least worthy of implicit confidence, because there enter into them so many elements, all tending to obscure the truth. Suffice it to recall the fact that all dealings in gold dust are there prohibited, and that this prohibition gives rise to all manner of fraudulent and illegal traffic. Nevertheless, in 1861, M. Tarassenko-Otreschkow, an old officer of the Commissary Department of the army, who had taken part in the siege of Sebastopol, and had afterward devoted himself to the study of economic questions, entered upon that new vocation by the publication of a book entitled “Production of Gold and Silver in Russia,” and treating of the production, importation, and exportation of those metals. We should be sorry to speak disrespectfully of a worthy man deceased for twenty-five years, but in view of what we have said above, we cannot accept as of any great authenticity the information contained in a book whose author, while he was unquestionably a most conscientious man, was not in a position to estimate at its proper value the information he had collected.

So much being premised by way of reservation, we may say that, according to the statement of Narcissus Tarassenko-Otreschkow, silver mining in Russia dates from about 1704, and gold mining from 1745. Between these dates and January 1, 1825, the total production of the precious metals was R. 110,804,540, or F. 443,218,160. The minute exactness of these figures, referring to a period not distinguished for precision, furnishes in itself food for reflection, and we do not insist upon their accuracy. During the reign of the Emperor Nicolas I., from 1825 to 1855, the mines produced R. 360,103,480 (F. 1,440,413,920), and from January 1, 1855, to January 1, 1860, R. 120,000,000 (F. 480,000,000); making a total for the three periods of about R. 591,000,000 (F. 2,364,000,000). The author places the average annual production of gold at 1500 poods (a pood being equal to 16⅓ kilograms), of the value of about R. 20,000,000, and the average annual production of silver at 1000 poods, worth R. 951,000; making a total annual production of R. 21,000,000 (F. 84,000,000). During the thirty-five years, 1825-1860, there were mined only R. 480,000,000, or an average of only R. 13,000,000 per year. Finally, for the last three years of his epoch, M. Tarassenko-Otreschkow makes the following detailed statement:

This makes, he says, a value of about R. 23,000,000 per year. The coinage at the St. Petersburg mint in 1857 was R. 27,200,000; in 1858, R. 22,200,000, and in 1859, R. 23,700,000; making a total of R. 73,100,000. The importations for those three years were, respectively, R. 8,800,000, R. 6,600,000, and R. 2,800,000; a total of R. 18,200,000. The exportations were, respectively, R. 23,700,000, R. 30,800,000, and R. 28,600,000; a total of R. 83,100,000. The exports exceeded the imports, therefore, by R. 64,900,000. We may add that from 1825 to 1860 Russia received from abroad in payment of trade balances R. 100,000,000. At this point we may dismiss these citations, whose value is purely archæological. There can be no doubt that during the years immediately following the Crimean war and the Peace of Paris (1856), a number of events conspired to cause a large exportation of the precious metals from Russia. We need only recall what we have previously said about the abundance of paper money, and bear in mind these two facts: that immediately after the war heavy purchases of all kinds were made abroad, and that a large number of Russians, whom the war had kept at home, left the country after it was over, taking considerable sums of money with them.

We have also seen how, as part of the plan of establishing a metallic currency in 1862, R. 100,000,000 were brought into Russia by a foreign loan of £15,000,000, and with what rapidity it went out again at the end of eighteen months. We have described, further, how from 1868 to 1875, as a result of railway loans, for which the State became responsible, the precious metals, and especially gold, were heaped up in the vaults of the fortress of St. Peter and St. Paul in St. Petersburg, and under what pressure arising out of the Eastern war of 1877-8 and the issue of R. 400,000,000 of new bills by the State Bank, this fund was depleted in its turn. Lastly, we have passed in review the series of fortunate events—notably the debt conversions and an excess of exportations over importations—as a result of which the metallic holdings of the Government have once more been restored, in 1895, to about R. 600,000,000. But we have no hesitancy in declaring that no reliable information is to be had as to the production of the precious metals in Russia prior to 1876. In 1894, however, there was issued by the Finance Department a table showing the production of gold from 1877 to 1893. From this it appears that, during those 17 years, the mines of Russia produced R. 477,793,862; that the largest production of any year (R. 33,000,000) was that of 1893, amounting in weight to 2343 poods 6 livres 14 zolotniks 47 dolei;* that the smallest production of any year was that of 1891, a little more than 1052 poods, valued at R. 14,374,720.

During the same period, the mints issued to individuals, in pieces of R. 10 (impériales), R. 5 (demi-impériales), and R. 3 (ducats), R. 54,000,000; to the Emperor’s private treasury, R. 2,167,655; to the fisc (Imperial Treasury), R. 17,636,855, and to the State Bank, R. 324,882,687. The Bank also received R. 124,845,914 in bars, and medals were struck for public institutions and individuals to the value of R. 1,712,867. Putting these sums together, we find that the R. 477,793,862 produced by the mines somehow becomes R. 525,000,000. But it is to be remembered that the production is estimated in fine gold, while the coinage was of a fineness of only 11/12 until 1886, and of 9/10 since that date. The mintage during those seventeen years was as follows, in millions and tenths of millions of roubles:

A brief official table has been issued for 1894 placing the production of that year at 36,312¾ kilograms of fine gold, of the value of F. 125,070,797 (R. 31,250,000); the export of bars at 60 3-5 kilos; the export of Russian gold coin at 53¼ kilos, and the export of foreign gold coin at 48,512½ kilos, the kilogram being estimated at F. 3444½. The imports are estimated to have been 899 3-5 kilos of bars; 43 4-5 kilos of Russian coin, and 140,373¼ kilos of foreign coin. Thus the imports aggregated 141,317 kilos, against 48,626 kilos of exports, a difference of 92,691 kilos, which, at F. 3444½ per kilo, amounts to F. 319,273,149. The imports of manufactures of gold, which should be deducted from this sum, aggregated F. 1,500,000. The gold used in the arts was 8027 1-5 kilos, of the value of F. 27,600,000; the gold coinage aggregated F. 12,000,420, consisting of 1007 impériales (R. 10) and 598,007 demi-impériales (R. 5), having, together, a gross weight of 3871 1-5 kilos and a net weight of 34841/10 kilos.

As for the production of silver, which has never been very great in Russia, an official table informs us that in 1894 it amounted to 8,578,641 kilos, of a value of R. 1,906,774½; that the exports were 155,717 1-5 kilos in bars, 31 3-5 kilos in Russian coin, and 5111/10 kilos in foreign coin, a total exportation of 156,259 kilos, besides manufactured articles of a value of F. 224,912. The importations were 500,491½ kilos in bars, 657 kilos in Russian coin, 8878 kilos in foreign coin, and manufactured articles to the value of F. 1,182,682. In the arts were used 137,338 kilograms of fine silver, valued at F. 30,500,000. There were coined 3000 one-rouble pieces 9/10 fine, and 3,000,000 smaller coins (10-copeck pieces) 5/10 fine. The silver production of Russia for the six years, 1887-92, is officially estimated at 5015½ poods, as follows: 939 poods in 1887, 924 in 1888, 846 in 1889, 889 in 1890, 838 in 1891, and 579½ in 1892.

Russia’s part in the international movements of the precious metals in recent years has naturally been very considerably affected by the great depreciation of silver on the one hand, and on the other by Russia’s extensive conversions of debts held abroad, necessitating large gold movements. The following official table shows the imports and exports of gold during the last twenty-four years:

For the whole of the twenty-four years the importations were R. 421,670,000, and the exportations, R. 539,541,000, a difference of R. 117,871,000. It is needless to say that that difference would have been much larger but for the fact that the last four years of the series alone show imports aggregating nearly R. 300,000,000, against R. 38,500,000 of exports.

Another official publication, which appeared in 1894, shows the movements of the precious metals, bullion, and specie during the seven previous years (1887-93), from which we quote merely the totals, with this word of explanation, that in returning bullion and specie under the same heading, 100 poods of coin has been reckoned as the equivalent of ninety poods in bars.

The following table gives the like facts concerning silver:

The coinage of silver has always been of two kinds: that of standard fineness (9/10), and that serving merely for small change, which, previous to January 1, 1867, was coined to represent seventy-five per cent. of its nominal value, but since that date, only fifty per cent. It is needless to say that, for many years, silver coins in Russia, as elsewhere, have not been worth the amounts inscribed upon them. The silver rouble is to-day a depreciated coin, like the pieces of 50, 25, or 10 copecks, with merely this difference, that the proportion of silver contained in it is forty per cent. greater than that contained in the smaller coins (90 per cent. as against 50). With this explanation, we may state that from January 1, 1860, to September 30, 1894, the St. Petersburg mint coined silver of standard fineness (9/10) to the value of R. 34,780,529¼; subsidiary silver coins to the value of R. 127,944,847.10; and copper to the value of R. 8,571,928.34. The recoinage is not included in these figures. For the same years (1860-94), it aggregated R. 24,500,000 in pieces 9/10 fine, and R. 20,500,000 in subsidiary coins. During the same period of thirty-five years the mintage of coins less than a rouble has consisted of 83.7 millions of 20-copeck pieces, 35 millions of 15-copeck pieces, 14.5 millions of 10-copeck pieces, and 2.2 millions of 5-copeck pieces, a total of 135.4 millions of subsidiary coins, of which 7,725,000 pieces were coined abroad and the remainder in Russia.

Russia is not, any more than other countries, proof against counterfeiters. It has even been said that the counterfeiting of Russian bills of credit has developed into a regular business in various foreign lands. There is nothing astonishing about this, for the more extensive any country is, the greater the ease with which a large number of counterfeit bank bills may be circulated in it before the authorities become aware of the fact. We accept, then, merely as a minimum the figures contained in an official table and purporting to show that the amount of counterfeit Bills of Credit put in circulation between 1879 and 1893 was only R. 1,312,189.

[* ] A dolia = 0,68578 grains; a zolotnik = 96 dolei, a livre = 96 zolotniks; a pood = 40 livres.