t Russia has mainly relied for funds
for her expanding industrial development. In the Baring crisis she
sent her gold to London to fortify the situation, and in the American
crisis of 1907 she extended her hand across the sea. Then she turned
about and steadily built up her gold reserve in the Bank of France,
from $500,000,000 to above $800,000,000, although her people were not
expanding in population, industry, or enterprise. France had grown so
confident that she seemed at one time to have lost her financial
cunning.

In Germany in 1913 I was told that German finance had passed through
the "fire test," that two years of building recession and of expanding
commerce had placed her on a solid financial base; and it was true.

I was told to step over to Paris and see a disordered budget, an
increasing national deficit, bad investments in Mexico and South
America, and disorganized finance. I did and found it all true. I
also found that France was fully able to take care of herself without
any outside help, and, but for the specter of outside interference, to
delay her financing if she so elected.

It has been something of a mystery as to how there could be two Balkan
wars and so little of public finance behind them. Of course, Russia
and France helped the Balkan States and Germany helped Turkey. The
money of France came from the French banks and was loaned to the
treasuries of the Balkan States and to Greece--to Bulgaria 350,000,000
francs; to Greece 250,000,000.

The French government said that this could not be financed by public
issue after the war until the national budget itself had been arranged,
although French bankers were permitted to float a $50,000,000 Servian
loan. With the increasing cost of labor and supplies the French
railways had been steadily running behind, and France had to face a
deficit in her budget of something like 1,000,000,000 francs, or
$200,000,000, per annum.

It was proposed last January that the government should consolidate its
indebtedness and put its financial house in order, by an issue of
long-term securities; but Caillaux opposed the programme and defeated
it for many months. This postponed the issue of the Balkan States'
loans.

To-day Caillaux is about the most hated man in France. Although he is
financially well-to-do, the people believe that his connections and
sympathy with Germany were too close. The German press took his side
in the famous Calmette shooting af