the
illusion that Russia can create for herself a manufacturing industry
capable of competing with that of Western Europe without uprooting from
the soil a portion of her rural population.

It is only in the purely agricultural regions that families officially
classed as belonging to the peasantry may be regarded as on the brink of
pauperism because they have no live stock, and even with regard to them
I should hesitate to make such an assumption, because the muzhiks, as I
have already had occasion to remark, have strange nomadic habits unknown
to the rural population of other countries. It is a mistake, therefore,
to calculate the Russian peasant's budget exclusively on the basis of
local resources.

To the pessimists who assure me that according to their calculations the
peasantry in general must be on the brink of starvation, I reply that
there are many facts, even in the statistical tables on which they
rely, which run counter to their deductions. Let me quote one by way
of illustration. The total amount of deposits in savings banks, about
one-fourth of which is believed to belong to the rural population,
rose in the course of six years (1894-1900) from 347 to 680 millions of
roubles. Besides the savings banks, there existed in the rural districts
on 1st December, 1902, no less than 1,614 small-credit institutions,
with a total capital (1st January, 1901) of 69 million roubles, of which
only 4,653,000 had been advanced by the State Bank and the Zemstvo, the
remainder coming in from private sources. This is not much for a big
country like Russia, but it is a beginning, and it suggests that the
impoverishment is not so severe and so universal as the pessimists would
have us believe.

There is thus room for differences of opinion as to how far the
peasantry have become impoverished, but there is no doubt that their
condition is far from satisfactory, and we have to face the important
problem why the abolition of serfage has not produced the beneficent
consequences which even moderate men so confidently predicted, and how
the present unsatisfactory state of things is to be remedied.

The most common explanation among those who have never seriously studied
the subject is that it all comes from the demoralisation of the common
people. In this view there is a modicum of truth. That the peasantry
injure their material welfare by drunkenness and improvidence there can
be no reasonable doubt, as is shown by the comparativ