ut the other half of her
indebtedness has been spent on armaments, wars, and other unproductive
items.

Russia's new budget is about 3,500,000,000 rubles ($1,800,000,000.) The
interest on the new loan will increase this budget only 6 per cent. But
this new loan increases again her unproductive debt and places a heavy
burden upon the taxpayer for whom the Government has prepared many
"surprises" this year.

The possibilities of _internal_ loans are not very great. During the
first month of the war about 380,000,000 rubles of savings were
withdrawn from the banks. Of this sum only 76,000,000 were redeposited
later when the first excitement had passed. The rest of the money
evidently was either used up for production, for consumption, or for
private storing of ready cash. How much of this money will come forth to
buy the various short-time loans no one is able to tell beforehand. But
the big manufacturing interests are craving for _foreign gold loans_,
not for internal paper money loans.

How Russian Manufacturers Feel

[Digested from Russkia Vedomosti, No. 266, Nov. 18, (Dec. 1,) 1914, P.
6.]

The manufacturers of war supplies are making large profits through the
war. All they need is Government advances to buy their raw material. The
Government permits them to borrow from the State bank upon Government
orders for war supplies. The only difficulty lies in the extent of the
credit. The Government would not permit borrowing more than one-third of
the amount of its orders, while the manufacturers are asking for
two-fifths.

The manufacturers who are using imported raw material and are working
for the private consumer are suffering heavily from the war. The lack of
coal, of hides, of wool and of cotton is threatening Russian industry
with a crisis. There is a great want of hydroscopic (absorbent) cotton,
since the only factory for this product was in Poland (City of Zgerzc)
and has been destroyed. Lack of dyestuffs and other chemicals is
hampering many other industries. The importation of tea and coffee has
been curtailed considerably.

Russian cotton mills used to get 45 per cent. of their raw material from
the United States, since only 55 per cent. of their demand can be
supplied by Central Asia.

Furthermore, this Asiatic cotton can be used for the coarser grades of
manufacturing only.

The war has cut off the American supply altogether.

Moreover, the manufacturers need cash to buy the cotton availab