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THE

FUTURE OF RUSSIA



THE

FUTURE OF RUSSIA



BY

EUDOLF MAETIN



TRANSLATED FROM THE GERMAN

BY

HULDA FEIEDEEICHS



LONDON

SMITH, ELDEE, & CO., 15 WATEELOO PLACE
1906

fAll rights reserved]



PBEFACE

BERLIN, March 1906.

ON August 22, 1905, during the peace negotiations
at Portsmouth, the first edition of my book, * The
Future of Russia and Japan,' was published. With-
in a few days and weeks the contents of the volume
had been made known in all parts of the world.
There can be but few books which have in so short a
time and to an equal degree attracted the attention of
the press of every civilised country. A large section
of the press at home and abroad has attacked my
assertions with an extraordinary amount of heat.
My prediction of the revolution and State bankruptcy
was stigmatised as phantastic nonsense.

In private life a conscientious man avoids
predicting his neighbour's misfortune. Nor ought
it to be said of a State that it is making for
revolution and bankruptcy unless the prediction of
such catastrophes is well-founded, and unless there
are urgent reasons for a public warning. But when
his own nation, his own country, is endangered by
the revolution and bankruptcy of a neighbouring
State ; when a considerable part of the wealth of his



293278



vi THE FUTUEE OF EUSSIA

country is in danger, then it is the duty of the man
who knows the facts to raise a warning voice.
This duty becomes the more imperative the less
there is known of the actual circumstances of the
neighbouring State, and the less the general public
is in a position to form an opinion.

Before he predicts such tragic events as the
revolution and bankruptcy of a neighbouring State, a
conscientious man will see to it that his statements
rest on a very safe foundation if he is aware that
they will cause a considerable sensation. In the
uncertain realm of politics trustworthy predictions
can only be made upon a basis of absolutely reliable
assumptions. A. well-founded prediction concerning
a great State catastrophe is of importance to every-
body, no matter what his nationality may be. The
steady progress of the civilisation of the world is of
joint and separate interest to every human being.
If I know that a vessel carries an infernal machine
on board I warn every one who is about to embark
on that vessel, whether he be German, Englishman,
Frenchman, or Chinese. And when my own country
in particular is threatened by a catastrophe I shall
with special emphasis draw attention to the danger,
nor shall any one turn me from this duty.

If I had been living at Berlin in the year 1788,
I should have published a book on the subject of
1 The Future of France and Germany.' In Chap-
ter VI. of the present volume I shall show, under



PKEFACE vii

the heading 'The Great Kevolution,' that reliable
reports in the ' Vossische Zeitung ' concerning the
state of affairs in France would have enabled a
thoughtful and intelligent reader at Berlin to know
beyond a doubt what was about to happen in France.
The outbreak of the French Kevolution, to which
historians mostly give the date of the storming of
the Bastille, July 14, 1789, could be clearly foretold
from the * Vossische Zeitung ' as early as the year
1787. If a popular volume on the French Kevolu-
tion and its consequences had appeared at, say, the
beginning of the year 1788, this would have been of
use not only to France but to the whole civilised
world. A good representation of this kind is of
value in any case to the private individual, and also
to the statesman, even though the final course of
events cannot be modified. To what inhabitant of
a high mountain valley would it not be of use to
know when the avalanche is coming, and what
course it will take ? If the destruction of his village
can no longer be averted, he can at all events save
himself, his family and his possessions.

At the very beginning of the Kusso-Japanese
war I was convinced that Kussia would suffer a
serious defeat, the consequences of which would be
the revolution, and together with it the bankruptcy
of the State. The defeat in war, however, was only
the chance occasion for the revolution and the State
bankruptcy ; the real causes lie deeper. They are,



viii THE FUTUEE OF EUSSIA

as I have pointed out in my book, the backwardness
of Russian agriculture ; the lack of education and
capital among the peasants ; the power of the anti-
educational Greek Church ; the peculiarities of the
Slav race ; the amount of the Russian National
Debt and the strong contrasts between the various
nationalities and professions in the Russian Empire.
On the strength of these assumptions, which are
scientifically correct, I predicted in my book,
published on August 22, 1905, the revolution and
State bankruptcy in Russia.

While holding that my assumptions are well-
founded and scientifically correct, and that for this
reason my predictions were accurate, the *Nord-
deutsche Allgemeine Zeitung' declared in a pro-
minent place of its issue of Sunday, September 3,
1905, that my statements were without founda-
tion, and my predictions were reckless prophecies.
The following is the text of this historically
remarkable explanation : ' In German capitalist
circles interested in Russian values a recent work on
" The Future of Russia and Japan " seems to have
created some uneasiness. Considering the contents
of the book, the uneasiness can only be explained by
the fact that the author, Dr. Rudolf Martin, is a
Government Councillor at the Imperial Statistical
Office, his title as such being given on the front page.
With regard to the conclusions arrived at, it is
hereby emphatically stated that Mr. Martin has



PKEFACE ix

written and published his book without the
knowledge of either his superiors in office or of the
Government. It goes without saying that the
Government is in no way concerned with a work
which, on the basis of unproved assumptions, arrives
at wild conclusions concerning the fate of Russia
within the next decades.'

On October 27, 1905, the railway strike in Kussia
for the granting of a constitution had become
general. From that day public opinion in all
civilised countries agreed that a revolution had
broken out in Kussia. This, the more important of
my two predictions, had been verified. I was no
longer called a false prophet. The sequel to this
revolution, the State bankruptcy, which was my
second prediction, will come about much sooner
than it would have done without the revolution.

Shortly after the appearance of the above
paragraph in the ' Norddeutsche Allgemeine Zeitung,'
intended to reassure German capitalists, the Russian
Empire entered upon a state of revolution which
some day will cause not only serious uneasiness, but
grievous trouble, to German capitalists interested in
Russian values. On August 31, 1905, just before
the notice appeared, Russian State securities of 1902
stood at 93-20. On December 22, 1905, they had
fallen to 77-60. In March 1906 they were arti-
ficially and with difficulty kept up to 83 and 84.
Before long they will fall to 70 or even 60. Even



x THE FUTUKE OF EUSSIA

Count Witte's organ, the ' Kusskoe Gossudarstvo,'
wrote, on February 22, 1906, in discussing credit
operations by means of which 600 million roubles
were immediately to be raised : ' In all probability
we shall be obliged to resort to extreme measures.
This, however, other countries have also been
obliged to do in moments of difficulty.'

This plain statement contains a great deal that
may well cause uneasiness to German capitalists
interested in Russian prices. It stands in striking
contrast to the optimism exhibited by Privy Coun-
cillor of the Legation, Professor D. Helfferich,
with regard to recent Russian loans. Since this
political economist and acknowledged authority on
financial affairs published his extremely favourable
articles on Russian finance in the * Marine Rund-
schau,' issued by the Imperial Admiralty with his
full official title, in the autumn of 1904, I considered
it my duty to counterbalance their importance by
giving my full official title last year to my repre-
sentation of Russian finance.

It was not my official title, as the ' Norddeutsche
Allgemeine Zeitung ' has it, but the gravity of the
contents of my book which made German capitalists
uneasy and helped to prevent another Russian loan
in Germany. My predictions have been proved by
the course of events because the assumptions in my
book were reliable and had a scientific basis. A
nation of 142 million human beings can be judged



PBEFACE xi

far more easily by its actions and achievements
for decades in advance than an individual. And as
my prediction of the fall of Russian prices and the
beginning of the revolution have been justified by
events, so also my prediction of the continuation of
the Russian revolution and of the State bankruptcy
will be verified.

According to the ' Norddeutsche Allgemeine
Zeitung' the contents of my book are not dis-
turbing. How could German capitalists be disturbed
by the wild, confused assertions of a book ! I
decline most emphatically to accept the opinion of
the ' Norddeutsche Allgemeine Zeitung,' and I
declare hereby that the contents of my book ought
most seriously to disturb German capitalists holding
Eussian State securities.

Considering the unflattering opinion of my book
expressed by the ' Norddeutsche Allgemeine Zeitung,'
I have been all the more pleased with the opinion
of our most eminent historian, Professor Hans
Delbruck, who referred to my book in the October
number of the 4 Preussischen Jahrbiicher ' as ' a
political document that cannot be too highly valued.'
In the same manner, the man best acquainted among
German political economists with Russian political
economy, Professor Carl Ballod, lecturer at Berlin
University, and member of the Royal Prussian
Statistical Office, has fully acknowledged the
entirely scientific character of my book when



xii THE FUTUEE OF EUSSIA

reviewing it in Schmoller's ' Jahrbuch fiir Gesetzge-
bung ' (Part IV., 1905). Not one of the assumptions
made in my book has been disproved by expert
critics.

Therefore I am well content to leave to future
historians the task of judging between me and the
' Norddeutsche Allgemeine Zeitung.'



PREFACE

TO

THE ENGLISH EDITION

SINCE the appearance of the German edition of the
present volume in March last, two important events
have taken place in Russia. In April the Russian
Government once more succeeded in raising a
gigantic loan. This loan of two and a quarter
milliard francs (90,000,OOOZ.) is the largest loan
ever contracted by a Government on one occasion.
Although the international syndicate of bankers
will only advance this sum gradually the last
payment to be made in June 1907 the loan in its
entirety has not sufficed to cover the Russian
Budget deficit for 1906. This important increase
of the Russian National Debt will have fatal con-
sequences for the balancing of future Budgets.
The Russian National Debt at the end of October
1906 amounts to twenty-four and a third milliard
francs, or nineteen and a half milliard marks
(975,000,0002.). The annual interest on this Debt



xiv THE FUTUEE OF EUSSIA

amounts to about 823 million marks, or 1,092 million
francs (41,150,OOOZ.). The exact figures will only
appear in the Budget estimate for 1907.

The second event of importance has been the
first meeting of the Duma, from May 10 till
July 22, 1906. The long and excited debates have
resulted in no positive improvement in the con-
dition of Russia. They have, however, made clear
to all the world the hopelessness of the social,
economical and political condition of the Empire.
Nothing could have proved more conclusively the
truth of the pessimistic statements in my book than
the speeches of the 448 deputies of the Eussian
people elected in every part of the Empire. The
long debates on the agrarian question in particular
have established the fact that the position of the
peasants cannot be improved for many years to
come. The dissolution of the Duma on July 22,
1906, points to the impossibility of peaceable col-
laboration of Czardom and modern representatives
of the people. The striking incompatibilities to
which, in Chapter IV of the present volume, I have
attributed the Russian catastrophe, have increased
instead of decreasing during the year ending on
October 27, 1906.

The great fall in Russian values, which I pre-
dicted last March in the first preface to the present
volume, took place very soon. After the disso-
lution of the Duma, the Four per cent. Russian



PBEFACE TO THE ENGLISH EDITION xv

Government Bonds of the year 1902, which at the
end of March 1906 still stood at 84, fell to 68}
per cent. Notwithstanding the energetic inter-
vention of the Russian syndicate, they have never
since then risen to 75, while they have repeatedly
gone down to 73, 70, and even 69. The apparent
quiet throughout the country brought about by
the institution of rural courts is only superficial.
The continual importation across the various
Russian frontiers of arms and ammunition for the
revolutionaries shows that a systematic rising on
a large scale is contemplated. The proposed re-
assembly of the Duma on March 2, 1907, is a sign
of anything but improved social relations. In
October 1906 the Russian Government declined to
acknowledge the constitutional-democratic party
which is the most powerful section of the Duma.
No fewer than 180 members of the dissolved Duma
were proscribed for having signed the manifesto pub-
lished at Viborg, in Finland, after the dissolution
of the Duma. A large number of members of the
Duma have been arrested or banished. Hertzen-
stein, professor of national economy and leader of
the Cadets (constitutional-democrats), was murdered
after the dissolution of the Duma. In spite of the
rural courts, robberies are on the increase in every
part of the Russian Empire, as they were in France
during the first years of the Revolution. It has
become a matter for surprise when a month passes



xvi THE FUTUEE OF EUSSIA

without mutiny in the army. The mutiny of the
bodyguards of the Preobrajensky Regiment in the
summer of 1906 shows how far the spirit of insur-
rection has entered even the aristocratic sections
of the army. All these things are signs of the
approaching storm. Quiet collaboration of the
Government and the Duma which will assemble on
March 2, 1907, seems an impossibility. The recent
accumulation of points of conflict forebodes hard
battles between the Government and the represen-
tatives of the people. The elections for the Duma
will re-awaken the excitement among the peasantry
and recall the fact that under the rule of the Czar
their cry for more land has no chance of being
heard. Before the spring of 1907 the Russian
Empire will be shaken by additional serious
troubles. I stand by my prediction that the Four
per cent. Russian State Bonds of 1902, which on
October 20, 1906, stood at 73-60 at the Berlin
Exchange, will within a few months have fallen
to 60.

In the new edition of the present volume, which
was first published in March 1906, recent events
in Russia are dealt with. Particular attention is
given to them in the additional chapter, ' A Glance
Ahead.'

During the whole month of October of the
present year and into November, Russian Govern-
ment bonds, railway shares, and nearly all industrial



PBEFACE TO THE ENGLISH EDITION xvii

and bank shares, have almost uninterruptedly risen
in value at all the exchanges. The Kussian Govern-
ment bonds, which in September 1906 had fallen to
70, rose till on November 2 they stood at 78 at
the Berlin Exchange. This upward tendency of
Eussian values has been extraordinarily rapid. The
primary cause was the energetic intervention of the
Eussian syndicate, but the movement was carried
on by buyers of the ordinary capitalist class. These
buyers are under the mistaken impression that the
revolution has come to an end, and that Eussian
State finances are beginning to right themselves.
Next spring, however, it will be found at the Paris,
Berlin, and London exchanges that the conflict
between the Government of the Czar and the new
Duma not only continues, but becomes more
pointed. In the autumn of 1906 the Eussian
Government has fairly well succeeded in maintaining
order throughout the Empire. But no improve-
ment whatever has been made in the Eussian
village, and the discontent of the land-hungry
peasant is still growing.

If this rise in prices should induce the inter-
national haute finance to grant another milliard
loan to the Eussian Government, the nations taking
shares in this loan will find that they have to pay
the piper. Even without the continuance of the
revolution, Eussia is faced with State bankruptcy.
The continuance of the revolution, however, stands



xviii THE FUTUKE OF EUSSIA

in close relationship to the neglect of the Bussian
peasants and their farming ; to the gagging of the
intellectual liberty of the people ; to the growth of
the National Debt and to the increase of financial
difficulties. The thousands of capitalists in France,
Germany, and England, who have been beguiled by
the rise of prices during October 1906 into further
investments in Bussian stock, will bitterly repent
this venture within the next twelvemonth.

The Bussian Courts of Justice can in a few hours
despatch revolutionaries by the dozen into the next
world, but they cannot cause Bussian soil to yield
larger crops, nor can they satisfy the claims of
the peasants. That nation, therefore, is well advised
which steadily declines to heed the incessant
attempts of the Bussian Government to raise
another gigantic loan.

BUDOLF MABTIN.

BBBLIN, November 1906.



CONTENTS



CHAPTER PAGE

I. THE WORLD'S MOST IMPORTANT QUESTION . 1

II. RUSSIA'S FUTURE LIES IN THE VILLAGE . . 5

III. THE RUSSIAN AND THE FRENCH PEASANT BEFORE

THE REVOLUTION 15

IV. THE CAUSES OF THE RUSSIAN CATASTROPHE . . 28

THE COUNTRY AND THE PEOPLE ... 28

THE DREAM OF A WORLD EMPIRE . . . 33

THE RESPECT FOR RUSSIA .... 44

WAHLSTATT (1241) AND MUKDEN (1905) . . 53

THE GERMAN HATRED 73

RUSSIAN PERSISTENCY 83

THE FORCE OF CONTRASTS .... 89

V. THE RUSSIAN STATE BANKRUPTCY . ... 100
THE GREATEST DEBTOR IN THE HISTORY OF

THE WORLD 100

THE DANGER OF PERMANENT INSOLVENCY . 105

THE BOUNDLESS WEALTH OF RUSSIA. . . 125
THE GREATEST DEFICIT IN THE HISTORY OF

FINANCE 132

THE BREAKDOWN OF THE RUSSIAN GOLD

STANDARD 145

THE STATE BANKRUPTCY AS THE MOST POWER-
FUL WEAPON OF THE RUSSIAN GOVERNMENT 154
NECKER AND WITTE . . 164



xx THE FUTURE OF EUSSIA

CHAPTER PAGE

VI. THE GREAT REVOLUTION 188

THE PREDICTION OF THE REVOLUTION . . 188

CAUSE AND OCCASION 194

THE BEGINNING OF THE REVOLUTION . . 197

Louis XVI. AND NICHOLAS II 200

WERE THE FRENCH AND THE RUSSIAN REVOLU-
TIONS PREVENTABLE ? '219

THE IMPERIAL DUMA AS CENTRAL ORGAN OF

THE GREAT REVOLUTION 229

THE DURATION OF THE REVOLUTION . . 254

VII. THE GERMAN EMPIRE AND THE RUSSIAN REVOLU-

TION 266

VIII. A GLANCE AHEAD . . 279



THE FUTURE OF RUSSIA

CHAPTEE I

THE WOKLD'S MOST IMPOETANT QUESTION

NEVER before has a single question been of such
enormous importance to all parts of the globe as
the future development of Eussia is to-day. In
the past the incompleteness of communication
caused even the greatest event to be of moment only
to certain parts of the world. The improvement of
means of communication, especially during recent
decades, has drawn the destinies of individual
nations and countries more closely together.

The Eussian catastrophe, as we call the defeat of
Eussia in the Far East, the outbreak of the revolution
on October 27, 1905, and the approaching State
bankruptcy, is an event of far-reaching importance,
not only to the Eussian Empire, but to all Europe
and Asia as well.

The ascent of Japan means the unfettering of
the yellow race and the revival of Asia. It concerns

B



"'2 THE FUTUKE OF KUSSIA

the United States of America as well as the great
European Powers, and perhaps the future of Aus-
tralia.

The rise of Japan and the Russian catastrophe
influence the home and foreign policy of all the great
Powers. A Russia ransacked by a revolution no
longer represents a menace to India, Persia and
Constantinople. But the progress of the revolution
is a serious menace to the milliards lent to the
Russian State by French and German capitalists.
The course of events in Russia is, therefore, watched
by German and French capitalists with great anxiety,
and in Germany the fear is gaining ground that the
two and a half milliard marks of Russian State securi-
ties held in Germany even now, after a large amount
have been got rid of, may be lost.

But while the danger of a future loss of a con-
siderable part of the German national wealth is
very great, it is a certain fact that the Russo-French
alliance, in face of Russia's weakness, will not in
future endanger the prosperity of Germany.

The Russian revolution means the reappearance
upon the scene of the Polish question. The manner
in which things will shape themselves in Poland
will have a far-reaching influence on things in the
German Empire and in Austria-Hungary. The
state of affairs in the Baltic provinces will also in
the course of time cause excitement in Europe.

The great revolution in Russia, which came to a



THE WOKLD'S MOST IMPOETANT QUESTION 3

head on October 27, 1905, after many years of pre-
paration, is a political, national, social and socialist
revolution. It is the first revolution in the history
of the world the leadership of which is chiefly in
the hands of a social-democrat organisation, while
the neighbouring countries, Germany and Austria-
Hungary, have for decades past been steeped more
and more deeply in the spirit of international social-
democracy.

At times when great changes are in progress in
the history of the world that nation will in the long
run suffer least and profit most which first clearly
realises the causes and effects of such changes.

Is Germany to pay the piper ? When touching
upon this question in my book ' The Future of
Bussia and Japan,' which appeared on August 22,
1905, I attempted to save Germany, as far as
possible, from the loss which the great Eussian
catastrophe must occasion.

The darkness of the future can only be penetrated
when those factors are constantly and clearly
realised on which the future development of Eussia
is, and must be, mainly dependent.

The future of Eussia is closely connected with
the future of Eussian agriculture, by which eighty-
seven per cent, of the Eussian people make their
living. Those who are not acquainted with the
facts, scientifically proved, concerning Eussian
agriculture and the Eussian peasant population, can

B2



4 THE FUTUEE OF EUSSIA

form no idea of the duration and the importance
of the Russian revolution, and of the danger of
Eussian State bankruptcy.

The development of Eussian agriculture and
the education of the Eussian peasant population
during the next decades is the most important pro-
blem in connection with the distribution of political,
military, economical and financial power all the
world over.



CHAPTEK II

RUSSIA'S FUTURE LIES IN THE VILLAGE

THE future of Russia lies in the village. Those
who do not know the Eussian village should form
no opinion as to the progress of the present revolu-
tion or the destiny of the Eussian national debt.
Of the 142 million inhabitants of the Eussian Em-
pire about 115 million make their living by farming. 1
If the Eussian peasant is a contented, well-fed,
capable, zealous farmer, who knows how to extract
from decade to decade an increasing profit from the
soil, then a brilliant future awaits Eussia. If the
fourteen million farmsteads of the Eussian Empire 2
are on the whole in first-rate order, there is no
State in the world as well fortified against State
bankruptcy as Eussia. The soil of Central and South
Eussia, especially in the famous Black Earth district,
is far more fertile than the soil of the German Empire.

1 Alexander Novikoff, Das russische Dorf. From the collected
essays by Josef Melnik, Russen ilber Russland, Frankfurt a. M.
1906, p. 54.

2 There are 12,000,000 peasants in European Russia, 2,000,000
in Poland. Russia in Asia is not included. See Esemenoff,


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