No. 498.
Mr. Schuyler to Mr. Fish.

No. 93.]

Sir: I have the honor to inclose to you herewith, marked 1, 2, and 3, the budget of the Russian Empire for 1875, the report of the minister of finances thereon, and the report of the credit establishments for 1873.

Omitting the items which balance on both sides of the budget, the receipts for 1875 are estimated at 532,306,209 rubles, and the expenses at 529,050,426 rubles, leaving a surplus of 3,255,783 rubles.

The treasury receipts have been constantly increasing for the last few years, since the improved administration of the finances under the present minister, Mr. Rentern, as will be seen by the following table:

Millions of rubles.
1866 382 
1867 423⅛
1868 423½
1869 457½
1870 480½
1871 508⅕
1872 523 
1873 538 

[Page 1058]

This increase of revenue chiefly arose as follows, expressed in millions of rubles:

1868. 1869. 1870. 1871. 1872. 1873.
Excise on spirits 133 137 163 174 172 179
Direct taxes 88 90 96 94 94 93
Customs 35 40 41 47 53 54
Permissions for trade 10 11 11 12 12 13
Salt duties 10 9 11 12 13 11
Tobacco duties 7 7 8 8 10 10
Stamped paper 7 6 7 7 8 8
Official fees 3 3 4 5 6 7
Passports 2 2 2 2 2 2
Railway receipts 15 16 13 13 14 17

Three of the main items of revenue, excise on spirits, direct taxes, and salt duties, do not come from the productive forces of the country, and do not show any increase of public or commercial well-being; on the contrary, their augmentation is a growing burden upon the people. Under such conditions it is very natural that the population increases slowly, that the national wealth does not grow fast, and there may be cases when the revenues of the state will be drawn, not from the income of the people, but from their capital. The increase, for instance, in the excise on spirits is due partly to drunkenness among the people, and partly to the higher excise duties, but it is accompanied, for the last year for which the accounts have been made up, by a falling off in the direct taxes, and naturally by a lessening among the peasantry of the sum spent on the improvement of their food, clothing, and dwellings. The direct taxes, as the minister himself says, it is at present impossible to increase; and it is much to be hope that the change in the assessment of these taxes, which are now paid entirely by the peasantry, (the noble and mercantile classes being at present exempt,) will be so arranged as to fall more equably upon the population.

The salt and passport duties are both opposed to the increase of national prosperity; the first depriving the poor people of a necessary adjunct to their coarse food and injuring cattle-raising, the second also falling principally, as it must, upon the peasantry, and burdening them not only by the sum itself which is paid into the treasury, but by the secondary expenses, and the great loss of time, which is precious to workmen.

At the same time, with the increase of the revenues, the expenses have also increased.

The state expenses were, in—

Millions of rubles.
1866 432⅔
1867 4249/10
1868 4413/10
1869 4684⅘
1870 485½
1871 499¾
1872 523 
1873 539⅛

[Page 1059]

The chief items of these expenses, expressed in millions of rubles, are as follows:

1868. 1869. 1870. 1871. 1872. 1873.
Ministry of war 136 147 145 159 165 175
Ministry of finances 89 90 91 91 103 100
Interest and payment of state debt 79 88 86 85 88 93
Ministry of interior 37 39 42 43 43 43
Ministry of communications 22 25 38 33 31 29
Ministry of marine 18 18 20 21 22 25
Ministry of instruction 8 9 10 10 11 12
Ministry of justice 9 9 9 10 10 11
Ministry of court 10 10 10 10 10 13
Holy syond 7 7 8 9 9 9

It seems impossible to expect any diminution of these expenses, but, on the contrary, a constant increase, which it may be difficult for the treasury to meet.

In my dispatch No. 57, of January 28, 1873, inclosing the budget for that year, I stated that a surplus of 27,672 rubles was then anticipated, but expressed a doubt whether the increase of revenues would correspond to the increase of expenditure which it was foreseen would be necessary so as to leave a surplus. Such, indeed, was the case. The expenses were 25,958,580 rubles, or about 5 per cent, greater than the estimates, and the result of the year was a deficit of 1,198,014 rubles. During the two previous years, however, the complete returns of the treasury did really, for the first time in the modern history of the country, show a surplus, and it is unfortunate that the period of deficits has again begun. The result of the treasury balances for the eight years from 1866 to 1873 is as follows:

Deficits. Surplus.
1866 50,560,000
1867 1,773,000
1868 17,739,000
1869 11,301,000
1870 4,923,000
1871 8,453,000
1872 630,000
1873 1,198,000

This want of accordance of the results of the completed accounts w the estimates is owing in part to the enormous extra budgetary or foreseen expenses, which, for the last few years, are as follows:

1869 37,181,880
1870 35,801,426
1871 35,698,066
1872 34,488,164
1873 26,367,822

The great increase of revenue is therefore swallowed up in new expenditure, and affords no relief by diminishing taxation. It would seem that some method might be adopted for including these sums in the budget, and refusing all other expenditures until the next year’s estimates, especially when we find that, out of the 26,367,822 rubles spent in 1873 beyond the estimates, only 7,051,508 were necessitated by exceptional and actually unforeseen circumstances.

With the extra budgetary expenses for 1875 in the same ratio as in preceding years the total actual expenses would be, not 529,000,000, but 555,000,000, and it would therefore require an increase of the actual receipts over the estimates of 23,000,000 to prevents deficit. The main revenues not being in proportion to the productive forces of the country, [Page 1060] a point must sometime be reached at which increased taxation will diminish and not increase the revenue, and there are indications that the Russian treasury is approaching that point.

The increase of the estimates for 1875 over those of 1874 of 17,938,294 rubles is chiefly owing to the collection by the treasury of certain local taxes, to an additional tax on real estate, and an additional tax on the rights of trading.

I have, &c.,