No. 498.
Mr. Schuyler to Mr. Fish.
St. Petersburg, March 17, 1875. (Received April 7.)
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 |
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 |
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:
| Rubles. | |
| 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.,