THE EFFECT OF WAR ON RUSSIANSTOCKS.

Otago Daily Times, Issue 5112, 6 July 1878, Page 6

THE EFFECT OF WAR ON RUSSIANSTOCKS.

The Statist observes that in case of war between England and Euss'a there can be no doubt, of course ; that a very severe f?U in Russian stocks must take place. Russian credit has already been strained by the war with Turkey. The Russian debt, funded and unfunded, has been in-crea-sedby upwards of 700,000,000 roubles. Such a war agaiu, each year of it—if ib should last more than one year—must cost Russia quite as much as the war with Turkey just ended. And a country like Russia, which enters Jnlo war with a deficit, or with only a slight surplus, and which has hardly a margin of taxation, caDnot but be embarrassed immensely by a sudden new debt of say £200,000,000 sterling, which must cost £10.000,000 a-year. in any view such a change must depress the stocks. Although there has been a fall of something like 25 per cent, from the point reached before the Turkish war, a further fall of like magnitude in the event of war with England is at lea3fc not improbable. On the assumption that Russia would not pay her foreign debt interest, it is even thought that her credit will sink, like that of Turkey or any other defaulting State, if not to zero, then to a point very little better. The Statist, however, thinks the assumption is only likely to prove true in case of a war lasting more than two or three years. In a short war—and ihe Statist is of opinion that a war between England and Russia would probably be a short war— it sees no reason why this interest should not continue to be paid. It may be said that an addition of 200 millions to the Russian debt—which seems likely enough if a war with England succeeds the war with Turkey—would not only embarrass, but would overwhelm Russian finance. But, in the first place, the Russian revenue has been increasing for many years, and in a way which shows a certain elasticity in the resources of the country. If the past growth should continue, the deficit of ten millions may be overtaken in time and the gradual improvement will improve Russian credit, so that Russia will be enabled to borrow wherewithal to fill up the annual gaps in its budget. In the next place, the augmentation of revenue such as has taken place in Russia shows that a certain amount of wholly new taxation could be imposed—cot a great deal, perhaps, but still something to diminish the annual deficit. Russian finance, therefore, need not be "overwhelmed" by the consequences of only a short war.