V. I.

Lenin

Our newspapers as usual, have published the most respectful report of the
Minister of Finance on the budget— the state revenues and
disbursements for 1902. As usual, everything, according to the Minister’s
assurance, is going well: “the finances are in a most satisfactory
state”, “equilibrium has been firmly maintained in the budget”, “the railway system continues its successful
development”, and there is even “a steady improvement in the
people’s welfare”! Small wonder that so little interest is shown in
questions of the state economy, despite their importance; interest is
blunted by the obligatory, standard eulogies; for everyone knows that
paper will put up with anything, that “anyway” the public
“isn’t allowed to peep” behind the scenes of official financial juggling.

On this occasion, however, the following circumstance stands out
particularly. With his usual legerdemain the conjurer shows the public his
empty bands, makes passes, and produces one gold coin after another. The
public applauds. Nevertheless, the conjurer begins to make the most
frantic efforts to defend himself and is almost in tears when he assures
us that he is not deceiving us, that there is no deficit, and that his
liabilities are less than his assets. Russians have been so well schooled
in respectable behaviour in official places that even as onlookers they
feel uncomfortable, and only a few mutter the French saying under their
breath: “He who excuses himself accuses himself.”

Let us see how our Witte “excuses” himself. The gigantic
expenditure, amounting to almost 2,000 million rubles (1,946 million), has
been fully covered only because of the 144 million taken from the famous “free cash in hand” at
the State Treasury, which free cash in hand was made up by last year’s 4
per cent loan of 127 million rubles (floated at 148 million rubles, of
which 21 million have still not been taken up). In other words, a deficit
covered by the loan? Nothing of the sort, says our magician, “the
loan was certainly not floated because of the need to cover expenditures
unforeseen in the estimate”, since 114 million rubles remained
“completely free” after the coverage; the loan was raised
because it was desired to build new, railways.

Well said, Mr. Witte! But, first, what you say does not refute the fact of
the deficit, since 114 million rubles, even if “completely
free”, cannot cover an expenditure of 144 million rubles. Secondly,
the free cash in hand (114 million rubles) included 63 million received in
excess of the usual revenue for 1901, as compared with the budget
estimate, and our press has long since revealed the fact that you
artificially reduce the estimate for the budget revenue in order
to effect a fictitious increase in the “free cash in hand” and
steadily increase taxation. Last year, for instance, stamp duties were
raised (the new stamp duty regulations), the price of government-distilled
vodka rose from 7 rubles to 7 rubles 60 kopeks a vedro ,[1 vedro—about 12.3 litres (21.7
pints).— Tr .] customs duties continued to increase (increases were introduced
“temporarily” in 1900 on account of the war in China), and so
on. Thirdly, while you laud the “cultural role” of the railways, you modestly refrain from mentioning the purely Russian and very
uncultured custom of plundering the Treasury when rail ways are
built (to say nothing of the shameful exploitation of the workers and the
starving peasants by railway contractors!). Thus, a Russian newspaper
recently reported that the cost of building the Siberian railway was
initially estimated at 350 million rubles, but that in actuality 780
million have been expended and that in the end the total cost will
probably exceed 1,000 million (Iskra has had something to say
about the plunder on the Siberian railway: see issue No. 2). You compute
the revenues with precision, Mr. Witte, omitting nothing, but how about
rendering an account of the actual extent of the expenditure ?

Another matter not to be forgotten is the fact that the building of
railways in 1902 was undertaken partly because of the military purposes of
our “peace-loving” government (the vast Bologoye-Sedlets line,
more than 1,000 versts long) and partly because of the absolute necessity
to afford at least some “help” to oppressed industry, in whose
affairs the State Bank is directly interested. The State Bank has not only
granted loans with a liberal hand to tottering enterprises, but has
practically taken many of them under its full control. The bankruptcy of
industrial enterprises threatened to lead to the bankruptcy of the state!
Lastly, let us not forget, either, that it is under the administration of
the “genius” Witte that the sum of the loans and the size of
the taxes are constantly increasing, despite the fact that the capital of
the savings-banks is applied exclusively to support state credits. This
capital has already exceeded 800 million rubles. Taking all this into
consideration, we realise that Witte’s economy is wasteful, that the
autocracy is heading slowly but surely for bankruptcy, since taxation
cannot be raised indefinitely and the French bourgeoisie will not always
come to the aid of the Russian Tsar.

Against the charge of having increased the national debt Witte defends
himself with arguments that are sheerly ludicrous. He compares liabilities
with “assets”, he compares the sum of the state loans for 1892
and 1902 with the costs of the state railways for the same years and
produces a reduction in the “net” debt. But we have still
further assets: “Fortresses and warships” (I swear, the report
had it so!), harbours and government factories, quit-rent, and forests.

Magnificent, Mr. Witte! But have you not noticed that you are like the
merchant summoned to court as a bankrupt who tried to justify himself
before the bailiffs who were about to make an inventory of his property?
As long as an enterprise is unshakably solvent no one would dream of
asking that loans be specially guaranteed. No one doubts that the Russian
people have plenty of “assets”; but the greater these assets,
the greater the guilt of those who, despite the abundance, conduct the
economy by increasing loans and taxation. You are merely demonstrating to
the people that they should get rid of those who squander their assets, and do so as quickly as possible. In actual fact, of all the
European countries, Turkey alone has so far put forward special state
assets as a guarantee of state loans. This action has naturally led to
the assumption of control by foreign creditors over the assets
that were to guarantee them the return of the loans they had advanced. The
economy of the “great Russian state” administered by representatives of Rothschild and of Bleichröder—what
glittering prospects you open up before us, Mr.

Witte! [1]

This is quite apart from the fact that there is no banker who will accept
fortresses and Warships as collateral, that these represent a minus, not a
plus, in our economy. Even railways can serve as a .guarantee only when
they are run at a profit. However, from Mr. Witte’s report we learn that
up to the present all Russian railways have, in general, been run at a
loss. Only in 1900 was the deficit on the Siberian railways covered and a
“small net profit” obtained—so small that Mr. Witte remains modestly silent as to its amount. He also remains silent in regard
to the fact that in the first eight months of 1901 the takings of the
railways in European Russia dropped as a result of the crisis. We can well
imagine the balance of our railway economy if the actual sums of money
plundered during construction, as well as the official sums allotted for
the job, were taken into consideration. Is it not high time to place these
valuable assets in more reliable hands?

Needless to say, Witte speaks in the most soothing tones of the industrial
crisis: “The hitch ... without doubt does not affect general
industrial prosperity and, after a certain interval of time, we shall
probably [!] see a fresh period of industrial revival.” Fine comfort for
the mil lions of the working class, who suffer from unemployment and
reduced wages! You may search in vain in the list of state expenditures
for the slightest hint of the millions and tens of millions that the Treasury has wasted on direct and indirect
support of the industrial enterprises “suffering” from the
crisis. What gigantic sums are involved in such support may be seen from
press reports to the. effect that the total sum of the loans granted by
the State Bank between January 1, 1899 and January 1, 1901 increased from
250 million to 449 million rubles, and that industrial loans increased
from 8,700,000 to 38,800,000 rubles. Even the loss of four million rubles
from industrial loans did not cause the Treasury any difficulty. And as
for the workers who have sacrificed on the altar of “industrial
success”, not the contents of their purse, but their lives and the
lives of the millions dependent on them, the Treasury helped these workers
by sending thousands of them from the industrial towns to the starving
villages “free of charge”!

Witte avoids the word “famine” altogether, assuring us in his
report that the “detrimental effects of the poor harvest ... will be
mitigated by generous help to the needy”. This generous help,
according to him, amounts to 20 million rubles, while the deficit in the
harvest is estimated at 230 million rubles (if one takes as the base the
very low price of 50 kopeks a pood, compared, however, with the years of
favourable harvests). Indeed, how very “generous”! Even if we assume
that only a half of the losses is borne by the poor peasantry, it will
still become evident that we underestimated the greed of the Russian
Government, when we wrote (in re Sipyagin’s circular; see Iskra ,
No.

9)[See present volume, pp. 231-38.— Ed .] that the government was cutting relief loans down to one-fifth.
The Russian Tsar is generous, not in his aid to the peasant, but in his
police measures directed against those who really wanted to help the
famine-stricken. He is also generous in squandering millions in order to
grab an appetising slice in China. In two years, Witte informs us, 80 million rubles went in extraordinary expenditure on the war in China
and “in addition very substantial sums were expended from the ordinary budget”. This means that anything up to
100 million rubles was expended, if not more! The unemployed
worker and the starving peasant may take comfort from the fact that Manchuria is almost sure to be ours...

Lack of space keeps us from dealing at length with the remaining parts of
the report. Witte also defends himself against the charge of scantiness in
the disbursements on public education: to the 36 million rubles of the
estimate of the Ministry of Public Education he adds the disbursements of
other ministries on education and “cooks up” the figure of 75
million rubles. But even this figure (of doubtful veracity) is extremely
miserable for the whole of Russia, representing less than five per cent of
the total budget.

The fact that “our state budget is organised mainly on the basis of,
a system of indirect taxation” is considered by Witte to be an
advantage, and he repeats the stale bourgeois arguments on the possibility
of “adjusting the consumption of taxed articles to accord with the
degree of prosperity”. In actual fact, however, it is notorious that
indirect taxation affecting articles of mass consumption is distinguished
by its extreme injustice. The entire burden is placed on the shoulders of
the poor, while it creates a privilege for the rich. The poorer a man is,
the greater the share of his income that goes to the state in the form of
indirect taxes. The masses who own little or nothing constitute
nine-tenths of the population, consume nine-tenths of the taxed items, and
pay nine-tenths of the total of all indirect taxes, while they receive no
more than two- or three-tenths of the national income.

In conclusion, an interesting “trifle”. On which items were
expenditures most of all increased from 1901 to 1902? The total
expenditures increased from 1,788 million to 1,946 million
rubles, that is, by less than one-tenth. Nevertheless, expenditures on
two items increased by nearly a quarter: from 9,800,000
to 12,800,000 rubles “for the maintenance of members of the royal
family” and ... “for the maintenance of the special corps of
gendarmes” from 3,960,000 to 4,940,000 rubles. We have here the
answer to the question: What are “the most urgent needs of the
Russian people”? And what touching “unity” between the tsar and the
gendarmes!