When I wrote these lines, I knew that the economic boom in the Russian Empire which began in the second half of the 19th century was largely financed by foreign loans and borrowings. And when Bolshevism triumphed in Russia many creditors - European companies and individuals - hoped that this country would reckon with external debts in the same way as the Russian Empire did. In particular, the holders of the "billion frank Russian loan" in France also hoped for this. In many ways, this determined the policy of France both in relation to Soviet Russia and in relation to the Ukrainian People's Republic as good as to the other attempts to create non-Russian national states on the territory of the former Russian Empire.
Your question made me dive deeper into the topic. Here's what I found out today.
The Russian empire widely resorted to foreign loans. For a long time they could not be accommodated, although the first attempts were made back in the 17th century, when Tsar Mikhail Fedorovich sent an embassy for this to England and Holland. But the Moscow state was unable to borrow money abroad either then or later.
The first successful foreign loans were under Catherine II. At the beginning of the 20th century the Russian Empire had the largest external debt in the world. And in terms of the total amount of public debt, it ranked second in the world after France. Up to 400 million rubles were spent annually on servicing the external debt.
It must be said that in the world only two independent countries had external debt by 1914 - Russia and Japan. The rest of these debtors were colonial or dependent countries. For example, India had a huge external debt to the British Empire. But the Russian external debt was 2.6 times higher than the Indian one.
The sale of Russian Alaska to the States in 1867 for $ 7.2 billion significantly improved the state of Russia's foreign debt in the 19th century. Nevertheless, the large-scale railway construction in Russia and the industrial boom demanded more and more money. And Russia began to place more and more loans in Europe. Since the 1890s, the foreign debt of the Russian Empire also began to grow rapidly. Russian loans were very interesting for Europeans, since the annual interest on them was up to 10-14%. In addition, they were all guaranteed by the gold of the Russian treasury. At the same time, 30 years before the start of WWI the gold reserve of the Russian Empire increased 5 times and reached 1.74 billion rubles by the middle of 1914. By its size RE ranked first in Europe
The largest foreign loan of the Russian Empire was so called Russian loan in France, which I already mentioned earlier. From 1888 to 1910, French citizens invested in it. He was encouraged in those years by the French government. It was considered very reliable as it was backed by Russian gold.
More than 1.5 million French people signed up for Russian loan, which amounted to 15 billion gold francs, in modern currency - more than 53 billion euros. To buy Russian bonds with high yields, the French often sold houses and family jewels.
This amount represented exclusively the funds of individuals, and not investments of French companies and banks which also actively invested in the Russian economy. On the eve of the First World War, thousands of kilometers of railways including the Trans-Siberian Railway, as well as factories, ports and mines were being built in Russia with the money of French investors.
At the same time, Russia carried out aggressive marketing in Europe to promote its loans. In 1904 alone, she spent 3.3 million gold francs to bribe the European press, officials, trade unionists, etc.
The main creditors of the Russian Empire were England (about 47% of the RE external debt) and France (about 35%). Next came Germany, Holland and the States. The rest of the countries accounted for 2-4% of Russia's external debt.
The WWI dramatically increased Russia's external debt. By the time the Bolsheviks seized power in Russia, it totaled about 12.5 billion rubles.
On January 21, 1918 the authorities of Soviet Russia, or rather, the All-Russian Central Executive Committee canceled all external loans of the Russian Empire. In fact, this became the first Russia's default on foreign debts in the 20th century.
Accordingly, France believed that only an United and Indivisible Russian state would ensure the payment of the external debt to France and the French. Therefore, France actively supported the White movement and obstructed any attempts by the non-Russian peoples of the former Russian Empire to create their own national states. Including the independent Ukrainian state.
As a result, Soviet Russia will never pay the French the Russian loan. Moreover, in 1939 the Russians will provide the Third Reich with powerful political and economic support in the WWII. And with a Russian friend in the rear, Hitler will be confident that there will be no risks in the east during his invasion of France in 1940. On June 17, 1940, Molotov invited German Ambassador Schulenburg to his office in the Kremlin and conveyed to him the warmest congratulations of the Soviet government on the brilliant success of the German army. The defeat of France.
Links
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