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Financial aid of Russia and Japan from the USA in 1904-1905.

n. P. Pischikova


In 1904-1905

Work is presented by department of History of Russia of the Ryazan state university of S.A. Yesenin. The research supervisor - the doctor of historical sciences, professor A.F. Agarev

Article is devoted by one of pages of relationship of Russia with the USA. The author pays attention to the American financial aid of Russia and Japan in 1904-1905. Article is based on archive materials and besperevodny literature.

This article deals with one of the points in the relations between Russia and the USA. The author reviews the matter of American financial aid to Russia and Japan in 1904-1905. The article is based on archives and non-translated literature.

The Russo-Japanese war influenced economic relations of Russia and the USA, studying the financial relations of the parties and first of all is represented especially interesting to financial aid of the USA of Russia and Japan during the war. Therefore the purpose of article to define a role of the help of the USA for warfare both Russia, and Japan. For work on this subject AVPRI funds were fundamental. Izuche-

ny the archive material allowed to be guided by primary sources at assessment of the Russian policy and to find a number of valuable materials on the Far East policy of Russia and the USA. Missing information of documentary character was found in the collections of documents of economic character published at different times. Additions and specifications to the unpublished and published documents became

are possible as a result of use a demon - translated English-speaking literature. In addition, the statistical materials which came out both in Russia, and in the USA, periodic literature and monographic researches of economic orientation were used.

The Russo-Japanese war which began in February, 1904, demanded tension of all financial resources of Russia. War excluded a possibility of regulation of expenses. The Russian government came to a conclusion about the organization of a series of military loans at the foreign exchanges.

From the beginning of combat operations in the Far East the Russian government decides to address for money on warfare the USA again. In spite of the fact that the Russian financial agency had no enough means, his head Vilenkin was afraid to take concrete measures to opening of the American market for the Russian values. Vilenkin considered that specific actions to take carelessly and prematurely, it is necessary to wait for more propitious moment on theater of military of action for Russia. Therefore the decision was made that Vilenkin will enter with representatives of the New York financial world explanations concerning powerless position in Russia of the Jewish population.

The reason to that was given by the official petition of the Washington office transmitted to Lamzdorfu through the American ambassador in St. Petersburg Mac-Kormika for removal of prohibition of entry into Russia to the American Jews. Reckoning on the American money markets, the Russian government could not but reckon with moods of financial circles and public opinion of this country, and therefore watched closely behavior of the American press and is old - the elk to influence on it. Thereof "explanation" in the American newspapers concerning the measures taken by the Russian government "for improvement of life of Jews" in Russia such as cancellation of "50-verstny boundary" was made.

Tried to use cancellation of 50-verstny boundary and adoption of the decree of August 11, 1904 on expansion of the rights of Jews out of the pale of settlement of Vilenkin to induce the head of "Kuhn, Loeb and Co" banking house Schiff who arranged a loan of Japan in May, 1904 "to take the lead of opening of the American market for the Russian values". Vilenkin even made in September, 1904 the project of the organization of a trip to Russia of large English and American bankers Rothschild, Cassel, Schiff, the Ostrich and Selig-mana. As envisioned by Vilenkin, this trip would give the chance to Kokovtsov to start discussion with bankers of a question of the room of the Russian values at the London and New York exchanges. Schiff stated readiness in case the official invitation of the Russian government follows to take part in the organization of this trip. The idea of arrival of bankers to St. Petersburg was supported also by the Russian ambassador in Washington Cassini. However the attempt of rapprochement with the American bankers did not yield serious practical results also this time.

In December, 1904 Kokovtsov submitted the report to the tsar in whom underwent the analysis of prospect of financing of war in 1905. The Minister of Finance supported foreign markets where he expected to receive within the next year about 500 million rubles which would last only for 8 months of war (about 60 million rubles a month), the deficiency of about 40 million rubles under the article of extraordinary expenses which should be covered from revenue from zaymov1 too in addition was outlined.

Kokovtsov excluded an opportunity to derive the additional amounts at the expense of internal resources. As Kokovtsov the existing system of podatny taxation already "considered caused impoverishment of the center of Russia". Additional taxes on objects of mass consumption would bring the sums hardly sufficient "for a covering of percent on loans which were and will be concluded by Russia for needs

real war with Japan" 2. He saw an exit from the situation only in the request for the credits to the Western European exchanges.

In the Russian Ministry of Finance in 1904 there were no illusions concerning an opportunity in the nearest future to obtain the credits in Washington. "For Russia, - wrote in December, 1904 Kokovtsov in the vsepoddanneyshy report, - the foreign money market in full at the moment even is inaccessible. The markets American and English for us are closed by political situation and, besides, and before war with Japan with them we had no strong communications. On the first we never made our credit operations, on the second - we do not make them several decades. From the money markets of the Old and New World there are for us therefore available only markets of France, Germany and partly Holland as behind small exceptions the other countries, as well as we, have no spare capitals and need the external credit" 3. And it is valid when at the end of 1904 there was a question of large financial transaction abroad for financing of military operations again in 1905, the Russian Ministry of Finance could choose only between Berlin and Paris.

Meanwhile the financial position of Russia became more and more critical. In July, 1905 it was decided to use a trip of secretary of state S.Yu. Witte to Portsmouth for conclusion of peace with Japan that once again "to probe the soil"

about a big loan for Russia the American bankers. On July 22 before departure to Portsmouth Witte talked to National City Bank of New F which came to him to New York on a loan the vice president. By Vanderlip and with "partner" Morgan J. Perkins, but the solution of a question was postponed until completion of negotiations.

The issue of a loan in the USA was discussed with special care after the end of negotiations on Portsmouth a game again -

ferention. As the initiator and this time F. Vanderlip acted, but, unfortunately, results of negotiations are unknown. On August 25 Witte's meeting with J.P. Morgan at which Witte suggested Morgan to place a loan in 400 million dollars in the American market for Russia took place. Morgan said that he will agree to placement only if the loan has the international character. Share of the USA will be from 50 million to 100 million dollars Besides, he demanded to give in exchange at the first operation "special benefits to the American market" and demanded not to allow to participation in a loan of other American bankers. Morgan promised to recruit England in a loan and also agreed to send for negotiations to Europe Perkins or to arrive most. In addition, it was not against to begin preliminary negotiations with Kokovtsov. Kokovtsov personally invited Morgan or the person authorized by him to Paris in October to start negotiations on a loan. However Kokovtsev could not leave to Paris in October and invited for its conclusion bankers to St. Petersburg. Morgan refused and suggested to postpone a meeting of bankers until the expected arrival of his representative Perkins to St. Petersburg 6 or 7/19 or on October 20, 1905 Morgan's Representative brought to St. Petersburg the letter in which "the question of a loan closely contacted providing the Russian orders to the American industry" 4.

Refused Morgan Kokovtsov's requirements. Thus, negotiations in October, 1905 did not bring any practical results. Negotiations with Morgan continued in Paris, but it was clear that to the agreement with the American bankers not to come.

As for Japan, the USA together with Great Britain willingly went for granting a loan to it. Especially the USA showed care of Japan when that perfidiously attacked Russia and gained one victory for another. The first loan was granted to Japan in the spring of 1904 by syndicate

27 1

"Kuhn, Loeb and To °" and "National and commercial bank". Released for the total amount of 50 million dollars I will jam it was distributed equally between New York and Londonom5.

Realization of the first loan cleared away a way for receiving the subsequent loans in which Japan was in great need. The second Anglo-American loan in 60 million dollars was released in November, 1904. A half of this loan with great success was placed in New York during several dney6. Distribution of the third loan to 150 million dollars which is released in March-April, 1905 exceeded all expectations. The subscription to it was blocked several times, despite conditions, less favorable to creditors (4.5% instead of former 6%). In July Japan released the fourth loan in which distribution bankers of England, the USA and Germany took part. In the USA the subscription exceeded the predetermined sum four times.

All Japan received loans in 725 million yens. From this sum of 27 million yens it paid banks for komissiyu7. Net proceeds of Japan from foreign loans were about 698 million yens. In the USA 44% of total amount of foreign loans of Japan were realized that covered nearly one fifth expenses on time of military operations.

Thus, the help of the USA of Japan in the form of the loans necessary for providing both the Japanese army, and the population in the back had enormous value for implementation of plans of the Japanese militarists. Negotiations of representatives of Russia with the USA did not bring any practical results. The reasons of reticences with representatives of business of the USA were various. First, throughout the Russo-Japanese war of the USA secretly supported Japan, but not Russia, and interposed in the matter of Russia with other states. Secondly, the reasons of not followed practical results during the negotiations which were taking place after the conclusion of the Portsmouth world were in a domestic situation of Russia. The domestic situation of Russia was restless, consequences of the Russo-Japanese war were burdened by the begun revolution. Summing up the result, one may say, that, having declared a neutrality during the Russo-Japanese war, the USA in many respects helped Japan. Using the economic help, the USA sought to weaken Russia, to close it an exit to the ocean, to distract it from the Far East borders, to thereby strike a blow which would not allow Russia to become the great Pacific power again for a long time. The basic purpose of the American financial aid of Japan during the Russo-Japanese war also consisted in it.

1 Vsepoddanneyshaya V.N. Kokovtsov's note on November 19 / 2 December, 1904. "Russian finance and European exchange in 1904-1906". Page 135-146.
2 In the same place. Page 135-146.
3 In the same place. Page 139-140.
4 Williams W. American-Russian Relations 1781 — 1947. New York; Toronto, 1952. P. 53.
5 Ogawa G. Expenditures of the Russo-Japanese War. New York, 1923. P. 56.
6AVPRI, t. Office, 1904, 129, T. 2 (Cassini - Lamsdorfu, 3 on November (16), 1904). 7 Dennett T. Roosevelt and the Russo-Japanese War. New York, 1925. P. 297.
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