On the eve of the World War the gold reserve attained 1,604
million rubles, without counting the gold deposited abroad in one
form or another; this at the time was the largest. amount of gold
held by any central bank and it slightly exceeded the amount of
notes in circulation. The growth of the gold reserve was a result
of good harvests, of a skillful foreign exchange policy, which con-
sisted of acquiring foreign bills at the height of the grain export
season, when their supply was most abundant and of the practice
of placing at the disposal of the railway companies the equivalent in
rubles of the proceeds of their loans placed abroad.
The following table shows the Russian gold reserve (whether
held in Russia or abroad) as of January Ist of each of the fifteen
vears preceding the World War:
January 1:
1900
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
Millions of rubles
843
7317
709
769
909
1,082
927
1,191
1,169
1,220
1,416
1.450
,436
1,656
1.695
GoLp SHIPMENTS TO ENGLAND AND TO SWEDEN
Notwithstanding the fact that Russia had entered the war
with a gold reserve of this magnitude, her financial position was much
weaker than that of any other belligerent country. The bulk of the
Russian rural population were not accustomed. to subscribe to public
loans, and as a result of the relatively small amounts of capital
funds available within the country, the government was compelled
to meet the greater part of its war expenditures by large issues of
paper money. The government was not disposed to spend any part
of the gold reserve of the State Bank, as it was afraid that an un-
favorable impression might be produced, if the metallic cover of
the notes in circulation became impaired. There was, however, no
other way. On the one hand, Russia required considerable funds
abroad to assure the service of her loans and to pay for her war
orders. On the other hand, it proved impossible to secure any credits
in the Allied countries during the first months of the war. The
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