The Prussian Government, however, took umbrage at what it deemed to be an interference with the internal affairs of the Prussian State, and some communications took place between the two Governments on the subject, but the incident had no effect on the relations between them. These remained as friendly as ever, though in the Austro-Hungarian Press doubts were freely expressed as to the desirability of continuing to be in alliance with a Power which did nothing to check the PanGerman agitation against Austria carried on in its own dominions, and which threatened to cripple Austrian commerce by its proposed new Customs tariff.

With England the Austro-Hungarian Government remained on the most friendly terms, and it repelled with firmness and dignity the attempts of the Pan-German party to produce dissension between the two countries on account of the Boer war. Count Goluchowski, in reply to interpellations raised in the Austro-Hungarian delegations on the subject, denied that there had been any breach of neutrality on the part of AustriaHungary in supplying arms and horses to England. All jurisconsults agreed that private industry was entitled to provide belligerents with supplies on the understanding that it took the risk of their being captured. As to mediation, that was impossible so long as both the adversaries were not prepared to accept it. The Hungarian Premier, M. Szell, spoke in the same sense, and deprecated any attacks upon a nation which had been always a true friend to Hungary. These attacks were made chiefly by the German Press in Austria-Hungary, which followed the lead of the Press of the German Empire on this as on other subjects, and especially by the organs of the Clerical party. One of these, the Vaterland, had a specially virulent article headed "Lord Kitchener as Hangman," and another, the Deutsche Zeitung, asserted that the war was carried on "in the interests of rascals of the Stock Exchange.'

CHAPTER III.

I. RUSSIA.

THE year in Russia began, as usual, with the announcement by the Minister of Finance of the Budget. His statement showed that Russia had sufficient ready money for meeting the extra military and naval expenditure in the Far East, although she had placed upwards of 200,000 troops on a war footing and transported many of them over enormous distances. The Estimates for 1901 showed a total expenditure of 1,788,482,006 roubles, of which 131,829,450 were for extraordinary expenditure. A surplus of 73,443,450 roubles was anticipated in the ordinary revenue over the ordinary expenditure-the largest

excess of revenue over income that had appeared in any Russian Budget during the past ten years. The principal increase of revenue-51,000,000 roubles-was assigned to the Government monopoly of the manufacture and sale of spirits and the Government railways, including the Trans-Baikal line in Siberia, and the Murghab branch of the Trans-Caspian line to the Afghan frontier, both of which had been recently opened to public traffic. A decrease of 21,000,000 roubles, however, was anticipated in the revenue from Customs duties, owing to the development of native industries, etc. The extraordinary expenditure, on the other hand, was calculated to produce a deficit of 56,886,000 roubles on the total Budget, which would have to be provided for out of the reserve resources of the Imperial Treasury. The expense of the war in China for 1900 was stated as 61,900,000 roubles. Apart from this, during the past six years the expenditure had increased at the rate of 125,000,000 roubles a year, and for 1901 10,000,000 roubles were provided for the Siberian Railway, 32,000,000 roubles for other railways, and 82,000,000 roubles for loans to private railway companies, including the company entrusted with the restoration of the line through Manchuria. There had been a diminution of the stock of gold in the country to the extent of 74,000,000 roubles in consequence of the embarrassment of the international money market through the South African and China wars. Yet the stock of gold in the Treasury and in circulation amounted to 1,492,000,000 roubles, while the gold in the Treasury exceeded the amount of paper in circulation by 225,500,000 roubles. M. Witte's optimistic anticipations were not, however, borne out by subsequent events. There was a complete failure of the crops in Kherson, Tomsk, and other provinces, including the rich territories of the "black soil," where "you tickle the earth with a rake and it laughs with a harvest"; and upwards of 16,000,000 roubles were spent by the Government for the relief of the starving peasantry. The landowners, too, sustained such heavy losses in quence of the failure of the harvest in this and preceding years chiefly owing, it was said, to overcultivation many of them devoted part of their holdings to viticulture. On the other hand, Russian trade at the beginning of the year was in a very flourishing condition. The exports had increased in value from 729,000,000 roubles, the figure for the preceding year, to 765,000,000 roubles, while they exceeded the imports by 106,000,000 roubles. The largest trade with Russia was that of Germany, whose exports into Russia amounted to 241,000,000 roubles, while those of England, which stands next, amounted to 127,000,000 roubles only. Germany's imports from Russia (204,000,000 roubles) were less than her exports, while England's (157,000,000 roubles) were more. From the United States Russia imported goods of the value of 45,000,000 roubles, and her exports to that country amounted to 4,500,000

that

roubles only. The commercial prosperity of Russia was not, however, maintained as the year advanced. Russian industry had for some years been stimulated by high import duties, levied chiefly on iron and steel manufactures and cotton goods, and by the action of the Government in facilitating credit. The result was an enormous increase in production. The production of coal in Russia increased from 424,000,000 poods in 1892 to 985,000,000 in 1900; of cast-iron, from 65,000,000 poods to 177,000,000; of wrought iron and steel, from 61,000,000 poods to 124,000,000; and of cotton goods, from 8,700,000 poods to 14,400,000. In 1893 the total length of railways in European Russia was 19,441 miles; in 1898 it was 24,656 miles. In 1891-2 Russia produced 29,650,000 poods of raw sugar (excluding molasses), and in 1897-8 39,949,000 poods. The demand, however, did not keep pace with the supply, and the usual consequences followed. Prices fell to such a degree that the manufacturers were no longer able to make a sufficient profit, numerous mines and mills were closed, and many thousands of artisans and labourers were thrown out of work.

Although M. Witte had firmly protested that he could carry on the finances of the Empire through the year without a loan, he found himself obliged in May to raise a loan of 424,000,000 francs at 4 per cent. "in order," it was officially stated, "to replace in the Imperial Treasury the sums spent in 1900 in advance to railway companies, and to provide for similar advances during the current year.' The money was chiefly raised in Germany.

The students' riots which had caused so much anxiety in 1899 and 1900 (see ANNUAL REGISTER, 1899, p. 301; 1900, p. 325) were repeated in 1901. In consequence of the disturbances which had taken place at Kieff at the end of 1900, besides the incorporation of the arrested students in the Army, severe punishment was inflicted on various persons who sympathised with them, including the historian, Milioukoff, one of the most distinguished men in Russia. In March demonstrations of the students of the University of Moscow took place in which all classes of the population participated, and nearly 400 of the students were incarcerated in the common felons' prison. Shortly after a large crowd collected round the monument to the national poet, Pushkin, and sang a "hymn of Liberty" to the tune of the national anthem "God preserve the Tsar," but expressing sentiments directly opposite to those of the official hymn. Other demonstrations were made about the same time by the students at St. Petersburg. They protested against the excommunication of Count Tolstoi by the Holy Synod, and delivered a petition to the Metropolitan of St. Petersburg requesting to be also excommunicated. Students assembled in the Kazan Cathedral, and, as a mark of their contempt for the orthodox religion, smoked in the church, shouted, threw various objects at the holy images, and whistled during the preparation

of the sacred elements for the Communion. The congregation endeavoured to turn the students out, and a general fight ensued, one of the students using a church banner as a weapon against his assailants. Revolutionary proclamations containing such phrases as "Down with the Tsar" and "Down with the rotten officials were meanwhile thrown on the cathedral steps, and a red flag was exhibited with an inscription protesting against the punishment of students by making them serve in the Army as common soldiers. The police now interfered, and after a fight in which many persons were injured, about 700 students were arrested. Forty-five Russian authors signed a protest against the "atrocities committed by the Cossacks and police in the capital and other Russian towns," appealing "to the Press of the world to give the utmost publicity to these lamentable facts."

Shortly after attempts were made on the life of M. Pobiedonostzeff, the procurator of the Holy Synod, and M. Bogoliepoff, the Minister of Instruction, by men stated to have been chosen by lot by the students to avenge the excommunication of Count Tolstoi and the severe steps taken by the Government to suppress the agitation in the Russian universities. Adjutant General Vannovsky, a member of the Council of the Empire, was then appointed Minister of Public Instruction in the place of M. Bogoliepoff, the Tsar stating in a rescript issued on this occasion that experience had shown such defects in the Russian scholastic system that a thorough revision and improvement of it had become necessary, and that he had accordingly appointed General Vannovsky to co-operate with him in this work. The first step taken by the new Minister was to re-open the Russian universities for the purpose of allowing meetings of students to decide whether they would prefer to undergo their examinations then or in the autumn. About 2,000 students assembled at St. Petersburg and decided that the examinations should be postponed until the autumn in order to enable those who had been sent away to take part in them. Meanwhile the Minister addressed a circular to all the universities and public schools of the Empire, inviting them to suggest such changes as they might deem desirable in the existing system. This also was hitherto the initiative of all changes in education was entirely This also was a new departure, as in the hands of the officials of the central administration.

The pacification produced by these measures, however, was only momentary. Wholesale arrests, domiciliary visits, and seizures of documents took place at St. Petersburg early in May, and revolutionary proclamations were scattered broadcast throughout the city. Three hundred workmen were arrested at Ekaterinoslaff for taking part in a riot, ostensibly against the Jews, and were flogged with birch rods by order of the Governor. Some of these so-called workmen turned out to be students in disguise. At Tiflis a crowd of students and workmen displayed

a red flag and attacked the police, and was only dispersed after many persons had been killed and wounded on both sides. A strike also took place at the Imperial Naval Arsenal; the troops had to be called in, and order was only restored after much bloodshed. On November 17 General Vannovsky received a deputation of the students at Moscow. He told them, in reply to their request that the students who had been expelled should be allowed to return, that this permission had been already granted to all whose expulsion had been due solely to the students' agitation, but that a larger proportion of Jewish students than that prescribed by regulation could not be admitted, that the question of superseding the bureaucratic Council of Inspection by boards of professors would be considered, and that as regarded freedom of meeting the existing rule, under which students' meetings are only allowed if presided over by a professor chosen by themselves, was considered amply sufficient.

Two letters addressed to the Tsar by Count Tolstoi, who, although he had been excommunicated by the Holy Synod on account of his religious opinions, still possessed immense influence among his countrymen, were secretly circulated in Russia in the spring. The first was an eloquent protest against the religious persecutions of the Russian Government, which in official publications was represented as a model of toleration. The Count said in this letter that he had long had it in his mind as a sacred duty, before he died, to try to open the eyes of the Tsar to "the senseless and terrible cruelties" which were being perpetrated in his name. "Thousands of the best Russians, sincerely religious people, and therefore such as constitute the chief strength of every nation, have been already ruined, or are being ruined, in prison and in banishment. . The flower of the population, notwithstanding all hardships and privations, have quitted their fatherland for ever in terror of the remembrance of all they have had to undergo there. . . . All these wish and pray for one thing only, and that is the permission to leave Russia and to go where they may safely worship God as they understand Him, and not as ordered by the authorities, most of whom recognise no God whatever. . . . Do not take counsel with the men who have ordered this persecutionwith Pobiedonost zeff, who is a man behind his time, cunning, obstinate, and cruel, nor with Sipiagin, a man of mediocre abilities, frivolous and unenlightened." In conclusion the Count gave the following advice to the Tsar: (1) To revise and abolish the contradictory and shameful laws now existing in regard to persecution in the name of religion, which have long ceased to exist in every other country except Russia; (2) to put an end to all persecution and punishment for departure from the religious creed of the State, and to liberate all persons imprisoned and exiled on account of their faith; and (3) to reconsider the question of how to reconcile the requirements of conscience in religious matters with the demands of the State-as, for example,