To cover the deficits of the years 1862-69, a number of internal and external loans was raised, as in the preceding years. The most important of these were, first, an internal loan of 100,000,000 roubles, issued in January 1865; secondly, a foreign loan of 6,000,000l., raised in January 1867; and, thirdly, a new foreign loan of 11,110,000l., negotiated in April 1869. The 100 millions were issued in bonds of the value of 100 roubles, bearing interest at 5 per cent.; while the foreign loan of 1867, also at 5 per cent., contracted for by Messrs. Baring, and placed at Amsterdam and London, was issued in bonds of 1,000 guilders and 1007., at 84 for 1007. The foreign loan of 1869, likewise contracted for by Messrs. Baring, was issued in 4 per cent. bonds, at 63 per 1001. The total nominal capital of the foreign loans of Russia raised in the years 1865-69, including those incurred for the purpose of railway construction, amounted to 46,415,000l., of which sum 33,415,000l. was contracted for in England, and 13,000,000l. on the continent of Europe. According to an official report of the Minister of Finance, dated March 18, 1866, the public debt inscribed in the Great Book, at the commencement of 1866, showed the following amounts :

I. DEBTS FOR A GIVEN PERIOD, CONTRACTED PREVIOUS TO THE YEAR 1864.

Five per Cents., bank-notes, issued by virtue of Imperial decree

In the course of 1864 there were inscribed in the Great Book:

Home Debts.

Four per Cents. (subscription to the Consolidated Loan) roubles Five per Cents. (Bank-notes issued by virtue of an Imperial decree of June 2, 1863)

SINKING FUND.-DEBTS FOR A GIVEN PERIOD.

1,707,304

4,971,050

Six per Cents.

Bonds of the Consolidated Four per Cent. State Loan, which had been exchanged for deposits not subject to be converted into bonds of this character

91,591

In consequence of these transfers the position of the public debt at the beginning of 1865 was as follows:

Net included in this account, are above 750 millions of paper money, called Bills of Credit, issued by Government on the guarantee of all the banks and other credit establishments of the empire, united into a State bank by imperial decree of September 1, 1859. The capital of these establishments, which are under the direction and supervision of the Minister of Finance, is stated to amount to 96,241,618 roubles, or 13,748,8021. The note circulation of Russia has increased very rapidly of late years, while the specie has diminished at the same time. There was

The guarantee fund of the note circulation not amounting to more than one-tenth, it has been found necessary to give them a forced currency. Notwithstanding this measure, gold and silver has been for many years at a premium, varying from 10 to 15 per cent.

The destruction of public credit, through an illimited issue of paper money, is of old standing. In the reign of Catherine II., the first attempt, on a large scale, was made to cover the annual deficits by a very liberal supply of paper roubles, the sum total of which at the death of the Empress, 1796, amounted to 200,000,000. During the subsequent wars with France and Turkey, new emissions of paper followed, with the consequence that, in 1815, the notes had fallen to 418, that is, one silver rouble was worth four roubles eighteen copecs in paper. Great efforts were now made by the Government to improve this state of things, by withdrawing a portion of the paper from circulation. After ten years of improved financial management, there remained, however, still 600,000,000 of notes, circulating at the rate of three paper roubles to one silver rouble. As a final remedy, the Imperial Government withdrew, în 1843. the whole of the old paper money, introducing, in its stead, a new form of bank notes, with forced currency. By these and other means, particularly the establishment of the State bank above mentioned, the nominal value of the paper money, called Bills of Credit, was considerably raised, so as to stand only at from 10 to 15 per cent. discount. However, as will be seen from the above statement, the issue of paper money continues at an increasing rate, the note circulation having more than doubled in ten years.

The finances of the Grand-duchy of Finland, represented by an average annual revenue and expenditure of 3,000,000 roubles, or about 429,000l.,. and a public debt of 45,000,000 roubles, or

6,435,000l., are administered separately from the imperial exchequer; but the special budgets of Poland ceased in 1867, on the final incorporation of the kingdom with Russia.

Army and Navy.
1. Army.

The land forces of Russia are formed of two descriptions of troops, different from each other in many respects-the regular troops, properly so called, and the feudal militia of the Cossacks and similar races. Some corps of the latter have been brought into regular form and training, and are occasionally employed like the rest of the army, although in many respects they differ entirely from the regular troops. The regular army is recruited from the classes of peasants and artisans, partly and principally by means of a conscription, partly by the adoption of the sons of soldiers, and partly by voluntary enlistment. Every individual belonging to these classes is, with a few exceptions, liable to compulsory service, provided he be of the proper age and stature. The levies, which take place alternately in the eastern and western divisions of the empire, are ordinarily in the proportion of one or two to every 500 males; but during war the proportion is at least as two or three to 500, and sometimes as much as four or even five to 500. This last, however, may be taken as the maximum levý, and is rarely exceeded. The number of recruits to be furnished by the empire in general, and by each district in particular, is fixed according to the results of the preceding census. The nobles nominate

such of their dependants as they please to complete their quotas, the only conditions being that they should have a good constitution, and be of the requisite size, and not less than 18, nor more than 40 years of age. The contingents supplied by some of the great landed proprietors are very large, sometimes amounting to 3,000, to 5,000, and even to 6,000 and upwards. The recruits are first sent to the recruiting establishments, and thence forwarded to the corps to which they are assigned. Nobles, magistrates, clergymen, and students are exempted from the service. Merchants and traders enrolled in the different guilds are also exempted; as are the only sons of peasants, and peasants with more than three children. The levies furnished by the Cossacks are regulated by particular treaties; and many half-savage tribes are excused, partly on account of their diminutive size, and partly because of their great aversion to a military life. Generally, it is found that a levy of two on every 500 males produces a supply of about 90,000 or 100,000 men. Substitutes are admitted in the event of the authorities being informed and not objecting to their employment.

The period of service is fixed at 22 years for the guard, and 25 years for the other troops. But since 1840, soldiers after 10 or 15 years' service, according as they belong to the western or eastern divisions of the empire, are entitled to an indefinite leave; and are sent home to their native place, their names being enrolled in the reserve of the battalion or squadron of the regiment to which they belong, that they may, if necessary, be again called into active service. The aggregate strength of the reserves those of 10 years' service being called the 1st reserve, and those of 15 years' service the 2nd-is estimated at about 215,000 men. The entire number of reserve troops formed in this manner is divided into two great levies, the total amount of which is as follows:-First levy: nine battalions of grenadiers, three of carabineers, thirty-six of infantry of the line, and thirty-six of chasseurs, or a total of eightyfour battalions of infantry, fifty-two squadrons, and twenty-four foot-batteries, or in round numbers 100,000 men, with 192 guns. Second levy: twelve battalions of the guard, twelve of grenadiers and carabineers, seventy-two of infantry of the line and chasseurs, or a total of ninety-six battalions of infantry, sixty-two squadrons, and twenty-four foot, with eleven horse-batteries, and two and a half battalions of sappers, or in round numbers 115,000 men with 280 guns.

Formerly, the annual recruitment took place simultaneously throughout the whole empire; but this being attended by many inconveniences, the Emperor Nicholas, in 1834, divided his realm into two moieties, to be subjected to the recruitment in alternate years. The divisions were at first into northern and southern, but were changed, in 1839, into eastern and western halves. At present, the two divisions consist of the following Governments :-The Eastern Half comprises Vologda, Kostroma, Yaroslaf, Vladimir, Moscow, Kaluga, Tula, Riazan, Tambof, the country of the Don Cossacks, Caucasia, Astrakhan, Saratof, Penza, Nijni Novgorod, Samara, Simbirsk, Kazan, Viatka, Perm, Orenburg, Tobolsk, Tomsk, Yeniseisk, and Irkutsk. The Western Half consists of Archangel, Olonetz, St. Petersburg, Novgorod, Tver, Smolensk, Pskof, Esthonia, Livonia, Courland, Vilna, Grodno, Minsk, Vitebsk, Mohilef, Volhynia, Kief, Podolia, Kherson, Taurida, Ekaterinoslaf, Poltava, Tchernigof, Orel, Kursk, Kharkof.

The imperial ukase which fixes the number of recruits is generally issued in November; the levy commences on the 15th of January, and must be concluded by the 15th of February. The inhabitants of some provinces are at times released from the necessity of furnishing recruits on account of a bad harvest; they are debited, however, with the amount on future levies. The military colonies in the south furnish eight men in a thousand every alternate year. The levies ordered by the Government were, in 1836, for both