Blackwoods Edinburgh Magazine – Volume 53, No. 332, June, 1843

The revenue from customs in 1841 amounted to 27,387,494 silver rubles, or upwards of two-fifths in excess of the receipts of 1830.

In order to exemplify the nature of the trade betwixt Great Britain and Russia, and exhibit it in its most disadvantageous aspect, we shall add here, from statements verified as authentic by competent authorities on the spot, the returns of British trade and shipping with certain Russian ports for 1842, which we have recently received direct. They will assist us to a conception of the relative importance of each place in respect of its commercial connexion with this country.

The commerce of the port of Archangel, omitting from the table Onega, Kola, Kemi, and Soumsk, the other ports in the White Sea, their traffic being inconsiderable, is thus represented.

1842.—Total shipping outward, 212, of which, British, 153, tonnage, 31,704

The commerce with Riga exhibits a somewhat more favourable proportion between imports and exports, and we are induced, therefore, to give the return of imports for 1842 in same detail as received.

Nature and value of merchandise imported into Riga from Great Britain during the year 1842:—

Countries from whence British vessels have arrived at the port of Riga during the year 1842:—

The commerce of Odessa represents a closer approximation still between imports and exports; and they would perhaps nearly balance, but for the large shipments of wheat to this country, which contribute to swell the exports.

In 1842, 174 British ships entered, tonnage 44,428, sailed 176 tonnage, 44929

The remainder by 64 British vessels entering from Leghorn, Turkey, Algiers, Amsterdam, mostly in ballast.

The remainder to the countries above named.

The commerce of St Petersburg is stated, for 1812, imports and exports together, at the value of 97,795,415 silver rubles. And of 1147 foreign vessels which left that port and Cronstadt with cargoes, more or less, 515 were British, of 117,793 tonnage—being a rather considerably less number than in either 1840 or 1841.

The present is the proper occasion to remark upon and explain the system of official valuation pursued in Russia, by which it will be observed how the real value, both of imports and exports, is swelled, probably with a view to the vain display of a greater commerce than is really carried on. As the system is nearly the same for both imports and exports, it cannot, of course, materially interfere with, or impeach the accuracy of the general balance-sheet. It is desirable, however, that the facts should be fairly represented, for the guidance of those who may be in the habit of consulting and comparing the official documents of different countries; and they will serve moreover to explain, in some degree, the extraordinary discrepancies which have been found betwixt the declared values of British products and manufactures exported to Russia, as published in the Board of Trade tables, and the same exports as exhibited in Russian customhouse returns.

In calculating the annual value of importations, it is the rule in the Russian customhouses to add the duties paid on the entry of goods to their original value. This practice in Russia, where the duties are so high, swells the value of imports far beyond their true amount, and gives a false and exaggerated view of them.

With respect to the exports, nearly the same practice exists. In calculating their value, all the shipping charges are added to the cost of the article; and we are informed by merchants resident in Russia, that on comparing the annual Government statements of exports for their establishments, they are found to correspond with the invoices forwarded to their foreign correspondents, which, of course, include commission, and all the expenses attendant on the shipping of the goods. The law also requires that the shipper, on clearing merchandise for export through the customhouse, should declare its value. With a view of preserving uniformity, the Russian authorities, from time to time, fix a standard price at which particular articles shall be valued for export at the customhouse. To exemplify the evil of this system, it is necessary only to mention that oats, for example, could lately be purchased at a Baltic port at sixty silver rubles per last, while the latest customhouse standard values them at eighty silver rubles per last. This practice is no way injurious to the merchant, but only unnaturally swells the tables of exports when annually made up by the Russian Government. A shipper, therefore, of any of the articles included in the Russian standard, is compelled to state a much greater value at the customhouse than he furnishes to his foreign correspondent, who, of course, only pays the market price of the article, with the additional shipping expenses.

The difficulty, such as it is, might be obviated, were the masters of British merchantmen compelled by law to submit their ship's papers, on arrival and departure, to the British consuls at each port, who would then be placed on the same footing with the consuls of other countries, and be enabled to communicate much important statistical information to their Government, of the opportunity for acquiring and transmitting which they are now deprived.

Our review of Russian commerce and industry would be more incomplete than it is, if we were to omit all notice of the vast mining wealth of that empire. But our limits, already nearly reached, do not admit of more than a passing reference. Suffice it, that in coal, both bituminous and anthracite, in iron and other metals, and salt, constituting the raw materials, Russia is rich enough for all her wants, and indeed supplies the great bulk of those wants within herself, with to spare in some of these products for her neighbours and other countries. Her mines are annually increasing in productiveness and number, as enterprise is extended and capital invested in them, and as domestic manufactures and improving agriculture increasingly absorb their produce. The treasure-yielding progress of her gold mines is one of the extraordinary events of the age. The existence of gold in Siberia was scarcely suspected till 1829. The first researches of adventuring individuals were attended with no success. Feodot Popoff, one of the earliest, succeeded at length in that year, when all others had abandoned the undertaking as hopeless, in discovering traces, and procuring some inconsiderable specimens, of gold—not in quantity, however, to repay the working; and the doubts before existing seemed confirmed as to the fruitlessness of further perseverance in the search. Major-General Kovalevsky, of the engineers of mines, having been appointed governor of Tomsk, renewed the attempt in 1830; and, at the close of that year, his indefatigable labours, and more methodical plan of operations, were rewarded with the discovery of a first considerable stratum of auriferous sands, which was designated Yégorievsky, (St George.) Adventurers flocked into the district forthwith, and in numbers, upon the widespreading news; and excellently did renewed labours recompense the zeal of the more fortunate; numerous were the discoveries of layers of golden sands. In one of these, last year, a massive piece of native gold, weighing 24½ pounds Russian, (the Russian pound is about 1½ oz. less than the English,) was discovered embedded in a fragment of quartz, and is now deposited in the museum of the School of Mines at St Petersburg. The yield of the Siberian mines has since been at the following rate of progression—omitting the intermediate years for brevity, although in every year there was an increase of quantity upon the preceding:—

The total of the thirteen years has been 2093 poods, 38 lbs., 46 zd. The pood, be it remembered, is equal to (rather more than) 36 lbs. avoirdupois.

On a rough estimation, the produce of all the gold, platina, and silver from the silver mines, could not have amounted to less, perhaps, for the year 1842, than three millions sterling.

According to the learned academician Köppen, of St Petersburg, in a lengthened memoir upon the subject, the total population of Russia, inclusive of Poland, Finland, and Trans-Caucasian provinces, ascended in 1839 to 65,000,000. Or of Russia Proper alone, 55,500,000.

With an empire so gigantic, a population so large, however disproportioned as compared with territory, and with resources so incalculable, it must appear extraordinary that foreign commercial relations are so limited. The total of exports and imports together for 1841, represents only, in round numbers, a commercial movement to the value of 165,811,000 silver rubles, or in sterling, about L.25,907,300. The matter which most concerns this country, is the very disproportionate interest which results to its share in the export and import trade of Russia. Taking the latest British returns of the value of Russian products imported into England, for the Board of Trade tables give quantities only, as we find them stated by Mr McGregor, the indefatigable secretary of that board, for 1838, at L.6,977,396, or say,

But bad as the case may be, it is not quite so bad as these figures would represent. It must not be forgotten in this sort of calculation, that shipping, freights, insurances, and commissions, represent property quite as substantially in the commercial sense, as even Mr Cobden's printed calicos, or friend Bright's flannel pieces. Now, we think it might admit of proof, that as much as nine-tenths of all the produce brought to this country from Russia, is so brought in British bottoms, and so also of the exports to Russia; although in 1840, the last of the Board of Trade tables containing such particulars, no more than 1629 British vessels, of 340,567 tonnage, against 296 foreign, of 79,152 tonnage, entered British ports from Russia—the proportions being much the same outwards; but whether the foreign were all Russian vessels may be doubted. Let us assume, however, that no more than three-fourths of both imports and exports were so carried, and leaving three-fourths British freights outwards to balance Russian one-fourth freights inwards and outwards, let us in fairness estimate the worth of that freightage in reduction of the enormous balance against us. As for Spain, in our last Number, we took twenty per cent to cover all the freightage charges, before indicated, on her commodities of less bulk though more value in proportion, twenty-five per cent on the average will not be too much, certainly, to cover those charges on the more bulky products of Russia, more especially when the long, costly, and intricate navigation of the Baltic, and the White and Black Seas, are taken into account. The calculation will then stand thus:—

or say two millions, as the three-fourths produce of outward freight would, perhaps, not quite compensate the one-fourth on inward and outward cargoes to the Russian shipping. Even such a balance is exclusively and unjustly large against a country which, like Great Britain, is a consumer of Russian products to the extent of seven-twelfths of the total exports of Russia to all the world. The consequence is, that the rate of exchange is almost invariably against this country. Lord Howick, indeed, most quixotically deals with adverse exchanges; he disposes of them summarily, and in a style that must have astonished the people on 'Change. This disciple and representative of Mr Edward Gibbon Wakefield's economics in the House of Commons, as Lord Durham was before his political disciple, and the victim of his schemes colonial, thus decisively disposes of adverse exchanges in the celebrated debate on Import Duties, taking Portugal for an example.

"A large increase of importations from Portugal would necessarily be attended by a proportionate increase of our export trade. Was it not clear that every merchant who imported a pipe of wine would anticipate the bills drawn against him on account of it, and that, whatever would be the increase in the amount of imports, there would be a corresponding increase in the amount of the bills drawn against us? How were our merchants to provide for them? There would be no difficulty in it, whether the trade of Portugal increased legally or illegally. Suppose an increase of imports into Portugal, there would be an immediate demand for bills to Portugal. The consequence would be, that if there was any other country from which Portugal received more than it exported, the bill-brokers would get bills from that country, and our manufactures would be sent there instead of to Portugal. Admit that you could not find in any other country the means of discharging your debt by importation of your manufactures, bills on Portugal should then rise to a certain premium, and gold and silver would be sent to discharge the debt. The gold and silver would come from some other country, and the consequence would be that we should send our manufactures, not to Portugal, but to South America; while Portugal would be obliged to send the bullion to some other country that it might carry on a smuggling trade with its neighbour, Spain. It was impossible for the ingenuity of man to point out any different result."

The "bill-brokers" will be greatly amused with the new line of business chalked out for them, of "getting bills" from other countries when short in this. There are two descriptions of "bill brokers," but the class bearing that designation purely deal with domestic bills only. The other class are known as "exchange brokers," because they meddle only with foreign bills; but as to "getting bills" from abroad when bills are wanting here, that trustworthy and respectable description of agents certainly never dreams of such an occupation. Lord Howick would seem to imagine that manufactories of bills existed specially abroad, and that people could draw with as much nonchalance from Paris or from Hamburg, upon Jack Nokes and Tom Styles at Amsterdam or Frankfort, as here Lord Huntingtower accepted for his dear friend the Colonel values uncared for, or as folks familiarly talk of valuing an Aldgate pump when an accommodation bill is in question. May we venture to hint to the member for commercial Sunderland, the ex for Northumberland, that the functions of "exchange brokers" extend no further than to ask A if he has any bills to sell, and B if he is a buyer; whereupon he has only further to learn what rate the one will purchase and the other sell at; that knotty point arranged, the bargain is concluded, and he receives his very small percentage. The operations are carried on every day, more or less, but on Tuesdays and Fridays, being especially "post days" on London 'Change, where Lord Howick any day may be initiated in the mystery, if not punctilious about being unceremoniously elbowed and jostled about.

In the principle of protection, we hold Russia to be perfectly in her right and her interest; in the abuse of it, she damages herself. Prohibition is not protection; restrictive duties equal to absolute prohibition, like the 85 per cent prohibitory tax, formerly levied here on Indian cotton fabrics, in favour of Lancashire, are not protection in the legitimate sense. The late Emperor Alexander hit the true nail of principle on the head when, in 1819, he reformed the Russian tariff on the calculation of imposts ranging from fifteen to forty per cent. We are, nevertheless, bound to say, that, even as protection is understood in its exaggerated sense by the Autocrat, the system has worked well for Russia, as indeed we have shown. She has accumulated wealth by that system; she has secured by it the possession of a large proportion of those precious metals, which are indispensable no less as the medium of foreign exchanges and balances, than as the means by which, above all other means, the operations of industry, and the employment of labour, are facilitated at home. How would industry progress, and wages be dispensed, if the master manufacturer could offer payment of wages only in yards or pieces of cloth, the iron-master in ore, or the land-proprietor in oxen, sheep, corn, hay, or cabbages? In respect of commercial balances, that of Great Britain against Russia is liquidated probably, to some extent, by the yearly balance resulting against Russia in her dealings with Persia; for the policy of Russia is to favour the commerce of Asia, whilst oppressing that with Europe, and Persia is always indebted to Great Britain. She has, however, the game in her own hands. Can we wonder that she plays it to her own advantage, half-political, half-commercial? She knows as well as we feel keenly, that the raw materials, in which she is so rich, are indispensable for our use; she charges accordingly. The time may come when we shall be more independent of her, and then, then only, she will conform to altered circumstances. The able and distinguished diplomatist at her court, Lord Stuart de Rothesay, who succeeded in the arduous task of negotiating the recent treaty of navigation with that crafty Government, is the man also who will not be slow to avail himself of any favourable conjuncture for turning circumstances to account, and redressing the adverse balance now against this country.

As before said, our intention, on this occasion, is not to dissect principles or theories, but to present facts. We have still more in store for the absolute theory men. But, in concluding, we may be allowed to observe, that the causes why a restrictive and exclusive system does answer for Russia, and, on the contrary, tends to the ruin of Spain, are simply these:—The raw materials of Russia are indispensable for this and other manufacturing countries, because cheaper and more abundant than can be elsewhere procured, and the price of labour is low. The raw products of Spain necessary for manufactures are, on the reverse, dear priced; her products of luxury, even, are dear; her rates of labour are higher than in this or any other country of Europe. Two shillings and sixpence a-day, or fifteen shillings a-week; with, besides Sundays, a hundred saints' days or holidays in the year, put her labour and produce quite hors de combat in the race of competition. A Spanish operative would no more toil on a dia de dos cruces, (two saints on one day,) than he would fast on a feast-day, with an odorous olla podrida before him on the table.