I had a long and exhaustive conversation about the material welfare of the Russian people with a statesman to whose identity I am not at liberty to furnish even the slightest clew, if I am faithfully to carry out my promise to guard against his recognition as my informant. They were several hours of searching criticism, such as I had never listened to, from a man who through long years had himself been active in a prominent position, an outpouring quite permeated by the most hopeless pessimism, and stated with a passion that contrasted oddly with the gray hair and deeply furrowed face of the speaker. My references to him were of such a nature that he felt it safe to allow himself the most uncompromising plainness of statement. But I carried away the impression that it would be sufficient to give the Russian statesmen the possibility to speak freely, and there would be left no stone unturned in that wicked structure that is called "the Russian government," so great is already the accumulation of bitter anger even among those of whom it would be supposed that they are the real leaders of the state. The autocracy cannot even utilize the forces that are at its disposal. "Yes, fate is cruelly upsetting all our calculations with this war," said the statesman, in answer to my question as to the probable effect of the war on the Russian economy. "No one even suspects what catastrophe we are facing, thanks to the policy that is just now celebrating its greatest triumph." "Is not that a paradox, your excellency?" "No, not at all. The triumph of our policy is the money reserve at our disposal, which enables us to mobilize without borrowing. But only nearsightedness can find therein additional justification of this economic policy, which, on the contrary, receives with its triumph also its death-blow." "May I have a fuller explanation?" "It may be easily given. Financial and fiscal considerations have destroyed our economy. You are surprised at this statement. But one must understand this system. The creation of a gold-reserve, the formation of a fiscal balance even at the expense of the internal forces of the nation, are, under certain conditions a necessity. For a backward agrarian state it is necessary, before all else, to join the more advanced countries in fiscal economy and guaranteed values, and if that requires sacrifices, it pays, in the end, in the greater credit facilities, I might say by the greater financial defense of the state." "And your excellency believes that the internal development of the nation was thereby neglected, just as an athlete develops the muscles of his limbs at the expense of his heart muscles?"