REFORM OF RUSSIA'S FINANCES AND CENTRAL ADMINISTRATION 89fisc. This is particularly true of a large country without excess capital
and where many hidden treasures do not yield any revenue as they
have not been touched by labor. How can these potential rewurces
of revenue be exploited through the application of labor to them?
By increasing the amount of capital which can be applied to such
purposes, and this kind of capital must be obtained by borrowing,
reasons Speransky. Sound private credit, well protected by law,
contributes to the support of public credit. In Russia, however, this is
not the case, for the capital borrowed by the state from the nation's
wealth, i.e. the debt of the state, is not protected by laws and is therefore
subject to constant fluctuation. 1 Indeed, the value of assignats is
based on the people's faith in their redeemability, for by themselves
the pieces of paper have no value. In saying this, Speransky is arguing
against the theory current since the time of Catherine II that paper
money actually "creates money," that it is money in the same sense
as precious metals, and is capable of fulfilling the same functions. In
fact, Speransky points out, assignats are only a disguised form of a
state debt. 2 At the present time, this debt is covered in part by
arbitrary taxation. But such taxation harms industry, its burden is very
unequally distributed, for it works more hardship on the poor than
on the rich. There are no positive gains to be derived from the
existing system of assignats to make its defects more bearable.^3
What should be done to remedy the situation? In his usual systematic
manner, Speransky breaks up the problem into two courses of action:
the ultimate goals and long range policies, and those measures which
can, and must, be taken immediately to prepare the ground for the
eventual solution of the crisis. He does not hide the fact that any
nation's system of finance rests on a multiplicity of varied interests,
passions, habits. Every change in the system is bound to bring forth
sharp reactions from these interests and passions. A workable plan of
financial reorganization must take this fact into account and provide
means for overcoming temporary opposition and inconveniences for
1 "Assignats are papers based on suppositions. Not having any intrinsic value,
they are nothing else but hidden debts." Plan Finansov, p. 38.
2 And that is why the emission of assignats is an undetermined taxation, imposed
permanently, Plan Finansov, p. 39. The reasoning of the last two pages is very
reminiscent of that of Richard Cantillon, who - according to Charles Rist - had
the most correct insight into the problem of exchanges and credit of all the
economists of the 18th century. Cantillon's ideas, not very widely known, had been
summarized at length by Condillac; and from Slovtsov's statement (see note 2, p. II)
we know that Speransky had read and studied Condillac while still at the seminary.
Cf. Charles Rist, Histoire des doctrines relatives au credit et a la monnaie - depuis
John Law jusqu'a nos jours (2e ed., Paris 1951), Chapter I, pp. 53-65 passim.
3 Plan Finansov, pp. 39-41.