y mobilized their
finances long before they had begun to mobilize their troops.

France, on the contrary, persuaded that peace would not be disturbed,
took no thought of the morrow. Yet her budgetary estimates showed an
ugly deficit. This gap, however, would have been filled up in the
ordinary course of things by a big loan which was about to be floated.
But M. Caillaux, probably the most clever financier in France, who, if
he applied his knowledge and resourcefulness to the furtherance of his
country's interests, could achieve great things, used them--and
together with them his parliamentary influence--to upset the Cabinet
and thwart the loan scheme. Then, taking over the portfolio of the
Finance Minister in the new Cabinet, he arranged for borrowing a small
instead of a large amount, thereby exposing his country to risks more
serious than the public realized. For it was a heavy disadvantage on
the eve of the most exhausting struggle ever entered upon by the
French people, whose strongest position was weakened as no enemy could
have weakened it.

Russia was in a different, but nowise better, position when suddenly
called upon to meet the onerous demands of the world-contest. She,
too, having pinned her faith to the maintenance of peace, had made no
preparations for war, financial or military. Moreover, a considerable
sum of her money was at the time deposited in various foreign
countries, and especially in France, for the service of her loans and
the payment of State orders placed with various firms. This money, on
the outbreak of hostilities, was automatically immobilized by the
moratorium, although the delicate question whether a moratorium can be
legally applied to sums thus deposited by a foreign Government has not
yet been decided with finality. As a matter of fact, Russia's deposits
remained where they were, and could not be utilized. The consequences
of this embargo were irksome, and for a time threatened to become
dangerous. Little by little, however, these restrictions were removed,
partly by the French Government and partly by the spontaneous efforts
of the banks.

France, too, suffered in a like way from the paralysing effect of the
moratorium. For the French had no less than half a milliard francs
lent out at interest for short terms in Russia. This sum could, as it
chanced, have been refunded at once without inconvenience, seeing that
it was liquid in the banks of Petrograd, Moscow, Warsaw, and other
c