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United States Department of State / Papers relating to the foreign relations of the United States, with the annual message of the president transmitted to Congress December 2, 1902
(1902)

Roumania [Romania],   pp. 905-915 PDF (924.2 KB)


Page 905

 RO1ITMANIA. 
FINANCIAL CONDITIONS IN ROUMANIA. 
Jfr. Francis to jTfr. flay. 
 No. 20, Roumanian series.] 
LEGATION OF THE UNITED STATES, 
Athens, Afarch 10, 1902. 
 SIR: During the last ten years all the young Balkan States have become involved
in financial difficulties. Greece, Servia, and Bulgaria have been compelled
to accept the principle of foreign control. Roumania alone has not yet bowed
to the yoke. Each of these communities have initiated a costly scheme of
public works which, for the present, furnishes no return comniensurate with
the outlay incurred. Each has established an elaborate educational system
which has resulted in an increasing number of those who, disdaining manual
labor, expect to be supported in the public service. The Government is thus
compelled to maintain a host of unnecessary functionaries. * * * The enormous
military expenditure is also one of the gravest causes of economic exhaustion;
but in military matters the junior members of the European family are not
always free agents. * * * 
' rhe inevitable result has been excessive borrowing abroad. The temptation
to resort to the foreign money markets is all the greater owing to the high
rate of interest at home. Except in Greece, private liberality has done little
to aid in providing schools, hospitals, barracks, prisons, etc. The circulation
of foreign capital creates a certain artificial prosperity liable to sudden
interruption by a crisis in the European money market or by some serious
catastrophe at home. A combination of these factors has led to the present
critical situation in Roumania. 
 To judge by the figures of successive budgets the economic progress of Roumania
has been almost phenomenal. Under the rule of King Charles that country has
made gigantic strides. But it would be unsafe ~to take the budget figures
as an accurate index of increasing prosperity without making allowance for
the inflation produced by a succession of foreign loans. On the other hand,
the extraordinary expenditures incurred within this period must be considered,
as well as the heavy drain on the national resources resulting from an accumulation
of external debt. Of the extraordinary expenditures the principal outlay
has been on public works, railways and rolling stock, on harbors, docks and
roads, on bridges, schools, and various public buildings. A large proportion
may he regarded as ultimately productive, and therefore justifiable, but
many of the constructions might have waited, and the practice of defraying
ordinary working expenses from extraordinary revenue appears to be indefensible.
The remainder of the debt has been devoted to military expenditure, or to
cover budgetary deficits. For the military outlay there is something to show.
905 


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