Editing Russo-Japanese War (section)

== Economics ==
{{see also|Japanese military currency (1894–1918)#Russo-Japanese War (1904)}}

Despite its [[gold reserve]]s of 106.3&nbsp;million [[Pound sterling#Gold standard|pounds]], Russia's pre-war financial situation was not enviable. The country had large budget deficits year after year, and was largely dependent on borrowed money.<ref name="Sherman83_59">{{cite journal |last=Sherman |first=A.J. |date=January 1983 |title=German-Jewish Bankers in World Politics, The Financing of the Russo-Japanese War |journal=Leo Baeck Institute Yearbook |volume=28 |issue=1 |pages=59–73 |doi=10.1093/leobaeck/28.1.59 }}</ref>

Russia's war effort was funded primarily by France, in a series of loans totalling 800&nbsp;million [[french franc#Latin Monetary Union|francs]] (£30.4&nbsp;million); another loan in the amount of 600&nbsp;million francs was agreed upon, but later cancelled. These loans were extended within a climate of mass bribing of the French press (made necessary by Russia's precarious economic and social situation and poor military performance). Although initially reluctant to participate in the war, the French government and major banks were co-operative since it became clear that Russian and French economic interests were tied. In addition to French money, Russia secured a loan in the amount of 500&nbsp;million [[German gold mark|marks]] (£24.5&nbsp;million) from Germany, who also financed Japan's war effort.{{r|Sherman83_59}}<ref name="Hunter93_146">{{Cite book |last=Hunter |first=Jane |chapter=The Limits of Financial Power: Japanese Foreign Borrowing and the Russo-Japanese War |editor-last1=Hamish Ion |editor-first1=A. |editor-last2=Errington |editor-first2=E.J. |year=1993 |title=Great Powers and Little Wars: The Limits of Power |location=Westport, CT |publisher=[[Greenwood Publishing Group|Praeger]] |isbn=978-0-275-93965-6 |pages=146, 151–152 |chapter-url=https://books.google.com/books?id=obVxAAAAMAAJ&q=Foreign+Borrowing |access-date=11 January 2018 |archive-date=18 October 2020 |archive-url=https://web.archive.org/web/20201018230712/https://books.google.com/books?id=obVxAAAAMAAJ&q=Foreign+Borrowing |url-status=live }}</ref>

Japan's pre-war gold reserves were a modest £11.7&nbsp;million; a major portion of the total cost of the war was covered by money borrowed from the United Kingdom,<ref>{{cite journal |title=British Assistance to the Japanese Navy during the Russo-Japanese War of 1904–5 |journal=The Great Circle |volume=2 |issue=1 |date=April 1980 |pages=44–54 |jstor=41562319 }}</ref> Canada, and the United States. During his canvassing expedition in London, the Japanese vice-governor of the Bank of Japan [[Takahashi Korekiyo]] met [[Jacob Schiff]], an American banker and head of [[Kuhn, Loeb & Co.]] Schiff, in response to [[Anti-Jewish pogroms in the Russian Empire|Russia's anti-Jewish pogroms]] and sympathetic to Japan's cause, extended a critical series of loans to the Empire of Japan, in the amount of 200&nbsp;million US dollars (£41.2&nbsp;million). He also raised loans from the [[Rothschild family]] in Britain.<ref>"Schiff, Jacob Henry". Dictionary of American Biography. New York: Charles Scribner's Sons. 1928–1936. pp. 430–432.</ref>{{sfn|Steinberg|2008|p=5}} Japan's total war expenditure was 2,150&nbsp;million yen, of which 38%, or 820&nbsp;million yen, was raised overseas.{{r|Hunter93_146}}