There have been several Russian borrowings. The first loan dates from 1888. The Russian loan of June 1906 is an international loan signed by Russia intended to restore finances after the Russo-Japanese war (2.25 billion francs, half covered by France).
There was a craze for this savings, until it disappeared in 1918. In recent years, the Russian state has made a "symbolic repayment" to loan holders.
In the second half of the 19th century, France was isolated from all points of view in Europe. The tensions with its German neighbor are felt more every day. Logically, France is therefore seeking to develop a weighty alliance on European territory. It was the Russia of the time that would become this diplomatic “lifeline”.
In 1867, the Russian railway companies launched a loan in France called "Nicolas" for the construction of new tracks in Russia. The Russia of the time then had a significant need for capital, linked to very expensive investments. This loan was not the first. In 1822, the Russian state issued a loan in France in its own name.
In 1870, France was at war with Germany. The tensions that had increased between the two countries reached their point of no return with the annexation of Alsace-Lorraine to Germany. In addition to this military annexation (Treaty of Frankfurt - May 1871), France was forced to pay Germany five billion gold francs as war indemnities. Back then, it was customary to humiliate the loser. France will do the same after the First World War with Germany. This military defeat and the desire to reconquer Alsace-Lorraine prompted successive French governments to seek the good graces of Russia. The latter is all the more receptive as their main source of capital, Germany, has dried up. The Germans are now investing in their territory and capital exports are becoming rarer. At the time, Russia was also considered a very insolvent country by the authorities.
In 1882, the signing of the tripartite alliance Germany - Austria-Hungary - Italy took place. France is definitely isolated in continental Europe. It must at all costs obtain an alliance with Russia to avoid any armed conflict which would be devastating for its territory. This rapprochement will lead in 1892 to the signing of a military convention between Russia and France. In the event of an invasion of France by Germany, Russia will have to open a front in the East.
Throughout the end of the 19th century, the French government did everything it could to establish good relations with the Russian state, but without lending large amounts of capital to Russia from the French state budget. The French state, which at the time had to support its own economic development, chose to consolidate relations with Russia with the money of French savers.
Russia will issue an incalculable number of loans on French territory, either State loans, or community loans, or loans linked to railway companies. These loans will allow Russia to create tens of thousands of kilometers of railway lines, to open the Trans-Siberian, to develop new industries (chemicals) and older ones (mines). Renowned French companies were investing in the satellite states of Russia, the market of the future. French money allowed Russia to develop very strongly in a few years. Without this money, the Russian state could not have reached its technological level.
For thirty years, the government and the French media will encourage French savers to invest a total of almost a third of French savings in Russia. A third of French savings were placed in Russia for an amount of approximately 15 billion gold francs. From 1887 to 1913, the net export of capital corresponded to 3.5% of the GNP of France.
"Lending to Russia is lending to France!" “:this sentence is taken from advertising posters encouraging savers to buy Russian bonds. The solvency risks of the Russian state which had led Germany to stop all loans to Russia did not seem to cloud the optimism of the French governments. 1897 even accentuated the phenomenon. The ruble is attached to gold and increases this character of security.
In addition to a massive government campaign to favor Russian borrowing, the French media heavily emphasized the value of helping Russia. Later, we will learn that these same media were well paid for several years by the Russian state, which paid them high commissions. Banks were not left out. During any loan issue, the bank is remunerated via fees that it collects each time an investor decides to participate in this loan. For Crédit Lyonnais alone, it is estimated that 30% of the profits made before 1914 were thanks to Russian loans alone. Such sums largely explain the deafness of banking establishments and their lack of communication and financial transparency.
Russian bonds guaranteed their holder “100% security” (backed by the French state) and attractive performance in terms of the financial market at the time. The issues of loans accelerated to slow down at the beginning of the 20th century. At the time, a Frenchman's savings were his "lifeline" for what was not yet called retirement. It was therefore not uncommon to see a family invest all their savings in Russian loans, as they would have been invested in French government loans.
In 1918 a Bolshevik decree unilaterally repudiated all of these debts. More than a million and a half French people had invested in these loans; some, strong of the assurances of the French government, had placed all their savings there, and found themselves, overnight, in ruins.
Since then, the Soviet government first, then the Russian Federation, have considered this debt as null and void, in defiance of the principles of international law, which are nevertheless universally recognized. Contemporary supporters have always vehemently opposed this position without, however, succeeding in imposing respect for the law on the successive governments of Russia.