ABSTRACT
This chapter seeks to integrate technical yet vital details of war finance with the broader political and social dynamics. The October 1915 loan was the first to be advertised as a 'war bond', deserving the attention of the 'small investor' who wished to demonstrate his patriotic duty. Government controls over foreign purchases were relatively weak throughout the war, and virtually non-existent in its first phase, something that aggravated relations between Russia and Britain. Russia's First World War was an expensive business, reflecting its duration and the size and requirements of the armed forces. Sobolev, another critic of the government's financial policy, argued that the 'income tax ought to be made the foundation of the fiscal system and not be regarded, as it is at present by the Ministry of Finances, as subsidiary taxation'. The economic consequences of a large and sustained increase in the budget deficit took the form of sustained growth in the monetary base.
