It is only possible here to deal with Bulgarian finance prior to the declaration of independence in 1908. At the outset of its career the principality was practically unencumbered with any debt, external or internal. The stipulations of the Berlin Treaty (Art. ix.) with regard to the payment of a tribute to the sultan and the assumption of an "equitable proportion" of the Ottoman Debt were never carried into effect. In 1883 the claim of Russia for the expenses of the occupation (under Art. xx. of the treaty) was fixed at 26,545,625 fr. (£1,061,820) payable in annual instalments of 2,100,000 fr. (£84,000). The union with Eastern Rumelia in 1885 entailed liability for the obligations of that province consisting of an annual tribute to Turkey of 2,951,000 fr. (£118,040) and a loan of 3,375,000 fr. (£135,000) contracted with the Imperial Ottoman Bank. In 1888 the purchase of the Varna-Rustchuk railway was effected by the issue of treasury bonds at 6% to the vendors. In 1889 a loan of 30,000,000 fr. (£1,200,000) bearing 6% interest was contracted with the Vienna Länderbank and Bankverein at 85½. In 1892 a further 6% loan of 142,780,000 fr. (£5,711,200) was contracted with the Länderbank at 83, 86 and 89. In 1902 a 5% loan of 106,000,000 fr. (£4,240,000), secured on the tobacco dues and the stamp-tax, was contracted with the Banque de l'état de Russie and the Banque de Paris et des Pays Bas at 81½, for the purpose of consolidating the floating debt, and in 1904 a 5% loan of 99,980,000 fr. (£3,999,200) at 82, with the same guarantees, was contracted with the last-named bank mainly for the purchase of war material in France and the construction of railways.

In January 1906 the national debt stood as follows: - Outstanding amount of the consolidated loans, 363,070,500 fr. (£14,522,820); internal debt, 15,603,774 fr. (£624,151); Eastern Rumelian debt, 1,910,208 (£76,408). In February 1907 a 4½% loan of 145,000,000 fr. at 85, secured on the surplus proceeds of the revenues already pledged to the loans of 1902 and 1904, was contracted with the Banque de Paris et des Pays Bas associated with some German and Austrian banks for the conversion of the loans of 1888 and 1889 (requiring about 53,000,000 fr.) and for railway construction and other purposes. The total external debt was thus raised to upwards of 450,000,000 fr. The Eastern Rumelian tribute and the rent of the Sarambey-Belovo railway, if capitalized at 6%, would represent a further sum of 50,919,100 fr. (£2,036,765). The national debt was not disproportionately great in comparison with annual revenue. After the union with Eastern Rumelia the budget receipts increased from 40,803,262 leva (£1,635,730) in 1886 to 119,655,507 leva (£4,786,220) in 1904; the estimated revenue for 1905 was 111,920,000 leva (£4,476,800), of which 41,179,000 (£1,647,160) were derived from direct and 38,610,000 (£1,544,400) from indirect taxation; the estimated expenditure was 111,903,281 leva (£4,476,131), the principal items being: public debt, 31,317,346 (£1,252,693); army, 26,540,720 (£1,061,628); education, 10,402,470 (£416,098); public works, 14,461,171 (£578,446); interior, 7,559,517 (£302,380). The actual receipts in 1905 were 127,011,393 leva.

In 1895 direct taxation, which pressed heavily on the agricultural class, was diminished and indirect taxation (import duties and excise) considerably increased. In 1906 direct taxation amounted to 9 fr. 92 c., indirect to 8 fr. 58 c., per head of the population. The financial difficulties in which the country was involved at the close of the 19th century were attributable not to excessive indebtedness but to heavy outlay on public works, the army, and education, and to the maintenance of an unnecessary number of officials, the economic situation being aggravated by a succession of bad harvests. The war budget during ten years (1888-1897) absorbed the large sum of 275,822,017 leva (£11,033,300) or 35.77% of the whole national income within that period. In subsequent years military expenditure continued to increase; the total during the period since the union with Eastern Rumelia amounting to 599,520,698 leva (£23,980,800).