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Summary Russia: The Economy
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Main reforms under Von Reutern (Minister of Pros and Cons on Von Reutern’s policies Sergei von Witte (Minister of Finance Pros and Cons of Witte’s reformsFinance 1862-1878) Pros 1892-1903) main reforms
- Treasury reformed Enterprise encouraged via govt subsidies + trade
Pros
- New ways of collecting taxes treaties
- Auditing accounts of govt departments (ensuring no corruption) Use of foreign technical expertise + capital (mainly - Introduced new rouble, backed on Annual growth rate 8%/yr from
- Publishing budgets put in place 1894-1913
- Tax-farming (individuals/groups buying right to collect certain
from France) supported industrial expansion + value of gold, in Jan 1897 Railway trackage doubled
railway network expanded
taxes) abolished, reformed to include more indirect taxation
- Banks + credit facilities extended with state bank establishment in
Annual growth rate of 6% during Von Reutern’s Coal output + in S Russia from
1860, municipal (town) banks in 1862 + saving bank in 1869 time - Continued the policies of 183M puds (a Russian measure of
- Trade promoted via reduction of import tariffs from 1863 Coal + Oil extraction increased, e.g. Naphtha Vyshnegradsky weight) in 1890 to 671M in 1900
- Govt subsidies offered to enable private entrepreneurs to develop extraction company established by Nobel brothers Foreign investment soared (France
railways in 1879 + in 1872 in Donetsk ironworks set up. Oil
- Foreign investment encouraged with govt-guaranteed annual 1/3rd foreign capital, Britain 23%,
extraction began in Baku in 1871
dividend Germany 20%, Belgium 14%, USA
- New legislation regulated ‘joint-stock’ companies (govt + 5%)
individuals invest money in business + get return of that) to
Cons
encourage ‘safe’ investment Russia's economy remained weak (when New rouble strengthened currency
- Govt support offered for development of cotton industry (to try compared to other European nations) + encouraged foreign confidence +
capture US markets during US Civil war of 1861-65) + mining in 1/3 all govt expenditure went to repay debt + investment
Donets Coalfield rouble had wild variations in value Capital used to fund public works,
- Indirect Taxes: Taxes placed on goods/services rather than income. Limitations of Emancipation Edict + tax system develop infrastructure + develop
Easy to collect but unfair on peasants
which left 66% govt revenue from indirect taxation
mines, oilfields + forests for timber
kept peasantry poor + small domestic market.
Tariff reduction = decline in govt revenues and in
Cons
1878 raised then again
Foreign investment declined in
early 20th century
Main reforms of Ivan Vyshnegradsky (Minister Pros and Cons of his policies
of Finance 1887-1892)
Pros
Introduced 30% import tariff on value of raw 30% import tariff which helped boost
materials iron industry of Southern Russia +
development of industrial machinery
- Negotiated loans from other countries, such Between 1881 and 1891 gain exports
as the French increased 18%
By 1892 Russian budget was in surplus
- Increased indirect taxes + swelled grain
exports Cons
Many peasants left with no reserve
grain in Winter as grain requestioned by
state
Vyshnegradsky quote: 'We ourselves
shall not eat, but we shall export'.
Helped create famine in 1891-92 where
many thousands of peasants died
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