S. Witte's monetary reform in Russia at the beginning of the twentieth century and its significance for economic development. Foreign economic system Witte To enhance the influx of foreign capital Witte

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NON-GOVERNMENTAL EDUCATIONAL INSTITUTION

HIGHER PROFESSIONAL EDUCATION

INSTITUTE OF COMMERCIAL AND LAW

COURSE WORK

Discipline - Money, credit, banks

On the topic: S. Witte’s monetary reform in Russia at the beginning of the twentieth century and its significance for economic development

Completed by a student

Departments "Finance and Credit"

Shiryaeva T.B.

Checked by Doctor of Economics Korchagin V.V.

MOSCOW 2013

Introduction

Chapter 1. Witte's monetary reform

1 Personality S.Yu. Witte

2 Sequence of monetary reform

3 Attitude in society to monetary reform and its significance for the Russian economy

Chapter 2. Projection of the Witte reform on modern Russia

1 The financial system and economy of Russia at present

2 Possible reforms in Russia

Conclusion

Bibliography

INTRODUCTION

monetary reform Witte

At the end of the 19th - beginning of the 20th century, the Russian Empire intensively developed the industrial sphere of production, increasing the economic power of the country in order to become on par with the strongest powers in the world of that time.

Russian capitalism in the last quarter of the 19th and early 20th centuries. entered the imperialist stage, which corresponded to world trends. The monetary reform of 1987, which is called the Witte reform, was the locomotive that pulled Russian industry, thereby accelerating the modernization of the state. The need for monetary reform in Russia was dictated by the development of industry. In the years 1893-1899, the most rapid growth occurred in heavy industry, production increased in the mining and metallurgical industries, and in mechanical engineering. In the 90s of the XIX century. In the Russian economy, monopolistic associations - cartels and syndicates - become relevant, joint-stock commercial banks emerge. But for sustainable economic development, a stable currency was needed, which would prevent the depreciation of monetary capital. This would help attract foreign investment, which was needed by the industry due to the lack of domestic capital. An attempt to strengthen the credit ruble by removing “extra” paper money from circulation was defeated. And by the end of the 19th century. The need for a transition to a gold currency became increasingly clear.

The first on this path was Great Britain, which introduced a gold coin standard in 1816. Then Sweden, Germany, Norway, Denmark, Holland, Italy, Greece and Belgium switched to gold monetary circulation.

Russia was part of the world market, so there was a need to create the same monetary system as in other European countries. The ruble was a fully convertible currency, but the sale of foreign currency for rubles and the unlimited export of credit rubles abroad impeded the development of foreign trade and reduced budget revenues. This prevented the flow of foreign capital into the country, as future profits in gold currency became uncertain and investments became risky. Thus, the main reason for the monetary reform of 1895-97. the government became interested in developing Russia's foreign economic relations.

A powerful breakthrough in industrial production was ensured by the successful reign of Emperor Alexander III, who adhered to a position of neutrality in relations with all world powers and did not allow the country to be drawn into military conflicts, which made it possible to maximally direct state resources to the development of production and industry. The pragmatic interests of the nation and healthy logic underlay the policy of this Russian emperor. The Russian “economic miracle” of the late nineteenth century has a simple explanation: there were no wars during the reign of Alexander III. The black holes of endless conflicts and clashes, pan-European fires and small battles under Alexander III stopped devouring the strength of the Russian people. For the first time in many years, the country’s resources, all its power, were directed toward internal development.

In particular, the construction of an extensive network of railways in the European and Asian parts of the Russian Empire, which was strongly promoted by S.Yu. Witte is the founder of monetary reform, who began his career as a specialist in the operation of railways and reached the post of Minister of Finance, which he held for 11 years.

CHAPTER 1. WITTE MONETARY REFORM

1.1PERSONALITY S.YU. WITTE

Sergei Yulievich Witte went down in history - as they would say today - as an effective manager. At the very beginning of his career, after failure in the field of science, he specialized in the commercial field of railway business. While serving as Minister of Railways, Witte increased the profitability of industry and transport. Looking at the biography of this statesman, we can admit: developing commercial transport<#"justify">So what kind of person was this - Sergei Yulievich Witte? This famous dignitary had a noticeable, and in many cases, a decisive influence on various areas of the empire’s foreign, but especially domestic policy, becoming a kind of symbol of the possibilities and at the same time the helplessness of a powerful state system. The significance and scale of his historical role are comparable only with the personality of another outstanding administrator - the transformer of the decline of the monarchy - Pyotr Arkadyevich Stolypin. Witte was a sharp, purposeful, ambitious man, ready to overcome unfavorable circumstances without regard to established canons and ideas. This was a broad Russian nature, which at times felt cramped in the present; a nature that often combined opposing feelings and ideas and often succumbed to impulsive impulses that caused misunderstanding and condemnation.

Bureaucratic career of S.Yu. Witte began in 1888, when he became personally known to Emperor Alexander III. He refused to run the royal train at increased speed, as demanded by the emperor's retinue, and thereby caused great displeasure among his superiors. But two months after this, a disaster occurred precisely for the reasons mentioned by Witte. They remembered him, and soon he was invited to St. Petersburg. I. Vyshnegradsky, who was the Minister of Finance at that time, offered him the position of director of the department of railway affairs. At first he headed the department of railway affairs in the Ministry of Finance, and then - from February 1892 - the Ministry of Railways.

Minister of Railways Witte was appointed to the post of Minister of Finance in 1892, where he served for 11 years. All the successes and achievements of S. Yu. Witte are connected with this work; one of the main works of his life was carried out here - monetary reform. Witte did not immediately approve of the financial policy of his predecessor I.A. Vyshnegradsky. on the introduction of gold parity. The eminent scientist Vyshnegradsky, having become convinced of the success of reorienting the monetary circulation of Austria-Hungary towards gold, invited the initiator of this transition, financier Adolf Rothstein (who participated in the development and implementation of the Austrian law on gold circulation) to Russia. Later, Adolf Rothstein took the position of director of the St. Petersburg International Commercial Bank (1896 - 1904) and became Witte's confidant. Upon resigning, Vyshnegradsky handed Witte a note outlining his thoughts on the upcoming reform of monetary circulation. A number of preliminary measures included a certain restraint in budget expenditures, and the continuation of a policy to increase revenues from exports and imports, and the conversion of external loans, designed to increase the terms of payments and reduce interest on them, and a decrease in the percentage of income from bonds and mortgage notes on land banks, which was supposed to facilitate the flow of capital into the commercial and industrial sphere. In fact, Witte adhered to this line, carrying out a number of conversions of old ones and concluding several new loans on terms that were relatively favorable for Russia.

Having taken the post of one of the most influential ministers, Witte showed himself to be a real politician, declaring his readiness to bring Russia into the ranks of advanced industrial powers within two five years. This supremely talented man was given the task of transforming the economic life of the country. In 1897, he said: “The same thing is now happening in Russia that happened in its time in the West: it is moving to the capitalist system... Russia must switch to it. This is an immutable world law.”

At the turn of the 20th century, Witte’s economic platform took on a very definite and targeted character: within about 10 years, to catch up industrially with the more developed countries of Europe, to take a strong position in the markets of the Near, Middle and Far East. Accelerated industrial development was ensured by attracting foreign capital, accumulating domestic resources with the help of a state-owned wine monopoly and strengthening indirect taxation, customs protection of industry from Western competitors and encouraging exports. Foreign capital was given a special role in it - in the late 90s, Witte advocated their unlimited involvement in Russian industry and the railway business. The Russian government tried to take loans not from international financial organizations, but placed its obligations on the domestic market of foreign countries. “Russian papers” were specially issued in low denominations, making them accessible to the petty bourgeoisie, office workers, even servants. By limiting the import of foreign goods into Russia with high customs duties, the government encouraged exports with various tax breaks and bonuses. Witte was not afraid to start a real customs war with Germany, achieving equal trade relations with this country. By varying tax rates, the Ministry of Finance created the most favorable conditions in one industry or another, directing the flow of capital in the right direction. For successful economic competition with the West in the coming 20th century, for more vigorous industrial and agricultural development, financial stabilization was needed. Tough tax, customs and conversion measures made it possible by the end of the 80s. achieve a deficit-free budget and stable growth of gold reserves. S.Yu. Witte saw that throughout the 80s. the exchange rate of the credit ruble was subject to significant fluctuations, and therefore continued to intensively accumulate gold and foreign exchange reserves.

In 1894-1895, Witte achieved stabilization of the ruble, and in 1897 he did what his predecessors had failed to do - he introduced gold currency circulation, providing the country with a hard currency until the First World War and an influx of foreign capital. At the same time, taxation, especially indirect, increased sharply.

The peculiarity of the course given by Witte was that he, like none of the tsarist finance ministers, made extensive use of the exceptional economic power of power that existed in Russia. The instruments of government intervention were the State Bank and the institutions of the Minister of Finance, which controlled the activities of commercial banks.

He also pursued an independent personnel policy and issued a circular on the recruitment of persons with higher education. He paid a lot of attention to the creation of an educational system that trained personnel for industry, in particular, to the opening of new “commercial” educational institutions.

In the summer of 1905, he was sent by the Emperor to the USA to conclude the Portsmouth Peace Treaty<#"justify">1.2.SEQUENCE OF CURRENCY REFORM

Witte's primary task was to decide which way to carry out the monetary transformation: to take a course towards gold monometallism or towards bimetallism, using both gold and silver equally. At first, Witte was inclined to the second option, because Russia was accustomed to the circulation of coins made of different metals, and silver reserves had accumulated in huge quantities. But he understood that there was a risk of a decrease in the value of one parity if there was an increase in the market conditions of the other parity, which would certainly affect the stability of banknotes backed by two metals. After weighing everything, Witte approved monometallism. In February 1895, Minister of Finance S. Yu. Witte presented a report to Emperor Nicholas II on the need to introduce gold circulation. The new project for financial reform found the approval of the tsar. Witte decided to introduce the gold standard, adopted in England and many other countries of the world. In the bill submitted to the State Council in March 1896 On the correction of monetary circulation S. Yu. Witte defined the main conditions and goals of the reform as follows: To consolidate the achieved successes in the field of financial economy by laying under them a solid foundation of metallic monetary circulation . At the same time, the reform must be carried out in such a way as not to produce the slightest shock or any artificial changes in existing conditions, because all valuations, all property and labor interests of the population rest on the monetary system... The projected reform, without disturbing people’s habits, without fluctuating prices , without introducing disorder into all calculations, will lead to the transition of our homeland from the legally uncertain, economically harmful and politically dangerous paper currency circulation to the circulation of gold coins and tokens of exchange for it.

The “gold standard” is a monetary system in which gold is recognized and used as the only monetary commodity and the universal equivalent of values. This standard is not subject to inflation. In the event of a decline in economic activity, gold coins went out of circulation and ended up in the hands of the population, and when the need for money expanded, gold was put into circulation again. Gold money retained its nominal value. This simplified payments for foreign economic transactions and contributed to the development of world trade. Historically, the gold standard was implemented in three forms - gold coins, gold bullion and gold exchange (the latter two forms existed in the 20th century).

In the 19th century, especially in its last quarter, most countries switched to a gold and exchange system due to the enormous growth in commodity circulation and the development of credit. England actually switched to a gold currency at the end of the 18th century, and gold monometallism was officially proclaimed in 1816. In the 70s it was introduced in Germany, in the Scandinavian countries, in the countries of the Latin Monetary Union (France, Italy, Belgium and Switzerland), as well as in Greece and the USA, and in the 90s - in Austria-Hungary, Japan and Argentina. Thus, the entire world economy was based on this principle. Therefore, it must be emphasized that the collapse of the Russian monetary system during the First World War was not a failure of the Witte model, but an integral part of the collapse of the world system of gold monometallism.

The monetary reform in Russia took quite a long time to prepare and took a total of 15-17 years. Three previous finance ministers made a significant contribution to its implementation: M. Reitern, N. Bunge and I. Vyshnegradsky. S.Yu. Witte continued and completed their work. The purpose of the preparation is to replace the inflationary circulation of irredeemable paper banknotes with a gold standard system. It was necessary not only to return to metal circulation instead of paper money, but also to change the basis of the monetary and monetary system: move from the silver standard to the gold one. It was necessary to achieve a positive balance of payments and accumulation of gold reserves (by increasing exports, limiting imports, pursuing protectionist policies, and concluding external loans). Eliminate the budget deficit. Stabilize the exchange rate. The new Minister of Finance had to act in a more favorable environment: industry was on the rise; the rapid process of railway construction continued; a number of positive developments were observed in agriculture; the trade balance had a stable positive balance. Targeted economic and financial policies led to the fact that on January 1, 1897. Russia's gold reserves reached 814 million rubles. Witte skillfully realized these advantages. His main goal was to strengthen Russia's monetary system - the supporting structure of the rapidly emerging single national market.

At the end of the 19th century, there were two currencies in Russia: the silver ruble and credit notes. The kopeck was considered a small change and was used only in small payments. The credit ruble exchange rate was set by banks, and by the 1890s averaged one and a half rubles per silver ruble. The new monetary reform was supposed to unify the silver and paper rubles, as well as prevent further depreciation of banknotes, the issue of which was already almost out of control.

The start of monetary reform was preceded by a number of acts designed to reduce the volume of speculative transactions and weaken foreign exchange intervention. Speculation in the ruble was on a huge scale. The specificity of the speculation was that its object was primarily ruble cash. The rubles were secretly and obviously taken abroad in suitcases. June 13, 1893 banks were prohibited from even indirectly contributing to the game on the course. Persons guilty of concluding such transactions were subject to a fine of 5-10% of the transaction amount. A “statistical” (1 kopeck per 100 rubles) duty was introduced on the import and export of credit notes. For secret import or export, that is, without paying a duty, a fine of 25% of the smuggled amount was provided. Control over exchange operations in Russia was strengthened and a ban was introduced on the execution of exchange transactions by foreign brokers. Thanks to these decisions, exchange rate fluctuations began to decrease.

At the very beginning of 1895. The Russian Ministry of Finance purchases on the Berlin Stock Exchange, which played an important role in speculation with Russian rubles, for the huge sums of Russian rubles offered for a period of time (at the rate of 219 marks per 100 rubles), a massive purchase was made (for 30 million rubles). ) buying credit notes at a low rate. When making payments, they had to be repaid at a higher rate, which was very beneficial for Russia. Alarmed European stockbrokers realized that it had become impossible to get the ruble on time, and that they had clearly missed the sale. Many of them were forced to turn to the Russian Ministry of Finance with a request to allow them to purchase the required amount of rubles. Witte graciously allowed it, but set a new price - 234 marks for 100 rubles. Buyers were forced to agree. The Russian treasury was significantly replenished as a result of this operation. There was no longer any need to be afraid of serious attempts to play to reduce the ruble. Witte ensured that the ruble exchange rate “stayed” quite firmly at two-thirds of its gold parity.

Preparatory measures include the conclusion of a customs union with Germany. In response to high duties on Russian grain exports, Witte passed a law through the State Council, according to which tariff rates were recognized as minimal only for those countries that adhered to the most favored nation regime in relations with Russia. Germany did not adhere to such a regime, and its exports to Russia were subject to duties at a higher rate. Germany was forced to make concessions. In 1894 a new trade agreement was concluded, beneficial to Russia.

The rapid growth of industry in the 90s caused the rush of joint-stock banks, mainly from St. Petersburg, into a new area for them - lending and financing of industry. However, the merging of banks with industry at this time was still fragile. The amount of Russian securities in 1900 exceeded 12 billion rubles. Somewhat more than a quarter of this huge amount was accounted for by government loans concluded by the government for national needs, i.e. primarily for military needs. A third were government loans for the construction of railways, as well as shares and bonds of railway companies. Industrial stocks and bonds fell just 16%. Mortgage papers (mortgage sheets of land banks) accounted for 21% of the total amount of Russian securities. 60% of it was located within the country and 40% abroad. It should be emphasized that a huge number of mortgage-backed securities, placed almost entirely in Russia, diverted funds from the domestic money market to lending mainly to landowners, lending that was almost exclusively unproductive in nature: land was usually mortgaged by landowners not to obtain funds for improving the economy, but for purely consumer needs.

In the 90s in Russia there was a process of concentration of bank capital, merging of banks with industry, and strengthening of interbank relations. The Russian Bank for Foreign Trade, the St. Petersburg International Bank, the St. Petersburg Accounting and Loan Bank, and the Russian Commercial and Industrial Bank are beginning to act in joint financing of industrial enterprises. The nineties were the period of the emergence of Russian financial capital.

Under Witt, government control over private banks increased enormously. It is carried out through the State Bank and the Special Office for the Credit Section of the Ministry of Finance. The role of this department of the Ministry of Finance increased dramatically in the late 1880s with the formation of the Foreign Branch of the Credit Chancellery. It began preparing materials for issuing loans. There they monitored the situation in the international money market and the financial and political press. The scope of responsibilities of the Credit Office especially increased in the last decade of the 19th century, when Russia began to actively attract foreign capital to modernize industry. The functions of the Credit Office gradually expanded, and it turned into “a completely unique institution” that combined “not only administrative, but also purely operational functions.” “Along with the administrative tasks of public administration in the field of money management and credit,” the office concentrated “certain activities related to issuing loans, purchasing currency and making foreign payments not only to the government, but also to numerous public institutions. The volume of operations carried out by the Credit Office exceeded hundreds of millions of rubles, i.e. exceeded the volume of operations of any banking institution.

The monetary reform of 1895-1897, carried out by Witte, was carried out in several stages and consisted of a number of measures aimed at establishing a solid gold content of the Russian currency, ensuring the free exchange of banknotes for gold at a fixed rate, and introducing gold coins into monetary circulation. The last task was difficult not so much because of its technical solution, but because of psychological factors. The fact is that although gold coins have been regularly minted in Russia since the time of Peter I, they practically did not participate in internal monetary circulation, but were used by the population as treasures or for external payments. This was facilitated by the practice of distributing gold coins by members of the imperial family as awards to distinguished military personnel (including ordinary soldiers) and officials. In the 80s - the first half of the 90s of the 19th century, gold coins actually began to participate in monetary circulation, but legally the law remained in force according to which all transactions had to be concluded in silver.

The first step was financial reform, which included strict tax policies to increase government revenues.

A decisive step towards gold circulation was the law approved by Nicholas II on May 8, 1895. It had two main provisions: all written transactions permitted by law can be concluded for Russian gold coins; in such transactions, payment can be made either in gold coin or in credit notes at the gold rate on the day of payment. In the following months, the government took a number of other measures aimed at establishing the gold equivalent. Among them: permission for offices and branches of the State Bank to buy gold coins at a certain rate, and for those in the capital to sell and make payments at the same rate; then rules were introduced for the State Bank to accept gold coins into a current account. Soon the same operation will be introduced in private commercial banks, which announced that they will accept gold for current accounts and for all obligations. In November 1895 the gold coin was accepted by the cash registers of all government agencies and state-owned railways. Despite these measures, the gold coin was very slowly established as a priority means of payment. This was explained both by the lack of habit among the population and the obvious inconvenience of a gold coin for large payments and transfers, since there was no correspondence between nominal and market prices. Semi-imperials and imperials with the designation 5 rubles and 10 rubles circulated at 7 rubles. 50 kopecks and 15 rubles, which constantly caused confusion and numerous abuses in calculations. Demand for the gold coin was also hampered by fears that the State Bank would lower the rate through administrative means, which could lead to financial losses. In an effort to allay such fears, the State Bank announced on September 27, 1895 that it would buy and accept gold coins at a price not lower than 7 rubles. 40 kopecks for a half-imperial, and in 1896 the purchase rate was set at 7 rubles. 50 kopecks These decisions led to the stabilization of the ratio between the gold and credit rubles in the ratio 1:1.5. To stabilize the ruble, the Ministry of Finance recognized it necessary to devalue the credit monetary unit based on monometallism. The parity between the paper ruble and the credit ruble was established not on the basis of a common noun, but in accordance with the real exchange rate.

Since the mid-90s, in order to prepare the population for the circulation of paper banknotes redeemable for gold, measures have been taken to increase the production of deposit metal receipts. The state bank issued “deposits” to individuals in exchange for gold bullion, foreign gold coins and foreign banknotes redeemable for gold, receipts from gold mines and gold mines, and expenses abroad paid for in gold. The St. Petersburg and Moscow offices of the State Bank carried out the free exchange of deposit metal receipts for gold 5-ruble coins. Metal deposit receipts were issued in denominations of 5; 10; 25; 30:50; 100; 500 and 1000 rubles. They had basically the same design as similar receipts issued in 1886. In settlements between private individuals, these banknotes were accepted with the mutual consent of the parties.

The new monetary system, built on the principle of gold monometallism, included the following elements:

The new ten-ruble gold coin was the main coin of Russia and legal tender. According to the law of 1885, gold coins were required to be accepted for all payments before they were withdrawn from circulation at the rate of 1 ruble. = 1 rub. 50 kopecks in a new minted gold coin.

The payment power of silver was limited to 50 rubles.

State credit notes had the force of legal tender and were included in the bank's liabilities. They were exchanged for gold at the rate of 1 ruble. 50 kopecks credit for 1 rub. gold, or 66 2/3 kopecks in gold per credit ruble, which corresponded to the average exchange rate of the ruble and the ratio of the settlement balance that developed in the years before the reform.

The issue of credit notes was carried out by the State Bank only for the commercial operations of the bank. Up to 1 billion rubles. credit notes were backed by 50% gold, over 1 billion rubles. - fully.

All obligations on government and private loans concluded in metal rubles before this law remained unchanged, that is, they were subject to payment in new rubles at one and a half times the size.

The first law “On the minting and putting into circulation of gold coins” was signed by Nicholas II the day after the meeting - January 3, 1897. It included the following provisions:

Gold imperials (the old denomination of 10 rubles) and semi-imperials (5) remain in circulation. A new denomination is minted on them (15 and 7.50, respectively), i.e. the ruble was devalued;

the operations of the State Bank for the purchase and sale of gold have lost their temporary nature;

The gold ruble was established as a monetary unit, containing 0.774235 gold (equal to 17.424 shares). Coins of 10 rubles and 5 rubles are full-fledged gold money, i.e. the five-ruble coin contained 5 spools 17.424 = 87.12 shares of gold, and the ten-ruble coin contained 1 spool 78.24 shares of gold (1 spool = 96 shares);

gold coins are legal tender with no limit on the amount;

freedom of coinage (any bearer of 1 spool of 78.24 shares of gold received a 10-ruble coin from the state, transferring gold to the state for re-minting) - to ensure that a 10-ruble coin could not cost more than the metal contained in it;

tolerance in weight (2/1000 of a part above or below the legal weight in a 10-ruble coin) and tolerance in fineness (1/1000 of a part above or below the legal standard), establishing a maximum weight at which the coin was recognized as full-weight (to guarantee the content of pure metal );

gold monometallism: full-fledged gold money and inferior silver and copper. This means that the silver and copper content in the corresponding coins, say in ruble coins, was less than what could be bought on the market for one ruble;

coin income, which was formed due to the inferiority of silver and copper money, was included in the list of state budget revenues. At the same time, there were strict restrictions on the issue of inferior coins: the number of silver coins issued should not exceed the established standard (3 rubles per person), and the Minister of Finance sought permission to issue copper coins.

By the end of the 19th century, Russia had an extremely complex taxation system. The following taxes existed:

· Land tax

· Real estate tax

· Tax on monetary capital

· Apartment tax

· Trade tax.

The main scourge of all these taxes is the taxation not of the amount of income, but of the form of ownership and personality of the owner (depending on the guild, title, etc.). By the beginning of the twentieth century, these taxes brought the treasury about 7% of the total amount of government revenue. Trade and industry in Russia were subject to very small taxes. By the mid-nineties of the last century, taxes on these industries amounted to about 3% of all budget revenues, although trade and industry had already become the core of economic development and income from these industries accounted for almost half of all budget revenue items.

The results of the monetary reform became noticeable very quickly. The State Comptroller's report for 1897 stated: Judging by the reviews it received everywhere abroad, there can be no doubt about its fruitful significance, as proof of the financial strength of Russia, which even our obvious ill-wishers have begun to recognize. The impact exerted by the monetary reform within the country can be judged by the fact that the number of credit notes issued for public circulation decreased from January 1897 to May 1, 1898 by 221 million rubles (from 1121 to 900 million rubles), and in return for this, the commercial and industrial market within the country is saturated with gold and silver coins, of which over 250 million rubles have already been put into circulation (including over 170 million rubles in gold). This fact indicates that gold circulation is not only expanding the range of its distribution, but has already penetrated into remote areas of our vast Fatherland, becoming part of the everyday practice of the people.

1.3.PUBLIC ATTITUDE TO MONETARY REFORM AND ITS IMPORTANCE FOR THE RUSSIAN ECONOMY

The success of an undertaking unprecedented in the history of Russia was ensured by the undoubted and unequivocal support that Witte’s specific proposals and projects received at the very top of the hierarchical pyramid. Without the patronage of Emperor Nicholas II, some of Witte’s fundamental proposals could not have materialized. The very idea of strengthening the ruble by switching to gold parity met primarily the interests of industry: the reliability of the currency stimulated capital investment. For the agricultural sector, such a transformation did not promise any special benefits in the foreseeable future, and even vice versa: the stabilization of the domestic monetary unit, the increase in its exchange rate would inevitably lead to higher prices for exports. Since ancient times, the main products of Russian exports have been agricultural products, and the planned reform infringed on the interests of large noble landowners who had long headed the corridors of power, exerting a significant influence on the course of state policy.

The main provisions of the project were published on March 15, 1896 in the magazine “Novoye Vremya” and gave a powerful impetus to discussions, behind which the positions of different classes and social groups of Russian society were clearly visible. If the Finance Committee approved the main provisions of the project, they met with almost unanimous rejection in the State Council. In such a situation, Witte decided to bypass the State Council and turned directly to the Tsar. “His Majesty fulfilled my request,” he wrote in his memoirs, “and assembled a strengthened financial committee under his chairmanship on January 2, 1897. At this meeting, the fate of financial reform was essentially decided, that is, it was decided to introduce metallic circulation based on gold."

When the upcoming monetary reform was announced, protests began from various quarters. Stabilization of the ruble at the level of two-thirds was objected to from the most opposite points of view. Some declared that this was a malicious bankruptcy, that the ruble could be exchanged for gold only 100 for 100 - although over the past forty years all economic life had adapted to the new, lower exchange rate. Others pointed out the desirability of introducing both gold and silver currencies (bimetallism); still others argued that the reform was doomed to failure anyway and only threatened the greatest upheavals; and some denied its usefulness altogether.

The activities of the Ministry of Finance became the target of fierce attacks from conservative circles of society. Supporters of historical exclusivity and national identity launched a noisy campaign to discredit both S. Yu. Witte himself and his financial endeavors. Public passions reached their highest intensity in 1896. Russian society, which until recently had been very far from economic interests, suddenly plunged with unprecedented fervor into lively discussions about the ways and methods of financial reorganization.

The entire monetary circulation reform was designed for the future industrial development of Russia, and it served it. But the question inevitably arose about how the devaluation and free exchange of the ruble for gold would affect intra-economic activities and, first of all, the position of the bulk of the subjects of the Russian crown in the near future. S. Yu. Witte believed (and his assumptions were fully justified) that the reorganization of financial circulation would not lead to any noticeable socio-economic disturbances. The currency conversion system affected mainly foreign economic activity, and the introduced ratio of metal and paper banknotes only consolidated the actual situation. The way of life of the bulk of the population, its daily material and production support, actually did not depend either on the gold parity itself or on the nature of world monetary payments. Russian peasants for the most part remained outside the world money market system, and prices within the empire were subject to state control.

At the end of the 19th and beginning of the 20th centuries, the gold unit prevailed in Russian monetary circulation and by 1904 it accounted for almost 2/3 of the money supply. On January 1, 1900, metal backing accounted for 189% of the amount of banknotes, and gold coins already accounted for 46.2% of the total monetary circulation.

Thus, the end of the 19th century was characterized in Russia by the implementation of a major financial reform, which qualitatively changed the position of the Russian monetary unit. The ruble has become one of the most stable currencies in the world. Transformations 1895-1897 were part of a broad program of economic innovations in the 1990s. The reform contributed to Russia's integration into the world market system.

CHAPTER 2. PROJECTION OF WITTE'S REFORM ON MODERN RUSSIA

In Soviet Russia, the name Witte was forgotten literally until 1991. If he was mentioned in monographs on history, it was with the prefix “reactionary.” But in recent years, interest in the personality of S.Yu. Witte has grown incredibly high. When Vladimir Putin was asked: “What kind of prime minister of Russia should be?”, he answered: “Like Witte.”

Interest in the figure of Sergei Yulievich Witte today is due to an involuntary comparison of the results of economic reforms of the 90s of the XX century and the implementation of reforms of the early XXI century with the transformations of the 90s of the XIX century, the success of which is largely due to their systematic nature, understanding of the national characteristics of the historical path of Russia and personal the energy of the great reformer.

1 FINANCIAL SYSTEM AND ECONOMY OF RUSSIA AT THE PRESENT TIME

The financial policy of the state is a set of measures aimed at achieving the goals declared by government bodies<#"justify">Budget policy is a mirror that reflects all the pros and cons of government affairs, the balance of interests of the state and society, regions and economic entities. The main goals of budget regulation are to ensure growth in production volumes and citizens' incomes. In the absence of reforms, the only way to maintain a balanced budget is to increase the tax burden and simultaneously increase the country's internal debt, as has been observed in recent years.

In order to use the levers of budget regulation, which stimulates production growth and provides the constituent entities of the Federation with equal opportunities to finance the minimum standard of public services to the population, several conditions must be met. These are: long-term budget policy; a well-thought-out strategy for managing public debt; transition from an annual budget “horizon” to three-year planning and replacement of the departmental method with program-targeted budget financing; competitive distribution of budget assignments and securing them in relevant contracts with strict control by government departments. This also includes the proactive determination of the main, breakthrough areas of investment, which will “pull” the economy as a whole.

The development of mechanisms for implementing budget reform should be carried out simultaneously at the federal and regional levels. Today, federal legislation deals only with the federal budget and its expenses. It is necessary to increase the role of the consolidated budget, half of which remains outside the budget system. Off-budget social funds are also a channel for the territorial redistribution of public finances. The principles and criteria of this process are still beyond the control of even the Federal Assembly of the Russian Federation.

In the Russian Federation, social reforms would be relevant that directly depend on the country’s budget, that is, on the redistribution of funds in the budget: this is the beginning pension reform, caused by the redistribution of the age structure of the population due to the decline in the birth rate in the 90s, strengthening the position of non-state pension funds and consulting firms also involved in pension savings, increasing the literacy of the working population and increasing their responsibility for their own future pension provision, including through legislation. There is also a need for reorganization and financial injection into the healthcare sector - technical equipment of state healthcare institutions, especially in the regions of the Russian Federation, control of the targeted use of budget funds. All these components are included in the National Project “Health” and the State Program “Health Development until 2020”, which is formed according to all the rules and criteria of a program approach in management and is very specific, starting with a program of goals, objectives, structure, target indicators and ending with risk assessment .

The draft new law on education has been approved by the government and will soon be finalized and sent to the State Duma. To implement the reform, it will be necessary to allocate an additional 16 billion rubles from the federal budget in 2013, said Dmitry Medvedev. The funds will be used to pay teachers and lecturers, increase scholarships for students and other needs. One of the most anticipated issues is the reduction in the number of universities. According to the Prime Minister, the number of higher education institutions in the country exceeds all reasonable limits. The Unified State Exam was also criticized by the head of government. One of the most important tasks was the work towards increasing the salaries of teaching staff in 2018.

Thus, in Russia at present, many areas of public importance can be subjected to reform, modernization, reorganization to increase the country’s competitiveness in the world market and improve the social life of the population of our country with a centuries-old history and great reformers, for example, Peter I and Sergei Yulievich Witte.

CONCLUSION

The introduction of a gold currency strengthened government finances and stimulated economic development. At the end of the 19th century, Russia was ahead of all European countries in terms of industrial production growth rates. This was largely facilitated by the wide influx of foreign investment into the country's industry. Only during the ministry of S.Yu. Witte (1893-1903) their size reached a colossal size - 3 billion. rubles in gold. At the end of the 19th and beginning of the 20th centuries, the gold unit prevailed in Russian monetary circulation and by 1904. it accounted for almost 2/3 of the money supply. Russo-Japanese War and Revolution 1905-1907. made adjustments to this trend, and since 1905. The issue of credit rubles began to increase again. However, right up to the First World War, Russia managed to keep intact the most important principle of currency reform: the free exchange of paper money for gold.

The turn of the 19th - 20th centuries, which became a turning point in the history of Russia, was marked by the collapse of the traditional agrarian-patriarchal society and the emergence of a new industrial one. This process was closely connected with the activities of the great reformer of the country S.Yu. Witte. By modernizing Russian economic structures, he sought to give the capitalism developing in the country a European look. Only in the industrial development of the country did Witte see the path of its bourgeois progress, while he considered the industrial factor not as a purely technical one, but as an important transformative economic principle and a social instrument for stabilizing the political situation.

First of all, the study showed that the reforms of S.Yu. Witte were the practical implementation of the program of socio-economic modernization of Russia, and in this sense, one cannot fail to note their logical consistency and theoretical validity. Secondly, the reforms considered were systemic in nature, they were closely interconnected and were subordinated to the main goal - the creation of a national Russian industry.

In particular, Witte completed the process of stabilizing the ruble begun by his predecessors and introduced gold currency circulation in Russia. In this regard, the State Bank was reformed, which became the central issuing institution. The introduction of the gold standard ensured a stable position of the ruble and opened up opportunities for the widespread attraction of foreign capital to Russia, both in the form of loans and investments.

S.Yu. Witte sought to make extensive use of the international money market. Simultaneously with attracting foreign capital, S.Yu. Witte took measures to accumulate domestic resources. This goal was primarily served by the taxation system. In 1898, a new fishing tax was approved, which supplemented state revenues through deductions from industrial enterprises. Indirect taxes have increased sharply. One of the most effective means of accumulating domestic resources was the wine monopoly, introduced in 1894. In order to develop domestic industry, Witte adhered to a protectionist system.

Under the influence of objectively existing factors of the uniqueness of Russian history (natural-climatic, geopolitical, confessional and others), a specific, special social organization took shape in Russia and existed for centuries. One of its most characteristic features was that the state here was not a superstructure over civil society (as in Western countries), but the backbone, and sometimes the creator of civil society institutions. The specificity of the Russian political system was that it either had a sacred character (and sometimes suppressed the already weak institutions of civil society), or, being ineffective, led to the Troubles and the collapse of not only territorial, but also social ties. In Russia, the state, society, and personality were never divided (as in the West), they were mutually permeable, integral, and conciliar. Statehood in Russia has always relied on a corporation of serving nobility (whether it was the nobility or the nomenklatura, the liberal bureaucracy or someone else). This type of social organization has always been extremely stable and, changing its forms, but not its essence, was recreated after every shock in Russian history.

Reforms in historical literature usually mean only those political decisions that are aimed at liberalization, greater or lesser limitation of power, separation of powers, transfer of a certain amount of powers to its various branches, involvement of representative institutions and public organizations in public administration (i.e. . "strengthening the power horizontal"). With this approach, counter-reforms always look like government responses that are protective and conservative in nature.

The power of the first person in Russia has always been decisive. It also determined the fate of political reforms. If not everything, then a lot in Russian reforms depended on the first person (whether he was called emperor, general secretary or president). Attempts to limit the power of the first person and expand collegial forms did not bring the desired result. Moreover, each such attempt led to a weakening of the power itself, and ultimately to disorganization, ending in even greater centralization and strong personal power. It is not surprising that now, according to the current Constitution, the president of the country has powers comparable to the power of the emperor at the beginning of the 20th century. And in some ways it surpasses them. For example, according to the Basic Laws of the Russian Empire of 1906, individual decrees of the emperor were not effective if the Duma did not approve of them. If she was on vacation at that time, then the emperor’s decree had to receive her approval within two months. Otherwise, he lost power. As is known, the decrees of the president of the country cannot be canceled by anyone.

When carrying out reforms, it is extremely important that the country's population clearly understands their goals, stages and social consequences. At the beginning of the 20th century. For this purpose it was proposed to create a special Ministry of Ideology. As far as we know, plans to create a similar structure were also discussed in the mid-1990s. But both then and now these plans were not destined to come true.

The effectiveness of reforms, of course, depends on the extent to which the historical experience of our country will be used; how effective the political system, the system of power will be; to what extent it will be possible to complement political processes with social changes in the interests of the people. The current pride of reformers is the increase in the country's gold and foreign exchange reserves from 12 billion dollars in a short period of time. up to 150 billion dollars quite justified (although the merit here is not only theirs, but also the global situation in oil and gas prices). But it should not lead to euphoria. After all, as long as these capitals themselves lie as dead weight in overseas banks, and the domestic economy as a whole remains uncontained

competitive, the population of the country will never feel the effectiveness of the reforms. This is all the more strange when, in the interests of petty savings in the country, the share of already modest expenditures on education, health care, and science is reduced from year to year. At the same time, these industries are facing challenges to reach the global level. We are talking about those sectors through which a person can really feel the effectiveness of the reforms being carried out. This is all the more important because the ideology of reform itself should and can only be understood by educated people. At one time, F. Laharpe noted that carrying out reforms in Russia without a serious increase in the educational level of the population is impossible and pointless. In recent years, the quality and level of domestic education has been steadily declining due to meager funding.

When we talk about historical experience, its analysis can sometimes lead us to idealize this experience, to attempts to blindly copy it. Therefore, we must not forget that the historical experience often heard today is the experience of Tsarist Russia a hundred years ago, of Russia heading towards the revolutionary upheavals of 1917. Lessons must also be drawn from this and conclusions drawn.

BIBLIOGRAPHY

Budget message of the President of the Russian Federation D. Medvedev for 2012-2015.

Ministry of Finance of the Russian Federation. - M., 2011

3. History of Russia from the beginning of the 18th to the end of the 19th century. Ed. A.N. Sakharov, Moscow, AST, 1996.

Muravyova L. A. Gold ruble S. Yu. Witte: (On monetary reform in Russia 1895-1898) / L. A. Muravyova // Money and credit. - 2003.

5. Witte S. Yu. The most humble report of the Minister of Finance // Library of Historical and Philosophical Literature [Electronic resource] / Comp. N. N. Kudryakov. - 2004. - Access mode:

Witte S. Yu. (1849-1915). Selected memories. 1849-1911: in 2 volumes / S. Yu. Witte. - M.: Terra, 1997. - 352 p. - (Secrets of history in novels, stories and documents)

7.Zlobina A.A. Finance. - M.: MGIP, 2010

Report on results and main activities for 2011-2013.

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Witte's monetary reform

The monetary reform of 1897, which is called the Witte reform, was the locomotive that pulled Russian industry, thereby accelerating the modernization of the state.

The need for monetary reform in Russia was dictated by the development of industry. It was necessary to ensure the stability of the Russian ruble. This would help attract foreign investment, which was needed by the industry due to the lack of domestic capital. The monetary reform, initiated by Witte, was considered quite successful, although it had some drawbacks.

Prerequisites for reform

Russian capitalism in the last quarter of the 19th and early 20th centuries. entered the imperialist stage, which corresponded to world trends. In the 90s of the XIX century. In the Russian economy, monopolistic associations—cartels and syndicates—become relevant, and joint-stock commercial banks emerge. But for sustainable economic development, a stable currency was needed, which would prevent the depreciation of monetary capital. An attempt to strengthen the credit ruble by removing “extra” paper money from circulation was defeated. And by the end of the 19th century. The need for a transition to a gold currency became increasingly clear.

The first on this path was Great Britain, which introduced a gold coin standard in 1816. Then Sweden, Germany, Norway, Denmark, France, Holland, Italy, Greece and Belgium switched to gold monetary circulation.

Nikolaev ruble after Witte's monetary reform

What does the expression "gold standard" mean?

This is a monetary system where gold is recognized and used as the only monetary commodity and the universal equivalent of values. This standard is not subject to inflation. In the event of a decline in economic activity, gold coins went out of circulation and ended up in the hands of the population, and when the need for money expanded, gold was put into circulation again. Gold money retained its nominal value. This simplified payments for foreign economic transactions and contributed to the development of world trade.

Five rubles in gold. Obverse

Five rubles in gold. Reverse

How did society react to the new monetary system?

Differently. The nobility and landowners were especially opposed. If this was good for the new commercial and industrial bourgeoisie of Russia and foreign partners, then the instability of money made it possible for the domestic bourgeoisie to increase income, in particular, from the export of grain

Preparation for reform

A huge amount of work has been done to prepare the reform since the 80s of the 19th century. Minister of Finance N.Kh. Bunge and his successor I.A. Vyshnegradsky. The purpose of the preparation is to replace the inflationary circulation of irredeemable paper banknotes with a gold standard system. It was necessary not only to return to metal circulation instead of paper money, but also to change the basis of the monetary and monetary system: move from the silver standard to the gold one.

It was necessary to achieve a positive balance of payments and accumulation of gold reserves (by increasing exports, limiting imports, pursuing a protectionist policy, and concluding external loans). Eliminate the budget deficit. Stabilize the exchange rate.

Purposeful economic and financial policies led to the fact that on January 1, 1897, Russia's gold reserves reached 814 million rubles.

Having taken office as Minister of Finance S.Yu. Witte stopped practicing under I.A. Vyshnegradsky speculative exchange game on the credit ruble. The State Bank, using its own and treasury gold and foreign exchange reserves, fully satisfied the demand for foreign currency. His predecessors in this post were financial scientists N.Kh. Bunge and I.A. Vyshnegradsky made attempts to streamline the monetary system, the main flaw of which was the excess of the credit and paper supply, the devaluation of the ruble and its extreme instability.

As a result, the scale of speculation was reduced. Stabilization of the market exchange rate of the credit ruble in 1893-1895. created the prerequisites for carrying out monetary reform: fixing the exchange rate based on the exchange of the credit ruble for gold according to the actual ratio between them.

The prerequisites for carrying out monetary reform were: gold reserves, a stabilized exchange rate, a trade surplus, a balanced budget, non-interference by the Tsar and the State Council in the work of the Ministry of Finance and the State Bank.

Nicholas II

On May 8, 1895, Nicholas II approved a law according to which all legal transactions could be concluded in Russian gold currency and payment for such transactions could be made in gold coins or credit notes at the gold rate on the day of payment.

But the gold coin very slowly became a priority means of payment. The State Bank even took the next step: on September 27, 1895, it announced that it would buy and accept gold coins at a price not lower than 7 rubles. 40 kopecks for a half-imperial, and in 1896 the purchase rate was set at 7 rubles. 50 kopecks These decisions led to the stabilization of the ratio between the gold and credit rubles in the ratio 1:1.5. In January 1897, it was decided to introduce metal circulation based on gold in the Russian Empire. On January 3, 1897, Nicholas II signed the law “On the minting and release of gold coins into circulation.”

New monetary system

On January 3 (15), 1897, Russia switched to the gold standard. Gold coins of 5 and 10 rubles, as well as imperials (15 rubles) and half-imperials (7.5 rubles) were minted and put into circulation. The new type of credit notes were freely exchanged for gold.

However, many preferred paper money: it was easier to store.

The convertibility of the ruble strengthened credit and contributed to the influx of foreign investment and the economic development of the country. The initiator and conductor of the monetary reform of 1897 was S. Yu Witte, Minister of Finance of Russia in 1892-1903.

The study of their experience, sober calculation, unyielding will, professional competence, knowledge of the mechanisms of power gave S.Yu. Witte had the opportunity to develop a reform project and gain the support of Emperor Nicholas II. The reform was prepared in an atmosphere of secrecy, since it was assumed that it would not be supported by broad sections of society, especially court circles and the landed nobility: stabilizing the steering wheel met the objectives of industrial development, but led to a fall in prices for agricultural products.

The Ministry of Finance and its head were subjected to sharp indignation, attacks, and accusations of wanting to impoverish the country. Critical articles, angry feuilletons, pamphlets and cartoons appeared in the press.

Caricature of Witte

The majority of members of the State Council opposed the reform, which forced Witte to transfer it to the discretion of the Finance Committee, where he had many associates. Under the chairmanship of Emperor Nicholas II, the decision to adopt the monetary reform was made at an expanded meeting of the Finance Committee.

Significance of the Currency Reform of 1897

It stabilized the ruble exchange rate and streamlined monetary circulation, created a solid base for domestic entrepreneurship, and strengthened Russia’s position in the international market.

Sergei Yulievich Witte (1849-1915)

S.Yu. Witte. Lithograph by A. Munster

Statesman. He held the positions of Minister of Railways (1892), Minister of Finance (1892-1903), Chairman of the Committee of Ministers (1903-1906), Chairman of the Council of Ministers (1905-1906). Member of the State Council. Count (since 1905). Actual Privy Councilor.

Origin - from the Baltic Germans. Mother is from the Russian princely family of the Dolgorukovs.

He graduated from the Faculty of Physics and Mathematics of Novorossiysk University (Odessa) in 1870, receiving a Candidate of Sciences in Physics and Mathematics.

He abandoned his scientific career and went to work in the office of the Odessa governor, then was engaged in the commercial activities of operating railways and then remains constantly in this field, becoming in 1892 the Minister of Railways, and at the end of this year - the Minister of Finance. He held this post for 11 years. He accelerated the lengthy construction of the Trans-Siberian Railway, considering it an important stage in the country's economic progress.

Witte's undoubted merit is his implementation of monetary reform. As a result, Russia received a stable currency backed by gold for the period until 1914. This contributed to increased investment activity and an increase in the influx of foreign capital.

He opposed the strengthening of the privileged position of the nobility, believing that Russia's prospects were connected with the development of industry.

With his participation, labor legislation was developed.

With his active participation, government reforms were carried out, including the creation of the State Duma, the transformation of the State Council, the introduction of electoral legislation and the editing of the Basic State Laws of the Russian Empire.

Contributed to the construction of the Chinese Eastern Railway.

Developed a reform program, implemented by P. A. Stolypin.

He was a supporter of the accelerated development of industry and the development of capitalism. Carried out a reform of industrial taxation.

He promoted the introduction of a state “wine monopoly” on alcohol.

He concluded a peace treaty with Japan, according to which half of Sakhalin Island passed to Japan.

He showed extraordinary diplomatic abilities (Treaty of Union with China, conclusion of the Portsmouth Peace Treaty with Japan, trade agreement with Germany).

He was buried at the Lazarevskoye cemetery of the Alexander Nevsky Lavra.

Witte with great energy created conditions for the influx of foreign capital into Russia, both in the form of loans and in the form of direct investments, which contradicted the precepts of Vyshnegradsky. The country's raw materials and energy resources, cheap labor, a stable monetary and financial system and exaggerated ideas about the socio-political stability of the autocratic system made Russia an extremely profitable area for the investment of foreign capital. Its share in the share capital of the mining, metalworking and engineering industries exceeded the share of Russian capital. Foreign capital predominated in the heavy industry of the South of Russia, in the development of Baku oil, and in the gold industry. With foreign money, new industries such as electrochemical, electrical engineering, urban utilities, and the production of the latest communications equipment were developed. If in 1893 the share of foreign capital in relation to the total share capital was 27%, then by 1900 it had increased to 45%.
This course to attract foreign capital was economically justified: it was based on the undoubted fact that Russia was a country poor in capital, with limited internal possibilities for their concentration and a high share of unproductive expenses. Attempts by Vyshnegradsky and Witte to use agricultural production for the needs of industrial modernization encountered resistance from the local nobility, and, in principle, could produce a real effect only with the merciless plunder of the Russian countryside, which at the end of the 19th century. seemed unthinkable.
The influence of foreign capital did not affect the independence of Russian foreign and domestic policy, although public and private loans made in France undoubtedly strengthened the strength of the Russian-French alliance. The confession of S. Yu. Witte is significant: “I am not at all afraid of foreign capital, considering them to be a benefit for our fatherland, but I am afraid of the completely opposite, that our order has such specific properties, unusual in civilized countries, that few foreigners will want to have with us case".
Witte's reforms. The main task of S. Yu. Witte in the first years of his ministry, when he felt the complete trust of Alexander III, was the introduction of a wine monopoly. Conceived by Vyshnegradsky in order to sharply increase treasury revenues, the wine monopoly included retail and wholesale trade in spirits and alcohol purification. In 1894, the wine monopoly received the force of law and gradually began to be introduced in the provinces of the Russian Empire. By the end of Witte’s ministry, it covered almost the entire territory of the country and provided significant revenue to the treasury - more than 10 percent of budget revenues.
Witte completed the conversion of Russian foreign loans, which was conceived by Bunge and began to be implemented under Vyshnegradsky. Since 1888, the Paris Exchange exchanged 5% and 6% Russian government bonds for bonds with lower interest rates and longer maturities. The conversion of Russia's foreign loans led to the transfer of Russian securities to the French money market and to an increase in public debt. Under Witte, the growth of private and public debt to foreign banks intensified: by 1903, foreign government debt reached a huge figure for those times of 5,800 million rubles.
The increase in external debt made it possible to stabilize the position of the ruble and carry out a monetary reform in 1897, which established gold monometallism. The growth of tax revenues, the production and purchase of gold allowed the State Bank to increase its gold cash to an amount that almost corresponded to the amount of credit notes in circulation. Credit notes began to be exchanged for gold without restrictions. The introduction of the gold standard opened up new opportunities for attracting foreign capital.
Witte's monetary reform strengthened the external and internal exchange rates of the ruble, but it was based on financial and fiscal measures, rather than genuine economic stabilization. Witte called the monetary reform “the greatest” and was proud that he carried it out despite the resistance of landowners - grain exporters, as well as the French government, which spoke out for bimetallism. He saw its importance in the further strengthening of national industry.
In a certain sense, this goal was achieved. Since 1893, Russian industry has developed at an unprecedentedly rapid pace: in less than 7 years, the volume of industrial production more than doubled. By the end of the 19th century. According to the main structural parameters and gross indicators, Russia was among the 4-5 leading industrial powers in the world. Russia's ever-increasing role in the global economic system was fully consistent with its political authority and military power.
Urbanization became irreversible: by 1897, the urban population of what had recently been an entirely agricultural country was 13%, and the influx of population to large industrial centers was exceptionally high. The old industrial centers - the Ural, Central, North-Western - began to compete seriously with the new ones: Donetsk and Baku.
The industrial boom, which began in 1893, was accompanied by the technical re-equipment of the main industries. The heavy industry sectors developed especially quickly: metallurgy, machine-building, and mining. Their share in the total industrial output has increased from 30 to 46% in less than 10 years.
Length of railways over the last 10 years of the 19th century. almost doubled. Witte continued Vyshnegradsky's policy, which consisted of concentrating railways in the hands of the state. Private railways, often burdened with debt, were bought out on terms favorable to their owners. State-owned railway construction received a new scope, which served to accelerate the development of heavy industry and attract foreign capital. If in 1892 490 versts of railways were reopened, then already in 1894 - 2,117, and in 1899 - more than 4,600. For Russia with its vast expanses, railway construction was of exceptional importance: it contributed to the economic development of territories with enormous economic potential, stimulated the transition to large forms of production organization.
The successes of economic modernization were obvious. However, it was limited in nature and practically did not affect the agricultural sector. Under Vyshnegradsky and Witte, the marketability and export capabilities of the Russian countryside increased, but the growth of marketable products was ensured mainly at the cost of bringing new lands into circulation. The efforts of the finance ministers were not enough to change the balance of social forces in the village. The positions of the local nobility remained unshaken, and the most important issue of Russian life - land - was not resolved.
The political and social consequences of economic modernization were contradictory. Its success was not the success of private enterprise, it was not the triumph of free competition and spontaneously developing market relations. State patronage of national industry led to the fact that the element of Russian entrepreneurs was not the free market, but the monopoly rights that the government granted them.
This was particularly evident in the sphere of relations between labor and capital. Relying on the government apparatus, Russian industry leaders extracted super profits from the exploitation of workers. With the exception of relatively small groups concentrated in state-owned military factories, Russia's industrial workers earned less than in any other industrialized country. The maturity of the labor movement, which coincided with the period of modernization, was not truly recognized by the factory owners. Under pressure from the strike movement, the government began to regulate relations between entrepreneurs and workers.
The political primitiveness of the Russian capitalists was so great that not only Bunge, but also Witte was accused of socialism. The peculiarities of the formation and development of Russian capitalism made its representatives immune to the ideas and practices of social reformism and compromise. The consequence of this was the radicalization of the working class, and the undoubted connection between autocratic institutions and capital contributed to the workers’ putting forward not only economic, but also political demands. Industrial Russia did not know social harmony. The price of economic modernization was the antagonism between the new classes of society: the industrial proletariat and the bourgeoisie.
Industrial crisis. At the end of 1899, Russian industry felt the first symptoms of a crisis, which the following year became universal, covering the entire world economy. It turned out to be especially long and difficult for the Russian economy.
The first harbinger of the recession was the European monetary crisis, which forced the State Bank, and then private banks, to reduce loans to enterprises and increase interest rates. This was followed by a reduction in trade credit and massive closures of small and medium-sized industries. Entrepreneurs sought a way out in a sharp reduction in wages and lockouts. Unemployment in certain industries and in some regions reached 40-50%, which predetermined the inevitability of acute social conflict.
The industrial crisis of 1900 testified to the maturity of capitalist production in Russia and its involvement in the global economic system. It is no coincidence that it was during these years that the first syndicates began to emerge, heralding the onset of the stage of monopoly capitalism.
At the same time, the crisis showed the incompleteness of the modernization efforts of Bunge, Vyshnegradsky and Witte. The development of production and structural changes in industry were not accompanied by social changes. The authorities postponed the resolution of pressing social issues and ignored the demands of the masses, which was useless and dangerous. Economic modernization turned out to be unnecessary for the local nobility, which had all the political power in the country. Objectively, its further implementation required a radical change in existing social relations and a change in the political system.
The inaction of the authorities doomed the national economy to crisis and led the country to disastrous shocks. Even energetic finance ministers were unable to change the stagnation and routine that reigned at the top. N. X. Bunge, I. A. Vyshnegradsky and S. Yu. Witte were never able to overcome the inertia, incompetence and lack of will of the people who decided the fate of Russia at the turn of the 19th-20th centuries.

Witte's foreign economic system

When, in an episode known to the reader in early 1898, Nicholas II reassured Witte that he had complete confidence in him as Minister of Finance, the Tsar, in all likelihood, was not being a hypocrite. He had every reason to be satisfied with the activities of the dignitary in the area of public finance closest to his jurisdiction. In this field, Witte not only showed tireless concern for the interests of the nobility, but also achieved visible successes that strengthened the great power of Russia and expanded the capabilities of its government.

Under him, only in the 90s, treasury revenues increased almost 1.6 times*. Particular attention was paid to public financial reporting - annual budgets published by official government bodies. By dividing government spending into ordinary and emergency, the appearance of a deficit-free budget was created. The sign of “financial well-being” contributed to the expansion of credit. Billions of rubles were attracted to the country's economy in the form of internal and external loans, as well as foreign investments. The growth of public debt and budget revenues made it possible to continue the policy of supporting landownership and finance the industrial boom of the 90s, as well as to significantly expand government allocations for economic and military needs.

* (From 1168.8 million rubles in 1892 to 1857.2 million rubles in 1899 (see Ministry of Finance. 1802 - 1902.- Part II. - St. Petersburg - 1902. - pp. 640 - 643, 646 - 649).)

Thus, the budgets of the ministries of finance and communications almost tripled from 1892 to 1899, and their share in government spending increased from 17 to 29%. At the same time, allocations for armaments increased significantly. The budget of the Military and Naval Ministries increased almost 1.5 times over the same years. Witte met their increasing demands, only in some cases restraining his disproportionate appetites. He took credit for being able to find the necessary funds to “re-equip the army and increase the navy” *.

* (Ministry of Finance. 1802 - 1902.- Part 2. - St. Petersburg, 1902.- P. 637, 640 - 643, 646 - 649.)

Simultaneously with the growth of allocations for economic needs, the intervention of Witte’s department in national economic life expanded. “The Ministry of Finance grew during these years and absorbed more and more new branches of the state economy,” noted an observant contemporary. “It essentially became a combination of several ministries” *. In addition to finance itself, Witte's terms of reference included trade and industry, customs and border services, commercial and agricultural credit, merchant shipping, the financial part of railways and even technical educational institutions. In parallel, the foreign economic functions of the Ministry of Finance developed. The newspaper “Novoe Vremya” later, not without some justification, called it “a state within a state”, which “commanded its own army, had its own fleet under a special flag, its own railways outside the empire, its own diplomatic representatives” **.

* (Glinsky B. Decree. Op. - P. 274.)

Witte’s own approach to the problems of the national economy was distinguished by its national breadth. It organically included the foreign economic aspect and the role of Russia on the world stage. At the same time, the class limitations of the tsar's minister were manifested in him.

Unlike foreign affairs, where Witte had no prior training, the national economic field was to some extent familiar to him. His contribution to the theory and practice of economics received public recognition already in 1893, when he was elected an honorary member of the Imperial Academy of Sciences, but the economic program of the new Minister of Finance, including its international aspect, did not take shape immediately.

He largely inherited the general direction from his predecessors N. Kh. Bunge and I. A. Vyshnegradsky. The point here was not in imitation - Witte cannot be denied originality - and not even in the fact that he needed time to get up to speed on new issues - Witte knew how to do this quickly. Another thing is more important: he always believed that the key to the success of big politics is continuity and consistency. Mastering a wide range of issues of his new competence, Witte moved from the more familiar aspects of railway, trade and customs affairs to less known ones, while simultaneously developing the program as a whole. Its formation can be traced through his annual reports to the king.

In his first budget report, he outlined the principles of the economic policy pursued in a general form: to promote the development of agriculture as the main source of the people's well-being in Russia and, through the organization of public works, and especially railway construction, to stimulate private enterprise in the use of the country's enormous, but still lying in vain, resources. In the program of work of the Ministry of Finance in the commercial and industrial field, approved by Witte in the fall of 1893, the task was to promote the development of the processing industry so that it would not only satisfy domestic needs, but could also successfully compete outside Russia. At the same time, the outstanding role of government policies and administrative measures was emphasized, in particular the protective customs tariff, trade agreements with foreign countries, and railway tariffs *.

* (See, Shepelev L. E. Tsarism and the bourgeoisie in the second half of the 19th century. Problems of trade and industrial policy. - L., 1981. - P. 204 - 208.)

Already in the next report - on the state list of income and expenditures for 1894 - Witte formulated his central idea of achieving “complete national economic independence”, since Russia, with its enormous variety of climatic and soil conditions and inexhaustible natural resources, has all the data for this. Government policy was to serve as an active factor in the intended transformation. The state had to, without abandoning traditional concerns about improving agricultural production, expand patronage to other areas of economic activity. Customs protection seemed insufficient to Witte. He insisted on the development of all types of industrial credit and emphasized the importance of concentrating railways in the hands of the government, which would effectively influence the economic development of the country *.

* (See Bulletin of Finance, Industry and Trade. - 1894. - No. 1. - P. 8 - 12.)

At the beginning of 1894, Witte presented a report to Alexander III on the need to expand Russian-Asian trade. He argued that the Asian countries bordering Russia serve as markets for Russian manufactured goods. An increase in turnover will contribute to both the development of Russian industry and the improvement of trade and payment balances. Finally, “Russia’s commercial importance in these countries is in the closest connection” with its “political influence” *. In the Committee of the Siberian Railway, Witte specifically raised the question of better ensuring Russia's trade interests in the Far East, especially in China**.

* (See Ananich B.V. Decree. Op. - P. 15.)

** (See Prologue of the Russian-Japanese War. - pp. 25 - 26.)

The budget report of 1895 was devoted to the apologetics of the financial and economic system that developed under Alexander III. It included, in particular, the use of the foreign money market while observing the necessary caution and proportionality of the amounts borrowed to the capabilities of the country. The pathos of the report was to affirm the need to continue to follow the principles learned under the late tsar. Knowing the character of the new emperor, Witte warned him against “vacillation from side to side, inflicting bloody wounds on the state body” *. In the next budget report, the Minister of Finance put forward as the main task of his department “correction of monetary circulation,” that is, financial reform.

* (Bulletin of Finance, Industry and Trade. - 1895. - No. 1. - P. 13.)

Thus, already in 1893 - 1896, Witte was able to determine the main goal of economic policy and some of the main means of achieving it. The desire for complete economic independence, which corresponded to his views on the great power role of Russia, had an objectively progressive meaning. But the Minister of Finance did not encroach on the traditional patronage of “agriculture” (read: landowners), but sought to combine this with expanded assistance to industry and trade. A sharp increase in the intervention of the autocratic state in economic life (customs protection, railways, credit) was envisaged and implemented. So far, there has been a rather cautious talk about attracting foreign funds. The special importance of Russian-Asian trade was emphasized.

The planned course aroused criticism from influential circles of the nobility and landowners, who saw in it a lack of attention to their interests and excessive patronage of the bourgeoisie. The system of customs protection of industry was perhaps the first to be attacked. The landowners believed that it not only forced them to buy more expensive goods, but also caused high taxes on Russian agricultural products abroad.

In 1896, the provincial leaders of the nobility, who had gathered for the coronation of Nicholas II, presented the Tsar with a note about the needs of noble land ownership. They complained about the supposedly plight of the landowners. Among other urgent wishes were the abolition or weakening of protective customs tariffs. The “first landowner” reacted favorably to these petitions and ordered the establishment of a Special Meeting on the Affairs of the Noble Class to consider them *.

* (It existed until 1902, during which time it prepared a number of reactionary projects in order to strengthen the economic position of the nobility.)

Meanwhile, Witte, who attached great importance to demonstrating the successes of his department, was busy organizing the Nizhny Novgorod All-Russian Exhibition. It opened shortly after the coronation, so that members of the extraordinary foreign embassies present at the celebrations had the opportunity to get acquainted with the achievements of the Russian national economy. The royal couple also came to the exhibition. Nicholas II visited the pavilions several times, examined everything in detail, but was noticeably cold towards Witte, who accompanied him. He was at a loss as to which of the envious ministers and in what matter led the intrigue against him. Nicholas was simply under the impression of the note from the leaders of the nobility.

The minister of the tsarist government, Witte, could not help but give paramount attention to the interests of the landowners. But he understood them more broadly; he saw the need, for the sake of the power of the same noble-autocratic state, to promote the parallel development of industry. Therefore, the Minister of Finance could not agree with the abandonment of one of the foundations of the adopted economic system - customs protectionism.

He dedicated the 1897 budget report to his open, decisive defense. Referring to the achievements of Russian industry demonstrated at the Nizhny Novgorod exhibition, Witte connected them with the customs policy pursued by the government over the past 20 years. He saw his personal merit in maintaining and somewhat strengthening protectionism. The minister believed that a premature significant weakening of this system “would be a major political mistake and a source of deep shocks in the economic body of the country.”

In Russia, he argued, industry was already generating more income than agriculture, exerting a predominant influence on the distribution of economic resources. A reverse reorganization of the economic structure along the lines of an agricultural country “would be tantamount to an economic catastrophe.” Agriculture itself would not benefit from such a turn, since most Western countries switched to customs protection of their own agricultural production. In the current situation, Russia’s refusal to seriously patronize industry would mean voluntary consent to the open exploitation of its productive forces by other countries, which was incompatible with the dignity of a great power. In conclusion, he pointed out that protectionist policy does not exclude the possibility of lowering certain articles of the customs tariff as the corresponding branches of domestic industry are strengthened and with the consent of foreign states to compensate for this by lowering duties on Russian agricultural products *.

* (See Bulletin of Finance, Industry and Trade. - 1897. - No. 1. - P. 6 - 7.)

Nicholas II did not like the report because of its straightforwardness, and Witte preferred to soften his tone. In the same year, 1897, he prepared his comments on the note of the provincial leaders of the nobility that alarmed the tsar. The Minister of Finance denied that he was “guided by a biased intention to challenge the judgments of the note,” especially since he, “for his part, fully shares some of them.” He saw, however, in the note there were inaccuracies and one-sided assessments. Witte consistently examined the complaints of the leaders of the nobility, proving the groundlessness of their accusations of weak assistance from the state.

The minister explained the negative attitude of the noble leaders towards protective customs tariffs as a “completely natural” consumer point of view, as well as a reluctance to see beyond the interests of the day. He contrasted this with the need for a broad government approach, with the goal of transforming Russia into a “self-sufficient economic unit.” Repeating in a slightly modified form the main arguments of the 1897 budget report, Witte called on the Tsar to follow the behests of Alexander III. This time he ended with a concession to the nobility, albeit of a private nature: he recognized the possibility of lowering duties on agricultural machinery and implements imported into Russia *.

* (See Gindin I.F., Gefter M. Ya. Decree. op.- pp. 125 - 155.)

Let us note that the significance of customs protectionism in the historical development of states is ambiguous. For Russia in the 90s of the 19th century, when the formation of domestic heavy industry was taking place, it had a progressive character to a certain extent. At the same time, customs protectionism placed additional burdens on the general consumer, primarily the working population, whose fate was of little concern to the tsarist government.

In 1895 - 1897, under the leadership of Witte, the monetary reform prepared by his predecessors was carried out. The transition from unstable paper currency to hard, convertible currency was an urgent task for the Russian economy. It was dictated primarily by the interests of industrial development and attracting foreign capital.

In March 1895, Witte spoke at a meeting of the Finance Committee in favor of allowing transactions in gold and collecting certain government payments in gold. He pointed out that under the existing order it is difficult to place foreign capital in Russia. “Meanwhile, without the assistance of foreign capital,” he argued, “we are not able to use the natural resources with which some areas of our vast homeland are so generously endowed.” In a speech at the State Council on December 28, 1895, Witte drew the audience's attention to another external aspect of monetary reform - the need to strengthen Russia's international credit. Under the existing monetary system, money is lent to her less readily and on less favorable terms. We have to “pay foreign creditors, as it were, a special tax, a special insurance premium” for the risk of fluctuations in the ruble exchange rate *.

* (See Materials on monetary reform 1895 - 1897 / Ed. prof. A.I. Bukovetsky.- Issue. 1.- St. Petersburg - Moscow, 1922.- P. 36, 141 - 142.)

The problem of streamlining monetary circulation allowed for various solutions. In the context of the depreciation of silver on the world market, Witte chose the most expensive, but also the most promising from the point of view of international relations, gold monometallism. He thus showed a certain courage. The choice of the minister aroused hostility against him from the defenders of the paper and silver rubles - representatives of the interests of the landowners who exported grain and received additional benefits from the difference in exchange rates. True, in the conditions of a favorable economic situation in the second half of the 90s, Russian grain exports could progress quite successfully even with a hard currency, which Witte took into account.

The discontent of the landowners influenced the mood of government spheres. Witte feared that he would not be able to obtain the required majority in the State Council. The support of the tsar came to the rescue, whom he was able to convince that the introduction of gold currency was bequeathed by Alexander III. At the final stage, Witte deftly carried out the reform not through the State Council, but through the Finance Committee, which met in an expanded format under the personal chairmanship of Nicholas II *.

* (See Witte S. Yu. Decree. op.- T. 1.- S. XIX - XX; T. 2.- P. 96.)

Attacks on the reform did not stop even after its introduction. Witte was opposed in Russia by such publicists and economists as S. F. Sharapov, G. V. Butmi, P. V. Ol, and abroad by a retired official of the Ministry of Finance I. F. Tsion. They frightened us with the inevitability of Russia's financial bankruptcy. The editor of the far-right magazine "Russian Labor" Sharapov presented two notes to the Tsar. In the first, he insisted on repealing the “orders of 1897,” threatening economic disaster and state bankruptcy. In the second, he accused Witte of “deliberate and conscious” crimes and even demanded his arrest and trial *. Sharapov's notes were handed over to the Tsar by an enemy of the Minister of Finance, Grand Duke Alexander Mikhailovich. Nicholas II did not back down in this case, but took note of the Black Hundred criticism of Witte.

* (See Materials on the history of the USSR.- T. VI.- M., 1959.- P. 217.)

The Minister of Finance did not remain passive in the face of attacks. He also submitted notes to the king, spoke in the press and at various meetings, and even tried to resort to administrative measures against Zion. In his notes of 1897, Witte reinforced his economic arguments with the expression of loyal feelings. Knowing about Nicholas II’s commitment to the idea of autocracy, he argued in one of them that “the greatness of Russia is based on autocratic unlimited rule in the originality in which it is bequeathed to us by our native history...” In another note, the Minister of Finance sang a laudatory ode to the Russian bureaucratic a system that covers “almost all spheres of activity, as it were, with a common tent” and places them in the service of the state *.

* (See TsGIA.- F. 560.- Op. 26.- D. 97.- L. 187 ob.- 188; D. 100.- L. 172.)

Soon, Witte's opponents turned their criticism to the policy of attracting foreign capital. Here it was easier for them to act under the banner of protecting national interests. In 1897 - 1899, the Minister of Finance had to face influential opposition, led by Grand Duke Alexander Mikhailovich. It all started with a private question about the admission of foreign capital into the oil industry of the Caucasus, but gradually grew into a discussion of policy regarding foreign entrepreneurship in general. Nicholas II was inclined this time to be sympathetic to the “patriotic” views of Witte’s opponents. He ordered that the issue be referred to a meeting of ministers under his personal chairmanship.

Witte took the fight. Shortly before the March special meeting of 1899, he submitted a report to the Tsar on the need to put an end to vacillations regarding trade and industrial policy *. The minister emphasized that this policy must be carried out “according to a specific plan, with strict consistency and systematicity.” At the same time, he was forced to admit that attacks on the line pursued under him “continue and even intensify.”

* (The report was entitled "On the need to establish and then strictly follow a certain program of commercial and industrial policy of the empire." It served as the basis for further discussion in the government (see Materials on the history of the USSR. - T. VI. - P. 173 - 195).)

Witte set out to contrast the “narrowly national” point of view of his opponents with a “thought-out system”, “all parts of which are inextricably linked with one another.” The fundamental task, not only economic, but also political, was still proclaimed to be the creation of a “completely independent national industry.” Until now, Witte notes, Russia's economic relations with Western Europe have been "quite similar to the relations of colonial countries with their metropolises." But “Russia is a politically independent, powerful power; it has both the right and the power not to want to be an eternal tributary of economically more developed states...”

The author of the note considered customs protection, which was implemented in the tariff of 1891, to be the initial basis of the system adopted by Alexander III. Protectionism has already begun to bear fruit in industry and trade. But a protective tariff alone is not enough. Russia's domestic production has not yet reached the size necessary to meet the country's needs. “It is impossible to wait for this growth to continue slowly.” To give the country “the same industrial maturity as the United States of North America is already entering,” it is necessary first of all to have an abundance of capital. In Russia there is still too little capital and entrepreneurship.

Without going into the reasons for this phenomenon, because here he would have to talk about the burden of semi-serf landownership, Witte immediately moved on to looking for a way out of the dilemma that had arisen. If the government is powerless to create capital, then it has the power to help attract it from countries where it is available in abundance. “The influx of foreign capital is, in the deep conviction of the Minister of Finance, the only way to accelerate our industry” to the required level.

Witte believed that opponents' fears about the influx of foreign capital were exaggerated. In this regard, he formulated another task of the defended system - “the establishment of such relations that we would pay interest on the capital we received from Europe from our proceeds from export to Asia.”

Further, the author of the report stated that the import of foreign capital into Russia is not only not unhindered, but, on the contrary, is surrounded by a number of restrictions that do not exist in all developed countries. Too much subordination of foreign entrepreneurs to Russian authorities is one of the reasons for the relatively weak influx of foreign capital, so that “one might rather wish for a simplification of our legislation on foreigners.”

In conclusion, Witte made several interrelated proposals for the tsar’s discretion: a) to maintain the customs tariff of 1891 unshakable until the resumption of trade agreements in 1904, while seeking in the meantime to reduce the cost of manufactured goods through the development of domestic production; b) time possible tariff reductions to coincide with the renegotiation of the mentioned agreements, in order to have grounds in return to insist on more favorable conditions for the import of Russian agricultural products; c) “not to make during this time any new, against existing legal provisions, restrictions on the influx of foreign capital, either by issuing new laws or broad interpretation of existing ones, or, especially, by administrative orders”; d) upon renewal of trade agreements, return to the issue of foreign capital and then decide whether new restrictions should be introduced.

Witte's report, compiled in February 1899, testified that the views of its author had developed into a coherent system: Russia's economic independence could be achieved through government intervention, customs protection of industry and the widespread import of foreign capital, the outflow of profits from which abroad would be compensated by the benefits of Russian capital. Asian trade. The practice of economic support for the semi-serf nobility remained unshakable.

Witte's recommendations were of a compromise nature: he did not reject the possibility of lowering the tariff in principle, but recommended postponing this measure for implementation later with greater benefits; did not call for completely eliminating restrictions on foreign capital, but insisted on not introducing new ones in the coming years. Witte himself admitted that he made concessions here to “certain circles,” that is, to the noble-landowner opposition.

Without relying only on the tsar, who was prone to hesitation, the Minister of Finance also appealed to bourgeois-landowner public opinion. On March 1, he presented his economic program at a meeting of the commission to streamline the grain trade. In a speech then published in print, he sought to prove that the creation and strengthening of national industry by the proposed methods corresponded to the urgent tasks of the development of agriculture itself *.

* (See Materials on the history of the USSR.- T. VI.- P. 195 - 199.)

A meeting of ministers on the fundamentals of trade and industrial policy took place on March 17, 1899. Witte in his speech emphasized the need to hurry to develop industry in every possible way. He argued this, in particular, by the difficult international situation, which does not allow us to exclude the possibility of sudden wars. The Minister of Finance expressed the idea that one should be afraid not of the influx of foreign capital, but of how foreign governments might oppose their influx into Russia, just as Bismarck closed the German market to Russian credit.

Witte’s main opponent turned out to be Muravyov, who read out a specially prepared note. The Foreign Secretary agreed with the desirability of maintaining the protective system adopted in 1891 until the expiration of the ten-year period of trade treaties. He also accepted the thesis that this system should pursue not narrow financial goals, but broad objectives of the development of national industry. At the same time, Muravyov saw the danger of subordinating entire regions or individual sectors of the Russian economy to foreign capital. He therefore proposed that the government regulate the influx of foreign capital, allowing them in joint-stock form only into the manufacturing industry, and not into the mining industry. Muravyov was supported by A.N. Kuropatkin, who was especially afraid of the penetration of foreign capital into the territory of the Cossack troops.

The resolution of the meeting, approved by Nicholas II, was half-hearted. On the one hand, it emphasized the need to firmly and consistently pursue economic policies. The Tsar recognized “the principles underlying the tariff of 1891 to be preserved in unshakable integrity” with the continued inevitable participation of foreign capital and entrepreneurs. On the other hand, it was stated that the duration of high protectionist duties should be “as short as possible.” It was noted that it was politically undesirable for the concentration of vast land holdings in the hands of foreign companies. Hence, the conclusion was drawn about the need to preserve the conditions for admission to the activities of foreign joint-stock enterprises, including the right of the local administration to give permission for the acquisition of real estate *.

* (Ibid. - pp. 200 - 208.)

Witte continued to fight. At the end of March 1899, he addressed the Committee of Ministers with a proposal to abolish restrictions on the admission of foreigners to the management of Russian joint-stock companies. We were talking about industries and areas where the activities of foreigners were limited or prohibited by Russian legislation, that is, about 21 western provinces, the Steppe and Turkestan general governments, and partly about the Caucasus. The Minister of Finance also spoke out against additional restrictions on such activities on behalf of local authorities. In the first half of June, the Committee of Ministers considered Witte’s petition and recognized “the continuation of this order of things as extremely undesirable.” However, even in this case, the tsarist government did not oppose the system of restrictions in general, but only for the elimination of the inconsistency created by the arbitrariness of local authorities *.

* (Ibid. - pp. 209 - 216.)

Witte remained true to the belief in the extremely important importance of foreign capital during the further development of his economic program, when he formulated the task of accelerated industrial development of Russia. In February 1900, he presented the Tsar with a lengthy report “On the situation of our industry.” It noted the successes of the country's industrial development over the past decades, indicating its rich potential. At the same time, Witte focused on the backwardness of Russian industry and trade in comparison with European countries and the United States, especially if we take into account per capita indicators. He emphasized that Russia remains a predominantly agricultural country, while the political and military power of all states now rests on their industrial development. Russia, with its huge diverse population and complex challenges in world politics, needs a strong economic foundation more than any other country. “International rivalry does not wait. If energetic and decisive measures are not now taken to ensure that over the next decades our industry is able to cover with its products the needs of Russia and the Asian countries that are or should be under our influence, then the rapidly growing foreign industry will be able to break through our customs barriers and establish itself both in our fatherland and in the said Asian countries, and, having taken root in the depths of popular consumption, it can gradually clear the way for more disturbing foreign political influences.” He warned the Tsar that the slow growth of industry could make it difficult for Russia to fulfill the great international tasks, weaken its power, and lead to political and cultural backwardness.

Meanwhile, the minister argued, the rapid development of industry in Russia is quite possible. The vast empire is rich in natural gifts. In addition to huge natural resources, it has cheap labor resources. True, the people are still poorly educated, but by nature they are gifted, quick-witted and diligent. The patronage system adopted by the government protects domestic entrepreneurs from competition from foreign rivals. And if, under such favorable conditions, there is still no necessary growth, then the reason here is the lack of real capital.

This led to the categorical conclusion that for Russia “there is no other choice” but to attract funds from abroad, and that the task of accelerating industrial development can be solved “ not otherwise as with the direct assistance of foreign capital." Russian industry, Witte believed, would benefit not only from the influx of money, but also from more experienced, skillful and courageous foreign enterprise. In addition, foreign capitalists will be interested in the fate of their investments during periods of political complications in Russia .

Church in Harbin. From the official publication "Ministry of Finance. 1802 - 1902"

The minister noted that the prospect of a widespread influx of foreign capital still causes “some anxiety” among many. He, however, considered it groundless. All modern rich countries have gone through a similar path of development without losing their independence. Witte recognized some justification for such fears only in the field of state credit: it was safer to satisfy its needs with internal funds than to rely entirely on foreign exchanges when issuing loans. Foreign investments do not threaten Russia with any danger, and therefore it is desirable to remove existing restrictions on the opening of foreign companies here, the participation of foreign capital in Russian joint-stock companies and on the entrepreneurial activities of citizens of other states *.

* (Marxist historian. - 1935. - No. 2 - 3. - P. 131 - 139.)

Witte's ideas met the requirements of the time and corresponded to the socio-political conditions of Russia, where the financing of noble-landowner land ownership diverted huge amounts of money. Only a revolution could open another path to rapid economic development. Witte's program corresponded to the fundamental interests of the ruling classes, but for the Russian proletariat and other working people it promised additional oppression - from predatory foreign entrepreneurship - and growing payments on foreign debt. The problem of addiction was not without real outlines

Russia from capital exporting countries, although (here Witte was right) it could have grown more likely from foreign government loans.

The tsarist government could not manage without these loans. The task of the Minister of Finance was to achieve more favorable terms of transactions. With regard to the old debt, Witte completed the conversion developed under Bunge and widely carried out by Vyshnegradsky. Its economic meaning consisted in the exchange of 6- and 5% Russian loan bonds placed on foreign exchanges for bonds with a lower interest rate and a longer maturity. With a slight increase in the total amount of external debt, this led to a decrease in annual payments. The operation also had an important political aspect. It meant the transfer of Russian securities from the German to the French money market, which laid a kind of economic foundation for the building of an alliance with France.

True, in 1893, Witte barely managed to complete the placement on the Paris market of the 3% loan he inherited from the Vyshnegrad 1891 loan. But the very next year, Russia’s 3.5% gold conversion loan had unprecedented success, which was explained not only by improved economic conditions, but also by a turn in Russian-French political relations. The subscription operation was carried out by a syndicate of French and Russian banks. In 1896, Witte successfully placed, through the same syndicate, headed by the Parisian Rothschild, another government loan, the purpose of which was to support the implementation of monetary reform *. For the sake of the success of the enterprise, the Minister of Finance ensured that Rothschild was introduced to the Tsar, who was then on a visit to France.

* (See Ministry of Finance. - Part 2. - pp. 389 - 391.)

Following this, however, the use of the French money market slowed down. A campaign against the “hobby” of Russian funds began in the press of the allied country. The French government, for its part, has become restrained about placing new Russian loans, citing the fact that the Paris market is “overburdened” with Russian values.

The real reason for this change was the significant increase in Russia's debt to its ally, which encouraged the latter to use the situation in its own interests. According to the French cabinet, the tsarist government did not pay due attention to these interests. Thus, when implementing the monetary reform, Witte ignored the advice of French financiers and politicians to introduce bimetallism in Russia, which would be beneficial for their country. In 1896, the Russian Minister of Finance categorically refused to participate in the operation to liquidate Turkish funds purchased by French financiers for speculative purposes, but which did not bring the expected income *. This failure was all the more annoying for the French government because Nicholas II had already given his consent during his stay in Paris.

* (Witte rightly believed that there were no hunters among the Russian public, and there was no need for the treasury to participate in this dubious enterprise. In an effort to soften the refusal, he made some counterproposals, which, however, did not receive practical implementation (see AVPR. - f. Chancellery. - 1896. - D. 109. - L. 30 vol.).)

In the summer of 1897, the French Minister of Finance G. Cochery, in a letter to the Minister of Foreign Affairs G. Hanotot, clearly formulated the line that should be followed in relation to Russian loans. Its essence was to place Russia's financial transactions on the Paris market under the control of the French government, which could sanction or reject them depending on the target setting and its own financial plans *.

* (Documents diplomatiques francais.- Ser. 1.- T. XIII.- P. 450 - 453 (hereinafter: DDF).)

When in the same year Witte tried to place in France a large batch of 4% internal annuity and mortgage notes of the Noble Bank, the French Ministry of Finance opposed the admission of these securities to quotation. An even more painful clash occurred in 1899, when the French government suspended the implementation of the deal between the Russian Ministry of Finance and the Lyon Credit on the placement of mortgage sheets of the Noble Bank.

If Witte quickly responded to the campaign in the French press by creating a special fund to bribe some newspapers, it was more difficult to find a way to influence the government of his ally. For this purpose, he used the visit to France in October 1899 of Foreign Minister Muravyov. At Witte’s request, he insisted during the negotiations on allowing the mortgage notes of the Noble Bank to be included in the quotation. In response, the French government proposed placing a Russian railway loan on the Paris market with the condition that funds from its sale would be used to build a strategic railway in Central Asia: after the Fashoda crisis in relations with England, French politicians had to reckon with the possibility of a military clash with it and sought make the British Empire vulnerable to the actions of the Russian army.

The idea of building the Orenburg-Tashkent railway corresponded to the plans of the tsarist government itself. Witte, however, did not want to place a railway loan in France, which was unprofitable for commercial reasons. He countered this with his own version of the deal: the French government would allow mortgage notes from the Noble Bank worth 200 million rubles to be placed on the Paris market in 1900-1901, and Russia would begin construction of the said road using internal funds. At the end of 1899, France's consent in principle to this proposal was obtained*.

* (Ananich B.V. Russia and international capital. - pp. 39 - 40.)

Difficulties with the French loan led the Minister of Finance to the idea of the need to expand the circle of Russian lenders in order to be able to choose between the world's most important exchanges.

In May 1898, Witte spoke at the Committee of Ministers for the development of commercial and financial ties with England, arguing that this was more profitable than turning to the Paris market, which was already saturated with Russian securities *. Almost simultaneously, an agent of the Ministry of Finance, S.S. Tatishchev, arrived in London and entered into negotiations with the English Rothschild. He bluntly pointed out that the main obstacle to the opening of the London money market for Russia is the tense political relations between the two countries. Tatishchev established contact with several other banking houses in England, but the result was equally disappointing. In June 1898, he reported to Witte that London financial circles did not want to think about “expanding their ties with our treasury until the dark clouds disappear from the political horizon” **. The only thing Tatishchev managed to achieve was the admission of the Russian 4% internal rent to the quotation in London in the same year, which, however, did not bring any tangible results.

* (See Ananich B.V. Russian autocracy and the export of capital. - P. 23.)

** (See Ananich B.V. Russia and international capital. - pp. 29 - 32.)

The conclusion of an agreement with England on the spheres of railway interests in China seemed to give hope for progress also in the field of financial relations. This time, Witte entrusted the task to the director of the St. Petersburg International Bank, A. Yu. Rotstein, who was close to him, who managed to place a 4% loan for the Moscow-Vindavo-Rybinsk Railway in England in June 1899. Witte, in a special report to Nicholas II, tried to pass off this operation as a great success, marking the restoration of ties with the London money market after a many-year break *. In fact, the loan amount was insignificant, and it was placed with the help of the banking houses of Berlin and Amsterdam. The main thing was that the financial transaction with Henry Schroeder and Co. did not continue and did not open a new frontier in Russian-English financial relations. This was explained not only by the fact that the emerging Russian-British rapprochement had stalled. The general situation on European stock exchanges has deteriorated - a sign of an impending economic crisis.

* (Ibid. - pp. 35 - 37.)

The depressed state of European money markets prompted Witte to pay more attention to the possibility of lending in the United States. In the fall of 1898, he received an offer to conclude a Russian loan in America from the New York financier Ivins. Almost simultaneously, the Russian Consul General in Washington, V. A. Teplov, announced a similar initiative of a group of American bankers. Witte was quick to send to New York the vice-director of the Special Chancellery for Credit, A. I. Vyshnegradsky, who was to be assisted by US Treasury agent M. V. Rutkovsky. Negotiations on a loan of $80 million, which continued until the end of the year, ended, however, in failure. Its main reason was that the commercial conditions of J. Morgan and his companions turned out to be unacceptable for the Russian side.

In the spring of 1899, negotiations resumed, this time with the participation of Rothstein, already known to the reader, who met with Morgan in Brussels. A little later, Otstein wrote to his counterparty that Witte welcomed their contact and Morgan’s desire, if the opportunity presented itself, to “get involved in Russian affairs” and that the Minister of Finance would be glad to enter into direct relations with him. Following this, someone close to Morgan came to St. Petersburg. Porter, who conferred with Witte and Rothstein about establishing closer Russian-American financial and trade ties. The practical result of all these meetings turned out to be insignificant at that time. In the fall, American bankers J. Perkins and W. Ingersol (New York Life Insurance Co.) entered into an agreement with the St. Petersburg International Bank to issue a 4% loan to the South-Eastern and Vladikavkaz Railways in the amount of $10 million (approx. 20 million rubles) * . At the end of September, the Minister of Finance wrote with disappointment to Muravyov that “in America it will also hardly be possible to find a strong loan...” ** .

* (See S. Yu. Witte’s attempts to open the American money market for Russian loans (1898 - 1902) // Historical archive. - 1959. - No. 1.-S. 123 - 140.)

** (Ananich B.V. Russian autocracy and export of capital. - P. 25.)

Thus, Witte's first attempts to enter the broad international money market did not bring the expected results. But it would still be wrong to deny any meaning behind them. Contacts and small operations to a certain extent prepared the ground for the future. They should also have encouraged French financiers and politicians, who did not want to lose the Russian market, to greater flexibility.

Since, according to Witte’s calculations, the import of foreign capital into Russia was supposed to be partly balanced by the development of Russian-Asian trade, the Ministry of Finance took a number of measures in this direction, leading to the creation of a special economic mechanism and the placement of Russian, primarily government, capital in the relevant countries.

Back in April 1893, on Witte’s initiative, a special meeting on trade with Asian states was convened at the Ministry of Finance. Representatives of the Ministry of Foreign Affairs and the War Ministry took part in it. By the beginning of 1894, the meeting discussed some issues of trade with Persia, Afghanistan and Bukhara and began to consider the problem of expanding trade with China.

One of the most important recommendations of the meeting was to acquire the ownership of the treasury of the Persian Loan Society, which belonged to Ya. S. Polyakov. In 1894, Witte carried out the decision to purchase the Loan Society by the State Bank through the Finance Committee and achieved its approval by Alexander III. The New Loan (later Accounting and Loan) Bank of Persia, considered formally private, was actually a Russian state enterprise. Its establishment required expenses from the treasury in the amount of 11.3 million rubles, not counting large loans from the State Bank. The Finance Committee set the task for the Loan Bank to promote “the development of active trade of Russians in Persia, the sale of Russian manufactured goods there, the distribution of Russian banknotes among the Persian population, as well as the displacement of English works from Persia” *.

* (See Red Archive. - 1933. - T. 1 (56). - P. 49 - 50; Ananich B.V. Decree. op.- P. 17.)

“The opening of a Russian bank in Tehran marked, according to the conclusion of the researcher of the issue, the direct transition of the autocracy to an active economic policy in Persia, designed to conquer the Persian market and oust the English rival from Persia.” Through the Loan Bank, Russian state capital flowed into the country, invested in loans, concessions for the construction of dirt roads, coinage, etc. Until the end of the century, Russia achieved noticeable success, catching up with England in terms of trade turnover with Persia, surpassing in imports and taking a monopoly position on markets in the north of the country *.

* (See Ananich B.V. Decree. Op. - P. 17; Anspach A. La Russie economique et l'oeuvre de M. de Witte. - Paris, 1904. - P. 381.)

Already in 1895, the Loan Bank entered into confrontation with the English Imperial Bank, which had previously monopolized the financing of the Persian government. At first, the matter was limited to small operations. In 1898, the rivalry intensified. The struggle began for another large loan to the Shah's government, which promised great benefits. As preliminary steps, Russia in September provided Persia with a loan of 1 million rubles at 6% interest, and the Loan Bank guaranteed Persian bills for 0.5 million rubles. At Witte’s insistence, the loan was guaranteed by income from northern customs and “Caspian fishing grounds.” In addition, the Shah issued a written commitment to the Russian mission for 2 million rubles*.

* (See AVPR.- F. Office.- 1898.- D. 106.- L. 71, 80 pp., 105 pp.)

The loan itself was initially conceived as Russian (St. Petersburg International Bank), then Franco-Russian, and in 1899 even a project for a triple Anglo-Franco-Russian operation was discussed. Back in 1898, England proposed to Russia to agree on joint financing of Persia, which would pave the way for the division of spheres of economic influence in this country. This disengagement was consistent with the program of Anglo-Russian rapprochement outlined by Salisbury. Witte was at one time inclined to accept the English proposal. At the same time, he proceeded from the interests of big financial policy, trying to ensure the English money market for Russia. He was also attracted by the prospect of cooperation with England in the fight against the German Baghdad Railway project.

The Ministry of Foreign Affairs regarded Witte's opinion about the possibility of a “joint Russian-British loan and delimitation of spheres of influence in Persia” with great doubt *. Cooperation with London was not sympathized with by allied France, which was still under the impression of Fashoda and wanted Russia to build the strategic Orenburg-Tashkent road in case of war with England. Persia itself also objected to the triple loan, fearing an English invasion of the south of the country.

* (See Ananich B.V. Decree. Op. - P. 21; Ostaltseva A. F. Anglo-Russian agreement of 1907. - Saratov, 1977. - P. 41 - 42.)

When Witte’s financial calculations and hopes for cooperation against the Baghdad road did not materialize, he began to continue his course towards an independent Russian loan. To get rid of the French and English financial groups, Witte nominated a direct agent of the government, the Loan Bank, instead of the St. Petersburg International Bank. At the end of 1899 - beginning of 1900, negotiations were underway on a Russian loan, during which the Minister of Finance sought a monopoly right to lend to the Shah's government and the establishment of control over Persian finance through the Loan Bank and the extension of the Shah's obligation not to build railways for another 10 years.

An important step in the development of Russian Asian trade was the formation of the Russian-Chinese Bank. The question of its creation was raised by merchants trading with China, and in 1894 was subject to detailed discussion in the Ministry of Finance. The services provided by Russia to China during the period of the end of the Sino-Japanese War allowed Witte to carry out his plan, and in December 1895 the Committee of the Siberian Railway approved the charter of the bank.

Most of the shares of this institution belonged to the tsarist government, and the rest went to a syndicate consisting of the four largest Russian (Petersburg International, Petersburg Accounting and Loan, Russian for Foreign Trade and Volzhsko-Kama) and a group of six French banks *. The majority of the board members and its chairman were replaced at the direction of the Ministry of Finance. According to the charter, the functions of the bank in Russia were relatively limited. But in the Far East they turned out to be extremely broad: they covered trade, insurance, commission transactions, issuing their own bank notes, and obtaining concessions. In addition to promoting the development of economic ties between Russia and China, the bank served as a tool for strengthening Russian political influence as opposed to English **. Russia's trading successes in China turned out to be more modest than in Persia, due to both the remoteness of the Pinsk Empire from the European part of the country and the presence of a number of strong rivals there. Competition in the field of railway construction developed more favorably for tsarism. Here Russia, inferior to England, was significantly ahead of Germany and France ***.

* (Mainly creditors of Russia, such as Gottinger and Co., Paris-Netherlands Bank, Lyon Credit, National Accounting Office, etc.)

** (See Ananich B.V. Decree. op.- pp. 5 - 6; Prologue of the Russian-Japanese War.- pp. 26 - 29.)

*** (Popov A. Far Eastern policy of tsarism in 1894 - 1901 // Marxist historian. - 1935. - Book. 11 (51).- P. 45.

In the same 1895, when the Russian-Chinese Bank was founded, Witte’s attention was attracted to India, which, according to his calculations, could become a vast market for Russian kerosene. Russia's main rival here was the United States. In order to overcome American competition, the Secretary of the Treasury put forward the idea of a mutual reduction in duties on Russian kerosene and Indian rice, which would balance the benefits of the two sides. The issue was discussed through diplomatic channels. However, the British government, fearing the penetration of Russian influence into India, did not want to meet this proposal *.

* (See Popov A. English policy in India and Russian-Indian relations in 1897 - 1905 // Red Archive. - 1926. - T. 19. - pp. 56 - 57.)

Another measure of the Ministry of Finance to expand Asian trade was the founding of the Russian-Korean Bank at the end of 1897. As in previous cases, this institution, being a joint-stock company in form, was largely of a state nature. 51% of its shares belonged to the tsarist government, and the rest to the Russian-Chinese Bank. Its board included representatives and appointees of the Ministry of Finance. The bank was created, as Witte wrote in a report to the tsar, “to strengthen Russia’s economic influence in Korea and develop Russian-Korean trade.” The charter opened up even greater freedom of operations for the new credit institution than for the Russian-Chinese Bank *. These opportunities, however, were not realized due to the cooling of Russian-Korean relations and the weakening of Russia’s position in this country. Having barely started its activities, the bank was forced to curtail it, and soon completely liquidate its affairs.

* (See Ananich B.V. Decree. op.- pp. 7 - 9.)

Despite this failure, from other banks, the CER Society and related enterprises, Witte created an impressive financial and economic mechanism, closely intertwined with the state one and enjoying the diversified support of the tsarist government. Researchers called it differently: “trust”, “combine”, and a contemporary and enemy of the Minister of Finance V.K. Plehve - even “Witte’s state”. Some visible signs of the state were indeed present in it, for example, a reformed border guard corps headed by a minister. The activities of this mechanism were headed by the expanded apparatus of the Ministry of Finance *.

* (Witte began his ministerial activities with one deputy (comrade), and in 1902 he already had four. The Ministry of Finance included 11 departments and large divisions. The State Bank, the State Noble Land Bank, the Peasant Land Bank, and the Mint were subordinate to him. The General Office of the Minister had its own scientific committee. Over a thousand officials worked in the central office of the ministry alone. The Minister of Finance had his own official representatives (agents) in the largest countries of the world.)

While importing fairly large amounts of foreign capital in the form of loans and allowing it to be invested in the national economy, the tsarist government simultaneously carried out a necessarily limited export of capital. In accordance with the economic program of the Minister of Finance, he was sent almost exclusively to neighboring Asian countries, where he stimulated the development of Russian trade and entrepreneurship, and also contributed to the growth of Russia's political influence. For other areas, even those of significant political interest, funds were usually not available. The same Witte persistently rejected proposals from the Foreign Ministry for concessions in Serbia and Montenegro, including subsidizing the Danube-Adriatic Road, which was important for Russia *.

* (See Kirova K. E. Italian expansion in the Eastern Mediterranean (at the beginning of the 20th century). - M., 1973. - P. 208, 234; TsGIA.- F. 560.- Op. 22.- D. 254.- L. 26 - 27, 61 vol., 64.)

The development of economic relations with foreign countries was facilitated by intensive railway construction. In the 90s, the construction of railways reached a scale previously unprecedented in Russia. Their total length has increased by almost 70%. On average, more than 2.5 thousand miles of new tracks were laid per year. State construction and the purchase of more important or unprofitable roads from private companies made it possible to concentrate 60.5% of the entire railway network in the hands of the government *. In terms of the scale of railway construction, Russia has taken third place in the world after the USA and Great Britain.

* (See Bulletin of Finance, Industry and Trade. - 1900. - No. 1. - P. 61; Ministry of Finance. - Part 2. - P. 588; Prologue of the Russian-Japanese War.- pp. 61 - 62.)

The Siberian Railway was of particular importance for Asian trade. In 1899 - 1900, the construction of most of it was completed. In combination with steamship traffic along natural waterways, the path to the Far East could be considered paved. At that time this was an outstanding achievement. The pace of construction was 1.5 times higher than during the construction of the famous Canadian Road. In Manchuria, by mid-1900, about 1,300 versts of railway tracks had been laid - more than half of the projected length of the Chinese Eastern and Southern Moscow Railways.

While paying tribute to the organizational abilities of Witte and the leading railway engineers, we must not forget about the great labor feat of the people. Hundreds of thousands of workers from the European part of Russia and Siberia, as well as soldiers, exiles, convicts, and migrant workers from eastern countries worked with the help of primitive tools for 16 - 18 hours a day.

The exploitation of cheap labor and generous government allocations served as a source of fabulous enrichment for capitalists and officials. The road, wrote V.I. Lenin, went down in history as great “not only for its length, but also for the immeasurable robbery of government money by the builders, for the immeasurable exploitation of the workers who built it...” *. Overspending of public funds compared to the approved construction cost was observed almost everywhere, sometimes reaching 30%. Additional funds were required for the construction of the Perm-Kotlas and Yekaterinburg-Chelyabinsk lines, as well as individual branches and auxiliary enterprises. If the initial project estimated the cost of the entire highway at 329 million rubles, then in fact its implementation cost the treasury almost 1 billion rubles, or three times more **!

* (Lenin V.I. Poli. collection op.- T. 5.- P. 82.)

** (See TsGIA.- F. 1622.- Op. 1.- D. 936.- L. 28 rev.- 31.)

Not all elements of Witte's economic system worked equally effectively. In the field of industry, especially if we take into account production per capita, the gap between Russia and more developed countries was narrowing more slowly than expected, as the minister himself admitted in the mentioned report in February 1900. Asian trade, despite some progress, still could not compensate for the outflow of profits of foreign companies, since its negative balance not only decreased, but even increased *.

* (See Review of Russian foreign trade along the European and Asian borders for 1899. - St. Petersburg, 1901. - P. 46.)

Back in 1893, Witte presented a report to Alexander III on the need to develop the Russian merchant fleet, arguing that 90% of Russia's maritime trade was carried out under a foreign flag. The Ministry of Finance took a number of measures: the port dues system was simplified and unified, and agreements were concluded with a number of states “on the mutual recognition of certificates of measurement.” Navigation between Russian ports, including those located in different seas, has become a monopoly of the domestic fleet. This was followed by the abolition of duties on ships purchased abroad intended for long-distance transportation. Nevertheless, there has been no significant increase in the number of ships flying the Russian flag or the volume of cargo they transport*.

* (See Ministry of Finance. - Part 2. - pp. 550 - 554; Review of Russian foreign trade along the European and Asian borders for 1899. - P. 56.)

Witte's economic system required enormous funds. At the same time, government spending on military needs and assistance to feudal landowners increased significantly. One of the finance minister’s contemporaries wrote about this after his death: “S. Yu. Witte paid a lot and often to the noble-landowner element. Otherwise, it would have been incomprehensible how he could have remained in power for more than a decade. They served this purpose some credit operations of the state bank granted to borrowers of the noble bank (May 29, 1897), benefits on the payment of duties on the sale of estates (April 10, 1895), benefits on the inheritance of reserved estates and majorates (May 25, 1899). , June 3, 1902). The same purpose was served by the benefits for distilleries and sugar refineries established in connection with the introduction of a wine monopoly and the rationing of the sugar industry. In general, landowner Russia could not claim that S. Yu. Witte nourished the Russian industry for his money. her account" * .

* ()

At whose expense were measures taken to stimulate industry, transport and trade carried out, who primarily paid for the growing costs of armaments? A clear answer to this question was given by V.I. Lenin, who carefully analyzed the budget reports of the Minister of Finance. He revealed the techniques of “official financial magic” and showed that Witte was conducting a “predatory economy” based on a constant increase in “the amount of loans and the amount of taxes” *.

* (Lenin V.I. Poli. collection op.- T. 6.- P. 257 - 259.)

Even underestimated official data indicate that during Witte’s management of the Ministry of Finance, Russia’s public debt increased from 4.9 billion to 6.7 billion rubles. The actual growth was even more significant. According to the assessment of the Soviet researcher P. I. Lyashchenko, during the 90s, “the amount of state debt for the purpose of financing railway construction, encouraging industry, accumulating a gold fund and other financial transactions increased by more than 3.5 billion rubles, of which approximately up to 2.5 billion rubles - through the domestic money market and 1 billion rubles - through foreign government loans" *. Paying payments and interest on loans placed an increasingly heavy burden on taxpayers.

* (Lyashchenko P.I. Decree. op.- T. 2.- P. 189.)

The tax pressure intensified under Witt to an even greater extent. Direct taxes increased by 1.5 times, and indirect taxes by more than two times, not counting the state wine monopoly. Who bore the brunt of the tax burden in Russia? According to the Minister of Finance himself, his budget was built primarily on a system of indirect taxation. Indeed, in 1900, indirect taxes brought in 45.5% of government revenue. and direct - only 13.4% of receipts. A quarter of all income came from the government sale of vodka (“drinks”), introduced in 1894-1897 on Witte’s initiative*.

* (See Glinsky B. Decree. Op. - P. 271; Lyashchenko P.I. Decree. op.- T. 2.- P. 390 - 391.)

In justifying such a policy, the Minister of Finance hypocritically claimed that everyone could proportion the consumption of taxed items to the degree of their wealth. In fact, indirect taxation was, in the words of V.I. Lenin, “the greatest injustice.” It fell heavily on the poor and created a privilege for the rich, since it applied, as a rule, to consumer goods. As a result, the poor and disadvantaged strata, who made up 9/10 of the population and consumed the corresponding amount of taxed products, also paid 9/10 of indirect taxes, while receiving no more than two to three tenths of the national income *.

* (See Lenin V.I. Poly collection. op.- T. 6.- P. 262 - 263.)

The distribution of direct taxes also did not correspond to the level of income of the population. About half of them were paid by the peasantry in the form of redemption payments, stretching back to the time of the “great” reform of 1861. At the same time, landowners enjoyed tax breaks. In 1896, in connection with the coronation, the treasury not only “forgave” them the arrears of the state land tax, but also reduced the amount of the tax itself by more than half for the future. The increase in taxes on entrepreneurs was more than covered by various forms of state patronage, and even direct financial assistance to them. Suffice it to recall the large industrial loans of the State Bank *.

* (See Ministry of Finance. - Part 2. - P. 445; Gindin I. F. Non-statutory loans of the State Bank and the economic policy of the tsarist government. Historical notes. - T. 35. - M., 1950.)

If we consider that, according to the 1897 census, approximately 77% of the population of Russia was the peasantry, it becomes clear that it was they who had to bear the main burden of the financial policy of the autocracy. And this in conditions when barely 1/5 of it belonged to wealthy owners, and the remaining 4/5 were the proletarian and semi-proletarian layers of the village and the poorest small owners *!

* (Lenin V.I. Poli. collection op.- T. 3.- P. 502 - 503.)

This flaw in Witte's economic system was quite obvious even to his contemporaries from the bourgeois camp. P. N. Milyukov wrote in a biographical article about the Minister of Finance that his policy gave “an impetus to the rapid development of industry at the expense of the welfare of the countryside” and that it “turned into a system of squeezing funds from the rapidly impoverished population for use that was not always productive” *. Another bourgeois author gave the following retrospective assessment in Russkie Vedomosti: “But young industrial capitalism could only be created at someone else’s expense: it was paid for by the peasantry. In his vigorous activity, S. Yu. Witte found surprisingly little time to care about the peasant population ... And the duration of the industrial crisis that befell the Russian national economy in the first years of this century proved that the builder erected the building on a foundation that was not strong enough" ** .

* (Encyclopedic Dictionary Garnet. - T. X. - M., without a year. - P. 346.)

** (Glinsky B. Decree. Op. - P. 275.)

V.I. Lenin foresaw that Witte’s predatory economy was slowly but surely leading the autocracy “to bankruptcy, because taxes cannot be raised endlessly and the French bourgeoisie will not always help out the Russian Tsar.”

* (Lenin V.I. Poli. collection op.- T. 6.- P. 259.)

Was Witte himself aware of the instability of his system? He would be a lousy finance minister if he did not weigh the options of the country's main taxpayer. The peasantry occupied him as a politician and in other respects. It was an antagonist to the landowners on the land issue. When Witte was once asked abroad whether the information about the unbearable situation of Russian workers was correct, he replied that the government was doing everything possible to improve the living conditions of workers, but he immediately expressed the idea that the main problem in Russia lay elsewhere - in the situation of the peasantry, which is immeasurably more numerous and with which the most important question about land is connected *.

* (See The Past.- 1918.- No. 1.- P. 200.)

At first, Witte saw a solution in the resettlement of peasants, in their development of new lands, mainly along the Siberian road. In 1893 - 1899, about 960 thousand migrants and walkers moved to Siberia, only a part of whom were able to settle in new places *. At such a pace, the solution to the agrarian question would drag on for many decades.

* (Anspach A. Op. cit.- R. 56; Lyashchenko P.I. Decree. op.- T. 2.- P. 273.)

And the Minister of Finance quite soon realized the need to loosen the shackles of the remnants of serfdom that constrained the development of the peasantry. In 1898, Witte approached the Committee of Ministers with a proposal to form a special commission to consider legislation “on the rural situation.” After much debate, his initiative received support there. But Nicholas II did not approve the opinion of the Committee of Ministers, although he did not completely reject it. This prompted Witte to address the Tsar with a special letter on the peasant issue in October of the same year. He tried to seduce the monarch with the prospect of a manifold increase in tax revenues from the rural class if it was placed in more favorable legal and property conditions. However, the appeal to the “first landowner” had no effect *.

* (Glinsky B. Decree. op.//Historical Bulletin.- 1915.- T. CXLI.- No. 8.- P. 522; Witte S. Yu. Decree. op.- T. 2.- P. 520 - 529.)

Then, in the budget report for 1899, the Minister of Finance repeated some of his arguments openly. He expressed the opinion that the main reason delaying progress in strengthening the peasant economy lies “in the uncertainty of the property and social relations of the peasants, which gives rise to various difficulties in the very routine of running a personal farm, in the most advantageous disposal of forces and means and in the accumulation of the latter.” Witte believed that the time had come “to begin solving the task bequeathed to our generation of the final arrangement of the social and property life of the peasants” * .

* (Bulletin of Finance, Industry and Trade. - 1899. - No. 1. - P. 8 - 9.)

His initiative, however, ran into a blank wall of misunderstanding and fears among the ruling circles. The tsar did not dare to bring the peasant issue up for discussion even at a closed meeting. Nicholas II recommended that the Minister of Finance contact the commission on affairs of the nobility. There, the dignitary's attempt to talk about changing the situation of the peasantry was immediately stopped by seasoned serf owners *. And the pragmatist Witte resigned himself, or rather, put off the pressing issue until better times.

* (See Encyclopedic Dictionary Pomegranate. - T. X. - P. 349 - 350.)

He even tried to rehabilitate himself in the eyes of the tsar and the Black Hundred bison, showing off his “devotion to the autocracy by drawing up an indictment against the zemstvo” *. This refers to the notes of the Minister of Finance on the project of introducing zemstvo institutions in the outskirts, the second of which became public and was subjected to devastating criticism by V.I. Lenin in the famous work “Persecutors of Zemstvos and the Annibals of Liberalism.” By speaking out against the expansion of zemstvos, Witte simultaneously contributed to the resignation of one of his enemies in the government - Minister of Internal Affairs I. L. Goremykin.

* (Lenin V.I. Poli. collection op.- T. 5.- P. 26.)

Witte showed more ability in bureaucratic balancing act than in political foresight. His hopes for better times turned out to be untenable. The economic crisis of the early 20th century and the re-emergence of famine in the Russian countryside exposed the weaknesses of the economic policy associated with the name of the Minister of Finance. The crisis had far-reaching political consequences.