By the 1880s the process of imperial expansion had ended. The expansion was noteworthy in its asymmetry from an economic point of view. Poland and Finland, Central Asia and Bukhara and the Caucasus clearly differed in their levels of economic development and business culture. Poland and Finland served as a bridge between Russian and European business culture. The economy of Poland and especially Finland enjoyed a certain degree of autonomy. For instance, Finland possessed its own customs system and currency. Finland also introduced gold money (zolotaia marka) twenty years before the gold standard was started in the empire. Finland independently concluded foreign loans, and during the First World War even acted as a creditor to the imperial gov- ernment.61 Areas where Islam was prevalent represented yet another level of economic development. Muslim entrepreneurship had its specific features. In these regions of the empire, even on the eve of the First World War, deals were concluded on the basis of sharia. The multinational and multi-confessional character ofthe empire affected the makeup ofthe Russian bourgeoisie and its disunity. For example, representatives of influential financial circles in Moscow,
58 A. N. Solov'eva, Zheleznodorozhnii transport Rossii vo vtoroi polovine XIX veka (Moscow: Nauka, i975), p. 27i.
59 T. M. Kitanina, Khlebnaia torgovliaRossii (Moscow: Nauka, 1978), p. 275.
60 Iu. N. Shebaldin, 'Gosudarstvennii biudzhet tsarskoi Rossii v nachale XX veka (do pervoi mirovoi voiny)', IZ, 56 (1959): 165.
61 See K. Pravilova, 'Finliandiia i rossiiskaia imperia: politika i finansy', IZ, 124, 6 (2003): 180-240; B. V Anan'ich, 'Zolotoi standart Finliandii i Rossii: finansovii aspect imperskoi politiki' in Rossiia na rubezhe XIX-XX vekov. Materialy nauchnykh chtenii pamiati professora V.I. Bovykina, Moscow, 20Jan. 1999 (Moscow: Nauka, 1999), pp. 115-24.
which were dominated by Old Believers, were very critical oftheir Petersburg counterparts. The Riabushinskiis, for example, believed Petersburg was a city of temptation, 'a frightening city', where 'market orgies' and 'unprincipled brokers' reigned.[393] This disunity would influence the Russian bourgeoisie's role in the political life of the country.
Financial and commercial policy at the beginning of the twentieth century
The world economic crisis at the beginning of the twentieth century and the ensuing depression brought serious harm to the Russian economy. The economy had not recovered when the country found itself locked in the Russo- Japanese War of 1904-5. In 1905 came revolution.
Witte's reforms did not pass these tests unscathed. During the war economic reforms were not possible. In addition, the Finance Ministry lost its special role in determining overall government policy after the creation in 1905 of the Council of Ministers, whose chairman was to play the role of prime minister. In the same year the Ministry of Trade and Industry was formed, and the Ministry ofAgriculture was re-named and strengthened, thereby reducing the Ministry of Finance's previous domination of economic policy.
In 1903 Witte was forced to leave the Ministry of Finance. E. D. Pleske replaced him as minister. Pleske was an experienced and knowledgeable bureaucrat but was not connected with financial or scholarly circles. The same thing can be said of V N. Kokovtsov, who headed the Ministry of Finance from 1904 to 1914, with a short break between 1905 and 1906. Until 1907, by Kokovs- tov's own admission, it was impossible even to think of any creative policies. His key concern was to maintain the gold standard, and then support P. A. Stolypin's land reforms.[394]
The revolutionary movement in Russia in November-December i905 led to a massive outpouring of gold from savings banks. At the end of December i905, the State Bank had almost exhausted its statutory lending limit. The fate of gold money in Russia depended on a large foreign loan. V N. Kokovstov was sent to Paris on an emergency mission to conclude a deal. His trip coincided with the worsening of Franco-German relations over a conflict in Morocco. The Moroccan crisis was supposed to be solved at an international conference in Algeciras in January i906. The French government repeatedly announced that it was counting on Russian support at Algeciras. Nicholas II ordered V N. Kokovtsov to tell the French government in Paris that Russia was prepared to support France at Algeciras. In return, the French agreed to organise a small, and once the Algeciras conference was over, a large loan for Russia.
On 29 December 1905 / 11 January 1906 a contract was signed with French banks for a loan worth i00 million roubles. The situation was so critical in Petersburg that officials did not wait until the loan documents arrived from Paris by post and hurried to add 50 million roubles to the balance of the State Bank's foreign accounts.[395]
When on 18/31 March 1906 an agreement was finally reached in Algeci- ras, the French finance minister allowed the Russian ambassador in Paris, A. I. Nelidov, to begin negotiations with bankers for a larger loan. The Russian 5 per cent loan of 1906 was concluded on 9/22 April for a sum of 2,250 million francs, i,200 million of which France paid, 330 million came from England, i65 million from Austria, 55 million from Holland and 500 million from Russian banks. The Russian government was unable to secure more international creditors for the loan: German, Italian, American and Swiss banks refused to participate.[396] The 1906 loan allowed the preservation ofWitte's gold standard.
The trials to which the Russian financial system was subjected in the years of war and revolution motivated Kokovtsov to reject further forced development of domestic industry designed to catch up with the more economically developed countries of Western and Central Europe.
The world economic crisis of 1900-3 slowed the growth of Russian industry and resulted in more then 3,000 enterprise closures. In 1903 Russia boasted 23,000 industrial enterprises employing 2,200,000 workers.[397] In 1904 the rest of Europe experienced growth while the Russo-Japanese War and revolution led to the destabilisation of monetary circulation and a fall in industrial production in Russia. After a series of poor harvest years beginning in 1906, Russia finally produced a strong harvest in 1909. This immediately made an impact on the general economic health of the country. According to customs statistics, Russian exports were worth 1,300 million roubles in 1909, the highest figure of the decade by more than 325 million roubles. The trade surplus increased by 500 million roubles. This affected monetary circulation and increased Russia's gold reserves. By i January i909 the gold reserve was i,307 million roubles, and by the end of the year the sum had reached 1,708 million roubles, having increased by 401 million roubles.[398]
Russia's entrance into the Entente in 1907 strengthened Franco-Russia relations and coupled with renewed industrial growth promoted the development of co-operation between French and Russian banks. In particular, the French helped to improve the finances of the Petersburg private banks. In 1910 the Northern and Russo-Chinese Banks united. Together, they formed the new Russo-Asian Bank. During the years of economic growth before 1914 Franco- Russian financial groups were formed. From the Russian side, the main participating banks were: the Petersburg International, the Russian Commercial- Industrial, the Azov-Don, the Petersburg Discount-Loan, the Russian Foreign Trade, the Russo-French, and the Siberian Commercial Bank; and from the French side - Credit Lyonnais, Comptoir National d'Escompte, Banque Francaise pour le Commerce et L'Industrie, Banque de L'Union Parisienne. French and Russian banks co-operated on railway projects in Siberia, Turkestan and the Caucusus and in joint operations in the Balkans.
393
B. V Anan'ich,
394
V S. Diakin,
395
B. A. Romanov
396
B. V Anan'ich,