4. Economic Changes

• Who did Alexander II appoint as minister of finance in 1862?

  Mikhail von Reutern
• When was the State Bank founded?

  1860
• What was the purpose of the State Bank?

  Answers:

  • It was the largest credit institution in the country.
  • It did not control the currency (the Tsar did), which made it difficult to control inflation and the foreign exchange value of the rouble.
  • It supported the development of 278 municipal banks, 727 loans and saving associations, 566 joint-stock companies, and 33 joint-stock banks.
• When did Reutern publish the first state budget?

  1862
• What were government departments obliged to do under the new financial reforms?

  Publish their accounts.
• What changes were made to tax collection?

  A new centralised system of tax collection was introduced, with the medieval practice of tax-farming, where companies bought the rights to collect taxes on certain goods was abolished.
• When were tariffs on imports and exports lowered?

  1863
• What changes were made to the railway?

  Answers:

  • In 1854, Russia only had 700 miles of track compared to almost 14,000 in 1881.
  • The state invested 1.8 billion roubles and there was considerable private investment.
  • Reutern encourages foreign investment by initially guaranteeing the annual dividend on investors' shares, and Russia benefited from foreign expertise.
• What were the impacts of the changes made to the railway?

  Answers:

  • Grain increased threefold (but from a low base).
  • The production of coal and iron increased. In 1860, 0.33 million tonnes of coal was produced compared to 6.03 million tonnes in 1890.
  • The railways helped to open up the Baku oilfields and the production of petrol.