The rule of Nicholas 2 between 1894-1905

• Segei Witte was finance minister from 1892-1903
• Witte faced problems such as little investment and competition in the market due to a small bourgeoisie in russia. Another problem was that peasants did not have freedom of movement thus thee was little work in urban areas and the expetise could not be spread throughout Russia. Lastly there was not a surplus of grain THUS preventing the russian government from financial gain from exports
• Witte brought advisors and engineers to Russia to spread expertise and to help Russia modernise along the same lines as Britain and france. Who at the time were having private enterprise.
• Witte negotiated large foreign loans from western powers, particularly France, much of which was invested into industrialisation. This also gave Russia a high standing amongst Western powers and convinced the west to get involved in Russian economic affairs
• Witte raised taxes and rates on loans. Thus raising Government revenue and discouraged people from taking large loans
• High tariffs were placed on foreign goods particularly steel and coal , so that Russian fledging industry would be protected and address the balance of trade
• In 1897 Russia joined the gold standard. This increased confidence in the Russian economy, and this also brought investors from other places, and as a result, Western factories opened in Russia. This also prevented Russia from printing large amounts of money
• Witte invested most of the money raised through foreign loans into Russia's railway system
• The Trans-Siberian railway stretched 600km
• Witte improved the railway network between the industrial centres of Moscow, St Petersburg and Baku
• The trans-siberian railway appealed to the tsar because it was useful for troop movements
• The railway meant that goods could be transported and the more remote Siberian regions would be more connected
• After Witte's interference as finance minister, new problems arose, including an economy that became too dependent on financial loans, which would have a catastrophic effect on Russia should the global economy crash.
• Witte prioritised heavy industry and neglected light industries such as textile or tool production, which could be used to modernise the economy further.
• Witte neglected the agriculture sector, Russia's weakest area.
• The trans-siberian railway was more of a showpiece than a particularly modernising network.
• High taxes left people with little surplus income to invest or to purchase material goods.
• Due to Wittes reforms workers' living conditions decreased substantially, and their families starved due to heavy taxes on food. Fines and public beatings increased. Housing became crowded and the slum housing appeared. Maxist ideas began to spread
• During the Russo-Japanese war Russia was 3 times the size of japan
• During Russia-J war Russia's army consisted of about 700 000 to 1 000 000 troops
• The japanese navy was far more advanced than Russia's
• The number of Russian soldiers that died in the battle of Mukden were 89 000
• Military defeats led to a loss of confidence in the Tsarist regime
• In 1905 working and living conditions were deteriorating in Russia
• The trade union campaigned for a better life for their workers
• To soften public opinion Nicholas 2 lifted some censorship and allowed the Zemstva more rights