6 - Economic and Social Developments

• What was Russia in the absence of?

  An entrepeneurial Middle Class
• Who was Finance Minister in 1862-78?

  Von Reutern
• Von Reutern's Reforms

  • Reformed Treasury and new way to collect taxes.
  • Tax Farming was abolished and tax system reformed to include indirect taxation.
  • Government subsidies for entrepeneurs to make railways.
  • Foreign investment -> guaranteed annual dividend.
  • Joint Stock Companies
  • Donets coalfield and Cotton Industry
• What year was the state bank established?

  1860
• What type of banks were made in 1862?

  Municipal
• What type of banks setup in 1869?

  Savings
• What opportunity led to Russia to capture former American markets and Donets Coalfield?

  American Civil war 1861 to 1865
• Successes of Von Reutern:

  • Govt Subsidies and Trade Treaties -> Encouraged enterprise.
  • Foreign technical expertise -> Industrial expansion and railway network.
• What % has Von Reutern seen annual average growth at?

  6
• How had oil extraction started in Russia?

  Caspian sea port of Baku 1871
• When and where was an ironworks setup?

  Donetsk 1872
• How was coal and oil extracted even further?

  1879 -> Naptha Extraction Company established by Nobel Brothers.
• Failures of Von Reutern

  • 1/3 of govt expenditure -> repayment of debts + currency saw variations in value.
  • Tariff reductions meant a decline in government revenues.
• 'The taxation system left _ of Government revenue coming from _ _'

  66, Indirect taxation
• '_ _ meant a decline in govt revenues and the decision to make raise of these again from _'

  tariff reductions, 1878
• 1880 - 1890, what was the increase in coal?

  3m metric tons to 5.9m metric tons
• 1880 - 1890: increase in crude oil=

  0.5m metric tons to 3.9m metric tons
• Which good did not see significant increase?

  Pig-iron,
• Who was finance minister in 1887?

  Vyshnegradsky
• 'A prohibitive import tariff of _ of the value of _ materials'.

  30%, raw
• Why did Vyshengradsky introduce a import tariff?

  To boost home production and help the iron industry along with development of industrial machinery
• What did Vyshnegradsky need to do?

  Balance the budget while financing enterprise
• Who did Vyshnegradsky negotiate loans with?

  French 1888
• What else did Vyshnegradsky do?

  Increased indirect taxes, mounted a drive to swell grain exports.
• 'From 1881 to _, grain exports increased by _%'


  1891, 18
• By what year was Russian budget in surplus?

  1892
• 'This remarkable export drive was achieved at the expense of the peasants who paid taxes and saw their grain requisitioned by the State'.
• Vyshnegradsky's famous words before the famine:

  We ourselves shall not eat, but we shall export
• How many provinces did the great famine affect?

  17 out of 39
• How many died due to starvation and disease 1891-1892?

  350k
• Who argued that economic modernisation would curb revolutionary activity?

  Witte
• How did Witte believe was the only way forward?

  Protective tariffs, heavy taxation and forced exports to generate capital
• What did Witte do to increase foreign investment?

  Sought additional loans
• 1880 - 1895: increase in foreign investment?

  98m roubles to 280m roubles
• What did Witte's foreign investment go towards?

  Mining

  Metal trades

  Oil

  Banking
• 'Witte also encouraged engineers, managers and workers - from France, Belgium, Germany and Sweden, to oversee industrial developments and advise on planning and techniques'.
• By what year was Russia's rate of growth able to make it 4th largest industrial economy?

  1897