ALEXANDER II ECONOMY

Question 1

1. the economic condition of Russia in 1855

• When alexander II came to the throne, the Russian economy remained mostly rural with a ratio of

compared to britain

Answer 1

11:1 village to town dwellers compared to Britain’s 2:1.

Question 2

1. the economic condition of Russia in 1855

• Markets existed but business was small scale – money was not the usual form of payment:

Answer 2

exchanges took plane in kind.

Question 3

1. the economic condition of Russia in 1855

• Although Russia was Europe’s main exporter of

Answer 3

agricultural produce and possessed vast reserves of coal, timber, and oil, much of these remained untapped and communications between different parts of the empire was poor.

Question 4

1. the economic condition of Russia in 1855

• The serfs were poor - most managed to survive on the produce they grew for themselves, and cottage industries (work done in the worker’s own home) provided

Answer 4

extra cash needed for special purchases or taxes.

Question 4

1. the economic condition of Russia in 1855

• The lack of progress was particularly due to Russia’s commitment to a serf-based economy.

Serfs were people who were

Answer 4

classified as a property of their owners. They could be bought or sold, subject to beatings, and not allowed to marry without permission. They were also liable for conscription into the army. There were 2 types: privately owned (30% paying rent and 70% providing labour) and state serfs (paid taxes or rent). Many worked in village communes (mirs) ran by village elders.

Question 5

1. the economic condition of Russia in 1855

• This limited economic development by limiting the forces that drive change (3)

Answer 5

wage earners, markets, and entrepreneurs (invests money to set up businesses).

Question 6

1. the economic condition of Russia in 1855

• There was little incentive for opportunity for serfs to develop into wage earners because

Answer 6

• For the majority money was irrelevant as there was no internal market demand (desire and ability to buy products of manufacturers).

Question 7

1. the economic condition of Russia in 1855

• The small landowning elite obtained most of what they needed from their serfs in the form of service and feudal dues - this provoked

Answer 7

idleness as landowners saw little need to do more.

Question 8

1. the economic condition of Russia in 1855

• There was no opportunity for capital accumulation (building up money reserves to invest) since income was generally falling – agricultural changes (crop rotation, machinery, fertilisers) in western Europe increased

Answer 8

productivity and competitiveness of European markets.

Question 9

1. the economic condition of Russia in 1855

• Many landowners had to take out mortgages on their estates as they had been forced into debt – sometimes they even mortgaged their serfs but did not seek alternative ways of making money because

Answer 9

money was of little use in Russia’s under-developed economy.

Question 10

6 . Economic developments: industrial developments

ECONOMIC CHANGE
THE BEGINNING OF STATE-PROMOTED INDUSTRIAL GROWTH
Industrialisation largely driven by the state in an attempt to match western Europe.
Von Reutern (minister of finance 1862-78) produced a series of reform designed to boost the economy and drive industrial growth:

the treasury

Answer 10

• reformed and new arrangement for collecting taxes (auditing accounts of government departments and publishing budgets) put in place.

Question 11

6 . Economic developments: industrial developments

Von Reutern reforms

Banks and credit facilities extended

Answer 11

• – 1860 state bank established, 1869 savings bank.

Question 12

6 . Economic developments: industrial developments

Von Reutern reforms

* Trade promoted with the

Answer 12

reduction of import duties from 1863.

Question 13

6 . Economic developments: industrial developments

Von Reutern reforms

* Government subsidies offered to

Answer 13

enable private entrepreneurs to develop railways.

Question 14

6 . Economic developments: industrial developments

Von Reutern reforms

Government support offered for the development of

Answer 14

• the cotton industry and mining in the Donets coalfield.

Question 15

6 . Economic developments: industrial developments

Von Reutern reforms

Tax farming was

Answer 15

• Tax farming (groups bought the right to collect certain taxes) abolished and tax system reformed to include more indirect taxation.

Question 16

6 . Economic developments: industrial developments

IMPACT OF VON REUTERN

(3)

Answer 16

• Reforms forced tax farmers to look elsewhere to invest.
• The opportunities provided by the government subsidies and trade treaties encouraged enterprise.
• The use of foreign capital and technical expertise supported industrial expansion and the railway network saw remarkable expansion.

Question 17

6 . Economic developments: industrial developments

von reutern’s overall average annual growth rate =

Answer 17

6% during his term in office.

Question 18

6 . Economic developments: industrial developments

2 industrial developments under reutern:

Answer 18

Oil extraction began in the Caspian Sea port of Baku (1871) and
ironworks set up in Donetsk (1872) started mining the rich iron fields of the Krivoi-Rog region.

Question 19

6 . Economic developments: industrial developments

However, despite all these improvements Russia’s economy remained comparatively weak:

Answer 19

• Textiles remained the dominant industry.
• 1/3 of all government expenditure went on the repayment on the debts of the Russian Rouble which was subject to wild variations in its value.
• The limitations of the emancipation edict and the taxation system left 66% of government revenue coming from indirect taxation, kept the peasantry poor and the domestic market small.

Question 20

6 . Economic developments: industrial developments

Tariff reductions meant a decline in government revenues, and these were raised again in

Answer 20

1878.