ALEXANDER III ECONOMY Flashcards
chapter 6
INDUSTRIAL ‘TAKE OFF’ UNDER VYSHNEGRADSKY
Tariffs raised again under Vyshnegradsky who took over in
1887
INDUSTRIAL ‘TAKE OFF’ UNDER VYSHNEGRADSKY
vhysnegradsky introduced a 30% import tariff on the value of raw materials - designed to
boost home production and ended up helping the iron industry of southern Russia as well as the development of industrial machinery.
INDUSTRIAL ‘TAKE OFF’ UNDER VYSHNEGRADSKY
He needed to balance the budget while managing enterprise - he negotiated some valuable loans from the French in 1888 and increased indirect taxes which mounted a drive to sell grain exports.
This policy appeared very successful on the surface:
give 2 reasons why
- 1881-91 grain exports increased by 18% as a % of total Russian exports.
- 1892 –> Russian budget in surplus
INDUSTRIAL ‘TAKE OFF’ UNDER VYSHNEGRADSKY
vhysnegradsky failures
2 reasons
- This was achieved at the expense of the peasants who paid taxes and had their grain requisitioned by the state - many were left with no reserves for winter, resulting in thousands dying in 1891-2 great famine brought by bad harvests and grain requisitioning.
- Vyshnegradsky was dismissed in 1892 because of this disaster made worse by his own policy.
INDUSTRIAL ‘TAKE OFF’ UNDER WITTE
Vyshnegradsky successor, Witte was committed to economic modernisation as a means to curbing revolutionary activity.
* He believed the only way forward was to
continue with protective tariffs, heavy taxation and forced exports to generate capital.
INDUSTRIAL ‘TAKE OFF’ UNDER WITTE
He also sought additional loans from abroad which helped foreign investment considerably:
Much of this went into
- 1880 – 98M of roubles
- 1894 – 280M of roubles.
mining, metal trades, oil, and banking.
INDUSTRIAL ‘TAKE OFF’ UNDER WITTE
Witte encouraged engineers, managers and workers from France, Germany Britain, and Sweden to oversee industrial developments and advise on planning - this led to a
huge expansion of the railway network (1200km constructed 1891-5).
INDUSTRIAL ‘TAKE OFF’ UNDER WITTE
By the mid 1890s what %
of the whole Russian railway system was owned by the state?
60%
INDUSTRIAL ‘TAKE OFF’ UNDER WITTE
Russia’s rate of growth enabled it to become the world’s
4th largest industrial economy by 1897
this helped to increase Russian exports ad foreign trade, although the bulk of this was still in grain rather than industrial goods.
THE AGRICULTURAL ISSUE
Emancipation failed to ring any fundamental change in agricultural practice.
Although there was variation, the average peasant received less than 4 hectares.
what were the 4 things perpetuated by the mir elders that hampered agricultural change?
High taxes,
grain requisitions,
redemption payments and
the traditional farming practices
THE AGRICULTURAL ISSUE
Yields remained low in comparison to western Europe, and although the government established the
land banks, impact
peasants’ (1883) and nobles’ (1885) land bank to facilitate land purchase, the loans they offered often merely increased debts.
THE AGRICULTURAL ISSUE
There was an overall increase in agricultural production in the 70s and 80s, largely due to the efforts of the kulak class to respond positively to Vyshnegradsky’s export drive.
However, the disastrous
1891-2 famine showed that the basic economic problem, which emancipation had been expected to solve remained: The average Russian peasant had too little land to become prosperous.
THE AGRICULTURAL ISSUE
Average grain and rye production also remained
comparatively low compared to western countries in the 80s.
The Peasants’ Land Bank held funds and reserves of land - set up to
assist peasants who wished to acquire land directly or through purchase from nobles.
The Nobles’ Land Bank was designed to help nobles with
the legal costs involved in land transfer and in land improvement schemes. Interest rates on loans from these banks were kept deliberately low.
