Chapter 6 - Economic and social developments Flashcards
Economic and social developments
When was Mikhail von Reutern the Minister of Finance?
1862 - 78
Under Alexander II
What did Von Reutern want to acheive with his economic reforms?
Boost the economy
Funds to drive industrial growth
What were Von Reutern’s economic reforms?
- New tax collection arrangements
- The publishing of budgets was put in place
- Tax-farming was abolished
- Reformation of tax system to include more direct taxation
- Esablishment of a state bank in 1860, municipal banks in 1862 and savings bank in 1869
- Reduction in import duties in 1863 to promote trade
- Government subsidies offered to private entrepreneurs to develop railways
- Foreign investment encouraged with a government-guaranteed annual dividend
Tax farming = the buying of rights to collect certain taxes
What was the impact of Von Reutern’s reforms?
- Forced tax farmers to look elsewhere to invest
- Enterprise was encouraged by the use of government subsidies and trade treaties
- Industrial expansion
- Increase in railway networks
- annual average growth of 6% during Von Reutern’s time in office
Developments in industry during Von Reuterns time in office
- Textiles was still the dominant industry
- Oil extraction in the Caspian Sea port of Baku in 1871
- Ironworks was set up in Donetsk in 1872, started mining the rich ironfields of the Krivoi Rog region
- Naphtha Extraction Company established in 1879 by the Nobel brothers to exploit coal and oil production futher
What were some limitations with the economy during Von Reutern’s time in office?
- Russia’s economy remained comparitively weak
- 1/3 of government expenditure went on the repayment of debts
- The Rouble was subject to large variations in its value
- 66% of government revenue came from indirect taxation, which kept the peasantry poor and the domestic market small
- Tariff reductions led to a decline in government revenue, so in 1878 they were raised again
When was Vyshnegradsky Minister of Finance?
1887 - 92
Under Alexander III
What were Vyshnegradsky’s economic reforms?
- 30% import tariff to boost home production. It helped the iron industry and the development of industrial machinery
- increased indirect taxes
- increase in grain exports
- 1881-91 grain exports increased by 18% (% of total Russian exports)
- by 1892, the Russian budget was in surplus
When was the Great Famine?
1891-92
The Great Famine 1891-92
- affected 17 of Russia’s 39 provinces
- due to an early winter and a long, hot and dry summer, which ruined crops
- starvation left people more susceptible to disease, like cholera or typoid
- over 350,000 died from starvation or disease
- the government failed to organise adequate relief
- left to the volunteer groups to help the peasants
Showed that the average Russian peasant had too little land to become prosperous.
Witte’s aims
Economic modernisation as a means to curb revolutonary activity.
Believed the only way forward was to continue with:
- protective tariffs
- heavy taxation
- forced exports to generate capital
- additional loans from abroad
- increase in foreign investment
How much did foreign investment increase by due to Witte’s policies?
1880 - 98 million roubles
1890 - 215 million roubles
1895 - 280 million roubles
**
Where was there investment?
- mining
- metal trades
- oil
- banking
Who did Witte encourage and why?
people from other countries –> industial development
He encouraged:
- engineers
- managers
- workers
from France, Belgium, Germany, Britain, Sweden to oversee industrial development and advise on planning techniques.
Their help led to a huge expansion in the railway network.
When did Russia become the world’s 4th largest economy?
1897
By the mid-1860s, how much of the railway network was State-owned?
60%
In the years 1891-95, how many km of railway was constructed?
during Witte
over 1200 km
What did Aleksandr Engelgardt say about Russia in regards to Emancipation?
radical writer in the mid-1870s
“everything carries on as it was before the Emancipation”
What factors hampered agricultural change?
- high taxes
- grain requisitions
- redemption payments
- traditional farming practices perpetuated by the mir
When were Peasants’ Lank Banks established and what did they do?
Established in 1883
- held funds and reserves of land
- set up to assist peasants who wished to acquire land
- low interest rates
- helped increase peasant ownership
- between 1877-1905 over 26 million hectares passed to peasants
- However, helped support inefficient farms, which continued in traditional ways
Comparison of grain production in the 1880s
Grain production:
Russia = 45 puds per desiatin
UK and Germany = 146 puds per desiatin
~
Rye production:
Russia = 54 puds per desiatin
France and USA = 68 puds per desiatin
Industrial development led to the introduction of what?
Class
Middle class
People more focused on money, capital and wages.
What were some of the changes in the landed elite?
- personal landholdings had declined considerably as some had debts to pay off and others abandoned farming in favour of more rewarding professional activities
- 1880, nearly 1/5 of university professors came from hereditary nobility
- by 1882, 700+ nobles owned their own business in Moscow
- by 1882, nearly 2,500 were employed in commerce, transport or industry
- Some found work in the zemstva
- although there were changes in position, most former serf owners retained much of their previous wealth and status
- divided according to wealth
What were some changes in the middle class?
- introduction of middle class due to an expansion in industry and an increase in educational oppourtunities
- bankers, doctors, teachers etc in high demand, although their numbers added up to no more than half a million in the 1897 census
- government contracts to build railways, and state loans to set up factories provided oppourtunities
