Russian economy during WW1 Flashcards
What was the state of the Russian economy in 1914?
Stable, The ripple was fully backed by gold, and the country was being guided by highly accomplished bankers and economists.
Underlying issues of the economy?
Russia’s trade turnover was no greater than Belgium and only one-fifth of that of Britain.
Russia’s capital markets were also not as well developed as they were elsewhere in Europe
What did the underlying issues of the economy signify?
The Russian economy whilst it had developed was no where near as developed as western counter parts.
How much was the Russian stock market worth in 1900?
11.9 billion roubles
How much was the Russian stock market worth in 1914?
21.1 billion roubles
How much had the Russian stock market risen by between 1900 and 1914?
Almost doubled.
Despite the growth in the stock market what was worrying about it?
Without foreign investment the growth in the stock market would have been cut roughly in half.
What massive mistake was made by Nicholas II in August 1914?
Banning the sale of alcohol
Why had the banning of alcohol been brought in?
During the Russo-Japanese war and the disorders of the 1905 revolution drunken antics and disorder was rife within the military. Thus to stop this alcohol was to be banned.
How much did vodka sales contribute to the state budget?
28%
Why was the banning of alcohol so bad on an economic factor?
The tax on vodka made up a large part of the countries budget and this was now unavailable on the eve of a very costly war that would only become more expensive.
Why was the banning of alcohol also a bad social factor?
Alcohol was one of the most consumed substances in Russia at the time and it led to a lot of people disliking the Tsar and his government from all social classes. Also led to the emergence of a black market in Alcohol.
Showcased the Tsars incompetence at being a ruler.
What was the other fiscal decisions that doomed the Russian economy at the time?
Suspending the one-to-one gold backing in order to issue paper money beyond the normal legal limits.
Why was the decision to suspend gold backing taken?
The reasons were the need to provide instant appropriations for mobilization of the army and liquidity to stem a run on the banks.
Why was the decision to suspend gold backing so bad?
It set in motion an inflationary spiral that would be difficult to brake during the war. Printing paper money in large quantities like Russia was doing was a huge fiscal problem and show the irresponsibility of the Tsar and his ministers as they created high levels of inflation.
