INDUSTRIAL INDUSTRIAL DEVELOPMENT UNDER DEVELOPMENT UNDER

NICHOLAS IINICHOLAS IIThe role of WitteThe role of Witte

RJ TarrRJ Tarr

(a) Raising Money - (a) Raising Money - The Gold StandardThe Gold Standard

Policies / Positive Policies / Positive AssessmentAssessment • Immediately upon taking office Witte raised a Immediately upon taking office Witte raised a

massive amount of capital – he secured a massive amount of capital – he secured a loanloan from the French government, raised from the French government, raised taxestaxes, , tariffstariffs and and interest ratesinterest rates

• Put Russia on the Put Russia on the Gold StandardGold Standard in 1897. This in 1897. This tripled foreign currency investment during tripled foreign currency investment during his period in power (because it could now be his period in power (because it could now be exchanged for Gold, investors were more exchanged for Gold, investors were more confident in the currency). Gold Standard confident in the currency). Gold Standard meant currency was valued according to the meant currency was valued according to the Gold reserves in the country’s banks Gold reserves in the country’s banks

ReservationsReservations

• This meant a higher national debt – This meant a higher national debt – 20% of budget was just on servicing 20% of budget was just on servicing the debt (i.e. paying the interest off) the debt (i.e. paying the interest off) by 1900.by 1900.

• Light industry and agriculture were Light industry and agriculture were pretty much ignored. pretty much ignored.

(b) Investing Money – (b) Investing Money – The Trans-Siberian The Trans-Siberian

RailwayRailway

Policies / Positive Policies / Positive AssessmentAssessment

• He then started investing in capital He then started investing in capital projects – in particular, projects – in particular, railwaysrailways, , which offered military as well as which offered military as well as economic advantages and therefore economic advantages and therefore gained the support of the Tsar.gained the support of the Tsar.

• The The Trans-Siberian RailwayTrans-Siberian Railway was the was the showpiece, stretching 9600 miles showpiece, stretching 9600 miles from Moscow to Vladivostok. from Moscow to Vladivostok.

ReservationsReservations

• Its value was more symbolic than Its value was more symbolic than anything else – it was only single anything else – it was only single track and some sections were still track and some sections were still incomplete in 1914. incomplete in 1914.

• An unfortunate consequence was An unfortunate consequence was that it encouraged Nicholas II to that it encouraged Nicholas II to believe he could defeat Japan in the believe he could defeat Japan in the 1904-5 war. 1904-5 war.

Overall AssessmentOverall Assessment

Policies / Positive Policies / Positive AssessmentAssessment

• He was aware that the long-term benefits He was aware that the long-term benefits of industrialisation was preceded by short-of industrialisation was preceded by short-term social dislocation and political term social dislocation and political tension; so he aimed to leapfrog over this tension; so he aimed to leapfrog over this stage and “stage and “Save Russia by rapid and Save Russia by rapid and forceful industrialisationforceful industrialisation” ”

• Massive growth 1893-1900 Massive growth 1893-1900 • All this in the face of the suspicion and All this in the face of the suspicion and

hostility of the conservative establishment hostility of the conservative establishment (Milyutin had faced the same problem).(Milyutin had faced the same problem).

ReservationsReservations

• Growth was from a very low base.Growth was from a very low base.

• Even if developments taken at face Even if developments taken at face value, this does not mean that value, this does not mean that Tsarism would have adapted Tsarism would have adapted politically to the economic changes.politically to the economic changes.

• 4/5 of population in 1914 still 4/5 of population in 1914 still peasants.peasants.