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Russian Studies in History, vol. 47, no. 3, Winter 2008–9, pp. 38–70. © 2009 M.E. Sharpe, Inc. All rights reserved. ISSN 1061–1983/2009 $9.50 + 0.00. DOI 10.2753/RSH1061-1983470302

V.L. Stepanov

Laying the Groundwork for Sergei Witte’s Monetary Reform The Policy of Finance Minister I.A. Vyshnegradskii (1887–1892) Even in the early 1920s, the famous economist Anatolii Iosifovich Buko­ vetskii was pointing out how little research had been done on the money supply [denezhnoe obrashchenie] in prerevolutionary Russia: “We cannot say that even so interesting a juncture as the monetary reform of S.Iu. Witte has been thoroughly studied and elucidated, despite the significant number of Russian and foreign scholars who have worked on it and written about it.” Bukovetskii thought this situation had occurred because the relevant official documentation had been held “in strictest confidence.” Prior to the Revolution, only two private parties—the economists Petr Petrovich Migulin and Vasilii Timofeevich Sudeikin—were allowed English translation © 2009 M.E. Sharpe, Inc., from the Russian text © 2004 Russian Academy of Sciences, Editorial Board of “Otechestvennaia istoriia,” and the author. “Predposylki denezhnoi reformy S.Iu. Vitte: politika ministra finansov I.A. Vyshnegradskogo (1887–1892),” Otechestvennaia istoriia, 2004, no. 5, pp. 49–69. Translated by Liv Bliss. Valerii Leonidovich Stepanov, Doctor of History, is senior research fellow at the Institute of Russian History, Russian Academy of Sciences. This project was completed with support from the Interregional Studies in the Social Sciences Program, the Kennan Institute for Advanced Russian Studies, a Ministry of Education of the Russian Federation grant funded by the Carnegie Corporation in New York, the John D. and Catherine T. MacArthur Foundation, and the Open Society Institute (Soros Foundation). The viewpoint reflected in this article may not coincide with that held by these philanthropic organizations. 38

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to see a restricted body of documents kept by the Special Chancellery for Credit. The economist Illarion Ignat’evich Kaufman and Aleksandr Nikolaevich Gur’ev and Mikhail Pavlovich Kashkarov from the Ministry of Finance’s Academic Committee, who had assisted Witte with the monetary reform, obtained open access to the ministry’s holdings, but the overviews they wrote made little use of archival materials.1 The situation has not changed much since then. Admittedly, the 150th anniversary [in 1999—Trans.] of Witte’s birth brought a flurry of new interest among scholars and the public in the life and work of Russia’s greatest turn-of-the-century reformer, and researchers have recently been seeking to reconceptualize and reevaluate his contribution to Russian economic modernization and political evolution.2 The overwhelming majority of authors hold the introduction of the gold standard to be Witte’s finest achievement as minister of finance, with only a few contemporary historians contending that the monetary reform did not conform to the specific conditions in Russia and harmed the Russian economy.3 Although the historical literature does discuss the reform’s significance, analyze the methods used to implement it, and conceptualize Witte’s role as its initiator, we are still lacking a synoptic work that would summarize both the reform’s planning and implementation and its multifarious influence on various branches of the economy.4 (The monograph published by V.E. Vlasenko more than a half-century ago was poorly documented and has long been obsolete.)5 The Finance Ministry’s policy on the money supply prior to the reform has suffered from even greater neglect. In his memoirs, Witte did everything humanly possible to downplay the results achieved by his predecessors and to highlight his own role. “Although my predecessors Bunge and Vyshnegradskii had prepared our finances for reform,” he wrote, “their preparations were relatively insignificant. When the time came, no definitive plan of monetary reform had been established, even in general terms, not to mention in every detail.”6 The straight facts, however, and the repeated acknowledgments of Witte himself recorded in a variety of documents refute that assertion. The back story of the monetary reform has been mentioned to greater or lesser degree in jubilee publications issued by the Ministry of Finance7 and in the works of prerevolutionary, Soviet, and contemporary economists and historians.8 But the topic has been studied too superficially and with only limited recourse to the sources. That historiographical lacuna is partially filled by a monograph on Nikolai Khristianovich Bunge, finance minister from 1881 to 1886, who did much to ease the economic

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crisis, set his sights on transforming the monetary system, and foresaw the devaluation of the ruble and the transition to gold monometallism.9 But most of the preparations for reform lay on the shoulders of Bunge’s successor, Ivan Alekseevich Vyshnegradskii, who served as finance minister from 1887 to 1892. Vyshnegradskii’s policy has never been exhaustively studied. A.A. Lazutkin’s candidate’s dissertation on his stabilization measures examines the problem of regulating the money supply in greater detail than do other studies, but it, too, employs a circumscribed range of sources.10 Yet the paths and methods of governmental policy in that area were largely defined by the views and programs adopted by the minister of finance.11 This article on the steps Vyshnegradskii took to bring order to the money supply is mainly based on an abundance of materials found in the Russian State Historical Archive (St. Petersburg), mostly in the holdings of the Finance Committee, the State Council’s Department of the National Economy, the Finance Ministry’s General Chancellery, the Finance Ministry’s Special Chancellery for Credit, the State Bank, the St. Petersburg Office of the State Bank, and others. The stabilization of the ruble in the latter half of the nineteenth century was a key task for the government’s economic policy. As a result of the reforms effected by Finance Minister Egor Frantsevich Kankrin from 1839 to 1843, Russia had in place a system of silver monometallism, wherein the official means of payment was the silver ruble, with gold coins and banknotes treated as subsidiary. Banknotes were exchanged for gold or silver at a fixed rate. The paper ruble, backed only by stocks of precious metal rather than by other highly liquid assets, was vulnerable; and the depletion of precious metals used for purposes of exchange inevitably led to inflationary trends in the money supply. The Kankrin system, therefore, existed for no longer than a decade. The issuing of banknotes not backed by gold or silver during the Crimean War of 1853–56 led to a fall in the ruble exchange rate relative to silver parity and caused inflation, a rise in the price of precious metals, and widespread demand for the disbursement of those precious metals by the Treasury. This coincided with a shift that took the balance of payments from an asset balance to a liability balance, due to the collapse of state-owned credit institutions, the unsuccessful beginning of railroad construction, and a mass exodus of Russians to Europe occasioned by the lifting of restrictions and the 1856 repeal of taxes on passports for foreign travel. As specie flowed abroad, disappearing from the domestic

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money market, the government was forced to halt the free exchange of banknotes in May 1858, and a lengthy period of reliance on paper money as the medium of exchange began. Over time, the Finance Ministry was on several occasions obliged to resort to printing money to cover budget deficits. The total temporary issue of banknotes was categorized as a non-interest-bearing Treasury debt owed to the State Bank. Decades of disarray in the money supply had dire consequences for the economy, forming an artificial obstacle on the road to Russia’s economic modernization. The national currency’s isolation from foreign money markets undermined the prestige of Russia’s finances abroad, adversely affected its international credit standing, and made the attraction of foreign capital more difficult. The shortage of specie in circulation deprived the monetary system of its necessary elasticity. For a long time, the country suffered from an imbalance between the economy’s requirement for money and the actual amount of money available. An excess of banknotes depressed prices for goods and artificially boosted production, whereas a shortage of notes led to rising prices and economic stagnation. In connection with an expansion of entrepreneurial activity that began in the 1860s, the economy would periodically experience a greater need for circulating funds. The paper money shortage was felt especially keenly in the fall, after the harvest was in and the volume of goods passing from hand to hand shot up. The attraction of gold from other countries at a lower price assures stability in a monetary unit’s exchange rate when specie is in circulation. Therefore, the paper ruble’s exchange rate was subject to particularly strong fluctuations for many reasons: international complexities, governmental measures, industrial crises, crop failures, the state of the balance of payments and the balance of trade, the size of the state’s domestic and foreign debt, ruble speculation on Western exchanges, and so on. The unpredictability of the ruble rate had an extremely negative impact on trade and industry, placing commercial accounting on shaky ground, causing extreme volatility in prices for goods and sharp market differentials, and creating a fertile field for speculation and stock-jobbing. The economy constantly incurred huge losses on imports, on treasury and private payments made in gold to foreign entities, on the exchange of rubles by travelers from Russia, and so forth. Inflation inflicted significant damage on the nation’s finances: public solvency fell, state tax revenues were partially devalued; state income decreased and its expenditures increased, which resulted in both direct

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and indirect tax increases; attempts to determine the exact amount of the national debt became problematic and the issue of paper money in emergencies difficult; and the decline in the nation’s creditworthiness prompted high rates of interest on foreign loans. All this complicated the balancing of national revenues and expenditures and led to chronic budget deficits. The circulation of paper money favored exporters of agricultural commodities, who benefited from disparities between the ruble rate within Russia and abroad. Some population categories (industrialists, merchants, and members of the free professions) were able to adjust their income to accommodate increases in the price of goods and even to profit from a drop in the exchange rate. At the same time, though, the depreciation of banknotes was a blow to the well-being of state and private creditors, wage-earning blue- and white-collar workers, individuals on the government payroll, and individuals living on the income from securities, bank deposits, rents, and other contractual payments.12 In the decades immediately following the Great Reforms, the Ministry of Finance underestimated the seriousness of the situation. The disarray in the money supply was judged to be a temporary phenomenon resulting from the [Crimean] War. The government’s aspiration was to raise the ruble to silver parity, since devaluation was equated with a partial declaration of bankruptcy by the state. Officials believed that the removal from circulation of “excess” banknotes, the augmentation of the precious-metal fund with the aid of foreign loans, and the institution of free exchange would suffice. Those plans proceeded irrespective of the balance of payments and the general state of the economy, the Finance Ministry’s assumption being that the restoration of the exchange rate would in and of itself assure economic growth. The sale of gold abroad to prop up the ruble, which cost the Treasury tens of millions of rubles, outweighed in importance the development of Russia’s productive forces.13 The State Bank responded to the debt the Treasury had incurred through the temporary issue of banknotes by calling in loans and tightening commercial credit, both of which had unfavorable repercussions on the economy.14 Yet economic conditions were by no means ripe for ruble stabilization: the budget deficit had become chronic, the national debt had risen sharply, the financial resources to reinforce the exchange fund did not exist, and the country ran a negative balance of trade and balance of payments year after year. An attempt by Finance Minister Mikhail Khristoforovich Reitern to restore free exchange in 1862 and 1863 had been a

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complete failure. Shortly after the Crimean War, the Finance Ministry began to consider backing banknotes with precious metal, since, with only paper money in circulation, silver monometallism had become a system that existed in name only. That said, the “upper echelons” and society had long been convinced that any free exchange of banknotes must be based, as before, on the silver standard and that gold specie should remain subsidiary. The government, however, had to consider the effect on Russia of changes in the world market, where silver was ceding to gold as the more valuable form of bullion. The demonetization of silver was caused by the growth in goods exchange and the development of credit relations, the “white metal” being too inexpensive and inconvenient a commodity to fulfill the function of a measure of value and medium of exchange. The fall in silver prices and the increasing amounts of gold being mined in the latter half of the nineteenth century had determined the Western countries’ transition to gold monometallism (England instituted gold as the standard measure of value as early as 1816). From 1871 to 1873 Germany adopted the gold Reichsmark as its national currency. In the next two decades Denmark, Sweden and Norway, Finland, Italy, Romania, and Austria-Hungary followed. Countries with a bimetallic standard (Belgium, the Netherlands, France, Switzerland, and the United States of America) also made gold primary, whereas silver specie began to perform as a subsidiary method of payment.15 In Russia, too, the conditions necessary for the introduction of gold monometallism were gradually falling into place. In 1849 the government began contracting foreign loans in gold specie, linking these figures somewhat to the silver ruble. In the 1860s the large-scale building of railroads began, wherein they were chartered as state-supported corporations. As the construction proceeded, those private companies issued interest-bearing securities denominated in foreign gold and guaranteed by the government. Such bonds represented a debt incurred by the state that could be redeemed from the Treasury in gold. From the mid-nineteenth century on, budget expenditures were constantly and increasingly made in gold specie. Because of the need to replenish the currency reserves and for other reasons, the government was compelled to publish a decree on 10 November 1876 mandating the payment of customs duties in gold as of 1 January 1877.16 This invalidated the Manifesto of 1 July 1839, “On the Ordering of the Monetary System” [Ob ustroistve denezhnoi sistemy],

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which ordained the recalculation of all taxes, fees, and duties in silver.17 From the mid-1870s payments were to be made not in silver specie but in gold and banknotes, which according to I.I. Kaufman meant that the country had to all intents and purposes transitioned to gold monometallism. Yet there were no corresponding monetary units—no gold rubles—in circulation.18 In his “Financial Testament” [Finansovoe dukhovnoe zaveshchanie] of February 1877, Reitern wrote of the inevitability of devaluing the ruble and basing the monetary system on a “different metal.”19 In March 1877 he urged the Finance Committee to permit commercial transactions in gold in order to bring gold specie into circulation. But the committee judged that recommendation premature on the eve of a war with Turkey and expressed its concern that such a measure might give rise to an assumption that the “government itself no longer ascribes the same significance to the paper ruble.”20 The “monetary question” became particularly acute after the RussoTurkish campaign of 1877–78, during which time new banknotes were issued when the ruble rate fell yet again. Between 1876 and 1881 the amount of paper money in circulation rose from 797.3 million rubles to 1.133 billion rubles, the exchange fund decreased from 231.2 million rubles to 171.4 million rubles, the precious-metal backing of paper money dipped from 28.8 percent to 15.1 percent, and the average annual ruble rate fell from 80.7 gold kopecks to 65.8 gold kopecks.21 Rising inflation was accompanied by general financial disarray, an industrial crisis, and a global agrarian crisis that weighed heavily on Russian agriculture. In this situation, the Ministry of Finance leadership disregarded Rei­ tern’s advice, preferring instead to stay the course. On 1 January 1881 a decree was signed that ordered a gradual repayment (in annual sums of 50 million rubles) of the Treasury’s debt to the State Bank incurred through the temporary issue of banknotes (a total of 417 million rubles) and the destruction of paper money deposited in the bank.22 In December 1882 Finance Minister Bunge delivered to the Finance Committee a presentation on permitting transactions to be conducted in specie but, unlike Reitern, at that time recommended no preferential treatment for gold. The committee promptly agreed, but in March 1883 the State Council, although acknowledging the essence of the proposal to be “correct in every way,” even so judged it premature, pointing to the impossibility of “insinuating” coinage into the money supply while the balance of payments remained in negative territory. The council charged

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Bunge with raising the question for discussion later, when the balance of payments turned positive, making it possible to remove some of the temporary issue of banknotes from circulation. The State Council also indicated that for the measure to succeed, transactions should be permitted in gold only, since the price of silver fluctuated constantly.23 The Monetary Statute [Monetnyi ustav] of 17 December 1885 first acknowledged gold specie as an independent means of payment that could be used in levying customs duties, settling state loans, and making payments to the Treasury.24 One contemporary scholar maintains that for a whole decade (1886–95), Russia had a system of gold and silver bimetallism.25 In formal terms, however, the statute maintained inviolate the previous system of silver monometallism and contained no provisions for exchanging banknotes only for gold. Even though gold made up 99.4 percent of the exchange fund on 1 January 1881, the “upper echelons” did not see conditions as ripe in Russia for a radical monetary reform.26 In compliance with the decree of 1 January 1881, from 1881 to 1883 the Ministry of Finance returned to the State Bank 167 million rubles of its 417 million ruble debt. Then it ran out of funds to continue making regular payments. To avoid having to take out another loan, Bunge sponsored a decree, issued on 8 June 1884, that authorized the Finance Ministry to repay the remainder of the debt both with cash and with 5 percent government bonds payable in gold or credit currency [kreditnaia valiuta].27 That enactment was confirmed in a Finance Committee resolution approved by the emperor on 22 November 1885.28 Only 87 million of the 417 million temporary-issue rubles were withdrawn from circulation from 1883 to 1885. But, since even that tended to inhibit trade turnovers, Bunge decided against any more “withdrawals” and accepted the impossibility of raising the ruble to parity. The Finance Ministry instead set its sights on combating fluctuations in the ruble rate and pegging it at the current level. At the same time, Bunge had become convinced of the need to transition to the gold standard, and on his instructions gold received in payment of customs duties began being stockpiled in a special treasury account in the State Bank.29 The ministry’s policy drew sharp criticism from conservative circles, whose influence had grown significantly with the accession of Alexander III [1881–94]. Mikhail Nikoforovich Katkov, editor and publisher of Moskovskie vedomosti; Prince Vladimir Petrovich Meshcherskii, editor and publisher of the St. Petersburg newspaper Grazhdanin; and their allies in the “upper echelons” and in society spoke out against the

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artificial injection of Western “stock-market” capitalism and in support of a “national” economic program. They demanded the quarantining of Russia’s economy from the West and greater state intervention in it. The conservatives viewed the paper ruble as the national currency, the ultimate unit of exchange, with its own value and purchasing power. They asserted that paper money did not have to be backed by precious metals and should be issued as the condition and needs of the economy warranted. Katkov held that a sufficient quantity of banknotes in circulation would prove a powerful factor in the development of productive forces, which would then facilitate the expansion of domestic consumption, raise wages, increase tax revenues, and so forth. Under pressure from the conservatives, Alexander III transferred Bunge to the chairmanship of the Committee of Ministers in early 1887, replacing him as finance minister with Ivan Alekseevich Vyshnegradskii, at the insistence of Katkov and Meshcherskii. Vyshnegradskii was a well-known mechanical engineer and prominent entrepreneur, who had been seated on the boards of several major corporations.30 Prior to his appointment to the Finance Ministry, he had declared himself in full solidarity with his patrons on “monetary” questions. But in a policy memorandum submitted to Alexander III in December 1886, Vyshnegradskii went no farther than pointing out the importance of “improving the relationship between our exchange fund and the quantity of paper money in circulation in this country.”31 The memorandum did emphasize the need to implement the basic points of a “national” economic policy: the reinforcement of protective customs duties, the introduction of a monopoly on spirits and tobacco, the unification of railroad tariffs, and so on. In pursuit of these policy points, the new finance minister rejected the conservatives’ view that Russia should have a “purely” paper money supply. Witte later recalled that Vyshnegradskii “entirely shared the views of his predecessors” on that question. He was a pragmatist and a technocrat and clearly understood that the logic of economic development left him no choice. He avoided extreme measures, preferring to act incrementally. Witte noted the “great caution” he exercised in transforming the monetary system.32 Katkov’s death in July 1887 untied his hands and freed him to a significant extent from the previous situation. The great journalist’s passing, furthermore, splintered the united “front” of the conservative press. Moskovskie vedomosti and Grazhdanin began to battle over Katkov’s legacy, trading reproaches and accusations.33

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Vyshnegradskii first laid out his program to bring order to the money supply in a presentation made to the Finance Committee in June 1887. “The restoration of our paper ruble to its full value,” he wrote, “seems scarcely desirable at present, given that the position of the exchange rate, which has long been depressed, has exerted something of a constant influence on the price of items that can be adapted to the full value of the paper ruble only over a long period of time. Furthermore, a rapid rise in the ruble would in consequence greatly reduce our exports and partially strengthen the import trade, which would further the disappearance of specie from domestic circulation, if the exchange of paper rubles for metallic money were to be launched with the aim of restoring the value of the paper ruble.” In Vyshnegradskii’s opinion, there was at that time no reason to expect the ruble exchange rate to rise at all, and the wiser course would be to shore up the recently established exchange rate of 1.5 paper rubles = 1 gold ruble. He underlined the fact that rate stabilization was impossible without instituting the free exchange of paper money for gold and silver, which meant that measures should be taken to create a sizable precious-metals fund. To bring specie into domestic circulation and restrict the outflow of the exchange fund’s resources, the use of metal currency in performing commercial transactions would have to be permitted. Although Russia then still lacked the economic conditions needed to bring coinage into its money market and begin exchange operations, Vyshnegradskii hoped for favorable changes in the immediate future. The finance minister recommended taking advantage of the current political calm and the favorable state of the European money market to add to the precious-metals fund (which then stood at 171.5 million rubles) without placing an undue burden on the state budget. He informed the Finance Committee of a potential 1.5-billion-franc loan from a group of French and American bankers, which if the government agreed would bring over 300 million gold rubles to the Treasury. Additionally, 40 million gold rubles from the State Bank’s turnover account, 13.5 million gold rubles currently held by the Mint, and 12.5 million gold rubles received in payment of customs duties could be transferred into the fund. The total sum of 537 million rubles would be more than enough to launch the exchange, since at the time 1.046 billion paper rubles were in circulation (equal to 697 million gold rubles).34 Meeting on 28 June 1887, the Finance Committee agreed with Vyshnegradskii. Bunge and Reitern, the committee chairmen, offered particularly fervent support. No one objected to the loan, although some

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people pointed out that the size of the loan would siphon too much gold out of Europe and would occasion a “monetary crisis” in the Western money market. It would therefore be more prudent to contract several loans totaling no more than 500 million francs. The committee charged the finance minister with (1) drawing up and submitting to the Finance Ministry a program of measures to secure the exchange operation in connection with precious-metal currency trades; and (2) presenting to the Finance Ministry suggestions on sourcing loans to supplement the exchange fund.35 In his memoirs, Deputy Finance Minister Fedor Gustavovich Terner noted that at this meeting the committee decided to transition to the “gold monetary unit” at some point in the future.36 Alexander approved the committee’s resolution on 10 July.37 The Finance Committee also listened to Vyshnegradskii’s report on the ongoing implementation of the Decree of 1 January 1881. The minister stated that in 1884–86 the State Bank had received from the Treasury 150 million rubles in 5 percent government bonds, which had reduced the debt of 330 million rubles of temporary-issue banknotes still in circulation to 100 million rubles. He was no longer speaking of the Treasury’s debt to the State Bank but of the State Bank’s debt to the exchange fund, since the Bank was maintaining two accounts, one for issuance transactions (liabilities—permanent-issue banknotes; assets—the exchange fund and the Treasury debt) and one for commercial operations (liabilities—temporary-issue banknotes; assets—the Treasury’s debt to the Bank on those banknotes for the same amount. As the Treasury repaid its debt, the asset side began to show cash in hand and the outstanding 5 percent government bonds payable in both gold and banknotes). The finance minister’s suggestions were: (1) to transfer into the exchange fund 40 million gold rubles from the bank’s turnover account, so that this amount could be written off the account of temporary-issue banknotes and carried over into the account of banknotes issued to secure the exchange fund; and (2) to allow the State Bank to pay off the remaining debt as instructed by the finance minister, either by transferring gold to the exchange fund or by destroying banknotes in step with the bank’s accumulation of gold reserves, while making every effort to avoid constraining the money market. Vyshnegradskii emphasized that the Finance Committee’s rejection of an analogous proposal made by Bunge in November 1885 and December 1886 had been motivated only by the worsening situation in

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Europe.* “Although we may not claim that at present all misgivings as to political complications have been eliminated,” he wrote, “at least the situation in that respect has improved, if only because the spring has passed with no breakdown of the peace. But to await a political calm wherein peace could be said to be entirely assured before taking measures to reinforce the money supply would mean putting those measures aside for an extremely long time and in the entire duration thereafter to endure such injury as will be inflicted on our currency by the discontinuance of all measures aimed at improving it.” The committee accepted Vyshnegradskii’s suggestions, and the emperor approved them on 10 July.38 On Vyshnegradskii’s instructions, 40 million gold rubles were then transferred into the exchange fund, which thus grew from 171.5 million rubles to 211.5 million rubles, and were equated to 63.7 million permanent-issue paper rubles, which made it possible to reduce the sum of temporary-issue banknotes from 330 million rubles to 266.3 million rubles.39 The sum of permanent-issue banknotes rose from 716.4 million rubles to 780.1 million rubles. This expedient of transferring sums from one State Bank account complicated the system for repaying the debt incurred on the temporary-issue banknotes, which was already not really a debt owed by the state to the bank or by the bank “to itself” but by the bank to the holders of paper money. The minister did, however, have a true understanding of the essence of the task, the crux of which was not the attribution of banknote issues to one account or another but the accumulation by the State Bank and the Treasury of sufficient sums to increase the size of the exchange fund. Two years thereafter, the books were formally closed on the temporaryissue banknote account: in late 1888 the State Bank received the remaining 50 million rubles in 5 percent government bonds. Even so, Vyshnegradskii made an attempt to regenerate that income, at least in part, to a total of 250 million rubles and to replenish the working capital of the State Bank. On 8 November 1888 a decree was signed to enter into a 4 percent gold loan in a nominal amount of 125 million rubles, to purchase the outstanding 5 percent foreign loan from 1877 and obtain funds that would enable the Treasury to settle up with the State Bank.40 In the next year, after the loan had gone through, the remainder of the proceeds, 23.4 million gold rubles, was transferred to the bank. A decree of 13 October 1889 transferred another 13.8 million rubles from uncommitted cash held *Due to unrest in the Balkans.—Ed.

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by the Treasury, which totaled 50 million rubles in paper currency.41 The 50 million rubles in 5 percent government bonds deposited in the bank in late 1888 were to be withdrawn and destroyed. This represented the full payoff of the Treasury debt to the State Bank. In sum, the bank had over the years received a debt repayment from the Treasury in the amount of 243.5 million rubles in cash and 173.5 rubles in unredeemed government bonds. The repayment of the bank’s own debt totaled only 150.7 million rubles, as a result of the destruction of banknotes with a combined worth of 87 million rubles and the transfer to the exchange fund of 40 million gold rubles, which equaled 63.7 million paper rubles. There remained in circulation unredeemed temporary-issue banknotes with a value of 266.3 million rubles, 92.7 million rubles of which were pure bank debt, with 173.6 million rubles secured by unredeemed government bonds.42 Shortly after his program had received the go-ahead on 10 July 1887, Vyshnegradskii presented to the Finance Committee a memorandum that laid out his plan of action in detail. To prepare for the exchange operation, he deemed it essential: (1) to obtain the State Council’s approval to permit commercial transactions to be conducted in silver and gold coin. As Vyshnegradskii put it, the situation had changed for the better since the State Council had rejected Bunge’s analogous proposal: 87 million rubles in banknotes had been removed from circulation, while 40 million rubles had been added to the exchange fund. “The imperial decree of 1 January 1881 could not have been fully obeyed by the removal of all temporary-issue banknotes from circulation,” he wrote, “before specie was afforded due access into the country, so that the former could make good the deficiency in paper bills that would naturally and necessarily be felt in the absence of specie and on the destruction of banknotes.” The minister made a point of noting that the implementation of this measure would facilitate the inflow into Russia of foreign capital, which, given that the discount rate [uchetnyi protsent] was higher in Russia than in Europe, could be invested exceptionally profitably. Western entrepreneurs who conducted transactions in coin alone would be fully insured against losses due to fluctuations in the rate of the paper ruble; (2) to allow specie to be deposited in the form of non-interest-bearing depositary receipts [depozitnye kvitantsii] into the State Bank, which would enable the account holder to withdraw the deposited moneys also in coin; and

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(3) to take out loans to supplement the exchange fund, increasing it to 550 million rubles, to institute an exchange rate of 1.6 paper rubles = 1 gold ruble. The loans should total 340 million gold rubles, of which 170 million rubles should be converted to English, French, and German securities and the remainder held in gold and silver. In the course of this operation, Vyshnegradskii planned to (1) guard against speculation by (a) instituting an exchange rate that was close to the average ruble rate of exchange against other currencies in the preceding months, and (b) not accompanying the announcement of the exchange with a public statement on the intention of gradually raising the ruble rate or on the time frame during which the exchange would continue at the declared rate; (2) initiate acceptance of gold in exchange for the issuance of banknotes and set a lower price for that metal than the price at which the banknotes would be issued when the latter were accepted, while allowing the Finance Ministry to determine what that difference would be; and (3) have the finance minister authorized (a) to approach the Finance Committee with recommendations on changing the paper ruble rate in specie, and (b) to sell foreign securities from the exchange fund, should cash be needed for the exchange. To Vyshnegradskii, the chief task while the exchange continued would be to keep gold in the country, and he saw that as possible under only two conditions. First, Russia’s national credit standing would have to be strengthened and the outflow of gold abroad stopped. This outflow occurred when the going rate for Russian securities fell, causing them to migrate from the European market to Russia. In a memorandum, he noted that this tendency was prompted by the calamitous state of national finances: a chronic budget deficit, appropriations that significantly exceeded budget estimates, and the unproductive nature of extraordinary expenditures. “While those causes obtain,” Vyshnegradskii wrote, “distrust in our finances can only grow. Although harboring no doubts as to the Russian government’s probity and readiness to meet its obligations, our creditors cannot but ask themselves if they may constantly count on the timely receipt of interest and the repayment of loans previously contracted, when the ordinary budget cannot function without loans, when extraordinary expenditures are met by seeking credit, with no funds allocated for repayment of that credit, and when, finally, above-budget and unbudgeted expenditures strip the budget of all meaning and serve only as a sign of a disordered economy.” The minister emphasized that only if above-budget and unbudgeted expenditures were restricted, if

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extraordinary expenditures were rendered productive, and if the budget were balanced would it be possible to improve the nation’s credit standing and to normalize the money supply. Second, the balance of trade would have to shift in Russia’s favor, in an amount of no less than 160 million rubles. Vyshnegradskii informed the Finance Committee that his ministry was working to revise customs tariffs. A significant increase in duties would limit imports, increase customs revenues paid in gold, and protect Russia’s industry from foreign competition.43 Vyshnegradskii’s first step in carrying out those plans was his presentation on permitting commercial transactions in specie and accepting specie in payment of taxes, fees, and duties, which was received by the State Council on 12 January 1888. Once again, the minister noted the importance of restoring the circulation of precious metals to attract into Russia the foreign capital that was essential to the revival of commercial turnovers after many long years of stagnation. In conclusion, he expanded on the choice made by the State Council in March 1883, after hearing Bunge’s presentation on permitting settlements to be performed only in gold. He indicated how impossible that would have been at the time, since Russia’s monetary unit was then, by law, the silver ruble. It would have been tantamount to announcing a transition to gold monometallism, which would have had no practical significance because it could not be effected without lengthy preparations.44 To date, however, the demonetization of silver had been proceeding apace. Whereas paper money had previously been losing value constantly against the silver ruble, by the late 1880s the silver ruble’s rate relative to the paper ruble had begun to fall, and by 1893 had declined by 20–25 percent. The resumption of the exchange of banknotes for silver coin had become effectively impossible, since that would immediately strip the notes of a quarter of their value.45 The minister’s statement did not, therefore, imply any refusal on his part to introduce gold currency at some point in the future. Later, during the 1896 discussions of a plan for monetary reform, Boris Pavlovich Mansurov, a member of the State Council, was to remark that Vyshnegradskii had not deemed it expedient at the time to broach the issue of transitioning to a gold monetary unit. Witte objected that the opinion expressed by the former finance minister did not reveal what he was really thinking. “If he had had the intention of using both metals to reinforce the money supply,” Witte declared, “then how likely is it that,

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while in charge of finances, he would have been concerned only with our accumulation of a gold reserve?”46 Rumors about Vyshnegradskii’s presentation leaked, causing, in the words of a contemporary, “tumult in our commercial world.” Stock exchange committees applied to the Finance Ministry for permission to discuss the issue.47 So, with the aim of calming public opinion and influencing sentiments in business circles, on 12 February 1888, based on a report by Vyshnegradskii, a Special Council was formed, chaired by Deputy Finance Minister Terner and staffed by Aleksei Vasil’evich Tsimsen, manager of the State Bank; V.V. Verkhovskii, director of the Special Chancellery for Credit; and representatives of the St. Petersburg, Moscow, Kiev, Khar’kov, Odessa, Warsaw, and Riga stock market committees.48 Later it was expanded to include representatives of the Volga area merchantry, which was perturbed by the possible threat to the grain trade, and Aleksei Borisovich Ber, director of the Department of Trade and Manufactories.49 The council had its first meeting in March 1888. In his address, Vyshnegradskii diplomatically assured all present that “devaluation did not enter into his plans.” Even so, only two representatives of the stock market committees—the famous bankers Ivan Stanislavovich Bliokh and A.N. Zak—agreed with his arguments. The rest disputed his assertion that the suggested measures would help attract foreign capital, circulate specie on the domestic money market, and raise the ruble rate. In their opinion, it would instead inspire loss of faith in the paper ruble, encouraging widespread stock-jobbing, and depress the exchange rate even further.50 Backing that assumption was that the alarming rumors fueled by talk of the Finance Ministry’s project had depressed the ruble rate to 49 gold kopecks.51 After learning of the Special Council’s negative response, Vyshnegradskii did not insist on the matter being forwarded to the State Council for further discussion. Forced to give up on the exchange operation, he instead set himself the goal of creating the financial and economic basis for monetary reform and winning support for his initiatives in the “upper echelons” and in society. Favorable changes in the economy facilitated those plans. A protracted industrial depression gave way to the rally of 1887–90, which affected almost all branches of industry. This growth in production coincided with the bountiful harvests of 1887 and 1888 (2.54 billion and 2.57 billion poods, respectively) [1 pood = approximately 36 lbs.—Trans.], which were followed by an average grain yield in 1889

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(2.01 billion poods) and a slightly better showing in 1890 (2.249 billion poods). Those two good years not only met the population’s immediate need for food but also made it possible to build up significant reserves, which would be tapped in 1889 and 1890.52 To balance the budget, the finance minister introduced a stringent policy of thrift with respect to treasury funds. The main cause of budget deficits was the huge outlays on state debt obligations (loans and government-guaranteed stocks and bonds). To reduce such expenditures, Vyshnegradskii determined to make use of the favorable state of the European money market, where, due to a capital surplus, the bank discount rate had fallen and the demand for fixed-income paper had risen. Under Vyshnegradskii, fourteen foreign and domestic loans at 4.5, 5, and 5.5 percent, totaling 1.868 billion rubles were converted to 4 percent loans. The net result of the conversion was an increase of 277 million rubles in the public debt and profits of 108.7 million rubles (i.e., only 5.8 percent of the loan total). The postponement of loan maturity by eightyone years, however, produced substantial savings in annual payments. Even in the early years, this saving averaged 21.5 million rubles. Later it grew, giving the Finance Ministry broader opportunities to accumulate a gold reserve (whereas in 1886 loan payments accounted for 38.1 percent of budget revenues, in 1892 they were down to 28.3 percent).53 Another source of budget deficits was the annual state payments to guarantee railroad company revenues. Vyshnegradskii’s policy, which aimed at reducing the construction of new lines, establishing a state tariff system monopoly, and buying up unprofitable private railroads brought about a substantial reduction in those payments, which fell from 38.2 million rubles in 1887 to 17.2 million rubles in 1891.54 The finance minister also endeavored to reduce military expenditures, which accounted for more than a third of the state budget. At his insistence, a system of maximum War Ministry budgets for 1889 through 1893 was instituted, with increases permitted only if the Treasury had the means to fund them. This made it possible to restrain somewhat the growth of spending on the army and navy.55 The military establishment, admittedly, also counted on significant above-budget appropriations, but the finance minister imposed severe limitations there, too. Whereas in 1886 the combined ordinary and extraordinary budgets totaled 39 million rubles, in 1890 this figure had fallen to 6.2 million rubles.56 To increase state revenues, the Finance Ministry resolved to raise taxes: peasant arrears in payment of the poll tax that Bunge had repealed were

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pursued; and state taxes on land and industrial production, the stamp duty, and excise taxes on tobacco, sugar, and spirits were raised. Taxes were levied on income from shares in railroad stock and from special current accounts [tekushchie schety], and excise taxes on kerosene and matches were introduced. Time allowed Vyshnegradskii only to begin clearing the way for a liquor monopoly, but a tobacco monopoly in Russia was considered impracticable.57 The economic rally made it easier to bring order to the collection of taxes and to reduce arrears.58 From 1887 to 1892 there was appreciable growth in state entrepreneurial activities, and the share of revenues from state-owned properties (railroads, the mail, the telegraph, etc.) in the budget grew from 8.9 percent to 14.8 percent.59 A frugal approach to state resources and increased revenues removed deficits from the ordinary budget, which from 1888 to 1890 showed an average net surplus of 64 million rubles. Rising extraordinary expenditures on loan interest, railroad development, and military needs greatly complicated the balancing of the overall budget, however, since covering such spending required loans and ordinary budget surpluses.60 Even so, Vyshnegradskii did manage to accumulate a reserve fund for use in emergencies. From 1887 to 1891 the Treasury’s uncommitted cash grew from 86.2 million to 205 million rubles.61 But all the Finance Ministry’s attempts to raise and stabilize the ruble rate were doomed to failure so long as the balance of payments remained negative due to nontrade state payments on foreign debt (130 to 140 million paper rubles annually from 1887 to 1892) and the enormous sums of money spent abroad by Russian subjects, which grew from 25 million to 54 million paper rubles in the same period.62 Finding it impossible in the short term to bring comparable sums in nontrade payments and tourist spending into the country, Vyshnegradskii was forced to offset nontrade payments by significantly increasing the modest but consistently positive balance of trade that had been achieved in the first half of the 1880s. The minister continued Bunge’s policy of systematically increasing customs assessments, eventually (on 11 June 1891) declaring the imposition of a protectionist tariff.63 This was made easier because exports to Russia were already suffering from the low ruble rate, which in 1887 had fallen to 55.7 gold kopecks.64 Simultaneously the Finance Ministry promoted the export from Russia of agricultural products, mostly grain. To this end, high export premiums and preferential railroad rates for the transportation of grain were established, and a network of grain elevators, grain platforms, and transshipment points were constructed on the

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railroads. From 1888 on, the State Bank began making loans collateralized by loads of grain, and the railroads were authorized to provide loans for grain stored in granaries.65 Whereas in 1886 grain exports stood at 278.4 million poods, in later years they shot up to 547.9 million (1888) and 466.4 million (1889).66 In monetary terms, grain accounted for 51.5 percent of all exports from 1886 to 1890.67 In 1887 to 1891 Russia was responsible for 47 percent of the overall imports of grain-importing countries in Europe. The trade surplus thus grew from 57.6 million rubles in 1886 to 397.9 million rubles in 1888 and 318.9 million rubles in 1889.68 In 1887 the balance of payments was positive to the tune of 24 million paper rubles.69 The growth in grain exports was attributable not only to increased agricultural productivity and international demand but also to ruble rate fluctuations. When the rate fell, grain prices in banknotes rose even as prices in foreign specie remained steady, causing farmers and exporters to offer increasing amounts of grain for export. During the agrarian crisis, however, grain prices fell and continued to fall. Moreover, the feverish growth in exports and the saturation of the European market with Russian grain reduced foreign-currency prices for grain. Therefore, despite an absolute growth in grain exports, the value of the exports inevitably fell. Whereas exports yielded 233.1 million rubles in 1886, they brought in 422.2 million rubles in 1888 and 376 million rubles in 1889.70 The Finance Ministry tried to offset the losses by pushing exports at “rock-bottom” prices, which meant that, especially when the ruble rate was falling, Russia was virtually giving away a portion of its agricultural output. The economy’s basic interests were sacrificed to the Finance Ministry’s “gold policy.”71 As the famous economist Leonid Naumovich Iurovskii put it, the accumulation of a gold reserve at a time when grain prices were depressed “placed a huge burden on the rural population.”72 But Vyshnegradskii declared, “Though we eat nothing ourselves, we shall export!”73 Even as he was stimulating exports, the minister had a vested interest in keeping the ruble rate low, since a rise in the ruble rate would slow grain exports. Whereas in early 1888 he had been trying to halt the ruble’s fall by buying up banknotes for gold on the exchanges, by the summer of 1888, thanks to a generous harvest and an increase in grain exports, the demand for banknotes shot up and the ruble rate began to rise. Vyshnegradskii decided to take urgent action. He reported to the emperor in a memorandum dated 14 July: “grain prices abroad are not rising

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further and the demand for the sale of grain at the current high ruble rate, heretofore limited as a result, has been exceedingly disadvantageous for Russian sellers, and grain exports have weakened significantly: any fall in the ruble rate increases the price of grain in credit currency.” In Vyshnegradskii’s opinion, steps to raise the rate should be postponed until grain prices rose on the European market. In a memorandum dated 19 July he recommended beginning to buy gold with credit currency, so as to “beat down” the rising rate. Alexander III agreed.74 The acquisition of gold on Russian and foreign exchanges in August and September was financed by loans and by the resources of the Treasury and State Bank. The operation was pursued so intensively that it caused drastic reductions in the amounts of the bank’s cash in hand, prompting an urgent need for new issues of paper money. Another compelling factor in this regard was the refusal of the “upper echelons” to permit transactions to be conducted in metal currency, which, compounded by a reduction in the overall quantity of banknotes, was causing no small difficulties for commerce. The revival of trade turnovers that had begun in the fall of 1886 entailed a growing demand for banknotes, which was further exacerbated in 1887 as a result of that year’s bountiful harvest and the expansion of grain exports. It became evident that, if the following year’s grain harvest was good, the lack of a sufficient quantity of paper money in circulation could have dire consequences for trade and industry. On 21 June 1888, therefore, Vyshnegradskii petitioned the Finance Committee to permit new issues of banknotes. “It must perforce be acknowledged,” he wrote, with the decree of 1 January 1881 in mind, “that if a shrinkage in the money supply effected by destroying banknotes as they accumulate in the coffers of the State Bank during a slackening of trade presents itself as an entirely rational measure, then one must also permit an increase in the quantity of banknotes if the revival of trade requires it.” Vyshnegradskii emphasized that the “removal of all obstacles to increased foreign exports of grain must be acknowledged as a matter of primary importance, both for the population of the empire and for the nation’s credit standing.” To secure trade turnovers, he recommended authorizing the minister of finance to issue banknotes backed by gold held by the Treasury or the State Bank (1 paper ruble = 1 gold ruble). The gold was to be held along with the exchange fund but in a separate account and was to be returned to the Treasury or the State Bank after the corresponding amount of paper money had been destroyed. The Finance

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Committee approved this suggestion on 26 June, and on 8 July the emperor signed the relevant decree.75 On 7 and 28 September 300 million rubles in banknotes were issued.76 The currency dumping worked: two months later the rate had fallen. The temporarily issued paper money was removed from circulation on 29 November and 14 December. The minister of finance later used volatility in the ruble rate to benefit the economy. His predecessors had also engaged in currency rate speculation, but Vyshnegradskii played the game much more extensively and with incomparably greater success. By buying up banknotes at a time when the Treasury and various businessmen were making payments abroad, the Finance Ministry prevented the ruble from falling too far. The acquisition of gold when the harvest was on the market represented the ministry’s effort in the other direction, to “suppress it.” Despite his plans, Vyshnegradskii was never able to fix the rate at 1.5 paper rubles = 1 gold ruble. In fact, from 1887 to 1892 the rate fluctuated as never before, from a low of 8.79 percent in 1892 to a high of 36.38 percent in 1888.77 In 1889 the Finance Ministry managed to keep the rate relatively low, thus favoring grain exports. The next year, however, under the impact of an expanding export trade and a growing demand for banknotes, the ruble rate averaged 72.6 gold kopecks. But this rapid rate rise complicated matters for trade and industry, when prices for Russian export goods began to fall at home and abroad. The revenues of agricultural products exporters contracted, and those goods began generating losses for their producers. With the rising rate came a drop in prices for foreign goods on the Russian market, facilitating the payment of customs duties on those goods, which were levied in gold. The minister of finance took prompt action. On 4 August 1890 he sent a memorandum laying out his intentions to Aleksandr Ageevich Abaza, the influential chairman of the State Council’s Department of the State Economy, to earn Abaza’s support. Attributing the rising ruble rate to “speculation,” Vyshnegradskii emphasized that it would do enormous harm to the economy and aggravate the state of the money supply. “If we allow this speculation to run its course,” he wrote, “there can be no doubt that the rate will rise further, and then, when exports halt altogether (which could occur in the near future), the rate is apt to fall, and a long way, at that. Thus, I foresee extreme rate fluctuations, which will reflect in the most doleful way both on our credit standing and on the productive forces that provide the basis for our finances.” Vyshnegradskii suggested rapidly buying up large amounts of gold to

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bring the rate up to the ruble’s gold valuation limit, concomitant with the established foreign prices for grain, at 1 paper ruble = 62.5 gold kopecks. He predicted an explosion of displeasure, both in the “upper echelons” and among the public (“there will be powerful criticisms”), since the country had greeted the rise in the rate with hopes for the ruble’s imminent “rebirth,” and for that reason he was especially adamant that the strictest secrecy be observed.78 To the letter was attached a memorandum on the significance that the upcoming operation would have for the accumulation of a gold reserve. The minister was recommending using the Treasury’s and the State Bank’s uncommitted cash (150 million paper rubles) to buy a quantity of gold worth 100 million rubles. He proposed adding that sum and 120 million gold rubles from the Treasury and the State Bank to the exchange fund (210 million gold rubles), which would bring the fund up to 430 million gold rubles. “In this situation,” Vyshnegradskii wrote, “even the launching of an exchange would present no danger, but perhaps we should be in no haste to launch the exchange but should use the sizable precious-metals fund to support the paper ruble at roughly its normal price, buying gold when the rate of exchange is improving and selling it when the rate has improved.” The minister planned to sell temporary-issue banknotes for gold at the high rate of approximately 1.3 paper rubles = 1 gold ruble and to exchange them later at the lower forced rate of 1.6 paper rubles = 1 gold ruble. Such a move would make it possible to acquire a portion of the precious-metals fund with no expenditures of any kind. In that sense, the operation conceived by Vyshnegradskii was nothing new to the Finance Ministry. By buying gold with banknotes issued from 1868 to 1875, Reitern had been able significantly to increase the size of the exchange fund; only the outbreak of the Russo-Turkish War had sidetracked his plans. Abaza gave his full approval to the recommendations in telegrams dated 7 and 9 August. Responding by letter on 11 August, Vyshnegradskii told Abaza that Deputy Minister of Finance Terner and Deputy Director of the Special Chancellery for Credit Eduard Dmitrievich Pleske were also privy to the details of the operation. Abaza then telegrammed confirmation of his commitment to support Vyshnegradskii.79 The next day Vyshnegradskii submitted a report to Alexander III with Abaza’s telegrams attached. He informed the emperor of the rising ruble rate’s pernicious influence on Russian exports and of the contracting revenues of agricultural producers. “These receipts,” Vyshnegradskii wrote, “are no longer rewarding the farmer’s toil and, given the influence that the

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marketing of our grain exerts on the well-being of all Russia, are also reflecting directly on other aspects of production. The present rapid rise in the exchange rate threatens to inflict extreme harm on our fatherland’s well-being.” As in his letter to Abaza, he again predicted an inevitable fall in the ruble rate to unprecedented lows. Vyshnegradskii was insisting on artificially lowering the rate with gold withdrawn from the State Bank’s uncommitted cash, so as not to constrain the money market. He again suggested accommodating the requirements of the grain trade by definitively pegging the paper ruble rate in gold at 62.5 kopecks (or 1 gold ruble = 1.6 paper rubles). In his report he also pointed out the advisability of buying, from time to time, a certain quantity of banknotes, to prevent the rate from falling too quickly and, as the need arose, of issuing paper money on the basis of the decree of 8 July 1888. The minister called for secrecy while this operation was under way, so as to avoid stock-market speculation and to enable the acquisition of a significant amount of gold with paper rubles still valued at the higher rate. “Turning now to the ultimate aim of the proposed measure,” he wrote, “it may be hoped that, in addition to averting a disastrous stagnation in our export trade, that measure will also make it possible in the near future to proceed toward launching the exchange and consequently toward the final pegging of the paper ruble at the above-mentioned rate of 62.5 gold kopecks.” Vyshnegradskii was proposing that the exchange be launched at an even lower rate than in his 1887 plan: he was to all intents and purposes floating the idea of secretly devaluing the ruble. Many opponents of devaluation were by that time beginning to acknowledge that it would have to happen sooner or later. On 16 August 1890 Alexander III approved the report.80 With royal permission, the Finance Ministry began buying up foreign bills of exchange and gold on the German, English, and American markets, mostly through Mendelsohn and Co. in Berlin. Although Vyshnegradskii, accompanied by Witte (at the time director of the Department of Railroads), left on 17 August on a trip to the Nizhnii Novgorod fair and thence to Central Asia and the Caucasus, he remained in personal control of the operation, charging Witte to send daily telegrams to St. Petersburg with detailed instructions for Terner.81 Whereas from 3 through 18 August the gold purchase was limited to £10,000 to £40,000 sterling per day, on 20 August that sum rose sharply, to £100,000 sterling. But since at that time the number of bills of exchange on offer exceeded ministry demand, the rate continued to rise, taking

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the value of the paper ruble from 76 gold kopecks to 81 gold kopecks by 3 September. Vyshnegradskii ordered the purchases to be increased, up to £300,000 sterling a day. In a telegram dated 19 September, he explained the plan of the operation, which was to buy between £50,000 and £100,000 sterling daily, closer to £100,000 when the rate was high and in the neighborhood of £50,000 when it fell, and endeavoring to anticipate large rate fluctuations by halting purchases if the rate was falling fast and acquiring more than £100,000 on days when it was rising rapidly. The rate did not fall again until early November, when it dropped to 76 gold kopecks and continued to decline thereafter. This gradualism was wholly in line with the Finance Ministry’s calculations.82 From August 1890 through July 1891, 116.7 million gold rubles were acquired for 154.3 million paper rubles, at an average price of 1 gold ruble = 1.32 paper rubles. In a briefing memorandum, Vyshnegradskii also informed the emperor that the ruble rate had fallen below 66.75 gold kopecks due to a poor harvest in several provinces and a likely reduction in exports. Even though the gold-ruble/paper-ruble ratio had gone above 1.5 (i.e., above the limit established by the decree of 8 July 1888), the minister of finance recommended continuing the gold purchases and initiating a sale only if the rate fell below 62.5 gold kopecks. On 28 July 1891 Alexander III approved that suggestion.83 In the course of a year (from 1 July 1890 to 1 July 1891), the amount of gold in the coffers of the Treasury and the State Bank grew from 183.3 million rubles to 299.3 rubles.84 The acquisition of gold was, however, complicated by a shortage of banknotes, since the decree of 8 July 1888 made no provision for any issue of notes until trade turnovers revived. Furthermore, the conversion of several domestic loans had created a need for funds to pay the surcharge on the presentation of interest-bearing securities for redemption, since the holders of those securities were entitled to receive cash in return. In May 1891 Vyshnegradskii requested the Finance Committee to permit an issue of banknotes backed by gold to meet the needs of the currency-switching operations.85 The committee agreed on 21 May, and three days later the emperor approved the decision.86 This did not solve the problem, however. By the end of July 1891 Vyshnegradskii was applying directly to Alexander III (since the members of the Finance Committee were on vacation) with a request to supplement the laws of 8 July 1888 and 24 May 1891 on the issuing of banknotes, arguing that the gold purchases of January through July had reduced

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the State Bank’s cash in hand from 138.9 million rubles to 91.4 million rubles and neither enactment had mandated any increase in the bank’s instruments of payment. Vyshnegradskii petitioned for the replacement of the unpublished decree of 24 May 1891 with another enactment that authorized the finance minister to resort to temporary issues of paper money in consideration of the condition of the State Bank’s coffers, based on the prescriptions of the decree of 8 July 1888. Vyshnegradskii pointed out that this matter would have to be brought before the Finance Committee for discussion at some later time, so as not to violate the letter of the law.87 On 28 July the emperor signed an attached draft decree,88 permitting 75 million rubles in banknotes to be issued in three phases (on 13 August, 20 August, and 6 September).89 In January 1892 Vyshnegradskii submitted to the Finance Committee a presentation justifying his actions.90 At the Finance Committee meeting on 2 February, Bunge expounded on the negative effect that the issue of paper money, even when backed by gold, would have on the ruble rate and on prices for goods. Because rising prices would inevitably bring with them a demand for new banknote issues, for which the gold reserves would eventually prove insufficient, it would be necessary to set a maximum amount for those issues. When other members of the committee agreed with Bunge, Vyshnegradskii replied that the paper money issue would be limited by “persistent and unconditional demand,” and that the danger they presented would be significantly mitigated by the banknotes’ being backed with gold and removed from circulation in a timely fashion. He underlined how impossible it would be to prohibit this measure, since “that will be especially damaging to Russia, where unexchangable paper money has driven specie entirely out of circulation” and “will lead either to the sale of accumulated gold at any cost or to the limitation of negotiable instruments to a certain maximum, which may not be exceeded no matter how great the people’s need.” Vyshnegradskii suggested setting a maximum amount for the issues that would leave the Treasury and the State Bank with no less than 100 million gold rubles in uncommitted cash that was not being used to back those issues. The committee then ratified the supplement to the decree of 28 July 1891,91 and two issues of paper money, totaling 25 million rubles, followed on 14 and 28 August 1892. Some of the banknotes issued in 1891 and 1892 (a sum of 125 million rubles) were withdrawn from circulation after Vyshnegradskii retired as minister of finance.92 Altogether, Vyshnegradskii oversaw the acquisition of 309.3 mil-

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lion gold rubles at a lucrative price. Other sources used to augment the gold reserves were customs duties, part of the receipts from conversion operations, and domestic gold mines, whose output had risen to 2,173 poods [annually] since 1845.93 From 1 January 1887 through 1 January 1893 the country’s gold reserves increased from 281.5 million rubles to 581.5 million rubles (211.5 million in the exchange fund, 150 million in the provisional fund formed to back the temporary-issue banknotes, 94.5 million in the Treasury, and 125.5 million in the State Bank).94 In the same period, the ratio of the exchange fund to the provisional fund rose from 16.4 percent to 30.2 percent.95 The accumulated gold was not placed in circulation, being used instead to support State Bank assets and to make payments on the national debt.96 The Ministry of Finance was planning to effect a monetary reform in the near future. “In 1892 everything was considered so ready,” Witte recalled, “that prior to leaving office Vyshnegradskii was prepared to set his proposal definitively in motion. He personally handed me a bulky manuscript in his own hand, in which his thoughts on this idea were laid out.”97 The Finance Ministry had formulated the basic principles of the upcoming transformation: the devaluation of the ruble; the establishment of gold monometallism; the simultaneous circulation of metal and paper money; the guaranteed exchange of banknotes for gold; the limitation of the issue of paper money to amounts not exceeding the requirements of the money supply; the authorization of the Treasury to accept specie in payment of taxes at the current rate; and consent to allow private parties to use metal coinage in their transactions. In 1895–97 these principles were enshrined in law. The monetary reform delayed the “devastation of all Russia.” The signs of imminent crop failure became evident in the spring of 1891, at which point there began a rapid rise in grain prices that the agrarian crisis had until then been keeping down. Although the finance minister learned of the alarming situation, he at first underestimated the danger and took no urgent measures, since a reduction of grain exports would have placed his entire “gold policy” at risk.98 In 1891 Russia exported 391.2 million poods of grain.99 The scale of the natural disaster did not become fully apparent until the fall of 1891, when only 1.756 billion poods of grain were harvested. There was catastrophic crop failure in twenty-nine provinces (affecting 59 percent of the rural population of European Russia), with harvests at famine levels in seventeen provinces. Another poor harvest in 1892

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(2.104 billion poods) did nothing to offset the losses of the preceding year.100 About four hundred thousand people died of hunger and a rampant cholera epidemic.101 The crop failure had dire repercussions for the economy. The reduction of the rural population’s purchasing power and the drop in demand for industrial output compounded the partial crisis of overproduction that had in some measure been caused by the global crisis of 1890 and affected mostly the branches of light industry that were most focused on the needs of the rural population.102 Even as famine ravaged the eastern steppes and some of the non-blackearth regions, the grain-exporting southern and western provinces were continuing to export to Europe not only their surpluses but also some of the grain needed for domestic consumption. Before the end of the summer, though, Vyshnegradskii was forced to take urgent steps, allocating 162.5 million rubles to help the starving.103 The export of grain was prohibited in stages: on 28 July, 16 October, and 3 November. The prohibitions were repealed on 4 June and 7 August 1892,104 a year in which only 196.4 million poods of grain were exported and the trade surplus stood at only 76.1 million rubles.105 The balance of payments, which from 1887 to 1891 had been steadily positive (at 115 million paper rubles in 1891), showed a deficit of 151 million paper rubles in 1892.106 The Treasury suffered enormous losses. The reduction in the peasants’ solvency significantly reduced tax revenues. The arrears—56.5 million rubles in 1890—rose to 63.9 million rubles in 1891 and 139.8 million rubles in 1892.107 The two years of famine led to 335 million rubles of above-budget appropriations (10.6 million in the ordinary budget and 324.4 million in the extraordinary budget), while the uncommitted cash in the Treasury fell from 205 million rubles to 25.4 million rubles.108 The famine of 1891 and 1892 and its aftermath revealed the instability in Vyshnegradskii’s financial system and the extreme nature of his “gold policy.” He became gravely ill in the spring of 1892 and retired at the end of August 1892, leaving Witte to make full use of his efforts. Prior to his appointment as head of the Finance Ministry, Witte had been no specialist on the money supply. In fact, as director of the Department of Railroads from 1889 to 1892, he had favored raising the ruble to parity and had argued with Vyshnegradskii on that point. Early in his ministry, Witte was even reputed to be an “inflationist”109 and a “supporter of the theory of unlimited issues of paper money.”110 As head of the Finance Ministry, he advised financing the construction of the

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Trans-Siberian Railroad with issues of paper money and returning to the Treasury for that purpose the 92.7 million rubles paid to the State Bank for the temporary issues of banknotes that the bank had never removed from circulation. Vyshnegradskii and Bunge spoke vehemently against the “paper money” plan, which never went into effect.111 Ultimately, Witte gave due credit to the “knowledge and experience of previous finance ministers” and proved a worthy perpetuator of his predecessors’ policy.112 Later he would recall: “When I took charge of the Finance Ministry, I was already certain from experience of the error of my bookish views and of the propriety of the viewpoint that I.A. Vyshnegradskii and all those who had led the Ministry before him had endorsed. My lot was to carry out the plan outlined in 1887.”113 During discussions of the proposal for monetary reform in the “upper echelons,” Boris Mansurov of the State Council declared that the finance minister’s aim was to devalue the ruble, whereas his predecessors had embraced the task of raising the ruble rate to parity. In a letter to State Secretary Viacheslav Konstantinovich von Plehve on March 1896, Witte emphasized that his policy unswervingly followed the program suggested by Vyshnegradskii and accepted by the Finance Committee in its session of 28 June 1887. “Thus,” he continued, “I cannot accept the high honor of having initiated the measures that I have taken or those that I propose to recommend regarding the money supply. I am nevertheless profoundly convinced of the perfect propriety of the above-mentioned designs and therefore take upon myself the complete and unconditional responsibility for implementing them.”114 Witte could not have introduced the gold standard had he not been able to build on the achievements of his predecessors. His achievement was his ability to create a “brain trust” of qualified economists to elaborate the details of the project115 and to carry through a reform that was opposed by, as he himself put it, “almost every thinking person in Russia.”116 Notes 1. Materialy po denezhnoi reforme 1895–1897 gg., ed. A.I. Bukovetskii (Petrograd and Moscow, 1923), pt. 1, pp. v–vi. 2. A.P. Korelin and S.A. Stepanov, S.Iu. Vitte—finansist, politik, diplomat (Moscow, 1998); L.I. Abalkin, Ekonomicheskie vozzrenie i gosudarstvennaia deiatel’nost’ S.Iu. Vitte (Moscow, 1999); B.V. Anan’ich and R.Sh. Ganelin, Sergei Iul’evich Vitte i ego vremia (St. Petersburg, 1999); Sergei Iul’evich Vitte—gosudarstvennyi deiatel’, reformator, ekonomist (K stopiatidesiatiletiiu so dnia rozhdeniia), 2 vols.

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(Moscow, 1999); S.D. Martynov, Gosudarstvo i ekonomika: sistema Vitte (St. Petersburg, 2002). 3. I.A. Blagikh, “Ekonomicheskie vzgliady S.Iu. Vitte,” in Sergei Iul’evich Vitte—gosudarstvennyi deiatel’, reformator, ekonomist, pt. 1, pp. 192–208; A.P. Parshev, Pochemu Rossiia ne Amerika (Moscow, 2001), pp. 139–55; A.I. Amosov, “Evoliutsiia denezhnogo obrashcheniia Rossii,” Voprosy istorii, 2003, no. 8, pp. 94–95. 4. For a bibliography on the monetary reform of 1895–97, see Sergei Iul’evich Vitte: Rossiiskaia denezhnaia reforma (Moscow, 1997). 5. V.E. Vlasenko, Denezhnaia reforma v Rossii v 1895–1898 (Kiev, 1949). 6. Iz arkhiva S.Iu. Vitte: Vospominaniia (St. Petersburg, 2003), vol. 1, bk. 1, p. 464. 7. Ministerstvo finansov, 1802–1902 (St. Petersburg, 1902), pt. 2; Obzor deiatel’nosti Ministerstva finansov v tsarstvovanie imperatora Aleksandra III (1881–1894) (St. Petersburg, 1902). 8. I.I. Kaufman, Kreditnye bilety, ikh upadok i vosstanovlenie (St. Petersburg, 1888); Kaufman, Iz istorii bumazhnykh deneg v Rossii (St. Petersburg, 1909); Kaufman, Serebrianyi rubl’ v Rossii ot ego vozniknoveniia do kontsa XIX veka (St. Petersburg, 1910); M.P. Kashkarov, Denezhnoe obrashchenie v Rossii: istorikostatisticheskoe issledovanie (St. Petersburg, 1898), vols. 1–2; P.P. Migulin, Russkii gosudarstvennyi kredit (1769–1899): opyt istoriko-kriticheskogo obzora (Khar’kov, 1899–1900), vols. 1–2; P.Kh. Shvanebakh, Denezhnoe obrashchenie i narodnoe khoziaistvo (St. Petersburg, 1901); A.N. Gur’ev, Denezhnoe obrashchenie v Rossii v XIX stoletii: istoricheskii ocherk (St. Petersburg, 1903); A.D. Druian, Ocherki po istorii denezhnogo obrashcheniia v Rossii v XIX veke (Moscow, 1941); Vlasenko, Denezhnaia reforma v Rossii v 1895–1898; Vlasenko, Denezhnaia reforma v Rossii v 1895–1897: analiticheskii obzor po dokumentam i materialam reformy (Moscow, 1992); T.G. Semenkova and A.V. Semenkov, Denezhnye reformy Rossii v XIX veke (St. Petersburg, 1992); Russkii rubl’: dva veka istorii. XIX–XX vv. (Moscow, 1994), A.V. Bugrov, Ocherki po istorii Gosudarstvennogo banka Rossiiskoi imperii (Moscow, 2001). 9. V.L. Stepanov, N.Kh. Bunge: sud’ba reformatora (Moscow, 1998). 10. A.A. Lazutkin, “Stabilizatsiia finansovoi sistemy Rossiiskoi imperii v mini­sterstvo I.A. Vyshnegradskogo (1887–1892),” Candidate of History diss. (Moscow, 1994). 11. See L.E. Shepelev, Tsarizm i burzhuaziia vo vtoroi polovine XIX veka: problemy torgovo-promyshlennoi politiki (Leningrad, 1981), p. 17; Bugrov, Ocherki po istorii Gosudarstvennogo banka, p. 207. 12. R.I. Sementkovskii, Nash veksel’nyi kurs (Prichiny ego neustoichivosti) (St. Petersburg, 1892); A.N. Gur’ev, Reforma denezhnogo obrashcheniia (St. Petersburg, 1896), pt. 1/1, pp. 13–131; Materialy po denezhnoi reforme 1895–1897 gg., pp. 10, 138–45. 13. Migulin, Russkii gosudarstvennyi kredit, vol. 3/2, pp. 117–18. 14. Bugrov, Ocherki po istorii Gosudarstvennogo banka, pp. 211–12. 15. G.A. Vilenkin, Obespechenie serebra i ego posledstviia (St. Petersburg, 1894); Kaufman, Serebrianyi rubl’ v Rossii, pp. 215–20; Materialy po denezhnoi reforme 1895–1897 gg., p. 171; F.I. Mikhalevskii, Zoloto kak denezhnyi tovar (Moscow, 1937), pp. 5–8, 69–93, 103–6, 177.

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16. Polnoe sobranie zakonov Rossiiskoi imperii [PSZ], vol. 51, sect. 2, no. 56573. 17. Ibid., vol. 14, no. 12497. 18. Kaufman, Serebrianyi rubl’ v Rossii, pp. 229–30. 19. Sud’by Rossii: doklady i zapiski gosudarstvennykh deiatelei imperatoram o problemakh ekonomicheskogo razvitiia strany (vtoraia polovina XIX v.) (St. Petersburg, 1999), p. 166. 20. Materialy po denezhnoi reforme 1895–1897 gg., pp. 41–49. 21. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, pp. 73, 83, 90, 91, 177. 22. PSZ 2, vol. 55, sect. 1, no. 61730. 23. Materialy po denezhnoi reforme 1895–1897 gg., pp. 49–88. 24. PSZ 3, vol. 5, no. 3380. 25. Bugrov, Ocherki po istorii Gosudarstvennogo banka, p. 226. 26. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, p. 73. 27. PSZ 3, vol. 4, no. 2302. 28. Russian State Historical Archive (RGIA), f. 563, op. 2, d. 259, ll. 31–36. 29. For further detail, see Stepanov, N.Kh. Bunge: Sud’ba reformatora, pp. 202–3. 30. For further detail on the biography of Vyshnegradskii, see V.L. Stepanov, “Ivan Alekseevich Vyshnegradskii,” Otechestvennaia istoriia, 1993, no. 4, pp. 99–115. [Translated in Russian Studies in History, vol. 35, no. 2 (Fall 1996), pp. 73–103.—Ed.] 31. I.A. Vyshnegradskii, “O zadachakh finansovykh uchrezhdenii v dele ustraneniia defitsita v gosudarstvennom biudzhete [1886 g.],” in Reka vremeni (Moscow, 1995), bk. 1, pp. 195–96. 32. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 2, l. 7 ob. 33. Vestnik Evropy, 1888, no. 1, “Vnutrennee obozrenie,” pp. 467–71. 34. RGIA, f. 694, op. 2, d. 85, ll. 1–16. 35. RGIA, f. 563, op. 1, d. 18, ll. 4 ob.–15 ob. 36. Vospominaniia zhizni F.G. Ternera (St. Petersburg, 1911), pt. 2, p. 176. 37. RGIA, f. 563, op. 1, d. 18, l. 1. 38. RGIA, f. 694, op. 2, d. 83, ll. 1–12 ob.; PSZ 3, vol. 7, no. 4639. 39. RGIA, f. 587, op. 30, d. 567, l. 1. 40. PSZ 3, vol. 8, no. 5540. 41. RGIA, f. 563, op. 2, d. 278, ll. 1–8, 9–13, 14–15 ob.; PSZ 3, vol. 9, no. 6295. 42. Ministerstvo finansov, pt. 2, p. 110. 43. RGIA, f. 694, op. 2, d. 63, ll. 1–46. 44. Materialy po denezhnoi reforme 1895–1897 gg., pp. 88–97. 45. Ibid., pp. 13, 165–66, 185. 46. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 2, ll. 3 ob. 47. RGIA, f. 560, op. 22, d. 172, l. 3. 48. RGIA, f. 1162, op. 16, 1888 g., d. 3, ll. 12–5. 49. RGIA, f. 40, op. 1, d. 40, ll. 62–62 ob. 50. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 1, ll. 358, 411. 51. N.Kh. Vessel’, Nasha novaia gosudarstvennaia finansovaia deiatel’nost’ (1892–1894 gg.) (St. Petersburg, 1894), p. 26. 52. S.A. Pervushin, Khoziaistvennaia kon’’iunktura: vvedenie v izuchenie dina­

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miki russkogo narodnogo khoziaistva za polveka (Moscow, 1925), pp. 158–59; A.F. Iakovlev, Ekonomicheskie krizisy v Rossii (Moscow, 1955), pp. 161–64, 169; A.S. Nifontov, “Khoziastvennaia kon’’iunktura v Rossii vo vtoroi polovine XIX veka,” Istoriia SSSR, 1972, no. 3, pp. 60–61. 53. Migulin, Russkii gosudarstvennyi kredit, vol. 2, pp. 86–257; A.L. Sidorov, “Konversiia vneshnikh zaimov Rossii v 1888–1890 gg.,” Istoricheskii arkhiv, 1959, no. 3, pp. 99–102; René Girault, Emprunts russes et investissements françaises en Russie: 1887–1914 (Paris, 1973). 54. Migulin, Russkii gosudarstvennyi kredit, vol. 2, p. 409. 55. Ministerstvo finansov, pt. 2, pp. 308, 642–43. 56. Obzor deiatel’nosti Ministerstva finansov v tsarstvovanie imperatora Ale­ksandra III, pp. 115–16. 57. Ministerstvo finansov, pt. 2, pp. 134, 144, 147–49, 152–53, 155–57, 177, 186–90. 58. Nifontov, “Khoziaistvennaia kon’’iunktura v Rossii,” pp. 52, 60–61. 59. A.A. Lazutkin, “Rol’ zheleznodorozhnoi politiki i stabilizatsii finansovoi sistemy Rossiiskoi imperii v ministerstvo I.A. Vyshnegradskogo (1887–1892 gg.),” Vestnik MGU, series 8: Istoriia, 1993, no. 6, pp. 32, 33. 60. Ministerstvo finansov, pt. 2, pp. 640–43. 61. Migulin, Russkii gosudarstvennyi kredit, vol. 2, pp. 549, 550. 62. Paul R. Gregory, Russian National Income, 1885–1913 (Cambridge: Cambridge University Press, 1982), p. 97. 63. For further detail on Vyshnegradskii’s customs policy, see M.N. Sobolev, Tamozhennaia politika Rossii vtoroi poloviny XIX veka (Tomsk, 1911); and L.V. Kuprianova, Tamozhenno-promyshlennyi protektsionizm i rossiiskie predprinimateli (40–80-e gody XIX veka) (Moscow, 1994). 64. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, p. 177. 65. T.M. Kitanina, Khlebnaia torgovlia Rossii v 1875–1914 gg. (Ocherki pravitel’stvennoi politiki) (Leningrad, 1978), pp. 88–91. 66. V.I. Pokrovskii, Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii (St. Petersburg, 1902), vol. 1, p. 105 (tables). 67. S.A. Pokrovskii, Vneshniaia torgovlia i vneshniaia torgovaia politika Rossii (Moscow, 1947), p. 318. 68. Pokrovskii, Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii, pp. 117, 141 (tables). 69. Gregory, Russian National Income, p. 97. 70. Pokrovskii, Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii, p. 105 (tables). 71. Materialy po denezhnoi reforme 1895–1897 gg., pp. 135–36. 72. L.N. Iurevskii, Denezhnaia politika Sovetskoi vlasti (1917–1927) (Moscow, 1928), p. 15. 73. Shvanebakh, Denezhnoe obrashchenie i narodnoe khoziaistvo, p. 21. 74. RGIA, f. 560, op. 22, 1888 g., d. 171, ll. 2–2 ob., 3–3 ob. 75. RGIA, f. 563, op. 2, d. 272, ll. 2–15 ob., 22–34 ob.; PSZ 3, vol. 8, no. 5396. 76. Sobranie uzakonenii i rasporiazhenii pravitel’stva. 1888 g., nos. 792, 892; Materialy po denezhnoi reforme 1895–1897 gg., p. 27. 77. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, p. 170. 78. RGIA, f. 583, op. 5, 1890 g., d. 145, ll. 1–5.

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  79. Ibid., ll. 6–9, 19–21, 22, 43.   80. Ibid., op. 4, d. 330, ll. 31–38.   81. Iz arkhiva S.Iu. Vitte: Vospominaniia, vol. 1, bk. 1, p. 197.   82. RGIA, f. 583, op. 5, 1890 g., d. 145, ll. 174–76 ob.   83. Ibid., op. 4, d. 330, ll. 39–43 ob.   84. RGIA, f. 563, op. 2, d. 310, l. 2 ob.   85. Ibid., d. 304, ll. 3–7.   86. Ibid., ll. 9–10.   87. Ibid., ll. 14–17 ob.   88. Ibid., ll. 18–19; PSZ 3, vol. 11, no. 7940.   89. Sobranie uzakonenii i rasporiazhenii pravitel’stva. 1891 g., nos. 884, 909, 953; Materialy po denezhnoi reforme 1895–1897 gg., p. 27.   90. RGIA, f. 563, op. 2, d. 310, ll. 1–5.   91. Ibid., ll. 6–20; Dnevnik gosudarstvennogo sekretaria A.A. Polovtsova (Moscow, 1966), vol. 2, pp. 421–23.   92. RGIA, f. 583, op. 4, d. 304, ll. 93–93 ob.; Sobranie uzakonenii i rasporiazhenii pravitel’stva. 1892 g., nos. 893, 937; Materialy po denezhnoi reforme 1895–1897 gg., p. 27.   93. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, p. 153.   94. Ministerstvo finansov, pt. 2, p. 112.   95. Kashkarov, Denezhnoe obrashchenie v Rossii, vol. 1, pp. 73, 196.   96. Bugrov, Ocherki po istorii Gosudarstvennogo banka, p. 224.   97. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 1, l. 780.   98. A.S. Ermolov, Nashi neurozhai i prodovol’stvennyi vopros (St. Petersburg, 1909), pt. 1, p. 100.   99. Pokrovskii, Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii, pp. 117, 141 (tables). 100. Iakovlev, Ekonomicheskie krizisy v Rossii, p. 169; Nifontov, “Khoziaistvennaia kon’’iunktura v Rossii,” pp. 61–62. 101. For further detail on the famine and its consequences, see Richard G. Robbins, Famine in Russia, 1891–1892: The Imperial Government Responds to a Crisis (New York: Columbia University Press, 1975). 102. Pervushin, Khoziaistvennaia kon’’iunktura, pp. 158–59; Iakovlev, Ekonomicheskie krizisy v Rossii, pp. 164–85; S.G. Strumilin, Ocherki ekonomicheskoi istorii Rossii (Moscow, 1960), pp. 502–6. 103. Ministerstvo finansov, pt. 2, p. 643. 104. PSZ 3, vol. 11, nos. 7939, 8010, 8037; vol. 12, nos. 8653, 8886. 105. Pokrovskii, Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii, pp. 117, 141 (tables). 106. Gregory, Russian National Income, p. 97. 107. Nifontov, “Khoziaistvennaia kon’’iunktura v Rossii,” pp. 52, 61. 108. Obzor deiatel’nosti Ministerstva finansov v tsarstvovanie imperatora Ale­ksandra III, pp. 115–16; Migulin, Russkii gosudarstvennyi kredit, vol. 2, p. 550. 109. Vospominaniia zhizni F.G. Ternera, pt. 2, p. 222. 110. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 1, l. 780. 111. RGIA, f. 1273, op. 1, d. 1; S.V. Sabler and I.V. Sosnovskii, Sibirskaia zheleznaia doroga v ee proshlom i nastoiashchem (St. Petersburg, 1903), pp. 117–23; Vospominaniia zhizni F.G. Ternera, pt. 2, p. 222; Prolog russko-iaponskoi

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voiny: materialy iz arkhiva S.Iu. Vitte s predisloviem i pod redaktsiei B.B. Glinskogo (Petrograd, 1916), pp. 9–16; Dnevnik gosudarstvennogo sekretaria A.A. Polovtsova, vol. 2, p. 460. 112. RGIA, f. 1152, op. 12, 1897 g., d. 78, ch. 2, l. 8 ob. 113. Ibid., ch. 1, l. 780. 114. RGIA, f. 583, op. 3, d. 1025, ll. 4–4 ob. 115. O.A. Drozdov, “K voprosu o roli S.Iu. Vitte v podgotovke i provedenii denezhnoi reformy 1895–1898 gg. v Rossii,” in Vitte—gosudarstvennyi deiatel’, reformator, ekonomist, pp. 21–42. 116. Iz arkhiva S.Iu. Vitte: vospominaniia, vol. 1, bk. 1, p. 464.

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