The Cambridge History of Russia by 1689-1917 Volume 2 -Imperial Russia

Author:1689-1917 Volume 2 -Imperial Russia [Volume 2 -Imperial Russia, 1689-1917]
Language: eng
Format: epub
Published: 0101-01-01T00:00:00+00:00

b o r i s a n a n i c h

Introduction

The beginning of the eighteenth century was a period of radical change

in Russia’s economy. These transformations are connected with the name

Peter I, but they proved possible thanks to the development of trade and the

accumulation of capital by the Muscovite government in the sixteenth and seventeenth centuries. The main sources of this capital growth were domestic and

foreign trade, salt mines, fishing, payments to the treasury, customs duties and

income from taverns. Capital was concentrated in the merchant class, the state

and monasteries. Monasteries sold bread, salt and fish, and to a certain extent

performed the functions of banks, undertaking credit transactions. Economically, Russia lagged behind the leading countries of Western Europe, where

developed banking and stock markets already existed and where concepts such

as bills of exchange and promissory notes were widespread.

In many ways, Peter I’s transfer of the Russian capital to St Petersburg

and his declaration of a Russian ‘empire’ predetermined the later development of the Russian government and economy. Peter’s ‘Europeanisation’

of the country occurred during wars and was accompanied by the breakdown of old customs and societal structures. The foundation of the empire

was an enormous financial burden on peasants and urban dwellers, and

limited their freedom of movement as well. Peter I introduced a poll tax,

military conscription and internal passport system. But the decisive role

in Russia’s economic development belonged to the government and state

enterprises.

The 21-year war with Sweden greatly influenced Peter’s commercial and

industrial policies. Providing the army and navy with everything it needed

required an intense development of industry and trade, all of which needed

to occur in an extremely short period of time. Peter I went down in history

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The Russian economy and banking system

as one of the founders of active government entrepreneurship.1 As a result of

the Petrine reforms there was a sharp jump in the development of manufacturing.2 The state financed not only the construction of new factories but also

founded new industrial districts. It owned industrial enterprises and enjoyed a

monopoly over areas of foreign and domestic trade. In 1705 a state monopoly

was introduced over salt and tobacco, products which brought state coffers

significant revenues. The state also monopolised the right to sell key Russian

exports. In 1706 yet another monopoly was introduced, this time on trade with

China.

Peter I sought to turn his empire’s capital city into a commercial and financial centre. He forcibly moved merchants from various Russian cities to St

Petersburg, and when he opened a stock exchange in the city he forced merchants to appear and trade at the exchange at designated times.

Before the beginning of the eighteenth century, Russian foreign trade was

conducted through the northern port of Archangel. In 1713 Peter broke with

this tradition, declaring St Petersburg to be Russia’s main trading port. Furthermore, delivering hemp, Russia leather ( iuft’), potash and other exports to Archangel was prohibited. Despite these measures, however, the state’s

share of the export trade in Russia in the first quarter of the eighteenth century did not exceed 10–12 per cent.3 Russian financial transactions in Western

Europe

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