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1861 - 1917
(1861-1917) This period saw the development of modern
infrastructure, mainly in urban European Russia, of
roads/piping/government buildings, and railroads, all financed almost
entirely by either France, Germany, England, or the U.S.A., or some
grouping of these depending on the alliances in place at the time.
(*KEY*) The monarchy was ALWAYS weak financially during this
period, as a result of the self-financed Moscow-St. Petersberg
Railway during the 1840’s and then, the Crimean War. (*KEY*)
Russia in this time became the world’s first great deficit spender.
Foreign lenders were drawn by collateralizing Russia’s rich natural
resources and, for a period herein, an adherence to a gold
standard---but there was never any real accountability regarding how
money was spent and no firm government planning. Militarily, the
focus was first on Turkey (warm water ports, stable textile
production) but when the western powers jointly annulled that
success, the emphasis was on central Asia and the brand-new Far
East. The need for capital, plus the weakening of its navy post-
Crimean War combined with England’s presence in Canada and the
rapid development of the Far East, made it feasible to sell Alaska to
its ally, the U.S.A. When Russia tried to expand its railroad-
facilitated influence in the Far East near to the Korean Peninsula and
onto the Yellow Sea, the Japanese (with some counselling from the
British, which didn’t like the prospect of Asian product going to
Europe via the new Russian railroad system instead of their fleet)
attacked in 1904 and Russia was soundly defeated. Already, by this
time populism and socialist revolutionary forces had already been
extant for about 35 years, and this little Russo-Japanese War was
the catalyst that set Russia on a path towards constitutional
monarchy to pacify the overall populous. Also in 1905, another 45-
year-old problem came to a crisis point: the freedom-of-the-serfs
land deal, having originated as follows in 1861: 1. Serfs freed. 2.
The Tsar bought land (another huge financial burden added to those
above) from various private owners (on which only some of the serfs
had been living) and 3. The Tsar sold it to the serfs, figuratively, on
a 100% credit basis. The serfs didn’t get the best lands, of course.
The serfs had been paying back, continuously, with no end in sight,
as terms and conditions changed. The Tsar dealt with this in 2 main
ways in 1905, aided by most likely Russia’s most brilliant civil
servant ever, Stolypin: 1. Allowing the consolidation/privatization of
farms under the ownership and management of serf-descendant
talent, with favorable debt restructuring. 2. Shipping off many
farmers off to Siberia on the newly-completed Trans-Siberian
infrastructure, mainly in urban European Russia, of
roads/piping/government buildings, and railroads, all financed almost
entirely by either France, Germany, England, or the U.S.A., or some
grouping of these depending on the alliances in place at the time.
(*KEY*) The monarchy was ALWAYS weak financially during this
period, as a result of the self-financed Moscow-St. Petersberg
Railway during the 1840’s and then, the Crimean War. (*KEY*)
Russia in this time became the world’s first great deficit spender.
Foreign lenders were drawn by collateralizing Russia’s rich natural
resources and, for a period herein, an adherence to a gold
standard---but there was never any real accountability regarding how
money was spent and no firm government planning. Militarily, the
focus was first on Turkey (warm water ports, stable textile
production) but when the western powers jointly annulled that
success, the emphasis was on central Asia and the brand-new Far
East. The need for capital, plus the weakening of its navy post-
Crimean War combined with England’s presence in Canada and the
rapid development of the Far East, made it feasible to sell Alaska to
its ally, the U.S.A. When Russia tried to expand its railroad-
facilitated influence in the Far East near to the Korean Peninsula and
onto the Yellow Sea, the Japanese (with some counselling from the
British, which didn’t like the prospect of Asian product going to
Europe via the new Russian railroad system instead of their fleet)
attacked in 1904 and Russia was soundly defeated. Already, by this
time populism and socialist revolutionary forces had already been
extant for about 35 years, and this little Russo-Japanese War was
the catalyst that set Russia on a path towards constitutional
monarchy to pacify the overall populous. Also in 1905, another 45-
year-old problem came to a crisis point: the freedom-of-the-serfs
land deal, having originated as follows in 1861: 1. Serfs freed. 2.
The Tsar bought land (another huge financial burden added to those
above) from various private owners (on which only some of the serfs
had been living) and 3. The Tsar sold it to the serfs, figuratively, on
a 100% credit basis. The serfs didn’t get the best lands, of course.
The serfs had been paying back, continuously, with no end in sight,
as terms and conditions changed. The Tsar dealt with this in 2 main
ways in 1905, aided by most likely Russia’s most brilliant civil
servant ever, Stolypin: 1. Allowing the consolidation/privatization of
farms under the ownership and management of serf-descendant
talent, with favorable debt restructuring. 2. Shipping off many
farmers off to Siberia on the newly-completed Trans-Siberian
Railway with offers of free land and subsidies. At this time, the Tsar also
grudgingly accepted a constitution. No one was happy because (*KEY*) the word
compromise doesn’t function in Russia, so a general major weakening of societal
infrastructures commenced, as bureaucracies, etc., attacked each other while trying
to maintain their status under modified rules. Two other financial drains are worth
mentioning: 1. The payment of a large bribe to the Chinese to help settle the
Sino-Japanese conflict of 1895. A condition of this was that Russia could build/own
a direct rail route across northern China, between Chita and Vladivostok. 2. 4
years earlier, at the beginning time-wise of Trans-Siberian construction, Russia self-
financed a railroad link between Vladivostok and Khabarovsk. As might have been
expected, by the eve of ww-1 Russia was the number 1 agricultural force in the
world but the constant weakening of society brought on by conflict between the
various factions considerably offset this new stature in importance. Let’s not forget
about debt service obligations as the number of bonds just kept on growing. World
War I accelerated this overall weakening process and this multi-dysfunctional
monarchy collapsed (the 4th constitution was thrown out in 1911) in its sea of debt in
1917.
grudgingly accepted a constitution. No one was happy because (*KEY*) the word
compromise doesn’t function in Russia, so a general major weakening of societal
infrastructures commenced, as bureaucracies, etc., attacked each other while trying
to maintain their status under modified rules. Two other financial drains are worth
mentioning: 1. The payment of a large bribe to the Chinese to help settle the
Sino-Japanese conflict of 1895. A condition of this was that Russia could build/own
a direct rail route across northern China, between Chita and Vladivostok. 2. 4
years earlier, at the beginning time-wise of Trans-Siberian construction, Russia self-
financed a railroad link between Vladivostok and Khabarovsk. As might have been
expected, by the eve of ww-1 Russia was the number 1 agricultural force in the
world but the constant weakening of society brought on by conflict between the
various factions considerably offset this new stature in importance. Let’s not forget
about debt service obligations as the number of bonds just kept on growing. World
War I accelerated this overall weakening process and this multi-dysfunctional
monarchy collapsed (the 4th constitution was thrown out in 1911) in its sea of debt in
1917.
