INDUSTRIAL PROGRESS AND THE PROLETARIAT
Russia till Lately a Peasant Empire--Early Efforts to Introduce Arts and
Crafts--Peter the Great and His Successors--Manufacturing Industry
Long Remains an Exotic--The Cotton Industry--The Reforms of Alexander
II.--Protectionists and Free Trade--Progress under High Tariffs--M.
Witte's Policy--How Capital Was Obtained--Increase of Exports--Foreign
Firms Cross the Customs Frontier--Rapid Development of Iron Industry--A
Commercial Crisis--M. Witte's Position Undermined by Agrarians and
Doctrinaires--M. Plehve a Formidable Opponent--His Apprehensions of
Revolution--Fall of M. Witte--The Industrial Proletariat.
Fifty years ago Russia was still essentially a peasant empire, living by
agriculture of a primitive type, and supplying her other wants chiefly
by home industries, as was the custom in Western Europe during the
Middle Ages.
For many generations her rulers had been trying to transplant into their
wide dominions the art and crafts of the West, but they had formidable
difficulties to contend with, and their success was not nearly as great
as they desired. We know that as far back as the fourteenth century
there were cloth-workers in Moscow, for we read in the chronicles that
the workshops of these artisans were sacked when the town was stormed
by the Tartars. Workers in metal had also appeared in some of the larger
towns by that time, but they do not seem to have risen much above the
level of ordinary blacksmiths. They were destined, however, to make more
rapid progress than other classes of artisans, because the old Tsars of
Muscovy, like other semi-barbarous potentates, admired and envied the
industries of more civilised countries mainly from the military point
of view. What they wanted most was a plentiful supply of good arms
wherewith to defend themselves and attack their neighbours, and it was
to this object that their most strenuous efforts were directed.
As early as 1475 Ivan III., the grandfather of Ivan the Terrible, sent a
delegate to Venice to seek out for him an architect who, in addition to
his own craft, knew how to make guns; and in due course appeared in
the Kremlin a certain Muroli, called Aristotle by his contemporaries on
account of his profound learning. He undertook "to build churches and
palaces, to cast big bells and cannons, to fire off the said cannons,
and to make every sort of castings very cunningly"; and for the exercise
of these various arts it was solemnly stipulated in a formal document
that he should receive the modest salary of ten roubles monthly. With
regard to the military products, at least, the Venetian faithfully
fulfilled his contract, and in a short time the Tsar had the
satisfaction of possessing a "cannon-house," subsequently dignified with
the name of "arsenal." Some of the natives learned the foreign art, and
exactly a century later (1856) a Russian, or at least a Slav, called
Tchekhof, produced a famous "Tsar-cannon," weighing as much as 96,000
lbs. The connection thus established with the mechanical arts of the
West was always afterwards maintained, and we find frequent notices of
the fact in contemporary writers. In the reign of the grandfather of
Peter the Great, for example, two paper-works were established by an
Italian; and velvet for the Tsar and his Boyars, gold brocades for
ecclesiastical vestments, and rude kinds of glass for ordinary purposes
were manufactured under the august patronage of the enlightened ruler.
His son Alexis went a good many steps further, and scandalised
his God-fearing orthodox subjects by his love of foreign heretical
inventions. It was in his German suburb of Moscow that young Peter,
who was to be crowned "the Great," made his first acquaintance with the
useful arts of the West.
When the great reformer came to the throne he found in his Tsardom,
besides many workshops, some ten foundries, all of which were under
orders "to cast cannons, bombs, and bullets, and to make arms for the
service of the State." This seemed to him only a beginning, especially
for the mining and iron industry, in which he was particularly
interested. By importing foreign artificers and placing at their
disposal big estates, with numerous serfs, in the districts where
minerals were plentiful, and by carefully stipulating that these
foreigners should teach his subjects well, and conceal from them none of
the secrets of the craft, he created in the Ural a great iron industry,
which still exists at the present day. Finding by experience that State
mines and State ironworks were a heavy drain on his insufficiently
replenished treasury, he transferred some of them to private persons,
and this policy was followed occasionally by his successors. Hence the
gigantic fortunes of the Demidofs and other families. The Shuvalovs, for
example, in 1760 possessed, for the purpose of working their mines and
ironworks, no less than 33,000 serfs and a corresponding amount of land.
Unfortunately the concessions were generally given not to enterprising
business-men, but to influential court-dignitaries, who confined their
attention to squandering the revenues, and not a few of the mines and
works reverted to the Government.
The army required not only arms and ammunition, but also uniforms and
blankets. Great attention, therefore, was paid to the woollen industry
from the reign of Peter downwards. In the time of Catherine there
were already 120 cloth factories, but they were on a very small scale,
according to modern conceptions. Ten factories in Moscow, for example,
had amongst them only 104 looms, 130 workers, and a yearly output for
200,000 roubles.
While thus largely influenced in its economic policy by military
considerations, the Government did not entirely neglect other branches
of manufacturing industry. Ever since Russia had pretensions to being
a civilised power its rulers have always been inclined to pay more
attention to the ornamental than the useful--to the varnish rather than
the framework of civilisation--and we need not therefore be surprised
to find that long before the native industry could supply the materials
required for the ordinary wants of humble life, attempts were made to
produce such things as Gobelin tapestries. I mention this merely as an
illustration of a characteristic trait of the national character,
the influence of which may be found in many other spheres of official
activity.
If Russia did not attain the industrial level of Western Europe, it was
not from want of ambition and effort on the part of the rulers. They
worked hard, if not always wisely, for this end. Manufacturers were
exempted from rates and taxes, and even from military service, and some
of them, as I have said, received large estates from the Crown on the
understanding that the serfs should be employed as workmen. At the
same time they were protected from foreign competition by prohibitive
tariffs. In a word, the manufacturing industry was nursed and fostered
in a way to satisfy the most thorough-going protectionist, especially
those branches which worked up native raw material such as ores, flax,
hemp, wool, and tallow. Occasionally the official interference and
anxiety to protect public interests went further than the manufacturers
desired. On more than one occasion the authorities fixed the price
of certain kinds of manufactured goods, and in 1754 the Senate, being
anxious to protect the population from fires, ordered all glass and iron
works within a radius of 200 versts around Moscow to be destroyed! In
spite of such obstacles, the manufacturing industry as a whole
made considerable progress. Between 1729 and 1762 the number of
establishments officially recognised as factories rose from 26 to 335.
These results did not satisfy Catherine II., who ascended the throne in
1762. Under the influence of her friends, the French Encyclopedistes,
she imagined for a time that the official control might be relaxed, and
that the system of employing serfs in the factories and foundries might
be replaced by free labour, as in Western Europe; monopolies might be
abolished, and all liege subjects, including the peasants, might be
allowed to embark in industrial undertakings as they pleased, "for
the benefit of the State and the nation." All this looked very well on
paper, but Catherine never allowed her sentimental liberalism to injure
seriously the interests of her Empire, and she accordingly refrained
from putting the laissez-faire principle largely into practice. Though
a good deal has been written about her economic policy, it is hardly
distinguishable from that of her predecessors. Like them, she maintained
high tariffs, accorded large subsidies, and even prevented the export of
raw material, in the hope that it might be worked up at home; and when
the prices in the woollen market rose very high, she compelled the
manufacturers to supply the army with cloth at a price fixed by the
authorities. In short, the old system remained practically unimpaired,
and notwithstanding the steady progress made during the reign of
Nicholas I. (1825-55), when the number of factory hands rose from
210,000 to 380,000, the manufacturing industry as a whole continued to
be, until the serfs were emancipated in 1861, a hothouse plant which
could flourish only in an officially heated atmosphere.
There was one branch of it, however, to which this remark does not
apply. The art of cotton-spinning and cotton-weaving struck deep root
in Russian soil. After remaining for generations in the condition of
a cottage industry--the yarn being distributed among the peasants
and worked up by them in their own homes--it began, about 1825, to be
modernised. Though it still required to be protected against foreign
competition, it rapidly outgrew the necessity for direct official
support. Big factories driven by steam-power were constructed, the
number of hands employed rose to 110,000, and the foundations of great
fortunes were laid. Strange to say, many of the future millionaires were
uneducated serfs. Sava Morozof, for example, who was to become one of
the industrial magnates of Moscow, was a serf belonging to a proprietor
called Ryumin; most of the others were serfs of Count Sheremetyef--the
owner of a large estate on which the industrial town of Ivanovo had
sprung up--who was proud of having millionaires among his serfs, and who
never abused his authority over them. The great movement, however, was
not effected without the assistance of foreigners. Foreign foremen were
largely employed, and in the work of organisation a leading part was
played by a German called Ludwig Knoop. Beginning life as a commercial
traveller for an English firm, he soon became a large cotton importer,
and when in 1840 a feverish activity was produced in the Russian
manufacturing world by the Government's permission to import English
machines, his firm supplied these machines to the factories on condition
of obtaining a share in the business. It has been calculated that it
obtained in this way a share in no less than 122 factories, and hence
arose among the peasantry a popular saying:
"Where there is a church, there you find a pope,
And where there is a factory, there you find a Knoop."*
The biggest creation of the firm was a factory built at Narva in 1856,
with nearly half a million spindles driven by water-power.
* Gdye tserkov--tam pop;
A gdye fabrika--tam Knop.
In the second half of last century a revolution was brought about in the
manufacturing industry generally by the emancipation of the serfs,
the rapid extension of railways, the facilities for creating limited
liability companies, and by certain innovations in the financial policy
of the Government. The emancipation put on the market an unlimited
supply of cheap labour; the construction of railways in all directions
increased a hundredfold the means of communication; and the new banks
and other credit institutions, aided by an overwhelming influx of
foreign capital, encouraged the foundation and extension of industrial
and commercial enterprise of every description. For a time there was
great excitement. It was commonly supposed that in all matters relating
to trade and industry Russia had suddenly jumped up to the level of
Western Europe, and many people in St. Petersburg, carried away by the
prevailing enthusiasm for liberalism in general and the doctrines of
Free Trade in particular, were in favour of abolishing protectionism
as an antiquated restriction on liberty and an obstacle to economic
progress.
At one moment the Government was disposed to yield to the current, but
it was restrained by an influential group of conservative Political
Economists, who appealed to patriotic sentiment, and by the Moscow
manufacturers, who declared that Free Trade would ruin the country.
After a little hesitation it proceeded to raise, instead of lowering,
the protectionist tariff. In 1869-76 the ad valorem duties were, on an
average, under thirteen per cent., but from that time onwards they rose
steadily, until the last five years of the century, when they averaged
thirty-three per cent., and were for some articles very much higher.
In this way the Moscow industrial magnates were protected against the
influx of cheap foreign goods, but they were not saved from foreign
competition, for many foreign manufacturers, in order to enjoy the
benefit of the high duties, founded factories in Russia. Even the firmly
established cotton industry suffered from these intruders. Industrial
suburbs containing not a few cotton factories sprang up around St.
Petersburg; and a small Polish village called Lodz, near the German
frontier, grew rapidly into a prosperous town of 300,000 inhabitants,
and became a serious rival to the ancient Muscovite capital. So
severely was the competition of this young upstart felt, that the Moscow
merchants petitioned the Emperor to protect them by drawing a customs
frontier round the Polish provinces, but their petition was not granted.
Under the shelter of the high tariffs the manufacturing industry as a
whole has made rapid progress, and the cotton trade has kept well to
the front. In that branch, between 1861 and 1897, the number of hands
employed rose from 120,000 to 325,000, and the estimated value of the
products from 72 to 478 millions of roubles. In 1899 the number of
spindles was considerably over six millions, and the number of automatic
weaving machines 145,000.
The iron industry has likewise progressed rapidly, though it has not yet
outgrown the necessity for Government support, and it is not yet able to
provide for all home wants. About forty years ago it received a powerful
impulse from the discovery that in the provinces to the north of the
Crimea and the Sea of Azof there were enormous quantities of iron ore
and beds of good coal in close proximity to each other. Thanks to this
discovery and to other facts of which I shall have occasion to speak
presently, this district, which had previously been agricultural and
pastoral, has outstripped the famous Ural region, and has become the
Black Country of Russia. The vast lonely steppe, where formerly one saw
merely the peasant-farmer, the shepherd, and the Tchumak,* driving along
somnolently with his big, long-horned, white bullocks, is now dotted
over with busy industrial settlements of mushroom growth, and great
ironworks--some of them unfinished; while at night the landscape is lit
up with the lurid flames of gigantic blast-furnaces. In this wonderful
transformation, as in the history of Russian industrial progress
generally, a great part was played by foreigners. The pioneer who did
most in this district was an Englishman, John Hughes, who began life
as the son and pupil of a Welsh blacksmith, and whose sons are now
directors of the biggest of the South Russian ironworks.
* The Tchumak, a familiar figure in the songs and legends of
Little Russia, was the carrier who before the construction
of railways transported the grain to the great markets, and
brought back merchandise to the interior. He is gradually
disappearing.
Much as the South has progressed industrially in recent years, it still
remains far behind those industrial portions of the country which were
thickly settled at an earlier date. From this point of view the most
important region is the group of provinces clustering round Moscow; next
comes the St. Petersburg region, including Livonia; and thirdly Poland.
As for the various kinds of industry, the most important category is
that of textile fabrics, the second that of articles of nutrition,
and the third that of ores and metals. The total production, if we may
believe certain statistical authorities, places Russia now among the
industrial nations of the world in the fifth place, immediately after
the United States, England, Germany, and France, and a little before
Austria.
The man who has in recent times carried out most energetically the
policy of protecting and fostering native industries is M. Witte, a name
now familiar to Western Europe. An avowed disciple of the great German
economist, Friedrich List, about whose works he published a brochure in
1888, he held firmly, from his youth upwards, the doctrine that
"each nation should above all things develop harmoniously its natural
resources to the highest possible degree of independence, protecting
its own industries and preferring the national aim to the pecuniary
advantage of individuals." As a corollary to this principle he declared
that purely agricultural countries are economically backward and
intellectually stagnant, being condemned to pay tribute to the nations
who have learned to work up their raw products into more valuable
commodities. The good old English doctrine that certain countries were
intended by Providence to be eternally agricultural, and that their
function in the economy of the universe is to supply raw material
for the industrial nations, was always in his eyes an abomination--an
ingenious, nefarious invention of the Manchester school, astutely
invented for the purpose of keeping the younger nations permanently in
a state of economic bondage for the benefit of English manufacturers. To
emancipate Russia from this thraldom by enabling her to create a great
native industry, sufficient to supply all her own wants, was the aim of
his policy and the constant object of his untiring efforts. Those who
have had the good fortune to know him personally must have often
heard him discourse eloquently on this theme, supporting his views by
quotations from the economists of his own school, and by illustrations
drawn from the history of his own and other countries.
A necessary condition of realising this aim was that there should be
high tariffs. These already existed, and they might be raised
still higher, but in themselves they were not enough. For the rapid
development of the native industry an enormous capital was required, and
the first problem to be solved was how this capital could be obtained.
At one moment the energetic minister conceived the project of creating a
fictitious capital by inflating the paper currency; but this idea
proved unpopular. When broached in the Council of State it encountered
determined opposition. Some of the members of that body, especially M.
Bunge, who had been himself Minister of Finance, and who remembered
the evil effects of the inordinate inflation of the currency on foreign
exchanges during the Turkish War, advocated strongly the directly
opposite course--a return to gold monometallism, for which M.
Vishnegradski, M. Witte's immediate predecessor, had made considerable
preparations. Being a practical man without inveterate prejudices, M.
Witte gave up the scheme which he could not carry through, and adopted
the views of his opponents. He would introduce the gold currency as
recommended; but how was the requisite capital to be obtained? It must
be procured from abroad, somehow, and the simplest way seemed to be to
stimulate the export of native products. For this purpose the railways
were extended,* the traffic rates manipulated, and the means of
transport improved generally.
* In 1892, when M. Witte undertook the financial
administration, there were 30,620 versts of railway, and at
the end of 1900 there were 51,288 versts.
A certain influx of gold was thus secured, but not nearly enough for the
object in view.* Some more potent means, therefore, had to be employed,
and the inventive minister evolved a new scheme. If he could only induce
foreign capitalists to undertake manufacturing industries in Russia,
they would, at one and the same time, bring into the country the capital
required, and they would cooperate powerfully in that development of the
national industry which he so ardently wished. No sooner had he roughly
sketched out his plan--for he was not a man to let the grass grow under
his feet--than he set himself to put it into execution by letting it
be known in the financial world that the Government was ready to open
a great field for lucrative investments, in the form of profitable
enterprises under the control of those who subscribed the capital.
* In 1891 the total value of the exports was roughly
70,000,000 pounds. It then fell, in consequence of bad
harvests, to 45 millions, and did not recover the previous
maximum until 1897, when it stood at 73 millions.
Thereafter there was a steady rise till 1901, when the total
was estimated at 76 millions.
Foreign capitalists responded warmly to the call. Crowds of
concession-hunters, projectors, company promoters, et hoc genus omne,
collected in St. Petersburg, offering their services on the most
tempting terms; and all of them who could make out a plausible case were
well received at the Ministry of Finance. It was there explained to them
that in many branches of industry, such as the manufacture of textile
fabrics, there was little or no room for newcomers, but that in
others the prospects were most brilliant. Take, for example, the iron
industries of Southern Russia. The boundless mineral wealth of that
region was still almost intact, and the few works which had been there
established were paying very large dividends. The works founded by John
Hughes, for example, had repeatedly divided considerably over twenty per
cent., and there was little fear for the future, because the Government
had embarked on a great scheme of railway extension, requiring an
unlimited amount of rails and rolling-stock. What better opening could
be desired? Certainly the opening seemed most attractive, and into it
rushed the crowd of company promoters, followed by stock-jobbers and
brokers, playing lively pieces of what the Germans call Zukunftsmusik.
An unwary and confiding public, especially in Belgium and France,
listened to the enchanting strains of the financial syrens, and invested
largely. Quickly the number of completed ironworks in that region rose
from nine to seventeen, and in the short space of three years the output
of pig-iron was nearly doubled. In 1900 there were 44 blast furnaces in
working order, and ten more were in course of construction. And all this
time the Imperial revenue increased by leaps and bounds, so that the
introduction of the gold currency was effected without difficulty. M.
Witte was declared to be the greatest minister of his time--a Russian
Colbert or Turgot, or perhaps the two rolled into one.
Then came a change. Competition and over-production led naturally to a
fall in prices, and at the same time the demand decreased, because the
railway-building activity of the Government slackened. Alarmed at this
state of things, the banks which had helped to start and foster the huge
and costly enterprises contracted their credits. By the end of 1899 the
disenchantment was general and widespread. Some of the companies were
so weighted by the preliminary financial obligations, and had conducted
their affairs in such careless, reckless fashion, that they had soon
to shut down their mines and close their works. Even solid undertakings
suffered. The shares of the Briansk works, for example, which had given
dividends as high as 30 per cent., fell from 500 to 230. The Mamontof
companies--supposed to be one of the strongest financial groups in the
country--had to suspend payment, and numerous other failures occurred.
Nearly all the commercial banks, having directly participated in the
industrial concerns, were rudely shaken. M. Witte, who had been for a
time the idol of a certain section of the financial world, became very
unpopular, and was accused of misleading the investing public. Among the
accusations brought against him some at least could easily be refuted.
He may have made mistakes in his policy, and may have been himself
over-sanguine, but surely, as he subsequently replied to his accusers,
it was no part of his duty to warn company promoters and directors that
they should refrain from over-production, and that their enterprises
might not be as remunerative as they expected. As to whether there
is any truth in the assertion that he held out prospects of larger
Government orders than he actually gave, I cannot say. That he cut
down prices, and showed himself a hard man to deal with, there seems no
doubt.
The reader may naturally be inclined to jump to the conclusion that the
commercial crisis just referred to was the cause of M. Witte's fall.
Such a conclusion would be entirely erroneous. The crisis happened in
the winter of 1899-1900, and M. Witte remained Finance Minister until
the autumn of 1903. His fall was the result of causes of a totally
different kind, and these I propose now to explain, because the
explanation will throw light on certain very curious and characteristic
conceptions at present current in the Russian educated classes.
Of course there were certain causes of a purely personal kind, but
I shall dismiss them in a very few words. I remember once asking
a well-informed friend of M. Witte's what he thought of him as an
administrator and a statesman. The friend replied: "Imagine a negro of
the Gold Coast let loose in modern European civilisation!" This reply,
like most epigrammatic remarks, is a piece of gross exaggeration, but
it has a modicum of truth in it. In the eyes of well-trained Russian
officials M. Witte was a titanic, reckless character, capable at any
moment of playing the part of the bull in the china-shop. As a masterful
person, brusque in manner and incapable of brooking contradiction,
he had made for himself many enemies; and his restless, irrepressible
energy had led him to encroach on the provinces of all his colleagues.
Possessing as he did the control of the purse, his interference could
not easily be resisted. The Ministers of Interior, War, Agriculture,
Public Works, Public Instruction, and Foreign Affairs had all occasion
to complain of his incursions into their departments. In contrast to his
colleagues, he was not only extremely energetic, but he was ever
ready to assume an astounding amount of responsibility; and as he was
something of an opportunist, he was perhaps not always quixotically
scrupulous in the choice of expedients for attaining his ends.
Altogether M. Witte was an inconvenient personage in an administration
in which strong personality is regarded as entirely out of place, and in
which personal initiative is supposed to reside exclusively in the Tsar.
In addition to all this he was a man who felt keenly, and when he was
irritated he did not always keep the unruly member under strict
control. If I am correctly informed, it was some imprudent and not very
respectful remarks, repeated by a subordinate and transmitted by a Grand
Duke to the Tsar, which were the immediate cause of his transfer from
the influential post of Minister of Finance to the ornamental position
of President of the Council of Ministers; but that was merely the
proverbial last straw that broke the camel's back. His position was
already undermined, and it is the undermining process which I wish to
describe.
The first to work for his overthrow were the Agrarian Conservatives.
They could not deny that, from the purely fiscal point of view, his
administration was a marvellous success; for he was rapidly doubling the
revenue, and he had succeeded in replacing the fluctuating depreciated
paper currency by a gold coinage; but they maintained that he was
killing the goose that laid the golden eggs. Evidently the tax-paying
power of the rural classes was being overstrained, for they were falling
more and more into arrears in the payment of their taxes, and their
impoverishment was yearly increasing. All their reserves had been
exhausted, as was shown by the famines of 1891-92, when the Government
had to spend hundreds of millions to feed them. Whilst the land was
losing its fertility, those who had to live by it were increasing in
numbers at an alarming rate. Already in some districts one-fifth of the
peasant households had no longer any land of their own, and of those
who still possessed land a large proportion had no longer the cattle and
horses necessary to till and manure their allotments. No doubt M.
Witte was beginning to perceive his mistake, and had done something to
palliate the evils by improving the system of collecting the taxes and
abolishing the duty on passports, but such merely palliative remedies
could have little effect. While a few capitalists were amassing gigantic
fortunes, the masses were slowly and surely advancing to the brink
of starvation. The welfare of the agriculturists, who constitute
nine-tenths of the whole population, was being ruthlessly sacrificed,
and for what? For the creation of a manufacturing industry which rested
on an artificial, precarious basis, and which had already begun to
decline.
So far the Agrarians, who champion the interests of the agricultural
classes. Their views were confirmed and their arguments strengthened by
an influential group of men whom I may call, for want of a better name,
the philosophers or doctrinaire interpreters of history, who have,
strange to say, more influence in Russia than in any other country.
The Russian educated classes desire that the nation should be wealthy
and self-supporting, and they recognise that for this purpose a large
manufacturing industry is required; but they are reluctant to make the
sacrifices necessary to attain the object in view, and they imagine
that, somehow or other, these sacrifices may be avoided. Sympathising
with this frame of mind, the doctrinaires explain that the rich and
prosperous countries of Europe and America obtained their wealth and
prosperity by so-called "Capitalism"--that is to say, by a peculiar
social organisation in which the two main factors are a small body of
rich capitalists and manufacturers and an enormous pauper proletariat
living from hand to mouth, at the mercy of the heartless employers of
labour. Russia has lately followed in the footsteps of those wealthy
countries, and if she continues to do so she will inevitably be saddled
with the same disastrous results--plutocracy, pauperism, unrestrained
competition in all spheres of activity, and a greatly intensified
struggle for life, in which the weaker will necessarily go to the wall.*
* Free competition in all spheres of activity, leading to
social inequality, plutocracy, and pauperism, is the
favourite bugbear of Russian theorists; and who is not a
theorist in Russia? The fact indicates the prevalence of
Socialist ideas in the educated classes.
Happily there is, according to these theorists, a more excellent way,
and Russia can adopt it if she only remains true to certain mysterious
principles of her past historic development. Without attempting to
expound those mysterious principles, to which I have repeatedly referred
in previous chapters, I may mention briefly that the traditional
patriarchal institutions on which the theorists found their hopes of a
happy social future for their country are the rural Commune, the native
home-industries, and the peculiar co-operative institutions called
Artels. How these remnants of a semi-patriarchal state of society are to
be practically developed in such a way as to withstand the competition
of manufacturing industry organised on modern "capitalist" lines, no
one has hitherto been able to explain satisfactorily, but many people
indulge in ingenious speculations on the subject, like children planning
the means of diverting with their little toy spades a formidable
inundation. In my humble opinion, the whole theory is a delusion; but
it is held firmly--I might almost say fanatically--by those who, in
opposition to the indiscriminate admirers of West-European and American
civilisation, consider themselves genuine Russians and exceptionally
good patriots. M. Witte has never belonged to that class. He believes
that there is only one road to national prosperity--the road by which
Western Europe has travelled--and along this road he tried to drive his
country as rapidly as possible. He threw himself, therefore, heart and
soul into what his opponents call "Capitalism," by raising State loans,
organising banks and other credit institutions, encouraging the creation
and extension of big factories, which must inevitably destroy the home
industry, and even--horribile dictu!--undermining the rural Commune,
and thereby adding to the ranks of the landless proletariat, in order to
increase the amount of cheap labour for the benefit of the capitalists.
With the arguments thus supplied by Agrarians and doctrinaires, quite
honest and well-meaning, according to their lights, it was easy to sap
M. Witte's position. Among his opponents, the most formidable was the
late M. Plehve, Minister of Interior--a man of a totally different
stamp. A few months before his tragic end I had a long and interesting
conversation with him, and I came away deeply impressed. Having
repeatedly had conversations of a similar kind with M. Witte, I could
compare, or rather contrast, the two men. Both of them evidently
possessed an exceptional amount of mental power and energy, but in the
one it was volcanic, and in the other it was concentrated and thoroughly
under control. In discussion, the one reminded me of the self-taught,
slashing swordsman; the other of the dexterous fencer, carefully trained
in the use of the foils, who never launches out beyond the point at
which he can quickly recover himself. As to whether M. Plehve was
anything more than a bold, energetic, clever official there may be
differences of opinion, but he certainly could assume the airs of a
profound and polished statesman, capable of looking at things from a
much higher point of view than the ordinary tchinovnik, and he had the
talent of tacitly suggesting that a great deal of genuine, enlightened
statesmanship lay hidden under the smooth surface of his cautious
reserve. Once or twice I could perceive that when criticising the
present state of things he had his volcanic colleague in his mind's eye;
but the covert allusions were so vague and so carefully worded that the
said colleague, if he had been present, would hardly have been justified
in entering a personal protest. A statesman of the higher type, I was
made to feel, should deal not with personalities, but with things, and
it would be altogether unbecoming to complain of a colleague in presence
of an outsider. Thus his attitude towards his opponent was most correct,
but it was not difficult to infer that he had little sympathy with the
policy of the Ministry of Finance.
From other sources I learned the cause of this want of sympathy. Being
Minister of Interior, and having served long in the Police Department,
M. Plehve considered that his first duty was the maintenance of public
order and the protection of the person and autocracy of his august
master. He was therefore the determined enemy of revolutionary
tendencies, in whatever garb or disguise they might appear; and as
a statesman he had to direct his attention to everything likely to
increase those tendencies in the future. Now it seemed that in the
financial policy which had been followed for some years there were
germs of future revolutionary fermentation. The peasantry were becoming
impoverished, and were therefore more likely to listen to the insidious
suggestions of Socialist agitators; and already agrarian disturbances
had occurred in the provinces of Kharkof and Poltava. The industrial
proletariat which was being rapidly created was being secretly organised
by the revolutionary Social Democrats, and already there had been
serious labour troubles in some of the large towns. For any future
revolutionary movement the proletariat would naturally supply recruits.
Then, at the other end of the social scale, a class of rich capitalists
was being created, and everybody who has read a little history knows
that a rich and powerful tiers etat cannot be permanently conciliated
with autocracy. Though himself neither an agrarian nor a Slavophil
doctrinaire, M. Plehve could not but have a certain sympathy with those
who were forging thunderbolts for the official annihilation of M. Witte.
He was too practical a man to imagine that the hands on the dial of
economic progress could be set back and a return made to moribund
patriarchal institutions; but he thought that at least the pace might
be moderated. The Minister of Finance need not be in such a desperate,
reckless hurry, and it was desirable to create conservative forces which
might counteract the revolutionary forces which his impulsive colleague
was inadvertently calling into existence.
Some of the forgers of thunderbolts went a great deal further,
and asserted or insinuated that M. Witte was himself consciously a
revolutionist, with secret, malevolent intentions. In support of their
insinuations they cited certain cases in which well-known Socialists had
been appointed professors in academies under the control of the Ministry
of Finance, and they pointed to the Peasant Bank, which enjoyed M.
Witte's special protection. At first it had been supposed that the bank
would have an anti-revolutionary influence by preventing the
formation of a landless proletariat and increasing the number of small
land-owners, who are always and everywhere conservative so far as the
rights of private property are concerned.
Unfortunately its success roused the fears of the more conservative
section of the landed proprietors. These gentlemen, as I have already
mentioned, pointed out that the estates of the nobles were rapidly
passing into the hands of the peasantry, and that if this process were
allowed to continue the hereditary Noblesse, which had always been the
civilising element in the rural population, and the surest support of
the throne, would drift into the towns and there sink into poverty or
amalgamate with the commercial plutocracy, and help to form a tiers etat
which would be hostile to the Autocratic Power.
In these circumstances it was evident that the headstrong Minister
of Finance could maintain his position only so long as he enjoyed the
energetic support of the Emperor, and this support, for reasons which I
have indicated above, failed him at the critical moment. When his
work was still unfinished he was suddenly compelled, by the Emperor's
command, to relinquish his post and accept a position in which, it was
supposed, he would cease to have any influence in the administration.
Thus fell the Russian Colbert-Turgot, or whatever else he may be
called. Whether financial difficulties in the future will lead to his
reinstatement as Minister of Finance remains to be seen; but in any case
his work cannot be undone. He has increased manufacturing industry to
an unprecedented extent, and, as M. Plehve perceived, the industrial
proletariat which manufacturing industry on capitalist lines always
creates has provided a new field of activity for the revolutionists.
I return, therefore, to the evolution of the revolutionary movement in
order to describe its present phase, the first-fruits of which have
been revealed in the labour disturbances in St. Petersburg and other
industrial centres.