Sergei Witte
Count Sergei Yulyevich Witte, also known as Sergius Witte, was a Russian statesman who served as the first prime minister of the Russian Empire, replacing the emperor as head of government. Neither liberal nor conservative, he attracted foreign capital to boost Russia's industrialization. Witte's strategy was to avoid the danger of wars.
Witte served under the final two emperors of Russia, Alexander III and Nicholas II. During the Russo-Turkish War of 1877–1878, he had risen to a position in which he controlled all the traffic passing to the front along the lines of the Odessa Railways. As finance minister from 1892–1903, Witte presided over extensive industrialization and achieved government monopoly control over an expanded system of railroad lines.
Following months of civil unrest and outbreaks of violence in what became known as the 1905 Russian Revolution, Witte framed the October Manifesto and the accompanying government communication to establish constitutional government. However, he was not convinced it would solve Russia's problems with the Tsarist autocracy. On 20 October 1905 Witte was appointed as the first chairman of the Council of Ministers. Assisted by his Council, he designed Russia's first constitution. But within a few months Witte fell into disgrace as a reformer because of continuing court opposition to these changes. He resigned before the First Duma assembled on. Witte was fully confident that he had resolved the main problem: providing political stability to the regime, but according to him, the "peasant problem" would further determine the character of the Duma's activity.
He is widely considered to have been one of the key figures in Russian politics at the end of the 19th century and the beginning of the 20th century. Orlando Figes has described Witte as the 'great reforming finance minister of the 1890s', 'one of Nicholas's most enlightened ministers', and as the architect of Russia's new parliamentary order in 1905.
Family and early life
Witte's father, Julius Christoph Heinrich Georg Witte, was from a Lutheran Baltic German family. He converted to Russian Orthodoxy upon his marriage with Yekaterina Fadeyeva. His father was made a member of the knighthood in Pskov but moved as a civil servant to Saratov and Tiflis. Sergei was raised on the estate of his mother's parents. His grandfather was Andrei Mikhailovich Fadeyev, a Governor of Saratov and Privy Councillor of the Caucasus, and his grandmother was Princess Helene Dolgoruki. Sergei had two brothers and two sisters. Helena Blavatsky, noted as a mystic, was their first cousin. Witte studied at a Tiflis gymnasium, but he took more interest in music, fencing and riding than in academics. He finished Gymnasium I in Kishinev and began studying Physico-Mathematical Sciences at the Novorossiysk University in Odessa in 1866 and graduated at the top of his class in 1870. After completing his studies he devoted some time to journalism in close relations with the Slavophiles and Mikhail Katkov.Witte had initially planned to pursue a career in academia with the intention of becoming a professor in theoretical mathematics. His relatives took a dim view of that career path, as it was considered unsuitable for a noble or aristocrat at the time. He was instead persuaded by Prince Vladimir Pavlovich Machabelov, Minister of Ways and Communication, to pursue a career in the Russian railroads. At the direction of the count, Witte undertook six months of training in a variety of positions on the Odessa Railways to gain a practical understanding of Russian railways operations. At the end of that period, he was appointed as chief of the traffic office.
After a wreck on the Odessa Railways in late 1875 cost many lives, Witte was arrested and sentenced to four months in prison. However, while he was still contesting the case in court, Witte directed the Odessa Railways and achieved extraordinary efforts towards the transport of troops and war materials in the Russo-Turkish War and attracted the attention of Grand Duke Nicholas Nikolaevich, who commuted his prison sentence to two weeks. Witte had devised a novel system of double-shift operations in his efforts to overcome delays on the railways.
In 1879, Witte accepted a post in St. Petersburg, where he would meet his future wife. He moved to Kiev the following year. In 1883, he published a paper on "Principles of Railway Tariffs for Cargo Transportation" in which he also discussed social issues and the role of the monarchy. Witte gained popularity in the government. In 1886, he was appointed manager of the privately held Southwestern Railways, based in Kiev, and was noted for increasing its efficiency and profitability. Around then, he met Tsar Alexander III, but he conflicted with the tsar's aides by warning of the danger in their practice of using two powerful freight locomotives to achieve high speeds for the royal train. His warnings were proven in the October 1888 Borki train disaster, Witte was then appointed Director of State Railways.
Political career
Railways
Witte worked in railroad management for 20 years after he had begun as a ticket clerk. He caught the attention of Finance Minister Ivan Vyshnegradsky, who appointed him as Russian Director of Railway Affairs within the Finance Ministry, where he served from 1889 to 1891. During that period, he oversaw an ambitious program of railway construction. Until then, less than one fourth of the small railway systems were under direct state control, but Witte set about expanding the rail lines and getting the railway service under control as a state monopoly. Witte also obtained the right to assign employees based on their performance or merit, rather than for patronage for political or familial connections. In 1889, he published a paper, "National Savings and Friedrich List", which cited the economic theories of Friedrich List and justified the need for a strong domestic industry, to be protected from foreign competition by customs barriers.A new customs law for Russia was passed in 1891, spurring an increase in industrialization by the turn of the 20th century. While Witte worked to achieve industrialization, he also fought for practical education. He said that railways operated by the state would be useless "unless it does its utmost for spreading technical education..."
Tsar Alexander III appointed Witte in 1892 as acting Minister of Ways and Communications. That gave him both control of the railroads in Russia and the authority to impose a reform on the tariffs charged. "Russian railroads gradually became perhaps the most economically operated railroads of the world". Profits were high: over 100 million gold rubles a year to the government.
In 1892 Witte became acquainted with Matilda Ivanovna Lisanevich in a theater. Witte began to seek her favour, urging her to divorce her gambling husband and marry him. The marriage was a scandal not only because Matilda was a divorcee but also because she was a converted Jew. That cost Witte many of his connections with the upper nobility, but the tsar protected him.
Minister of Finance
In August 1892, Witte was appointed to the post of Minister of Finance, which he held for the next eleven years, and he nearly doubled the revenues of the empire. During his tenure, he greatly accelerated the construction of the Trans-Siberian Railway. He also emphasized creation of an educational system to train personnel for industry, in particular, the establishment of new "commercial" schools. He was known for appointing subordinates by their academic credentials or merit, rather than because of patronage political connections. In 1894, he concluded a 10-year commercial treaty with the German Empire on favorable terms for Russia. When Alexander III died, he told his son on his deathbed to listen well to Witte, his most capable minister.In 1895, on a crusade against the evils of drunkenness, Witte established a state monopoly on alcohol, which became a major source of revenue for the Russian government. In 1896, he concluded the Li–Lobanov Treaty with Li Hongzhang of the Qing dynasty. One of the rights secured for Russia was the construction of the Chinese Eastern Railway across northeast China, which greatly shortened the route of the Trans-Siberian Railway to its projected eastern terminus at Vladivostok. However, following the Triple Intervention, Witte strongly opposed the Russian occupation of Liaodong Peninsula and the construction of the naval base at Port Arthur in the Russia–Qing Convention of 1898.
Gold standard
In 1896, Witte undertook a major currency reform to place the Russian ruble on the gold standard. That resulted in increased investment activity and an increase in the inflow of foreign capital. Witte also enacted a law in 1897 limiting working hours in enterprises, and in 1898 reformed commercial and industrial taxes. In 1899 the Petrograd Polytechnical Institute was founded on his initiative.In summer 1898, he addressed a memorandum to the Tsar calling for an agricultural conference on the reform of the peasant community. This resulted in three years of talks about laws to abolish collective responsibility and facilitate the resettlement of farmers onto lands on the outskirts of the empire. Many of his ideas were later adopted by Pyotr Stolypin. In 1902 Witte's supporter, Dmitry Sipyagin, the Minister of Home Affairs, was assassinated. In an attempt to keep up the modernization of the Russian economy, Witte called and oversaw the Special Conference on the Needs of the Rural Industry. The conference was to provide recommendations for future reforms and compile the data to justify those reforms. By 1900 the growth in the manufacturing industry had been four times faster than in the preceding five-year period and six times faster than in the decade before that. External trade in industrial goods was equal to that of Belgium. In 1904, the Union of Liberation was formed, which demanded economic and political reform.