WITTE, SERGEI YULIEVICH

(1849–1915), minister of communication (1892); minister of finance (1892–1903); chairman of the

Committee of Ministers (1903–1905); prime minister (1905–1906); responsible for program of industrialization and political reforms.

Sergei Witte descended from russified Lutheran Germans on his father's side and from Russian nobility on his mother's side. He was born in Tbilisi. In 1865 he finished a Tbilisi gymnasium and in 1870 graduated from the Department of Physics and Mathematics at Novorossysk University (Odessa). He dreamt of an academic career, but on his relatives' insistence he entered the state service on the Odessa Railway. In 1877 Witte moved to the privately owned Society of Southwestern Railways and there made a brilliant career, soon becoming its manager. In 1883 he published a book The Principles of Railway Tariffs for the Transportation of Goods, which earned him renown as a railway expert.

In the 1870s Witte fell under the sway of Slavophile ideas. He took a great interest in the theological writings of Alexei Khomyakov and participated in activities of the Odessa Slavic Philanthropic Society. Here he became a friend to Mikhail Katkov, an influential right-wing journalist. Witte also published feuilletons under a pen name. In 1881 and 1882 he participated in the pro-monarchist secret aristocratic society Svyataya Druzhina (The Holy Retinue) organized on Witte's advice by his uncle General Rostislav Fadeyev, a well-known military historian and publicist of Slavophile views. In 1882 the society was liquidated.

In 1887 Witte was appointed director of the Railway Department of the Ministry of Finance. In 1892 he advanced to the post of minister for railways and then to minister of finance. Witte soon became the most influential minister in the government, and his ministry the center of the entire state government. Witte proved to be an outstanding politician, capable of getting his bearings in the most complicated situations, designing longterm programs, and then carrying them out effectively. Soon Witte gave up his Slavophile views and turned into a modernizer of the European type. He sought to accelerate the industrial development of Russia with the aid of state support and foreign capital. He contended that Russia would catch up with advanced Western countries industrially within a decade and would secure a strong position for Russian manufactured goods in the markets of the Near, Middle, and Far East.

The program of industrialization, "the Witte system," as he called it, included (1) intensive railway building; (2) protectionism and state subsidies for private entrepreneurs; and (3) a great influx of foreign capital to industry, banks, and state loans. Never before in Russia had state economic intervention been used so widely and effectively. The state acted by purely economic means through the state bank and institutions of the Ministry of Finance, which monitored the activities of joint-stock commercial banks. In order to penetrate the markets of China, Mongolia, Korea, and Persia, the Ministry of Finance founded the Russo-Chinese, Russo-Korean, and Loan and Discount Banks. Witte's program achieved the desired results. In the period from 1892 to 1902, state finances were strengthened, foreign investment capital poured in (over 3 billion rubles or 1.544 billion dollars), and a stable monetary system was formed. The highest rates of economic development in Europe were attained (from 1883 to 1904 the volume of industrial output increased 2.7 times, or 6% per year). The annual growth rate of the national income averaged nearly 3.5 percent. The intensive economic development of Russia was accompanied by the improvement of the living standards of the broad masses of the population, as data on the increase in the height of recruits testify.

After setting industry on its feet and ensuring its self-development, Witte planned to carry through an agrarian reform. His attempts, however, met fierce resistance of conservatives. He was able only to simplify passport rules and abolish the rules on shared responsibility for taxes and other obligations laid on the peasants. The other aspects of the agrarian program designed by Witte were later introduced by his successor, Petr Stolypin.

Although Witte was transferred to the less influential post of Chairman of the Committee of Ministers in August 1903, the deteriorating political situation in the country, caused by Russian defeat in the Russo-Japanese War, and the insistence of public opinion brought him back to active service in the summer of 1904. Witte led the Russian delegation that concluded peace with Japan in the Treaty of Portsmouth. He then participated in preparing the October Manifesto of 1905, in which the emperor granted civil freedom. Witte took the post of prime minister in the new government and ran political affairs in a European style. He paid attention to public opinion, regarded the Russian and foreign presses as representative of public opinion, and exerted influence upon the public through the press. His government introduced the political rights granted by the October Manifesto, worked to appease the population and win it over to the government's side, curbed punitive excesses and pogroms, and conducted the elections to the Duma. Witte's activities, however, received criticism from all sides. The emperor viewed him as a rival in influence and popularity. The wealthy were disappointed in the Duma elections, whose results proved unfavorable for them. Revolutionaries cursed Witte for his repressive measures. Liberals censured him for his defense of the monarchical prerogatives in the Basic Laws and his other concessions to rightists. Conservatives were dissatisfied with Witte's participation in the demolition of the old political system and transition to a new one. After Witte had concluded the Portsmouth Peace Treaty with Japan, brought troops from the Far East back to European Russia, restored public order in the country, prepared the Basic Laws, organized elections to the Duma, and secured a big loan in Europe (843.75 million rubles or 434.16 million dollars) that brought stability to government finances, he was forced to resign.

Until his final days Witte hoped to return to power. In order not to be forgotten, he used all means available to him: the rostrum of the State Council, the press, intrigues, and connections in the West. Witte died in 1915 at the age of 66, his health undermined by hard work and forebodings. He opposed Russia's participation in World War I and predicted grave consequences similar to the upheavals that occurred after the Russo-Japanese War.

See also: economy, imperial; industrialization; october manifesto; portsmouth, treaty of; railways; trans-siberian railway

bibliography

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Boris N. Mironov