A lot of foreign money was invested in building railways in an attempt to create mobility across the vast continent and spread industrialisation from west to east. Wittes special project was the Trans-Siberian Railway which was nearly 4000 miles long from Moscow to Vladisvostok! (Which means Rule the East!). Most of the line was built between 1891-1902 but was not completed until the First World War.
Wittes economic policy seemed to be working as by 1897 the Russian currency, the Rouble, was put on the Gold Standard which gave it value in exchange with other currencies. But there were other problems that were beginning to undermine Wittes visions for a successful economy. Although a brilliant mind, Witte was not an easy man to get on with and he was not popular with the Tsarist court or the government. Change was resisted and Witte had no support for his vision of a richer, more powerful, modernised Russia.
There was also conflict with the military commanders who pushed their needs for transport and military hardware to the top of the economic agenda. These conflicts interfered with Wittes plans and so by the time of the Great Trade Recession at the turn of the century, critics could identify three major weaknesses in his economic reform. Witte paid
To drive his economic reform through without support or interest from the Tsarist court or the government Witte (who was German) brought in many experienced foreign industrialist and capital from the west to manage and finance his projects. This was not at all popular with the Tsar or Russia who did not trust him. Wittes industrial projects were always large and on a grand scale. He failed to nurture light engineering projects which would have helped to modernise manufacturing in Russia by broadening the skills of more workers and keeping more capital in a greater range of small industries.
Peasants had left the land in huge numbers to work in the new factories and to live in the cities. There was no planning for this and when the recession hit thousands of dispossessed and demoralised workers were ready to be mobilised into action against the Tsarist regime.
As the peasants left the countryside for the city in tens of thousands, agriculture reforms were needed to improve the production and the distribution of food. However, these challenges were not addressed at all.
Despite the success of improved transport across Russia, boosting exports and foreign trade, Wittes programme of reform was hampered by the unwillingness of the Tsarist regime to consider any changes in the social structures of the country. Feudal systems hampered the development of a strong middle class. The Tsar and his ministers only wanted economic expansion as a means of strengthening Russia’s military capability. Because of the high import tariffs, Russian consumers had to pay higher prices because the trader had to keep pace with the increased value of the Rouble.
The very strategies that Witte introduced to strengthen the nation and protect Tsardom against the disruptive forces in Russian society were unsupported and unappreciated by the Tsar and his ministers, these factors meant that it was difficult for Witte to realise his economic miracle and the Tsar asked him to retire in 1903.
