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Also known as: Sergei Iulevich Vitte, graf, Sergei Yulevich Witte, Count Sergei Yulyevich Witte, Sergey Yulyevich Witte
Occupation: cabinet official
Russian Minister of Finance who directed one of the fastest periods of economic growth in Russian history.
Sergei Witte often expressed sympathy for the many non-Russians in his country. Jews, Poles, and other peoples who were not Russian or Orthodox Christian frequently faced discriminatory laws in the businesses, education, and government of the Russian Empire. But there were basic contradictions in Witte's political career. On the one hand, he held very progressive views and stood for abolishing laws that discriminated on the basis of ethnic origins. Such laws, he felt, hindered the growth of Russia's productivity. Yet this modern outlook contrasted with his admiration for the old traditions of the Russian monarchy, whose absolute powers were often the source of discriminatory laws in the first place. When the Russian emperor Alexander II was assassinated by terrorists in 1881, Witte briefly joined a secret society dedicated to seeking out and destroying terrorists.
Witte spent his youth in the town of his birth, the Georgian city of Tbilisi, where his father worked as an official of the Russian government. As a young adult, he left to attend the Novorossiisk University in Odessa, Ukraine. His education centered on science, where he wrote a thesis on pure mathematics to complete his degree. But early attempts for a career in mathematics did not pan out, and Witte secured a position as a railway administrator for the government. Later he took a job as director of a private railway company in southern Russia, where he won renown as the principal author of a charter that guided the operation of Russian railroads. When Russian emperor Alexander III offered to double Witte's salary to attract him back into government service in 1889, Witte became the director of a newly created department for railroad affairs in the Ministry of Finance.
It was in the early 1880s when Witte incurred social disapproval by marrying his first wife, a divorcée with a daughter from a previous marriage. A few years later, his wife died of a heart attack. Society again raised a furor in 1892 when he married another divorcée, also with a daughter from a previous marriage.
Witte was a proud man, quick to take personal credit for many of the successes under his term as finance minister. He became best known for his efforts to modernize and increase Russian industry, viewing industrial development as necessary to the continued prosperity of Russia:
Industry gives birth to capital; capital gives rise to enterprise and love of learning; and knowledge, enterprise and capital combined create new industries. Such is the eternal cycle of economic life.
Under the patronage of the minister of finance Ivan A. Vyshnegradsky, Witte climbed rapidly in government service. An ambitious man, willing to compromise values, Witte conspired against Vyshnegradsky in late 1892 and managed to get himself appointed to the same position. Witte's vigor in pursuing his policies is sometimes referred to as the "Witte system." Some historians, however, downplay the originality of his plans and maintain that his policies merely continued the work of previous finance ministers.
Witte's policies had four basic aspects: tariffs and taxation, stability of money backed by gold, encouragement of foreign investment, and government supervision of heavy industries such as metal production and railroad construction. The motive behind the emphasis on industrial development was mainly political. If Russia was to remain a great power, she would have to match the economic might of other European powers. Critics of Witte's system charge that his plans caused long-term harm that offset any short-term gains. He raised revenue for the government by a heavy sales tax. In 1894, he established a state monopoly on liquor, the sale of which was extremely profitable. On the downside, Witte's high taxes took from Russian farmers money which could have been invested in new technologies to improve their agricultural productivity. High tariffs on imported goods like tea and salt meant higher prices that diminished the buying power of each peasant family.
The decade following Witte's activity as finance minister brought a slight slowdown to the growth of Russian industry. Government aid to businesses involved in heavy industry continued but on a lesser scale. This slowdown, however, also brought relief from the tax pressure Witte's policies put on the masses. Growth slowed, but prices also relaxed.
Thus, to build up industry in Russia, Witte put Russia through a period of austerity. The object was to buy up as much gold as possible with the sale of foodstuffs on foreign markets so as to increase Russia's gold reserves. In 1897, he accumulated enough gold to put Russia on the international gold standard, whereby each ruble (the unit of Russian currency) would be backed by gold. The arrival of the gold standard brought Russia recognition abroad and attracted foreigners to invest in Russian industry. One estimate values the amount of foreign investment at 200 million rubles in 1890, rising to 900 million rubles by 1900. The influx of foreign capital was so rapid that some Russians feared their country would be owned and controlled by foreigners.
In the area of foreign relations, Witte often exerted an important influence. In the 1890s, while diplomats tried to extend Russian influence in Asia, Witte established a Russo-Persian and Russo-Chinese Bank to facilitate trade with Iran and China. Opposed to the efforts of the Russian military to acquire more funding for the manufacture of armaments, Witte preferred to spend the money building up the economy. For this reason, he persuaded Emperor Nicholas II to support worldwide disarmament by calling together an international peace conference at The Hague, Netherlands, in 1899.
Railroads Emphasized; Trans-Siberian Route Completed
Russia was primarily an agricultural nation. In an effort to earn the support of the people who viewed his industrial development with suspicion, Witte also made training in business education more readily available, establishing between 150 and 200 schools of commerce. Railroads held a pivotal role in Witte's plans because they acted as the primary means to ship the needed material to market for sale and to transport the raw materials to factories for manufacturing. During Witte's tenure, the miles of railroad tracks in Russia almost doubled. As a champion of government control, he advocated buying back existing railroads from private companies. By 1900, 60% of Russian railroads were owned by the government. Witte believed that railroads like the famous Trans-Siberian would serve two purposes: economically, they would strengthen Russian industry and provide access to new land for farmers who needed it; culturally, they would enrich Russian civilization.
The majority of the Trans-Siberian railroad was completed during Witte's term as minister of finance. This achievement, crossing the Eurasian landmass from Moscow to the Pacific, was of the same magnitude as that of the Union Pacific or Canadian Pacific railway crossing of the North American continent.
Russia at this time was headed by an autocratic ruler who in theory had absolute power over every sphere of government. Even after Russia received its first constitution in 1905, the Emperor and his circle of advisors exercised ultimate control; any of his edicts had the force of law and superseded all other laws. Often civil liberties were violated; the police could arrest anyone who voiced too loud an opposition.
Repeated agitation by socialist parties and strikes among Russia's urban proletariat of factory workers influenced Witte and others to enact labor legislation. He made it mandatory for factory owners to provide their employees on-the-job accident insurance. He also set limitations on the length of the work day and allowed workers to elect their own representatives.
Though Witte's ministry could be sympathetic to the conditions of Russian workers, it did not always act in their best interest. Early attempts to improve the conditions of the working class were made through the creation of labor unions under the close supervision of Sergei V. Zubatov, a police agent of the Ministry of the Interior. Factory owners opposed the intercession of government officials on behalf of workers. Witte, who did not want to jeopardize Russia's appeal to big business, voiced his objection to such beneficial measures. But the Ministry of the Interior proved to be one of Witte's main opponents. It was directed by people who were far more conservative than Witte and weary of the discontent and changes among working class, which they linked to Witte's policies of rapid industrial growth.
While many of his programs for industrial development were known for their liberal or progressive nature, Witte, nevertheless, opposed any step toward democratic reform and diminution of the Emperor's absolute powers. Witte's distrust of democracy stemmed from the fear that the masses would not be able to elect competent representatives capable of working for the best interests of Russia. His ideal was a government administered by competent civil servants with a strong and decisive emperor as leader. Witte had almost worshipped Alexander III, who had died in 1894:
If [Alexander] were not certain of what he thought or would do, he would hold his tongue, but if he said something, one could have complete confidence in his word. . . . Had Emperor Alexander III lived on . . . we would have enjoyed peace, peace that would have permitted us to move along the road of gradual liberalization, toward a life in which the state exists for the good of the people.
A beneficent autocracy, claimed Witte, should consult representatives of the people about their wants, but never subject itself to them.
True to his belief that the government must act in the interests of the people, Witte had initiated efforts by the Russian bureaucracy to respond to their needs. After a wave of assassinations and rural violence toward government officials swept Russia, Witte created a special commission in 1902 composed of civil servants and non-government representatives to study the sources of dissatisfaction in the countryside. Unfortunately, Witte's dismissal as finance minister the following year and the hesitancy of Emperor Nicholas II prevented the enactment of the recommendations of the commission.
Like Witte, Nicholas also stood firmly against any diminution of an emperor's absolute powers. Despite this common view, Witte and Nicholas never fully liked or trusted each other. Their relationship had started well when Witte appointed Nicholas to chair the committee in charge of building the Trans-Siberian railroad. To Witte's surprise, however, Nicholas was not a figurehead and voiced his own informed opinions on the progress of the railroad. This tension between the two men only grew with time. Yet Witte's insight was handicapped by his pretentious or sarcastic manner which did not charm his government colleagues. Later, he reluctantly admitted, "I should have been more restrained in speaking to him."
To complete the Trans-Siberian Railroad, tracks had to pass through the Chinese province of Manchuria. Witte at first insisted that Russia's relations with China be based upon the mutual economic benefit of each side. However, when Russian armies began to move south of Manchuria and into the Yalu River of Korea, Witte expressed his disapproval of further Russian expansion in the Orient. His dissent caused a scandal which forced him to resign as finance minister in 1903. Afterwards, Nicholas appointed Witte to the largely ceremonial post of chair of the Committee of Ministers, which coordinated the work of the various ministries of the Russian government.
But there was rivalry between China, Japan, and Russia for control of Korea, and Russia and Japan were moving toward a crisis. Witte warned that peace must be kept in the Far East because of Russia's unreadiness for war. As the only railroad to Russia's Pacific coast, the Trans-Siberian line remained unfinished and could not transport troops and supplies to the theater of battle with Japan. While the Russians stalled the negotiations, the Japanese launched a surprise attack in February 1904 which crippled the Russian navy anchored at the city of Port Arthur on the Chinese mainland.
Troops Massacre Workers on "Bloody Sunday"
Further misfortune befell the government when on Sunday, January 9, 1905, an incident took place that was later to become known as "Bloody Sunday"; government troops massacred hundreds of innocent Russian workers as they marched in demonstration of their grievances. Upon Witte's suggestion, the government formed the Shidlovsky Commission to study the causes of the tragedy. Once again, the hesitancy of Emperor Nicholas prevented the government from taking firm action to make amends. The tragedy shocked the nation and set the tone for the rest of the year as unrest among workers and peasant crescendoed after the unnecessary violence.
By the summer of 1905, the war was going very badly for Russia, and Japan had sunk the rest of the Russian navy in the famous battle of Tsushima Straits. But despite its successes, Japan could not continue to finance its war and asked U.S. president Theodore Roosevelt to arrange a peace conference. Chosen to lead the Russian delegation at the conference held in Portsmouth, New Hampshire, in August 1905, Witte obtained a favorable settlement for Russia. Both parties agreed to withdraw their armies from Chinese Manchuria. Russia had to cede Port Arthur and part of the Sakhalin Island; it also had to recognize Japanese dominance over Korea. But Russia did not have to pay reparations for war damages to the victorious Japanese. Peace came none too soon, for Russia was rapidly being engulfed by domestic turmoil and massive waves of strikes protesting the unresponsiveness of the Russian autocracy to the needs of the people. Upon Witte's return to Russia, Nicholas granted him the title of count, in recognition of his efforts to secure a favorable peace. Witte, who was very status conscious, felt this to be a great honor.
Unfortunately the bureaucrats could not provide the responsible guidance that the autocratic regime desperately needed. The memory of bureaucratic mismanagement in handling the famine of 1891-92--compounded by the recent debacle with Japan--left the impression that the government bureaucrats were inept and insensitive.
During September and October of 1905, discontent in Russia had reached its peak. With nationwide strikes paralyzing the country and violent uprisings of peasants demanding more land, the government edged toward collapse. Witte advised Nicholas that unless some definitive action was taken, the wave of strikes would topple the remaining vestiges of autocratic power. He recommended an "all or none" strategy: either the government suppress all discontent with strict martial law or grant the public meaningful concessions. Since the majority of the army was still in the Far East because of the recent hostilities, it was not possible to stop the strikes with military force. Witte spoke candidly to Nicholas:
The inconsistent and clumsy actions . . . the administration resorted to in the past, and which continue to this day, have produced fatal results; it has nurtured a hatred for the government which grows from day to day. . . . The roots of this unrest unquestionably lie deeper. They lie in the disturbed equilibrium between the ideological aspirations of the thinking elements of Russian society and the external forms of their life [i.e. the government]. Russia has outgrown the existing regime and aspires to a rule of law based on civil liberty.
Witte concluded that acceptance of reform was the only "way to save the state."
The October Manifesto Is Issued; Witte Named Prime Minister
It took the Revolution of 1905 for the government to concede the need for political and economic reforms. The success of the Revolution culminated in the October Manifesto. On October 17, 1905, Nicholas issued this famous declaration which guaranteed civil rights and promised the rapid formation of an elected legislature or parliament (duma). Witte was appointed the first prime minister of the new Russian government. Though he preferred an autocratic state, he recognized the constitutional regime as the only way to make peace between government and society.
Witte's acceptance of democratic reforms surprised those who thought him to be an ardent supporter of autocratic government. Nicholas thought Witte too insistent on diminishing autocratic rule and too insistent on violent methods to restore order in Russia. He used the word "chameleon" to describe Witte's vacillation between liberal and conservative measures. Ironically, Witte's opinion of Nicholas echoed the Emperor's criticism; each viewed the other as inconsistent. Although Nicholas had a "good heart," Witte recalled, his "weak" leadership, which could be easily swayed into competing directions, was to a large degree to blame for the crisis that had faced the Russian government in 1905.
As prime minister, Witte's strategy was simple: to win the support of enough voters so that his government could function effectively with the backing of the Duma. He focused on the largest block of voters, the peasant farmers who made up approximately 80% of the Russian population. But the electoral laws did not allow for the elementary principle of "one person, one vote." The votes of the nobility counted many times more than the votes of the peasant farmers or factory workers. The peasants would control only 40% of the seats in the Duma. To ensure a favorable reception of peasant voters toward the government, Witte announced his intentions to introduce legislation into the new parliament to give peasant farmers desperately needed land--at the expense of the landlords. Since most of the Russian nobility were landlords, they spoke out against this measure; though the nobility only made up a small percentage of the population, their opposition carried weight within the imperial court of Nicholas II.
Witte experienced difficulties collecting support from other circles too. Instead of appointing government bureaucrats as ministers in his government, he had invited members of the liberal parties to join his cabinet. But his efforts to win support from non-government parties failed, and the liberals refused to serve, claiming that Witte's recent appointment of several arch-conservatives would stand in the way of effective cooperation. To complicate matters, his efforts to secure an alliance with conservatives also failed. When the Emperor saw the election results based on Witte's electoral law, he and other conservatives feared that the new Duma would be too liberal; indeed, the peasant bloc turned out to be hostile and distrustful toward the government, which was viewed as being too slow in addressing the need for more land. Nicholas had Witte dismissed and replaced him in March 1906 with a more conservative and pliable prime minister, Ivan L. Goremykin.
Meanwhile, the Russian government itself was teetering on collapse, not just from its inabilities to accept the Duma but from impending bankruptcy: the Russian treasury had critically exhausted its monetary reserves during the war with Japan. Although the government could turn to its Duma to raise new taxes, any dependence on the liberal-minded parliament repulsed Nicholas and his conservative advisors. Witte's last important act as prime minister was the successful negotiation of a 1906 loan from France--the "loan that saved Russia" as he liked to remember it--which supplied Nicholas with the financial strength to act independently of a liberal Duma.
Though visibly tired of being the center of complaints, Witte wanted to stay on as prime minister and enact his legislative policy for Russia. Part of Witte's program was designed to allow the peasant farmers to leave the communes (land collectively owned by the peasants) on a gradual and voluntary basis. Witte had come to believe that the peasant commune was inefficient and unproductive, preventing many peasants from consolidating their holdings. Later Peter A. Stolypin, an important prime minister who followed Witte, effectively abolished the communes, but not at the gradual pace which Witte recommended.
Witte's disapproval of Stolypin's methods exemplifies the basic contradictions in his thinking. On the one hand, he remained a firm supporter of the Emperor's supreme powers; on the other hand, he objected when Stolypin used the Emperor's powers to override the Duma. In defiance of the Russian constitution, Nicholas--upon Stolypin's urging--abolished the electoral laws designed by Witte and decreed a new set of laws, insuring the Russian nobility of a majority in the Duma.
After his dismissal as prime minister, Witte traveled abroad in Europe and never again entered public service. He remained bitter with Nicholas for not fully supporting his programs and frustrated with himself and the government: "All sensible measures come too late." His death in 1915 went largely unrecognized, partly because of remaining resentment from the imperial court. Nicholas was to remark that Witte's passing left him in a calm and not unpleasant mood.
-- Contributed by David Katz, Harvard University, Cambridge, Massachusetts
Name variations: Count Witte. Born Sergei Yulevich Witte on July 17, 1849 (all dates follow the Julian calendar), in the city of Tbilisi in the country of Georgia, which was then part of the Russian Empire; died on February 28, 1915, in St. Petersburg; son of a Baltic German father and a mother who was a descendent of the Dolgorukys, an ancient princely family of Russia; married: N.A. (Ivanenko) Spiridonova, who had a daughter from a previous marriage, Sonya; married: Matilda Ivanova, 1892, who also had a daughter from a previous marriage, Vera.
1849 Born in Tbilisi
1889 Became director of railroad affairs
1892 Became minister of finance
1903 Resigned as minister of finance
1905 Traveled to U.S. to conclude peace treaty with Japan; became prime minister after the Revolution of 1905
1906 Resigned as prime minister; left Russia
1907-12 Wrote memoirs
1914 Returned to Russia upon outbreak of WWI
1915 Died in Russia
Charques, Richard. The Twilight of Imperial Russia. London: Oxford University Press, 1958.
Falkus, M. E. The Industrialisation of Russia 1700-1914. London: Macmillan, 1986.
Marks, Steven G. Road to Power: The Trans-Siberian Railroad and the Colonization of Asian Russia 1850-1917. Cornell University Press, 1991.
Mehlinger, Howard D., and John M. Thompson. Count Witte and the Tsarist Government in the 1905 Revolution. Indiana University Press, 1972.
Modern Encyclopedia of Russian and Soviet History. Edited by J.L. Wieczynski. Academic International Press, 1976.
Riasanovsky, Nicholas V. A History of Russia. 4th ed. Oxford University Press, 1984.
Rogger, Hans. Russia in the Age of Modernisation and Revolution 1881-1917. London: Longman, 1990.
Von Laue, Theodore H. Sergei Witte and the Industrialization of Russia. New York, 1963.
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