A history of commerce

by Clive Day

543. Great size and small commerce of the Russian Empire.—The attention and imagination of men have long been impressed by the size of the Russian empire, which included an area greater than that presented by the moon at the full. Combining the characteristics both of Europe and of Asia, Russia was almost a world in herself, and, indeed, was called by one of her rulers “a sixth part of the world,” worthy to rank as a continent. Yet this great state took a place in modern commerce below petty countries like the Netherlands and Belgium. A country of such vast size might, of course, secure by internal trade many of the advantages which smaller countries must seek in international exchange. The United States presents an example of a territory so large and so richly endowed that it can afford, in considerable degree, to renounce commerce with the rest of the world, and can still maintain from its own resources a high industrial civilization. Russia has not enjoyed a similar success. It had a comparatively sluggish internal trade; and it lacked industrial civilization. We must seek in the history of commerce an explanation of these facts.

544. Historical reasons for backward development.—The few paragraphs devoted to Russia in a previous chapter suggested the main reason for the country’s backwardness. During many centuries, while the peoples of the West were advancing in civilization, the people of Russia were facing away from Europe, occupied in defending themselves against Asiatic princes. Russia shared in none of the great movements of early European history: feudalism, chivalry, crusades, rise of towns, Reformation, Renaissance. It was devoted entirely to the struggle for self-preservation. When it became part of the European world, therefore, about 1700, it brought with it into modern times many characteristics of an unformed, half-developed organization; and since that date it has been trying, and it is now still trying, to catch up with the rest of Europe.

545. Russian commerce about 1800.—The movement toward progress, initiated by Peter the Great about 1700, continued, with various fluctuations, during the century. In so far as it found expression in commerce we can regard the last fifty years before 1800 as a time of rapid advance; commerce grew to nine fold the volume which it showed in 1750. So slight, however, had been the beginnings of Russian trade, that it amounted in 1802 only to about fifty million dollars.

Russia was still practically in the position which it had occupied in the time of the Hansa, dependent on the West for all its finer manufactures, and supplying raw materials in exchange. Hemp and flax, crops which rapidly exhaust the soil, and for the cultivation of which the great tracts of fresh land in Russia offered an advantage, were the chief exports. Among others on the list were wood, grain, tallow, hides, furs, feathers, etc. The Russian nobles exported a certain amount of linen, which they forced their serfs to make for them that they might have the means of purchasing foreign luxuries, and manufactured also iron for sale abroad. The appearance among the exports of this metal, which we are used to associate with advanced industrial countries, is explained by the fact that charcoal was still an important source of fuel for the iron manufacture, and of this the boundless Russian forests offered an abundant supply.

546. Means of transportation.—Almost nothing had been done as yet to unite by means of transportation the vast stretches of territory in Russia. Roads were practically non-existent, and goods were transported by land only in winter, when they could be sledged over the rough ground on the snow. The waterways, with which the country is so abundantly provided, had been connected by a few important canals, and were the chief means of transportation. Goods were brought to them on sledges in winter, to await the high water of the spring freshets. They were laden on flat-boats, holding sometimes several hundred tons, but built to draw only two or three feet of water, and were floated down with the current when the ice melted. The boats were rudely constructed, and were broken up for timber or fire-wood at the end of the trip. The inconvenience and uncertainty of such a system of transportation are obvious, but it was, nevertheless, remarkably cheap; rates on some water routes were only one or two cents per ton-mile.

547. Chief ports.—The conditions of transportation confined almost all the foreign trade of Russia to the sea, and the commerce across the western frontier was insignificant. Archangel, situated on the river Dwina, a few miles from the coast of the White Sea, and the leading port of Russia before the time of Peter the Great, still retained a respectable share of commerce, and was visited every year by ships from England and the Netherlands. In relative importance, however, it had declined greatly after the foundation of St. Petersburg, which soon became the most important outlet for the country’s trade. A rival was at this time, however, growing up in the South, where Russia had only recently secured the territory on the shore of the Black Sea. Odessa, which was founded in 1793, rose rapidly in commercial importance, especially during the Napoleonic wars, when the Baltic trade suffered a severe check.

548. Development up to the Crimean War (1854-1856).—During the first half of the nineteenth century Russian commerce grew steadily but slowly; the rate of increase was much behind that of the preceding fifty years. A partial explanation of this check to progress can be found in the adoption, in 1822, of a prohibitive tariff; the importation of many foreign manufactures (clocks, textiles, porcelain, glassware, etc.), was absolutely forbidden. Shortly after the middle of the century, however, came a turning-point. The Crimean War, in which England and other states were engaged with Russia, is generally admitted to have yielded to neither of the chief combatants advantages proportional to the costs which it involved. It was in one way, however, of immense benefit to Russia. It awakened the country to a realization of its backwardness. It raised a demand for reform of antiquated conditions in economic and political life, which the Czar himself was the first to heed.

549. Reforms; growth of the railroad system.—The reform movement bore fruit in many lines to which we can pay but scant attention. It led to the emancipation of the serfs in 1861, by which a considerable part of the Russian people were liberated from a condition resembling medieval bondage, and became free land-holders. It secured at least a partial improvement in the system of government. It was, finally, to name the result of the greatest influence on commerce, the occasion for the introduction of the modern railroad system in Russia. The government had found itself so hampered in carrying on the war by the lack of transportation facilities, that it now bent every energy to remedying the defects. The railroads of Russia measured at the outbreak of the war only about 600 miles. In the ten years following the railroad system grew to over 2,000 miles, and in the next decade to about 10,000. Though the first lines were built mainly to serve military purposes, those constructed later were designed to develop the economic resources of the country; and it is hard to overestimate the importance of this development of the means of modern transportation, to a country which stood in such sore need of it as Russia.

550. Development of commerce.—The results of the reforms can be followed in the growth of Russian commerce after the middle of the century. In the decade 1860-1870 the foreign commerce of the country increased to more than double what it had been, and was growing at this time faster than the commerce of any other country in Europe, except that of a neighboring state, Austria-Hungary. Some significant changes, moreover, appeared in the direction and character of Russian trade. The great gains of the period were made by southern Russia, where the wheat fields of the rich “black-earth” district were brought within reach of a market. It was about this time that wheat won the first place among the exports away from flax and its products. Commerce by way of the Black Sea increased very rapidly, while the Baltic did not keep its proportional share in the commerce of the country, and the proportion of trade finding its outlet by the Arctic Ocean had sunk to insignificance. Commerce with the west of Europe across the land frontier, which formerly had been restricted by the difficulty of transportation, grew even faster than the Black Sea commerce, and gave an entirely new importance to trade relations with neighboring states. England had enjoyed the largest share of Russia’s commerce during the first part of the century, but could not hold her own henceforth in competition with Germany. This last-named country, then in course of rapid industrial development, was enabled by the railroads to win her way rapidly in Russian commerce, and soon was the largest sharer in it.

551. Character of industries and commerce.—Russia, like many other of the European states, enjoyed the greatest freedom of trade in the period following closely after the middle of the century. The customs duties levied in Russia at this time would have been considered high in western Europe, but they were much lower than the rates ruling in the first half of the century, and much lower than the rates in force at the century’s close.