The Economics of the Russian Village

by Isaac A. Hourwich

In the third place, the conditions prevailing some five or ten years ago must inevitably have undergone by this time great modifications.

It is no exaggeration to say that the round thousand[176] communities in the section submitted to examination represent an equal number of varying combinations of the fundamental agencies of rural economy. Nevertheless, we observe a certain regularity as soon as a complex, sufficient and necessary, of units is taken as a basis for examination. Thus we notice that all the figures relating to the district of Ranenburg are copied with a remarkable constancy in the district of Dankoff in the gubernia of Ryazañ. The same similitude is observed between the districts of Korotoyak and Nizhnedevitzk in the gubernia of Voronezh. It points to a certain uniformity of economic constitution as prevailing under like conditions over a still wider area. In a region confined mainly to agriculture, landholding is the determining factor of economic life. Should we find the same condition of landholding amidst similar surroundings, physical, geographical and legal, we might be justly entitled to assume throughout identity of economic structure. Such is virtually the case as regards the “central black soil, prairieless zone,” which has been the main seat of famine.

It may, therefore, reasonably be assumed that economic conditions in middle Russia about 1881 were essentially the same as in the region here described, allowance being made for numerical fluctuations. It was at this date that revolutionary peasantism had reached its climax, and to cope with it, a new era of “national policy” was inaugurated by Count Ignatieff. The question now arises as to whether counter-influences had arisen which exercised a neutralizing effect upon the economic tendencies that developed during the reign of Alexander II. A full discussion of the economic policy of the present Russian government would carry us beyond the limits of the present treatise.[177] I shall confine myself, therefore, to a few remarks relative to the two state institutions created for the encouragement of agriculture, viz: The Nobility’s Crédit Foncier, and the Peasant’s Crédit Foncier.

Hundreds of millions were appropriated in the course of a few years to prevent the complete ruin of the landholding nobility. No such liberality was allowed in the conduct of the Peasant’s Bank, which was founded with the express object of providing the money needed by the peasant for the purchase of land.[178] Amidst the jubilations with which the peasantist press greeted the birth of this still-born child, Mr. Lobachevsky (pseudonym), one of the broadest minded of the Russian statisticians, raised the sole dissenting voice. He advanced the opinion[179] that to establish a Bank with a stock of a few millions for tens of millions of peasants, was to create a small peasant bourgeoisie that would inevitably take advantage of the poverty of the more helpless members of its class, and that the poor householder would infallibly succumb if he accepted the services of the Peasant’s Bank. This opinion received a speedy confirmation in the actual practice of the Bank, which soon proved itself to be merely a supplementary department of the Nobility’s Bank.

Says Mr. Herzenstein, a Russian Catheder-Sozialist, “It is universally known that the peasants’ purchases enabled the landlords to get rid, at a high price, of those tracts which yielded them no income, and that, taking it all in all, the peasants paid more for their land than it was worth.”[180]

It was again the same truly Russian system which had been tried with such splendid success on the occasion of the emancipation of the serfs. Furthermore, the interest levied by the Bank, viz: 7½ per cent., exceeds that charged by any of the private mortgage banks (6 per cent.), whereas, with the Nobility’s Bank, the interest is less than that charged by private banks.[181]

It is therefore by no means surprising to find that speedy ruin is the debtor’s fate. In the period from 1887 to 1890, 8.8 per cent. of all the land purchased with the aid of the Peasant’s Bank, was relinquished by the mortgageors, the failures amounting to 7,637,034 rubles, or to 14 per cent. of all the loans granted by the Bank.[182] The operations of the Bank necessarily suffered a diminution.[183] However, all these inconveniences are but matters of secondary importance. Had everything gone smoothly, the Bank would nevertheless have effected no actual change in the economics of the village.

As may be remembered, the village community needs about one-half more land in order to enable all its members to hold their position as farmers. To put peasant landholding upon a proper footing in the famine-stricken region, many times more land would be required than that purchased by all the peasants throughout Russia with the aid of the Peasant’s Bank.[184]

It may be questioned whether the operations of the Bank have been even sufficient to counterbalance the further parcellation of peasant holdings which has resulted from the growth of population. The economic tendencies prevalent in the village during the first year of the present reign may be regarded as being even more pronounced to-day.