Before going farther, let me illustrate the march of industries towards the east by a few figures. And, to begin with, let me take the example of Russia. Not because I know it better, but because Russia is one of the latest comers on the industrial field. Fifty years ago she was considered as the ideal of an agricultural nation, doomed by nature itself to supply other nations with food, and to draw her manufactured goods from the west. So it was, indeed—but it is so no more.
In 1861—the year of the emancipation of the serfs—Russia and Poland had only 14,060 manufactories, which produced every year the value of 296,000,000 roubles (about £36,000,000). Twenty years later the number of establishments rose to 35,160, and their yearly production became nearly four times the above, i.e., 1,305,000,000 roubles (about £131,000,000); and in 1894, although the census left the smaller manufactures and all the industries which pay excise duties (sugar, spirits, matches) out of account, the aggregate production in the Empire reached already 1,759,000,000 roubles, i.e., £180,000,000. The most noteworthy feature of this increase is, that while the number of workmen employed in the manufactures has not even doubled since 1861 (it attained 1,555,000 in 1894, and 1,902,750 in 1910), the production per workman has more than trebled in the leading industries. The average was less than £70 per annum in 1861; it reaches now £219. The increase of production is thus chiefly due to the improvement of machinery.[3]
If we take, however, separate branches, and especially the textile industries and the machinery works, the progress appears still more striking. Thus, if we consider the eighteen years which preceded 1879 (when the import duties were increased by nearly 30 per cent. and a protective policy was definitely adopted), we find that even without protective duties the bulk of production in cottons increased three times, while the number of workers employed in that industry rose by only 25 per cent. The yearly production of each worker had thus grown from £45 to £117. During the next nine years (1880-1889) the yearly returns were more than doubled, attaining the respectable figure of £49,000,000 in money and 3,200,000 cwts. in bulk. Since that time, from 1890 to 1900, it has doubled once more, the quantity of raw cotton worked in the Russian factories having increased from 255,000 to 520,700 cwts., and the number of spindles having grown from 3,457,000 to 6,646,000 in 1900, and to 8,306,000 in 1910. It must also be remarked that, with a population of 165,000,000 inhabitants, the home market for Russian cottons is almost unlimited; while some cottons are also exported to Persia and Central Asia.[4]
True, that the finest sorts of yarn, as well as sewing cotton, have still to be imported. But Lancashire manufacturers will soon see to that; they now plant their mills in Russia. Two large mills for spinning the finest sorts of cotton yarn were opened in Russia in 1897, with the aid of English capital and English engineers, and a factory for making thin wire for cotton-carding has lately been opened at Moscow by a well-known Manchester manufacturer. Several more have followed since. Capital is international and, protection or no protection, it crosses the frontiers.
The same is true of woollens. In this branch Russia was for a certain time relatively backward. However, wool-combing, spinning and weaving mills, provided with the best modern plant, were built every year in Russia and Poland by English, German and Belgian mill-owners; so that now four-fifths of the ordinary wool, and as much of the finer sorts obtainable in Russia, are combed and spun at home—one fifth part only of each being sent abroad. The times when Russia was known as an exporter of raw wool are thus irretrievably gone.[5]
In machinery works no comparison can even be made between nowadays and 1861, or even 1870. Thanks to English and French engineers to begin with, and afterwards to technical progress within the country itself, Russia needs no longer to import any part of her railway plant. And as to agricultural machinery, we know, from several British Consular reports, that Russian reapers and ploughs successfully compete with the same implements of both American and English make. During the years 1880 to 1890, this branch of manufactures has largely developed in the Southern Urals (as a village industry, brought into existence by the Krasnoufimsk Technical School of the local District Council, or zemstvo), and especially on the plains sloping towards the Sea of Azov. About this last region Vice-Consul Green reported, in 1894, as follows: “Besides some eight or ten factories of importance,” he wrote, “the whole of the consular district is now studded with small engineering works, engaged chiefly in the manufacture of agricultural machines and implements, most of them having their own foundries.... The town of Berdyansk,” he added, “can now boast of the largest reaper manufactory in Europe, capable of turning out three thousand machines annually.”[6]
Let me add that the above-mentioned figures, including only those manufactures which show a yearly return of more than £200, do not include the immense variety of domestic trades which also have considerably grown of late, side by side with the manufactures. The domestic industries—so characteristic of Russia, and so necessary under her climate—occupy now more than 7,500,000 peasants, and their aggregate production was estimated a few years ago at more than the aggregate production of all the manufactures. It exceeded £180,000,000 per annum. I shall have an occasion to return later on to this subject, so that I shall be sober of figures, and merely say that even in the chief manufacturing provinces of Russia round about Moscow domestic weaving—for the trade—shows a yearly return of £4,500,000; and that even in Northern Caucasia, where the petty trades are of a recent origin, there are, in the peasants’ houses, 45,000 looms showing a yearly production of £200,000.
As to the mining industries, notwithstanding over-protection, and notwithstanding the competition of fuelwood and naphtha,[7] the output of the coal mines of Russia has doubled during the years 1896-1904, and in Poland it has increased fourfold.[8] Nearly all steel, three-quarters of the iron, and two-thirds of the pig-iron used in Russia are home produce, and the eight Russian works for the manufacture of steel rails are strong enough to throw on the market over 10,000,000 cwts. of rails every year (10,068,000 cwts. in 1910).[9]
It is no wonder, therefore, that the imports of manufactured goods into Russia are so insignificant, and that since 1870—that is, nine years before the general increase of duties—the proportion of manufactured goods to the aggregate imports has been on a steady decrease. Manufactured goods make now only one-fifth of the imports, and only occasionally rise to one-third, as was the case in 1910—a year of maximal imports. Besides, while the imports of Britain into Russia were valued at £16,300,000 in 1872, they were only £6,884,500 to £11,320,000 in the years 1894 to 1909. Out of them, manufactured goods were valued at a little more than £2,000,000—the remainder being either articles of food or raw and half-manufactured goods (metals, yarn and so on). They reached £15,300,000 in 1910—a year of maximum, and consisted chiefly of machinery and coal. In fact, the imports of British home produce have declined in the course of ten years from £8,800,000 to £5,000,000, so as to reduce in 1910 the value of British manufactured goods imported into Russia to the following trifling items: machinery, £1,320,000; cottons and cotton yarn, £360,000; woollens and woollen yarn, £480,000; chemical produce, £476,000; and so on. But the depreciation of British goods imported into Russia is still more striking. Thus, in 1876 Russia imported 8,000,000 cwts. of British metals, and they were paid £6,000,000; but in 1884, although the same quantity was imported, the amount paid was only £3,400,000. And the same depreciation is seen for all imported goods, although not always in the same proportion.