Two great reforms are noticeable under the present reign. The sale of spirits has greatly decreased since the government took the monopoly of the manufacture and sale of liquor. The French loans made the establishment of the gold standard possible and speculation in Russian paper money ceased.
The completion of the Trans-Siberian Railway aroused great expectation for the future of Russia's commerce. The war with Japan has prevented the possibility of estimating the effect it will have upon oceanic trade. But Russia's manufactures have had a wonderful increase; its effect is shown in the population of the cities. In 1870, Russia contained only six cities with a population of over 100,000; their number was doubled in 1897. Warsaw, the old capital of Poland, had 243,000 inhabitants in 1865; in 1897, they had increased to 615,000. Lotz, also in Poland, rose from 12,000 to 315,000. This cannot fail to exert a powerful influence upon the future of the empire; first, on account of the creation of a middle class which, even at this early day, numbers nine per cent of the population; and next, because the mechanics and factory hands are recruited from among the peasants, who thus are brought into daily contact with more intelligent people, and acquire new ideas and new necessities. The official class is bitterly opposed to this new departure, because it foreshadows the day when the drag upon Russia will be cast off.
Nicholas seems to have reversed his father's policy in the Balkan States. He also acted in concert with Europe in 1896, when trouble arose between Turkey and Greece. It began in Crete, where Turk and Christian could not agree. Stories of massacres infuriated the Greeks and the king had to choose between a revolution and a declaration of war. In April, 1897, an army of 80,000 men under Prince George crossed into Thessaly, but was driven back by a Turkish army of 150,000 men. Prince George had invaded Crete in February, but the powers compelled him to evacuate the island. The czar interceded with the sultan, and the absurd war was ended.
The Slavophils, after their failure in the Balkan provinces had excited the Armenians in the provinces near the Russian Caucasus. They attacked the Kurds, a nomadic tribe of Mussulmans, when the Turks took the side of their co-religionists and treated the Armenians with no soft hand. The Panslavists demanded autonomy for Armenia, but this did not suit Prince Lobanof, who had succeeded de Giers as Minister of Foreign Affairs, because he feared trouble in the Caucasus. In 1895, Russia, France, and England, presented a note to the sultan, suggesting the appointment of a high commissioner, the abolition of torture, and reforms in taxation. Turkey agreed, but Shakir Pasha, the high commissioner, failed to restore order and the disorder threatened to become a revolt. Even in Constantinople a condition of anarchy prevailed.
The atrocities committed by the Turks aroused indignation everywhere, when the Armenians seized the Ottoman Bank, but the conspirators were forced to flee from the building and to seek refuge on an English yacht. The Turks were furious and killed more than 5,000 Armenians. Again the powers remonstrated; but at this time it began to dawn upon the public that the Armenians were a least quite as much to blame as the Turks, and the interest subsided. Russia had discovered that the Armenians are undesirable citizens, and sent back some 40,000 of them who had settled in the Russian Caucasus. Germany, intent upon securing concessions from Turkey, left the sultan a free hand; meanwhile the British public was engrossed by the Boer war, and the Armenians, seeing that they were left to their own devices, subsided.
The civilized world was startled when, on August 24, 1898, Russia issued a note to the powers, declaring that "military and naval budgets attack public prosperity at its very source, and divert national energies from useful aims," and suggesting a conference to discuss the subject of displacing war by an International Court.
The note received generous applause, especially in the United States and Great Britain, the two foremost nations devoted to the arts of peace. The several governments agreed to participate in the proposed conference. The place selected was The Hague, the capital of the Netherlands, where the sessions opened on May 18, 1899.
Of all the great powers, the United States was the only one unreservedly in favor of an arrangement whereby war would be prevented. Most of the other powers looked upon an International Court as visionary, and so far as the ostensible purpose is concerned, the conference was a failure. Still, it bore fruit in defining and adding strength to international law. Among its most important results is the clause that "When a conflict seems imminent, one or several powers shall have the right to offer mediation, and its exercise shall not be regarded as an unfriendly act." A permanent Court of Arbitration was established at The Hague. It is composed of judges selected from a list on which every country is represented. On the 29th of July, the delegates of sixteen nations signed the protocol embodying the conclusions; it was afterwards signed by sixteen more. It remained, however, with the United States, to give vitality to an institution which was looked upon with ill favor by many governments.
Although the reign of terror from the nihilists has passed, political murder is still rampant in Russia, and recent events in the Far East have caused a renewal of the agitation for reforms. In 1904, the Governor-general of Finland was assassinated, and soon afterwards, the hated and dreaded Minister of the Interior de Plehve shared that fate. His successor seems to be anxious to grant greater liberties to the people. The united action of the zemstvos, and the final issue of the war in the Far East, may have important results. Nicholas II, amid all his perplexities, was made glad by the birth of a son and heir, who received the name of Alexis.