The financial reform of Witte became an important stage in theThe development of the Russian economy in the late 19th and early 20th centuries. It strengthened the ruble not only in our country, but all over the world thanks to the establishment of its free exchange for gold. The reason for this was the instability of the monetary system in Russia at the end of the century. However, after the "recovery" of the ruble, the prestige of the domestic economy significantly increased, which led to an increase in investment and foreign capital inflow.
The financial reform of Witte was calledthe need to create a stable currency, which so needed at the turn of the century monopoly associations in our country. The fact is that at the time being in Russia, under the influence of the main trends of the world economy, large monopoly associations such as cartels and syndicates began to appear. For large money transactions, a currency was required that would preserve the value of financial capital.
At first, the government tried to solve the problem withusing the release of so-called extra paper money, but this did not help. By the end of the century, the need to introduce a gold currency became evident. Witte's financial reform was carried out according to the West European model. The fact is that the gold coin standard was introduced in many countries of Europe in connection with the emergence of a single world market. Russia actively conducted foreign trade, and therefore, like its partners, needed a similar monetary system.
The tsarist government was interested in the fact,to develop the country's foreign economic relations. The last circumstance was seriously hampered by the fact that the ruble, despite being a convertible currency, was nevertheless not strong enough to serve as the equivalent of an exchange.
Foreign entrepreneurs often did not daresell their denominations, since it was not provided with gold. Witte's financial reform pursued the goal of overcoming this barrier and putting the ruble on the same level as European monetary units. This was to attract foreign investment and investments in the domestic economy.
The financial reform of Witte, whose date is 1897year, was prepared by his predecessors. Bunge and Vyshnegradskii understood the weakness of the paper money system and tried to replace it with a metal standard. Both wanted to make the domestic ruble strong enough for it to freely exchange not only for silver, but also for gold. To achieve this goal, they set the task of creating a stock of this valuable metal, pursuing a protectionist policy, making foreign loans, and limiting imports and increasing exports of goods.
Thus, even before Witte arrivedMinister of Finance, the rate of the domestic currency was stabilized. By the year of the reform, our country's gold reserves have reached more than 800 million rubles. The State Bank, under the new minister, introduced foreign currency into circulation and stopped speculative actions on the credit ruble.
Witte's financial reform wasa natural continuation of the policies of its predecessors, who by their measures achieved a firm fixation of the ruble and the cessation of exchange speculation. Thus, all the necessary prerequisites for the introduction of the gold standard were created. The stock of this precious metal, the stable exchange rate, the well-formed budget, the development of foreign and domestic trade, the independent work of the Ministry of Finance contributed to the "recovery" of the domestic economy and stimulated the breakthrough in industrial development that Russia reached by the outbreak of the First World War.
Sergei Yu. Vitte for ten yearsthis post and during this period has achieved considerable. Thanks to his efforts, railway construction was accelerated, a favorable trade agreement was concluded with Germany, a wine monopoly was introduced, which became an important source of replenishment of the state budget. Thanks to its monetary reform, gold turnover increased sharply, and the number of paper units fell, which, of course, increased the prestige of the Russian economy on the world market.
Sergei Yulievich Witte achieved "recovery"domestic financial system, which was reliable right up to the outbreak of the First World War in 1914. However, it should be noted that many contemporaries were dissatisfied with the abolition of bimetallic treatment in the country, since the bulk of the population began to experience an acute shortage of monetary units, which adversely affected their purchasing power.
This concept means the recognition of gold as the maina monetary commodity and the only equivalent of values. The advantage of this system is that it is not subject to inflation. In the event of a fall in economic activity, this valuable metal settled in the hands of contemporaries, when the situation stabilized, it was again put into circulation. Witte's financial reform of 1897 was primarily beneficial for the development of foreign trade, as it facilitated the payment of transactions. The introduction of the gold standard was very displeased landlords and nobles, but the enterprises of the domestic bourgeoisie received a new impetus for development in large part due to the export of grain, which increased incomes.
The financial reform of Witte, the reasons for which wereare caused by the instability of the monetary system of the second half of the 19th century, began with the decree of the emperor of 1895, which allowed to pay transactions with gold domestic currency or credit tickets at its rate. However, the new cash denominations rather slowly entered into a turnover. Therefore, the State Bank decided to buy a gold coin at a good price - 7 rubles 40 kopecks.
The latter measure helped to stabilizethe relationship between paper and metal monetary units. In 1897, the government decided to introduce a golden appeal in Russia. Coins from this metal began to be minted since 1897. The first of them were worth 5 and 10 rubles. Also issued were imperial (15 rubles) and half-imperial, which amounted to half their value. However, it is significant that the majority of the population still preferred paper money, as it was easier to keep on hand.
The financial reform of Witte, the results of which turned out to bein general, very positive for the domestic industry, was prepared in strict secrecy, as its developers were not in vain afraid of opposition to court circles and the local nobility. The fact is that the introduction of the gold standard strengthened the positions of the Russian bourgeoisie, but led to a fall in prices for agricultural products. After the reform began, its initiators were subjected to sharp attacks by the public.
However, Witte enlisted the support of the emperor andspecial financial committee and achieved approval of its project. As a result, the ruble rate stabilized, and domestic entrepreneurship received a new impetus for development. The positions of the domestic economy on the world market have strengthened, which brought Russian industry to a new level. One of the shortcomings of the reform is the increase in Russia's debt due to the attraction of foreign capital, but the cost of borrowing has fallen.
In addition, during the reformincrease in state property due to the creation of a gold reserve and the acquisition of railways in the ownership of the treasury. Success was contributed by Witte's skillful budget policy, which refused to save public funds. This thrift, he contrasted financial activity, contributing to the inclusion of capital in the industrial turnover. So, the monetary reform has strengthened the Russian economy and brought it to the world level.
