This article discusses the economic thought and policy of Sergei Witte, the Russian Minister of Finance from 1892 to 1903, particularly with regard to how he used Russian commercial fleets effectively. Famously based on Friedrich Liszt’s economic thought, he encouraged the construction of the Trans-Siberian Railway and Russia’s industrialization under government protection. Although little attention has been given to his shipping trade policy, in his book About Nationalism—National Economy and Friedrich Liszt, he stated that it was necessary to develop a national fleet to boost a country to its highest economic stage.
In this article, first, we examine Witte’s two books, About Nationalism and Abstract of the Lecture on the National and State Economy, which reveal how he considered the relations between free trade and protectionism and Russia’s foray into Asian markets, especially China and Iran.
Second, we compare the plans managed by Witte regarding the establishment or reform of some shipping associations between 1899 and 1903. In 1899, he granted approval to the Northern Steamship Company and the Russian East Asian Steamship Company, with their parent companies in Copenhagen, to enter the same line of business as the Russian Volunteer Fleet, which had made round trips between Odessa and Vladivostok since 1879. In 1901, when Witte noticed that the number of Russian commercial ships was not enough to open up markets in the East for Russian export, he insisted that the Volunteer Fleet be gradually transformed from an auxiliary fleet of the Navy into a shipping trade company although other Russian ministers rejected his reform plan. Expecting these three shipping associations to play a part in boosting Russia to its highest economic stage, Witte used the Russo-Danube steamship established in 1903 and the Shipping Company with the Chinese Eastern Railway Company in 1899 to support Russian diplomacy with neighbor countries, not to aim to make profit.
Third, we deal with the establishment of the “Persian Line” of the Russian Steam Navigation and Trading Company (ROPiT), the biggest steamship company in imperial Russia founded in 1856. In 1902, Witte made ROPiT introduce a new line, which provided direct service between Odessa and the Persian Gulf. One previous study discussed that the demand for carrying Muslim pilgrims to Mecca by Russian ships helped the introduction of the new line, while another pointed out its connection with a plan to construct a pipeline between Baku and the Persian Gulf. In addition to these reasons, this article reveals that Witte attempted to use not the occasional calls of warships to the Persian Gulf, but regular commercial service to compete with British power over Southern Iran, even if the line sank deep into debt.
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