bringing in foreign specie by forcing foreign merchants to pay customs in silver
thalers. Tariff rates skyrocketed twice in the century, both in times of war (1724,
1757), but as a rule were moderate, often ranging according to the significance of
the item in Russian domestic production. Having developed militarily essential
industries (iron, coal, potash, and sailcloth), in 1724 Peter I’s government placed
high protectionist levies on imports that competed against them, but those rates
were lowered in a tariff of 1731. In 1757 Elizabeth’sfiscal minister Petr Shuvalov
used a protectionist tariff primarily to increase income during the Seven Years War,
targeting already well-protected items of domestic production such as iron, copper,
linen, and sugar and prohibiting the export of essentials such as rye, timber, gold,
silver, and wool. Catherine II’s tariffs of 1766 and 1783 were moderately protec-
tionist, aiming towards freer trade; they allowed imports of raw materials for
Russian industry but sharply restricted imports of goods that would compete
with Russian production. For income generation, imports of luxury goods enjoyed
by Russia’s nobles were particularly highly taxed, but the fact that revenue from
customs more than doubled in the second half of the eighteenth century suggests
the prosperity of nobles and energy of entrepreneurs.
The Russian state pragmatically pursued liberal policies to support economic
growth and trade. Minister Shuvalov, for example, maintained the seventeenth
century’s prohibition of foreign, particularly European, merchants engaging in
retail trade in Russia, probably to counter-balance his abolition of internal tolls in
- This step created a more efficient movement of goods and served the interests
of nobles who were getting into surplus grain, distilling and manufacturing on their
serf estates. Furthermore, Shuvalov allowed nobles the right to engage in wholesale
and retail sale of items from their estates, impinging on the merchant estate’s
traditional claim on trade.
Shuvalov also founded in 1754 the sorely needed Nobles Bank and Commercial
Bank to provide long-term mortgage credit and short-term commercial credit.
Neither bank survived long (the Commercial Bank folded in 1782, the Noble
Bank in 1786): major borrowers in each bank were such eminent nobles, including
government ministers like Shuvalov himself, that forcing them to pay off their loans
proved impossible. A few other institutions provided loans and savings banks in
Catherine II’s reign, including foundling homes in the two capitals and the Boards
of Social Welfare in the gubernii. But their capacity to provide productive invest-
ment opportunity was minimal. Credit could be available from private individuals,
but at rates up to 20 percent, even though Shuvalov had set a legal maximum
interest rate of 6 percent (usury of any sort had been forbidden by the Lawcode of
1649). Merchants did, however, have access to some useful commercial instru-
ments: an effective, regulated system of letters of credit (veksel) provided security for
large-scale purchases. TheVekselRegulation of 1729 provided for legal recourse in
commercial courts (managed by urban governments) throughout the century.
Urban courts also protected contracts.
Throughout the eighteenth century the state depended upon monopolies select-
ively. The state claimed monopoly control over strategic and very lucrative
items, such as precious metals, salt, and alcohol. Other monopoly products were
Fiscal Policy and Trade 325