The author is Professor of Economics at the University of Houston. He would like to acknowledge the support of the National Science Foundation. Earlier phases of this research were conducted by the author during his tenure as a Humboldt Fellow at the Institut für osteuropäische Geschichte der Universtität Tübingen, and he is grateful to the staff of the Institut for their assistance. Ian Drummond and Richard Sylla made valuable suggestions on an earlier draft. Any remaining errors are to be attributed to the author.

¹ Gregory, Paul and Sailors, Joel, “Russian Monetary Policy and Industrialization, 1861–1913,” this Journal, 36 (Dec. 1976), 836–51.Google Scholar

² For a discussion of the methodology of estimating net foreign investment see Iverson, Carl, Aspects of the Theory of International Capital Movements. (London, 1936), pp. 41–43, 103–106.Google Scholar

³ Engeev, T. K., “O platezhnom balanse dovoennoi Rossii” (About the payments balance of prewar Russia), Vestnik finansov (Journal of finance), 5 (1928), 72–84.Google Scholar

⁴ Bovykin, Valerii I., “K voprosu o roli inostrannogo kapitala v Rossii” (On the question of the role of foreign capital in Russia), Vestnik Moskovskogo Universiteta (Journal of Moscow University), 1 (1964), 55–83Google Scholar; Gindin, I. F., Russkie kommercheskie banki (Russian commerical banks) (Moscow, 1948)Google Scholar; Vainshtein, A. L., Narodnoe bogatstvo i narodnokhoziaistvennoe nakoplenie predrevoliutsionnoi Rossii (National wealth and national economic accumulation of prerevolutionary Russia) (Moscow, 1960)Google Scholar; McKay, John, Pioneers for Profit: Foreign Entrepreneurship and Russian Industrialization, 1885–1913 (Chicago, 1970)CrossRefGoogle Scholar; Bonwetsch, Bernd, “Das ausländische Kapital in Russland,” Jahrbücherfür die Geschichte Osteuropas, 22, 3 (1974), 412–25.Google Scholar

⁵ Barkai, Haim, “The Macro-Economics of Tsarist Russia in the Industrialization Era: Monetary Developments, the Balance of Payments, and the Gold Standard,” this Journal, 33 (June 1973), 339–71.Google Scholar

⁶ For discussions of the steps undertaken by the Ministry of Finance in preparation for the introduction of the gold standard see Crisp, Olga, Studies in the Russian Economy Before 1914 (London, 1976), 4CrossRefGoogle Scholar; Migulin, P. P., Reforma denezhnago obrashcheniia v Rossii i promyshlenny krisis (Reform of monetary circulation in Russia and the industrial crisis) (Kharkov, 1902)Google Scholar; Elster, Karl, Vom Rubel zum Tscherwonjez (Jena, 1930)Google Scholar, ch. 1.

⁷ Parity (or above parity) with the new gold ruble rate was achieved in 1894. For a listing of the credit ruble-gold kopek exchange rate see Sobolev, M. N., Tamozhennaiapolilika Rossii vo vtoroipolovine 19 veka (Tariff policy of Russia in the second half of the nineteenth century) (Tomsk, 1911), vol. 1, pp. 411–12.Google Scholar

⁸ On this, see the sources in footnote 6.

⁹ Apparently this was especially true during the tenure of Vyshnegradski as finance minister, when efforts were undertaken to extract “hunger exports” from agriculture. See Crisp, Studies in the Russian Economy, pp. 100–104.

¹⁰ The positive current account balances in 1904 and 1905 were unexpected findings because in these years there was speculation that Russia would be forced to abandon convertibility. As the figures show, export surpluses were quite large in 1905 and 1906, so I would imagine that this speculation was due to political instability rather than to underlying economic factors.

¹¹ My national income calculations have not yet been published in their entirety. For a discussion of some preliminary findings, see Paul Gregory, “Russian Living Standards During the Industrialization Era,” Review of Income and Wealth (forthcoming, 1979).

¹² According to Elster, Vom Rubel, p. 16, the Russian central bank began in 1895 to buy and sell credit rubles at the prevailing exchange rate, which meant the actual “transition of Russia to a gold currency.”

¹³ According to my unpublished national income calculations, the average investment rate in the gold standard era was circa 9 percent; the annual growth rate of the economy was circa 3.6 percent, yielding an average capital-output ratio of about 2.5. I have also calculated that the growth rates of NNP and net capital were roughly equivalent, so the marginal and average capital-output ratios should have been similar.

¹⁴ Comparisons of my estimates with Engeev's reveal that the principal differences are due to his overstatement of both interest and dividend payments and net tourist expenditures for the pre-gold standard era. I should stress that the early period comparison should not be taken too seriously because, prior to 1885,1 had to resort to simple extrapolations. Engeev's estimates are surprisingly close to mine for the gold standard era, although there is disagreement about the separate accounts. Engeev's methodology was rather crude. Typically, he would estimate a particular item in one year and then assume that this amount held for the entire period. It is thus surprising that Engeev's figures were not further off the mark relative to my own.

¹⁵ On this point see Sonntag, John, “Tsarist Debts and Tsarist Foreign Policy,” Slavic Review, 27 (Dec. 1968), 529–41.CrossRefGoogle Scholar

¹⁶ For a Soviet attack on this policy of accumulating gold reserves, see Bukovetski, A. I., “Svobodnaia nalichnost' i zolotoi zapas tsarskogo pravitel'stva v kontse XlX-nachale XX v” (“Free Accounts” and the gold supply of the tsarist government from the end of the XIX to the beginning of the XX centuries), in Viatkin, M. P., ed., Monopolii i inostranny /capital v Rossii (Monopoly and foreign capitalin Russia) (Moscow, 1962), pp. 359–76.Google Scholar

¹⁷ These figures are calculated from Engeev, “O platezhnom balanse,” p. 74.

¹⁸ See the sources to Table 2 for the gold production statistics. For the gold standard era, Engeev makes the mistake of concluding that Russia continued to use foreign borrowing to accumulate gold reserves. This mistake is explained by the fact that he included gold in circulation in his figures.

¹⁹ Spitäller, Erich, “A Survey of Recent Quantitative Studies of Long-Term Capital Movements,” in International Monetary Fund, Staff Papers, 18 (March 1971), pp. 189–217.Google Scholar

²⁰ Ibid., pp. 189–217.

²¹ McKay, Pioneers for Profit, ch. 1.

²² Of course, interest rate comparisons may not appropriately capture the external rate of return on capital. The Russian state sought to raise the rate of return on direct investment through various tax and tariff policies, and it is possible that all marginal rates of return were not equalized as is assumed here. Nevertheless, I have no choice but to use interest rate differentials as the proxy for capital costs because of the enormous difficulty of preparing comparable figures on rates of return (dividends plus anticipated capital appreciation adjusted for risk) on direct investment. My own guess is that the Russian (and world) capital market operated efficiently enough so as to make these interest rate comparisons reasonably representative.

²³ Gregory and Sailors, “Russian Monetary Policy,” pp. 839–42.

²⁴ This does not suggest that foreign capital inflows failed to affect the exchange rate. Obviously, if they had been less the exchange rate would have dropped, ceteris paribus. What it does indicate is that variations in the exchange rate are explained (in a statistical sense) by variations in the excess demand for money.

²⁵ This finding supports Crisp's earlier arguments in favor of the gold standard; Studies in the Russian Economy, ch. 4.

²⁶ The Soviet conceptual definition of the raschetny balans is that adopted by the League of Nations in 1938 and is described in Frei, L. I., Osnovnye problemy mezhdunarodnykh raschetov (Fundamental problems of international accounts) (Moscow, 1945), pp. 30–33.Google Scholar

²⁷ Migulin, Reforma denezhnago obrashcheniia, chs. 1–3, and Engeev, “O platezhnom balanse,” pp. 72–84.

²⁸ Ol's estimates are found in S. F. Sharapov, Tsifrovoi analiz raschetnogo balansa Rossii za 15-letie, Doklad obshchestvu dlia sodeistviia russkoi promyshlennosti i torgovli na osnovanii tsifrovykh dannykh P. V. Olem (Quantitative analysis of Russia's balance of payments for fifteen years: a report to the Society for Cooperation of Russian Industry and Trade based upon the estimates of P. V. Ol') (St. Petersburg, 1897), Intro. Vyshnegradski's findings are summarized in Bovykin, “K voprosu o roll inostrannogo kapital a,” and in Girault, Réné, Emprunts russes el investissemenls francais en Russie, 1887–1914 (Paris, 1973), p. 95.Google Scholar

²⁹ Khrulev, S. S., Finansy Rossii i ee promyshlennost' (Finances of Russia and her industry) (Petrograd, 1916)Google Scholar. I was unable to obtain a copy of the original Khrulev study. His results are, however, summarized in Sidorov, Arkadij, “Zur Finanzlage Russlands vor 1914: Staatshaushalt und Staatsschuld,” in Geyer, Dietrich, ed., Wirtschaft und Gesellschaft im vorrevolutionären Russland (Koln, 1975), pp. 277–301.Google Scholar

³⁰ Pasvolsky, Leo and Moulton, Harold G., Russian Debts and Russian Reconstruction (New York, 1924)Google Scholar, appendix IV.

³¹ For examples see Lyashchenko, P. L., History of the National Economy of Russia to the 1917 Revolution, trans. Herman, L. M. (New York, 1949), p. 718Google Scholar; Sidorov, Zur Finanzlage Russlands, p. 264.

³² Bukovetski, “‘Svobodnaia nalichnost,’ “pp. 359–76.

³³ Gregory, Paul, “Russian National Income in 1913: Some Insights into Russian Economic Development,” Quarterly Journal of Economics, 90 (Aug. 1976), 445–60.CrossRefGoogle Scholar

³⁴ Société des Nations, Balance des payements, 1938 (Geneva, 1939).Google Scholar

³⁵ Obzor vneshnei torgovli Rossii po evropeiskoi i aziatskoi granitzam (Survey of the foreign trade of Russia across European and Asian borders) (St. Petersburg: Departament tamozhennykh sborov, 188S to 1914 annual editions).

³⁶ Miller, Margaret, The Economic Development of Russia 1905 to 1914 (2nd ed.; London, 1967), pp. 40–45Google Scholar; Sonntag, Tsarist Debts, pp. 529–41.

³⁷ Sonntag, Tsarist Debts, pp. 536–38.

³⁸ For example, see Obzor vneshnei torgovli za 1908 god, pp. 5–7.

³⁹ Pokrovsky, V. I., ed., Sbornik svedenii po istorii i statistike vneshnei torgovli Rossii (Collection of information about the history and statistics of foreign trade in Russia), Vol. 1 (St. Petersburg: Departament tamozhennykh sborov, 1902), pp. 14–35.Google Scholar

⁴⁰ B. V. Avilov, ed., “Prilozhenie k st. Ekonomicheskoe razvitie Rossii v XIX i v nachale XX veka” (Appendix to the article: economic development of Russia in the XIX and early XX centuries), Entsiklopedicheski slovar' Granat (Encyclopedic dictionary Granat), 7th ed., vol. 36, pt. IV, lxvi.

⁴¹ Dvoretski, E. V., Rossiiskaia statistika vneshnei torgovli kak istoricheski istochnik, Avtoreferat dissertatsii (Russian statistics of foreign trade as a historical source, dissertation abstract) (Moscow, Akademiia nauk, Institut Istorii SSSR, 1974).Google Scholar

⁴² For a discussion of the foreign policy implications of the Russian balance of payments, see Bemd Bonwetsch, “Handelspolitik und Industrialisierung. Zur aussenwirtschaftlichen Abhängigkeit Russlands,” in Geyer, ed., Wirtschaft und Gesellschaft, pp. 277–301.

⁴³ For Sergei Witte's own assessment of the potential contribution of foreign capital to Russia's economic development, see Von Laue, Theodore, “A Secret Memorandum of Sergei Witte on the Industrialization of Russia,” Journal of Modern History, 26 (March 1954), 60–74.CrossRefGoogle Scholar

⁴⁴ Lenin, Vladimir I., Polnoe sobranie sochineii. Tom 3: Razvitie Kapitalizma v Rossii (Complete collection of writings. Vol. 3: Development of capitalism in Russia) and Vol. 27: Imperializm kak vyshchaia stadiia kapitalizma (Imperialism: the highest stage of capitalism) (Moscow, 1958).Google Scholar

⁴⁵ Bonwetsch, “Das ausläandische Kapital in Russland,” p. 415. In particular, the works of Bovykin and Gindin are viewed as a revision of the “half-colony” view of the Stalin era.

⁴⁶ The French in particular, with their massive holdings of Russian debt, kept a close watch on Russian capital markets and published numerous surveys of the Russian economy. An example is the series Les finances de la Russie, d'apres les documents officiels, published by the central library of the French railroads.

⁴⁷ For example, Pasvolsky and Moulton, Russian Debts.

⁴⁸ The nalichnost' data were reported in the Ezhegodnik ministerstvafinansov (Yearbook of the Ministry of Finance) series, section heading: Kassovy otchet. A time series of nalichnost' data is provided, in Gindin, Russian Commercial Banks, pp. 452–53.

⁴⁹ These data are discussed in Bovykin, , “K voprosu o roli inostrannogo kapitala,” and are given in Russki denezhny rynok, 1908–1912 (The Russian money market, 1908–1912) (St. Petersburg: Osobennaia kantseliaria po kreditnoi chasti, 1914)Google Scholar, diagram 3, and in Vainshtein, Narodnoe bogatstvo, p. 435.

⁵⁰ For a discussion of this matter, see Bovykin, “K voprosu o roli inostrannogo kapitala.”

⁵¹ Ol', Pavel V., Inostrannye kapitaly v narodnom khoziaistve dovoennoi Rossii, Materialy dlia izucheniia estestvennykh proizvoditel'nykh sil SSSR (Foreign capital in the national economy of prewar Russia: materials for the study of the natural productive forces of the USSR), No. 53 (Leningrad, 1925).Google Scholar

⁵² Bonwetsch, Das ausländische Kapital in Russland, p. 416. Bonwetsch comes to this adjustment by comparing detailed studies of French and German capital with Ol's own estimates.

⁵³ Ol', Inostrannye Kapitaly, p. 9.

⁵⁴ For analyses of the Ol' data, see Bonwetsch, Das auslandische Kapital in Russland; McKay, Pioneers for Profit, pp. 28–36; Bovykin, “K voprosu o roli inostrannogo kapitala”; Vainshtein, Narodnoe bogatstvo, pp. 439–40; Gindin, Russkie kommercheskie banki, pp. 395–403.

⁵⁵ Sharapov, Tsifrovoi analiz, statistical appendix prepared by Ol'.

⁵⁶ Vainshtein, Narodnoe bogatstvo, pp. 441–43.

⁵⁷ Strumilin, Stanislav G., Statistiko-ekonomicheskie ocherki (Statistical-economic essays) (Moscow, 1958), pp. 519 and 686.Google Scholar

⁵⁸ Astrov, Nicholas J., The Municipal Government and the All-Russian Union of Towns (New Haven, 1929), pp. 148–49.Google Scholar

⁵⁹ Gindin, Russkie kommercheskie banki gives a foreign capital percentage of about 50 percent. Vainshtein's proportion is 83 percent.

⁶⁰ Astrov, Municipal Government, p. 148.

⁶¹ See Ol's discussion of these points in Sharapov, Tsifrovoi analiz, pp. 17–20.

⁶² Numbers of Russian and foreign travelers crossing Russian borders in both directions were reported regularly in various official publications (Obzor vneshnei torgovli, Ezhegodnik ministerstva finansov)under the heading “Movement of passengers.”

⁶³ S. Patakov, “Vneshnee passazhirskoe dvizhenie mezdu Rossiei i drugimi gosudarstvami (External movement of passengers between Russia and other countries), in Ezhegodnik Rossii 1909 g. (Yearbook of Russia, 1909), LXXIII; Opyt priblizitel'nogo ischisleniia narodnago dokhoda po razlichnym ego istochnikam i po razmeram v Rossii (An attempt to approximate national income in Russia) (St. Petersburg: Departament okladnykh sborov, 1906), p. 91.Google Scholar

⁶⁴ Most of these data are reported in the Obzor vneshnei torgovli series, heading ldquo;Foreign sailings.”