minister conceived the project of creating a
fictitious capital by inflating the paper currency; but this idea
proved unpopular. When broached in the Council of State it encountered
determined opposition. Some of the members of that body, especially M.
Bunge, who had been himself Minister of Finance, and who remembered
the evil effects of the inordinate inflation of the currency on foreign
exchanges during the Turkish War, advocated strongly the directly
opposite course--a return to gold monometallism, for which M.
Vishnegradski, M. Witte's immediate predecessor, had made considerable
preparations. Being a practical man without inveterate prejudices, M.
Witte gave up the scheme which he could not carry through, and adopted
the views of his opponents. He would introduce the gold currency as
recommended; but how was the requisite capital to be obtained? It must
be procured from abroad, somehow, and the simplest way seemed to be to
stimulate the export of native products. For this purpose the railways
were extended,* the traffic rates manipulated, and the means of
transport improved generally.

* In 1892, when M. Witte undertook the financial
administration, there were 30,620 versts of railway, and at
the end of 1900 there were 51,288 versts.

A certain influx of gold was thus secured, but not nearly enough for the
object in view.* Some more potent means, therefore, had to be employed,
and the inventive minister evolved a new scheme. If he could only induce
foreign capitalists to undertake manufacturing industries in Russia,
they would, at one and the same time, bring into the country the capital
required, and they would cooperate powerfully in that development of the
national industry which he so ardently wished. No sooner had he roughly
sketched out his plan--for he was not a man to let the grass grow under
his feet--than he set himself to put it into execution by letting it
be known in the financial world that the Government was ready to open
a great field for lucrative investments, in the form of profitable
enterprises under the control of those who subscribed the capital.

* In 1891 the total value of the exports was roughly
70,000,000 pounds. It then fell, in consequence of bad
harvests, to 45 millions, and did not recover the previous
maximum until 1897, when it stood at 73 millions.
Thereafter there was a steady rise till 1901, when the total
was estimated at 76 mill