In the second half of last century a revolution was brought about in the manufacturing industry generally by the emancipation of the serfs, the rapid extension of railways, the facilities for creating limited liability companies, and by certain innovations in the financial policy of the Government. The emancipation put on the market an unlimited supply of cheap labour; the construction of railways in all directions increased a hundredfold the means of communication; and the new banks and other credit institutions, aided by an overwhelming influx of foreign capital, encouraged the foundation and extension of industrial and commercial enterprise of every description. For a time there was great excitement. It was commonly supposed that in all matters relating to trade and industry Russia had suddenly jumped up to the level of Western Europe, and many people in St. Petersburg, carried away by the prevailing enthusiasm for liberalism in general and the doctrines of Free Trade in particular, were in favour of abolishing protectionism as an antiquated restriction on liberty and an obstacle to economic progress.
At one moment the Government was disposed to yield to the current, but it was restrained by an influential group of conservative Political Economists, who appealed to patriotic sentiment, and by the Moscow manufacturers, who declared that Free Trade would ruin the country. After a little hesitation it proceeded to raise, instead of lowering, the protectionist tariff. In 1869-76 the ad valorem duties were, on an average, under thirteen per cent., but from that time onwards they rose steadily, until the last five years of the century, when they averaged thirty-three per cent., and were for some articles very much higher. In this way the Moscow industrial magnates were protected against the influx of cheap foreign goods, but they were not saved from foreign competition, for many foreign manufacturers, in order to enjoy the benefit of the high duties, founded factories in Russia. Even the firmly established cotton industry suffered from these intruders.
Industrial suburbs containing not a few cotton factories sprang up around St. Petersburg; and a small Polish village called Lodz, near the German frontier, grew rapidly into a prosperous town of 300,000
inhabitants, and became a serious rival to the ancient Muscovite capital. So severely was the competition of this young upstart felt, that the Moscow merchants petitioned the Emperor to protect them by drawing a customs frontier round the Polish provinces, but their petition was not granted.
Under the shelter of the high tariffs the manufacturing industry as a whole has made rapid progress, and the cotton trade has kept well to the front. In that branch, between 1861 and 1897, the number of hands employed rose from 120,000 to 325,000, and the estimated value of the products from 72 to 478 millions of roubles. In 1899
the number of spindles was considerably over six millions, and the number of automatic weaving machines 145,000.
The iron industry has likewise progressed rapidly, though it has not yet outgrown the necessity for Government support, and it is not yet able to provide for all home wants. About forty years ago it received a powerful impulse from the discovery that in the provinces to the north of the Crimea and the Sea of Azof there were enormous quantities of iron ore and beds of good coal in close proximity to each other. Thanks to this discovery and to other facts of which I shall have occasion to speak presently, this district, which had previously been agricultural and pastoral, has outstripped the famous Ural region, and has become the Black Country of Russia. The vast lonely steppe, where formerly one saw merely the peasant-farmer, the shepherd, and the Tchumak,driving along somnolently with his big, long-horned, white bullocks, is now dotted over with busy industrial settlements of mushroom growth, and great ironworks--some of them unfinished; while at night the landscape is lit up with the lurid flames of gigantic blast-
furnaces. In this wonderful transformation, as in the history of Russian industrial progress generally, a great part was played by foreigners. The pioneer who did most in this district was an Englishman, John Hughes, who began life as the son and pupil of a Welsh blacksmith, and whose sons are now directors of the biggest of the South Russian ironworks.
The Tchumak, a familiar figure in the songs and legends of Little Russia, was the carrier who before the construction of railways transported the grain to the great markets, and brought back merchandise to the interior. He is gradually disappearing.
Much as the South has progressed industrially in recent years, it still remains far behind those industrial portions of the country which were thickly settled at an earlier date. From this point of view the most important region is the group of provinces clustering round Moscow; next comes the St. Petersburg region, including Livonia; and thirdly Poland. As for the various kinds of industry, the most important category is that of textile fabrics, the second that of articles of nutrition, and the third that of ores and metals. The total production, if we may believe certain statistical authorities, places Russia now among the industrial nations of the world in the fifth place, immediately after the United States, England, Germany, and France, and a little before Austria.
