Stuart Thompstone
Russian Participation in International Commerce before 1914 (Trans. from English - Y.A.Petrov.),
in: Ekonomicheskaja istorija. Ezhegodnik (Economic Hystory. Yearbook). 2002, Moscow: ROSSPEN, 2003, p.67-91.

Summary

This article evaluates the strategies adopted by Russian traders, companies and banks to increase the country's participation level in international commerce before 1914. It suggests that, when the obstacles to a significant Russian involvement in this sphere of economic activity are taken into account, the performance of the Russian business sector is by no means as disappointing as its critics have hitherto suggested.

Lack of training opportunities for young, aspiring international traders, the difficulty of obtaining substantial credits from the main international financial centers as London, and the large capital base that international trading at the time required, posed a significant entry barrier to all but the leading Russian commercial enterprises. Additionally the structure of Russia's international trade generally favored commercial undertakings headquartered in the importing or exporting country rather than in Russia. In the international commodity export trade the evolution of commercial practices allied with the transport and communications revolution in the second half of the nineteenth century favored firms based in the importing countries. Additionally it was more commercially attractive for Russian firms to compete with international firms in trading transactions between the Russian producer or consumer and the export or import port, as appropriate, rather than challenging foreign competition on the more risky leg between the port and the foreign producer or consumer.

In the final decades of tsarism Russian banks and railway companies offered keen competition to Russian merchant houses engaged in international competition but such companies were able to encroach on the business of foreign owned trading houses too. By 1914 Russian banks, railway and shipping companies, exporting either on a commission basis or on their own account, were significant players in the commodity export trade. Russia's high tariff barriers, which increased Russian industry's production costs, prevented Russian manufacturers from competing effectively in export markets but textile manufacturers and the banks, with which they were closely associated, increasingly controlled the raw materials import trade required for textile production. An examination Russia's late nineteenth century commodity import trade, which experience elsewhere suggests native commercial enterprise would be able to compete on more favorable terms, does show Russian commerce in a favorable light. Russian tea traders in particular were able to expand their activities from the domestic market, to play an important role in the country's international tea trade, setting up tea processing plants and trading offices in the world's main tea producing countries, as well as retail outlets in Western Europe and the United States.

The article concludes that the structure of Russia's international trade made significant local involvement unlikely. Russia followed the general global pattern. In those branches of international commerce, which experience elsewhere suggested were potentially promising, Russian performance was quite creditable.

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