What was the Witte system?

Answer 1

The Witte System was Sergei Witte's (the Minister of Finance in Russia at this time) methods of modernising Russia's economy in the 1890's. It included features such as putting Russia on the gOLD Standard in 1897, making the Rouble "stronger" as it was now readily convertible on the international money markets. It also placed confidence in foreign investment (and thus encouraged it) as the repayments of loans was linked to the Gold Standard, as Witte understood that foreign investment would act as a substitute for the lack of home capital. Witte also recognised the importance of the railways in Russia as they would boost heavy industry in the exploitation fo Russia's rich resources (coal, iron, oil etc.) railways would also provide a much needed form of transport for exports and freight that Russia's vast land required. Witte helped initiate the Trans-Siberian railway (although this was more as a prestige project). As part of the Witte system, a strong(er) banking system was established which helped channel middle-class savings into industry. Furthermore, Witte placed tariffs and high taxation rates in Russia in oder to raise revenuse to help "balance the books" as well as reduce imports, yet this had the primary effect of impoverishing the domestic.

This all worked quite well with Russia's industry rapidly developing and the economy strengthening by 8.5% 1906-1914.

If you wasn't looking for such detail, basically it was this system designed by this guy with a big beard to make Russia up to date.