Financiers and Generals: Debates about Military Spending in the Ruling Circles of the Russian Empire (1860s–Early 1890s)

ISSN 1019-3316, Herald of the Russian Academy of Sciences, 2022, Vol. 92, Suppl. 8, pp. S713–S728. © The Author(s), 2022. This article is an open access publication. Russian Text © The Author(s), 2022, published in Rossiiskaya Istoriya, 2022, No. 3. Financiers and Generals: Debates about Military Spending in the Ruling Circles of the Russian Empire (1860s–Early 1890s) V. L. Stepanov Institute of Economics, Russian Academy of Sciences, Moscow, Russia e-mail: Received October 28, 2022; revised November 1, 2022; accepted November 1, 2022 Abstract—Debates in the ruling circles of the Russian Empire about its military spending from the 1860s to the early 1890s are considered. The positions of opposing government departments are examined and analyzed: the Ministry of Finance, the State Control, the Department of State Economy, and some other central institutions demanded to measure the costs of the army with limited Treasury resources, and the Ministry of War advocated a significant increase in allocations for the needs of state defense, appealing to the strengthening armed forces of Western powers. Particular attention is paid to economic and foreign policy factors that to varying degrees influenced the amount of funding for the army—crises in the national economy, crop sizes, the state of industry and trade, budget balance, the level of public debt, the threat of international conflicts, local hostilities on the outskirts of the empire, etc. The author concludes that ultimately the government failed to bring the army into full compliance with the requirements of time, which was especially evident in the wars of the early 20th century. Keywords: economy, finance, budget, army, military spending, interdepartmental conflicts DOI: 10.1134/S101933162214009X In peacetime, prerevolutionary Russia allocated from a quarter to a third of the state budget for defense needs, ranking first in such spending among other great powers.1 The peculiarities of the geopolitical position, the vast territory, the length of the borders, and the difficulty in mobilizing troops forced the empire to maintain the largest army in the world, and the cost of it constantly increased due to rising prices for weapons, ammunition, provisions, fodder, and uniforms. Such an amount of inefficient spending was extremely burdensome for a poor country with a low level of industrial development and a meager financial base; it was one of the main causes of budget deficits and an increase in public debt. The debates of the highest ranks about the size of appropriations for the army were invariably accompanied by disagreements within the bureaucratic elite and caused constant tension in relations between the military and financial departments, since it was about especially large “sacrifices” from the treasury. The development of military capability was largely determined by the outcome of these debates. 1 Lapin, V.V., “Voiennye raskhody Rossii v XIX veke” [Russian Military Spending in the 19th Century], Problemy sotsial’noekonomicheskoi istorii Rossii. K 100-letiyu so dnya rozhdeniya Borisa Aleksandrovicha Romanova [Problems of the Socio-economic History of Russia: To the 100th Anniversary of the Birth of Boris Aleksandrovich Romanov], St. Petersburg, 1991, pp. 148–160. Until now, this long-term confrontation between the two ministries has not attracted the attention due from researchers. Single episodes relating to 1905– 1914 are covered in the books by A.L. Sidorov2 and K.F. Shatsillo who spoke critically of those who groundlessly reproached the government for insufficient funding of the armed forces, without taking into account the economic state of the country.3 W. Fuller in his monograph pointed to the inability of the government of Alexander III to reconcile civil and military interests. In a separate chapter, this historian described Russia’s military spending in 1880–1903 and examined the constant interdepartmental friction that arose in preparing budget estimates. However, this part of the book is actually a general overview based on a limited set of sources. In addition, for some unknown reason, Fuller completely ignored the conflicts between ministries in the 1860s and 1870s. In his assessments, he, in fact, sided with the generals who argued that the financial department solving economic problems neglected the needs of the army.4 2 Sidorov, A.L., Finansovoe polozhenie Rossii v gody Pervoi mirovoi voyny (1914–1917) [The Financial Situation of Russia during the First World War (1914–1917)], Moscow, 1960. 3 Shatsillo, K.F., Ot Portsmutskogo mira k Pervoi mirovoi voyne. Generaly i politika [From the Peace of Portsmouth to the First World War. Generals and Politics], Moscow, 2000, p. 11. 4 Fuller, W.C., (1985) Civil-Military Conflict in Imperial Russia 1881–1914, Princeton; New Jersey, pp. XXIII, 47–74. S713 S714 STEPANOV V.V. Lapin pointed to the “palpable tendentiousness” of Fuller, who “is more sympathetic to the military than to civilians.”5 A.J. Rieber, identifying the main bureaucratic “parties” in the era of the Great Reforms, only mentioned the serious differences between “economists” and “the military” in determining the level of spending on the armed forces.6 The aggravation of contradictions between financiers and generals began in the 1860s in connection with the urgent need to modernize the army. The Crimean War revealed serious shortcomings of the Russian military machine, i.e., the backwardness of the recruitment system, the low training level of the officer corps and senior command personnel, the heterogeneity of the management structure, the unsatisfactory organization of supply and rear services, and the lack of modern weapons. The upper echelons of the Empire began to discuss possible reforms taking into account the growing combat capacity of European powers and the improvement in military equipment. However, this required large allocations, while the country was experiencing economic difficulties: the cost of a lost war exceeded 500 million rubles; a huge deficit was covered from year to year through loans and the issuance of paper money, which caused an increase in public debt and depreciation of the ruble. Financial disruption was accompanied by industrial and commercial crises.7 Therefore, in order to balance the budget, all departments in the second half of the 1850s had to reduce their costs and abandon many undertakings. The Minister of War, General of Artillery N.O. Sukhozanet, who, on the instructions of Alexander II, did everything possible to reduce the cost of the army, almost without any innovations, could not ignore this fact. The situation changed after Lieutenant General D.A. Milyutin replaced him in 1861. On January 15, 1862, the emperor approved the report submitted by him, outlining transformations in all areas of the military system: from the military strength, organization, and recruitment of troops to the engineering, quartermaster, medical, educational, an (...truncated)