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

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.

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.
Until now, this long-term confrontation between the two ministries has not attracted the attention due from researchers. Single episodes relating to [1905][1906][1907][1908][1909][1910][1911][1912][1913][1914] are covered in the books by A.L. Sidorov 2 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  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 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, and judicial components. Milyutin was aware of the difficulty associated with accomplishing the tasks in the context of extremely limited financial means but felt that the War Ministry would "incur a heavy reproach if it only cared 5 117-137. about reducing the budget to the detriment of the welfare and improvement of the army." 8 He repeatedly petitioned Alexander II for increasing projected estimates and proposed in addition to allocate one-time extraordinary appropriations for various needs of the troops. This was contrary to the policy of the financial and control departments, which insisted on strict adherence to the rules introduced on May 22, 1862, for the preparation and execution of the budget list, which established a clear classification of military expenditures by paragraphs and articles, the procedure for moving money in the estimate of the ministry, and a stricter reporting system and control over the distribution of funds. The financiers, protecting the interests of the treasury, sought to reduce the already allocated amounts, and tried in every possible way to limit the extra-budget loans that had become quite sizeable. 9 As Milyutin admitted, "For any minister of finance, the main stumbling block is the Ministry of War." 10 Therefore, his demands led to clashes with M.H. Reutern who headed the financial department in 1862-1878 and V.A. Tatarinov who in 1863-1871 was the State Comptroller. They were supported by K.V. Chevkin, who in 1863-1874 chaired the Department of State Economy of the State Council. 11 "Reutern constantly complained and grumbled about the excessive, in his opinion, military spending," Milyutin recalled, "and Tatarinov, carried away by the desire to elevate the control unit to the level of a court of no appeal over the actions of all ministries, constantly challenged me to protest against his decisions regarding military orders, decisions that, in my opinion, were beyond the competence of the State Control Office, and often unfair and unfounded." No less "fierce skirmishes" occurred with S.A. Greig who in 1866-1873 held the post of Deputy Minister of Finance and sometimes replaced Reutern and in 1874-1878 found himself in the chair of the State Comptroller. "Wishing to appear as a zealous protector of the treasury," Milyutin wrote, "General Greig drove me out of patience with his arrogance, stubbornness, and doctoral tone. In March 1862, having barely taken office, Reutern, at a meeting of the Finance Committee, demanded that the Minister of War reduce the 1863 estimate by 15 million rubles, while Chevkin "begged" Milyutin to "save Russia from destruction." 13 Alexander II did not agree to such a significant reduction; however, the financiers continued to put pressure on Milyutin. "The War Department," he recalled bitterly, "was to be limited only to satisfying the most urgent, impelling needs, abandoning all enterprises and improvements associated with a new expense." 14 A particularly strong pressure on the department was associated with the allocation of significant funds in order to suppress the uprising in the Kingdom of Poland and prepare for a possible war with European powers, which led to an increase in spending from 114.2 million rubles in 1862, up to 155.6 in 1863 and 155.1 million rubles in 1864. 15 Contradictions between the ministries also arose in the field of railway construction. The military department criticized the project for the construction of the rail network developed in 1862 by the Main Directorate of Railways (GUPS). Milyutin inspired a series of articles by a member of the Advisory Committee at the Main Directorate of the General Staff, Colonel N.N. Obruchev 16 published in the "Weekly Supplements" to the newspaper Russian Invalid in 1864, and then published as a separate brochure. In them, the plans of the GUPS were criticized as insufficiently taking into account the tasks of the defense of the empire, and at the same time, the main directions of the highways were outlined, which were supposed to ensure the concentration of troops in the border regions. 17 However, the considerations of the War Department were not taken into account due to the objections of Reutern who considered railroad tracks primarily as a factor in economic development. Milyutin was not satisfied with the new project for the construction of the railway network presented by the Ministry of Railways (MPS) at the end of 1868. On his instructions, Obruchev, by that time already a Major General, drew up a note, in which he identified the likely future theaters of military operations and again 13  Due to budget deficits in the second half of the 1860s, the military budget was cut repeatedly and, as a result, expenditures decreased in 1865 to 140 million rubles and in 1866 to 129.7 million rubles. 22 In January 1866, Milyutin wrote to Alexander II that, postponing the satisfaction of the urgent needs of the army, "sooner or later we will again be taken by surprise by a new war, when it is no longer possible to make up for the lost time." 23 He repeatedly tried to reason with Reutern, proving to him the danger posed by weakening the combat capability of the troops. However, his opponent invariably replied that it was his business to balance the costs with the available resources and not delve into special military issues. Nevertheless, the Treasury had to find additional funds for urgent needs and, in the government and public circles, the generals were often blamed for the financial exhaustion of Russia. 24 Refuting these accusations, in 1865, Obruchev published in the Military Collection and in a separate edition an extensive essay on financing the army. Having considered various items of spending, the author stated that the amounts allocated to the ministry were not only far from excessive, but did not even satisfy the most pressing military needs. In the autumn of 1866, on the eve of the discussion on the budget estimates for the next year, Reutern reported to Alexander II that the only way to balance the budget was to reduce military spending by at least 20 million rubles. Milyutin, for his part, presented the autocrat with a general overview on the state of the army with a list of unresolved problems in its organization, rearmament, and supply, criticizing the opinion about the excessive number of Russian troops compared to other countries and the excessive costs of maintaining them. 26 On October 6, the Emperor chaired a meeting of the Council of Ministers where a policy note on measures and changes needed for stabilizing the economy compiled by Reutern was discussed. 27 Presenting a "gloomy picture" of the country's financial situation, he recommended cutting all departmental estimates, and first of all, the military one, which was met with a sharp protest from Milyutin. Both ministers firmly insisted on fulfilling their demands, threatening to resign. As a result, Alexander II ordered the heads of all departments to minimize the expenses planned for the next year. However, during a personal meeting with Milyutin, he allowed him to reduce costs only to the level at which there would be no weakening of the "combat strength" of the army. 28 Meanwhile, Obruchev argued in a new pamphlet that Russia's "state existence" since the time of Peter I was a continuous financial and economic crisis expressed in a huge debt of the treasury and a disorder in monetary circulation. The government policy based on serfdom and bureaucratic regulation led to a significant lag behind Western countries manifested in the emerging stagnation in agriculture; an acutely felt underdevelopment of industry, communications, and credit; and the dominance of foreign merchants. Economic progress, according to Obruchev, was only possible in Russia after the emancipation of "people's productivity," giving society wide freedom in arranging its private interests and turning the downtrodden peasant into a full-fledged individual with growing needs and means to satisfy them. The general was skeptical about the government's attempts to get out of financial difficulties by reducing the necessary public spending, sacrificing the country's urgent needs for the sake of plugging holes in the budget. 29 In the midst of continuing "unfounded complaints" from both "financial authorities" and the "public," Milyutin on January It proved that, despite the starting reform of the organization and supply of troops, the costs not only did not increase but even decreased, and in the event of further restrictions on the number and allowance of military units and formations, the empire would be "disarmed" in front of the growing power of neighboring states. "Spending on the army," wrote Obruchev "is the normal need of Russia, it is the burden that is inextricably linked with its historical existence and is redeemed by its independence and political significance." 32 Nevertheless, the Ministry of Finance did not agree with such arguments and officially criticized and refuted them. 33 However, in subsequent years, the amounts allocated to the military department gradually increased, which was largely due to the expansion of the government's financial capabilities. In the years 1869-1873, Russia experienced an economic recovery manifested in the rapid growth of the joint-stock establishment, industrial development, and active construction of railways, increased exports, and trade turnover. Revenues to the treasury increased significantly; in the first half of the 1870s, Russia ran an ordinary budget surplus, a significant supply of gold and silver was accumulated in the change fund, and the ruble rate rose. This coincided with the start of a new stage of military reforms. The brilliant victories of the German army over France in 1870 made a strong impression on Russia. "Minds were amazed at the enormity of the military forces deployed by Prussia, the perfection of their In November 1870, two commissions were formed to develop provisions on universal military service, as well as on relief, local, reserve troops, and a state militia. 35 In January 1871, as Milyutin noted, "the upcoming new transformations, in the form of a significant increase in our armed forces in case of war, should, without a doubt, require new funds of money." 36 He hoped that the relative streamlining of finances and Russia's obvious unpreparedness to fight against noticeably strengthened neighboring powers would force his opponents to make concessions. However, these hopes were dashed: the generals were still blamed for "ruining the state." Now critics referred to the example of the North German Confederation, which was able to put up a huge army although it spent much less on maintaining troops in peacetime than Russia. 37 Challenging such judgments, Milyutin instructed Obruchev to prepare a detailed analysis of the military budgets in both countries for 1870. A printed note with detailed tables, dated December 19, 1871, was sent to ministers and members of the Council of State. It explained the incorrectness of comparing the "gross" costs for the army of European states and Russia, which spent on each soldier half as much money as in Germany. The statistics cited by Obruchev showed that the impressive sums coming from the treasury were, in fact, significantly inferior to the expenditures of Germany and other great powers. Meanwhile, Russia, with its vast territory, unfavorable climate, underdevelopment of industry and transport, and the low level of people's education, needed much larger allocations for the formation of modern armed forces. The austerity policy pursued by the Treasury Department threatened the empire with military lag from their potential adversaries and loss of power. "The army," as Obruchev argued, "is a political, but at the same time a technical tool that requires the same continuous improvements as any other. If the very existence of the state requires the existence of this instrument, then it must be perfect, must stand on a level with other similar instruments of other states, and be ready to withstand the most stubborn struggle with them. Any  ation from these principles leads to disastrous consequences." A striking example of this was the defeat of Austria and France in the wars with Prussia, which, unlike its opponents, considered the army not as a burden on the economy, but as a force that ensures the very existence of the state. 38 In response, the Ministry of Finance criticized Obruchev's conclusions, also accompanying its considerations with numerous statistical tables. Rejecting accusations of "harmful thrift," Reutern's employees reproached the general for "completely unfair judgments," "ignorance of the facts and conditions of the case," and erroneous and biased use of numerical indicators. Their note stated that Obruchev, as a narrow military specialist, had forgotten about the real possibilities of the treasury. Meanwhile, "an army is strong only when its strength is not a burden for the country, when strong and proportional economic forces of the population stand behind the numerical armed force." Russia, using the lion's share of its income for the needs of the army, in this respect was in the first place in Europe, and in absolute terms, its military budget exceeded the similar appropriations of Germany and Austria-Hungary combined. 39 Obruchev, in turn, in a new note on April 10, 1872, objected: "Expenses for the army will always be a burden for the population, but this burden is the burden of its life, without which both its existence as a political body and the inviolability of its dignity are unthinkable, as well as its material and moral development." 40 This is where the controversy ended for the time being. According to Milyutin, it was purely "theoretical" in nature and had no consequences, since each side remained with its own opinion. 41 In July 1872, the Minister of War reminded the emperor of the "new sacrifices" that would be required in the course of the upcoming reform. "Inevitably, the financial issue had to come to the fore in connection with the highest considerations of strategy and politics," he wrote in his memoirs "and then the special tasks of the organization of the army itself and its reserves came forward." Recognizing that a decision on such an "important matter" cannot be pre- On February 16, prior to these meetings, Reutern submitted a note to the emperor in which he again stated that no European country allocated as much money to the army in peacetime as Russia, where in 1872 these funds accounted for 37% of the budget, while the Treasury was obliged to meet the increasing demands of other agencies from year to year for changes in various areas of public life. The Minister of Finance expressed fear that a further increase in military spending, not supported by appropriate sources of income, would destroy the first sprouts of economic well-being, give rise to huge budget deficits, deprive the government of the ability to allocate loans for supporting the national economy and private enterprise, force it to resort to predatory loan practices, and introduce new taxes, causing popular discontent and setting the stage for "destructive political and social trends." "To turn again on the path of annual deficits," he warned, "would mean leaving the road leading to the improvement of our finances, to the development of our economic condition, to the rise of the real and lasting power of Russia and to embark on the path that tends to upset finances, ruin the people, and to decrease the power of Russia, even militarily, for it would be vain to think that military power can increase when the economic forces of the state decline." 44 Reutern proposed to introduce a "normal" budget for the War Ministry for five years, i.e., to set an annual ceiling, beyond which no additional appropriations would be allowed. Such a system has never been practiced abroad, but in Russia, attempts have been made in this way to limit the expenditures of the treasury. In 1835, the finance minister E.F. Kankrin sent Nicholas I a draft "normal budget estimate" with a maximum expenditure for each department for the next year; however, during a detailed discussion of the budget, the estimated allocations significantly exceeded the planned limit. In 1857, on behalf of the Minister of Finance P.F. Brock, the Special Committee determined for three years "normal figures" for departmental estimates (except for the military and naval ministries). They even received the approval of the emperor, but then the Supreme Control Commission, which prepared the new estimated rules, recog- nized the budget caps as "an obvious deviation from the generally established concepts in financial affairs." 45 Reutern's note was reproduced and distributed among the participants of the panel. Already at its first meeting, Field Marshal Prince A.I. Baryatinskii said that in order to increase the armed forces of Russia, there was no need for a greater military budget but it would be sufficient to avoid unnecessary expenses by forming a special commission to find out the size of possible "savings." Reutern repeated the main points of his note, with which the participants were already familiar, and Prince Gorchakov and Chevkin called on generals for "thrift." For his part, Milyutin assured those present that he had no objection to the budget cap, but the conditions for its introduction required an agreement between the military and financial departments with the participation of the State Comptroller (at that time this position was held by A.A. Abaza). In fact, it was a concession that the minister made in the face of strong opposition to his plans. Meanwhile, a week later, Alexander II returned to the idea of Prince Baryatinskii and appointed the field marshal the head of the Financial Commission for consideration of military estimates, including Chevkin, Greig, Chairman of the Committee of Ministers P.N. Ignatiev, member of the State Council E.T. Baranov, and several generals. 46 However, all their efforts were reduced to petty criticism of the financial and economic activities conducted by the ministry. In July 1873, under the leadership of the prince, a note was drawn up for the emperor with a list of the alleged shortcomings. By order of Milyutin, his subordinates gave detailed explanations on all points of this "indictment." Ultimately, the work of the Commission proved to be inconclusive. 47 In the meantime, the financial department prepared and agreed with Milyutin and Abaza the Rules on the preparation, consideration, and execution of expenditure estimates of the Military Ministry for the five years 1874-1878, approved by Alexander II on July 4, 1873. The amount of expenses for 1874 was limited to 174.3 million rubles (five million rubles more than in 1873), and for 1875-1878 it was 179.2 million rubles per year. Changes were allowed when transferring funds to the estimates of other departments and vice versa. It was only allowed to request additional appropriations in the event of the outbreak of war, the equipment of a military expedition, and an increase in 45  prices for food and fodder. At the same time, the military department did not have to break down and allocate the entire annual limit to the estimated units and was permitted to deduct part of it to a special reserve fund for unforeseen expenses, redistribute loans between various departments, and transfer these amounts to the reserve fund balances that were not used by the end of the year, which had been previously supposed to be returned to the Treasury. 48 A commission including representatives of the three departments, which operated in 1874-1876 under the Chancellery of the Ministry of War, was engaged in adjusting and supplementing these rules (their new editions were approved by the emperor on June 26, 1874 and January 28, 1877 49 ).
In 1874 and 1875, the adopted norms were strictly observed but it was difficult for Milyutin to come to terms with the severe limitation of his financial capabilities. "After the sad outcome of the secret meeting on military affairs at the beginning of the year and with the establishment of a normal budget for the War Ministry," he wrote in his diary at the end of December 1873, "it is no longer possible for me to conduct the business of the military department with the independence and energy I had worked with so far for over 12 years." 50 As a result, the extensive transformations in the army outlined by the 1873 conference were greatly slowed down. "The War Ministry," Milyutin reported to the Emperor on January 1, 1876, "bearing in mind, on the one hand, this huge figure of forthcoming expenditures, and, on the other hand, a definite amount of the money resources put at its disposal by the normal budget, realized that the funds do not correspond to the goal and that despite the urgency of many changes, it is necessary to postpone them for quite a long period of time." 51 Despite the attained shaky compromise, interdepartmental disputes continued. Therefore, for example, in November 1873, at a meeting of the Committee of Ministers, Milyutin and Reutern entered into a "sharp debate" about the import of saltpeter into Russia for the production of gunpowder, and "a lot of unpleasant things were said to each other." 52  fere in all state affairs, according to Milyutin, "assuming with comic arrogance the appearance of an expert in financial matters." Soon he turned into "an ardent judge of all ministers" and "with his usual arrogance and swagger" accused them of "wastefulness," permitting himself "insolent antics," an "impudent tone," and "impertinent attacks" in relation to the military department. 53 In 1876-1882, extraordinary expenses related to the Russian-Turkish war of 1877-1878 amounted to 1.0754 billion rubles. 54 As a result, the country, as in the late 1850s, found itself in the grip of an acute financial crisis, which brought about huge budget deficits, a reduction in tax revenues, a sharp increase in public debt, a depreciation of the ruble, and galloping inflation. 55 In July 1878, Reutern, which had previously stubbornly opposed Russia's entry into the struggle against Turkey, lost his post to Greig. Milyutin, not without irritation, noted in his diary that he "is unlikely to improve Russia's finances, and may, for the sake of his arrogance, cause a lot of trouble." 56 Meanwhile, in 1878, the rule of five-year budget caps expired, and therefore, Greig, Milyutin, and the new State Comptroller D.M. Solskii convinced the Emperor on September 7, 1878, to extend the previously approved rules until the end of 1879 so that during this time they were able to consider the grounds for drawing up estimates for the Ministry in the future. 57 On March 23, 1879, following a report by the Minister of Finance, the emperor ordered the establishment of a Special High Commission under the chairmanship of Abaza to find ways to reduce public spending. 58 Abaza immediately sent Milyutin (who received the title of count on August 30, 1878) an official letter asking him to find a way to reduce the costs of his department. Milyutin replied that the War Department, with its modest budget, already at every step encountered obstacles to meeting the most urgent needs of the army, therefore, "any serious reduction in spending entails damage in the important matter of preserving the state's readiness for maintaining its political dignity." 59 Having consolidated his position 53  at the top, Count Milyutin was determined to achieve acceptable amounts of funding. In May 1879, he wrote to Greig that "the idea of establishing a normal budget for the War Department belongs entirely to the Ministry of Finance, which in 1873 determined the maximum amount of this budget in consideration of the funds of the State Treasury, and with no allowance for the needs of the War Department, from which it did not even require any prior information, and which had to match the costs with the funds given to him." 60 Realizing how difficult it was to determine accurately the size of a budget cap in this strenuous situation, Greig, in agreement with Solskii and Count Milyutin, proposed to the emperor to draw up an estimate of the War Ministry for 1880 on a general basis, and in the future to develop an optimal procedure for financing the army. On July 13, 1879, the emperor agreed to this step. 61 However, the State Comptroller in a report for 1879 noted that the administration of the military department, taking advantage of the abolition of previous restrictions, included in the estimate for the next year an amount exceeding the previous norm by 35 million rubles. 62 Therefore, Solskii deemed it necessary to consider possible options for curbing the growth of military spending. Alexander II ordered him to discuss them with Greig and Count Milyutin. In January 1880, the Minister of War was forced to admit the following: Until now, the lack of funds has constantly forced us to lag behind the Western European states in terms of military improvements and new measures; we were compelled to postpone or space out for many years even those measures that were recognized as the most urgent and indisputable and which in other states had long ago been implemented with the help of emergency financial allocations. Unfortunately, the state of our finances is such that even in the future one can hardly foresee that from this side there will be no obstacles to the right and fairly rapid course of change aimed at the development of our military organization in accordance with the political needs of Russia and the current state of military art. 63 In August 1880, Count Milyutin wrote a note criticizing the budget cap system and stating that it was impossible to calculate extraordinary costs accurately and to establish a single boundary for estimated costs with annual price increases. In his opinion, this would have made it necessary to reduce the actual strength of 60 Ibid, Fund 565, Inventory 1, File 2781, fols. 569 verso-570. 61  the army and even change the very organization of the armed forces in order to "adjust" the cost of their maintenance to the established amount. Nevertheless, the count offered a compromise and was ready to divide the annual estimate of his department into two parts: the ordinary one, determined taking into account military needs, and the maximum, extraordinary for emergency expenses, in excess of which additional appropriations were excluded. This fixed amount would have constituted the Ministry's reserve fund and would have been used as needed. 64 However, the Department of the State Treasury categorically objected to the establishment of such a fund and to giving the War Ministry full freedom to dispose of it because "such discretion can easily lead to the use of public funds to the detriment of the general state economy and to the imbalance of the country's funds, which should be the main determinant of the initial purpose of the upper limit for such expenses." 65 The prominent Kyivan economist N.H. Bunge, appointed in July 1880 as Deputy Minister of Finance, also disapproved this initiative. In a program note presented to the emperor on September 20 of the same year, he raised the question: "If the satisfaction of constant urgent military expenses should take place even when such expenses involve heavy sacrifices for the people and the state, then should it not also be necessary in difficult times to limit the one-time military costs that can be deferred, and will the government not act against the interests of the state by releasing money from the Treasury to form a fund, the direct expenditure of which there is no real need?" 66 In October 1880, Greig was replaced by Abaza, and Count T.A. Baranov took the chair of the Commission for the revision of departmental estimates. Count Milyutin tried to explain himself to the new minister. "I told him that his predecessors were completely wrong to consider me their worst enemy," he wrote in his diary, "that, on the contrary, I am glad to help the Minister of Finance with all my might in the sense of alleviating our financial difficulties; but at the same time, I hope that he, too, for his part, will reasonably weigh the urgent demands of national security in the present shaky political situation." The Count hoped that Abaza "will not be as presumptuous as Greig, nor as one-sided and stubborn as Reutern." 67 In addition, both ministers were politically like-minded people and played a prominent role in the liberal "coalition" that was formed in 1880-1881 around Count M.T. Loris-Melikov. Nevertheless, Abaza zealously defended the interests of his department. "Despite the restoration of a peaceful direction in our foreign policy, about a third of the expenditure estimate is allocated for the needs of the Military Ministry" he reminded Alexander II in December 1880. "Under such conditions, the Minister of Finance considers it his duty to express his conviction of the urgent need to take, at the direction of Your Imperial Majesty, such measures that could help reduce the funds now spent by the country to maintain its military forces." 68 When discussing the budget for 1881 in the State Council, Abaza stated that the financial breakdown was due to the exorbitant costs of the army and the only way to balance the budget was to reduce the number of troops and the amount of appropriations allocated to them. Count Milyutin objected that the scale of military construction did not depend on the "good will" of the government, but on the international situation and the combat power of neighboring powers. However, Abaza was supported by Solskii and the majority of the meeting participants. In March 1881, at the Special Office for Conscription, the Minister of Finance again insisted on reducing the number of soldiers when determining the number of new conscripts. 69 In May 1881, shortly after the accession of Alexander III to the throne, Bunge was replaced by Abaza and Count Milyutin by Infantry general P.S. Vannovskii, who enjoyed the personal trust of the new autocrat. However, this did not stop the struggle of financiers and generals. Vannovskii and Obruchev, who became chief of the General Staff, demanded money for the further modernization of the army. Their requests were fully justified, since the last war revealed many shortcomings in the organization, training, and supply of troops. The international situation did not rule out the possible involvement of Russia in armed conflicts. Despite the resumption in June 1881 and March 1884 of the Union of the Three Emperors, the Afghan (1885) and Bulgarian (1885-1886) crises significantly aggravated relations between the great powers. At the same time, the Russian army was noticeably inferior to its potential opponents in a number of indicators.
However, the plans of the generals were hindered by the post-war financial disorder, which was aggravated by the catastrophic crop failure of 1880, the low grain harvests in 1882 and 1885, the negative balance of trade and payments, and the crisis of overproduction in industry, which developed into a depression that lasted until 1887. Therefore, Bunge strongly urged Alexander III to adhere to a "peaceful but firm policy" in order to solve economic problems. 70 In February 1882, the minister was alarmed by the belligerent anti-German statements of General M.D. Skobelev in Paris. 71 At the end of March 1885, after the clash of Russian and Afghan detachments on Kushka, which caused increased hostility on the part of Great Britain, he bluntly declared to the emperor "even the most successful war cannot but be disastrous for us." 72 When Vannovskii was appointed to the ministerial post, Alexander III gave him the "priority order" to reduce the military budget at all costs. 73 This fully met the aspirations of the financial department. In addition to Solskii, Bunge was strongly supported by Abaza, who enjoyed great influence in the State Council, and from 1884 again presided over the Department of State Economy. Foreign Minister N.C. Giers, who sought to secure peace for Russia by all possible diplomatic means and avoided confrontation with Germany, expressed his solidarity with them. The financiers convinced Alexander III of the need to cut government spending, and in the first place, appropriations for the army. On July 17, 1881, pursuant to the report of Count Baranov, the highest order was issued to allow the Department of State Economy, the Ministry of Finance, and the State Control, when considering estimates for the next year, to proceed only from the principle of expediency, regardless of the current regulations, procedures, and staffing tables. 74 Thus, the fulfillment of the task previously entrusted to the Special High Commission actually ended up in the hands of these departments, which allowed them to reduce their expected costs. The worst affected was the War Ministry, the estimate of which was cut by 23.2 million rubles after the emperor's decision to reduce the staffing of troops. 75 In addition, on April 20, 1882, at the initiative of Bunge and Solskii, the ministers and chief executives were given the right to revise the staffing and instructed to reduce the amounts in the estimates for 1882 (primarily at the expense of office costs and overheads), and annually 70 76 However, the application of these decrees encountered resistance from the War Department the budget of which was to suffer the most. However, in the early 1880s, Vannovskii had to reckon with the disastrous state of the treasury. "It was clear," he later wrote to Alexander III "that for some time purely military interests should be sacrificed to a certain extent to economic interests, and that financial considerations should prevail over all others for the time being." 77 However, already in March 1884, Bunge informed the emperor that Vannovskii was demanding 6.75 million rubles for the construction of fortresses, an increase in the salary of officers, and the maintenance of the Cossack troops. According to the Minister of Finance, the satisfaction of such a request further increased the expected budget deficit of 11.6 million rubles. With a further rise in military costs, the government, forgetting about the "welfare of the people," would have to introduce new taxes, which were unlikely to be collected without arrears, and enter into loans on unfavorable terms, paying burdensome interest on them. "In this case," Bunge predicted, "a gradual breakdown in finances may occur, which will subsequently entail the inability to satisfy the urgent needs of the army and navy, and, finally, an economic crisis, easily turning into a shock to the political system." 78 Obruchev in September 1884 bitterly wrote to Count Milyutin in Simeiz: "We work a lot, but such is our fate that we move just at a snail's pace. There is no money." 79 Bunge did not propose a return to the system of budget caps. He was skeptical about this measure and did not see any guarantees that expenses during the year would not go beyond the boundaries of estimated assignments. 80 At first, he was able to contain military spending. While in 1881 it amounted to 255.6 million rubles, in 1882 it was already 204.5 million rubles, in 1883 it was 201.6 million rubles, and in 1884 it was 200 million rubles, but after battles on the Afghan border, they again increased to 206.7 million in 1885 and to 212 million rubles in 1886. 81  the actions of his department and a number of special commissions aimed at reducing the costs of the War Department and other central institutions, with rare exceptions, were ineffective. 82 On June 30, 1885, pursuant to the report of Vannovskii, Alexander III signed the "Rules for Requesting and Allocating Funds to the War Ministry for Expenses Caused by Military Circumstances" prepared by a Special Meeting chaired by Abaza. From this day forward, when the threat of war arose or in preparation for it, all departmental needs were met at the expense of extraordinary extra-estimated amounts, which were requested by the minister's "most humble" reports and allocated by the Treasury with the permission of his Imperial Majesty. After the outbreak of hostilities, decisions on granting loans were made by a Special Meeting of the Chairman of the Department of State Economy, State Comptroller, and heads of the military, naval, and financial departments. The allocated funds were reflected in a special paragraph of the estimate ("military fund"). Thus, the existence of two budgets, ordinary and military, was codified. 83 The new edition of these rules, with minor changes, was included in the Regulations on the Field Command of Troops in Wartime, approved on February 26, 1890, and was in effect until the outbreak of the First World War. 84 The generals, as before, insisted on constructing a network of railways to ensure the mobilization and concentration of the army on the border. Obruchev was especially active in this regard. According to S.Yu. Witte, strategic rail lines were his "mania." 85 On February 14, 1883, a meeting chaired by Alexander III approved a plan for the construction of three state-owned roads in the western provinces (more than a thousand miles in total). However, the financiers were in no hurry to allocate money for them.
The following year, at a meeting of the Committee of Ministers, Bunge and Solskii expressed their fear that the cost of constructing such long lines in a short time without any economic significance would become a heavy burden for the treasury. At a meeting convened to discuss these considerations, Vannovskii categorically stated that without the necessary communications it was impossible to ensure the "integrity and security" of the state. His opinion was supported by the participants of the meeting and on March 17, 1884, was approved by the emperor. 86 Later, work began on laying the Polesskii, Privislenskii, and Novoselitskii strategic roads, as well as the Trans-Caspian railway.
At the beginning of 1887, Bunge was replaced by the well-known mechanician and head of the board of several joint-stock companies, I.A. Vyshnegradskii. Having started to streamline the state finances, he was seriously worried about the possible involvement of Russia in one international conflict or another, since Vannovskii and his entourage did not rule out such a turn of events. A few days before his appointment, the future minister went to the director of the Asian Department of the Ministry of Foreign Affairs, I.A. Zinoviev, to ask him about the state of affairs in Europe. The latter assured him that nothing threatened the empire for the near future. 87 However, as soon as he took office, Vyshnegradskii "very decisively" warned Alexander III that, if the generals' appetites were not moderated, then by the end of the year the budget deficit could amount to 100 million rubles. "We need peace," he believed. According to the director of the Chancellery of the Ministry of Foreign Affairs, Count V.N. Lamzdorf, "the sovereign allegedly expressed to Vyshnegradskii his firm intention to adhere to a peace-loving policy." 88 The Minister of Finance was careful not to cause any unwanted reaction in Germany. In November 1887, he challenged the demand of Vannovskii to ban the exportation to Germany of the stone used for German fortresses on the Russian border, as such a move "may produce an extremely unfavorable impression politically." 89 Vyshnegradskii assured General A.A. Kireev that if war could be avoided within the next five years, he would be able to "repair our finances." 90 At the traditional final meeting of the State Council on December 28, 1887, Ivan Alekseevich declared "our financial future depends entirely on the triumph of a peaceful policy." 91 According to the State Secretary, A.A. Polovtsov, Vyshnegradskii "knew how to bring the sovereign to a loud proclamation of a peaceful policy" and "this merit is very great." 92 The situation at the top was clearly in favor of the Minister of Finance. highest generalship. The Naval Minister, Vice Admiral I.A. Shestakov spoke harshly of the "militant tendencies" of Vannovskii, calling him "just a fool and a madman." 94 The Commander-in-Chief of the Guards, Grand Duke Vladimir Aleksandrovich, having read the "most humble" program note submitted by Vyshnegradskii on December 21, 1886, told the emperor that "no improvement in finances is possible as long as we are burdened with military spending to such an extent that this militarism should lead to bankruptcy and the misfortunes that accompany it, that it is necessary to try to make it possible to reduce the armies, and that the merit of the sovereign who does this will be great." Polovtsov approvingly responded to these words: "These are smart words." 95 Chief Military Prosecutor Prince A.K. Imeretinskii, in a conversation with the Secretary of State, criticized the "war party" led by Obruchev, who allegedly considered France's clash with Germany at the beginning of 1887 advantageous, since Russia could use this to defeat Austria-Hungary and occupy the passes in the Carpathians. "Economic, moral considerations do not exist for these people," the prince complained. 96 Energetic and efficient, Vyshnegradskii quickly strengthened his position at the top, using the support of Solskii and especially Abaza, with whom he developed close relations. On August 11, 1887, in a note sent to Alexander III, he pointed out the need to take a "firm and unshakable decision" to ban excess budget appropriations. 97 The emperor imposed an approving resolution, and then, referring to the will of the monarch, the Minister of Finance refused the military additional loans and even slightly reduced their estimates for the next year. "We must hope," he wrote to the tsar "that this circumstance, being a new proof of the deep and sincere peacefulness of Your Imperial Majesty, will help the triumph of your peace policy, which will protect Russia from the disasters and horrors of war." 98 In turn, the Minister of War in January 1888 drew the attention of Alexander III to Russia's obvious lagging behind the European powers (especially Germany and France), which did not spare money to build up their forces and formed armies of "monstrous proportions." He insisted on the allocation of large sums to increase the number of troops, strengthen artillery and cavalry, build new and reconstruct old fortresses, and create food reserves. "How S724 HERALD OF THE RUSSIAN ACADEMY OF SCIENCES Vol. 92 Suppl. 8 2022 STEPANOV insignificant and even meagre these funds seem, compared with the hundreds of millions that other states grant without the slightest hesitation!" Vannovskii lamented. 99 At the same time, despite the obvious underfunding, in 1881-1888 the War Ministry reorganized the cavalry, transformed the rifle battalions into regiments, increased the number of officers, strengthened the troops in the Transcaspian region and the Amur region, formed "native" units and new ranger battalions in the Caucasus, arranged training camps for reserve personnel, raised the salaries of officers, improved the allowances of the lower ranks, etc. 100 In the spring of 1888, Vannovskii, with the consent of the emperor, submitted to the Minister of Finance a "List of Urgent Needs" of his department, asking for an increase in the annual estimate by 18 million rubles for the next five years, as well as a lump sum allocation of another 40 million rubles for additional expenses. 101 However, Vyshnegradskii remained adamant. In a note he wrote for Alexander III in April 1888, it was pointed out that the application for extra-budgetary loans was contrary to the clearly expressed will of the monarch, and an increase in spending threatened with a deficit of the budget balanced with such difficulty the year before. Like Bunge, he had no doubt that the introduction of new taxes "will remain on paper" and will not become a reliable source of income, but "could sow displeasure and grumbling, which could have very unfortunate consequences." In addition, in his opinion, the generals' requests were not caused by any urgent need, since, as the Foreign Ministry repeatedly assured, no war was foreseen in the coming years. Vyshnegradskii recommended "to take advantage of this favorable situation and not to scatter our meager funds on useless expenses, but to use them extremely sparingly in order possibly to improve our financial and economic situation." At the same time, he stated, "the well-being of the people, even with some imperfection of the military system, will bring more benefits during the period of armed conflict than the most complete combat readiness of the army with the people's shaken economic situation." 102 In order to resolve differences, on May 7, Alexander III convened a Special Meeting chaired by him, bringing together the ministers of foreign affairs, war, and finance. During the meeting, Vannovskii argued, "We should to expect a clash between Germany and France and must be ready." 103 However, the autocrat supported Vyshnegradskii recognizing that further improvement of the army was only possible taking into account the available resources of the Treasury, and that new loans and increased taxation were out of question. The finance minister hurried to consolidate his success and obtained the emperor's consent to the restoration of "normal" military budget estimates. On May 13, 1888, according to a joint report of Vannovskii, Vyshnegradskii, and Giers, the General Rules on the budget cap of the War Ministry for 1889-1893 were approved. During these five years, the estimated amount of 1888 (211.6 million rubles) was to be increased annually: in 1889 by 5.6 million rubles, in 1890 by 7.3 million rubles, in 1891 by 8.6 million rubles, in 1892 by 10 million rubles, and in 1893 by 11 million rubles. 104 On June 18, Alexander III approved the plan presented by Vannovskii to enhance the combat effectiveness of the army, which provided for the strengthening of officer cadres, an increase in the corps of recruits, the reorganization of old, and the formation of new military units, and the establishment of benefits for subaltern officers. 105 For the detailed development of the rules on the budget cap, an interdepartmental commission was established chaired by the Deputy State Comptroller T.I. Filippov. At its meetings in June 1888, new disagreements broke out; Major General P.L. Lobko, who represented the military department, with the sanction of Vannovskii, put forward his own version of the project, which provided the ministry with considerable freedom in the disposal of the allocated funds. As a result, two editions of the rules were submitted for consideration by the three ministers; therefore, by order of Alexander III, the controversial issue was discussed at the end of 1888 in a Special Meeting headed by Abaza. But even there Vannovskii failed to defend his position, and on December 20, pursuant to Vyshnegradskii's report, the emperor signed the Rules on the procedure for compiling, reviewing, and executing the financial expenditure estimates of the Military Ministry for the five years 1889-1893, which basically repeated the norms of the law adopted on June 4, 1873. 106 Vannovskii had little choice but to complain in his reports that now the Ministry would have to "adjust the organizational military reforms to precisely determined additional appropriations for each year, the size of which cannot even be compared with the emergency loans so hastily placed at the disposal of the military department in other states." 107 Meanwhile, the country's economic situation had improved markedly. Abundant harvests in 1887 and 1888 increased revenue collection, and the conversion of external loans reduced the annual repayment of debt. The country ran a budget surplus, the growth of grain exports changed the balance of trade and payments in favor of Russia, and the depression in industry and the stagnation in trade gave way to a revival of production and commercial turnover. In December 1888, at a meeting of the State Council, Vyshnegradskii once again called the "peaceful policy of the sovereign" one of the main reasons for streamlining finances. 108 However, he feared that the war might destroy the beginning revival of the national economy. Meanwhile, in February 1887, the Triple Alliance was renewed, while the Union of the Three Emperors ceased to exist after the Bulgarian crisis, and the "reinsurance" Russian-German treaty signed in June 1887 did not remove the contradictions between neighboring empires.
Taking advantage of the relative economic stabilization with growing tensions in Europe, the military tried to take revenge. This time the emperor was more sympathetic to the arguments of Vannovskii and Obruchev. According to Polovtsov, in April 1889, Alexander III told Abaza "that Vyshnegradskii narrowly looks at the activities of the Minister of Finance, caring exclusively about savings, that until now he, the sovereign, had fully supported Vyshnegradskii and categorically refused all the demands of the Minister of War, but that now, as circumstances change for the better, it will be necessary to meet some of these requirements." 109 The change in the position of the monarch caused concern in the financial department. At the end of May, Vyshnegradskii informed Alexander III that measures were being prepared in the Ministry of War and in some other central institutions that would require significant emergency expenses in the near future, exceeding the capabilities of the Treasury, especially taking into account the expected poor harvest. He proposed to collect information on all planned extra-estimated costs by September 15 and then discuss them in a Special Meeting. In early July 1889, Obruchev prepared a note for Alexander III, in which he criticized Vyshnegradskii's policy. The general acknowledged the minister's success in achieving a budgetary balance and alleviating the debt burden but argued that the finance department was paying attention exclusively to the interests of the treasury, neglecting "the needs for the development of the country's economic life." According to him, the principle of thrift, which Vyshnegradskii strictly adhered to, is harmful if it hinders growth in the productive forces of the people and, in particular, if it is used as an argument for freezing the construction of railways, which are necessary both for the national economy and for the defense of the state. Obruchev reminded him that Russia's neighbors had millions of armies and a dense network of railroad tracks for their rapid concentration, and the vast expanses of the empire made it vulnerable to enemies, which included members of the Triple Alliance, as well as Great Britain, and Turkey, and China. Therefore, the general insisted on the construction of strategic railways along the entire perimeter of the borders from the western provinces to the Far East. He acknowledged that these lines would have no economic significance and would not bring profit, but "not only the dignity, but also the very strength of the state's welfare depend, first of all, on its security." According to Obruchev's calculations, the implementation of his plan required the allocation of 300 million rubles (60 million rubles annually) from the treasury over the next five years. The resolution of Alexander III was quite unambiguous: "All this is fair and highly desirable to implement." 111 Vyshnegradskii, in a response note, denied Obruchev's accusations of deliberately suspending railway construction, referring to the construction of several lines in different regions. At the same time, he defended the expediency of laying exclusively such highways that would have not only defense significance, since the spending of state funds "on the artificial expansion of the railway network, of which a good half will be economically useless and financially harmful, will undoubtedly lead to our inability to find funds for more important state tasks." Vyshnegradskii predicted that the implementation of Obruchev's project, which was not provided with the necessary resources, "would inflict incalculable and perhaps irreparable harm on Russia," create a budget deficit, undermine state credit, and cause the ruble rate to fall. for the construction of two thousand miles of strategic highways. In an additional note presented on October 14, he added to these amounts another 300 million rubles for the laying of second tracks of strategic railways, the construction of new lines, and an increase in rolling stock. 113 However, the Department of the State Treasury, referring to the "supreme will" expressed on May 13, 1888, and the rules of December 20, 1888, recognized such requests as excessive and recommended finding funds for their satisfaction within the framework of the budget cap. 114 In the considerations of the Ministry of Finance set out on November 9, 1889, the achieved budgetary balance was not considered to be even halfway viable since the revenues of the treasury remained unstable and depended on the size of the crops. Therefore, in order to prevent deficits, it was necessary to observe strict prudence and to make every effort to reduce costs because of the impossibility of obtaining loans on favorable terms and burdening the population with new taxes. 115 Vyshnegradskii was supported by Giers who called the demands of the military inappropriate at a time when "our budget has just come into some balance, and the exchange rate began to rise." 116 Vannovskii and Obruchev were extremely annoyed with the tough position of the financial department. According to Count Lamzdorf, the Chief of the General Staff complained to others about Vyshnegradskii's stinginess and reproached him for "nothing being done to develop the country's productive forces and use the country's wealth." 117 The request of Vannovskii was considered in November 1889 by a special meeting chaired by Abaza. The Minister of War again talked about the huge costs of the army in other countries and the difficulty of calculating in advance the amount required for meeting current needs. Vyshnegradskii repeated that in an armed conflict, the chances of victory depended not only on the material security of the troops but also on the financial and economic position of the state. Finally, it was decided to provide the military department in 1890 with only ten million rubles for rearmament and four million rubles for other needs, the rest 113 of the expenses were to be made from the funds of the budget cap. The meeting also decided to issue ten million rubles to the Ministry of Railways in order to increase the capacity of the entire railway network and 16.6 million rubles to lay the second tracks of strategic lines. On December 14, this decision was approved by the emperor. 118 From April 15, 1890, new rules began to operate, according to which all funds intended for the rearmament of troops (annual emergency loans and part of the maximum amount) were to be separated as a special financial estimate. 119 At the end of December 1889, during a discussion in the State Council about the budget schedule for the next year, Abaza, arguing with the generals, stated that "the successes of our financial situation should not turn our heads, we should not get carried away by the theories of those who would like to involve our government in big expenses under the pretext that the expenses refer to the development of Russia's forces in the future." 120 Vannovskii, objecting to his opponents, wrote to Alexander III: "In essence, the need for developing the armed forces of the state cannot be compared with the need for developing other branches of state administration, and while for the latter internal relations, the economic forces of the people, and resources acquired by the state treasury are an exceptional measure, for the first all these data are by no means the only incentive and the only measure of tension." 121 Subsequently, the Minister of War sent the emperor three more versions of his plan for organizational measures for strengthening the combat capability of the army, which were approved on June 3, 1890; May 27, 1891, and July 26, 1893. 122 The introduction of budget caps with an annual surcharge and loans for rearmament led to an increase in military spending. In 1887 it amounted to 211 million rubles, and in 1888, 212 million rubles. In 1889 military expenditures were 226 million rubles; in 1890, 241 million rubles; in 1891, 252.8 million rubles; in 1892, 262.6 million rubles; and in 1893, military spending was 273.6 million rubles. 123 Its increase was not stopped even by the "all-Russian ruin" of 1891-1892.
does not allow us to compete in armaments with our western neighbors, but the situation, in any case, is so serious that it is impossible to dwell on the results already achieved and further efforts and sacrifices are needed to increase the combat readiness of the army." 129 In March 1892, Vyshnegradskii again tried in vain to cut the military budget by reducing the number of peacetime troops, the service term of conscripts, appropriations for construction work, and the maintenance of the military administration. 130 Shortly before the expiration of the five-year term of the budget caps, an issue of conditions for their extension came up at the top. State Comptroller Filippov in March 1893 wrote to Witte that the application of the rules adopted on December 20, 1888, often caused "dissent" between the military and financial departments and had to be adjusted. On July 23, 1893, pursuant to the report of Witte and Vannovskii, Alexander III ordered the establishment of "normal" budget estimates for 1894-1898. From then on, the amount of ordinary expenses of 1893 (229.2 million rubles) was to be increased in 1894 by 7.1 million rubles, in 1895 by 9 million rubles, in 1896 by 12 million rubles, in 1897 by 15 million rubles, and in 1898 by 20 million rubles. 131 New budget rules developed by the interdepartmental commission under the State Control in October 1893 were approved by the emperor on April 15, 1894. Compared with previous editions, they provided for a number of new benefits for the War Ministry: it was given the right to demand additional appropriations in excess of the maximum amount for the fight against epidemics and other "national disasters," the maintenance of "supernumerary" lower ranks and pupils of military educational institutions; the effect of the rules on compensation for the full cost of food distributed to the population from the commissary stocks was extended to all such distributions to outside institutions and individuals; it provided for the return of the difference in the ruble exchange rate with regard to expenses incurred in metallic currency in the Finnish and Caucasian military districts, as well as for trips of courier officers abroad; the procedure for reimbursement of costs associated with rising food prices, etc., was prescribed in more detail. 132 In the future, these rules were in effect in the five years of 1894-1898, 1899-1903, and 1904-1908 Witte saw them as a necessary evil: "Despite the fact that the establishment of normal budgets contradicts the basic requirements of budgetary affairs worked out by the long-term practice of civilized states, one still has to resort to this means, willy-nilly, in order to at least somewhat guarantee the State Treasury from unexpected and major claims to it." 134 However, budget caps could only partially contain further growth in costs, since over-the-budget loans were constantly issued for various needs of the army. In order to block this channel at least partially, Witte initiated the introduction of rules on May 4, 1894, according to which appropriations for rearmament were withdrawn from the emergency budget and transferred to the category of ordinary expenses. 135 From 1894 to 1902, military spending increased from 281.7 million to 325.6 million rubles; however, in percentage terms, its growth was significantly less than that of other departments. 136 Despite the industrial boom of 1893-1899 and significant government revenues, Witte still preferred to invest in profitable sectors of the economy. Subsequently, his controversy with A.N. Kuropatkin, who accused the former finance minister of neglecting the interests of the armed forces before the war with Japan evolved into a cause celebre. 137 Witte, justifying himself, stated that he really did not have the opportunity to satisfy all the requests of the army, but still it had at the turn of the nineteenth and 20th centuries the highest increase in appropriations in Europe. Further, friction between the two agencies continued. In 1906-1914, they were clearly manifested in the sharp confrontation between A.F. Rediger and V.A. Sukhomlinov with V.N. Kokovtsov 138 .
Since the attitudes taken by both conflicting parties for decades were practically opposite, it was extremely hard for them to reach an agreement. The generals argued that the amount of funds allocated should be determined primarily by the needs of the troops, guaranteeing the integrity and security of the empire, pointed to the obvious lag of the Russian armed forces behind the Western powers, reproached their opponents for ignoring military needs. However, these accusations were largely unfair, since the main reason for the underfunding of the army was the state of the economy and the state budget. According to the financiers, the amount of appropriations depended entirely on the resources of the treasury, and an excessive increase in unproductive expenditures was detrimental to the development of the national economy. They blamed the military department for an inability to use rationally the loans received and for mismanagement and embezzlement, especially in the commissariat and artillery. The position of the Ministry of Finance reflected the general desire of the ruling elite to have a "cheap" army. It is noteworthy that in the presence of the largest ground forces in terms of numbers, Russia, in terms of the annual cost of maintaining one soldier, was in last place among other great powers.
The interdepartmental struggle took place with varying success, and while the looming war, as well as the improvement in the economic situation, increased the chances of the military to receive additional funds, the opposite situation, the stabilization of the international situation, crises in the national economy, and budget deficits gave reason to their opponents to raise the issue of reducing costs. In this confrontation, the advantage was on the side of the financial department, which during the reign of Alexander III significantly increased its influence in government circles, and under Witte generally turned into a "superministry." It had always been supported by the State Control and the State Economy Department, as well as by most of the top bureaucrats, especially the heads of other institutions interested in increasing their own funding. Of crucial significance was the verdict of the emperor, who, under the threat of budget deficits and inflation, could not ignore the arguments of financiers. As a result, the government failed to bring the Russian army into full compliance with the requirements of the time, which was especially evident in the wars of the early 20th century.

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