The State Bank of the Russian Empire

The State Bank of the Russian Empire was founded in 1860 as Russia’s entire banking system was overhauled. It was established when capitalism was gaining ground in the Russian Empire and it became the first “great reform,” carried out Emperor Alexander II. Considerable state interference in the economy, necessitated by the specific conditions of Russia’s economic development, predetermined the genesis of the State Bank as an institutional element of the government’s economic policy.

The State Bank was a short-term commercial credit bank and, as its statute said, its aim was “to boost trade turnovers and strengthen the monetary system”. Its functions were to discount bills of exchange and other government and public interest-bearing securities and foreign bills, buy and sell gold and silver, receive payment on bills and other fixed-term monetary documents for the account of trustees, accept deposits, extend loans and buy government securities for its own account.

The activities of the State Bank of the Russian Empire may be divided into two periods. During the first period (from 1860 to 1894) the State Bank was largely an auxiliary institution of the Finance Ministry. Most of the State Bank resources were absorbed by direct and indirect financing of the Treasury. It was vested with the functions pertaining to the Finance Ministry apparatus: conducting the buy-out transactions and handling all paperwork related to them, propping up the state mortgage banks, and so on. Until 1887 the State Bank settled the accounts of pre-reform banks. All settlement operations were conducted at the State Treasury’s expense, which was debtor to these banks, but since the budget deficit made it impossible for the Treasury to provide the necessary funds, until 1872 the State Bank annually used a large part of its commercial profits for these purposes. Government debt to the State Bank was settled during the second period of the State Bank’s activities (in 1901). Throughout the entire pre-revolutionary period the State Bank, being an instrument of the government’s economic policy, participated in establishing and subsequently supporting commercial banks (for example, it extended unstatutable loans to them). Bankrupt banks were subsidised, financed, acquired or taken into receivership by the State Bank before being sold.

In the early 1880s the State Bank began to prepare a monetary reform, which was launched in 1895 and ended in 1898 with the introduction of gold monometallism in Russia. In the course of the reform the State Bank was granted the right to issue currency.

The State Bank’s second period began with the adoption of its new charter in 1894. After the monetary crisis of  1905-1906 caused by the Russo-Japanese war and revolution, the State Bank began to be transformed into a banks’ bank. By the beginning of the First World War the State Bank had become one of the most influential lending institutions in Europe. It had vast gold reserves, whose ratio never fell below 93%, except in the crisis year of 1906, and on average exceeded 100%. The State Bank regulated Russia’s money circulation and foreign exchange settlements and through commercial banks actively participated in crediting industry and trade.

During the First World War the State Bank mainly financed Russia’s war effort and on the eve of the October 1917 revolution the lion’s share of its assets was represented by treasury bills and loans against interest-bearing securities. Its gold reserves shrank from 1,604 million rubles as of June 16, 1914, to 1,101 million rubles as of October 8, 1917. The pre-revolutionary history of the State Bank ended on October 25 (November 7), 1917, when its Soviet history began.

Senior Executives of the State Bank

  1. Stiglitz A.L. — Governor of the State Bank in 1860-1866
  2. Lamansky E.I. — Acting Governor of the State Bank in 1866-1867, Governor of the State Bank in 1867-1881
  3. Tsimsen A.V. — Governor of the State Bank in 1881-1889
  4. Zhukovsky Yu.G. — Governor of the State Bank in 1889-1894
  5. Pleske E.D. — Governor of the State Bank in 1894-1903
  6. Timashev S.I. — Governor of the State Bank in 1903-1909
  7. Konshin A.V. — Governor of the State Bank in 1910-1914
  8. Shipov I.P. — Governor of the State Bank in 1914-1917
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