Two Centuries of Struggle
How Russia Fell into the Hands of Central Bankers
While a distinct financial system known as state banking had emerged in America (which I discussed here), a significant event was taking place across the Atlantic. From September 1814 to June 1815, the Congress of Vienna was held to address the aftermath of the French Revolutionary Wars, the Napoléonic Wars, and the dissolution of the Holy Roman Empire. During this time, it was proposed to establish a new world order focused around central banking. The banks had already lent money to all the major powers, except for Russia. However, Tsar Alexander I (1801-25) refused to participate in the central bankers’ scheme and instead formed The Holy Alliance with Austria and Prussia. This agreement was signed on 26 September 1815 by Emperor Francis I of Austria, King Friedrich Wilhelm III of Prussia, and Tsar Alexander. Additionally, the Tsar declined the bankers’ proposal to establish a central bank in Russia, for reasons that are unclear.
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AN AGE OF PROSPERITY
The State Bank of the Russian Empire was established on 12 June 18601with the purpose of increasing trade and strengthening the monetary system. Initially, it functioned as a subordinate entity under the direct authority of the Ministry of Finance until 1894 when it was transformed into a banker of the bankers and began operating as an instrument of the government's policies. The bank was responsible for minting and printing the nation's coins and notes, regulating the money supply, and providing low-interest loans to industry and commerce through commercial banks. It held enormous gold reserves, which were the largest in the world and exceeded the bank note issue by over 100%, except for the year 1906. By 1914, the State Bank of the Russian Empire had become one of the most influential lending institutions in Europe.2