The Nobles' Land Bank and the Peasants' Predicament

Regarding the local self-government issues, let's put them aside for now.

The proposal that sparked a fierce reaction from the finance ministry officials stems from the nobility's insatiable greed for loans.

Even in the 1860s, on the eve of the 1861 reforms, Russian nobles were already deep in debt from maintaining their extravagant lifestyles.

"In the 1870s and 1880s, one of the main petitions at provincial noble assemblies was the request to establish low-interest state credit institutions for the nobility," explained an elderly bureaucrat from the finance ministry to Crown Prince Nicholas.

"I recall that my father established the Noble Land Bank, which already provided favorable loans to the nobility. I discussed this with some local nobles," mused Nicholas, remembering his father's various policies to support the nobility, including the establishment of the Noble Land Bank.

This bank, created by Nicholas's father, Alexander III, was a significant effort to support the noble class.

It provided low-interest loans to nobles across Russia at rates far below those of market banks.

The required collateral was minimal, and the valuations of the pledged assets were often overestimated.

Despite these favorable conditions, the nobles remained unsatisfied with the loans from the Noble Land Bank.

"I reviewed the petition; it includes demands for lower interest rates, deferred payment of loans and interest, and an increase in loan amounts from 60% to 75% of the collateral value," Nicholas said.

These points were enough to make most officials in the small internal meeting shake their heads and murmur.

"These people treat the Russian Empire like a cow to be milked!"

Witte criticized the nobles' greed bluntly, making Nicholas scratch his cheek awkwardly, feeling as if accepting the petition was a grave mistake.

Although Witte's language was harsh, his opposition echoed the sentiments of many present.

"I've never harbored animosity towards the nobility... I myself am a hereditary noble and was raised in a traditional noble family.

I believe that among us, there are indeed many honorable, selfless individuals who embody true noble spirit, protecting the weak and serving the people," Witte continued.

His practical views often garnered agreement from Nicholas and many bureaucrats.

"The great reforms of Alexander II were largely implemented by a few enlightened hereditary nobles.

Back then, some nobles viewed the welfare of the people as their own, risking their lives for the nation.

But such nobles are few; most are political scoundrels, seeking to satisfy their greed and privileges at the expense of the general populace," Witte's words effectively stamped the petition with a seal of rejection, despite some points not yet discussed.

Only a few interior ministry officials thought there were minor points in the petition worth considering. However, after some thought, Nicholas announced that he would only submit the petition to his father after further consideration.

In other words, the petition's process ended with the crown prince.

"You made the right decision, Your Highness," Witte remarked after the meeting, staying behind in the cramped room while Nicholas wrote notes.

"That decision also relied on the advice of many counselors," Nicholas replied diplomatically.

"Such petitions are frequent; His Majesty often receives petitions from nobles across Russia," Witte said as he opened the door, allowing Nicholas to exit first.

They continued their conversation as they walked through the streets lit by kerosene lamps at night.

"Adhering to medieval policies in the approaching 20th century can only lead to unnecessary disaster."

"I agree that sacrificing the interests of the majority to benefit a privileged few is a recipe for chaos," Nicholas rarely expressed his political inclinations, but he did to Witte, who Nicholas considered a capable figure for significant roles in the future.

"Indeed, Your Highness," Witte agreed, adding, "If monarchs and politicians do not understand this simple truth, they will weaken the power and authority of the government. Preventing such harmful movements is the responsibility of the monarch."

"Do you believe this could lead to a revolution?"

"Precisely. In Russia, such revolutionary currents are particularly dangerous because nearly 35% of our population comprises conquered non-Russian nationalities."

Witte referred to revolutions like those of 1848, with barricades and rebellious citizens, or the Paris Commune uprising.

He couldn't foresee a future where a professional revolutionary socialist party would sever Russia from the old regime, creating a new world.

"Anyone who understands modern history knows that the rise of nationalism in recent centuries has made integration difficult for a noble class."

"Can I take this as your stance on national policy?"

Nicholas nodded. The rise of nationalism led to the most terrifying conflicts of the 20th century and many horrific events, yet it was also a tool for many countries to resist imperialism and colonialism.

"Yes, mainly in terms of legal work," Witte briefly mentioned, similar to his previous discussions on the "Jewish question," referring to a policy that treated various minorities equally from a political system standpoint.

Even this point was highly controversial in the current era of Great Russian nationalism.

### The Nobility's Issues

Following the majority decision led by Nicholas, the petition from the local noble assembly of Kiev Province was halted.

Such matters disappearing without a trace were commonplace in the administrative processes of the Russian Empire. Bureaucrats only needed to be loyal and accountable to their superiors, and all superiors ultimately answered to the Tsar.

This bureaucratic group did not need to be accountable to the general populace of Russia.

Afterward, Nicholas stayed in Kiev for a few more days, examining the economic conditions of the surrounding nobility and investigating the living conditions of village peasants.

"Compared to what I saw in Belarus, some of the communes here no longer redistribute land, while others are similar to those in Belarus," said Nicholas, whose once fair skin was now tanned from over a month of travel.

The Crown Prince was discussing with several bureaucrats familiar with agriculture.

"In the northeastern part of Belarus, the closer to traditional Russian cultural areas, the more common the redistributive type of communes. Conversely, in areas like southwestern Belarus and the Southwestern Borderlands, where there are many ethnic minorities, redistributive communes are less common."

Everyone agreed on this point, with no dissenting voices.

The Southwestern Borderlands referred to the territory governed by the Governor-General of Ukraine.

"But whether it's redistributive communes or those that no longer redistribute land, these peasant collectives face the problem of population growth outpacing land availability. The average land per person is insufficient, leading to diminishing economic returns, while the communes restrict peasant mobility, resulting in increasingly low per capita income."

What Nicholas observed was happening right across Russia: after 1861, serfs who gained land were trapped in communes by the government for easier management. The result was equal poverty, equal weakness, and a loss of production motivation.

"I admit there are many flaws in the economic production of communes, but to say that they should disappear from Russian history seems too radical," Nicholas said as some bureaucrats reviewed a draft article he had issued.

Witte, who had developed a significant network while managing the Southwestern Railway Company in Kiev, spoke up. Due to Alexander III's policy of Great Russian nationalism, many minority employees were dismissed, and Witte had recruited talented individuals into the railway company, reversing its losses and providing profitable stock.

People who could create wealth were naturally welcomed.

"During my time working in Kiev, I established the *Kiev Daily*," Witte proudly recounted his work in the warm southern region of Ukraine.

"I advocated for private railway operations and opposed government intervention. These discussions were compiled into a detailed theory and published as *Principles of Railway Tariffs*. As far as I know, this book remains the current guide for the Russian railway department."

Witte's views had evolved over time. He was initially influenced by Adam Smith's laissez-faire economics and later delved into Slavophilism, such as pan-Slavic and Great Russian nationalism. His ability to adapt and grow made him a valuable talent.

Nicholas and his investigative team were now discussing how to use the media Witte controlled to publish some of their findings. Though Nicholas's findings were generally accepted by the team, writing them into articles led to many disagreements.

The key issue was that Nicholas intended not just to describe problems but also to propose solutions.

"Would this conflict with His Majesty's policies towards the peasants?" some bureaucrats, hesitant to take risks, questioned.

"Whether it's my father or me, we sympathize with the peasants' plight. All this is to improve their lives. Based on this principle, we are not diverging from the Tsar's government but adhering to, practicing, and enhancing it," Nicholas declared.

Since the Crown Prince had spoken, no one further questioned whether the discussion content was overstepping boundaries.

"The first issue is that the land allocated to each peasant family in the commune is insufficient to meet their needs. Therefore, peasants must rent land from nobles and landlords," Nicholas said. After discussions with the landed nobility of Kiev and Minsk Provinces, he found that liberated peasants were still renting large amounts of private land.

Because peasants had limited financial means, even as nobles went bankrupt and sold land, many peasants couldn't afford to buy land, making renting their only option.

"Because the per capita land in the commune is too small, peasants have to rent land to grow more crops," Nicholas noted. If the problem were viewed straightforwardly, the solution was obvious.

If there's not enough land, give the peasants more land!

Nobles and other private landowners held over seventy million Russian acres, yet these landowners numbered only about 110,000 people, compared to millions of land-poor peasants.

However, Nicholas knew that implementing such a proposal would likely cause his draft to be stillborn.

"That would be a 'Paul I' measure," Witte cautioned seriously when Nicholas privately joked about forcibly redistributing noble land to peasants, making Nicholas feel a bit awkward.

In the Russian government, "Paul I" was a term used to describe unreasonable, absurd, and laughable decrees.

"You're right. No rational person would recklessly confiscate others' property," Nicholas acknowledged, knowing his power's source, and thus discarded the idea.

The most straightforward solution was unworkable, so Nicholas needed another approach.

"The simultaneous land scarcity in European Russia and our manpower shortages in the frontier areas suggests that relocating land-poor Russian peasants to land-rich Central Asia, Siberia, and the Far East could be a good solution."

Mass migration to fill the borders was Nicholas's first proposal in his draft.