As an administrator of provincial railways, Witte succeeded to the post of Minister of Ways of Communication in the late 1880s. From 1892 to 1903 he combined this post with the Ministry of Finance, having control over commerce, industry and labor relations.
With the full power of state at his disposal, Witte sought to bring [L3 204 / modernization] to Russia along Western lines but under firm authoritarian rule. The profit motive was not behind this policy. For Witte, new factories and improved communications were means to increase the resources of Russia and enhance her political and military influence in world affairs. Thus, his greatest achievement was the construction of the [M 003 / Trans-Siberian Railway and the East Chinese Railway]. For Witte they would make Russia the chief intermediary between Western Europe and the Far East, they would join European and Asiatic Russia, and would be an [L3 205 / economic stimulus].
The `Witte System' enjoyed considerable success for almost a decade. However, at the turn of the century international uncertainty (Boer War, [G 05 / Boxer Rebellion], and Spanish-American War) reduced the flow of foreign loans. Strikes and peasant unrest in Russia revealed the intolerance of reduced living standards Witte's policies entailed and influential agricultural interests were opposed to his emphasis on industry.
Witte's strained relationship with the Tsar eventually led to his dismissal. An influential group of militarists who thought Witte's policy of gradual economic penetration of Manchuria too cautious, persuaded Nicholas to relieve him from his responsibilities in August 1903. The following year their expansionist policies led to the Russo-Japanese War.
Following Russia's humiliation by Japan, the Tsar recalled Witte to represent Russia at the peace negotiations and he was able to conclude an agreement with favorable terms. However, civil unrest within the country demanded the people's grievances be heard and Witte persuaded Nicholas to create a constitutional government (Duma) with a measure of representation.
Witte was appointed the Duma's first prime minister and his role in the new system of government was important for organizing the suppression of all signs of revolt. It was important to bring a semblance of stability in order to regain investor confidence - Russian finances were in a state of virtual collapse after the revolts of 1905 and defeat in the Far East. Consequently, Witte secured a loan for 80 million pounds sterling from European bankers which freed the Russian government from financial dependence on the Duma. However, Witte remained unpopular with Nicholas and his entourage, and was dismissed in April 1906 after only six months in office.
With the outbreak of World War I, Witte was strongly opposed to Russia's involvement in hostilities. Thus, he was sympathetic to peace feelers put out by the German government through his own German banker. But all his attempts to influence policy were ineffectual and he never returned to office.
