ИСТИНА

This paper analyzes investment banking in pre-revolutionary Russia in terms of its origin, general quantitative appraisals, risk management, relations with the state. In addition to these objectives the research includes a regression analysis, which reveals ties investment banking in the 1890s with the international banks’ syndicates for Russian government securities issues and stock market banking specialization in the 1880s. It also proves investment banking integration into universal banking by 1914. The paper also contains a case-study on making of Hartmann’s Russian Machine-building Society in the South of Russia with the assistance of Dresdner bank and St. Petersburg International bank. The case uncovers a struggle for government order to this plant in 1895-1896. The case acquires special historical importance due to personal sources supported this sample: 1) memoirs of engineering and building project’s author — German engineer and industrialist Gustav Hartmann; 2) business correspondence of St. Petersburg International bank’s director Adolph Rothstein, who won in a hard struggle for signing of contract between Russian government and Hartmann; 3) Sergey Witte, Russian minister of finance, supported this contract, also the author of the one of the famous Russian memoirs. This case displays that the first large investment banking experience was caused by wrong assessment of state role as a source of guarantees and orders for a new engineering plant. The government order appeared really not great, bank received only short-term State Bank’s support in the most hard period of crisis in 1899-1903. Thus the State Bank, controlled by the government, just played the role of creditor of last resort. But in middle- and long-term perspectives bank had to find its own risk management strategy, and it evolved towards universal banking.