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operating in Russia: a 'free labour market,' the absorptionand utilization of capital accumulation (both homeand foreign) through developed banking, company andstock exchange systems, the close interlocking withworld prices and the world money market, the applicationof modern science to communications and industry,the concentration of power-driven machinery in largescalefactories. All these features were to be found inRussia even before the eighteen-sixties, but only inrudimentary forms or on a very small scale. From thesixties onward they became marked; from the ninetiesdominating.The emancipation of the serfs (1861) and the otherreforms of the sixties marked the watershed between theold and the nineteenth-century Russia, much as thereign of Peter the Great marked that between the oldMuscovy and a new Russia. Prior to the sixties Russianindustry had been technically backward and to a largedegree based on handicrafts and domestic industry.The two biggest exceptions were the iron and textileindustries, into which especially Peter had injected newlife.As has already been emphasized (p. 116), the industrialdevelopment that began in the early eighteenth centurywas initially almost entirely, and for a long time verylargely, bound up with the needs of the state, above allthe army and navy; hence the primary attention givento metallurgy, munitions and military supplies, includingthe new cloth factories. Foreign, especially German,technical skill was largely drawn upon; but not foreignmoney to any extent. Peter relied chiefly on the Russianmerchant class, not on the landed class, for his economicdevelopments, but there was insufficient capital accumulationavailable for the new merchants' factories withoutstate aid in various forms. The state directly workedmany of the mines and some factories, and where it didnot work them itself it had first call on their output.Russia in the eighteenth century was substantiallyself-supporting in munitions. She was not so, however,in cloth, despite Peter's efforts. Russian army contractsfor Yorkshire woollens continued to be, as in the seven-352