Redemption Operation

a state credit operation effected by the tsarist government of Russia in connection with the peasant reform of 1861. The redemption operation was carried out in accord with the Law on Redemption. The pomeshchik (landlord) was obligated to provide the peasants only with cottage plots for redemption, and the field allotment was redeemed by the peasants either by voluntary agreement with the pomeshchik or at the pomeshchik’s demand. The essence of the redemption operation was that the peasants received redemption loans from the state which were paid to the pomeshchik all at once. The peasants had to liquidate the loan debt over a 49-year period at 6 percent annually. The amount of the loans was calculated at 75 to 80 percent of the quitrent, capitalized at a rate of 6 percent. This meant that the peasants redeemed not only the land but also their personal freedom. When the peasants entered into redemption with the consent of the pomeshchik, they were obligated to pay additional charges (usually 20-25 percent of the redemption loan). For former pomeshchik peasants, the redemption payments became the most onerous form of direct taxes. In 1863, the Law on Redemption was extended to appanage peasants, and in 1864 and later it was extended to pomeshchik peasants in the Caucasus and Transcaucasus. The tense situation that developed in the countryside, the increase in the gap between redemption payments and the profitability of farming on the allotments, and the growth of arrears compelled the government to lower redemption payments at the end of 1881. Simultaneously, the government issued a law on Dec. 28, 1881, concerning the transfer, beginning on Jan. 1, 1883, of all former pomeshchik peasants to obligatory redemption. In the Caucasus and Transcaucasus, this was done only in 1912-13. The price of the land in terms of redemption payments significantly exceeded its value: in the black-soil provinces, redemption payments were 342 million rubles, as against 284 million for the value of the land, and in the nonblack-soil provinces payments were 342 million rubles, as against 180 million for the value of the land. With the revolutionary events of 1905, the tsarist government was forced to abolish redemption payments as of Jan. 1, 1907. From 1861 to 1906 the government exacted 1.6 billion rubles from former pomeshchik peasants and as a result gained an income of about 700 million rubles.