ИСТИНА

This research deals with integration processes in the commercial banking market in the Russian Empire in 1874-1913. The integration is studied through the interest rate analysis: the smaller the difference in interest rates between regions and periods means the greater market integration, as well as an easier way for banks to move resources to regions of potential growth. The average annual rate of return on all loans in a bank is used as a substitute for interest rate in this study. This rate has been calculated for any central office or regional branch of joint-stock commercial banks in 1874, 1897 and 1913, based on banks’ annual reports (freshly collected and calculated data). These data on banks’ units are grouped in accordance with large economic and geographical regions of the Russian Empire (using GIS-maps). According to the statistical analysis, including regression, the variation of average lending rates decreased by almost 2.5 times since 1874 to 1913. The reason was the dominance of branch banking in the Russian Empire. The regional interest rates' distribution can be explained by supply-demand effects (the more resources there were in the region the lower rates were there), scale effects (larger banks offered lower rates). At the same time, the level of rates did not go down: the average rates, weighted by loan portfolio, were 7.7% (1874), 6.8% (1897) and 7.1% (1913), because the integration process was accompanied by the democratization of banks' clientele. The overcoming of the elitism in bank lending was accompanied by slight increase in interest rates. The issue of financial market integration has a great potential for comparative studies. In comparison with the interest rates on the Bank of Japan in 1897, the Russian lending rates were significantly lower, because the Japanese rates ranged of 10-12% (Mitchener, Ohnuki, 2007). As regards the USA, we can compare our data with the gross rates of return on earning assets calculated on national banks’ financial reports. The method of the similar index’s calculation, based on Russian data, has not yet fully developed, but we can already say now that in 1897 the Russian average rates were a bit higher than the American ones (Russia — 7.9%, the US reserve-city national banks — 7.5%; the US non-reserve-city national banks — 7.2%) (Davis, 1965). The significant contrast is observed in the rates of the financial capitals: New York (4.43%) and St. Petersburg (7.9%). Compare interest rates between the US, Japan and the Russian Empire had not yet been completed.