History of Russia deficit required borrowing, primarily from Amsterdam; five percent of the budget was allocated to debt payments. Paper money was issued to pay for expensive wars, thus causing inflation. For its spending, Russia obtained a large and glorious army, a very large and complex bureaucracy, and a splendid court that rivaled Paris and London. However, the government was living far beyond its means, and 18th-century Russia remained "a poor, backward, overwhelmingly agricultural, and illiterate country." Peter I was succeeded by his second wife, Catherine I (1725–1727), who was merely a figurehead for a powerful group of high officials, then by his
Catherine I of Russia Catherine was able to have her way. The resulting tax relief on the peasantry led to the reputation of Catherine I as a just and fair ruler. The Supreme Privy Council concentrated power in the hands of one party, and thus was an executive innovation. In foreign affairs, Russia reluctantly joined the Austro-Spanish league to defend the interests of Catherine's son-in-law, the Duke of Holstein, against Great Britain. Catherine gave her name to Catherinehof near St. Petersburg, and built the first bridges in the new capital. She was also the first royal owner of the Tsarskoye Selo estate, where the