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
Peter III of Russia most popular reforms was the manifesto of February 1762 that exempted the nobility from obligatory state and military service (established by Peter the Great) and gave them freedom to travel abroad. On the day Peter submitted this manifesto, the parliament proposed building a pure gold statue of him, but Peter refused, saying that there must be much better uses for gold in the country. Peter III's economic policy reflected the rising influence of Western capitalism and the merchant class or "Third Estate" that accompanied it. He established the first state bank in Russia, rejected the nobility's monopoly on trade and