Alexander III died on October 20, 1894 and was succeeded by Nicholas II. The new emperor had received a good education but lacked the qualities needed for governing a country such as Russia. The apparent interference of Empress Alexandra Fyodorovna in state affairs dissatisfied the public. In the first years of his reign Nicholas II generally continued his father's policy. At a reception for representatives of the zemstvo (bodies of local self-government) he called constitutional reforms "senseless dreams". An ill omen for the future, his coronation in Moscow in 1896 ended in a horrible stampede on the Khodyn field, leaving hundreds dead.
Sergey Witte was Russian Finance Minister from 1892 to 1904. He contributed to the successful development of the Russian economy by carrying out monetary reform (introducing a stable gold ruble), establishing a government monopoly over alcohol, and protecting Russian producers. However, mobilization of funds for the development of heavy industry took place at the expense of agriculture, thus aggravating antagonisms within the country. At the same time, Russia's economic expansion in the Far East inevitably led to political rivalry with Great Britain and especially with Japan.
In 1900, Russia leased the Kwantung peninsula from China, where it built the harbor fortress Port Arthur, and a territory in Manchuria, where the Chinese Eastern railroad was constructed. In an attempt to expand its influence in North Korea, Russia entered into a conflict with Japan. In the opinion of influential government circles, a short and victorious war would defuse tension in the country. However, as a result of the technical and tactical backwardness of the Russian army and navy, as well as the unpopularity of the war, Russia suffered a number of defeats in the unsuccessful war with Japan which broke out in January 1904.
The "reconciliation" of the 1880s was followed by an upsurge in the revolutionary movement and increasing influence of social democratic ideas. The first congress of the Russian Social Democratic Labor Party took place in Minsk in 1898. Three of the nine delegates represented the Jewish workers' union, the Bund. The party organization was formed at the second congress in 1903. At the same congress the party split into the "Bolsheviks", headed by V.I. Lenin and the "Mensheviks", headed by Yuli Martov and Georgiy Plekhanov. In late 1901, populist groups united into the Socialist Revolutionaries' Party. The founders of the party were Mikhail Gots, Grigoriy Gershuni and others. Its Fighting Organization revived the People's Freedom Party's terrorist tactics. The assassinations of Education Minister Bogolepov (1901), Interior Ministers Sipyagin (1902) and Pleve (1904), and the Kharkov and Ufa governors shook the nation.
The beginning of the 20th century was marked by the rise of mass strikes. Peasants rioted in the Poltava and Kharkov regions in 1902. The influence of revolutionary parties was increasing, and participants in the liberal movement also created an illegal journal, "Osvobozhdeniye", or "Liberation". In an attempt to check the revolutionary movement, the Police Department began to set up government-controlled workers' organizations, among them the Jewish Independent Workers' Party, which split off from the Bund. However, the policy of infiltration into the revolutionary movement was not successful. A revolutionary revolt was imminent.
In the late 19th century the "Jewish question" was central to Russian conservative thought. As early as 1869 a baptized Jew, Yakov Brafman, published at government expense "The Book of Kagal", a distorted Russian translation of excerpts from Lithuanian pinkases with commentaries aimed at proving the eternal "harmfulness" of the Jewish community. This book was reprinted several times and quoted by all anti-semites. In the early 1880s N. Wagner was the first writer in Russia to popularize in his novel, "The Dark Way", the idea of a global Jewish plot. Soon, Vsevolod Krestovsky based his trilogy "The Jew Is Coming" on this idea. By the end of the century, Russian anti-semitic publications had developed into an extensive literature which treated world history as the struggle of Jewish "dark forces" against Christian civilization, especially against Orthodox Russia.
In the late 19th century Russian culture witnessed a decisive turn from civicism to aestheticism, from realism to symbolism, from philosophic positivism to realism. In poetry, Valery Bryusov, Dmitry Merezhkovsky and Zinaida Gippius followed the principles of symbolism. In painting, the artists' union "Mir Iskusstva", or "The World of Art", took over the leading position from the Wanderers (Peredvizhniks) group. In philosophy, Vladimir Solovyov's ideas were widely accepted, while former Marxists Nikolay Berdyaev, and Sergiy Bulgakov sought grounds for a new religious outlook. In the same years psychological prose and dramaturgy were reborn in the works of Chekhov. The new creative methods of the Moscow Art Theater won it national and later international fame. This was the beginning of the brilliant epoch of Russian culture called the Silver Age.