[1] Ostermann became secretary to Vice-Admiral Cornelis Kruse, who had a standing commission from Peter the Great to pick up promising young men, and soon thereafter entered the tsar's service.

The young man's knowledge of the principal European languages made him the right hand of Vice-Chancellor Shafirov, whom he materially assisted during the troublesome negotiations which terminated in the peace of the Pruth (1711).

He improved the state of trade, lowered taxation, encouraged industry and promoted education, ameliorated the judicature and materially raised the credit of Russia.

The dispositions previously made by Ostermann enabled him, however, to counter the blow, and all danger from Sweden was over when, early in September, Field-Marshal Lacy routed the Swedish general von Wrangel under the walls of the frontier-fortress of Willmanstrand, which was carried by assault.

[2] It now became evident to La Chetardie that only a revolution would overthrow Osterman, and this he proposed to promote by elevating to the throne the tsesarevna Elizabeth, who hated the vice-chancellor because, though he owed everything to her father, he had systematically neglected her.

He was condemned first to be broken on the wheel and then beheaded; but, reprieved on the scaffold, his sentence was commuted to lifelong banishment, with his whole family, to Beryozov in Siberia, where he died six years later, in 1747.

After his death the Ostermann titles and estates passed to his nephew, Alexander Ivanovich Tolstoy, chancellor of the Russian military orders.