<<>><<>><<>>_____TURKISTAN NEWSLETTER...ISSN:--1386-6265____<<>><<>><<>>
<<>><<>><<>>__________Volume:97-1:35--14--August--1997________<<>><<>><<>>
<<>><<>><<>>________Editor/Manager: Mehmet Tutuncu__________<<>><<>><<>>
<<>><<>><<>>________Business:S.Bogut,H.Savas________________<<>><<>><<>>
<<>><<>><<>>___Features: I. Noyan-Izmirli, Y. Puersuen______<<>><<>><<>>
<<>><<>>______Associate Editors: A.Baguirov, A. Eren, Z.Kadir___<<>><<>>
<<>><<>>________________________________________________________<<>><<>>
<<>><<>>________Editorial Board:________Dr.Robert M.Cutler______<<>><<>>
<<>><<>>________Dr.M.Gammer_____________Prof.dr.P.B.Golden______<<>><<>>
<<>><<>>________Dr.Baymirza Hayit_______Dr.H.M.Hubey____________<<>><<>>
<<>><<>>________Dr.H.Kirimli____________Dr.T.Kocaoglu___________<<>><<>>
<<>><<>>________Dr.H. Komatsu__________ Dr.H.B.Paksoy___________<<>><<>>
<<>><<>>________Dr.Nesrin Sariahmetoglu_________________________<<>><<>>
<<>><<>>________________________________________________________<<>><<>>
<<>><<>>__ Üze Tengri basmasar asra yer telinmeser, Türk bodun__<<>><<>>
<<>><<>>_____ ilining törügin kem artati, udaçi erti.___________<<>><<>>
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SPECIAL ISSUE:
Bakinskaia Guberniia Petroleum Industry During Early Industrialization,
1850-1880
(Theodore Karasik)
Introduction by the editor
Dear Readers.
This is a special issue of Turkistan-Newsletter.
It is about Caspian Oil and its exploitation.
This article does not include the current developments, but deals with
problems
of Caspian Oil dating back to the last century.
The paper was written by Theodore Karasik (UCLA History Department), as a
research project. The title is self explanatory: Bakinskaia Gubernia
(Azerbaijan) Petroleum Industry Policy, during the years of early
Industrialization, 1850-1880.
We can still use the information obtained from the analysis of the events
of the past century, because of the resemblance of these events to the
current ones.
During 19th Century, the efforts of privatization, and forming of
international consortia were on the agenda of the oil industry of Caspian
as nowadays.
It is interesting to note that, the 19th. century Armenians acted more
pragmatically than their compatriots do currently: The Armenian businessmen
were one of the major winners of the Caspian oil in 19th century. On the
contrary, the Armenians of today are one of the great losers in Caspian
oil business.
Had the Armenians of today acted more in line with their national wellfare
in mind, instead of starting an agressive war that can only lead into
destruction, they could have picked a piece of the pie of the Caspian oil
and its wealth. They can learn a lesson from their forefathers.
I hope that this article will contribute to reflect the actual situation,
and show that history repeats itself.
I thank Mr. Karasik for submitting this article to Turkistan Newsletter.
We are glad to be the first publication to carry this article.
A last reminder:
Turkistan-N is a forum where this kind of scholarly research is
published. We encourage our members to submit their
articles and papers to this medium where they can reach more
than 1200 readers, a number that far exceeds the readership of most scholarly
journals in this field.
Mehmet Tutuncu (editor)
<<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>><<>>
Bakinskaia Guberniia Petroleum Industry During Early Industrialization,
1850-1880
Theodore Karasik1
Ph.D. Student, UCLA History Department
Consultant, RAND
Summer 1997
Introduction
In the late 19th century, the administrative region known as Bakinskaia
guberniia produced a majority of Imperial Russia's petroleum exports.2 The
city of Baku was the only industrial center in the Caucasus and became an
important sector for the development of the Russian petroleum industry,
more so than any other "colony" at that time. The oil-rich region grew
slowly but by the turn of the century, Baku's petroleum had captured a
majority of the world market. In fact, by 1900, Baku's petroleum industry
accounted for one-half of the world's production of crude oil.
Petroleum industries in Bakinskaia guberniia became a critical component
in helping Russia's industrial revolution to accelerate by the late 19th
century. Extraction, production, and trade in petroleum brought revenues
critical to the state's budget. Baku's oil was successfully exported to
compete with oil fields in the United States which were just coming on line
from Pennsylvania. Significantly, the two countries competed with European
oil traders at a time when the introduction of revolutionary technologies
determined the pace of economic development. In this international race,
Baku became a focal point for Russian economic interests since St.
Petersburg desperately needed the revenues from the new industry to pay for
the legislation resulting from the Great Reforms (1855-1881).
However, there appears to be a lack of historical analysis on Bakinskaia
guberniia's petroleum industry from the 1850s to the 1870s. This fact
raises many questions about the development of the Baku oil fields in
mid-19th century: What kinds of programs did St. Petersburg seek to
introduce? How did competition between the Ministry of Finance and the
Ministry of War affect the outcome of investment in Bakinskaia guberniia's
fields? Who were some of the more prominent Russian politicians and
intellectuals working in the region? What types of governmental
legislation affected Bakinskaia guberniia's petroleum industry? How did
locals benefit from their oil holdings under the lease system? What
happened to them after the 1872-1873 land auction? How did local interests
contend with the introduction of new technologies resulting from the land
auction and the introduction of foreign companies into Bakinskaia
guberniia? This article seeks to address these questions.
Ministerial Competition and the Development of Baku's Oil Fields
Introduction
After the Russian government obtained control of Baku in the early 19th
century, and seeing how locals made profits from petroleum sales to
Persia, St. Petersburg established a monopoly on the working of the wells
and the sale of their production to regional buyers including Persians and
Ottomans.3 But during this period, Imperial Russia's attempts to control
Baku's oil did not succeed most of the time. The reasons included the
distance of the region from the capital, attempts by Russians, Armenians,
or Muslims4 to erect their own extraction and processing facilities in the
Baku fields, as well as the competition between the locals over rights and
privileges with each other.
Inhabitants of Bakinskaia guberniia from different classes -- peasant to
state employee-- succeeded in erecting equipment for oil extraction in Baku
by taking advantage of lax regional administration. In 1823, "Doubinin, a
Russian peasant," built the first oil refinery. This refinery, although
very primitive, nevertheless marked the first stage in the development of
the new petroleum industry. His example was soon duplicated by others.
In 1830, a Russian mining engineer, M. Voskoboinikov, started a similar
enterprise near Baku.5 Others in the next decades followed their examples
by copying technology from each other and building makeshift oil rigs,
making Baku a focal point for the local petroleum traders. Not until the
1850s did parts of the Russian government take an interest in the Baku oil
fields in an attempt to profit from the oil industry and help pay for
desperately needed reforms. This battle was fought between the Ministry of
Finance and the Ministry of War.
The Ministry of Finance
Although the Ministers of Finance subsequent to M.Kh. Reutern attempted
various individual programs of industrialization in other sectors of the
economy throughout the late 19th century, Reutern was the first to see the
potential of petroleum. His ministry's responsibility forced it to
implement new economic programs to increase state earnings. Under his
supervision, Reutern --with the assistance in some cases from the
scientist D.M. Mendeleev (see below)-- wanted to implement several programs
based on Baku's oil potential. First, he wanted to introduce foreign
companies into Russia's petroleum business to help modernize the fields.6
Second, Reutern sought to develop the Bakinskaia guberniia's refining
capacities that would later turn out to be an important development in the
early stages of the international oil trade. Eagerly, Reutern's
subordinates also sought to capture part --if not all-- of the Baku oil
market with Reutern's assistance. In the 1850s, a movement within the
ministry began to co
nvince the Russian government to remove the "petroleum districts of the
Caucasus" from local "owners" to whom they were leased and to auction them
to the highest bidder.7
Reutern's objectives were no simple task. He had to prove that his
ministry could undertake the reform of Baku's oil industry or else face the
prospect of losing power and influence among the ministers. Consequently,
the minister established a commission in St. Petersburg to examine Baku's
oil industry in the 1860s.8 In addition, locals, who had managed to rise
in rank due to military service or local administrative duties, supported
such tasks within the ministry. S. Goulishambarov, an Armenian with the
Ministry of Finance, led a group of St. Petersburg chemists to work on
resolving waste in the Baku oil industry.9
Reutern's objectives found supporters among Imperial Russia's early
capitalists. These individuals made efforts to make technical inroads into
Baku's oil industry, taking advantage of the land-lease system and
innovations from St. Petersburg. In 1858, Moscow businessman V.A. Kokorev,
on the advice of the chemist Justus von Liebich who had been working on
Baku oil issues, erected near Baku in 1858 a plant for the production of
illuminating oil based on German research.10 Owing to a series of
drawbacks and difficulties, however, it took several years to get the
operation up and running.11
Kokorev didn't have the technology to strengthen his operation immediately
after his initial foray into the oil business.12
But after a few years, Kokorev may have obtained the technical know-how
through sheer luck and sometimes through proxy. In 1858, when the
Transcaspian Trading Company (a jointly-owned company with Kokorev as the
main owner) established a kerosene factory in Baku, they did not construct
the refinery on the coast at the Black Town (the area of Baku known for its
refineries), and use crude petroleum or oil refuse in the furnaces but
chose Surakhani (another well site) "...on account of the supply of
hydrocarbon gas afforded spontaneously by the soil. This gas was allowed
to accumulate in gasometers...."13
Significantly, the technology made Kokorev's factory much more efficient.
But it's source came from another petroleum site. N.I. Witte, father of
the future Minister of Finance and later Prime Minister, became the first
owner to introduce this innovation at Baku where "a mechanic named Werser,
employed at [the Witte] refinery" provided the technology Kokorev needed.14
This ability to gain knowledge led Kokorev to establish his own mini-oil
empire by 1869. He had, by then, even used his earnings to develop the
first ship in the Caspian Sea to transport oil prior to the Nobels' efforts
later in the century.15
Other Russians had successes that would later prove to have an impact on
technology adaptation in Bakinskaia guberniia. As mentioned above, N.I.
Witte, became involved in Baku's oil industry, and he again serves as a
good example. In 1859, he too met with chemists to seek technical
assistance for his oil holdings but seemed to listen to Professor Mendeleev
more than others.16 He built the first refinery in Baku in 1863. This act
to construct "a petroleum distilling plant" met with opposition from other
local oil producers.17 But this technical assistance proved to be quite
valuable to local interests hoping to develop their own wells. Just as in
the case with Kokorev, other future oil barons took technical innovations
from Witte. For instance, "[D.] Melikov, an Armenian workman, who started
work on his own operation, stole his knowledge from Witte."18
By the 1870s, the ministry had prepared coherent ways to process Baku
petroleum with St. Petersburg's full governmental and academic support.
This act demonstrated the government's resolve to get the petroleum
industry up and running as quickly as possible in the race for
industrialization.19 In addition, both Russians and Armenians who rented
land benefited from the ministry's interest in developing Bakinskaia
guberniia. Significantly, it appears that Kokorev and Witte profited the
most from the technology and knowledge made available from Mendeleev. More
importantly, however, was the race over acquiring the knowledge for
petroleum industrialization in Bakinskaia guberniia in the upper reaches of
the government between the Ministry of Finance and the Ministry of War.
The Ministry of War
The Ministry of Finance's program ran into opposition from the Ministry of
War over the course of industrialization for the Imperial Russian Army.20
Nowhere was military reform a more salient matter than under the leadership
of Minister of War D. Miliutin. The Crimean War had exposed the weak and
backwards state of military equipment, the overall lack of command, and
poor training and morale. With the prospect of the Imperial Russian
military becoming a second-rate force in Europe, Miliutin attempted to
launch his own program of reform. In order to pay for the reforms,
Miliutin needed a much larger budget as early as the 1860s in the aftermath
of the war. The Ministry of Finance, in a battle over allocations, found
this to be disturbing news since Miliutin thought that perhaps a growth in
petroleum exports could raise state finances for his military reforms.21
Significantly, Baku's oil wealth was not unknown to Miliutin. He
recognized the strategic value of Imperial Russia's southern borders since
prior to 1860 he was Chief of Staff for the Caucasus. For Miliutin, the
Caucasus had served as a laboratory for experimentation in techniques of
military administration.22 Miliutin came to the Caucasus "with ideas on
how to solve the problem of effectively conducting operations in the area,
and the fusion of these ideas, together with the experience gained over
four years of their practical application, provided proof of the efficacy
of the new approach..."23 But he also saw the early years of the oil
industry and this helped him realize later how petroleum's value could
impact military reforms through investment in heavy industry.
Unfortunately for the Ministry of War, little came of Miliutin's
objectives in his reform effort during the 1860s and early 1870s. It took
too many years for him to get his program through the mechanics of the
Russian government. The basic problem for Miliutin was the need to spend
money on building weapons and ships, and increase training and morale which
met opposition from other ministers.
Although he might not have recognized it at the time, the change for
Miliutin came in the early 1870s when the Ministry of Finance held the Baku
land auction, resulting in a small budget increase. The significance of
St. Petersburg's decision to support Reutern over Miliutin had left the
Ministry of Finance with uninterrupted influence in Baku's oil industry,
allowed economic programs to expand rapidly during that period and thereby
established strong links in Bakinskaia guberniia. Only by late 19th
century, with the spread of foreign investment throughout the economy, did
the Russian government allow salient military reforms to occur based on
petroleum profits.24
The Role of the Intelligentsia: Mendeleev and Bakinskaia Guberniia
D. Mendeleev was perhaps one of the world's greatest scientists; his work
in physics was unprecedented. The famous chemist played a critical role in
helping to modernize the Baku oil industry. Throughout the 1860s,
Mendeleev investigated and examined Baku's oil industry and the problems it
faced. As early as 1862, Kokorev had contacted Mendeleev about traveling to
Baku to help him figure out new methods in oil extraction against the
Mirzoev oil family. But Mendeleev recommended that Kokorev invest in other
areas of the region since Baku did not have the capability to produce
kerosene at that time.25 The truth may be that Mendeleev did not want to
be part of Kokorev's plan against the Mirzoev's family.
Mendeleev became such an expert on the Bakinskaia guberniia's petroleum
industry that the government deputized him. By 1867, Mendeleev had
acquired authority under the Ministry of Finance to investigate the
problems of the Baku oil industry.26 With these new powers, he helped to
create two official commissions --one in Tiflis and the other in St.
Petersburg-- to see how Imperial Russia should handle the development of
the Baku oil fields.27
After several years of debate, in 1872, the commissions announced their
decision. In regards to Bakinskaia guberniia, Mendeleev provided
information on the poor management by local managers and workers in Baku.
Russian officials, who were angered by Mendeleev's report, decided that
they wanted to develop the petroleum industry under much closer supervision
from government and expand foreign investment. Mendeleev agreed to a
certain extent: "we have too much petroleum-- we must get it out."28 But
he did not want to create a strong "presence" in Baku to support the
region's oil industry.29 Instead, he proposed a radical change in
technical applications for oil extraction.30 Governmental officials
--specifically in the Ministry of Finance-- seemed to ignore Mendeleev on
this point since they sought a quicker pace toward industrialization in the
oil industry and needed to raise income quicker than the available
technology would allow. So the Ministry of Finance, with Mendeleev's work
in hand, sought to re
form the ownership of land in Bakinskaia guberniia through auction.
The 1872-73 Oil Land Auction
Introduction
With the recognition of the Russian state of the waste occurring in the
Baku oil fields, action by St. Petersburg to make Baku's oil ready for
international sales became extremely salient. Industrialization began to
change St. Petersburg's relationship with Bakinskaia guberniia. The impact
on local owners who had benefited from the lease system and how they
survived after the 1872 oil land auction becomes a critical issue in
comprehending how they adapted to changing conditions. But first, some
background on the lease system is necessary to understand the plight of the
local oil dealer after the auctions.
Background on Lease System
For the locals, the situation before the 1872-1873 oil reform reflected a
less then favorable atmosphere but it did have its benefits. Ownership was
based on a contract system with the government granting monopoly rights for
exploitation in specific plots for periods of four years. The contract
could be rejected at any time and there were non-option rights for renewal.
Contract holders therefore were never certain how long they would be able
to hold their rights to their land. Consequently, the locals attempted to
cash in on the land rules as quickly and as much as possible but with mixed
results.
From 1821 to 1873, Russia employed the lease system where the state
alternated between an otkup --a type of tax-farming, monopoly contract
system-- and direct state exploitation of Baku's oil fields.31 The
government, which made the exploitation of petroleum deposits a state
monopoly, leased the oil fields to individual entrepreneurs.
A survey commission from St. Petersburg sectioned the oil-producing
properties in Bakinskaia guberniia into twenty-seven acre plots. This
system was quite unusual since other countries divided their properties by
geological units. This fact made large-scale operation impossible because
the parcels were too small to permit the orderly recovery and production of
petroleum despite the introduction of new technologies. Furthermore, the
various fields of individual producers were too widely separated to permit
use of newer machinery and equipment. Instead, old methods of recovery
were usually used. The result was "a waste which spared neither the
[owners] fields nor his neighbors."32 In addition, since the fields were
leased for only four years, this system was exceedingly disadvantageous for
the lessee. The poor drilling methods at the time absorbed a considerable
portion of the entire term of the lease in getting wells drilled, and left
only a short time for production itself. Consequently, for Imperial
Russia, the results from the Baku oil fields were poor due to weak
technological advances.33
The Auctions
In 1872-1873, the Ministry of Finance ended the practice of granting oil
concessions on state lands and changed to long-term leasing to the highest
bidder.34 Local, Russian and foreign investors were now able to compete
for purchasing oil tracts to the highest bidder. Of the native investors,
Armenians seemed to have governmental support over other local ethnic
groups simply based on the fact that they had good connections with the
Russian oil traders and administrators and understood clearly the problems
found in Baku's petroleum industry.35
Charles Marvin, the English traveler, captured the nature of the 1872-1873
land reform in its finest aspect. In many parts of the law, exceptions and
other rules made local investment difficult in its aftermath. For
instance, some lands were exempt from being sold to Russian nobles:
These, to the number of forty-eight, were sub-sectioned into groups on
account of there being on each property from where an oil source had been
extracted before 1872. At Balakhani seventeen groups were to be offered,
but two, Nos. V and XVI, were withdrawn on account of claims lodged by
so-called "private owners." Considerable litigation resulted in just over
half of No. V group, the part on the left of the Mashtagi road consisted of
four plots in No. XVI each about 4,900 square feet, being adjudged Tsarist
property. The petroliferous area of Balakhani covered some 842 acres, but
only 460 acres were offered for sale. At first the Tsarist government
proposed to allot the remaining 382 acres to the villagers of Balakhani who
had no pasturage. Government experts and advisers, recognizing the immense
potential of these lands, on which at least one gusher had been drilled,
expressed opinions which led the authorities to distribute the plots
amongst court favorites, famous soldiers and noblemen. In 1878, for
example, oil lands were practically given away as royal gifts.
Lieutenant-General Lazarev was granted twenty-seven acres from plot No. VI
and a few years later the Countess Gagarin became the fortunate possessor
of thirteen and a half acres from Plot No. VIII.36
In addition, to make collusion between the bidders difficult and thus keep
potential governmental profits low, the Ministry of Finance sought to
increase its potential income by sealed tender in December 1872. The
results were impressive. Instead of the valuation price, 50,000 pounds,
the government "cleared over 298,000 pounds for fifteen groups offered at
the Balakhani field."37 This act signaled two important results.
Primarily, the Ministry of Finance had increased state revenues from the
land auction. In addition, St. Petersburg had succeeded --in part-- in its
plan to shake-up the ownership of Baku's oil industry.
The Ethnic Results from the 1872-1873 Auctions
Quite simply, in terms of the competition between locals for the Baku oil
fields, the Armenians won, by a large margin, over the Muslims after the
land auction. From the 1872 auctions, the position of the Armenian
families --the Aramiants, Lianozovs, Mailovs, Melikovs, Mirzoevs,
Mantashians and the Tavetosyans-- expanded over the years. Part of the
reason for this success can be attributed to the role Armenians played in
Baku since they dominated many of the political and administrative
functions in Bakinskaia guberniia.38 According to some accounts, Armenians
"edged [Muslims] out of many professions" after the land auctions.39
Although Armenians may have dominated the petroleum industry, Muslims also
prospered but at a much lower percentage of the total oil businesses in
Bakinskaia guberniia. It was still possible for some Muslim families-- the
Asadullayevs, Maghiyevs, Mukhtarovs, Sultanovs, and the Taghiyevs-- to
accumulate great political power and financial wealth. But many of the
firms were much smaller than their Armenian counterparts and concentrated
on small-scale extraction and refining. Of the 54 oil firms engaged in the
extraction of oil in Baku by 1888, only two major companies were
Muslim-owned.40 Of the 162 refineries, seventy-three were Muslim-owned,
but only seven of them had fifteen or more workers.41
Given the lack of hard data on some of the Armenian and Muslim families in
the Baku oil industry mentioned above, it is difficult to get a clear
picture of every family's oil business during the 1850-1880s. Two
families, however, have had enough written on them to give a clear picture
of their accomplishments under specific conditions. These families --the
Mirzoevs and the Taghiyevs-- were two of the most important families in the
Baku oil industry.
The Mirzoevs
For Armenians, the development of Baku was paramount, for they recognized
the potential of the oil-fields. They were part of the skilled labor, and
among them most of the managers, engineers, as well as many capitalists,
made lucrative deals.42 Many Armenians made fortunes which made them into
local and regional power brokers. One of them, the Mirzoev family, played
an important role in the Baku oil industry in the mid-1800s.
Mirzoev had a very strong hold on the Baku oil fields since he had
powerful connections in St. Petersburg. For years prior to the oil
reforms, Mirzoev played a prominent role in the Baku oil industry. From
1821 to 1825, he paid the Russian government to export his petroleum.43 He
was quite active in establishing his oil business within Baku between
1830-1860 by participating in local trade.44 By 1863, he had expanded into
the refinery business by building a factory near the Surakhany temple.45
Mirzoev began to recognize the benefits of the new technologies being
applied to Baku's oil industry. In 1865 he made sure to adapt the emerging
technologies from German scientists concerning photogens.46 Consequently,
the successes of photogen production in Germany gave him the leading edge
in Baku's petroleum refining at that time. By 1866, he had a small
operation with eight [Muslim] employees.47 In addition, by the turn of the
decade, Mirzoev had expanded his drilling operations to such a degree that
the Russian government felt compelled to intervene through the oil auctions.48
When the land auctions occurred in 1872-1873, Mirzoev both struggled and
benefited from the process.49 He did face obstacles during the bidding for
the tracts. For instance, oil men such as Kokorev went into the
competition determined to outbid Mirzoev and deprive him of his holdings.
"At the first and second sales one group after another was wrested from
him, and it looked as if this powerful oil man...was going to be left
without any crude oil whatsoever."50
Luckily for him, Mirzoev succeeded in defending himself from these
attacks. One way he did this was to guarantee that his associates in the
Armenian community in Baku were in a strong position to help him when the
land auction began.51 These connections helped when Mirzoev paid "close to
122,000 pounds for forty dessiatines at Balakhani and the last two 132,200
punds for sixty dessiatines".52 Despite its high price, Mirzoev made the
most of his holdings since he resumed operations immediately making huge
profits and expanding his local power in the years following the auction.
The Taghiyevs
Muslims did succeed in buying land during the auctions. But the Muslim
funds invested in the leases did not exceed five percent of the total,
while the share taken by the Armenians was ten times larger. For example,
few Muslims succeeded in buying oil lands, acquiring only five of the
fifty-one plots sold at the first auction.53 But still there were success
stories. One of them involved Zeynal 'Abdin Taghiyev, a prominent Muslim
oil tycoon.
Taghiyev stands out as a success in the Baku oil industry during the
1860s. Taghiyev started with a small oil-bearing plot of land and
multiplied his fortune by investments in kerosene refining and branched out
into extensive land and stock market speculations.54 Later, Taghiyev
financially supported a wide range of educational and philanthropic
ventures, among them schools, scholarships, newspapers and theater in
Azerbaijan as well as in other Muslim centers in Russia. For instance, he
subsidized an intellectual group and published their ideas in the
periodical Kaspii.55 His financing of Kaspii became quite important when
Taghiyev helped propel his local supporters into the December 1877 Baku
Duma elections.56 It also served as an outlet for Azerbaijani national
aspirations as printed material became available on a regular basis in
Baku.57 The journal later served as the launching pad for prominent Soviet
figures in Azerbaijan including M.V. Barinov who managed the petroleum
industry after it was nat
ionalized by the Soviets.58 According to some: "Taghiev's career was a
refreshing contrast to so many of the other oil barons who used their
sudden wealth to devote themselves to the wildest forms of
self-indulgence."59
Overall, the secret for Taghiyev was that the Baku auction didn't limit
his abilities; he sought to make oil only part of his entire financial and
political empire while exploring ways to re-invest in Baku's social,
economic and political growth.
Changes in the Oil Industry Following the Land Auctions: Impact on Muslims
and Armenians
Introduction
The 1872-1873 land auction had an impact on the way Muslims and Armenians
worked in the oil industry. But for the new foreign owners, the workers
presented several interesting challenges because of their ethnicity.
First, their clan-based society affected their social status within the oil
industry. Second, in the wake of the land auctions, Muslim workers adopted
technology by copying from foreign firms such as the Nobels. This act
became a convenient way to modernize the industry prior to the rise in
production in the late 19th century despite the fact that some acts were
criminal. In contrast, the Armenians tried to work with the new, foreign
investors as much as possible.
Clan System Influence
For Muslims, life in Bakinskaia guberniia was based on a clan system of
khanates.60 As oil industrialization began, the Muslims who populated
these khanates came to Baku to work in an urban environment for the very
first time. But since most of the Muslim workers retained close links to
their villages, they adjusted poorly to urban life. It was this "khan-bey
system" itself that significantly affected the way the Muslims lived in the
oil community. The Muslims were described as follows:
Their natural instincts are in favour of absolutism, and they acquiesce
willingly in their old feudal and tribal system. In each district there
are two or three families, usually the descendants of the khans, enjoying
enormous prestige, who can order their Moslem vassals to do anything.61
Consequently, based on the clan structure, the Muslim owners assembled an
impressive collection of police and security forces, to maintain and
protect their fields from theft despite their lowly appraisals. "[The oil
guard] consisted of a few dozen well-built Azerbaijanians, armed to the
teeth, who came from the mountain villages, belonged to one and the same
clan, and looked quite sinister and brutal. These people were the most
pampered children of the oil industry; everything was granted to them:
furlough, money, presents --even women, for it was owing to this guard that
a certain degree of peace reigned on the oil fields and in the works."62
Their behavior is explained since a number of the owners sprang from the
khan-bey system which brought a certain clannish culture into the oil
business.
Technology Adaptation and Crime
Once the Nobels entered the Baku market in the 1870s after the land
reform, many local oilmen copied their methods. The locals improved the
quality of their kerosene, turned waste into lubricants, and even formed
storage and transportation networks to expand marketing operations.63 For
example, A. Tavrizov, who was one of the Baku refiners, patented a
continuous distillation process, consisting in its essentials of an
adaptation of the slightly modified alcohol rectification plant to the
distillation of petroleum brought in by the Nobels.64
An example of thievery during this period involved tapping existing oil
pipelines. This act was part of an emerging black market in petroleum
productions. Essey-bey tells an interesting story of how small Muslim
producers acted against each other and the larger firms during this period:
In the Baku oil fields, after extraction, the raw oil was preserved in huge
reservoirs, build along the Caspian Sea near the refinery, but the derricks
where the oil is extracted are some fifteen miles away from them. Between
the oil-wells and the refinery pipelines conveyed the oil of the various
owners into a common reservoir. Each company possessed its own pipelines
and reservoirs belonged to a firm which preserved the raw oil, later
conveyed it to the refineries, and did good business this saw. Since there
were more than two hundred owners, the corresponding number of pipes were
laid across the desert close together; each firm had its own, so that the
amount of the oil which it entrusted to the company could be determined
exactly when it was received and there was no danger of crediting it to
another. The company vouched only for the oil that arrived in the
reservoirs, but not for the oil that was conveyed to them. Sometimes the
pipes burst or were leaky, so that the amount of oil flowing out and th
at flowing in did not correspond; for this reason the oil had to be
measured after its passage through the desert upon its arrival in the
reservoir. Whether this system was good or bad is open to doubt. Hundreds
of pipes, however, lay in the desert in disorder and presented a confusing
aspect.
One of these lines belonged to the well-known captain of industry, Riza, a
worthy gentleman who sought culture most assiduously, traveled abroad every
year, and was considered the up holder of the European civilization. The
one next to his belonged to a large firm and was in use day and night, for
the firm had a million-dollar fountain and did not know what to do with all
the oil. One day, however, representatives of the firm noticed that much
less oil ran into the reservoirs at the seashore than was extracted,
according to an approximate estimate: apparently it disappeared on the
way. Riders were sent into the desert to inspect the pipes, but nothing
suspicious was noticed; the pipes were intact. Nevertheless the oil
continued to vanish. The entire stretch was watched day and night, but in
vain. The whole affair was so incomprehensible that the firm might have
been suspected of making a fuss about its well purposely in order to
reassure its creditors. This lasted for months; but soon it became evid
ent that other firms, too, were being robbed in a similar mysterious
manner, and the matter because serious. Those who were robbed gathered
their employees, and during the night quietly had all the pipes near their
own relaid in the hope of determining the cause of the loss. And then
something unheard-of came to light. Riza's pipeline was found to be
connected so that their oil simply flowed into his line, to be booked as a
product of his oil-derricks when it entered the reservoir."65
Subsequently, Riza was imprisoned. 66
Riza's "secret and ingenious plan" soon found its imitators among other
minor oil men and some workers themselves.67
The Impact of Foreign Investment
The 1872-1873 land auctions allowed foreign companies to purchase tracts
and develop them. The Nobel Brothers Petroleum Company was one of the only
companies allowed into Bakinskaia guberniia after the land auctions. The
Ministry of Finance encouraged their participation since, according to
them, "it could bring order to the empire's oil industry and raise it to a
global level."68 The company constructed several pipelines and tried to
introduce new technologies in cooperation with the Ministry of Finance.69
The Russian government allowed the Nobels to introduce technical and
commercial innovations as well as create joint-stock companies that
resulted in many local firms going bankrupt or adapting to new technologies
and transportation improvements.70 Putting some of these operations out of
business was one of the main goals of the Ministry of Finance.
Most locals --either oil men or worker as well as mostly Muslim-- failed
to benefit from the Nobels. Some Muslims and Armenians in Baku's oil
industry sought to copy Nobel technology but with meager results and in a
various number of ways. First, locals attempted to copy pipeline schemes.
These pipelines failed to work adequately because of the poor workmanship
as well as the use of Russian technology which frequently broke down. The
local oil producers attempted to duplicate the Nobel technology by erecting
a maze of "jerry-built, leaking, and ill-fitting pipes that often were the
target of midnight raids where Muslims would switch oil from another
producer's pipe into their own, diverted lines into their own storage
tanks, or simply let the oil run out into the sand."71
Another serious impact from the Nobel's introduction of new technology
during Russia's industrialization was in transportation innovations for
extracting Baku's oil in the late 1870s. The Muslim workers had dominated
the transportation industry until the Nobel's came to Bakinskaia guberniia.
The first area impacted by the Nobel's presence was in barrel-making. One
of the major changes in the oil industry to challenge the Muslim oil
workers was the making oil barrels. The cost of making barrels in Baku to
contain the oil was very expensive sometimes resulting in the barrel being
far more valuable than its contents. By the time the refined products
reached Russian towns, the cost often exceeded the value of any foreign
petroleum product imported into Russia.72
Finally, changes in modes of transportation also affected how Muslims
moved oil from Bakinskaia guberniia. Many of the Muslims relied on what
Europeans and Russians would call at that time "primitive methods" of
getting petroleum to market:
The distance was some eight miles and the terrain not especially difficult,
at least for the hand-driven carts --the arabas-- of the [Muslims]. These
two-wheel conveyances had a large barrel suspended in the center and were
capable of carrying between seven and nine hundred pounds of oil. Horse or
mule provided the power, and the payment was the main source of income for
thousands of Tartars. It was a half-million dollar monopoly. And it was
slow, expensive, and not always reliable; heat, storms, and Muslim
religious observances interrupted the flow of oil. The costs were
reflected in the price of the refined product and if that price were to be
reduced the arbas would have to go.73
Consequently, the advent of the first pipeline meant financial ruin to the
arba drivers. In response, the drivers attacked Nobel facilities.
eventually, the Nobels had to protect their property by appointing their
own security and constructing sentry boxes every few hundred yards since
"[i]nfuriated [Muslims}, whose lucrative business they had destroyed, did
damage to their lines."74
Despite the sharp and negative impact on the majority of the Muslim
populace involved in the petroleum industry, contact between Armenians and
the St. Petersburg government continued as before the land auctions, giving
them an advantage when the Nobels entered the Caucasus. Those Armenian
companies that had been long established with the Russian government were
likely to survive if they followed the pipeline scheme put forth by the
ambitious foreigners.
The Armenians wanted to join the Nobels in their pipeline projects as soon
as possible. Towards the end of 1878, a start was made with the laying
down of three new lines. "Mirzoiev laid a nine mile, 4-inch pipeline from
the X. group and his Baku refinery. Another Armenian, G.M. Lianozov, laid
another nine and three-quarter mile 3-inch pipeline from his No. VII
group."75 The next year "the Baku Oil Company, Mirzoiev, Lianozov, and the
Caspian Company put down seventy miles a pipe, nearly close the Nobel's
work in the region."76 Significantly, these oil men had stayed in touch
with the St. Petersburg laboratories dedicated to researching and analyzing
new and different methods to extract and transport Baku's oil.77
Conclusions and Aftermath of the 1850-1880 Period
This article has sought to illuminate the kinds of programs St. Petersburg
introduced in Bakinskaia guberniia in the mid-19th century. It is not
meant to be the final word on petroleum industry between 1850 and 1880.
Instead, the article is a launching point for thinking about local
reactions to industrialization and its ramifications in late Imperial
Russia and, especially in the Caucasus.
Importantly, the article looked at how the government attempted to make
policy towards Bakinskaia guberniia. The competition between the Ministry
of Finance and the Ministry of War illustrated that Bakinskaia guberniia's
fields became a battleground over shrinking income during reform efforts.
In addition, the paper examined some of the more prominent Russian
businessmen and intellectuals working in the region. Some of their work
with the Ministry of Finance led to the 1872-1873 land auctions, probably
the most important event of this early period of Baku's oil industry.
Finally, it examined how locals operated their oil holdings under the lease
system and the disaster Muslim oil workers faced if they failed to adapt to
new technologies. Overall, then, there are three main areas of conclusion
that eventually led to the events of the 1880s-1890s that are important to
point out.
1) Competing Ministerial Interests and the Industrialization Race
In a modern industrialized state, gasoline, diesel oil, and lubricating
oil are of paramount importance. Their consumption is an unmistakable
indication of the extent of industrialization and motor technology.
However, in a predominately agricultural economy, such as Imperial Russia,
petroleum played a very important role despite the fact that its oil and
gasoline developments were falling far behind.78 For Imperial Russia,
petroleum sales may have bee more important than using the product. This
fact made Russia's needs unique compared to the European countries.
Significantly, the Ministry of Finance had succeeded in gaining
international investment and financing for the Baku petroleum industry and
making specific technologies from both Germany, and later, Russia,
available to the oil barons. Kokorev and others helped this process along.
However, the Ministry failed in supervising closely the application of the
new technologies, had weak government in the area, and failed to make sure
the entire region didn't fall behind the rest of European and American
petroleum programs.
By the early 1880s, however, the government strengthened its petroleum
policy by allowing even more foreign investment. Several ministries were
affected and bypassed. The Ministry of War still failed to receive more
money for reforms since the government was concentrating on issues closer
to the Russian heartland and not full-fledged military reform (i.e. peasant
and noble issues). In addition, the Ministry of Finance's program had
lapsed behind the efforts of other governmental efforts since losing
Reutern after the Russo-Turkish War (1877-1878). In the wake of Reutern's
dismissal, the Ministry of Finance still tried to fight from its weakened
position by continuing to concentrate on additional technologies to help
stop waste.79 By 1883, the effort had failed and petroleum policy had been
transferred to the Ministry of State Property.80 At this juncture, the
Imperial Russian government offered terms that were most favorable to
international investors such as the Nobels and later the Rothchilds, leadi
ng to more foreign investment and penetration in the Caucasus.81
2) The Role of the Intelligentsia on Economic Policy
Scientists like Mendeleev contributed to the growth of Baku's oil industry
and the future growth of the Imperial Russian industrial base. By far his
most significant contribution to Baku was the findings of his commissions
in Tiflis and St. Petersburg. The land auction was the key moment of the
period. His efforts illustrate the role that the scientific intelligentsia
had on oil policy. Significantly, from Mendeleev's point of view, the
mid-1800s had shown how much more work needed to be done in Bakinskaia
guberniia before it could become a world-class exporter. The entire
Caucasus could add weight to Russian trade compared to the rest of the
industrialized world.
In fact, Mendeleev's analyses of Bakinskaia guberniia's petroleum fields
continued throughout the 1880s. In 1880, Mendeleev returned to Baku
accompanied by A. Potylitsyn with both men having been given deputation
from the Ministry of Finance as being there "on oil affairs."82 The trip
turned into another referendum on the waste and transportation problems in
the Baku oil industry. Mendeleev spent his time shuttling back and forth
between the Volga region and Baku, trying to figure whether pipelines or
shipping would be more reliable.83 According to Mendeleev, an aggressive
export policy needed to be put into place as well as pipelines.84
Later in the decade Mendeleev became a valuable supporter of pipelines and
acted as a mediator between the Nobels and the local oil barons. He
arrived in Baku in May 1886 and by December 4 had managed to convince the
local oil barons that building pipelines were in the region's best
interest. He also served on a commission with Lianozov and Lazarev to
allow the transport of oil in order to accelerate Russian industrialization
as part of the pipeline program.85
3) Technological Impact on Locals
Life for the locals between 1850 and 1880 alternated between those who had
access to Russian officials and scientists and those who were bound to the
land by the khan-bey system. In many ways, the introduction of new
technologies into Bakinskaia guberniia both enhanced the lives of a few
fortunate individuals and wiped out the occupations of a majority of those
who had relied on the old, native system of oil extraction and processing.
Working in the fields or forming police and security forces became a
regular way of life for those who adapted to the new social conditions
caused by the land reform. In addition, it added to the migratory flow of
workers from the countryside to the city.86
But by 1882-1883, locals accused foreign investors of trying to monopolize
the industry and they looked increasingly towards the state for protection
--but with no help forthcoming.87 In response, joint-stock companies in
Baku helped to support local efforts against the Nobels and other
companies. Interestingly, here is an early example of the government
unable to prevent businessmen from organizing by specific industry to
discuss common problems and share in the coordination of policy with
interested ministries.88 This may be seen as an indication of discontent
with St. Petersburg's policy and the beginning of a referendum on Imperial
Russia style of government. As production grew, the gulf between foreign
companies, the government, oil producers, and the workers grew and turned
towards violence by the turn of the century. The period between 1850 and
1880 proved to be an important time of initial growth and prosperity
towards greater industrialization in the petroleum industry.
ENDNOTES
1 This article is a shorter version of a much larger work-in-progress.
Opinions and conclusions expressed here are solely those of the author and
should not be attributed to any other agency. The author would like to
thank Molly Molloy of the Hoover Institution for her help in finding useful
materials.
2 The Russian state absorbed the Baku Khanate in 1813 through the Gulistan
Treaty with the Persians. A number of other khanates passed under Russian
control which led to the administrative creation of the Baku and
Elizabethpole gubernii. See the following for a general background on
Russian advances in the region during the 1800s in A. Mil'man,
Politicheskii stroi Azerbaidshana v XIX - nachale XX vekov, Baku:
Azerbaidzhanskoe gosudarstvennoe izdatel'stvo, 1966, pp. 52-54; Samedov,
V.A. Neft' i ehkonomika rossii (80-90-e gody XIX veka). Baku: Elm, 1988
and Sumbatzade, A.S. Azerbaidzhanskaia istoriografiia XIX-XX vekov. Baku:
Elm, 1987. Some texts explore petroleum trade between Baku and Persia in
the early 19th Century. See M.A. Musaev, XIX asrin Baku shaharinin
tijarati (1800-1883 ju illar). Baku: Azarbayjan SSR Elmlar Akademiyasi
Naeshriyyati, 1966, pp. 7-32. For information on Baku's oil industry from
the 9th to the 17th century, see F.M. Aliev, Azerbaidzhansko-russkie
otnosheniia XV-XIX vv.
Baku: Elm, 1985 and S.G. Salaev and R.R. Rakhmanov, "Uvlekatel'nye
stranitsy istorii osvoeniia kaspiia," Azarbaijan neft
tasarrufaty/Azerbaidzhanskoie neftianoe khoziastvo, No. 4, April 1989, p
59. Hereafter, Azarbaijan neft tasarrufaty/Azerbaidzhanskoie neftianoe
khoziastvo will be abbreviated as ANK.
3 John Mitzakis, A Handbook of the Russian Oil Industry. London: The
Pall Mall Press, 1913, p. 24.
4 "Muslim" is used in this article since this is how Western and Russian
texts usually described Azerbaijanis at that time.
5 Ibid.
6 V.E. Tishchenko and M.N. Mladentsev. Dmitrii Ivanovich Mendeleev, ego
zhizn' i deiatel'nost'-- universitetskii period, 1861-1890 gg. Moskva:
Nauka, 1993, p. 297.
7 A. Keppan, The Industries of Russia: Mining and Metallurgy. (Published
as part of the Chicago World's Fair), Vol. IV, St. Petersburg, 1893, p. 83.
8 Tishchenko and Mladentsev, p. 268.
9 S.R. Sergienko, Ocherk razvitiia khimii i pererabotki nefti. Moskva:
Izdatel'stvo Akademii Nauk SSSR, 1955, p. 135. It is unclear whether this
effort had included Mendeleev or any of his St. Petersburg colleagues.
10 L.P. Arskaia, Nobeli-- Priemnye deti rossii. Moskva: 1994, p. 45.
11 Mitzakis, pp. 24-25.
12 Kokorev invited D. Mendeleev to go to the United States in 1876. The
trip is significant in that it occurred after the land auctions. For
materials on Mendeleev's visit to the United States, see Charles Marvin,
The Region of Eternal Fire: An Account of a Journey to the Petroleum
Region of the Caspian in 1883. London: W.H. Allen and Company, 1884, p.
194 and V.E. Parkhomenko, D.I. Mendeleev i russkoe neftianoe delo. Moskva:
Izdatel'stvo akademii nauk SSSR, 1957, pp. 53-61.
13 Marvin, p. 261.
14 Ibid.
15 V.A. Samedov, Neft' i ehkonomika rossii (80-90-e gody XIX veka). Baku:
Elm, 1988, p. 25.
16 Parkhomenko, p. 32.
17 James Dodds Henry, Baku, an Eventful History. London: Archibald,
Constable, 1905, p. 44.
18 Mitzakis, pp. 24-25.
19 Samedov, p. 45. By the time the industry reached its full potential in
the 1880s, seventeen facilities were in operation. See p. 47.
20 Imperial Russia knew the importance of the Baku oil wells when the
central government, early in the 19th century, established a
"military-administrative" system in Bakinskaia guberniia to help authority
spread to the country-side over the rule of the khans and beys. With a
government interested in centralizing economic control to boost military
expenditures, programs were implemented which focused on petroleum and its
extraction and transportation. But these efforts failed. See Eroshkin,
N.P. Istoriia gosudarstvennykh uchrezhdenii dorevoliutsionnoi Rossii.
Moskva: Vysshaia shkola, 1983, p. 189.
21 F.A. Miller, Dmitrii Miliutin and the Reform Era in Russia. Charlotte:
Vanderbilt University Press, 1968. p. 26-28, 53-57; See also W.C. Fuller,
Civil-Military Conflict in Imperial Russia, 1881-1914. Princeton:
Princeton University Press, 1985, pp. 7-13.
22 J.S. Bushnell, "Miliutin and the Balkan War: Military Reform Vs.
Military Performance," published in B. Eklof, et. al., Russia's Great
Reforms, 1855-1881. Indianapolis: Indiana University Press, 1994, p. 148.
23 Miller, p. 29.
24 Only in the late 1890s did Russian military expenditures rise beyond 285
million rubles from moneys gained in petroleum extraction from Baku. See
Miller, p. 29.
25 Tishchenko and Mladentsev, p. 296-297.
26 Sh.F. Mekhiev, et. al. "D.I. Mendeleev i razvitie neftianoi
promyshlennosti v rossii," ANK, No. 12, December 1986, p. 66.
27 A.S. Sumbatzade, Promyshlennost' Azerbaidzhana v XIX v. Baku: Akademiia
nauk Azerbaidzhanskoi SSR, 1964, p. 276. See also R.Sh. Kuliev, et. al.,
"Idei D.I. Mendeleeva zhivut i razvivaiutsia," ANK, No. 9, September 1991,
p. 59.
28 Despite originating from a fictional biography, the quote still captures
Mendeleev's overall thinking on Russian oil and its potential during early
industrialization. See Daniel Posin, Mendeleev: The Story of a Great
Scientist. New York: McGraw-Hill Book Company, Inc., 1947, p. 243.
29 Thomas C. Owen, The Corporation Under Russian Law, 1800-1917: A Study
in Tsarist Economic Policy. Cambridge: Cambridge University Press, 1991,
p. 112.
30 Tolf, p. 69, 238n.
31 For more on the issue of removing otkup from the tax system, see
Akademiia nauk SSR, Institut istorii, Leningradskoi otdelenie.
Monopolisticheskii kapital v neftianoi promyshlennosti rossii, 1883-1914:
Dokumenty i materialy. Moscow-Leningrad: Akademiia nauk SSSR, 1961, p. 9.
Hereafter, Monopolisticheskii kapital v neftianoi promyshlennosti rossii,
1883-1914: Dokumenty i materialy will be abbreviated as MKNPR.
32 Heinrich Hassmann, Oil in the Soviet Union. Princeton: Princeton
University Press, 1953, p. 23.
33 Ibid., p. 22.
34 Samedov, p. 13. For the legal findings surrounding the preparations and
implementation of the auctions, see Polnoe sobranie zakonov' rossiiskoi
imperii, No. 50545, 1872, pp. 230-231 and Polnoe sobranie zakonov'
rossiiskoi imperii, No. 52108, 1873, pp. 449-450.
35 For Russian Armenians, the early 1870s was a time of great opportunities
under St. Petersburg's rule. According to Walker, the Imperial Russian
government had looked favorably on Armenians during this period. See, for
example, Christopher J. Walker, Armenia: Survival of a Nation. New York:
St. Martin's Press, 1980, p. 67.
36 Marvin, p. 211; Henry, pp. 52-53.
37 Ibid., p. 211; Ibid., pp. 52-53.
38 Villari, L. The Fire and Sword in the Caucasus. London: T. Fisher
Unwin, 1906, p. 188.
39 Villari, pp. 187-188.
40 S. Gulishambarov, Ocherki fabrik i zavodov Bakinskoi gubernii. Tiflis:
1890, pp. 70-71.
41 Ibid., pp. 113-116.
42 Villari, p. 187.
43 Marvin, p. 209.
44 M.A. Musaev, M.A. XIX asrin Baku shaharinin tijarati (1800-1883 ju
illar). Baku: Azarbayjan SSR Elmlar Akademiyasi Naeshriyyati, 1966, p. 35.
45 Keppan, A, p. 83.
46 A.S. Sumbatzade, Promyshlennost' Azerbaidzhana v XIX v. Baku: Akademiia
nauk Azerbaidzhanskoi SSR, 1964, p. 286.
47 Ibid., p. 287.
48 Samedov, p. 13.
49 Marvin, p. 209
50 Henry, pp. 51-52.
51 McKay, John, "Entrepreneurship and the Emergence of the Russian
Petroleum Industry, 1813-1883," Research in Economic History, 8 (1983).
pp. 49-51.
52 Tolf, p. 44. Some argued that his successes rested on the fact that he
benefited from acquiring knowledge of American petroleum business practices
which is simply not true. See S.R. Sergienko, Ocherk razvitiia khimii i
pererabotki nefti. Moskva: Izdatel'stvo Akademii Nauk SSSR, 1955, p. 135.
53 Gulishambarov, p. 25.
54 Tishchenko and Mladentsev, p. 313.
55 Villari, p. 168.
56 Mil'man, pp. 212-213.
57 See, for example, the correspondence and discussion concerning feudal
societies and the need for educational reform during this period in
Gasan-Bek Zardabi, Izbrannye stat'i i pis'ma. Baku: Izdatel'stvo akademii
nauk azerbaidzhanskoi SSR, 1962, pp. 8-30.
58 I.D. Ruvinskaia, "Komandir nefti," ARK, No. 10, October 1988, pp. 61-62.
59 Taghiyev could also be quite tough. Later, in the 1880s, Taghiyev
participated in a Baku syndicate with the Nobels as well as the Caspian,
Arafelov and the Batum oil concerns, largely in the hands of the
Rothchilds. See Henry, p. 117. Two Armenian owners, G.M. Lianozov and M.I.
Lazarev, lamented to Minister of State Property M.H. Ostrovskii in
September 1886: "Tagiev, the owner of the Bibi-Eibat gusher, is at present
able to supply twice as much oil as the whole Baku region demands and
offers his oil like a gift. It can't go on: only ruin and liquidation of
the business remain for us if there is no hope for the authorization of the
Transcaucasian pipeline by the higher administration." See MKNPR, pp. 77-78.
60See, for example, Dz.M. Musatafaev, Severnye khanstva Azerbaidzhana i
rossiia: (konets XVIII - nachalo XIX v). Baku: Elm, 1989.
61 Villari, L, p. 167.
62 Beeby-Thompson, p. 60.
63 McKay, pp. 76-84.
64 Henry, p. 49.
65 Essad, pp. 36-38.
66 Ibid.
67 Ibid., p. 42.
68 MKNPR, p. 11. See especially documents No. 1 (pp. 47-53) and No. 2 (pp.
53-56) for detailed information on the Nobel contract with the St.
Petersburg government.
69 L.E. Shepelev, Tsariszm i burzhuaziia vo vtoroi polovine XIX veka:
Problemy torgovopromyshlennoi politiki. Leningrad: Nauka, 1981, pp. 181-182
70 McKay, p. 607.
71 Tolf, p. 53.
72 Beeby-Thompson, p. 4.
73 Tolf, p. 51.
74 Henry, p. 74. The ethnicity of the guards is unknown.
75 Ibid.
76 Tolf, p. 53.
77 Sergienko, p. 135.
78 Hassmann, p. 29.
79 Marvin, p. 260.
80 Shepelev, pp. 13-14, 46-52, and 160-161.
81 England reached agreements with Imperial Russia in 1859 for access to
Baku's oil. See Mitzakis, p. 62. But it took many years for England to
begin investments in the region. Only in 1886 did the Rothchilds receive
official recognition from Imperial Russia to conduct business in Bakinskaia
guberniia. See MKNPR, p. 672.
82 O. Pisarzhevskii, Dmitrii Ivanovich Mendeleev: 1834-1907. Moskva:
Molodaia gvardiia, 1951, pp. 152-153; See also Tishchenko and Mladentsev,
p. 314.
83 G.D. Amirkuliev, "Vklad D.I. Mendeleeva v razvitie bakinskoi neftianoi
promyshlennosti," ANK, No. 6, June 1984, pp. 61.
84 Ibid.
85 Sh.F. Mekhiev, et. al. "D.I. Mendeleev i razvitie neftianoi
promyshlennosti v rossii," ANK, No. 12, December 1986, p. 67. See also
Tishchenko and Mladentsev, p. 312.
86 It is interesting to note that the migratory pattern from village to
urban center remains a salient component in industrialization during 19th
century in Imperial Russia. For other studies on migratory patterns to the
urban center of Moscow in Late Imperial Russia, see J. Bradley, Muzhik and
Muscovite: Urbanization in Late Imperial Russia. Berkeley: University of
California Press, 1985.
87 McKay, pp. 76-84.
88 Shepelev, pp. 13-14, 46-52, and 161.
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