History of the Baku Oil Industry. Part 17

After the discovery of the oil fields, Baku became a special place, where various economic and political interests of international coalitions, industrial clans and leaders were concentrated and clashed. VK begins publishing chapters from the book by Ismail Agakishiev "History of the Baku Oil Industry and the Second Oil Boom (second half of the 19th century - beginning of the 20thcentury.)". The book presents a historical analysis of the emergence and current state of the Azerbaijani oil industry.

With the absence of democratic forces in the central government, the Transcaucasian Sejm was forced to make a decision on April 9th 1918 to proclaim the independence of the region in the midst of the 'Red Terror', primarily from the Bolsheviks. On April 22nd 1918 the establishment of the Transcaucasian Democratic Federative Republic was announced. The composition of this formation included the territories of the South Caucasus, which had been attached to Russia in the late eighteenth and first quarter of the XIX century. Initially they existed as autonomous parts of the empire, but later formed the Tiflis, Kutaisi, Baku and Yelizavetpol (Ganja) provinces as well as the Batumi region. The government, headed by A.I. Chkheidze, consisted of five Azerbaijanis: M.G. Hadjinsky (Minister of Trade and Industry), Fatali Khan-Khoysky (Minister of Justice), H. Melik Aslanov (Minister of Transport), I. Heydarov (Minister of State Control) and N. Usubbekov (Minister of Education). The TDFR's intentions to establish control over the Baku oil fields were not implemented because the power in the city belonged to the Baku Commune, which had remained faithful to the RCP (b), and saw its main goal in ensuring Soviet Russia with oil supplies. The Transcaucasian government failed to oppose the offensive actions of the Baku Bolsheviks due to tensions which immediately arose between national factions. At the end of May 1918 the Transcaucasian unity collapsed. The disintegration of the institution was caused by significant antagonisms between the seven main factions of the Transcaucasian Sejm: the Muslim socialist bloc, the Social Democrats, the Mensheviks, the "Musavat" party, the "ARF", the Socialist Revolutionaries, the Party of Muslims of Russia, the Socialist Federalists and National Democrats. Forces which were very different in ideological orientation and attitudes towards force had failed to achieve political consensus which made any joint effort impossible. On May 26th 1918 the Georgian representative withdrew from the Transcaucasian Sejm, which led to the dissolution of the whole structure. The TDFR ceased to exist. However, three sovereign republics emerged on its basis. It should be noted that the representatives of Azerbaijani parties opposed the collapse of the TDRF until the very end. But, facing the loss of statehood, they followed the decision of the Georgians and on May 28th 1918 announced the formation of the Azerbaijani Democratic Republic. Fatali Khan-Khoyski (1875-1920) was elected as its Prime Minister, while Mahammad Emin Rasulzade was elected leader of the Provisional National Council.

I will quote below how the Azerbaijani political leaders explained the promulgation of independence in the "Declaration of Independence" adopted by the Azerbaijan National Council: "A political order has been established in Russia in the course of the Great Russian Revolution, which resulted in the collapse of parts of the state body and the deflux of Russian troops from Transcaucasia. Left to their own resources, the peoples of the Caucasus took over the arrangement of their lives and created the Transcaucasian Democratic Federative Republic. However, in the further course of political events, the Georgian people thought it best to withdraw from the Transcaucasian Democratic Federative Republic, and to form an independent Georgian Democratic Republic. The current political situation in Azerbaijan related to the end of war between Russia and the Ottoman Empire, as well as unprecedented anarchy in the country, are prompting Azerbaijan, which includes the Eastern and Southern Caucasus, to create its own state organization and to bring the people of Azerbaijan out of their current difficult internal and external situation." Thus, even the Declaration stated that the announcement of the independence of Azerbaijan was related to the rejection of the political regime which had been established in Russia, as well as the actions of the Georgian side by Azerbaijani political forces which had signed the Declaration of Independence. At the same time, the authors of the Declaration made it unequivocally clear that they saw their new state in the context of other regional independent states. By that time, it became clear that the formation of an independent state of Azerbaijan will inevitably lead to war with the armed forces of the Azerbaijan Baku of the Council of the People's Commissars. The emergence of the Azerbaijan Democratic Republic a on the regional political arena deeply troubled the central Russian authorities, as well as the Baku Soviet with its policy which was objected to by most of the oil producers. For the first time in the history of Azerbaijan there appeared a chance that the native people of this land could become the owners of their own reserves. However, according to the Bolsheviks, it was essential to prevent this course of events and the oil was supposed to belong to the Soviets of Workers', Soldiers' and Sailors' Deputies, that is, in fact, to the Bolshevik government. On May 28th 1918, on the day of the announcement of the Democratic Republic of Azerbaijan, the Baku Soviet received a telegram from Joseph Stalin: "The Council of People's Commissars has approved the nationalization of the oil industry," On June 2nd 1918, based on Stalin's telegram, the Baku Council of People's Commissars adopted a decree on the nationalization of the oil industry, in other words - on the abolition of the private oil industry. However, the adoption of this decree was an impulsive act, rather than part of a well thought-out plan. In the context of the still-struggling Bolshevik regime in the country, that could lead to an overwhelming confrontation between oil companies and the Baku commissars, which eventually became one of the reasons for their loss of power. Certainly, the political crisis of the summer of 1918 in Baku was largely provoked by the extremely ill-conceived policies of the Council of People's Commissars in oil matters.

The Baku authorities saw the transfer of oil to Russia as their main task. However, for a long time they were unable to ship required amount of oil and petroleum products to Soviet Russia. Thus, in February 1918 only 26 tons of oil was transported to Russia. In the next months the exports increased. In April 1918 it amounted to 94 thousand tons.1. But this amount of oil could not possibly satisfy Russia - emergency measures were required. The Bolsheviks saw a way out in the total submission of economy to the state. Therefore, Lenin demanded that the leaders of the Baku Council of People's Commisars initiate "an attack of the Red Army on capital," which was supposed to manifest itself in the complete nationalization of oil industry. It prompted the issue of a decree on nationalization, which made the Soviet power owners of the oil industry. The statement of the People's Commissars of Baku on this occasion stated: "From now the only owner of all the trades, factories, shops and all the equipment becomes the people in the face of the workers-peasants' Soviet government." 2 But the hastily and shortly carried nationalization was accompanied by drastic disorganization of the production rate and discontent of the oil companies owners as well as engineering technicians. The workers were also not enthusiastic about the nationalization since their material conditions have sharply deteriorated during that period. The nationalization of oil industry has led to a drastic decrease in oil production and export of oil, which was the natural result of Bolshevik's ignorance of instruments of market economy.