The First Time in History
The Story of Russian Oil
Sometime in 1925
IN the great Oil Duel going on in the world today, making and
unmaking boundary lines and empires, Russia holds the balance of power.
She intends to develop her reserves for the benefit of her own people
and not for the pleasure or prestige of any foreign nation. Foreign
nations intend otherwise.
That is the story of Russian Oil,--a story of struggle,
beginning six years ago and destined to continue for a generation,--a
day by day struggle for control. This struggle was the big economic
fact behind Genoa, behind Tile Hague, behind British, French and
Italian intrigue in the Near East. It is even the story behind the
Turkish conflicts. Kemal Pasha explains the reason for the struggle for
the Dardanelles,--"This control is important because of Russian Oil."
One technical invention after another has brought Oil to a
commanding position in the world to-day. The nation controlling Oil
controls the seas and commerce of the world. The United States is today
producing the greater part of the world's oil. But she produces
wastefully, exhausting her reserves; within twenty years, at this rate,
she will have none left. The pleasure automobiles of America may have
exploded into the air the oil on which control of the seas depends.
England has been more far-sighted. She saw that without reserves
of oil, the British Empire was doomed. By financial power and political
intrigue, by conferences and by armies, she has secured control of a
large part of the oil reserves in the world. And now,--on the horizon
appears Soviet Russia, who has more oil than anyone else.
The fields of Baku alone, in the part already worked and known,
have a greater reserve than all the United States. Seven to eight
billions of barrels is the lowest calculation of the oil still
obtainable here. There is perhaps as much again in the peninsula around
Baku, untouched and unworked.
North of Baku lies Grozny, a smaller field, but producing the
best benzine in the world. It has oil so heavy in paraffin that the
wells have been closed down to wait for adequate refineries. In
Pennsylvania they call it paraffin oil if it has two per cent.
paraffin; but Grozny paraffin oil has six to eight per cent. It is so
stiff that they cannot pipe it, except in the midst of midsummer. It is
so rich that they cannot use it.
In the great mountainous desert beyond the Caspian lies another
oil district, the Ural Emba, discovered shortly before the war and
little prospected. Fifty separate oil fields are known to exist in that
80,000 square kilometres of waste country, inhabited by nomad tribes
and belonging without contest to the Russian government. Only two of
these fields have yet been opened, but already a billion barrels of oil
are known to exist in Emba. In the end it is expected to prove even
richer than Baku; and Baku is richer than the whole United States.
That's Russian Oil! No wonder England supported Denikin's army
when she thought he had a chance to secure this prize. No wonder she
abandoned him when he lost Baku. No wonder Standard Oil and Shell watch
each other like hawks in their moves with Russia, so that the reported
deal of Krassin with Shell was the bomb that wrecked the Genoa
conference. The press of England still takes disproportionate interest
in the little Soviet Republic of Georgia. Georgia is important as the
port through which the oil of Baku reaches the outside world.
There are two stories of Russian Oil. The story of stocks and
bonds and paper control, which goes on in Paris and London with
occasional episodes at San Remo, Genoa and The Hague; and the story of
workers and engineers in Baku, who never saw a stock or a bond. They
are stories of two different worlds, and to each of them the other
world is unreal and unknown.
Outside Russia, the great ones of earth have played with the
paper control of the oil fields. England and France have signed
treaties agreeing on what they would do with Russian Oil. English
representatives have visited America, to agree on a joint programme
between Shell and Standard Oil, and thus avoid friction between two
great nations. "They are fighting over the hide of the Bear, and the
Bear is not yet killed," remark the Russian newspapers with cheerful
The repeated, bitter demand from America and England for the
recognition of "private property" in Russia has much to do with Russian
Oil. Private property is quite secure to-day in Russia; and even
regarding the foreign property damaged in the past, Russia offered at
Genoa to discuss compensation for all foreigners who had actually lost
money by her revolution. The foreign diplomats refused this basis of
settlement; they demanded, not "compensation for losses," but complete
return of properties.
What was the difference in meaning between these two phrases,
which seem the same to the average citizen? This,--that after the
revolution had seized the properties, their Russian owners, escaping to
Paris, sold the stocks and bonds for a song.* Standard Oil
and Shell are assumed to have bought large blocks. If the fields are
restored, they get cheaply properties worth billions. If Russia gives
only "compensation for losses," they will get nothing for these
securities which they bought, in speculation, after the Revolution had
declared them valueless.
The engineers and oil workers of Baku have never laid eyes on
these paper shares that claim to own them. When I ask them if it is
Shell or Standard that now claims title, they answer: "How do we know?
We live in Baku."
In Baku was a story of battle and devastation. Turkish and
Armenian massacres. Revolution and counter-revolution. And through it
all, the heroic struggle of hungry, half-clad engineers and workmen
against floods that rose to overwhelm them, and fires that burned great
gushers, and spying and sabotage of managers, and against the slow
attrition of war and blockade and famine. They have seen the wells go
down in production until it was feared they would be lost to the world
under the waters of the Caspian. They have seen the tide turn and
production climb upward, slowly, very slowly, but according to definite
engineering plan. With the first coming of peace the change came. Now,
after two years, they feel secure of the future.
I have spent two weeks in Baku. It is desolate, and as
fascinating, as hell.
Three and a half days southward from Moscow, across the fertile
fields of the Ukraine and beyond the Caucasus, just over the borders of
Asia it lies, on the hot blue waters of the Caspian. An ancient Tartar
town, with a thousand years of history behind it; the ruins of the old
Khan's castle and mosque still stand on Baku hill. Up the narrow
streets in the Tartar City the Mussulman women toil, drawing their
veils across their faces with one hand and balancing heavy
water-buckets with the other. At their feet lies a city brilliant with
electric lights, full of giant refineries where a hundred streams of
machine-oils pour constantly, day and night, winter and summer. Here is
a modern power plant larger than any in Europe, sending current out to
operate the distant fields. Here is modern industrialism on a
foundation of primitive Asia; workers whose dialects have hardly been
reduced to writing, operating rotary oil-drills fresh from America.
As far as eye can see from the hills of Baku there are
oilfields. I drove through them day after day. Oil fields on every
horizon, forests of black shining derricks against blue skies or blue
water, or in the smoky hollows of the hills. There is no green thing,
for the mocking blue of the Caspian is salt; the only fresh water in
Baku is brought from a hundred miles away, and is barely enough for
drinking. So there are no trees in this desert country, except in one
central spot, the beautiful Villa Petrolla, built for the high
officials of the Nobel Oil Company to live in, and now occupied by four
Under my feet I could hear the rumbling of a gusher, expected
hourly in Bibi Eibat oil field, announcing its coming half a mile below
the earth. Not far away is another famous gusher, which has delivered
oil continuously for seven years, at a million barrels a year. From
other derricks sounds the rattle of chains, as the rotary oil-drill,
newly brought from America, whirls its way through sand and gravel
hundreds of feet below. And down through the greasy dust of the fields
creep little rivers of oil, olive-black with a green lustre, flowing
towards the great reservoirs.
All the oil comes at last to the city of Baku, to the great
refineries on the Bay. Here are pipelines leading to docks, and ships
loading and unloading. Here is the largest refinery in Russia, once
owned by Nobel, handling over a million barrels a month and turning out
eighty different kinds of oil products, benzines, kerosenes, machine
oils, paraffins. The diamond white of twenty different weights of
benzine pouring, pouring; the many-toned machine oils from golden to
deep brown; the great vats of soapy oil, milky green in colour,
followed by vats of "washed" oil, of a dead, dull slate; the black
olive in pools and reservoirs of sluggish mazut, refuse still useful
An industrial oil city, modern, mechanical, ruthless. In it live
children orphaned by famine, and veiled women of the East, and men,
Russians and Tartars and Persians and Armenians and the tribes of
Central Asia who have not yet learned to read and write but who can
produce oil for rebuilding a nation.
In the centre of Baku are the offices of Aznepth, the government
oil trust, operating all the fields. The oil king of the district is
Serebrovsky; it is he who has brought order out of chaos. He works
twenty hours daily; he lives in two rooms up an iron stairway from a
back court, a harder, bleaker life than tenement workers live in New
York or London. His wife is dying of tuberculosis; it was lack of milk
and eggs that slowly starved her. Only one little part of the price of
There were 150 oil companies operating in Baku under the reign
of the czar. The chief of them all was Nobel, a Swedish-Russian
company, in which, even before the war, it was rumored that Standard
Oil had bought control. Nobel had shares in many minor companies; he
put forth fingers of trade all over Russia in depots for the selling of
oil, controlling the machinery of distribution.
When the Revolution came, Gustave Nobel called together his
upper employees in Petrograd and gave them instructions before his
departure. They were to remain in Russia and keep close to oil, sending
out secret reports through Finland to Paris. In the wars of
intervention they acted as economic spies. Using their knowledge of
oil, and a show of friendliness, they secured high posts with the
Soviet government, which was making use of any experts not openly
hostile. One of them became manager of oil for the Petrograd district;
another was in the college of technical management for all Russian oil.
They were the heads of a conspiracy that reached all over
Russia, sending out weekly reports to Wrangel's Paris office, and
receiving money from abroad. They held themselves ready, when the time
came, to paralyse the oil industry and thus destroy Russia, burning up
oil fields and oil reserves if necessary. This was the type of sabotage
that Russia faced in every important industry. These oil spies were
caught in the end by the Extraordinary Commission and condemned to be
shot; but they were not shot, for they were foreigners.
While conspiracies like this raged through Russia, and while in
Paris was a riot of speculation--widows and orphans and demi-mondaines
staking the cost of bread or the price of lust for shares of Russian
oil--the Baku oil workers themselves were cut off from Russia by a ring
of steel. Armed force after armed force seized the wells and the
country round them; for four long years there was no settled life or
The workers of Baku had always been revolutionary, since the
uprising of 1905. It was in Baku that Krassin built an underground
printing plant, the largest producer of illegal literature in Russia.
When the revolution came in 1917 the Baku workers took over the local
government and declared the oil the property of the nation. There was
very little conflict. The owners of Baku were thousands of miles away.
Ninety per cent. of the lands belonged to the czar, and he was gone for
months. The next owners were foreigners who had leased the lands; and
they were abroad. Most of the local managers remained in the fields;
they were engineers, chiefly Russian; they kept on with their work.
The first change made by the new control in Baku was a
reorganisation of the fields. The 150 little companies, each with
dozens of little claims scattered through many fields, were wasting the
oil. They were competing with each other, trying to shift the floods to
their neighbours, trying to bore their little claims all round the
edges to drain their neighbour's oil. The engineers and workers knew
that such competition was criminal; since there was now only one owner,
the government, they organised the wells into eight great districts,
under one central management in Baku. The lesser engineers remained in
the districts; the higher engineers. managed from Baku. The Oil Workers
Union had its representatives in the management, in charge of supplies
Immediately war struck them. The Germans and Turks came down
from the north and established themselves in Tiflis, centre of the
Caucasus. The English troops came up from Persia. The great ones of
earth were bent on a race for Russian Oil. The old Russian army was
breaking into wandering bands and going home; it was an army of tired,
hungry peasants, to whom the revolution meant only a chance to rest and
eat on their own home soil.
Race and religious feeling ran high in the oil fields,
stimulated by so many opposing armies. The Mensheviks and Social
Revolutionaries declared the Soviet regime pro-German and set up a
counterrevolution with the aid of two Cossack bandits, calling the
British to help them. Under the encouragement of British advance, the
Armenians massacred 25,000 Mohammedans in the town and fields of Baku.
The English came in, took possession, and led forth from jail
twenty-seven Communists who had previously governed Baku. They took
them across the Caspian as prisoners and shot them down in the desert.
Thus blood and iron ruled in Baku.
Swiftly the Turks retaliated for the massacres begun by the
Armenians. Within two months they swept down into Baku from the north,
while the English retired towards Persia. The Turks then massacred
30,000 Armenians. A month or so later came the armistice of the great
war, and England told Turkey to clear out of Baku, as part of the price
of defeat. All these shifts of power took place in a single year, and
oil production dropped from 60,000,000 barrels in 1916 to 24,000,000 in
1918, the year of conflict.
For a year and a half the British held Baku, sharing control for
a time with some Italian troops, as the Versailles treaty and the
Supreme Council juggled with spheres of control in the Near East, but
regaining exclusive control again. There was a fiction of an
independent Azerbaijan government, which existed mainly for the purpose
of being corrupted. No accounts indicate that it was very popular or
had much independence.
When I visited the Caucasus, I found strong anti-British
feeling. Engineers who were by no means fond of the Soviet government,
said to me: "But at least the Bolsheviks freed us from the British."
The officers of the Russian czarist fleet which had helped the British,
began to grumble at the regulation which demanded of them a British
visa to enter Baku. "Have we fought with our Russian brothers who went
to school with us in the naval academies," they said, "in order that
British should give us leave to enter a Russian port?"
The oil fields were declared private property again. There was a
year and a half of relative peace. But oil production continued low, at
28,000,000 barrels. There were strikes, suppressed by tanks and armed
force. The Russian market, to which most of the oil must go--since the
pipeline to Batum and the outside world carries only kerosene--the
Russian market was cut off by a ring of steel, and behind that ring
Russia was fighting for her existence. The oil tanks of Baku filled to
overflowing, and in the earth storage reservoirs the oil spoiled from
long contact with the soil. Oil clogged the sands and ran into the sea.
And the floods in the unworked areas crept onward.
Somewhere, in the secret places of London and New York, there
are people who know why the British government gave large credits to
Nobel, based on future expectations, but allowed the smaller companies
to go to the wall. The rumours in Baku said that the Anglo-Persian
Company, controlled by the British government, had bought up shares of
Nobel as the price for its aid, and was cornering the oil for England.
The little companies were aligned; they were selling out cheap.
Somewhere in London and New York it is known who bought them. When
Litvinoff, in The Hague conference, asked for a list of the "creditors"
to whom Russia must "restore property," it was this that he meant. The
French newspapers denounced him for his impertinent curiosity.
Meantime, while Britain sat secure (more or less) in Baku, the
armies of Denikin, financed by British gold and helped by the American
Red Cross, drove northward, threatening the very centre of Russia
during that darkest year of 1919. They captured the Grozny oil fields,
where nine great gushers burned as the result of civil war. The gushers
burned on for a year and a half, consuming wealth enough to pay
one-fourth the annual state budget during the extravagant days of
czarist Russia. This was one of the minor losses of civil strife.
Then, in the fall of the year, the Red Army gathered strength,
slowly organised out of broken, starving bands into one united control.
Month by month through the winter Denikin was hammered back and when
another spring came, the oil workers of Baku knew that the red soldiers
were near on the borders of Azerbaijan. Promptly they revolted again,
calling on Soviet Russia for aid.
It took less than an hour for the government to change hands.
The red troops came down the railroad, took possession of the oil
fields, declared them national property, and have held them ever since,
from the 20th of April, 1920.
Some day the writers of historic romances will tell the tale
fitly, how the half-fed, half-clad workers of Russia brought a fleet of
cruisers and destroyers a thousand miles overland through the heart of
Russia, to take possession of the Caspian Sea. From Petrograd up the
Neva, through a chain of lakes and canals to the upper Volga, and down
the great channel of Russia to the Caspian--that was the unheard of
path they followed. It was an impossible feat--only one of many
impossible feats done in that year of exhaustion by the besieged
Russians. The British forces around the Caspian were completely routed.
Their army in northern Persia was scattered and fled southward,
expecting from week to week the announcement of a Soviet Persia. But
Russia preferred Persia as a friendly buffer state; she drew her armies
back, holding only the Caspian.
The oil fields were again in the hands of the Baku workers--what
there was left of them.
The thirsty Russian market drank the oil reserves with speed.
The storage tanks opened northward and the tank steamers on the
Caspian, spurred on by extra food for the workers, made record
deliveries. But oil production sank still farther. Drills were lacking,
and machinery, and ropes and clothes and shoes and food. Exhausted
Russia, struggling now against the combined attacks of Wrangel and
Poland, could absorb the Baku oil with joy, but could give nothing back
to the Baku workers. The floods crept onward; it seemed that the oil
fields would be lost altogether to the world.
"We are at the lowest point yet reached," cried the Fuel
Administration in warning. "In January we had 1,779 wells, only half
the normal number. By September we had only 845. The floods take now
the nature of a tempest. Over ninety per cent. of the liquid got out is
water. There are 40,000,000 to 50,000,000 tons excess water in the
district. The whole Baku fields, richest in the world, are threatened
And then--came peace. But with the peace, the greatest famine
the world has known. Yet famine was less disorganising than war. The
blockade was broken; the most necessary material could be bought
abroad. Even during the year of the great drought, Russia's industries
began to improve.
The engineers of oil drew up a plan, a month by month programme
for reconstructing the fields. It was a plan to rebuild the oil
district out of its own resources. Gradually, slowly, repairing
machinery in old wells, digging new ones, buying equipment piece by
piece as there was money.
It takes a long time and much capital to build an oil district.
Wells must be dug, hundreds of wells, for months before returns come
in. The average life of a well is five years; most of the Baku wells
wore out in war-time. Wells not steadily worked fill slowly with water,
requiring long, wasteful labour to bail them free again. During that
first year of peace, Russia was eager to grant concessions in oil
fields. She doubted the strength of her oil workers to reconstruct them
But step by step for two years and a half the programme has been
fulfilled. Baku has produced 122 per cent, of the programme demanded,
Grozny 103 per cent., and Emba 115 per cent. The oil workers are doing
better than the engineers had expected. Millions of dollars worth of
oil and oil products have been sold abroad already, and the proceeds
put into new wells and new equipment. One hundred and fifty-seven new
wells were being dug when I was in Baku. By 1925 they will reach normal
production and will then go forward to surpass pre-war.
"Within the next five years," says Krassin, chief of foreign
trade in Russia, and himself an engineer of prominence trained in the
Baku district, "our export of oil will without doubt exceed the prewar
The difficult, conflicting demands of the year of transition to
the new economic policy in oil, are shown picturesquely in the letters
of complaint sent by Serebrovsky to the newspapers of Moscow. Under the
regime of "war communism" Russia took the oil without payment,
supplying the workers, as far as she was able, with food and clothing.
Under the new policy, industries were to be self-supporting, but the
division line between industries was not yet worked out. For a year and
a half, during the transition period, many great government departments
wished to finance themselves from Russian Oil.
The oil industry itself possessed at first no legal right to
sell oil, but was forced to turn its product over to the All-Russian
Co-operatives, or the Department of Food Supply, or the Department of
Foreign Trade. These organisations, struggling under severe
emergencies, sold the oil and used the proceeds, not to re-equip the
oil fields, but for other pressing needs.
Bitterly caustic was the appeal sent by Serebrovsky on behalf of
the oil workers of Baku, printed early in 1922 in the Moscow Isvestia.
"Who doesn't want to trade with our oil, anyway? Only the dead ones.
But nobody wants to remember that we who produce it need food, shoes,
clothes, everything. We must beg for the right to exchange a couple of
poods of oil for poods of flour. We shiver at the very mention of the
Department of Foreign Trade.
"Then they begin to tell us how much better a concessionaire
could manage the oil fields. At this we really grow wild. Of course the
concessionaire is great and we are pitiful. He can sell his oil and
from us they merely take it away. He can clothe his workers, and we
have to persuade them that they are clothed. He can bring from abroad
everything that he requires, while to us they promise now for the third
year reservoirs, generators and electrical equipment. He has money and
credit, while we haven't a dead cent except rusty kerosene cans.
"But--the impudent thought--suppose the Congress should make us
equal in rights with the concessionaire. And should tell the Department
of Finance not to take away the little money we have, and the Food
Commissariat not to take our oil for nothing (for money we'll give it
gladly) and the Department of Foreign Trade to let us sell oil
abroad--for ourselves and not for the benefit of the Department of
Foreign Trade. ... Then our trading department would put forth fingers
in the same way that Nobel had it. Part of our production we'll give to
the State--we also are loyal state people--but we'll keep enough to buy
what we need for the industry.
"Give us the rights of the concessionaire and you will need no
other concessionaire than the Baku workers."
Out of these conflicting claims in the industries of Russia a coherent
plan was gradually built. The oil industry is now organised as an
independent unit. Under the Department of National Industries comes the
Fuel Administration; under the Fuel Administration comes the oil
management, appointing the chief engineers for the three different oil
districts. These engineers have absolute control of production, subject
to the labour agreement which they make with the Oil Workers Union.
That is the simple organisation for the production of oil.
The sale of oil is equally simple in form. Each of the three
great districts selects directors in an oil syndicate, which controls
the marketing of oil in Russia. The Fuel Administration in Moscow
appoints the chairman. They have branches all over Russia for the sale
of oil. Thirty per cent. royalty goes to the central treasury of the
State; the rest returns to the oil industry. But the oil industry
itself is an organ of the State, an independent self-sustaining organ
whose profits in the future shall be used as the people of Russia
determine. For the present those profits are to rebuild the industry
and to improve the life of the Baku oil workers.
Wages in Baku are still low in money. When I visited that city
in April, 1922, they ranged from $6 a month for apprentices to $40 a
month for the highest engineers. Now they are doubtless much higher;
for all over Russia wages have been going up rapidly. The low money
wage marked the time of transition from rations to money; Russia had as
yet little money to pay with. At the time of my visit there were no
more free rations, but a worker with family secured his basic food
supply through the oil workers' co-operatives for about $3 a month. The
buying was done on a large scale by the oil company, which helped
finance the cooperatives as they struggled to their feet.
In addition to wages, the union contract called also for free
lodging, free fuel, free water and electric light. Hundreds of new
houses were going up in Baku to relieve the over-crowding. In
individual standard of living, the secretary of the union told me, in
such things as clothes and furniture and housing--they had not yet
reached prewar. But in social opportunity, in chances for culture and
education and fellowship and hospital care in illness, they were
already infinitely better off than before.
Education, health, the entire social life of the workers was
also temporarily financed by Aznepth, the government oil company. The
first demands of the unions were not for higher wages, but for large
funds set aside for joint social progress and protection. Aznepth was
required by union agreement to put an amount equal to thirty-two per
cent. of its wage scale into hospital, school and other social funds.
The schools for the oil workers' children had grown from twenty-two to
sixty-two; there were fourteen kindergartens where none had existed
before; a dozen day nurseries and fifteen homes for famine orphans.
Eventually, these would be taken over by the school authorities of
Baku; but until those authorities were strong, the oil company
organised and financed them.
For the older workers there were 121 classes for reading and
writing, and twenty-five libraries. There were eight factory schools
where apprentices work four hours and study four. There was a technical
university where a simple Tartar oil worker, studying his way upward
from the first course in reading, might finish at last as a qualified
engineer. There were thirty workers' clubs, each with its stage, dance
hall and entertainments. During my visit they were giving
entertainments to raise money for the German workers on the Ruhr. They
didn't think of themselves as paupers; they had built already a
nourishing social life.
They have control of their lives in certain ways unknown even to
American workers. The problem arose, about the time of my visit, of
cutting down an office staff which was too large for the oil industry.
Ever since the Revolution, Aznepth had been carrying the weight of all
the office workers of the old oil companies; they were not needed in
the new reorganisation, but neither could they be fired without serious
suffering. Now the time had come when the union agreed that they should
be dropped. The question which workers should be dismissed was handled
by a committee of three--the manager, the secretary of the union, and
the president of the city government. The manager's task was to save
the most efficient workmen; the union secretary protected the heads of
families; the president of the city council planned, as far as
possible, for transfer of these workers to jobs in public services.
There was no reckless slashing of the payroll, without regard to the
human lives involved.
Thus, step by step, the oil workers and engineers of Baku are
rebuilding the oil industry, and making it the foundation for a
wholesome community life, and for a reserve of power for Russia. Under
this new form of organisation, what chance has foreign capital in
Russian oil? Many chances for making money; no chance for controlling
I have been present at many discussions of concessions. They may
take many forms. Over in Ural Emba are new fields waiting development;
the concession I heard planned for Ural Emba required a capital of
$39,000,000 for wells and storage and pipe-lines, before any returns
would come in. Within ten years the profits would be tens of millions,
and the contract might run for thirty years.
In a new field like this, a foreign company would be allowed
independent rights of development. But only a big company could handle
a field like this. "We will not allow the methods that have wrecked
American oil fields," said the chairman of the concessions committee to
me. "We will not permit a host of little companies, competing with each
other, and wasting the oil. We demand that a concessionaire shall have
enough capital to develop the district properly, with all the pipes and
transport necessary. This, in the Ural Emba, is $30,000,000 for first
investment....In fields where great gushers are to be expected, we
demand that the concessionaire provide adequate storage tanks, that the
oil may not be wasted. He must provide protection against fires and
floods. He must have a plan for working the whole field rationally.
Sound oil companies, wishing to develop an industry, can make big money
from Russian oil. But wildcat companies, interested in quick returns on
a little capital, to make a showing and sell out to the public--for
these our leases offer no inducements."
Smaller companies, unable to develop a whole field from their
own capital, can take other forms of concessions in Russian oil. The
Barnsdell International Corporation, at present working in Baku, is an
example of a contract much favoured by Russia. The American company
brings in machinery and administrative ability and digs wells on a
contract with Aznepth, receiving for its work a percentage of the oil.
The members of the company whom I met in Baku told me they had been
received with tremendous enthusiasm.
When foreigners go to Baku or to other concessions in Russia,
these are the conditions that they meet: government managers,
over-worked, wearing themselves out in building a new Russia; workers
who are still on low wages but who are politically independent,
economically well organised, full of the purpose that industry shall
increase in wealth and raise the general standard of living as it
These managers hail with joy a capitalist who comes as partner
to make industry more efficient. These workers greet happily the
thought of American methods and American standards. But neither
managers nor workers want men who dabble in politics, or attempt to
make of them a subject nation, as has been done throughout history with
the peoples of undeveloped lands.
Meantime the owners of stocks and bonds in the old Russian oil
companies, speculate with their paper control in Paris and London, and
demand that the wells be given back to them. They do not realise that
most of the wells they owned have long since died under the floods of
the Caspian. And that to resurrect those companies again would be as
impossible as unscrambling an omelet.
For the great forces of life, that sweep forward by months or by
ages, wiping out cities and civilisations and building new ones, have
carried the workers of Baku into a different world. They have seen a
half dozen armies of occupation. They have seen massacres of tens of
thousands. They have fought back floods and fires. Half-starved and
with bare hands in place of equipment, they have begun the rebuilding
of a wrecked industry. And now, when there is again hope in Baku, and
peace, and increasing production, wrought through the agony of body and
brain--they have not the faintest idea of returning the wells to the
nations whose armies helped wreck them. They are building for the
future in Baku and not on the past.