On the historic day of May 28, 1918 Azerbaijan declared independence. Thus, after over than 100 years, national statehood was re-established and Azerbaijan’s government started creating its own state institutions. However, in spite of the energetic steps taken by the government, this process was complicated and impeded by the military-political situation it faced at the same time. Even after the declaration of independence, a diarchy existed in Azerbaijan: the city of Baku and Baku province were controlled by the Bolshevik regime. It is clear enough that the Bolsheviks, led by Shaumyan, were completely controlled and directed by Soviet Russia; this explains the fact that the interests of Baku’s economy and especially the oil industry, were subjected to Russian interests.
On May 1, 1918 The Baku Soviet of Peoples Commissars published a declaration claiming that it would apply all the decrees of the Soviet government in Russia (1). Soviet Russia, covered with the fire of civil war was in great need of fuel. It would have been impossible to achieve the military victory on the Russian fronts without the oil from Baku.
Therefore Lenin characterized the issue of nationalizing of the oil industry as the highest priority from the very first day of the Communist regime. He instructed the Baku Soviet to provide the oil supply. His telegram of May 28, 1918 stated that “…most importantly, the oil production should be secured.” (2) In two weeks he sent another telegram ordering the Baku Soviet to ” take necessary measures to rapidly export the oil products from Baku.” (3)
This certifies the extreme need for oil in Russia, which was in a state of war and which had a government which would not pay the price it had to pay to have the oil delivered to Russia. It also refused to discuss the issue of who really owned the Azerbaijani oil fields.
In spite of the resistance of oil producers and international corporations in Baku, the Communists were carrying out the nationalization in a hurry. At the initiative of Great Britain and France, the diplomats of Spain, Holland, Norway, Denmark, Switzerland and Iran protested the nationalization of the oil industry, but the protest eventually declined. It was characterized by the Soviet as interference with the internal affairs of RSFSR. On June 1,1918 Baku Soviet of National Commissars (Baksovnarkom) issued a decree on the nationalization of the oil industry and, on June 5,1918, on the nationalization of the Caspian Trade Fleet. All in all, 400 enterprises of the oil industry were nationalized.
Nationalization was sabotaged both by oil producers and by a significant part of the workers who soon realized that nationalization would not improve their life in any way. The hunger that swept Baku and its regions at that time caused a sharp reduction in the number of available workers, as well as massive flight of the labor force from Baku. Within one year, from 1917 to 1918, the number of workers and clerical staff declined to 38 thousand. However, no difficulties could stop the commissars who were ready to sacrifice anything to transport the oil and oil products to Russia. One of the commissars, Fioletov, most often reported on oil production and export to Soviet Russia during the meetings of Baku Sovnarkom: these meetings usually took place 2-3 times a week, starting at 10-11 am and lasting to 2-3 am. On the12th day after adoption of the decree, Shaumyan was pleased to inform Lenin about the increase of oil export: up to 1,300 thousand poods (20,800 tons) in comparison with 600- 700 thousand poods (about 11,000 tons) being exported before the decree was issued (4).
Oil delivery from Baku to Soviet Russia grew from 25,000 tons in February, to 94,000 tons in April to 492,00 tons in July.(5) The export to Russia with no compensation of such a tremendous amount of oil, constituting a significant portion of the national wealth of the region’s people was clearly against Azerbaijan’s interests. The country was in a deep economic crisis and could not use its own oil to make its way out of the situation. From this standpoint, the Bolshevik nationalization act which was adopted without the consent and approval of Azerbaijan National Government was unlawful; also it restricted the rights of the Azerbaijani people. This was one of the reasons why the Azerbaijani government located in Gyanja was eager to get rid of the Bolshevik regime in Baku.
After a long battle for the liberation of Baku in September, 1918 the national government. led by Prime-minister Fatali-khan Khoyski moved to the capital. The legitimate Azerbaijani government established its power, ending the 4- month long diarchy. Peaceful life started to take shape in Baku. However, the government which inherited many difficulties from the communists was continuously facing more and more problems due to both internal and external factors; at the same time it was trying to carry out economic and social reforms.
One of those factors was the presence of Turkish military authorities in Azerbaijan. During World War I the Turkish economy was in a poor shape and in a great need of oil. A special agreement between Azerbaijan and Turkey obligated Azerbaijan to provide oil, cotton, wool, and other products at a cost of 1 million liras to Turkey (6). The Turkish command took measures for the refurbishment of the Baku-Batumi kerosene pipeline to transport the oil products. Simultaneously, the trains with oil tanks for Turkey and Germany started moving: from Baku through Batumi at a rate at least 23 tanks per day. (7) At that time the tankers were leaving Batumi for Istanbul one after another.(8) Even under those conditions Azerbaijan’s government was using maximum effort to pursue its own independent policy. The denationalization of the oil industry was being prepared for implementation.
On October 6, 1918 the Council of Ministers issued a resolution on the denationalization of the oil industry. On October 7, 1918 a governmental decree was published returning the oil fields and plants to oil companies, and ships of Caspian Trade Fleet to their former owners: this constituted a rehabilitation of private property by the government (9). The eight-hour work day, collective agreements and labor control over the production was abolished. On December 12, 1918, during a reception for a delegation of oil producers the Minister of Trade and Industry Jevanshir Behbudov stated that “the attention of the government will be aimed at having the workers do their job without interfering in management of enterprises”.(10)
In spite of the steps taken by the government, the situation in Azerbaijan became more complicated due to international circumstances, especially with the defeat of Germany and Turkey in World War I. On October 30, 1918 Turkey signed an armistice with the Entente in Mudros. In accordance with the conditions of that agreement, British troops were deployed in Azerbaijan. However, General Thomson – Commander-in-Chief of British troops – did not recognize Azerbaijan’s government as legitimate, regarding it as pro-Turkish. Martial law was introduced until the moment “when civil power becomes strong enough to absolve the troops from responsibility of providing the social order.” (11)
Effective November 29, 1918 the trade ships of Caspian Fleet were turned over to the disposal of the British command. Besides Baku, the British occupied Batumi in accordance with Mudros agreement. They had a very important strategic bridgehead from the Black to the Caspian Sea in hand. They were intending to take control over the oil industry by founding a British Oil Administration. In December 1918, the chairman of British Bibi-Eybat oil company Herbert Allen stated in London that: “The Russian oil industry extensively financed and properly organized by British management may become a valuable acquisition for the British Empire.”(12)
Within nine months (from December 1918 to August 1919) the British exported up to 30 million poods of oil at cost of 113.5 million rubles from Baku. (13) All oil products exported by them were not subject to any excise deductions and were cleared without any delays. Regardless of such an attitude on the British command’s attitude and the difficulties it created for Azerbaijan’s government, Baku did overcome them and thereby proved its democratic orientation by achievements in the economy, such as denationalization etc., and in politics particularly by establishing a parliamentary republic. For that reason the British command recognized the new government headed by Khoyski as the sole legitimate one on December 26, 1918. (14)
However, the new government did not manage to overcome the numerous difficulties and deep economic crisis which inescapably led to severe governmental emergency. After long political debates Nasib bay Ussubayov of Musavat party, former Minister of Education and Minister of Finance, was assigned to form a new government. One of the first priorities of this new government was to review its economic orientation with regard to traditional economic partners of Azerbaijan. The subject of discussion was Soviet Russia which was in a bad need of oil and constituted a main sales market for Azerbaijani oil.
The impossibility of exporting the tremendous reserves of oil products which were accumulating in the republic caused a decline in oil production. This decline in oil production in its turn led to a shrinkage of operations in the oilfields and resulted in the dismissal of workers, a huge increase in prices, rapid inflation of paper money, along with intensification of strike movement in Baku. Most strikes occurred in 1919 – total number of striking workers was 6,189 (1918 – 849 workers, 1920-3,263).(15) The majority of strikes were of economic nature.
The Prime-Minister at the parliamentary session on April 14, 1919, in analyzing the difficult economic situation, said that “all vital difficulties we are facing are a result of well-known anomalous conditions in our trade. The wealth and prosperity of our country is oil. Meanwhile, connections with Russia, the main consumer of our oil, are interrupted. This factor may put us in very difficult conditions.” (16) In connection with this, N. Ussubayov started establishing economic connections with Soviet Russia under the condition that it not interfere with the internal affairs of Azerbaijan. However, it never became a reality, as it encountered strong resistance by Britain which was implementing a military-economic blockade against the RSFSR, though eventually the British presence in Baku started to weaken. After 9 months of presence in Baku, on August 29,1919 the British troops began a massive pull out.
This, however, did not improve internal political conditions. On September 13, 1919 N. Ussubayov resigned from his position as prime-minister, aggravating the governmental crisis. Encouraged by that, Bolshevik agitation became more visible, even though they still lacked any internal support. The threat from Soviet Russia significantly increased. A new government was never formed, and economic reforms were not a high priority for the Azerbaijani parliament which continued its work on the eve of the Russian aggression. On the night of 27-28 April 1920, the Russian 11th army crossed the Azerbaijani order and started its march into Azerbaijan, resulting in the cessation of democratic development in Azerbaijan for as long as 70 years.
by Nigyar Maxwell
Nigyar Maxwell, Ph.D. is a researcher at the Department of Azerbaijani History 1917-1920, Institute of History, Azerbaijan Academy of Science in Baku.
References: 1. Bulletin of Baku Soviet . 1918 1 May. 2. Bakinsky Rabochi, 1918 25 May. 3. Vestnik Bakinskogo Soveta No. 1-2 1928. 4. Z. Ibrahimov. "Struggle of Azerbaijani workers for socialist revolution. " Baku 1957. P. 401. 5. ibid. p. 402. 6. Azerbaijan Central State Archive of Political Parties and Social Movements (ACSAPPSM). Fund 277, inv. 2, file 33, p.34. 7. Central State Archive of New History (CSANH) Fund 277, inv.1 file 1, p. 28. 8. A. Shamsaddinov. "Turkish participation in intervention against Russia in 1918". Scientific notes of oriental studies institute. 9. Azerbaijan. 1918 October 7. 10. Zarya Vostoka. 1928. April 1. 11. Azerbaijan. 1918 October 7. 12. E.A. Takarzhevsky. "From the history of foreign intervention and civil war in Azerbaijan." Baku 1957, page 185. 13. Azerbaijan Arkhivi. 1989, November 19 14. Azerbaijan. 1918 November 19. 15. Central State History Archive (CS HA) Fund 509, inv.1 file 332, p.89. 16. Azerbaijan. 1919 February 16.