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THE STATE BANK AND THE COTTON INDUSTRY IN TURKESTAN:
DEVELOPMENT OF INFRASTRUCTURE AND FINANCIAL
NETWORKS IN THE LATE XIX-EARLY XX CENTURY
Parvina Ismoilova
A lecturer of the Department of the History of Uzbekistan
at the Fergana State University parvinahistorian@gmail.com
ORCID:0000-0003-2032-497X
https://doi.org/10.5281/zenodo.15039636
Abstract:
The article examines the process of economic expansion in the
Turkestan region, in which private credit institutions, especially the State Bank,
played a significant role, providing financial support for the development of
cotton growing, trade and industry. On the basis of sources it is analysed that
this support mainly met the interests of tsarist Russia rather than the needs of
the local population.
Keywords:
Turkestan region, State Bank, cotton industry, economic
policy, cotton prices.
The Turkestan region, having become a colony of Tsarist Russia, and
having become a raw material appendage, although in reality for the most part
this was only for cotton, offered great potential for economic exploitation of the
region by Russian capital. In many ways, though, Tsarist Russia doubted what
Turkestan really represented for Russia. For example, D. Kirilchik in his article
emphasises, “.... empire could not finally decide on the status of the region,
namely: was Turkestan a colony or an integral part of the empire with a
population ethnically alien to the majority of Russian inhabitants? The lack of
such certainty posed obstacles to the economic development of the region, in
particular, it prevented foreigners who could bring investments to the region
from purchasing property”.
[1: 52]
However, it is worth noting that despite the lack of clarity in
understanding the status of the Turkestan region, Tsarist Russia was not
prevented from pursuing an economic policy in its own interests. Banks and
trading houses were established, which facilitated the inflow of capital and
credit. This primarily helped in the expansion of cotton plantations and trade
networks. With the development of the textile industry, cotton ginning plants
and textile factories were built in the region, which were naturally under the
control of Russian shareholders. This process increased the dependence of the
local economy on the imperial market and weakened the possibility of
developing a local market in the province.
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The rapid spread of cotton growing in the Turkestan region was due to
its obvious profitability and advantages for tsarist Russia. The region's fertile
soil and warm climate were ideal for growing cotton, and demand for the crop in
Russia and abroad was skyrocketing. The increase in demand was driven by
industrialisation in Russia and a desire to reduce dependence on cotton imports
from abroad. As a result, cotton cultivation became a central part of Turkestan's
economy, having a significant impact on the demography, land use and life of the
region's population.
Cotton prices in early 1913 were:
A pood of raw material of 1st grade 4 rub.60 kop.- 5 rub.; 2nd grade 4 rub.
- 4 rub. 20 kop.; mezheumok 12 rub. 20 -50 kop. Finished cotton 1st grade,
normal 13 rub. 20 - 25 kop.; 2nd grade 12 rub. 70 - 80 kop. mezheumok 12 rub.
20 - 50 kop.
[2:100]
As can be seen from the above-mentioned data, cotton prices in Turkestan
in 1913 show a sharp imbalance: raw cotton was sold cheaply (4-5 rubles per
pud), while finished cotton cost three times as much (13 or more rubles). This
gap shows how Russia made a profit by buying cheaply from local dekhkans and
selling expensively after processing. The dekhkans of the Turkestan region were
trapped in poverty, forced to grow cotton to pay taxes in money but earning
little for their labour. Meanwhile, Russian factories and banks grew rich,
controlling both production and profits. The focus on cotton destroyed
traditional agriculture, leaving the region dependent on a single crop and
vulnerable to price fluctuations. Ultimately, prices were more than just numbers
- they symbolised the colonial exploitation that changed the fate of Turkestan.
The purchase of cotton was allocated to two very different systems: 1) the
purchase of raw cotton with its purification at own or leased mills and 2) the
purchase of finished fibre. In the first case, a complete full cleaning of the fibre,
its best sorting and classification, surpassing even the American sorting, is
obtained. Such an operation is carried on only by large bona fide firms in
constant communication with the mills, and the number is limited.
The second system is purely speculative, in which the only aim is to
increase the value of the goods at all costs: here neither brand nor trade honour
and connections are valued; good varieties are mixed with inferior varieties, the
cotton is poorly cleaned, soaked and sold to factories with sap, dust and even
leaves.
[3 :107]
One of the first banks in the Turkestan region was a branch of the State
Bank, which was opened on 10 May 1875 in Tashkent. At the time of
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establishment of the bank branch, the manager of the bank was the Acting State
Counsellor Alexander Ignatyevich Shtein.
[4:5]
Later the director of the branch
was N.M. Bakhtiarov, who managed the bank until 1881. This branch was the
only bank in the krai that controlled the budgetary funds of the colonial
administration and issued loans for trade development.
[5:7]
Thus, the
establishment of a branch of the State Bank in Tashkent was a significant step
towards the development of a formal financial system in Turkestan, facilitating
trade and economic growth.
Gradually, the branches of the State Bank began to expand in the
Turkestan region, and by 1915 there were already 10 branches of the bank in
the region.
[6:296]
The branch of the State Bank played an important role in financing trade
operations, especially in the cotton industry, which became a key instrument in
the economy of the region. However, the bank's activities were mainly oriented
towards satisfying the interests of tsarist Russia rather than developing the local
economy. The lending process in the Turkestan region was mainly aimed at
expanding cotton production, which in turn supplied the textile industry of the
empire. Local entrepreneurs and artisans were left behind.
References:
1.
Кирильчик Д. В. Частный капитал в Туркестане: дискуссия на
страницах периодических изданий в 1880-1910-х гг //Вестник
Московского университета. Серия 8. История. – 2022. – №. 4.
2.
Путеводитель по Туркестану и железным дорогам Ташкентской и
Средне-Азиатской. 1907-1908 / / Сост. по офиц. данным под ред. А.И.
Дмитриева-Мамонтова. — 6-е изд. — Санкт-Петербург : тип. И. Шурухта,
1913.
3.
Там же
4.
Русские банки : справочные и статистические сведения о всех
действующих в России государственных, частных и общественных
кредитных учреждениях. К книге прилагается "Стенная таблица" с
перечнем городов, в коих находятся кредитные учреждения или их
отделения / сост. А.К. Голубев.. — Санкт-Петербург : Ком. Съезда
представителей банков коммерч. кредита, 1896-1908.
5.
Алимджанов Б.А. История банковского дела в Центральной Азии. —
Ташкент: “Замон Полиграф”, 2022.
6.
Правилова Е. А. Финансы империи : деньги и власть в политике
России на нац. окраинах, 1801 - 1917. — Москва : Новое изд-во, 2006.
