There are over a hundred independent companies, but only twenty-five are doing a refining business, and of these only eight have sufficient capital to conduct their operations upon a paying basis. The large distribution of the interests is, however, very demoralizing. It has been a bad thing for the town and the industry and for everybody concerned, because whenever any large enterprise was undertaken, cut-throat competition has been used to interrupt and embarrass it. As one gentleman expressed it, it would have been to the advantage of everybody concerned if half the oil that has been produced at Baku had been allowed to run into the sea.
There are three large companies, the largest one belonging to the family of the late Alfred Nobel, the Swedish philanthropist, who founded the Nobel Institute at Stockholm and endowed it with funds from which the prizes for the promotion of peace, science, and literature are annually paid. Colonel Roosevelt, you will remember, went to Christiania in May, 1910, to receive the Nobel prize for peace which was awarded him because of his success in conciliating Russia and Japan and putting an end to the recent war.
Alfred Nobel, himself, was largely interested in the development of the Baku oil industry at the beginning, but, about the year 1877, he withdrew, and his brothers, Ludwig and Robert Nobel, continued the work. They turned their holdings over to a stock company many years ago, and
Emmanuel Nobel, a son of Ludwig, now holds the controlling interest in the company. He is the Rockefeller of Russian petroleum and is estimated to be worth $60,000,000. Although a Swede by birth and ancestry, he is a Russian subject, maintains a splendid palace in St. Petersburg and has a villa with a large park in the Crimea, where he goes for the summer.
The next richest man is an Armenian named Mantashoff, who still lives in Baku and looks after his interests. There is also a Tartar gentleman who has made millions in the oil fields and is spending a part of his income in the erection of a splendid building for a college in the city of Baku. The institution will be provided with an endowment sufficient to maintain a competent faculty and pay for the free education of a certain number of young men of Tartar families forever. It will be altogether the most imposing building in Baku when it is finished, and it stands upon the principal street.
The second largest company is controlled by a French syndicate organized by the Rothschilds twenty-two years ago, and the third in importance is owned by local Armenians. These three companies practically control the refining industry, which is very large, considering the area of the oil fields, much larger than in any part of the United States.
Baku produces more oil than any other single field. Last year (1909), its total product was 55,863,504 barrels, and Groznyi, the neighbouring district, produced 6,249,627 barrels, making the total from the Caspian 62,113,131 barrels, as compared with 179,562,479 barrels produced in the United States.
Austria is the second producer of the countries in Europe and reports 12,612,295 barrels for 1908; Roumania comes next, with 8,252,157 barrels, and Germany, 1,009,278 barrels.
From these figures, you will see that the industry at Baku is very important, and the Russian government derives a revenue of between $60,000,000 and $75,000,000 a year by taxing it. There is a direct tax upon the producers, an additional tax of thirty cents upon every pood, which is eight gallons, produced, beside the income from the sale of stamps required on contracts, bills of lading, and all other commercial paper. The little city of Baku, with 130,000 inhabitants, and they mostly Persians, Armenians, and Tartars, is the fourth source of revenue for the Russian treasury.
Most of the refineries, especially those of the Nobel and French companies, are located at what is called in Russian, Tchorny Gorod, or the "Dark City," which is connected with Baku by street car lines. The Nobel Company has provided homes for its officers and employes at the "White City, " a mile or two away — Biely Gorod, as it is called in Russian.
The Dark City consists of a large number of refineries, surrounded by high railway tracks, mostly covered with tank cars, and the gutters on both sides are filled with a network of pipes tapping a myriad of tanks and conducting the oil between the wells and the refineries and the reservoirs where it is stored for shipment. The Dark City is located upon the shore of the Caspian Sea, where extensive docks have been built and pumps provided for filling tank boats, which carry oil up the Volga River into the interior of Russia as far as Moscow, via Astrakhan, where it flows into the Caspian.