A Russian bank in the Khanate of Khiva of Novo-Urgench branch of the Russo-Asiatic commercial bank

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A Russian bank in the Khanate of Khiva of Novo-Urgench branch of the Russo-Asiatic commercial bank

B.A. Alimdjanov, PhD in History, Postdoctoral Student, Al-Beruni Institute of Oriental Studies; D.G. Yanchenko, PhD in History, Associate Professor, St. Petersburg State University

Cotton farming, being one of the leading branches of economic activity of Turkestan of the beginning of the 20^th century, attracted the attention of big investors of the Russian Empire. This article examines functioning of the Novo-Urgench branch of the Russo-Asian commercial bank (RACB) on the basis of the material from Russian State Historical Archive (RGIA): successful and unsuccessful operations, organizational structure, interaction with clients, and its influence on the regional market. The unique character of this branch of one of the largest Russian banks lay in that fact that it was the only lending and financial institution that expanded its operations throughout the entire oasis of Khiva, including territories that were under control of the Khan of Khiva.

Both local political and economic elites and entrepreneurs from Central Russia were clients and partners of the Novo-Urgench branch of the bank. Wide-spread liaisons allowed the institution to promptly conquer and maintain, even under conditions of a crisis, its niche on the market of financial services in Central Asia. On the threshold of the World War I, the bank attempted to monopolize cotton farming, working with big clients and even stimulating development of the processing industry. Novo-Urgench branch of the Russo-Asian bank provided help to the local merchantry trying to increase export of raw cotton and to enter both Russia-wide and international markets. For the objective reasons of shortage of liquid assets, underdeveloped infrastructure of the region, swings in stock-exchange and problems with human resources, the Novo-Urgench branch of the Rus- so-Asiatic bank could not capture and control the Khivan market. During the war years, the Central Asian periphery was under the influence of the problems characteristic of not only the banking sector, but Russian economy as a whole.

Keywords: Russian-Asian Commercial Bank, Khanate of Khiva, Turkestan, cotton, alfalfa, Russian Empire.

Российский банк в Хивинском ханстве Ново-Ургенчского отделения Русско-Азиатского коммерческого банка

Б.А. Алимджанов, канд. ист. наук, докторант, Институт Востоковедения им. Абу Райхана Беруни; Д.Г. Янченко, канд. ист. наук, доц., Санкт-Петербургский государственный университет

Хлопководство, как одна из ведущих отраслей экономики Туркестана начала XX в., привлекало внимание крупных инвесторов Российской империи. В советской и современной историографии интерес к деятельности имперских банков на территории Центральной Азии обусловлен продолжающимися дискуссиями о роли и значении российского капитала в экономическом развитии региона. Зачастую для принятия рациональных долгосрочных финансовых решений представителям российского капитала на окраинах нужно было тщательно изучить специфику местной политической ситуации. В статье на основе материалов Российского государственного исторического архива подробно рассмотрено функционирование Ново-Ургенчского отделения Русско-Азиатского коммерческого банка: успешные и неудачные операции, организационная структура, взаимодействие с клиентами, влияние на региональном рынке.

Уникальность этого филиала одного из крупнейших русских банков в том, что он был единственным кредитно-финансовым учреждением, развивавшим свою деятельность по всему Хивинскому оазису, включая территории, подконтрольные хивинскому хану. Клиентами и партнерами Ново-Ургенчского филиала банка становились как представители местной политической и экономической элиты, так и предприниматели из Центральной России. Широта связей позволила этому учреждению в короткий срок завоевать и сохранять даже в кризисных условиях свою нишу на рынке финансовых услуг в Центральной Азии.

Накануне Первой мировой войны банк принял решение монополизировать хлопковую отрасль, работая с крупными клиентами и даже стимулируя развитие обрабатывающей промышленности. Ново-Ургенчский филиал Русско-Азиатского банка оказывал помощь местному купечеству в попытках увеличить экспорт сырья и выйти не только на общероссийский, но и на международный рынок. В силу объективных причин (нехватка оборотных средств, слабая инфраструктура региона, биржевые колебания, кадровые проблемы) Ново-Ургенчский филиал не смог захватить и контролировать рынок Хивы. В годы Первой мировой войны влияние проблем, характерных для банковского сектора, как и для всей экономики России, в полной мере испытала и среднеазиатская окраина.

Ключевые слова: Русско-Азиатский коммерческий банк, Хивинское ханство, Туркестан, хлопок, Российская империя.

History of banks and banking in Turkestan has barely been researched, and where it has, it mostly shed light upon these aspects within the framework of the Soviet concept of “monopolistic capitalism”. Researchers have only fragmentarily studied operations of the State bank of the Russian Empire, Russo-Asiatic Aminov A.M. Ekonomicheskoe razvitie Srednei Azii (Kolonial'nyi period). Tashkent, 1959. P. 272; Vekselman M.I. Rossiiskii monopolisticheskii I inostrannyi kapital v Srednei Azii (konets XIX -- nachalo XX v.). Tashkent, 1987. P. 35, 40-50, 62-67, 69-74, 82-83, 85-90, 93, 114-116, 119-120; Gindin I.F. Banki i ekonomicheskaia politika v Rossii (XIX -- nachalo XX v.). Izbrannoe. Ocherki istorii I tipologii russkikh bankov. Moscow, 1997; Istoriia Uzbekskoi SSR / eds by M.G. Vakhabova, V.Ia. Nepomnina, T.N. Kary-Niiazova. Vol. 1, book 2. Tashkent, 1956. P 207-208; Kitanina T.M. Voenno-infliatsionnye kontserny v Rossii 1914-1917 gg. Kontsern Putilova-Stakheeva-Batolina. Leningrad, 1969; Pogorel'skii I.V. Ocherki ekonomi-cheskoi i politicheskoe istorii Khivinskogo khanstva kontsa XIX -- nachala XX v. (1873-1917 gg.). Leningrad, 1968. P 92; Potapova N.Yu. Istoriia predprinimatel'stva v Turkestane (vtoraia polovina XIX -- nachalo XX v.). Tashkent, 2011. P 74-76, 91; Sadykov A.S. Rossiia i Khiva v kontse XIX -- nachale XX veka. Tashkent, 1972; Iuldashev A.M.: 1) Proniknovenie russkogo monopolisticheskogo kapitala v ekonomike Turkestana (1900-1917 gg.): avtoref. diss. ... kand. ekon. nauk. Tashkent, 1961; 2) Agrarnye otnosheniia v Turkestane (konets XIX -- nachalo XX v.). Tashkent, 1970. P 124-126, 208-217, 219-221. and Volzhsko-Kamski banks. It is not possible today to clearly evaluate and characterize activities and functioning of the banks of the Empire in Central Asia on the basis of the works by Soviet and post-Soviet historians as they often contradict contemporary concepts of empire.

According to a famous Soviet historian who researched the topic, A. S. Sadykov, “activities of the financial capital did not transform the character of the commodity-money and credit relationships which existed in Khiva in the past; they only created a certain hierarchy where almost all producers were subject to the banking capital (through middlemen)” Sadykov A.S. Ekonomicheskie sviazi Khivy s Rossiei vo vtoroi polovine XIX -- nachale XX v. Tashkent, 1965. P. 153.. Given that, Z.D. Kastel'skaia argues “Russian capitalism created a vast system of banks in Turkestan to the end of exploiting the local economy” Kastel'skaia Z.D. Iz istorii Turkestanskogo kraia (1865-1917). Moscow, 1980. P 64..

However, we favour N.B. Khotamov's opinion, characteristic of late Soviet historiography: “Russian financial capital in its colony, the Central Asia... did not provide assistance to the local banks which emerged in the region independently of the Russian ones, and therefore remained weak and did not have a significant influence on the economic life” Khotamov N.B. Rol' bankovskogo kapitala v sotsial'no-ekonomicheskom razvitii Srednei Azii (nachalo 90-kh gg. XIX v. -- 1917 g.). Dushanbe, 1990. P. 4..

Nowadays, it is difficult to agree with the view that activities of merchants and entrepreneurs were a sign of emergence of “local industrial and commercial bourgeoisie” in the region which held strong economic position, where “connections and strong financial dependence on Russian commercial, industrial and especially banking capital did not allow it to become the monopolist in the commercial and industrial sector” Makhkamova N.R. Sotsial'naia struktura obshchestva na territorii Uzbekistana: traditsii i transfor- matsii (konets XIX v. -- 30-e gody XX v.). Tashkent, 2009. P 26..

Consequently, all above-stated ideas call for re-interpretation. The analysis of the sources and contemporary historiography on the subject enable to confidently maintain that it was virtually impossible to become a monopolist in the profiteering economy that developed in the Khanate of Khiva.

Establishing routes of communication and building railroads indeed strengthened ties between central parts of the country and its economically backward outskirts, stimulated their involvement in the Russian market, promoted emergence and development of economic sectors (most of all, those related to cotton farming) previously unknown to Russia's Central Asia, and even their entering the international market as T.M. Kitanina points out Kitanina T.M. Proniknovenie krupnogo rossiiskogo finansovogo kapitala v ekonomiku Srednei Azii v kontse XIX -- nachale XX v. St. Petersburg, 2019.. However, it was mostly true for the regions where the Russian government system and law were predominant.

As evidenced by the archival documents on the branches of the Russo-Asiatic bank, we argue that credit operations of the institution in the Khivan oasis promoted profiteering in the local markets more than development of processing industry which, of course, held back fast modernization of economy. Let us consider these processes as exemplified by the work of a unique banking system, the Novo-Urgench branch of the Russo-Asiatic commercial bank in the khanate of Khiva and neighbouring regions of Governorate-Gen- eral of Turkestan.

The Russo-Asiatic commercial bank (RACB. -- Authors' note) (prior to 1910, it was called the Russo-Chinese bank) was considered the largest bank in the region; it had a vast network of 13 branches around Central Asia Salomatina S.A. Rossiiskie i sovetskie banki v stranakh Srednego i Dal'nego Vostoka 1890-1920-e gg.: transformatsiia imperskikh traditsii // Ekonomicheskaia istoriia: ezhegodnik. 2014. Vol. 2013. P. 568-624; Sokolov V.V. Kolonial'nyi Turkestan: ekonomiko-promyshlennoe sostoianie i razvitie. Moscow, 2002.. In its operations, the Russo-Asiatic bank attempted to have control over, indeed, cotton farming and industrial production. Modernization of economy of Central Asia, according to the understanding of the bank's administration, obviously lay in financing of export crops and intermediate trade between the central regions and the periphery. In the context of the Russian colonization of Turkestan, and a project of reclamation of Mirzacho'l (lit. “hungry steppe”) that never came to life Mamaev A.V. Imperskii proekt zaseleniia Golodnoi stepi // Quaestio Rossica. 2019. Vol. 7, no. 4. P. 1259-1274., functioning of RACB in Khiva could be seen as an alternative, commercial approach to establishing economic dominance of the empire's central power over Central Asia.

Economic position of the Khanate of Khiva and interests of the Novo-Urgench branch of the Russo-Asiatic commercial bank. The Novo-Urgench branch of the Rus- so-Asiatic commercial bank was the only lending and financial institution which attempted to develop its operations around the entire oasis of Khiva. Commercial interests of the Novo-Urgench branch extended over Khivan territory proper with its towns and kishlaks -- Khiva, Urgench, Khanki (currently settlement of Xonqa, Uzbekistan), Hazorasp, Tashauz (currently town of Da^oguz, Turkmenistan), Mangit -- altogether home to approximately 1 million people, and the Amu-daria branch with its towns and kishlaks -- Petroaleksandrovsk (currently town of To`rtko`l , Uzbekistan), Shurakhan, Gurlyan (currently settlement of Gurlen, Uzbekistan), Khodzhent (currently town of Khudzhand, Tadzhikistan), Chimbai, Akhbugut (in the estuary of the Amu-daria) -- altogether home to approximately 600 thousand people Perepiska Upravleniia otdeleniiami s Novo-Urgenchskim otdeleniem banka o sostoianii mestnogo rynka i osnovnykh napravleniiakh deiatel'nosti otdeleniia, ob organizatsii Otdeleniem eksporta liutserny cherez Gamburgskuiu birzhu, o popytke sozdat' sindikat skupshchikov liutserny dlia ustraneniia konkuren- tsii, 1911 g. // Rossiiskii gosudarstvennyi istoricheskii arkhiv (RGIA). F. 630. Op. 1. D. 475. L. 64 ob.-65..

Cotton farming was the key pillar of the economy of the region -- a field that unalterably enjoyed support of the tzar's government in Turkestan. However, in 1906, according to the state controller P. H. Schwanebach, cotton farming became more profitable than all other crops in the region and was so developed that the existing benefits could be cancelled Mamaev A.V. Podgotovka reform pravleniia Turkestanskim kraem v nachale XX v.: Ekonomicheskie aspekty // Nauchnyi dialog. 2019. No. 11. P. 391.. That opinion was perhaps induced by the events of the Russian revolution of 1905 and a resulting tendency of the Russian government to strengthen its influence over the periphery. In this context, taking into account the special status of the Khanate of Khiva in the Russian Empire, operations of the Russian commercial structure in what concerns monopolization of the cotton market are of special interest.

In the years of 1910 and 1911, approximately 850 thousand of pudi of cotton fibre totaling 12 million roubles was produced in the Khanate of Khiva. Purchase and export of cotton was mainly carried out by Yaroslavskaia Bolshaia Manufaktura (manufacture), Moskovskoe torgovo-promyshlennoe tovarishchestvo (business association), trading house “Stuken and K°”, brothers Kraft, oilery and techno-chemical plant of Z. M. Persitz, Y. M. Shlossberg. Novo-Urgench branch of the Russo-Asiatic bank bought up more than 20 % of all cotton in 1910/11 RGIA. F. 630. Op. 1. D. 475. L. 64 ob.-65.. Local and international profiteers, merchants and manufacturers also bought raw material.

There were 23 cotton-ginning factories in the Khivan khanate, 5 of which were in Petroaleksandrovsk (they were owned by P. A. Manuilov, A. Ravilov, Chaubanov, Samandarov, Dzhalekov and Mad'iarov); 4 factories were located in Urgench and belonged to Yaroslavskaia manufaktura, K. A. Manuilov, S. Bakkalov and a Khivan company; 3 factories were situated in Gurlyan and owned by the Rizaev brothers, P.A. Manuilov and B. Maksutov; 3 factories in Tashauz belonged to Yaroslavskaia manufaktura, the Chernikov and S. Bakkalov; 2 factories were found in Hazorasp and owned by S.M. Aminov and S. Bakkalov, and one factory in Mangit belonged to K.A. Manuilov. There were three oileries: P.A. Manuilov was the owner of two factories in Petroaleksandrovsk and Khanki, Yaroslavskaia manufaktura and an oilery in Urgench. All oil was sold for local use Ibid..

In 1911, up to 400 thousand pudi of alfalfa to the amount of 3 million roubles was exported from Khiva, more than one third of which -- by the Urgench branch. “Apart from our bank”, noted A. Slutskii who inspected the Novo-Urgench branch of RACB, “alfalfa was also purchased by Kraft, the Rizaev brothers, Karnel, the Chernikov brothers, etc. About 500 thousands of karakul pelts are exported from Urgench district with the sum total up to 4 million roubles Ibid.”. Up to 30 thousand pudi amounting to 200 thousand roubles were exported. The list of goods intended for export from the Khivan khanate going through Urgench was concluded by leathers, meshis (leather bags) and intestines.

The structure of import to the region remained considerably traditional. Manufactured goods were on top of the list with, according to Slutskii's estimate, “up to 200 thousand pudi totaling around 8 million roubles, followed by 200 thousand pudi of castor and lump sugar totaling around 1 million roubles” Ibid.. Circa 150 thousand pudi of kerosene totaling 300 thousand roubles were imported into the region. Prior to the intensive activity developed by RACB in the region, Cossacks from the Urals who had been forcefully relocated to the Amu-daria division for avoiding Orthodoxy were the influential trading element. A. Slutskii noted the following: “Kerosene trading is in the hands of Uralians, but they will probably lose it as they have lost sugar. About 60 thousand pudi of green tea to the amount of 1,5 million roubles is imported. The trade is in the hands of Persians, mainly the Rizaev brothers” Ibid..

During the first decade of the 20^th century, control over the market passed into the hands of agents of transport companies, branches of the Russo-Asiatic bank, and large reselling entrepreneurs. The increasing influence of representatives of large capital appears to have been an all-Russian tendency that involved the periphery as well. The volume of both import and export sales were estimated by analysts of the Russo-Asiatic bank at 3 million pudi (48 900 tons), however the technical provision of import and export operations left much room for improvement.

Almost all goods were transported over Chardzhui “in kayuks, of which there are around 300 in the Amu-daria, each with the capacity between 1500 and 2000 pudi. A small proportion of goods is transported via the Aral Sea by the shipping agency `Khiva' (ill-equipped, for that matter)” Ibid., Slutskii wrote. When the Amu-daria froze up, insignificant part of goods was sent via Chardzhui (currently town of Turkmenabad, Turkmenistan), Asgabat (currently town of Ashgabat, Turkmenistan) and Krasnovodsk (currently town of Turkmenbashi, Turkmenistan -- auth.), but such means of transportation were expensive and risky. Evidently, the complicated logistics and underdeveloped transport infrastructure were, as in most other peripheral regions, a substantial obstacle on the way to economic modernization.

Main operations of the Novo-Urgench branch of the Russo-Asiatic bank. The Novo-Urgench branch of the Russo-Asiatic bank was founded in 1909. The first director of the bank was V.Y. Komarovskii (from 1909 until 1911), a former employee of the Poznanskii broth Ibid. L. 85-90.. Initial capital (opening balance) as of 1 January1910 was approximately 4 million 100 thousand roubles Otchety Novo-Urgenchskogo otdeleniia banka za 1910-1917 gg. // RGIA. F. 630. Op. 1. D. 474. L. 16 ob., and by 1 January 1917 the opening balance had decreased and amounted to 3 622 561 roubles 03 kopecks Ibid. L. 158 ob., which in our view was connected with the development of crisis in the Russian banking system which manifested itself in the years of the First World War.

In 1911, the main branch of the Russo-Asiatic bank assigned the Novo-Urgench branch with a constant capital of 1 million roubles Ibid. L. 210-212.. “We believe”, reported the administration of the branch back to Saint Petersburg, “that one million roubles assigned to our branch should be far from enough. Apart from what we invested in alfalfa, the amount will only be enough for our main operations. We should think that we shall need 1 million roubles of constant capital and an additional capital of 1 million roubles” Ibid..

The bank provided its branch with another 800 thousand roubles, but even that was not enough. I.I. Fruhling (director of the branch from 1911 until1 916) considered it impossible to “renew the last year's agreement with Mr. Mad'iarov and Mr. Bakkalov (both were in the khan's coterie and even accompanied him in his travel to Saint Petersburg. -- Authors' note) in case of realization of the idea of syndication (here: cooperative operations. -- Authors' note) of the Khivan market by alfalfa exporters. And in that case, we shall need a capital of at least half a million roubles” Otchety Novo-Urgenchskogo otdeleniia banka za 1910-1917 gg. L. 239-241..

In 1911, the bank attempted monopolization of the Khivan market but the idea to unite all large firms under the umbrella of the branch failed. The main reason for the failure of the “syndication” was, according to I.I. Fruhling, “high prices for alfalfa in Khiva and the expected fair yield in France” Ibid. L. 248-249..

The main active operations of the bank were negotiation of bills (Table 1), acceptance credits and term loans. For negotiation of bills, Bill negotiation committee was created; in 1911, a representative of interests of a group of Persian traders and manufacturers and an authorized person of the trading house of the Rizaev brothers, K.A. Aliev, was invited Ibid. L. 42.. Operations with bills, as stated by the administration of the bank, were not developed to the level of the cotton-farming districts of the Ferghana region of the Governorate-general of Turkestan. Negotiation of bills, according to the opinion of V.Y. Komarovskii, yielded “profit rather insignificant and unstable. Operations of that linear eanaemic and could not be developed due to the nature of the local production sector and underdevelopment of bills of exchange among the local population who recourse, as required by Sharia, to performance of cadikhat, which is not accepted by the bank” Ibid. L. 85-90..

Table 1. Active (bill) operations of the Novo-Urgench branch of the Russo-Asiatic bank, roubles Ibid. L. 2, 16 ob., 18, 35 ob., 37, 62 ob., 64, 82 ob., 84, 107 ob., 109, 131 ob., 133, 158 ob., 160.

Apparently, the traditional system of debt instruments of “bill” type was maintained in Khiva and widely used by the local population. One could challenge the cadi's decisions (and cadi received at least 1,5 % of a deal) with khan, which, of course, was not acceptable for the bank acting in accordance with the Russian legislation.

The data above shows that bill negotiation peaked at 1912 and 1913, and soon began to decrease due to the bad condition of the bank's bill portfolio. Since 1911, the Novo-Urgench branch began to negotiate promissory notes by the order of the administration although I.I. Fruhling did not approve of that operation. In his correspondence with the bank's administration, he aired grievances regarding “large disincentive for successful collection of cotton consignment and absolute requirement to demand promissory notes from clients prior to issuing loans against transport documents. The formality literally drives the Khivan client away since he is used to going without it when dealing with Stuken and Torgopro (the Moscow business association. -- Authors' note)” Perepiska Upravleniia otdeleniiami s Novo-Urgenchskim otdeleniem banka o sostoianii mestnogo rynka i osnovnykh napravleniiakh deiatel'nosti Otdeleniia, ob organizatsii otdeleniem eksporta liutserny cherez Gamburgskuiu birzhu, 1911-1916 gg. // RGIA. F. 630. Op. 1. D. 476. L. 103-106, 108-109.. In 1913, the operation was approved by the bank's administration (Table 2).

Table 2. Negotiation of promissory notes, roubles RGIA. F. 630. Op. 1. D. 474. L. 64, 84, 109.

In the autumn of 1911, the bank raised interest charges for all bill and commodity operations to 10 % p. a. This was done to the effect of “liberation from small and uninteresting clientele” and the said effect was mainly achieved by the refusal to accept bills from such clients Ibid. D. 476. L. 26-27..

The bank's principal income was from on-call loans (see Table 3).

Since 1914, the bank began to supply on-call loans against security papers, which by 1916 had accrued almost 167 thousand roubles but, for reasons well-known, the number fell down in 1917. Table 3 shows that the number of on-call loans against goods and railway bills of lading was constantly growing, which is attributed to the growth of steady export to the European Russia and Western Europe. It is to be noted that during the World War I, the number of on-call loans against bills was decreasing, while loans against goods were growing; this is accounted for by stock-exchange manipulations and inflation.

Table 3. Active operations (on-call loans) of the Novo-Urgench branch of the Russo-Asian bank, roubles RGIA. F. 630. Op. 1. D. 474. L. 3 ob.-4; 20 ob.-21; 39 ob.-40; 66 ob.-67; 86 ob.-87; 111 ob.-112; 135 ob.-136; 162 ob.-163.

By May 1916, commodity operations of the branch amounted to 690 thousand roubles. The amount was comprised by the following: against cotton, 498 thousand roubles (72 %), against tea -- 116 thousand roubles (17 %), against alfalfa -- 34 thousand roubles (5 %), against sugar, manufactured products, etc. -- 42 thousand roubles (6 %) Otchet inspektorov banka B. Lukod'ianova i R. Tal'ma o revizii deiatel'nosti Novo-Urgenchskogo otdeleniiana 16 maiia 1916 g. Direktor I.I. Friuling // RGIA. F. 630. Op. 1. D. 480. L. 9 ob.-10 ob.. The Novo-Urgench branch of the Russo-Asiatic bank also developed the business line of term loans (Table 4).

Table 4. Active operations (term loans) of the Novo-Urgench branch of the Russo-Asiatic bank, roubles Ibid. L. 3 ob.-4, 22, 41, 68, 88, 113, 137, 164.

Term loans were issued by banks mainly against goods and trade documents. Loans were issued in the amount of 80 % of the total price of goods, and advances were secured by clients' bills in hand Ibid. D. 475. L. 44-48.. Loans were mainly issued against cotton, alfalfa and tea. The decrease in term loans against goods in 1913 and 1914 is accounted for by the situation on stock exchange and bankruptcy of merchants. For instance, in 1913 the trading house of the Rizaev brothers, one of the largest vendors of tea (see Table 5) went bankrupt. Consequentially, two branches of the Russo-Asiatic bank suffered: the Samarkand and the Novo-Urgench.

Table 5. Debts of the Rizaev brothers on 01.11.1913, roubles Ibid. D. 476. L. 171; D. 477. L. 42.

As a result of the agreement between the bank and the firm, bill debt payment was broken down into installment plan for 6 years, and the debt was secured by the firm's real estate mortgage valued at 200 thousand roubles Ibid. D. 476. L. 171.. Despite all effort, the Rizaev brothers could not pay their debts to the bank. By 1 July 1917 their debt amounted to almost 250 thousand: 144 372 roubles 46 kopecks (on-call against bills) and 105 436 roubles 43 kopecks (on-call against trading documents) Perepiska otdela nedvizhimykh imushchestv s Novo-Urgenchskim otdeleniem o sostoianii schetov klientov po kreditam, obespechennym zakladnymi na nedvizhimoe imushchestvo, s prilozheniiami vedomostei o nedvizhimom imushchestve, 1913-1917 gg. // RGIA. F. 630. Op. 1. D. 477. L. 42..

Apart from the trading house of the Rizaev brothers, other large regional entrepreneurs were bill debtors to the Novo-Urgench branch of the Russo-Asiatic bank (Table 6).

Table 6. Statement of debt secured against real estate on 01.12.1913, roubles Ibid. L. 8.

In 1916, the bank sold its property, including Yu. Aitbaev's factory for 31 661 roubles 39 kopecks, thus partly covering losses.

For the period concerned, the main data for the bank's active operations are given in Tables 7 and 8.

Let us consider balance in hand for active operations at the beginning of each year in 1910-1916 (Table 8).

Table 7. Main operations flow in 1909-1915, roubles³⁸ RGIA. F. 630. Op. 1. D. 480. L. 7 ob.

³⁹ Ibid.

⁴⁰ Ibid. L. 17 ob.

Table 8. Main operations flow, roubles Ibid. D. 474. L. 8, 26, 45, 72, 92, 119, 143, 168.

It is to be noted that by 1916, active operations of the branch comprised only around 800 thousand roubles, which did not cover the bank's expenses.

Passive operations of theNovo-Urgench branch of theRusso-Asiatic bank. With each passing year, the branch developed passive operations more and more: deposits on current accounts increased, on-demand deposits decreased, and term loans showed steady growth since 1912 (Tables 9 and 10).

Table 9. Passive operations (deposits) of the Novo-Urgench branch of the Russo-Asiatic bank, roubles Ibid. D. 480. L. 29 ob.-31 ob.

Table 10. Balance in hand of deposits and current accounts, roubles Ibid.

Deposits to the bank increased sharply in 1916 and, according to an inspector, the result “surpassed all expectations: over 5 months and several days, deposits had grown by 151 % and, even during our inspection, the increase in deposits was 37 %”.

Interest rates and the number of deposits in the bank depended on the increase in prices for export goods and successful suppression of Turkmen uprising. The biggest deposits and current accounts as per 16 May 1916 belonged to the Khivan khan, 150 thousand roubles with 5,5 % p. a.; K. Babadzanov, 158 915 roubles with 5,5 % p. a.; M.K. Tadziniiazov, 113 thousand roubles with 3,5 % p. a.; A. Mad'iarov, 70 140 roubles with 3 p. a. %; K. Abduldzabbarov, 51 682 roubles with 3 p. a. %; K. A. Manuilov, 50 803 roubles with 3 p. a. %; M. Avezniiazmatov, 50 thousand roubles with 6 % p. a.; A. Ischanov, 50 thousand roubles with 5,5 % p. a. Aggregate capital of these clients constituted 40 % of all deposits and current accounts (694 540 roubles). The average interest rate for deposits and current accounts in 1915 was 3,66 % p. a., and as per 16 May 1916 it was 3,89 % p. a. RGIA. F. 630. Op. 1. D. 480. L. 29 ob.-31 ob. The increase in the number of deposits influenced the bank's administration policy; it began to take loans from the branch. By June 1916, the administration owed the branch almost 1,5 million roubles Ibid. L. 40 ob..

Transfers and correspondent accounts should also be considered successful: in 1911,3048668 roubles 68 kopecks were debited; 3 429 486 roubles 07 kopecks were credited, and by 1917, 18 828 689 roubles 12 kopecks were debited; 18 757 924 roubles 90 kopecks were credited Ibid. D. 474. L. 23, 165..The Novo-Urgench branch ordered goods for its clients through other branches: the Rizaev brothers paid for tea through the offices of the Samarkand branch of the Russo-Asiatic bank; small firms paid through the offices of the Moscow branch and could order manufactured goods, honey, silver and different gold coins (imperials, Turkish liras) Ibid. D. 475. L. 58 ob.-63 ob.. In consequence of direct debit operations, transfers and letters of credit, the profit grew (Table 11).

Table 11. Direct debit, transfer, letters of credit, roubles Iibid. D. 480. L. 32 ob.-40 ob.

During the World War I, the branch mainly sold war bonds. “On-calls for 145 thousand roubles, secured exclusively against war bonds”, inspectors wrote in 1916, “primarily the last one (State 5^ % short-term war loan of 1916. -- Authors' note); the margin is between 6 and 8 %. Term loans and buy and sell account for only 8 thousand roubles -- only lottery-bearing bonds” Ibid. L. 17 ob..

In 1915, the Novo-Urgench branch owned 725 shares of the “Emba Caspian Oil Company, Limited”; 41 shares of the Putilov plant, 24 shares of the Russo-Asiatic bank Ibid. D. 476. L. 203.. Despite the economic growth incidental to the war needs, stock exchange operations were slow to develop in the Khivan khanate and Governorate-general of Turkestan.

Commodity operations of the Novo-Urgench branch of the Russo-Asiatic bank. From 1910, the bank attempted, through its branches, to trade alfalfa and cotton at foreign markets at its own expense (mainly in Moscow and Hamburg). Cotton was purchased (for the amount of up to 3 million roubles) by the Novo-Urgench branch “a meta” (from Italian “a meta”, i. e. half-and-half or fifty-fifty. -- Authors' note) with the Moscow branch of the Russo-Asiatic branch, and alfalfa was bought “a meta” with Mad'iarov and Bakkalov for the amount of up to 1,5 million roubles Ibid. D. 475. L 56-58..

Cotton was bought by the bank's branch through intermediary merchants I. I. Pershin in Petroaleksandrovsk, Hazorasp and Shurakhan, T. Piskunov -- in Urgench, I. Karmanov -- in Thashauz. In Gurlyan, cotton was purchased through the agency of the trading house of the Rizaev brothers “ameta” Ibid. L. 58 ob.- 63 ob..

Inspector A. Slutskii pointed out in 1911 that “ill-written contract with Mad'iarov and Bakkalov left, first of all, much room for misuse in the course of purchasing alfalfa” Ibid.. Mad'iarov and Bakkalov, despite buying “118 thousand pudi, reported purchases only several times, given that Mad'iarov's average buying price is 17 kopecks more per pood than ours, and Bakkalov's -- 13 kopecks more than ours” Ibid.. The inspector noted that “all was bought at the bank's expense” Ibid. although, according to the contract, they participated nominally in profit and loss at 55 % Ibid..

Slutskii took notice of the “good relationship” established between the branch's director Komarov and Bakkalov and Mad'iarov as well as of the “trust that both had in him [the director]”, although “through certain misunderstanding in the course of alfalfa payment calculations”, the clients “appeared to have developed some kind of suspicion towards the bank's actions” Ibid.. Slutskii recommended to revise contracts with Bakkalov and Mad'iarov in the interests of the Novo-Urgench branch and continue operations with alfalfa Ibid. L. 67 ob.- 68 ob.. A total of 144 169 pudi 15 pounds (approximately 2 million 363 thousand tons and 720 kilograms. -- Authors' note) of hulled alfalfa were bought together with these partners, out of which 77261 pudi 25 pounds (approximately 1 million 266 thousand tons and 740 kilograms. -- Authors' note) with book value of 684371 roubles 60 kopecks, i. e. around 8,71 roubles for pood franco-Urgench.

During 1911, goods for the total value of 854 204 roubles 29 kopecks were bought at the expense of the branch and sold for the total of 1 179 513 roubles 85 kopecks Ibid. D. 474. L. 25.. Despite the positive development of the branch's commodity operations in 1911, the negative profit from cotton trading was 234 342 roubles 91 kopecks Ibid., and the total value of goods not sold 766 031 roubles Ibid.. The negative tendency continued in the years to follow (see Table 12).

Table 12. Commodity operations of the bank's branch, roubles

In 1911-1913, cotton and alfalfa operations were influenced by the difficult environment at Moscow and Hamburg stock exchanges, whereupon the bank sustained substantial losses. Apart from the negative conditions at stock exchanges, 70 carloads of alfalfa could not be dispatched because of the early winter of 1911 RGIA. F. 630. Op. 1. D. 474. L. 16 ob., 44, 91, 118. Ibid. D. 475. L. 1-2.. In March 1911, the director of the Novo-Urgench branch V.Y. Komarovskii, asked the administration of the Rus- so-Asiatic commercial bank for permission to proceed to Hamburg to the end of solving the alfalfa stock exchange sale issue. In order to reduce expenses, Komarovskii suggested that administration should sell alfalfa to America or that firms should buy it on a commission basis Ibid. L. 22-25.. It is noteworthy that the director attributed failures in trade operations exclusively to the early winter and bad infrastructure of the khanate of Khiva. V.Y. Komarovskii also recommended that the branch should buy cotton in the region directly. We can assess the risks of such operation from the letter written by F. Miliashkevich, who managed the Samarkand branch, to the Moscow branch of the Russo-Asiatic commercial bank. At the end of March 1911, he complained about transport companies (“Vostochnoye”, “Kavkaz I Mercuriy”) which failed to apply enough care to the transportation of cotton resulting in the deteriorated quality of the material and corresponding lower prices on stock exchange. Given that, transport companies charged 3 kopecks per each pood in order to “cover goods with tarpaulin”, which had no effect but increased the final price Ibid. L. 39-40..

Following A. Slutskii revision, the Novo-Urgench branch of the bank drastically decreased purchase of goods at its own expense and commenced development of commission operations, but the branch failed to lead in this sphere as well. In 1913, cotton yield in the khanate of Khiva (approximately 16 % of all land was occupied with cotton fields) was 1 million pudi (100 thousands of which were used by the local population) Ibid. D. 476. L. 178-179, 180.. The Moscow business association held the first place for commission sale of cotton (up to 500 carloads). The company, according to the director of the branch, was second to none as it is common practice to issue loans against goods up front, which is of course impracticable for any banking institution Ibid.. Consecutively, the Novo-Urgench branch only received Ibid. carloads of cotton for consignment selling Ibid..

The World War I destabilized markets and was bound to have a positive influence on the development of commission sale of cotton through the bank. Nevertheless, in December 1914, Vadiaevskoe business association purchased 160 carloads of Khivan cotton in such a manner Ibid. L. 200.. However, by May 1916, only 45 carloads of the material were received for consignment sale during the season Ibid. D. 480. L. 10 ob. -- 12 ob..

Until August 1914, the branch continued selling alfalfa on Hamburg stock exchange. “During May 1914”, the branch's director wrote in his report, “60 carloads of alfalfa were sold in Hamburg and currently there remains of the said alfalfa in the same market: 1911 harvest -- 25 carloads, 1912 -- 12 carloads, 1913 -- 59 carloads, totaling 96 carloads” Ibid. D. 476. L. 200.. After the beginning of the war, Hamburg stock exchange sales were suspended Ibid. L. 191. which prompted the search for alternative channels for sales. Khivan alfalfa began to be sold to America through Vladivostok. Persian and Russian merchants (Khadji Aga Galiyev and Geyman) Ibid. D. 480. L. 28 ob. started collaboration on alfalfa export, and gradually alfalfa prices began to increase.

Expenses and profit of the bank's branch. In 1910-1917, the profit of the Novo-Urgench branch of the RACB was of unsteady nature (Table 13).

Table 13. Expenses and profit of the Novo-Urgench branch of the Russo-Asiatic bank, roubles Ibid. D. 474. L. 11, 11 ob., 12 ob., 29, 29 ob., 31, 47, 47 ob., 48 ob., 75, 75 ob., 76 ob., 94, 94 ob., 95 ob., 121, 121 ob., 122 ob., 151, 151 ob., 152 ob., 170, 171 ob., 172 ob.; D. 475. L. 9-11.

As it becomes evident from the table above, almost half of the branch's expenses were comprised of salary to the employees, the other half included telegraph (almost 2400 roubles per year) RGIA. F. 630. Op. 1. D. 475. L. 14-16., refurbishment of premises, fuel and stationery. Pure loss in the amount of almost 6500 roubles in 1910 was due to bankruptcy of S.P. Fomin and his failure to pay loans to the bank. In the correspondence of the branch's director, the reason for bankruptcy is described in sufficient detail and, apparently, so is the standard operating procedure of the bank in a bankruptcy situation. The initial debt of S.P. Fomin was “as per January of the accounting year: 12 thousand roubles -- loan issued against 32 500 pudi of chigit (cotton seeds. -- Authors' note) and 22.756 roubles13 kopecks -- unpaid advances and the price difference between the one agreed upon and paid at his expense, a total of 34 756 roubles 13 kopecks... and from our selling of his cotton-ginning factory -- 28 306 roubles 62 kopecks. The remaining 6449 roubles 51 kopecks, as we do not hold a security or any means of collecting from him, we were forced to write off from our profit for 1910” Ibid. L. 9-11.. In the annual report for 1910, the losses were explained additionally by permanently high cotton prices on the Khivan market.

In 1911, the branch lost almost 250 thousand roubles on an unsuccessful cotton and alfalfa transaction. In 1913, net profit fell to 5400 roubles, the reason behind such a decrease were protested bills for the amount of 37 768 roubles 74 kopecks Ibid. D. 474. L. 76 ob. as well as bankruptcy of the trading house of the Rizaev brothers. In 1916, profit fell yet again along with a decrease in active operations and an increase in passive operations. Apparently, banking business in Central Asia bore not a few hidden risks.

Inspections of the activities of the Novo-Urgench branch of the Russo-Asiatic bank. Materials from the Russian State Historical Archive allow for detailed scrutiny of two prominent inspections of the Novo-Urgench branch of the RACB. In 1911, inspector А. Slutskii who came from Saint Petersburg for re...