It is not strange, considering the adverse circum stances, that the Russian industry rose slowly.
The real cause for wonderment is that it developed at all. Before 1880 the entire output scarcely ever exceeded 3,000,000 barrels a year. At that time, the Pennsylvania field alone was producing ten times as much as the Russian wells, and American oil was being carried thousands of miles to be sold in the cities of western Asia, in St. Peters burg and Moscow, under the very eyes of the Rus sian operators. But out of the seemingly hopeless depression there gradually loomed signs of sal vation.
American methods of drilling and boring were introduced and paved the way for increased pro duction as soon as other conditions were favorable. Astatki was successfully used as fuel, and the pop ular clamor against its dangerous character was so conclusively disproved that it was adopted for practically all the craft on the Caspian Sea. The lighter products began to find various uses in manufacturing processes, materially improving conditions for the refiners. The government re moved the burdensome excise tax. Perhaps most important of all was the entrance of the Nobel brothers into the field, bringing with them western ideas, ingenuity and energy. These men of Swed ish descent, seeing into the future, realized the possibilities of the Russian industry and immedi ately turned their efforts into improving every as pect of the business: the methods of production, refining, transportation, and securing markets for their products in competition for the lucrative trade which the Americans had enjoyed unmo lested so long.
When the Nobels entered the refining business in 1875, they realized clearly that the existing transportation facilities would never allow any profitable development and that the first thing to be done was to devise something better. All handling of crude oil between the wells and the refineries was done in the clumsy, high-wheeled, native carts, driven by Tartars and Persians. Scarcely a track in the whole district was fit to be called a road, and every rain temporarily stopped all transportation. The native drivers often struck at the busiest time of year, making a condition of affairs far worse than there had ever been in the Pennsylvania fields. Baku had no
railroad connections of any kind ; in fact, no rail road approached within hundreds of miles of the place; the nearest seaport was over 500 miles away and, for all commercial purposes, as inacces sible as if it had been ten times as far ; foreign trade was, therefore, entirely out of the question ; the only access to domestic markets was limited to the water route through Astrakhan, via the Cas pian and the Volga river, and even that outlet was closed from November to February of every year by ice in the North Caspian ports and in the river.
With so many handicaps to overcome, none but the most resolute would have dared hope for large successes. The American success with pipe lines offered a solution for part of the difficulties; and the first line, eight miles long, was built by the No bels to supply their refinery. The line proved to be such an unqualified success, in spite of the op position, that others were quickly laid, while the idea of a trunk line to the Black Sea was widely discussed. Such a line would undoubtedly have followed soon if it had not been for unyielding government opposition.
The entire absence of any means of export trade by sea meant that practically the whole consump tion of oil outside the immediate Caspian district must be confined to Russia, and to those localities in Russia accessible by the Volga, its canals and tributaries, and by the Russian railroads. An elaborate distributing system, therefore, was the only means which would build up a wider market and allow the industry to expand. The Nobels again led the way. A large fleet of tank steamers was introduced to carry the products of their re fineries to the mouth of the Volga, where trans shipment was made to river barges for shallow water navigation. Important distributing centers with great storage reservoirs were established in convenient places, where large supplies brought by barges via Astrakhan and then by rail from Tsaritzin could be accumulated during the season when the ports were ice free.