The ukase issued by the Senate in 1776 sanctioned the existence of the Kahal, regarding it primarily as a fiscal and legislative institution, which the Russian administration found convenient for its purposes. At the instance of Governor-General Chernyshev, the Jews of White Russia were set apart as a separate tax-unit and as an estate of their own. They were to be entered on special registers in the towns, townlets, villages, and hamlets, wherever a census was taken. The instructions read that

in order that their taxes may be more regularly remitted to the exchequer, Kahals shall be established in which they [the Jews] shall all be enrolled, so that every one of the "Zhyds,"[237] whenever he shall desire to travel somewhere on business, or to live and settle in one place or another, or to take anything on lease, shall receive a passport from the Kahal. The same Kahal shall pay the head-tax, and turn it over to the provincial exchequer.

Thus, as regards the payment of taxes, and the rights not only of transit but also of business, every Jew was placed in the same position of dependence on his Kahal as under the old Polish régime. At the same time the Kahal was endowed with certain judicial functions. District and Government Kahals, the latter conceived as courts of appeal, were established for cases between Jews, each of these Kahals being assigned a definite number of elective judges. Only lawsuits between Jews and non-Jews were to be brought before the general magistracy courts.

But a few years later the Government was shaken in its resolve to uphold the former Kahal organization to its full extent. In 1782 an inquiry was addressed by the Senate to Passek, the new Governor-General of White Russia, as to the legality of establishing special Jewish law courts. A year later the Government took a decided step in the opposite direction. It recognized the rights of Jews registered in the merchant class to participation in the general city government, to elect and to be elected on equal terms with the Christian members of the magistracies, town councils, and municipal courts. The realization of this reform was greatly hampered by the opposition of the Christian merchants and burghers, who hated the Jews, and could not reconcile themselves to the municipal equality of their competitors. Having accustomed themselves to look down upon the Jews as citizens of an inferior grade, the Christian city officials assumed a hostile attitude towards their Jewish colleagues who had been elected to public posts, and by electioneering methods managed to reduce their numbers in the city corporations to a minimum. The interests of the Jews were bound to suffer, particularly as far as the administration of justice was concerned.

On the other hand, the administration itself began to oppress them. The liberal Chernyshev was superseded by the anti-Jewish Passek, who did his utmost to restrict the Jews in their economic activities, to the obvious advantage of their competitors in the ranks of the Shlakhta and the Christian merchants.

The Jews—a contemporary who had himself been affected by these measures informs us—were driven from their breweries and distilleries, their toll-houses, hostelries, etc., which formed their principal means of livelihood. Thousands of families were reduced to beggary. In addition, new restrictions were introduced affecting business, handicrafts, and so forth.

The acuteness of the economic and social crisis among the Jews of White Russia during that period of transition is evidenced by the petition which their delegates submitted in 1784 to Catherine II.

The petition, consisting of six points, is permeated with a profound feeling of despair. The Jews complain that the administration has deprived them completely of their main sources of income: distilling, brewing, and liquor-selling in the cities. They furthermore point out that Governor-General Passek has forbidden the landed proprietors to lease the inns on their estates to Jews, and that in consequence a large number of families, who depended for their livelihood on some form of liquor-selling and innkeeping, had been brought to the verge of ruin. They also contend that the Jews had not reaped the expected benefits from the equal municipal rights conferred upon them, for where the Jews are in a minority not a single Jewish candidate is admitted to a municipal or judicial office, "so that whenever a Jew goes to law against a Christian, he is liable to become the victim of a partial verdict, because there is no coreligionist to intercede on his behalf in the courts, and he is not familiar with the Russian language." Their further grievances relate to the arbitrariness of the landed proprietors, who "from sheer caprice, contrary to agreement," impose an excessive land rent on the Jews who have erected houses on their property, so that they are forced to abandon their houses. Sometimes houses are requisitioned for Government purposes, or are torn down "to be rebuilt according to [new official street] plans," without the slightest compensation to their owners. The magistracies, on the other hand, often compel the Jews who are domiciled in the townlets and villages, but are enrolled among the merchants or burghers of some city, to build houses in that city, "whereby the Jews are liable to be reduced to extreme poverty, inasmuch as by spending their capital on building they have no capital wherewith to run their business."

The petition was received by the Empress, who, in forwarding it, in 1785, to the Senate for consideration, deemed it necessary to indicate her general attitude in the following "resolution":