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.
Domes of the Persian section of Baku
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 employés 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.
Mr. Norman, an English engineer, who formerly lived in Chicago, and spent several years in the employ of the Standard Oil Company, showed me around the Nobel refineries and told me an interesting story of the development of the industry here.
“Naphtha Springs, as they were called, have been known here for ages,” said Mr. Norman. “The fire worshippers came a thousand miles for thousands of years to worship them until the Russians conquered the territory. In the ’50s a steamship company on the Caspian Sea undertook to collect oil by scraping the surface of the ground, and they carried it to other ports. It was also shipped into the interior by camel caravans. Then two gentlemen, a Russian and an Armenian, obtained a concession to work the deposit, and had a monopoly until 1876, when the Nobel Brothers of Sweden—Alfred, Ludwig, and Robert—came down, put their brains to work, built refineries, and have been here ever since. They now practically control the industry, employing about 10,000 people and have refineries and machine shops covering an area of one and a half square miles.