Entangled Competition: Globalization, Imperial Domination, and Local Development in the Port Cities of Riga and Odesa

Abstract

Riga and Odesa (Odessa) rank among the Russian empire's foremost nineteenth-century ports. These port cities, respectively located on the Baltic and Black Seas, enabled imperial Russia to trade huge amounts of goods, boosting its burgeoning economy in the second half of the nineteenth century. We argue that, despite the distance separating the two cities, it is only in relation to each other that their full significance emerges. This article explores the histories of Riga and Odesa, examining their situations within the Russian empire's economic geography and taking a closer look at the interrelationships between the two ports. In our view, this history is more than a narrative of competition for the premier position among the ports of the Russian empire; it is also a tale of local initiatives, engagement with the imperial center, lobbying for imperial financial support, relationships of economic interdependence, and an example of the crucial role that ports at the supposed periphery of an empire played in a globalized economy.

In 1919, Bruno von Gernet, Riga's chief statistician, published a thorough investigation of Riga's economic history and situation.¹ Numerous tables documented the largely uninterrupted rise in imports and exports and in the port's total turnover from 1866 to 1913. Riga's explosive growth was impressive in its own right; von Gernet, however, made sure that it appeared even more so via direct comparison with its competitors. His tables therefore included the equivalent figures for Russia's capital, St. Petersburg (including Kronstadt), and for other Baltic Sea ports, namely Tallinn (Reval), Pärnu (Pernau), Ventspils (Windau), and Liepāja (Libava, Libau). One line below, another port appeared: Odesa (Odessa).²

Table 1. Average value of the total turnover (export and import) of the Baltic ports and Odesa in foreign trade (in rubles)³

Why did von Gernet choose to add Odesa (Odessa) to his tables? What made it an interesting object of comparison with Riga? At first glance, the comparison might appear somewhat spurious, given the fact that the two cities’ trade routes overlapped very little; Odesa, located on the Black Sea, centered its trading relationships on the Mediterranean world and ports such as Livorno, Marseille, and Genoa, whereas the Baltic port of Riga was more suitable for trade across the North Sea and toward the Atlantic, that is, with Hamburg, London, or Amsterdam.

An area in which the two ports did compete related to commodities transported on the Dnipro (Dnepr, Dnieper) and the Daugava (Dvina, Düna), which the rivers Berezina and Ulla and the Berezina canal system had connected since the beginning of the nineteenth century, permitting, at least in theory, the transportation of timber and grain from Belarus and Ukraine to both ports. The direction of the flow—the Daugava into the Baltic and Dnipro into the Black Sea—and the distance to be covered determined which commodity went to which port: timber from the Belarusian forests of the Vitebsk and Minsk gubernias to Riga, and grain from Ukraine to Odesa.

In 1794, a Polish nobleman named Czacky had the idea of constructing artificial waterways to connect the forest-rich region near Minsk and Vitebsk with the port of Riga using the Daugava and its tributaries Ulla and Essa, and joining this waterway with the Dnipro Basin.⁴ These rivers and the Berezina canal, built between 1797 and 1805 and later enlarged, became the primary route for waterborne transportation of timber to Riga during the nineteenth century. This construction work forged smaller-scale links between Riga and Odesa; among the engineers involved was François Sainte de Wollant (Russian: Frants Pavlovich de Vollan), a Flemish builder who was one of Odesa's first architects.⁵ The “Berezina Canal System” had obvious flaws, including its need for fourteen locks and a fairway of one meter, which could accommodate only small barges. Various potential projects aimed at eliminating these weaknesses were under discussion by the end of the nineteenth century. In the early 1900s, when the debate around improving existing waterways and building new ones intensified, one idea mooted was that of creating a canal from Riga to the Black Sea city of Kherson to provide a natural waterway to Odesa via the Black Sea. This canal would have been wide enough to carry steamships and would not require locks.⁶ Riga's port engineer, Arnold Pabst, promised that this new facility would enable transportation of “large masses of goods . . . over enormous distances at low cost, which railroads are incapable of.”⁷ The outbreak of World War I precluded this project's realization; yet an improved connection between two of the Russian empire's most important port cities remained a matter of debate until the October revolution.

The convoluted story of the Berezina canal system hints that the two ports, and the local authorities in Riga and Odesa, were very much aware of each other, a consciousness and intertwinement that intensified in the second half of the nineteenth century, when imperial Russia's state authorities became more closely involved in the ports’ running and increasingly centralized transportation and trade policy. The advent of railroads boosted the Baltic ports’ accessibility, yet high transport costs usually favored the geographically closer port, which for Ukrainian grain exports was still Odesa.⁸ Thus predominantly occupied with wheat exports, Odesa became the Russian empire's largest port, recording the highest sales volumes among its port cities throughout most of the nineteenth century; this did not change until catastrophes such as the Crimean War, the famine of 1891–92, and repeated poor harvests began to affect the availability of its principal export commodity.⁹ Thereafter, in the twentieth century's first decade, Riga attained the highest sales volume of imperial Russian ports, becoming the world's biggest port for timber exports, a region of rapid industrialization, and an exporter of various other commodities, including perishable animal products.¹⁰

Following the example of Riga's chief statistician, albeit for other reasons, this article will compare and link the development of Riga and Odesa during the world's globalization waves in the nineteenth century.¹¹ Combining new source material from regional and national archives with contemporary publications originating in Riga, Odesa, and St. Petersburg, we argue that it was precisely these two port cities that served as crucial hubs, connecting the Russian empire to global trade flows. We first analyze the rise and development of both ports comparatively. Our stories stress the significance of seemingly peripheral localities to the political and economic geography of imperial Russia.¹² More centrally still, our case study of the timber trade will illustrate the ability of these localities to connect ports and industries, at least neglecting the empire's center, or indeed bypassing it altogether. In this way, our study represents a contribution to the growing body of literature decentralizing Russian imperial history.¹³

Odesa and Riga were both entangled competitively with and connected to economies across the globe. These transregional and transnational perspectives illuminate the necessity of revising our view of imperial Russia's economy. Scholars of the 1980s, consciously or unconsciously influenced by the Soviet planned economy, focused their considerations primarily on how the imperial center managed and controlled the Russian economy.¹⁴ In fact, as our archival documents from Riga and Odesa indicate, the Russian empire's economy was much less centralized than that of the Soviet Union. Local institutions such as the Exchange Committees, city councils, and local businesses had relatively independent radii of action. Cities in the Russian empire were able to raise loans and receive substantial investments from foreign banks. Personal business connections between merchants and local institutions in the cities in question and bankers and traders in London, Paris, Marseille, or Berlin were of greater significance in the arrangement of such loans than scholars have previously assumed.

The sections that follow will draw on new spatial history as a contextualizing framework for their exploration of how Odesa and Riga advanced to become major trading ports in imperial Russia.¹⁵ Conceiving of spatial history in the tradition of Edward W. Soja, we will accordingly center the “triple dialectic of space, time and social being,” exploring trade connections of the two ports, their hinterlands, and the destinations of their exports to uncover mechanisms underlying the social production of space.¹⁶ In tracing these spatial configurations over time, we will emphasize dynamic reconfigurations of economic spaces and of the Russian empire's economic and political order. By telling a story of the “mobilization of local elites as local and regional actors,” we discuss power relations between local and imperial authorities and the shifts they underwent as events unfolded.¹⁷

Local actors played vital roles in constructing these spatial configurations, putting their own local interests first despite the imperial government's attempts to unify and streamline their policies at the periphery, which had intensified with the unification policies of Alexander II and Alexander III. This local self-confidence was partly the product of the multi-ethnicity of both cities: Russian dominance was constantly challenged by Baltic Germans in Riga as well as Greeks, Jews, and various other ethnic groups in Odesa. Previous research has addressed this aspect of Riga's and Odesa's history extensively, highlighting the prominent position of non-Russians in the city's government and self-administration.¹⁸

Building on this research on the cities’ multi-ethnic make-up, we aim to take a closer look at spatial configurations. Odesa and Riga were connected with their hinterlands in the Russian empire and the world, but also faced periods in which these connections were severed. Understanding these reconfigurations of spaces requires us to consider the perceptions Riga and Odesa each held of the other city and of its role within the framework of the Russian empire, as evident through the eyes of the cities’ administrations, port statisticians, engineers, Exchange Committees, merchants, and business owners. Differences in the cities’ ways of organizing their commerce and trade affected the success of their lobbying campaigns in the capital, as did decisions taken by the imperial government and by municipal authorities in consultation with local actors.

On and Off the Battlefield: The Crimean War and the Re-Orientation of Imperial and Local Economic Geographies

Odesa and Riga served as gateways—to the Black and Baltic Seas, respectively—connecting the Russian empire to global trade flows. In the mid-nineteenth century, trade via the Black and Baltic Seas was seriously affected by the Crimean War (1853–56), which, as a point of caesura for both Riga and Odesa, can usefully serve as a starting point for our reflections on the two port cities.¹⁹ While the Black Sea was a contested battlefield and hostilities destroyed numerous port facilities along its coast, the Baltic Sea suffered due to the blockade policy applied by Russia's adversaries. The Russian fleet, superior to its British opponent in numbers, remained in its protective fortresses, choosing to stay inactive but keeping considerable parts of the British navy and its allies in the Baltic. Having insufficient artillery to mount attacks, the British navy focused its operations on blockading all Russian Baltic Sea ports.²⁰

After the Crimean War, the administrations of both Riga and Odesa sought to harness the impetus created by postwar incentives under the reformist Tsar Alexander II.²¹ They did so in particular via their Birzhevye komitety (Exchange Committees), institutions whose foundations predated the war but that rose to importance mostly after its end. During the 1830s and 40s—or as early as 1816, in the case of Riga—“local commerce . . . formed associations of various types and structures in line with the specificities of conditions on the ground,” under the umbrella term “Exchange Committee.”²² In 1872, the Russian empire counted seventeen Exchange Committees, a number that would rise to thirty-six in 1903. For merchants and entrepreneurs, membership in an Exchange Committee was voluntary but beneficial; as the official representative bodies of trade and industry in their towns and cities, the Exchange Committees had the right to communicate directly with the central authorities and be heard by them.²³ The character of these committees diverged greatly: “In addition to organizations of a purely commercial nature, there were provincial committees that did not have any role in exchange matters, but instead asserted their entitlement to represent their estates. . . .”²⁴ The involvement of merchants in improving Riga's and Odesa's trade infrastructure led to a wide range of initiatives and entanglements, and to a complicated landscape of influence among the municipal bodies and local Exchange Committees on the one hand and the imperial authorities on the other.

Riga was in the fortunate position of having commenced modernization of its port prior to the Crimean War. In 1850, the Rizhskii birzhevoi komitet (Riga Exchange Committee, Rigasche Börsen-Comité) obtained the Tsar's approval of a government loan of one million silver rubles for the port's modernization, to be repaid by a levy of twelve kopecks for each ship entering or departing the harbor.²⁵ Essentially, the members of the Riga Merchants’ Association had agreed to tax their own businesses in exchange for the improvement of the port's and city's infrastructure. Originally, a tax (a half percent of the value of the goods carried on incoming and outgoing ships) had benefited the Rizhskaia duma (Riga's City Council, Rigaer Rat). Between 1840 and 1842, the Riga Exchange Committee successfully negotiated the sharing of the tax take; until 1912, a quarter percent went to the City Council, while the other quarter was collected by the Exchange Committee. These funds enabled Riga's merchants to make their own decisions on the approval of new projects for improving infrastructure and logistics in the port and the city.²⁶

This shift in local politics, essentially empowering the relatively new institution of the Exchange Committee at the expense of an older, traditional body, can also be interpreted as an attempt by the imperial authorities to limit the power and impact of the Riga City Council. In the mid-nineteenth century, Riga's City Council was still governing the city on the basis of German laws dating back to the medieval period, and its councilors stemmed predominantly from the native Baltic German communities. Baltic Germans were also dominant in the Riga Exchange Committee, yet merchants of Russian and other ethnicities were, at least, members of the Merchants’ Association. The Exchange Statute of 1867, which confirmed the regulations issued by the Exchange Committee for its self-government, indeed specified the inclusion of at least one foreign merchant and of two additional merchants who had commercial relationships with gubernias in the Russian hinterland.²⁷ These stipulations point to the far more “cosmopolitan nature” and, to some extent, more imperial character of the Exchange Committee, in contrast to the conservative and very German Riga City Council, as well as the Baltic German knighthoods (Ritterschaften) that were still leading the way in the rural areas of the Baltic provinces.²⁸ This relatively marked orientation of the Exchange Committee toward imperial structures may explain the support imperial authorities showed to this local institution at a time when the Russian state was beginning to move toward greater powers for central imperial authorities, the unification of regulatory and administrative structures, and an alignment of the empire's peripheries with the Russian imperial heartland.²⁹

With money from the 1850 loan and subsequent loans, the Riga Exchange Committee made use of the port's inactivity during the Crimean War, when most Baltic trade passed through the southern Baltic port of Klaipėda (Memel), which was part of Prussia. Between 1850 and 1861, it carried out a fundamental modernization of the port, at an ultimate total cost of two million silver rubles.³⁰ This local initiative secured the economic wellbeing of the city for the decades that followed. The works encompassed the construction of a new cross dam into the tributaries of the Daugava, the fortification of several existing dams, and the construction of a new harbor mole in Mangaļsala (Magnusholm). Most of the works were complete by the time the Crimean War ended in 1856. When the international economy and shipping via the Baltic Sea regained momentum in the 1860s, Riga was in an excellent position to attract trade, having gained, in the words of one contemporary observer, “one of the best port entrances on the Baltic Sea.”³¹ Views such as this demonstrate that Riga's and Baltic needs were the prime driving forces in considerations and decisions around the works. Riga's merchants had strong channels of communication with imperial offices, but their general outlook and their conception of spatial relationships were regional in character.

While Riga was able to benefit from its wartime modernization, the Crimean War left Odesa in a very different and more disadvantageous position. Odesa was only 200 km away from the conflict's epicenter in Sevastopol, and the war marked the end of an upward trend in the city's fortunes that had lasted for several decades. The first blow came with Nicholas I's ban on the export of grain from all Russian Black Sea ports, which condemned a million chetverts of grain deposited in Odesa to rot rather than be sold.³² When an expeditionary British and French fleet reached its shores on April 22, 1854, Odesa experienced severe bombardments that inflicted serious material damage on ships and port facilities. The part of the city close to the port suffered almost complete destruction, and 250 people lost their lives.³³ Beyond this immediate damage, the Crimean War had a lasting impact on trade during the nineteenth century's second half.³⁴ New producers of grain emerged on the world market, and new global transportation routes, particularly the Suez Canal, came into being. After the war, Odesa's authorities faced the challenge of remaining as competitive as possible by equipping the port for the steam age. One important and helpful decision in this context was the ending of Odesa's dual role as a port of trade and a naval base, to enable it to focus on economic productivity. The Russian Imperial Ministry for Ways and Communication launched a program of modernization for the port to this end during the 1860s. The British architect Charles A. Hartley, the winner of an international competitive tender, oversaw the construction of a wharf for the New Harbor, a new pier, and new wharfs in the Quarantine Harbor, as well as the extension of the Platonovskii and Karantinyi Piers.³⁵

Before the outbreak of war, in December 1848, the Odesskii birzhevoi komitet (Odesa Exchange Committee) was founded to represent the interests of merchants and tradesmen, giving them a voice in municipal and governmental affairs. This form of self-government gained even more weight in the second half of the nineteenth century when, in addition to infrastructural and economic improvements, Tsar Alexander II sought to strengthen his empire's southern periphery in political terms. Parts of what are known today as the Great Reforms entailed changes to structures and processes of municipal self-government.³⁶ The tsar granted Odesa a reformed charter in 1863, immediately after reforming St. Petersburg's charter in 1846 and Moscow's in 1862. Odesa's charter was soon to serve as a model for other cities of the empire, which received new charters in 1870.³⁷ It was the city's privileged access to the center of imperial power and the influence of its governor-general in St. Petersburg that allowed Odesa to receive this charter only one year after Petr Valuev initiated empire-wide debates about city reforms in 1862, discussions that represented an initial response to the untenability, after Russia's defeat in the Crimean War, of the chronic underfunding that had long afflicted urban infrastructure.³⁸ The new charters gave cities access to higher tax revenues, reducing their dependence on state funds from St. Petersburg. Cities and towns, specifically their elites, assumed broader remits. According to Odesa's municipal regulations as of 1870, the city government was responsible for maintaining the city's prosperity. While this duty was potentially limitless, the decision-making power of the municipal authorities was not: “The care of the management of the urban economy and beautification (blagoustroistvo) is vested in the city government, and [the] legal execution [of this responsibility] is under the governor's supervision in accordance with the provisions of the present statute.”³⁹ Valuev and Alexander II further hoped that their reforms would create interest among the nobility in becoming more closely involved in cities’ political administrations. All of these factors had a particularly crucial role to play in Odesa.⁴⁰

While Alexander II and the imperial Court did not seek to broaden the electorate, they wished to encourage Odesa's elites to take a more active role in its administration. They envisioned the more educated and liberal nobles as agents of reform and change, assuming positions of leadership and helping the city to identify new and alternative routes for its development.⁴¹ In Odesa, the imperial center aimed to create a new strategy for construction and renovation works in the port, directing their emphasis away from short-term repairs enabling quick profits toward the sustained, long-lasting transformation of the port's infrastructure.⁴² Achieving these ends would have required the firm and unwavering commitment of Odesa's entire urban elite. Until the end of the nineteenth century, however, the dominant force in the city Duma was a small group of large-scale landlords, mostly “merchants who saw themselves as dignitaries of the city and did not act according to modern political categories, but managed and administered the city as their [own] commercial enterprise, especially since their taxes made up a large part of the city's budget.”⁴³ The predominance of the mercantile world would continue to shape the city's destiny and remain a nuisance to the center until the end of the nineteenth century.

Odesa's and Riga's Trade Connections and Economy Within and Beyond the Empire

The prosperity of Riga and Odesa depended on good and reliable links to the Russian empire's principal trade routes. The course of these routes shifted markedly during the nineteenth century, especially after the advent of the railroad. Alongside the possibilities they opened up, new transportation technologies posed challenges to local economic clusters, which found themselves required to adapt to the political and economic reconfigurations within the empire. At the end of the Crimean War, two key aims predominated in imperial Russia's economic policy: improving its agricultural output via better export facilities and, more crucially still, supporting its emerging industries.

Both of these objectives pursued the purpose of overcoming the political and economic weaknesses that plagued Russia, which the Crimean War had laid bare. Various policies sought to advance these aims; the single most important of these was probably the abolition of serfdom in 1861, which unleashed the productive forces of the liberated peasants. The Baltic provinces, where serfs had been freed at the beginning of the nineteenth century, were ahead in this development. Another endeavor in this regard involved reforms to trade and customs policies. The first two decades after 1856 saw a relaxation of customs tariffs with the purpose of facilitating imports of pig iron and other raw materials, primarily for the construction of railroads. A sharp contrast to these policies unfolded in the nineteenth century's final decades with the rise of protectionist tariffs aiming to shield the products of the country's newly industrialized sectors from foreign competition. This development culminated in 1891 with the introduction of a general tariff known as the Mendeleev tariff. Three successive ministers of finance during this period, Nikolai Bunge (1881–86), Ivan Vyshnegradskii (1887–92), and Sergei Witte (1892–1903), in their attempts to stabilize the balance of foreign trade, relied almost exclusively on increasing exports of agricultural products, principally grain. Due to the significant role of the Russian empire's peripheral ports in this endeavor, imperial authorities intensified their communication with Odesa and Riga.⁴⁴ Witte in particular was keen to achieve a stable currency that would make Russia eligible to join the Gold Standard and boost its reputation as a reliable debtor.⁴⁵

The economic development of the empire, in both the agricultural and industrial sectors, remained highly “sectoral and regional,” with some regions benefiting from the new policies and others in slow decline; this divergent trend intensified as the nineteenth century moved toward its close.⁴⁶ This landscape of inequality affected policymaking at the imperial, national, and regional levels. The existing hierarchy of regions within the empire underwent a significant rearrangement, with former economic mainstays losing importance and new dynamic centers of agriculture, industry, and commerce emerging. Some districts in the agriculturally advanced Black Earth region showed considerable entrepreneurial spirit in commercializing Russian agricultural produce.⁴⁷ The vast territories of Siberia rose to greater prominence, particularly in relation to the expansion of grain cultivation and the commercial production of other agricultural products, including perishables such as eggs, butter, and poultry. The Siberian butter trade gained impetus after the arrival of refrigerated rail cars and fast steamships fitted with refrigerator technology.⁴⁸

Ports and port cities, as bustling hubs of trade and centers of regional economies, were at the heart of these advances. Imperial authorities sought to make use of the expertise gained by local authorities. The sources show how St. Petersburg used the Exchange Committees from port cities and centers of trade across the empire to gain information and to pool their efforts and resources. By the end of the nineteenth century, every major port city in the Russian empire had an Exchange Committee, whose expertise the imperial ministries used to acquire information on the development of trade in order to develop the ports, expand trade routes, and facilitate industrialization. In December 1904, the Ministry of Finance established a temporary office for the Exchange Committees in St. Petersburg; in 1906, it created the All-Russian Congress of Representatives of Exchange Trade and Agriculture, which invited representatives of Exchange Committees to the capital for regular meetings two to four times a year.⁴⁹ These meetings were not “top-down” events at which the Ministry of Finance told merchants from all over the country how to run their businesses; the representatives from the Exchange Committees came to these gatherings as experts in whose knowledge and experience the Ministry had a vested interest. Occasionally, the Exchange Committees even joined forces to counter the St. Petersburg Ministry. When in 1912 the Ministry tried to impose new rules for additional documentation of Jewish merchants, Riga's and Odesa's Exchange Committees corresponded by opposing this policy, since it would have harmed their economies.⁵⁰

When local merchants and sailors stood on the famous Potemkin steps in Odesa and looked to the port and out to sea, their faces were turned toward the south and west, and Russia's capital was behind them.⁵¹ This position can serve as a metaphor of the direction Odesa and its port were taking at this time. To the historian Evrydiki Sifneos, Odesa was more of a Mediterranean than a Russian city.⁵² Its remoteness from the imperial center and its increasingly intertwined relationships with the Black Sea and the Mediterranean world continued to drive its development in the remainder of the nineteenth and the early twentieth century. Specifically, Odesa and its port were situated in three distinct, entangled spatial contexts. First, it was an endpoint to shipping via the region's rivers, the Dnipro, the Dniester, and the Danube; second, it was a vital cabotage transportation hub along the Black Sea coast; and third, it connected the Russian empire to global trade routes via the Mediterranean. In 1838, the cities with which Odesa principally traded were Livorno, Genoa, and Marseille; ranked fourth, and the first non-Mediterranean ports in the list, were the English cities of Liverpool and London.⁵³ Genoa and Marseille enjoyed free port status, making them natural trading partners for Odesa. From the time of its establishment, Odesa's principal function in Russia's economy and trade had been to export agricultural goods, mainly grain, to other countries. In the second half of the nineteenth century, Russia's attempts to increase its foreign exchange revenue, with the ultimate aim of joining the Gold Standard, saw this export orientation intensify further. This meant that overland transportation served above all to bring goods to the port.

Odesa's orientation toward the Mediterranean was a central theme in debates around its incorporation into the railroad network, fueled by a new duel that was simultaneously a regional and global threat to the city's dominance in the grain trade. Discussions in the early planning of the line centered around two approaches: a state-funded route for the primary pursuit of military and strategic objectives (the rapid deployment of troops from central Russia to the empire's southern borders) and an economically-driven link principally connecting Odesa to the region's agrarian centers (with the chief purpose of bringing grain to the port).⁵⁴ In light of the prior decision to emphasize Odesa's economic advancement, it should be of no surprise that the ultimate course of the Southern Line tended to favor the second variant. In 1864, the Russian empire Committee of Ministers approved a proposal to facilitate the transportation of grain to port by connecting Odesa with the booming agricultural heartlands of Ukraine. Work on this link commenced shortly afterward, and Odesa became an integral part of Russia's southern railroad system.⁵⁵

During the 1860s and, particularly, the 1870s and 80s, people in Odesa rightly feared the loss of their city's regional supremacy to emerging competitors. Mykolaїv (Nikolaev), a naval base located a few miles northeast of Odesa, began to develop its commercial port, becoming increasingly attractive to foreign vessels and merchants.⁵⁶ Given its favored status among influential figures in the Naval Ministry in St. Petersburg, Mykolaїv had little trouble attaining an excellent railroad connection; of equal importance was its success in establishing an industrial sector and driving its economy's diversification. Besides Mykolaїv, other port cities on the northern Black Sea coast, such as Sevastopol in Crimea and Rostov-on-Don on the Sea of Azov, gained market shares from Odesa. A further problem arose in the nineteenth century's second half, when the grain market changed to Odesa's disadvantage, with falls in price caused by economies of scale and lower transportation costs in North and South America with which Odesa was unable to compete. Odesa's citizens resisted this trend via various strategies, one of which consisted of attempts by the city's local elites to push for the acquisition of logistics technology. In 1879, the Ministry of Finance hired Robert V. Orbinskii, a Finnish-born economist and professor at the New Russian University of Odesa, as an expert in the grain trade, and sent him “to the United States to inspect the transportation system and the methods applied there for grading cereals.”⁵⁷ On his return, he wrote a detailed report, published in 1880 as a 447-page volume “On the Grain Trade of the United States in North America.”⁵⁸ One year later, Orbinskii applied his experience to Odesa's situation, issuing a memorandum on the state of its grain trade that Patricia Herlihy has rediscovered and explores in her groundbreaking study. Unsurprisingly, Orbinskii recommended the installation of grain elevators and the “adopt[ion of] the ‘American system.’”⁵⁹

While Odesa was oriented toward the Mediterranean, Riga instead looked northwest. As an erstwhile member of the Hanseatic League, Riga had a long tradition of strong trading relationships with the British Isles, the German lands, and the Netherlands.⁶⁰ Throughout the long nineteenth century, the United Kingdom remained Riga's largest trading partner, with the German states in second place. Between 1867 and 1913, the value of Riga's exports to the UK increased sixfold and to imperial Germany by a factor of twenty. Riga clearly profited from its geographic position and relative proximity to Europe's economic power houses, the UK and Germany, which were in need of food supplies for its growing populations. At the same time, the value of imports from the UK increased by a multiple of eight, and those from Germany by a multiple of thirty.⁶¹ The disproportionate boom in imports had the effect that, by the late 1890s, Riga's trade balance was becoming increasingly even. Although the city's economy remained primarily export-based, this represented a development distinct from the early modern period, when Riga's exports had exceeded imports three- to fourfold.⁶² The relatively high volume of import business made Riga a profitable destination for shipping companies, as it minimized empty or half-loaded journeys. The sharp rise in imports had its origins in Riga's industrialization, which fueled increased demand for raw materials and machinery, and in the readier availability of exotic raw materials from overseas colonies in greater quantities and at lower prices than previously, a consequence of the steamship revolution.⁶³

Domestic needs for raw materials and machinery thus formed one pillar of Riga's economic success; another was the heightened demand for industrial products and raw materials in central Russia, to which Riga had acquired robust rail links by the late 1860s. The growth in timber-processing and iron-producing facilities in Riga turned its industries into key players in railroad car and track production.⁶⁴ Railroad tracks were among the goods most frequently transported on the railroad from Riga to Daugavpils (Dvinsk, Dünaburg) and Vitebsk, and railroad sleepers were also one of the prime export goods shipped from Riga to British ports.⁶⁵ Riga became the location of two of Russia's major rolling stock manufacturers, the Russo-Baltic Wagon Corporation, originally founded in 1869 as a branch of the Wagon Factory Van der Zypen & Charlier based in Deutz, Cologne, and the wagon and machinery factory Phoenix, established in 1895.⁶⁶

The planners of Russia's railroad network based their decisions on both economic and military considerations. Proponents of the latter in particular did not perceive any advantage in an emphasis on Riga's port; this left the city's administration and local institutions with the task of ensuring that Riga would not be left behind in the process of railroad construction, but instead gain links to the imperial center and the Russian hinterland. When it became evident in 1852 that St. Petersburg and Moscow were to be connected to Warsaw via Daugavpils, Riga's merchants set up a railroad commission headed by Gustav Hernmarck, then chair of the Riga Exchange Committee.⁶⁷ The Riga-Daugavpils Railroad Society (Riga-Dünaburger Eisenbahngesellschaft), initially a private enterprise funded by British and Baltic German industrialists, opened in 1861.⁶⁸ Subsequent extensions of the railroad to Vitebsk and Orel, alongside the overall expansion of the Russian railroad network, gave Riga access to imperial Russia's agrarian centers of production; the city was, however, competing directly with the Baltic ports in Tallinn (Reval), Liepāja (Libau, Libava), and Ventspils (Windau). After the Crimean War, the Russian government and its railroad planners evidently favored Liepāja due to plans for its enlargement as a military port. Riga's merchants and administrators complained bitterly that planned rail routes advantaged the port in Liepāja, suggesting that “all seemed more or less designed to divert the freight trains away from their old route to Riga” and to “turn them partly to Libau [Liepāja] and partly to the Prussian ports.”⁶⁹ This scenario appeared to Riga's merchants and administrative authorities as a real threat. Comparing the trade figures for Liepāja and Riga in the 1870s and 1880s, we see a continuous sharp rise in both numbers of ships docking at Liepāja and the associated trade volume. Between the periods 1871–75 and 1876–80, Liepāja's trade volume more than tripled, and it doubled again in the five years to 1885.⁷⁰ Contrastingly, Riga's trade declined by 16 percent between 1876–80 and 1881–85.⁷¹ Nevertheless, taking into account the figures cited at the outset of this article, we can conclude that in the end Riga remained ahead of Liepāja.

In the long term, Liepāja succeeded in outperforming Riga only in certain sectors and in relation to single, specific products. Liepāja overtook Riga in terms of grain exports, while from 1907 onward, Ventspils became the eastern Baltic's principal exporter of Siberian butter due to the intense and successful lobbying activities of Moscow-based business owners who had funded the Moscow-Ventspils Railroad.⁷² Overall, however, Riga retained its top-ranking position among its direct Baltic rivals in terms of exports and imports, and by 1905 had even overtaken the capital St. Petersburg. We might consider this achievement a sign of the shrewd management shown by local businessmen, strong lobbying skills, and the successful diversification of Riga's export commodities, which by the late nineteenth century included dairy products.

Riga was the first port in the Russian empire to construct a cold storage facility.⁷³ The interest of other port cities in this new technology saw knowledge transferred among imperial Russia's port cities, or from periphery to periphery. In 1910, for instance, the department of the Ministry of Trade responsible for the port of Archangelsk approached the Riga Exchange Committee to ask about its experience of setting up and running the port's cold storage facility and request help in creating one in Arkhangel΄sk.⁷⁴ As its early investment in cold storage facilities shows, Riga's merchants and local institutions evidently knew how to move with the times. The city's railroad connections were also more suitable than those of Odesa for capitalizing on new trading relationships with manufacturers of dairy products in Siberia and southern Russia; the extension of the Riga-Daugavpils Railroad to Orel gave Riga direct access to areas of intensive agricultural production in the south and eventually a link to the Trans-Siberian Railroad.

By the early twentieth century, the United Kingdom was purchasing 70 percent of the eggs shipped through Riga's port.⁷⁵ This figure illustrates the vital role of the city's and its merchants’ well-established links with British merchants and traders, and with global markets.⁷⁶ Riga benefited on several occasions from its excellent connections with the UK, the world's “biggest moneylender” at that time.⁷⁷ British money funded a number of infrastructure projects for Riga's port. Among these were the construction of the initially private Riga-Daugavpils Railroad, four-fifths of the funds for which came from British investors; the cold storage facility completed in 1902; and the expansion of Riga's sewage system and water supply, funded with the help of a loan from a London bank made to the city administration in 1913.⁷⁸ The business connections Riga's merchants maintained with London or Liverpool, often on the basis of personal acquaintance and perpetuated down the generations, were just as crucial to them as their links to St. Petersburg.

Odesa's and Riga's Positions in Global Trade Networks in the Early Twentieth Century

As we have detailed above, Odesa's main role in the Russian empire's economy was as a hub for its trade in grain. Immediately after its conquest of Ukraine, the Russian state pursued the cultivation of wheat and rye in its fertile soils. Production of the latter was mainly for consumption in Russia; the former, by contrast, carried prospects of boosting Russia's export surplus. The shift in trade flows away from the Atlantic Ocean toward the Mediterranean occasioned by Napoleon's imposition of the Continental System on Europe provided emergent opportunities which Russia aimed to exploit. The establishment of a porto franco regime was intended to flank the rapid increase in exports with support for the import business; within the space of a few years hereafter, Odesa had risen to become a leading port in terms of trade volume in Europe.⁷⁹

The opening of the Suez Canal both posed a threat to Odesa's position in the global network of port cities and opened up new opportunities for the city. In 1871, the steamer Chikhachev passed through the canal on its way to India and China, returning “with 56,000 puds of tea.”⁸⁰ The voyage forged a regular commercial link between Odesa and Shanghai; the period that followed saw Odesa become the “tea entrepôt of the Russian Empire.”⁸¹ After 1878, the “Volunteer Fleet” (Dobroflot) established a regular connection between Odesa (and thus central Russia) and the Far East. Odesa enjoyed a near-monopoly on Russian trade with Port Arthur and Vladivostok, and the Volunteer Fleet took troops, convicts, and emigrants to the Russian possessions in the Far East, as well as carrying “sugar, cloth, agricultural implements, tools, and seeds for sowing.”⁸² The ships then returned to Odesa with tea as their cargo. The Vysotsky & Co. tea enterprise had a packing factory in Odesa that processed the incoming tea leaves. The advantage provided to Odesa by its new link to the Far East proved short-lived, falling away with the advent of the Trans-Siberian Railroad and the improvement it offered to the transportation of people and goods.

Riga, rather than using “native” coal from the Donets basin, imported large amounts of coal from the British empire to power its industrial sector, which by 1913 encompassed 372 businesses with, collectively, over 86,000 employees and an annual turnover of 220 billion gold rubles, all running on British coal.⁸³ Tariffs notwithstanding, the imported coal, transported via ship, was cheaper than bringing coal from Ukraine to Riga via rail. While imperial authorities advocated the use of “native” coal from Ukraine, local Baltic merchants did not make their decisions according to an imperial mindset, but rather on the basis of a straightforward analysis of costs, and drew, in the final analysis, on their global business networks.

In 1913, of Riga's 372 businesses, 101 factories were in the metallurgical, iron and machinery-producing sector, with its high demand for fuel. The city's largest business, the Russian-French Rubber Gutta-Percha and Telegraph Works Provodnik, founded in 1888, had a workforce of 14,000 immediately before the outbreak of World War One.⁸⁴ The raw material it principally used was rubber, imported from the Congo and South America via middlemen in British, Belgian, Dutch, and German ports.⁸⁵ Ships arrived with raw materials such as coal and rubber on board and left with agricultural export commodities (timber, flax, hemp, grain and eggs). Except for timber, which was largely carried to Riga via waterways, most other commodities arrived on the newly constructed railroads from southern Russia and Siberia, enabling Riga to extend its range of exports to commodities such as eggs and butter and in so doing responding to the needs of an increasing population in west European centers of industry.

Within the decade preceding WWI, Riga evolved into Russia's principal export harbor, shipping various agricultural commodities to western Europe and importing raw materials and machinery for its own native industrial sector and for the Russian market. The city's self-governing authorities, such as the Riga Exchange Committee, drove the modernization of its facilities to the standards required for the approaching twentieth century. Between 1901 and 1906, a joint effort by the city of Riga and the Riga Exchange Committee saw the construction of a completely new export harbor near the city center, next to the island of Andrejsala (Andreasholm).⁸⁶ A loan of five million rubles, backed by the Riga Merchants’ Association and secured by the Russian state bank, funded the work.⁸⁷ Once again, the modernization of the port took place on local initiative. While the imperial authorities provided support, such as investments from the imperial state budget in the electrification of the port's railroad station, the project would not have happened had Riga's merchants and their local institutions not driven it forward.⁸⁸ Maps of the new export harbor show that the port and its fairway through the river Daugava were given greater depth to enable larger, modern ships to access it. Several icebreakers, purchased by the Riga Exchange Committee, kept the Daugava and the port entrance ice-free, even during the winter months, while steam shovels kept the export harbor clear of sand build-up. In this way, Riga was able to make the best possible use of its location at the outskirts of the Russian empire, and by 1905 had attained the largest sales volume among the Russian empire's ports. The port of Odesa also continued to develop: the port area expanded, new port structures were created and loading logistics were mechanized. However, none of this could make up for the port's gradual loss of economic importance due to rising competitors in the global grain trade.⁸⁹

Competition for Commodities: Waterways and the Timber Trade

Geographically speaking, Odesa and Riga are relatively far apart, separated by a distance of over 1,200 km. During the imperial period, the two ports’ respective predominant agricultural exports were a further factor distinguishing them from each other, because wheat, flax, and hemp had specific, divergent markets. There was, however, one commodity that both ports traded, making them direct competitors: timber. Typically shipped down the rivers Dnipro, Dniester, and Buh and later also by railroad, timber reached the Black Sea coast via an uncomplicated course. Similarly, large amounts of timber were transported to Riga and the Baltic Sea on the Daugava and its tributaries, Ulla and Essa, as well as the Berezina Canal. Yet the Daugava did not extend as far into the hinterland of the Russian empire as did the Dnipro, Dniester, or Buh. Initially at least, the economics of timber transportation from the Ukrainian forests heavily favored Odesa; moving a wagon of oak from Kyiv, Mohilev-Podilskyi, or Berdichev to Odesa cost half as much as moving it to Riga, as the distance was only half as far.⁹⁰ For Belarusian cities such as Brest and Gomel΄, by contrast, transporting oak to Riga was more profitable due to the shorter distance involved.⁹¹

This situation began to change in the late 1880s and the 1890s, with imperial Russia's railroads transporting continuously increasing volumes of timber.⁹² In 1894, the Odesa Exchange Committee wrote to the editorial board of the Vestnik Finanzov, Promyshlennosti i Torgovli on the state of its timber trade. The letter stressed the fact that Odesa had exported timber for almost seventy years and now wished to regain its former strength in this area after a decline in the 1880s. The main importers of oak shipped from Odesa were port cities in southern France, notably Sète, Marseille, and Bordeaux, and to a lesser extent French Algeria. These were ports with which Riga had also forged well-established trade connections by the 1890s, making use of the shrinking transit times occasioned by the steamship revolution.⁹³ French demand for high-quality wood increased the pressure on Odesa's export economy. The felling of the large, mature trees that were needed for producing furniture in France became an increasingly complex undertaking due to a decline in forest cover, and therefore in the availability of timber, and on account of forestry laws. Timber from the Caucasus would have been able to meet this demand, but its transport to Odesa was virtually impossible. When the Russian government built Odesa's railroad, it first and foremost paid attention to connecting the port with the grain-producing regions in Ukraine; the connections with the imperial center were secondary. In contrast, Riga had better and faster railroad links to the imperial centers, Moscow and St. Petersburg, and therefore likewise to the newly built Transcaucasus Railroad.

As the Odesa Exchange Committee's letter indicates, its merchants were clearly aware of Riga as a significant rival; while French demand and a shortage of timber were hindering Odesa's development, Riga was in a position to “[export profitably] from the areas near the Baltic Sea . . . wood to England as logs, boards, vanchos [edged oak planks] and others, which require much less processing, and there is no purpose in sending the timber to Odesa.”⁹⁴ The Odesa Exchange Committee concluded that it was incumbent on the imperial Ministry of Finance to reverse the trend and create more favorable conditions for its timber trade, largely by further reducing railroad tariffs. The fact that a copy of this letter made it into the files of the Riga Exchange Committee is indicative of its significance and of Riga and Odesa having watched each other closely at this time. It also evidences the way in which local institutions on the periphery of the Russian empire used the available channels of communication with the imperial center for their own interests. It is not simply the case that authorities in the center discussed strategies for the imperial Russian economy and then implemented them in the regions; local merchants were a vital source of ideas for the improvement of imperial Russia's trade network and its economic output.

The ports of Riga and Odesa enabled imperial Russia's involvement in the increasingly globalized world economy at the turn of the twentieth century. One necessary factor in these developments was the world's growing demand for products from the Russian empire. Booming economies in west European industrial heartlands depended on commodities from the Russian empire, such as Ukrainian grain, eggs from southern Russia, butter from Siberia, and timber from Belarusian forests. Russia was more than willing to meet this demand; its ambition to introduce the gold standard relied on this export-oriented economy. The result was increasingly intense intertwinement between the economies of imperial Russia and those of Britain, France, Germany, and Italy. Ultimately, Russia's rulers made the decision in settling the national balance of payments by increasing agricultural exports, a course of action which propelled the country into the position of the fourth largest European economic power. Russia's pre-WWI annual economic growth rates of up to five percent were only possible due to the shipping of cargo to distant destinations.⁹⁵ We note in this context the effective impossibility of overestimating the significance of the steamship revolution to imperial Russia's role in the European and global economy; indeed, steamships were just as crucial as railroads to Russia's rise as an economic power.

Port cities were always more than transport hubs; they were also sites of cross-spatial economic and social connections, connecting the Baltic and Black Sea shores with each other, Europe, and the world.⁹⁶ Initiatives, engagement, and policies implemented by local institutions in both port cities were indispensable drivers of this development. Organizations of merchants and administrators, familiar with their area and region, changed the spatial configurations of Russia's economy as much as ministerial officials in St. Petersburg. The Russian government was acutely aware of this, which was why the imperial Ministry of Trade and Industry carefully monitored the modernization of the empire's ports and increasingly sought to involve local actors such as the Exchange Committees in these works. At the same time, imperial Russia's Exchange Committees were strong and relatively independently operating interest groups that were in a position to propose changes for trade and economic policies or make specific suggestions to central imperial authorities.

This article highlights the importance of the local and imperial political contexts that necessarily defined radii of action for trade economies at the periphery of the Russian empire. In Odesa, merchants had formed a predominant part of the city administration prior to the Exchange Committee's foundation, and played a crucial role in the Duma and its committees. The Odesan Exchange Committee was therefore more of a functional extension of the Duma and the self-organized merchants of the city. In Riga, where merchants had ruled the city since the medieval period, the Exchange Committee became a major local player, whose power, resourcefulness and economic might beyond the city of Riga were well-known, drawing the attention of Russian nationalists at the imperial center who attacked it for its cosmopolitan character and for the fact that Riga's native Baltic German community continued to play a significant role in the city's economy.⁹⁷

It is doubtless the case that the local nature of the trade administrations in Riga and Odesa had the purpose of limiting their activities to economic engagement and networking—political power in a narrow sense was to be concentrated at the imperial Court and the Petersburg ministries.⁹⁸ Yet, as this article has shown, this divide-and-rule policy had limits and unintended consequences. Indeed, cities and local institutions on the periphery of the empire had a crucial impact on Russia's economic trajectory and, by connecting with each other, produced implications for discussions and decisions at the center.