CC BY
0I Journal of Siberian Federal University. Humanities & Social Sciences 2023 16(12): 2104-2112
EDN: XNROHL УДК 94(47).08
Cooperators in the Township Court:
on the Issue of Business Models
of Siberian Butter-Making in the Early 20th Century
Alexey K. Kirillov*
Institute of History SB RAS Novosibirsk, Russian Federation
Received 20.07.2022, received in revised form 20.10.2023, accepted 25.10.2023
Abstract. Rarely used sources - records of township courts - help the author to reveal a business model used by Siberian butter producers of the late Russian empire period. The author brings to close consideration decisions of Tulinskoye township court discovered recently in the regional archive of Novosibirsk. Information from court records lets the author establish two facts previously unknown. 1) The practical work of Siberian butter-making cooperation was accompanied by numerous conflicts between cooperative organizers and ordinary members; 2) The reason for these conflicts was the organizers' desire to fasten local milk deliverers to certain butter-making factories through the system of contracts and penalties. These facts contradict to the usual arrangement of cooperatives of the early 20th century. The conclusion says that Siberian butter-producing artels were in fact private businesses disguised as cooperatives in order to have legal opportunity to get hold of some part of milk market and thus avoid competition for raw materials.
Keywords: late imperial Russia, cooperative studies, economic history, siberian studies.
Research area: history.
Citation: Kirillov A. K. Cooperators in the township court: In the issue of business models of siberian butter-making in the early 20th century. In: J. Sib. Fed. Univ. Humanit. soc. sci, 2023, 16(12), 2104-2112. EDN: XNROHL
© Siberian Federal University. All rights reserved
* Corresponding author E-mail address: alkir.nsk@gmail.com
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Кооператоры в волостном суде: к вопросу о бизнес-моделях сибирского маслоделия начала XX века
А. К. Кириллов
Институт истории СО РАН Российская Федерация, Новосибирск
Аннотация. Опираясь на редко используемые источники — решения волостных судов, - автор реконструирует бизнес-модель, использовавшуюся маслоделами дореволюционной России. Непосредственному разбору подвергнуты недавно введённые в научный оборот решения Тулинского волостного суда из Государственного архива Новосибирской области. Сведения из «книг на записку решений суда» позволяют автору установить два прежде неизвестных факта: 1) деятельность сибирской маслодельной кооперации сопровождалась многочисленными столкновениями между организаторами и рядовыми членами кооперативов; 2) причиной этих столкновений было стремление организаторов закрепить поставщиков молока за определёнными маслодельными заводами посредством системы контрактов и штрафов. Эти явления противоречат обычному устройству кооперативов в начале XX в. Вывод гласит, что сибирские маслодельные артели были, по существу, частными предприятиями, замаскированными под кооперативы с целью законным путём подчинить себе часть молочного рынка и тем самым избавиться от необходимости конкурировать за сырьё.
Ключевые слова: дореволюционная Россия, история кооперации, экономическая история, история Сибири.
Научная специальность: 5.6.1 - отечественная история.
Цитирование: Кириллов А. К. Кооператоры в волостном суде: к вопросу о бизнес-моделях сибирского маслоделия начала XX века. Журн. Сиб. федер. ун-та. Гуманитарные науки, 2023, 16(12), 2104-2112. EDN: XNROHL
Introduction
One of the concepts popular with economists in the first quarter of the 21st century is the business model. This concept was used even before it became famous. At least for the period from 1975 to 1994 the researchers counted 166 articles at scientific periodicals, the titles of which contain this term (Zott, Amit, Massa, 2010). An explosion of interest to business models in the second half of the 1990s was a consequence of the success of dotcoms - commercial Internet projects. Their creators seemed to make money out of nothing: without erecting factory buildings, without investing huge capitals, they managed to become rich and influential people.
The slogan "money makes money" faded before the implemented dream of "getting rich with one's own brain".
Existing definitions of business model are too diverse, there is no room for a single generally accepted definition (Peric, Durkin, Vitezic, 2017). In the very broad sense, a business model is the idea that underlies any business, even if it has not been formulated clearly. As the experienced manager and professor David Teece put it, "Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it
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employs" (Teece, 2010: 172). However, business model researchers have something in common: they all describe success stories. Search for a business model encourages finding out a peculiar managerial invention in every success story. Identifying business models is not concerned with describing success of new technologies; it is something to do with explaining how it was possible, on the basis of technologies already created by others, to launch one's own business. This is why two Danish researchers from Aalborg University, looking for the roots of the study of business models, send us to the monographs of the 1960s, the titles of which contain the words "corporate strategy", "organizational structure", "management theory" (Nielsen, Lund, 2014). It is logical that the historical study of business models also refers to the times when this concept itself did not even exist. In a book translated into different languages of the world three professors of the University of St. Gallen (Switzerland) proposed aphoristic names for 55 business models, real examples of which cover the last century and a half (Gassmann, Csik, Frankenberger, 2014).
One of the outstanding success stories of pre-revolutionary Russia concerns the butter production at Siberia. Prime-minister Peter Stolypin in his joint report with Alexander Krivoshein about their trip to Siberia in 1910 tried to impress its readers with the fact that the Siberian butter-making gave Russia twice as much gold as the Siberian gold production. He meant the price of butter exported from Siberia to the world market. After the emergence of the Trans-Siberian Railway, which made possible selling this perishable product in distant markets, the West Siberian butter-making began to grow rapidly in the 1890s. This branch started practically from zero; by 1907 it came to the creation of the Union of Siberian Butter-Making Cooperatives, one of the offices of which worked as far as in London.
Butter-making factories would be created not only by cooperators, but also by private entrepreneurs. However, it was the cooperatives that became famous as the main organizers of the Siberian butter-making boom. Cooperation was in the 19th century as much a symbol of the era of change as a steam locomotive.
Although cooperative scholars use to trace the idea of cooperation several centuries back to famous philosophers, the start of practical spread of cooperation around the world is associated with the Rochdale Cooperative in Great Britain (Holyoake, 1900). The British example was taken up by the Germans (Notz, 2021); the names of Hermann SchulzeDelitzsch and Wilhelm Raiffeisen were recognized universally among Russian cooperators of that epoch. Cooperative ideas had penetrated into Russia immediately after their spread in the West; mass attempts to implement them began in the 1860s; and in the 1890s it came to the approval of the first model charters for cooperatives. The decade between the Revolutions of 1905 and 1917 became the era of their rapid growth: trade cooperatives, consumer cooperatives, production cooperatives, credit cooperatives became ubiquitous in Russia (Korelin, 2009).
Cooperation is more than a profit-making technology; it is an instrument to change society. Cooperation allows to get away from the opposition of the capitalist's and wage workers' interests. All the members are equal in a cooperative, they make decisions together and share the profits, and everyone has a chance to be elected chairman. Not surprisingly, one of the main ideas of the American political organization "The Order of the Knights of Labor" (1869) was "to abolish as rapidly as possible, the wage system, substituting co-operation therefore" (Gourevitch, 2015: 136). Over the following century and a half, faith in cooperation as the main driving force of social transformation waned. But to this day, cooperative enterprises are considered by the cooperation inspirers as a mode of existence of modern economy, alternative to monopolies and private capital (Williams, 2007).
It was in this sense that cooperation history was studied by the recognized master of the late Soviet historical science Konstantin Tarnovskij. In his last monograph, written "for the desk drawer" and published posthumously, he reflected on "democratic capitalism" as one of the historical alternatives of Russia at the dawn of the 20th century (Tarnovskij, 1995). Eurocentrism being inherent in historians of
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European Russia, Tarnovskij does not mention Siberian butter-making. However, Siberian authors - contemporaries as well as historians -make up for this omission.
On the whole recent publications about the history of Siberian butter-making are panegyric. But sometimes the reader discovers details that do not correspond to the general serenity of the articles. Historians write about the "superstitions of the peasants", who were often hostile to butter factories, and sometimes staged real butter riots (Skobelev, 2010; Ermachkova, 2015). The authors quote with pleasure the delusional rumors transmitted by peasants about the dangers of separators, but when it comes to explaining the reasons, they do not go further than pointing out the difference in material interests between those who sell their milk to the factory and those who do not (since they don't have enough milk). This should be understood so that the cooperative members were all on the same side of the barricade; the dividing line runs outside the cooperatives. In this, modern authors seem to repeat the conclusions of Sergey Shvetsov, a well-known public figure and expert on peasant life. It was he who, with reference to local informators, used the name "butter riots" as early as 1902 while the trail was still warm (Shvetsov, 1902). It is true that Shvetsov summed up his search for the causes of those "wild and cruel" pogroms with the conclusion about "the clash of primitive forms of economy and the general conditions of life of the Siberian village with capitalism that burst into it in the form of butter-making, being generated somewhere outside by conditions alien to this village and therefore abstruse to it". At the same time, Shvetsov's essay creates a more complex picture due to small observations that the author leaves aside from clearly formulated conclusions.
Shvetsov describes the strife between the peasant majority and butter-making experts -strangers to the village community, who would initiate the cooperatives. Whatever we think about the reasons for this discord, it can be considered proven by Shvetsov's descriptions that the peasants' hostility did not concern cooper-ators in general, but the initiators of cooperatives, who were strangers to the peasant mass-
es both by their previous residence place and by their way of life (that tended to aristocratic habits). Ordinary cooperators in all the pogrom stories are present only as a background, which is implied, but is not playing a role. Thus the butter-making cooperative ceases to be in our eyes a community of equals, some other image begins to emerge.
The question arises about the essence of this intra-cooperative inequality. A hint at the answer is contained in an article intended to introduce contemporary economists to the pre-revolutionary butter-making (Nikolaev, 2016). In general the article accords with its enthusiastic advertising name, but some internal flaws of the cooperative system are mentioned as well. Trying to estimate them in general, the author applies the cliché of "commune holdovers". The author sees the holdovers' manifestation in the artel (cooperative) contract fixing fines for those who fail to deliver milk to the cooperative factory. Certainly, a fine for violating a voluntarily concluded contract is by no means a commune holdover. But the very presence of a whip where, it seemed, everything was decided by a carrot, draws attention to itself. We get one more link in the chain, the end of which is still hidden from our sight.
Leonid Goryushkin, who was himself grown up in a Siberian village (although during the collectivization) and began his path to the Academy of Sciences by studying the pre-revolutionary peasantry, felt the internal problems of cooperation deeper than others. Cooperation appears in Goryushkin's monograph as a negative phenomenon; in particular, the author says directly that "the kulaks used the butter-making cooperation" in their own interests - "to increase their capital by attracting funds from the middle peasants" (Goryushkin, 1967: 209-211, 286-287). Translating from the language of the late Soviet era ("kulaks"), we understand that cooperation in the eyes of Goryushkin was a form of production that gives the main benefit to the organizers (entrepreneurs), and does not at all create equality. The idea that the dividing line runs within the cooperation (not outside) is formulated very clearly. But what way might a cooperative, in which everyone is equal according to the char-
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ter, be turned into a tool for the exploitation of workers by entrepreneurs? Goryushkin does not disclose this. This is revealed to us by the decisions of township courts.
Discussion
The New York University professor Jane Burbank has shown that decisions of township courts offer material for studying diverse aspects of the Russian peasant life (Burbank, 2004). Still it is not the source that is used often. Though a mass source, decisions of township courts are a rare one. Each year, in each of the thousands of Russian townships, courts composed of peasants would make hundreds of decisions on disputes between peasants. All decisions of each township court would be recorded in a special "registration book" (journal), fastened with a cord and sealed with the wax seal of the peasant chief (krest'yanskiy nachalnik, Siberian analogue of zemskiy na-chalnik at European Russia). The vast majority of these "books" have not survived to this day. One of those that survived, composed at 1914, belongs to the Tulinskoye township (volost) of the Barnaul district (uyezd), Tomsk province (guberniya). During the entire year, only three lawsuits related to butter-making were examined in this court. All three are lawsuits by representatives of butter-making artels against peasants.
Decision # 291 refers to the artel created in the village of Borozdina. The record of the case is scarce; although the opening formula mentions witnesses who appeared at the trial, nothing is said about their testimony. It is not clear on what basis the court considered the complaint unfounded and denied satisfaction. But the positions of the parties are clearly indicated: Evsey Verbitsky, accredited representative of the Borozdina butter-making artel, "testified that Sergey Dmitriev signed up to them in the artel and now is refusing from that", while Sergey Dmitriev "testified that he did not give any obligations as for joining the artel". The dispute, therefore, was about membership in the cooperative - and this is precisely the theme that appears again in both lawsuits filed
1 State Archive of the Novosibirsk Region. Fund D-78. Op. 1. L. 47ob.- 49.
by representatives of the Tulinskoye butter-making artel.
On the same day, March 28, 1914, the suit of the Tulinskoye artel against five "peasant members of the artel"2 was considered (decision # 353). Alexander Kirillovich Verbitsky is recorded as accredited representative of the cooperative. The degree of his kinship with Evsey Verbitsky (whose middle name we do not know) cannot be established, but the coincidence of surnames is certainly not accidental4.
The amount of the claim against each of the peasants ranged from 10 to 20 rubles according to the number of cows they possessed (5 rubles for each). Thus, the cost of defeat in the litigation for all defendants was significant, for some of them - comparable to the price of a cow.
The trespass of the Tulinskoye peasants in the description of the plaintiff is very similar to the case of Borozdina: "they left the artel arbitrarily by which they violated the contract." The defendants objected more extensively than in the previous case. The peasants "declared that they did not sign the artel contract, and we only asked how many cows they had in the artel, but they did not agree and now do not agree, and if they had agreed, then Kladov, as a literate person, should have signed himself, and the illiterate should have asked someone to sign". Despite the confusion with "we" and "they", it
2 Six men were named in the suit, but pretensions to one of them were settled during that month when the suit was waiting for consideration.
3 State Archive of the Novosibirsk Region. Fund D-78. Op. 1. L. 55ob.- 58.
4 Two more people with the same family name are found among 196 decisions of Tulinskoye court of that year. Epifan Evseevich Verbitsky (probably a son of the Borozdina artel representative) is registered as a witness for a quarrel at Borozdina village (decision # 145), Gavril Kirillovich Verbitsky (probably a brother of the Tulinskoye artel representative) - as a witness in a land dispute in the Tulinskoye village (# 138) and the defendant in a dispute related to the lease of land by him from one of the residents of Tulinskoye (# 139). We learn from these decisions that Gavril was assigned to the village of Borozdina, and lived in Tulinskoye. These two villages were closest to each other; their allotments certainly had a common border. In view of all the above, there can be no doubt that all the four Verbitskys known to us were relatives. The Verbitsky clan combined grain farming and butter-making, expanding both of them beyond the borders of Borozdina village to the township center Tulinskoye.
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is clear that this entire sentence conveys the replies of the defendants. It can be doubted how accurately this scanty pisar's (secretary's) record reflects the issues discussed, but we surely get a general description of what happened: the peasants came to the cooperative organizers to find out conditions under which their participation was possible, and the result of this conversation was interpreted by the parties differently.
Unlike his colleague (and probably his relative), the representative of the Tulinskoye artel presented to the court a contract, the most important points of which are known to us in the narration of the township pisar'. This contract gives some food for reflections, since the only literate peasant of all the defendants (Konstantin Kladov) was not recorded in it. At the same time, the plaintiff did not single out Kladov from the general number of defendants, so we can think that the degree of desire of all the defendants to join the artel was equal, as well as the way the organizers treated them.
The following reconstruction of events seems logical: the peasants came "for reconnaissance" to the cooperative organizer; in general they were disappointed by the conditions offered to them, which is why Kladov did not sign the contract; on the other hand, the peasants did not clearly demand the organizer to keep their names away from the members list. Meanwhile, a usual form of confirmation of commitment in a semi-illiterate Russian village was not only a signature of different person "for the illiterate" (the defendants pointed out the lack of this kind of signature), but even simple mentioning the name of a person with an indication of his illiteracy as an excuse for the absence of his signature. The cooperative organizer had therefore the opportunity to "interpret the doubts" about the outcome of the conversation in his favor and write down the illiterates at his own discretion. Still he could not himself write down Kladov: it was well known in the village who was literate and who was not. The surname of Kladov under the contract without his handwritten signature would have been an obvious fraud.
In this scenario the inclusion of Kladov in the number of those sued acquires special significance. It proves that the main argument in
favor of the claim from the point of view of the artel representative was not even the contract as such (in which there was no Kladov's name), but the very situation, the validity of which was supported by the contract. Alexander Verbitsky believed that the mere fact of the conversations was already sufficient to consider the conversations' participants obliged in the face of the artel.
The court used the same approach: assessment of the situation, not of the documents. But their opinion was different: "The township court, seeing from the explanation of the defendants and from the delivered contract that Kladov was not written down in the contract at all, the remainders Zelentsov, Usov and Kungurtsev, although they were written down, in the court's opinion they did not agree to join the artel, and therefore [the court] decided: to deny the claim of the representative Verbitsky".
This decision appeared one of only three Tulinskoye court decisions canceled that year by the district assembly of peasant chiefs. On October 31, 1914, the peasant chiefs decided to recognize Kladov not guilty, but to recover the money requested by the plaintiff from the rest. Thus peasant chiefs, unlike the peasants, used not the essential approach but the formal legal approach: whoever is not recorded - let him have a good luck; who is recorded - should be held responsible. It is not clear why they used this approach: whether because they insisted on the formal side of the matter; or because they supported the artel organizers in essence but still did not consider it possible to violate the formal side too grossly and therefore did not support Kladov's accusation.
In any case, the decision # 35 allows us to see some part of what was not unclear: the system of fines not only existed, it was actively used already at the stage of acquaintance of the peasants with the artel. The cooperative membership did not seem very attractive to the peasants, and the organizers used any pretext for creating a basis to forcibly fix the peasants in the artel.
One more question remains unanswered: what exactly embarrassed the peasants about the artel? The answer to this question is given
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to us by decision # 1325, adopted by the same Tulinskoye court on September 26 on a lawsuit filed on July 1, 1914.
This time it was the Tulinskoye peasant Vasily Kiprianovich Gulyaev who acted as a representative of the Tulinskoye butter-making artel6. He wanted to get 30 rubles from his fellow villager Efim Grigoryevich Zelentsov. In support of his position, he presented a contract dated December 21, 1913, "in which, among other things - at paragraph 5 it is expressed: We, comrades, undertake to work together in mutual benefit, not to deliver milk from our cows to any other factory. However, if any of us undertakes to deliver his milk to some other factory, then he is obliged to pay, i.e. to have paid in favor of the artel a penalty of 5 rubles from each cow, and that the defendant Efim Zelentsov is indeed listed in the contract with 6 cows from which, as the representative explains, Zelentsov does not deliver milk".
The defendant tried to dismiss the charge in the same way as his predecessors did in the hearing of March 28. But - apparently - Gulyaev reminded something to him, as result of which Zelentsov had to add a clarification, shedding new light on the state of affairs with cooperation in the village of Tulinskoye. "The defendant peasant Efim Grigoryevich Zelentsov explains that he does not give milk from his 6 cows to the butter-making artel in the Tulinskoye village because he did not agree [to participate] in the company of the butter-making artel, but they brought him in arbitrarily as an illiterate. He added that he ordered himself his cows be enlisted in the butter-making artel but he did not agree to the clause of the agreement terms
5 State Archive of the Novosibirsk Region. Fund D-78. Op. 1. L. 179ob.- 182.
6 Strictly speaking, nowhere is it said that there was only one butter-making cooperative in Tulinskoye; it can be assumed that Verbitsky and Gulyaev represented different cooperatives. But in this case, probably, the clerk (pisar' who wrote down the decisions) would have noted this, instead of using one designation for both ("Tulinskoye butter-making artel"). Speaking about Gulyaev the author of the protocol emphasizes that the first thing he did in the court was producing his procuration to represent the interests of the artel. The same was not reported about the Verbitskys: perhaps their rights seemed unquestionable to the pisar'. However, regardless of whether Verbitsky and Gulyaev represented the same artel or different ones, both proceedings are important for the overall picture.
concerning penalty which is why he does not consider himself obliged to pay 30 rubles to the Tulinskoye butter-making artel".
The additional testimony changes the picture almost to the opposite! It turns out that the peasant did not reject dealing with the artel, he just wanted more favorable conditions than those offered by the general contract. Even the township court judges (benevolent to "artel victims", as we have seen) did not support the defendant in such circumstances, and awarded the victory to the artel representative.
The question remains open as to the similarities and differences between the stories that served as the basis for decisions # 35 and # 132. The similarity of the initial positions of the defendants ("was listed against my will") provokes assumption that the backgrounds were also the same ("ordered myself to enlist the cows"). But this assumption does not match the circumstances of Konstantin Kladov, who refused to sign, and the other defendants in the case # 35 were in one company with him.
In any case, Decision # 132 is useful as it shows the apprehensions of the peasants concerning the butter-making cooperatives. They were not averse to participating in this business but did not want to take on onerous obligations in the form of the penalty. On the contrary this point was a key condition for the organizers of the artel. Hardly having received at least one payment for their milk, the cow owners have already found themselves forced to pay the penalty that tied them firmly to the artel. The masters of the artel did not even need to prove the delivery of milk to other factories; it would suffice that a peasant registered (by someone) in the artel contract did not deliver milk to "his" cooperative.
Conclusion
Now when we see that the penalty was not just one of the conditions of the contract but a tool (or rather a weapon) used actively to expand the circle of artel members it is reasonable to think about the sense of this system. The matter is that the arrangement of the cooperatives that we saw differed significantly not only from the general cooperative ideal, but also from the model that the officials of the
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Ministry of Finance tried to introduce specifically in the butter-making production and specifically in Western Siberia. According to the official and publicist Alexander Murashkint-sev, the standard charter was applied in 1902 to all butter-making cooperatives of the Tobolsk province (next to Tomsk), in which fines were imposed only for "spoilage of milk" (dilution with water), the most terrible punishment being expulsion from artel (Murashkincev, 1902: 5). This charter by itself implies the presence of some difficulties in the cooperative development, including the refusal of artel members to deliver milk to their factory. But still, artel acts as a real cooperative, where all milk deliverers turn out to be not just suppliers of raw materials, but comrades, owners, and recipients of profit from a common enterprise. On the contrary, the cooperatives that we saw at the Tulinskoye township were organized, in fact, as private enterprises. One or several organizers, who formed the core of artel, invested their capital (and therefore nothing is said in the court records about entrance fees), and then proceeded to put together, by any means, a circle of members sufficient for the sustainable operation of the factory.
The meaning of cooperation in this case is fundamentally different from the classical scheme. In the classical model, the main difficulty is the creation of start-up capital, and it is overcome by the mandatory entry fees of cooperators. In our case, obviously, the initiators did already have capital. A cooperative was needed only to make sure that milk suppliers do not run away to competitors. This is the essence of the Siberian butter-making cooperation as a special business model.
By the beginning of the 20th century butter-making had already become a well-
References
known technology at Siberia; modern equipment could easily be bought (on credit as well) in the Siberian hinterland; refrigerators ("ice vans") for the transportation of butter ran in abundance along the Trans-Siberian Railway; the distribution system for the vast world market was established thanks to large trading firms. The technological chain was thus debugged; it was easy to create a new butter-making enterprise. The bottleneck in the system, from the point of view of the entrepreneur-buttermaker, turned out to be raw materials; success depended upon the number of peasants who were ready to deliver milk of their cows to the factory. To protect oneself from the competition of already existing butter-making factories as well as possible new ones, to secure reliably a share of the market sufficient to have income -this is what the cooperative form was used for.
Theoretically, this model does not look very reliable: there is no such cooperative from which it would be impossible to withdraw. In practice, as we have seen, the model worked. Be it for the lack of juridical competence, or of purposefulness, it is sure the peasants used to find themselves artel members regardless of their unwillingness to play by the proposed rules.
Such a business model differs sharply from any of the 55 models presented in the above-mentioned book by Swiss authors. Their models are designed only and exclusively for voluntary participation: Western citizens know how to defend their rights. In Russia at the beginning of the 20th century, the violent growth of a large sector of the economy turned out to be based on the business model of "voluntary-compulsory" fixing of suppliers of raw materials by factories that were cooperatives in form, but private enterprises in essence.
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