Paths to success: Jewish businesses at the turn of the nineteenth century and their (in)visibility
A conversation about entrepreneurship and business in Ukraine in the second half of the nineteenth–early twentieth centuries, particularly the sector that was in the hands of the Jewish community.
The second half of the nineteenth century in Ukraine marked the appearance of individuals who may be called magnates. Did small businesses (shops, stalls) exist exclusively, or was there also big business?
Our guest on the show today is Tetiana Vodotyka, Candidate of Sciences in History, scholarly associate of the Institute of History of Ukraine at the National Academy of Sciences of Ukraine, editor-in-chief of the journal City: History, Culture, Society, and the author of the books The Space of Possibilities: Ukraine in the Age of Iron and Steam, The Culture of Entrepreneurship in Dnipro Ukraine (Second Half of the Nineteenth–Early Twentieth Centuries, and The History of Success: Distinguished Ukrainian Businessmen of the Nineteenth Century.
Vasyl Shandro: Business in the late nineteenth century and the Jewish community’s presence in it: To what extent is it the visible part of this business? Are these just individual cases, or can we speak of quite a powerful, functioning Jewish financial and economic community that had a great impact on what was happening in Ukraine?
Tetiana Vodotyka: In reality, everything depends on the region. If we are talking about Kyiv, then Jewish entrepreneurs were an extremely visible part of this community. There were the Brodskys: the father, Israel, and the brothers, Lazar and Lev, who left an outstanding trace in the history of Kyiv, its architecture — its external appearance. When we speak about the general imperial scale, then we cannot avoid mentioning the Poliakovs, for example, Samuil Poliakov, whose knowledge and entrepreneurial flair were beneficial to the entire empire. Thanks to him, a railway network and the first railway lines were built. He was also one of the first to invest in the extraction of coal in the Donbas.
If we are talking about an even larger scale, then we must mention Chaim Kahan’s company, which operated on the territory of Ukraine and the Russian Empire and eventually in all of Europe. He was an oil magnate who launched the sale of kerosene for lighting and other domestic needs in a number of small and large cities of Ukraine. Eventually, this grew into a large, vertically integrated company that extracted oil, processed it at an oil-processing plant, and transported it in his own cisterns to sales points. After the revolution, of course, it was shut down, but Kahan’s family, his descendants, continued their activities in Weimar Germany — in Berlin.
When we speak in general, it was like this: As entrepreneurs, Jews were visible. This applied both to the smallest link, say, the woman who cleans a house or an apartment, to the sugar that you purchase in a store; sugar that is produced in sugar plants that belonged to Jewish businessmen.
Vasyl Shandro: The second half of the nineteenth century expanded the space of opportunities to the maximum. How were these spaces expanded in Ukraine? What new opportunities appeared in Ukraine in order to conduct these new businesses?
Tetiana Vodotyka: We can also speak of sectoral expansion in terms of gentrification. Sectoral means those sectors and directions of entrepreneurship that did not exist earlier; for example, the service sector or banking, finance, credit, and investing in companies that are being built up. Jewish entrepreneurs did not act as co-creators but as co-founders. This is also transport: railways, urban streetcars. Getting back to Kyiv: There was a businessman named David Margolin, who invested and partly strategized the development of the Kyiv streetcar system.
In the context of intensification, we can speak of sugar production mentioned earlier. The late nineteenth century ushered in qualitatively new market conditions in the development of this branch. There were a few overproduction crises when it became clear that this was an advantageous matter and that finally, there was more than was needed. An oligarchic conspiracy begins to form in this market. Entrepreneurs begin uniting in order to protect their interests. It was not just Jews uniting, but Ukrainians and Russians as well. As a result, an all-Russian society, a general imperial association was created. And one of the key roles in this association, so that these businessmen could communicate with each other, was played by the Jew, Lazar Brodsky. Within the limits of the empire, the key foundation was comprised precisely of Jews and Ukrainians, the Tereshchenkos and Khanenkos.
Vasyl Shandro: In one way or another, these people were involved with the imperial government. Was it possible to conduct business without being under the mantle of St. Petersburg, so to speak?
Tetiana Vodotyka: Where big business is concerned, it was, but not for long. The example of Oleksii Alchevsky is a clear indicator of this. When Alchevsky needed financial aid at the beginning of the twentieth century, when his business began to fail because of that overproduction, he asked the government for help, but he was refused.
If you were a Jew and had a big business, then integration and investing in your positive image were a matter of survival. The Brodskys, the Margolins, or Poliakov, whose charitable donations were no smaller than those of the Tereshchenko family, obtained far fewer honors and recognition. As a result, Tereshchenko was granted a hereditary title and honorary citizenship in Kyiv, and while he was still alive (1899), a street was named after him. The Brodskys did not receive anything close to what Tereshchenko had, even though their contributions were proportionate.
Vasyl Shandro: When we talk about big Jewish business in Ukraine, we are speaking in the direct sense about Ukraine because outside the territory of Ukraine, it was difficult for Jews to survive. Could big Jewish business exist, say, in Tula?
Tetiana Vodotyka: Even in Kyiv, it was not always possible to own a large Jewish business because Kyiv was not part of the Pale of Settlement. In order to start a business in Kyiv, it was necessary to become a Kyivan merchant of the first, second, or third guilds —in other words, to purchase a license for the right to conduct business, the right to reside in Kyiv. During the second half of the nineteenth century and the beginning of the twentieth, the situation in Kyiv did not change. Whereas all businessmen were leaving the merchant class en masse because this license was an unnecessary waste of money, for Jews, this was generally a license for the right to live in the city. As regards Chaim Kahan, he and his sons-in-law expressly joined the merchant class in St. Petersburg in order to enjoy the possibility of developing their business and hold an initial public offering on the St. Petersburg stock exchange. “State antisemitism” is what the Russian imperial policy toward Jews is usually called.
Getting back to the subject of Kyiv: Jewish business was vitally important for the economic life of this city. Without Jews, the economy would not, of course, have developed so powerfully as it began to do in the second half of the nineteenth century. Proof of this is the fact that, after the Revolution of 1905 and the large-scale pogroms, the merchants of Kyiv submitted numerous requests to the imperial government that they be included in the Pale of Settlement, so that there would not be any artificial obstacles to the city’s economic development stemming from the circumstance that Jews were forced to expend additional resources on legitimizing their status. These requests fell on deaf ears; no attention was paid to them. The artificial obstacles in the form of state antisemitism could not have had a positive impact on the economic activities of the Jews.
Vasyl Shandro: It turns out that things were not so simple. It was necessary to purchase licenses to conduct one business or another and to survive. This also applied to residence.
Tetiana Vodotyka: Yes, this also applied to residence. You can imagine the corruption potential of the Pale of Settlement. For the right to settle in a city where it was possible to earn a living but one that was not part of the Pale of Settlement, Jews were ready to pay — a lot and not just a single time. Nevertheless, this did not guarantee success or safety.
Vasyl Shandro: Are there any documented stories of success where a person from the lower classes achieved unbelievable heights and wealth?
Tetiana Vodotyka: Yes, there is no shortage of stories about entrepreneurs with Jewish roots. That same Chaim Kahan, whom I have already mentioned, is a truly brilliant example. He was not all that educated. He was born into the family of a Jewish teacher and a fishmongeress. He was able to build up his own vertically integrated company called Petrol, earning money from the sale of kerosene then oil products. Later, he acquired an oil-processing plant in Saratov. On the eve of the Revolution of 1917, his company was preparing to hold an initial public offering on the St. Petersburg stock exchange. He managed to make a fortune and become a well-known intermediary thanks to the diversification of partnerships.
He found himself partners for selling kerosene in literally every city of Ukraine. The negotiations with his counteragents in Melitopol, Zaporizhia, Kyiv, and Dnipro are preserved in the archives. They shared risk on an equal basis; Kahan was responsible for supplying kerosene; the earnings were equal. Warehouse rental, communicating with local consumers, workers hired locally — all this lay on the shoulders of the local partner. This business model functions to this day. Another component of his success lay in his cooperation with titular companies that processed and extracted oil. From the Nobel brothers, he learned about the logistics of transporting oil and oil products in cisterns. His entire family worked in the business. He had daughters and, thus, sons-in-law, who headed the firm’s regional branches in Kharkiv, Warsaw, and St. Petersburg.
Another fascinating figure was David Margolin, who invested in the development of the Kyiv streetcar system and the Kyiv water pipeline. He was, in today’s parlance, an investor, a venture capitalist. He was also something of a 007 agent: He loved technical innovations, secrecy, and passion. For example, when a streetcar was built in Kyiv, he built himself a separate car upholstered in red satin.
Vasyl Shandro: Do we know what happened to all these businesses during the Revolution and afterwards?
Tetiana Vodotyka: I don’t know what happened to Margolin’s businesses. I know that Margolin survived the revolution, emigrated, and died in Europe in 1925. Obviously, thanks to his diplomatic connections, he was able to emigrate quite safely. If we are talking about the businesses that existed on the territory of Ukraine and how these businesses served the newly created national Ukrainian state, then Arnold Margolin served the Ukrainian state. Michel Tereshchenko served the Provisional Government in Moscow. By this, I mean that it is not necessary to endow the figures of the past with extraordinary features that are unambiguously positive or negative solely because of nationality. I am often asked: How can this be? The Tereshchenkos were Ukrainians. That’s the kind of Ukrainians they were — by surname, by origin, but not by their world perception. Michel Tereshchenko’s act reveals that, in keeping with his world perception, he was not Ukrainian.
Chaim Kahan’s business survived the revolution. A business owned by the well-known Kyivan developer Lev Ginsburg did not survive the revolution, and he did not manage to emigrate. There is evidence that he ended his life as a beggar and died alone. In general, everything that had been created at the beginning of the twentieth century formed an excellent basis for the Soviet authorities, for industrialization. All this was nationalized, placed at the service of new goals. Everything possible and impossible was done in order to ignore the contribution of the entrepreneurs who in fact, founded these businesses and brought them to their prime.
Vasyl Shandro: Our calendar features a day on which we honor the Ukrainians who rescued Jews during the Second World War. As regards the waves of pogroms that took place at the beginning of the twentieth century, are there similar stories about Ukrainians sheltering and protecting Jews?
Tetiana Vodotyka: I don’t have any direct stories, but there are accounts of how members of the Ukrainian intellectual and ecclesiastical elites defended Mendel Beilis during the notorious Beilis affair. For example, he was defended by the Ukrainian priest Hlaholiev, whose son later rescued Jews from Babyn Yar. Some writers, for example, Korolenko, defended the Jews. Of course, there are accounts of rescues during the pogroms, but I am not aware of them. It should be noted that the general mood during the pogroms and in 1905 is marked by terrible accounts of how that same Lev Brodsky, who had done so much for Kyiv and for Kyivites, was forced to escape with his daughter through the back door of his house. If even the likes of Brodsky were forced to flee, then what can we say about the attitude toward other Jews and their property?
Vasyl Shandro: Did Jewish women work in business?
Tetiana Vodotyka: There are some facts pointing to this. There is quite a lot of evidence indicating that Jewish women were forced to travel to Kyiv to earn a living. They were hired as domestic workers; they worked as midwives or offered medical assistance if they had an education. Many Jewish women obtained access to business management after their husbands’ deaths. There are stories about a Mrs. Tuba Timen, who submitted a request to the municipal authorities to allow her to keep the business in the family and to manage the five hired employees — clerks. Mrs. Timen herself was illiterate, but this did not prevent her from conducting the business, and rather successfully to boot. In general, there is data indicating that nearly 20 percent of Kyivan artisans were women. These are ateliers, some services that women at the time could offer, considering their lack of access to education. In general, a woman in business was a rarity at the time.
This program is created with the support of Ukrainian Jewish Encounter (UJE), a Canadian charitable non-profit organization.
Originally appeared in Ukrainian (Hromadske Radio podcast) here.
Translated from the Ukrainian by Marta D. Olynyk.
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