Chapter VII. The Development of Large-Scale Machine Industry (2)

The main source of factory statistics in Russia is the returns supplied annually by owners of factories and works to the Department of Commerce and Manufacture, in conformity with the law passed at the very beginning of the present century. The very detailed regulations in this law concerning the submission of information by factory owners are nothing but a pious wish, and to this day the factory statistics are organised on the old, purely pre-Reform lines and are simply appendices to gubernatorial reports. There is no precise definition of the term “factory and-works,” and consequently gubernia and even uyezd authorities employ it in the most diverse ways. There is no central body to direct the proper and uniform collection, and verification, of returns. The distribution of industrial establishments among various departments (Mining, Department of Commerce and Manufacture, Miscellaneous Taxes Department, etc.) still further increases the confusion.

In Appendix II we cite the data on our factory industry in the post-Reform period that are to be found in official publications, namely, for the years of 1863-1879 and 1885-1891. These data relate only to trades not subject to excise duty; moreover, for different periods information is given for a different number of trades (the returns for 1864-1865 and for 1885 and subsequent years being the fullest); that is why we have singled out 34 trades for which data are available for 1864-1879 and 1885-1890, i.e., for 22 years. To judge the value of these data, let us first examine the most important publications on our factory statistics. Let us begin with the 60s.

The compilers of factory statistics in the 60s fully appreciated the extremely unsatisfactory nature of the returns they were handling. In their unanimous opinion the number of workers and the total output were considerably understated in the factory-owners’ reports; “there is no uniform definition, even for the different gubernias, of what should be regarded as a factory and a works, since many gubernias include among the factories and works, for example, windmills, brick-making sheds and small industrial establishments, while others take no account of them, with the result that even comparative data on the total numbers of factories and works in the different gubernias are valueless.” Still more trenchant is the criticism by Bushen, Bok and Timiryazev, who, in addition, point to the inclusion of those occupied at home among the factory workers, to the fact that some factory owners supply returns only for workers who live on the factory premises, etc. “There are no correct official statistics on manufactory and factory industry,” says Mr. Bushen, “and there will be none until there is a change in the main principles on which the primary material is gathered.” “The tables of factories and works for many trades include, evidently by misunderstanding, numerous purely artisan and handicraft establishments that possess nothing of the character of a factory or works.” In view of this, the editors of the Yearbook refused even to summarise the data printed, “not desiring to pass on to the public incorrect and obviously exaggerated figures.” To give the reader a precise idea of the extent of this obvious exaggeration, let us turn to the data given in the Yearbook, which differs to advantage from all other sources, in that it contains a list of factories with an output exceeding 1,000 rubles. At the present time (since 1885), establishments with a smaller total output are not counted as factories. An estimate of these small establishments according to the Yearbook reveals that 2,366 were included in the general list of factories, employing 7,327 workers and an output amounting to 987,000 rubles. The total number of factories, however, in 71 trades, according to the Yearbook, was 6,891, with 342,473 workers and an output totalling 276,211,000 rubles. Consequently, the small establishments represent 34.3 % of the total number of establishments, 2.1% of the total number of workers, and 0.3% of the total output. It stands to reason that it is absurd to regard such small establishments (with an average per establishment of a little over 3 workers and less than 500 rubles output) as factories, and that there can be no question of there being anything like a complete registration of them. Not only have such establishments been classed as factories in our statistics, but there have even been cases of hundreds of handicraftsmen being quite artificially and arbitrarily combined as a “factory.” For example, this very Yearbook mentions in the rope-making trade of the Izbylets Volost, Gorbatov Uyezd, Nizhni-Novgorod Gubernia, a factory “of the peasants of the Izbylets Volost; 929 workers; 308 spinning wheels; output 100,400 rubles” (p. 149); or in the village of Vorsma in the same uyezd, a factory of “temporarily bound peasants of Count Sheremetev; 100 smithies; 250 carpenters’ benches (in homes); 3 horse-operated and 20 hand-operated grind stones; 902 workers; output 6,610 rubles” (p. 281). One can imagine what an idea of the real situation such statistics give!

A special place among the sources of factory statistics of the 60s is held by the Military Statistical Abstract (Vol. IV. Russia, St. Petersburg, 1871). It gives data on all the factories and works of the Russian Empire, including mining and excise-paying establishments, and estimates that in 1866 there were in European Russia no more nor less than 70,631 factories, 829,573 workers, with an output totalling 583,317,000 rubles!! These curious figures were arrived at, firstly, because they were taken, not from the reports of the Ministry of Finance, but from the special returns of the Central Statistical Committee (these returns were never published in any of the Committee’s publications, nor is it known by whom, how and when they were gathered and processed); secondly, because the compilers of the Military Statistical Abstract did not hesitate in the least to class even the smallest establishments as factories. (Military Statistical Abstract, p. 319) and furthermore supplemented the basic returns with other material: returns of the Department of Commerce and Manufacture, returns of the Commissariat, returns of the Ordnance and Naval Departments, and finally, returns “from the most diverse sources” (ibid., p. XXIII). Therefore, in using the data of the Military Statistical Abstract for purposes of comparison with present-day data, Messrs. N.–on, Karyshev and Kablukov revealed their total unfamiliarity with the principal sources of our factory statistics and their utterly uncritical attitude towards these statistics.

During the debate in the Free Economic Society on the paper read by M. I. Tugan-Baranovsky, who pointed to the completely erroneous character of the figures in the Military Statistical Abstract, several speakers declared that even if there was an error in the number of workers, it was only a slight one—10 to 15%. That was said, for example, by Mr. V. V. (see verbatim report of debate, St. Petersburg, 1898, p. 1). He was “joined” by Mr. V. Pokrovsky, who also confined himself to a bald statement (p. 3). Without even attempting a critical examination of the various sources of our factory statistics, these people and their supporters contented themselves with generalities about the unsatisfactory nature of factory statistics, and about the data having recently become more exact (??) and so forth. The main issue, the crude error of Messrs. N.–on and Karyshev, was thus simply glossed over, as P. B. Struve quite rightly observed (p. 11). We therefore think it worth while to calculate those exaggerations in the data of the Military Statistical Abstract which could and should have been noticed by anybody handling the sources attentively. For 71 trades we have the parallel statistics for 1866 both of the Ministry of Finance (Ministry of Finance Yearbook, I) and of unknown origin (Military Statistical Abstract ). For these trades, leaving out the metallurgical, the Military Statistical Abstract exaggerated the number of workers employed in factories and works in European Russia by 50,000. Further, for those trades for which the Yearbook gave only gross figures for the Empire, refusing to analyse them in detail in view of their “obvious exaggeration” (Yearbook, p. 306), the Military Statistical Abstract gives 95,000 workers over and above these figures. In brick-making the number of workers is exaggerated by a minimum of 10,000 ; to convince oneself of this, one should compare the data by gubernias given in the Military Statistical Abstract and those in Returns and Material of the Ministry of Finance, No. 4 of 1866 and No. 6 of 1867. For the metallurgical trades the Military Statistical Abstract exaggerated the number of workers by 86,000 as compared with that in the Yearbook, having evidently included some of the mine workers in its figure. For the excise-paying trades the Military Statistical Abstract, as we shall show in the next section, exaggerates the number of workers by nearly 40,000. Altogether there is an exaggeration of 280,000. This is a minimum and incomplete figure, for we lack material to verify the data of the Military Statistical Abstract for all trades. One can therefore judge to what extent those who assert that the error of Messrs. N.–on and Karyshev is trifling are informed on this subject!

In the 1870s much less was done to combine and analyse factory statistics than in the 1860s. The Ministry of Finance Yearbook contains data for only 40 trades (not subject to excise duty) for 1867-1879 (Vols. VIII, X and XII; see Appendix II), the exclusion of the other trades being ascribed to the “extremely unsatisfactory nature of the material” for industries “which are connected with agricultural life, or are appendages of artisan and handicraft industries” (Vol. VIII, p. 482; same, Vol. X, p. 590). The most valuable source for the 1870s is Mr. P. Orlov’s Directory of Factories and Works (1st edition, St. Petersburg, 1881, returns for 1879 taken from the same reports of factory owners to the Department of Commerce and Manufacture). This publication lists all establishments with an output of not less than 2,000 rubles. The others, being small and inseparable from handicraft establishments, are not enumerated in this list, but are included in the summarised data given by the Directory. Since no separate totals are given for establishments with an output of 2,000 rubles and over, the general data of the Directory, like those of previous publications, combine the small establishments with the large ones; for different trades and different gubernias unequal numbers of small establishments are included (quite fortuitously, of course) in the statistics. Regarding trades connected with agriculture, the Directory repeats (p. 396) the Yearbook’s reservation and refuses to give “even approximate totals” (author’s italics) owing to the inaccuracy and incompleteness of the data. This view (quite a legitimate one, as we shall see below) did not, however, prevent the inclusion in the Directory’s general totals of all these particularly unreliable figures, which are thus lumped together with relatively reliable ones. Let us give the Directory’s total figures for European Russia, with the observation that, unlike previous figures, they also embrace excise paying trades (the second edition of the Directory, 1887, gives the returns for 1884; the third, 1894, those for 1890):

We shall show further that the drop in the number of factories indicated by these data was actually fictitious; the whole point is that at different times different numbers of small establishments were classed as factories. Thus, the number of establishments with an output exceeding 1,000 rubles was estimated in 1884 at 19,277, and in 1890, at 21,124; with an output of 2,000 rubles and over: in 1884 at 11,509, and in 1890 at 17,642.

In 1889 the Department of Commerce and Manufactures began to issue in separate editions Collections of Data on Factory Industry in Russia (for 1885 and subsequent years). These data are based on the material mentioned (factory owners’ reports), and their treatment is far from satisfactory, being inferior to that in the above-mentioned publications of the 60s. The only improvement is that the small establishments, i.e., those with an output of under 1,000 rubles, are not included among the factories and works, and information regarding them is given separately, without their being distributed according to trades. This, of course, is a totally inadequate criterion of what a “factory” is; a complete registration of establishments with an output exceeding 1,000 rubles is out of the question under the present system of gathering information; the separation of “factories” in trades connected with agriculture is done quite haphazardly—for instance, for some gubernias and in some years watermills and windmills are classed as factories, while in others they are not. The author of the section “Chief Results of Factory Industry in Russia for 1885-1887” (in the Collection for these years) falls repeatedly into error in disregarding the fact that the data for the different gubernias are dissimilar and not comparable. Finally, to our characterisation of the Collections let us add that till 1891 inclusive they only covered trades not subject to excise duty, while from 1892 onwards they cover all trades, including mining and excise-paying; no special mention is made of data comparable with others given previously, and no explanation whatever is given of the methods by which ironworks are included in the total number of factories and works (for instance, ironworks statistics have never given the value but merely the volume of works’ output. How the compilers of the Collections arrived at the value of the output is unknown).

In the 1880s there was still another source of information about our factory industry, one deserving attention for its negative qualities and because Mr. Karyshev used data from this source. This is the Returns for Russia for 1884-85 (St. Petersburg, 1887. Published by the Central Statistical Committee), which gives in one of its tables the “totals of output of factory industry in European Russia, 1885” (Table XXXIX); the number of factories and of workers is given only for Russia as a whole, without being distributed according to gubernias. The source of information is “data of reports of Messrs. the Governors” (p. 311). The data cover all trades, including both excise-paying and mining, and for every trade the “average” number of workers and output per works is given for the whole of European Russia. Now it is these “averages” that Mr. Karyshev proceeded to “analyse.” To judge their value, let us compare the data in the Returns with those in the Collection (to make such a comparison we must subtract from the first-mentioned data the metallurgical, excise-paying, fishing and “other” trades; this will leave 53 trades; the data are for European Russia):

Thus, the gubernatorial reports included tens of thousands of small agricultural and handicraft establishments among the “factories”! Of course, such establishments were included among the factories quite fortuitously for the various trades, and for the various gubernias and uyezds. Here are examples of the number of works according to the Returns and the Collection, in some trades: fur—1,205 and 259; leather—4,079 and 2,026; mat-and-bag—562 and 55; starch-and-treacle—1,228 and 184; flour-milling—17,765 and 3,940; oil-pressing—9,341 and 574; tar-distilling—3,366 and 328; brick-making—5,067 and 1,488; pottery and glazed tile–2,573 and 147. One can imagine the sort of “statistics” that will be obtained if one estimates the “size of establishments” in our factory industry by taking “average figures” based on such a method of computing “factories”! But Mr. Karyshev forms his estimate in precisely this manner when he classes under large-scale industry only those trades in which the above mentioned “average number ” of workers per factory (for the whole of Russia) is over one hundred. By this phenomenal method the conclusion is reached that only a quarter of the total output is provided by “large-scale industry as understood within the above-indicated limits”!! (p. 47 of article cited). Further on we shall show that factories with 100 and more workers actually account for more than half the total output of our factory industry.

Let us observe, incidentally, that the data of the local gubernia statistical committees (which are used for the gubernatorial reports) are always distinguished by the utter vagueness of the term “factory-and-works” and by the casual registration of small establishments. Thus, in Smolensk Gubernia, for 1893-94, some uyezds counted dozens of small oil-presses as factories, while others did not count any; the number of tar “works” in the gubernia was given as 152 (according to Directory for 1890, not one), with the same casual registration in the various uyezds, etc. For Yaroslavl Gubernia, the local statisticians in the 90s gave the number of factories as 3,376 (against 472 in the Directory for 1890), including (for some uyezds) hundreds of flour-mills, smithies, small potato-processing works, etc.

Quite recently our factory statistics have undergone a reform which has changed the plan for the gathering of information, changed the significance of the term “factory and-works” (new criteria have been adopted; the presence of an engine or of not less than 15 workers), and enlisted factory inspectors in the work of gathering and verifying information. We refer the reader for details to the above mentioned article in our Studies where a detailed examination is made of the List of Factories and Works (St. Petersburg, 1897) compiled according to the new plan, and where it is shown that despite the reform, improvements in our factory statistics are scarcely noticeable ; that the term “factory-and-works” has remained absolutely vague; that the data are very often still quite haphazard and must, therefore, be handled with extreme caution. Only a proper industrial census, organised on European lines, can extricate our industrial statistics from their chaotic condition.

It follows from the review of our factory statistics that the data they contain cannot in the overwhelming majority of cases be used without being specially processed, the principal object of which should be to separate the relatively useful from the utterly useless. In the next section we shall examine in this respect the data on the most important trades, but at the moment we put the question: is the number of factories in Russia increasing or decreasing? The main difficulty in answering this question is that in our factory statistics the term “factory” is employed in the most chaotic manner; that is why the negative replies to this question which are sometimes given on the basis of factory statistics (e.g., by Mr. Karyshev) cannot be of any use. We must first establish some definite criterion for the term “factory”; without that condition it would be absurd to illustrate the development of large-scale machine industry with data for establishments of which the totals have at various times included various numbers of small flour-mills, oil-presses, brick-sheds, etc., etc. Let us take as a criterion the employment of not fewer than 16 workers in the establishment, and then we shall see that the number of such industrial establishments in European Russia in 1866 was a maximum of from 2,500 to 3,000, in 1879 about 4,500, in 1890 about 6,000, in 1894-95 about 6,400, and in 1903 about 9,000. Consequently, the number of factories in Russia in the post-Reform period is growing, and growing fairly rapidly.