The Russian-American Industrial Corporation (abbr. RAIK ; eng. The Russian-American Industrial Corporation, RAIC ) is a commercial enterprise , founded in 1922 by agreement between the government of the USSR and the . The corporation, funded mainly by small donations from sympathetic members of the American Union of Workers, was conceived as a mechanism for launching new sewing factories in Soviet Russia, which at that time was experiencing economic disasters that hit the country during the Civil War and the policy of military communism .
| Russian-American Industrial Corporation | |
|---|---|
 | |
| Base | 1922 |
| Abolished | 1925 |
| Founders | Sidney Hilman |
| Industry | sewing industry |
RAIK raised $ 2 million, which was spent on the launch or modernization of 34 industrial facilities, which employed 17,500 workers. Shareholders of RAIK received a payment of 5% per annum of the corporation's profit until its activities were terminated in 1925.
History
Background
The revolution of 1917 and the ensuing fierce and bloody civil war led to the collapse of the economy in the country. Cities were depopulated, workers and peasants returned to their villages to redistribute land. Due to a lack of labor, raw materials and organizational capabilities, many factories in the country were closed, and industrial production fell sharply. The famine of 1921-1922 swept the country, millions of people died from disease and lack of food.
In the United States, many of those who most wanted to help Soviet Russia were the recent emigrants from the Russian Empire , including thousands of Jews . Many of them worked in American sewing workshops and participated in the growing union movement in New York . The most powerful textile unions were the United Sewing Union of America (ACWA) and the Sewing Union (ILGWU).
One of the most influential trade unionists was Sidney Hilman , born in 1887 in вagar , Lithuania (then part of the Russian Empire ). Even in his youth, Hilman became a Marxist and since 1903, as a member of the Bund and the Menshevik wing of the RSDLP, he took an active part in the revolutionary movement [1] . It was on his initiative that the Russian-American Industrial Corporation was founded to import sewing machines in Soviet Russia and exchange experience in organizing industrial production.
Founding of the Corporation
The idea of creating a corporation originated in the summer of 1921. Already this year, an exemplary industrial colony was formed in the Kuznetsk Basin in Western Siberia under the leadership of IWW leader William Heywood and the Dutch communist Sebald Rutgers [2] . Thanks to the contribution of American technology to organizational know-how at the Kemerovo coal mines, labor productivity increased tenfold, which aroused the interest of Soviet officials and caused the spread of the production program in other industries [2] .
The idea of creating a similar joint venture in the field of clothing industry was put forward by Hilman [3] . He spent more than a month in Soviet Russia, studying the situation in which her textile industry was located [4] . Shocked by hunger and devastation, Hilman began to advocate the immediate allocation of financial assistance to the USSR, believing that the injection of foreign capital is crucial for the restoration of the Russian industrial base [5] .
Hilman proposed expanding the Kuzbass model and expanding the application of American manufacturing practices and technologies [6] . This proposal has been formally approved. Hilman had a personal conversation with Vladimir Lenin , in which they clarified the details of the organization of the joint venture [6] .
Hilman and Lenin signed a formal agreement, choosing nine plants for the project - six in Petrograd and three in Moscow . The main condition was to attract $ 1 million from the United States [7] . Hilman said in an interview with the Izvestia newspaper before leaving that this initiative would ultimately go beyond the garment industry and encompass other industries [6] .
The issue was referred for discussion at the V National Assembly of the United Union of Garment Workers, held in Chicago in May 1922, and was approved there [8] . Speaking to union members, Hilman accused the nations of the League of Nations of a systematic campaign aimed at “ forcing Russia to submit to the dictates of international financiers ” and said that to provide or not to help Soviet Russia means not to advocate for or against Bolshevism , but to be “ for or against the killing of millions of people ” [9] . Hilman's report was warmly greeted with applause, and plans to create a new international company quickly came to fruition [9] .
Documents for the official registration of an enterprise in the United States were filed in Delaware June 2, 1922 [10] . The authorized capital was formed at the expense of union members who purchased shares of RAIK at a price of $ 10 each [6] . The sale of shares was not a donation, but an investment , the bulk of which was to be insured by Lloyds of London [11] . The office of the corporation was in New York [12] .
The formation of the RAIK was approved by the leader of the Socialist Party, Eugene W. Debs , who was released from prison six months earlier. He noted that the low share price allowed workers to “invest in this most timely and laudable enterprise, in accordance with their financial capabilities, as well as contribute to America’s work to restore Russia and ensure the highest level of human well-being around the world” [12] .
Development
After the approval of the RAIK program by the congress of the United Union of Garment Workers, Hilman returned to the USSR in the summer of 1922 to settle organizational issues [13] . He concluded contracts with state economic planning bodies: with the Labor and Defense Council , which allowed the RAIK to conduct business with various Soviet institutions, and with the Supreme Council for National Economy , which provided insurance to the RAIK and undertook to pay dividends in the amount of 8% of the invested funds, in the event that either party considers it necessary to terminate the company after a three-year trial period [13] .
The first investment by RAIK was the import of small parts of machines and other equipment. Deliveries began in August 1922 [13] . Despite promises to raise $ 1 million to fully finance the corporation, this amount was never collected, although an initial payment of $ 200,000 was made in early 1923 [13] .
The activities of the RAIK were regulated by the Control Council of nine members, seven of whom were Soviet citizens because of the unequal financial obligations of the two parties to the enterprise [13] . The day-to-day management of production capacities of the RAIK, however, was largely handed over to American skilled workers and experts, and the introduction of American production methods into backward Russian industry was one of the main reasons for accessing the program from the Soviet regime [14] .
The nine original plants provided by the RAIC by the Soviet government were to be expanded to a network of fifteen enterprises across the country in accordance with the terms of the contract [15] . These factories were to produce a variety of consumer goods, including shirts, coats, suits, raincoats, underwear, caps, gloves and other fabric products [15] . Both Soviet and American workers worked in the factories, most of whom were emigrants from Tsarist Russia [15] .
Ultimately, investments exceeded the $ 2 million mark, and RAIK production expanded to 34 plants, which employed 17,500 people [16] .
Dividends were paid to shareholders twice. The initial partial payment of 3% was paid at the end of 1923, covering the first half of the production activity. The second payment of 5% was received in January 1925, covering the period of 1924 [17] . In the news coverage of the last payment, it was stated that the total number of RAIK shareholders was 5,500 people [18] .
Termination
The restoration of the Soviet economy with the help of market-oriented new economic policies has reduced the need for external capitalization of light industry. The activities of the RAIK, respectively, were discontinued by the end of 1925 [19] . The value of the company in the early years of NEP was significant: its factories worked in eight cities and produced more than 20% of the total production of Soviet clothing in those years [19] .
In addition to reducing the Soviet Union's need for foreign investment in the production of consumer goods, one of the factors contributing to curtailing the RAIK was the financial insolvency of the American side. Budget of the union The personal finances of its members were depleted during the protracted strike of 1925 [19] .
One way or another, the activities of the RAIK had long-term consequences. The corporation helped streamline financial relations between the Industrial Bank of Moscow and two banks belonging to the United Union of Apparel Workers of America: the United Trust and Savings Bank of Chicago and the United Bank of New York [19] . These ties made it possible to transfer additional funds from workers in America to their families in the Soviet Union, with more than $ 9 million transferred in this way by early 1925 [19] . This greatly eased the difficult economic situation of Soviet citizens trying to restore their lives in the conditions of economic chaos.
See also
- Amtorg Trading Corporation
- All-Russian Cooperative Joint Stock Company (ARKOS)
Notes
- ↑ Steven Fraser, Labor Will Rule: Sidney Hillman and the Rise of American Labor. New York: The Free Press, 1991; pp. 14-15, 18.
- ↑ 1 2 Philip S. Foner, History of the Labor Movement in the United States: Volume 9: The TUEL to the End of the Gompers Era. New York: International Publishers, 1991; p. 311.
- ↑ The Russian-American Industrial Corporation for Aid in the Economic Reconstruction of Russia: Prospectus. New York: Board of Directors of the Russian-American Industrial Corporation, 1922; pp. 3-4. ("RAIC Prospectus")
- ↑ RAIC Prospectus, p. four.
- ↑ RAIC Prospectus, pp. 4-5.
- ↑ 1 2 3 4 Foner, History of the Labor Movement in the United States: Volume 9, p. 312.
- ↑ Foner, History of the Labor Movement in the United States: Volume 9, pp. 311-312.
- ↑ Advance, issue of June 2, 1922, cited in Foner, History of the Labor Movement in the United States: Volume 9, p. 311.
- ↑ 1 2 Foner, History of the Labor Movement in the United States: Volume 9, p. 313.
- ↑ RAIC Prospectus, p. 3.
- ↑ Foner, History of the Labor Movement in the United States: Volume 9, p. 314.
- ↑ 1 2 "Russian-American Industrial Corporation Endorsed by Debs," Appeal to Reason [Girard, KS], whole no. 1388 (July 8, 1922), p. 3.
- ↑ 1 2 3 4 5 Foner, History of the Labor Movement in the United States: Volume 9, p. 315.
- ↑ Foner, History of the Labor Movement in the United States: Volume 9, pp. 315-316.
- ↑ 1 2 3 Foner, History of the Labor Movement in the United States: Volume 9, p. 316.
- ↑ In JSTOR Tony Michels, "Exporting Yiddish Socialism: New York's Role in the Russian Jewish Workers' Movement," Jewish Social Studies, vol. 16, no. 1 (Fall 2009), p. 20.
- ↑ Foner, History of the Labor Movement in the United States: Volume 9, p. 317.
- ↑ Foner, History of the Labor Movement in the United States: Volume 9, p. 318.
- ↑ 1 2 3 4 5 Foner, History of the Labor Movement in the United States: Volume 9, p. 321.
Literature
- AA Heller, "A Program of Reconstruction," Soviet Russia, vol. 7, no. 9 (Nov. 1, 1922), pp. 230-232.
- Robert Minor, "A Splendid Opportunity," Soviet Russia, vol. 7, no. 11 (Dec. 1922), pp. 301-303.
- LI Prokova, "VI Lenin and the Russian-American Industrial Corporation" (VI Lenin and the Russian-American Industrial Corporation), CPSU History Issues, No. 4 (1964). —In Russian.
- "Our Workers Investing in Russia," The Literary Digest, vol. 74, no. 2, whole no. 1681 (July 8, 1922), p. 13.
- The Russian-American Industrial Corporation for Aid in the Economic Reconstruction of Russia: Prospectus. New York: Board of Directors of the Russian-American Industrial Corporation, 1922.
- Der Wiederaufbau Russlands und die Aufgabe der Arbeiterschaft: Eine Erläuterung der Pläne und Ziele der Russian-American Industrial Corporation. (The reconstruction of Russia and the task of the working class: an explanation of the plans and objectives of the Russian-American Industrial Corporation) New York: Russian-American Industrial Corporation, 1922.
- Sidney Hillman, Report on the Current Status of Russia. (Speech on the current situation in Russia) New York: Board of Directors of the Russian-American Industrial Corporation, nd [c. 1923].
- The Russian-American Industrial Corporation: Report to the Board of Directors and Stockholders on Conditions in Soviet Russia and Contracts. New York: Russian-American Industrial Corporation, 1923.
- Report of the Directors and Financial Statement Submitted to Second Annual Meeting of Stockholders of the Russian-American Industrial Corporation, Feb. 26, 1924. New York: Russian-American Industrial Corporation, 1924.
Links
- Tim Davenport (ed.), Russian-American Industrial Corporation (1922-), Early American Marxism website, via Marxists Internet Archive, www.marxists.org/