Conditions for opening steamship routes in Russia’s Baltic provinces and Finland 1837–70
Russia’s Baltic provinces and Finland differed from Russia’s interior areas due to their long coastline. On the one hand, it helped to connect those areas, but on the other hand, the Baltic Sea played a crucial role in connecting Russia to Europe. In 1837–70, 16 passenger steamboat routes had been established that called at Estonian ports. Due to Estonia’s geographical position, entrepreneurs from Turku, Riga and St Petersburg as well as from Tallinn operated those lines. With the exception of studies on migration policies, the roles of institutions and legislation have not been addressed in depth in maritime history studies. Therefore this article focuses on the following questions: how legislation impacted the establishment of steamboat companies, and how the state organised steamboat traffic.
Steamship companies were the first transportation organisations to operate as joint-stock enterprises. Joint-stock laws started developing in Russia in the first decades of the 19th century. The first legislation regulating steamship companies that operated between Baltic Sea ports was adopted in 1835. A comprehensive act regulating all joint-stock companies followed in 1836. According to the 1836 law, which was in force until 1917, the establishment of a joint-stock company depended a great deal on the state. Both the tsar and the Ministry of Finance had to approve the company statutes. Both had the right to make changes in the statute’s clauses or in proposals for capital formation. The Grand Duchy of Finland followed its own separate path. Joint-stock companies in Finland were exempted from this legislation until 1864 because Finland adhered to the Swedish Law of Entrepreneurship and Shipping from the 18th century. Due to those circumstances, personal relations and the company’s own contribution played a key role in joint-stock companies.
Statutes approved by the Ministry of Finance and the tsar provided companies with the opportunity to apply for benefits and prerogatives like tax relief or monopoly rights for certain routes for fixed time periods. Such various supportive measures were highlighted to foster the development of steamship connections on routes of national importance. The state could take part in the establishment process as well, as the case of the Osilia steamship company demonstrates. In cases where there was insufficient establishing capital, and to encourage the establishment of companies, the state bought a certain number of stocks in the company.
Russian merchant shipping legislation and organisation was introduced for the first time in contemporary Estonia at the beginning of the 18th century after the Great Northern War, whereby Estonian territory was incorporated into Russia. The organisation of both merchant and passenger shipping was divided between different authorities in Russia. The aim of establishment ministries in the first decade of the 19th century was to set up a system where tasks were clearly divided and unambiguous. In reality, this goal was not put into practice for the whole system. Hence merchant shipping was still divided between the Ministry of Finance, the Ministry of the Navy, and the Ministry of Internal Affairs, in addition local authorities. Local authorities became the link between the companies and state authorities because they were familiar with local circumstances and could provide consultative information.