W. de Henning’s Position on the Privatisation of State-Owned Metallurgy

Abstract

The formation of metallurgy in Russia occurred during the Northern War, which predetermined the dominance of state ownership in this sector of the economy. During the end of the war, Peter I embarked on a policy of privatising the state-owned industry. The regulatory and legal basis for privatisation was the Berg Privileges of 1719. However, having begun the policy of transferring state-owned factories to companies of private industrialists, Peter I was not consistent. He thought about the development of the state-owned metallurgy of the Urals and, at the same time, considered the possibility of its transfer to private industrialists in the future. This article examines the position of W. de Henning on the issue of privatisation. During his leadership of the local mining industry in 1720–1722, V. N. Tatishchev was the first to raise the question of the need to privatise the state-owned metallurgy of the Urals. In 1722, Peter I appointed Henning as head of the state mining industry of the Urals, giving him extensive administrative power. In 1722–1724, Henning managed to reconstruct the old state-owned factories and build new ones – Yekaterinburg, Polevskoy, Pyskor, and Yagoshikha. Meanwhile, in 1724, Tatishchev presented to Peter I projects for the privatisation of state-owned factories in the Urals. The emperor “accepted these projects as beneficial ones” but at the same time, developed a complex procedure for considering privatisation issues in the relevant central and local state bodies. In 1724, Tatishchev’s projects received negative reviews from the Berg Collegium and Henning, who pointed to high profits from state-owned factories. At the same time, Henning proposed his projects which either meant the transfer of state-owned factories to the company of Peter I, A. D. Menshikov, F. M. Apraksin, etc., or the transfer of Pyskor plants to him, A. Stroganov, and M. Turchaninov. However, Tatishchev and Henning’s discussion of the projects ground to a halt due to the death of Peter I. Again, the question of privatisation of the state-owned metallurgy of the Urals arose during the so-called “sales crisis” of 1729–1732 and was already post-suppressed by Henning. Henning’s privatisation projects were discussed in the Senate, the Berg Board, and the Monetary Commission. In 1733, a Commission on state-owned factories was established. However, in 1732, the “sales crisis” was overcome, and Henning abandoned his privatisation projects. He finally came to the conclusion that state ownership in metallurgy was no less effective than private ownership and began a new stage of construction of state-owned factories in the Urals. The same position was held by Tatishchev, who replaced Henning in 1734–1737 as head of the Ural plants. The subsequent history of privatisation campaigns of the second half of the eighteenth – early twentieth centuries confirmed the validity of this conclusion, with considerable state ownership in metallurgy not only remaining but also expanding.