The economy of the eastern Caucasus performed unevenly in the
first generation of Russian rule. Of course, there were obvious nega-
tive factors stemming from the competition for political hegemony,
but there were a variety of other problems as well. The overall vol-
ume of trade increased but not impressively. Russia's Caspian trade
and its overland trade via Tbilisi, intended to be a center for dealings
with western Asia, both showed a substantial excess of imports over
exports. Tariff policy was part of the problem. Russian authorities
kept most of the tariffs on trade among the east Caucasian provinces
and with European Russia to provide sorely needed revenue, despite
the complaints of merchants. These tariffs were not eliminated until
the 1830s. While tariffs on trade with Iran do not seem to have been
a problem in general, the brief experiment with taxing the export of
petroleum products from Baku brought a sharp decline in purchases
by Iranians and led to the repeal of that tax. However, there was no
reconsideration of the increased price charged for the oil, which led
to a slump in exports to Iran. Periodic bans on trade between Baku
and Iran during the first war also seem to have done lasting damage
to the city's commercial contacts. Baku long gave the impression of
being a lesser commercial center, actively involved in trade but not
especially prosperous. In the earliest years of Russian rule, foreign
merchants were required to pay their customs duties in Tbilisi be-
cause the only customs office was located. This was a considerable
inconvenience for many merchants. Even after a few more customs
posts were established along the Caspian coast, problems continued
to exist. Also, as long as parts of the region were ruled by khans,
tariffs were not standardized since khans generally imposed smaller
duties than the Russian authorities. Finally, the Treaty of Torkman-
chai (1828) set the rate at 5 percent for the entire region. Russian
authorities knew that smuggling was widespread, but they lacked the
means to prevent it.
Difficulties in transportation compounded the region's economic
problems. Even though there were large quantities of fish to be caught
in the Saleyan fisheries and a strong demand for fish in the markets
of European Russia, the transportation cost of fishing in Saleyan
from a base of operations in Astrakhan pushed the market price un-
competitively high, with the result that the much sought after fishing
concession ran at a loss for years. Tbilisi's commerce suffered from
similar problems, despite the high hopes of selling Russian products,
above all textiles, to Iran and the Ottoman Empire via Tbilisi. The
difficulties of communication between Russia and the Georgian capi-
tal were much the same as they had been before the Russian takeover.
The Consequences of the Struggle 151