Plums

Merchant Enterprise and the Development ofthe Phm-Based Trades in Serbia, 1847-191T

B% MICHAEL PALAIRET

FOR the smaller and more remote economies of continental Europe theeconomic history of the pre-1914 era should perhaps be seen most con-structiyely as one pf a commercial revolution on the fringe of the industrial-

izing centre. One of t ie mainsprings of this process must surily have been thetremendous expansion, within the area which naay be described broadly asMediterranean Europe, of the export of specialist and industrial crops, to thecountries of the industrial centre. A case study of this process is afforded by thedevelopment of trade iin the produce of the plum orchards of Serbia, which sup-

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582

PLUM-BASED TRADES 583

plied the expanding nineteenth-centur\- world market for prunes. Starting fromvirtually nothing in the i86o's, Serbia's prune export became the largest in theworld. In 1903-7, Serbia exported 35,400 tonnes of prunes per annum_, while herprincipal rivals on the international market, the U.S.A. and Bosnia-Hercegovina,exported 22,400 tonnes and 21,800 tonnes a year respectively.^ This developmenthad profound effects on the small Serbian economy, and it is the object of thisarticle to quantify- them, to examine the means by which Serbian plums wereplaced on the world market, and to assess the impact of the plum-based tradeson the evolution of the country's economic institutions.

At the moment no serviceable and comprehensive economic histor\' of Serbiaexists to which the reader may be referred for background on this subject, so it istherefore necessary to outline the salient features in the experience of the pre-1914 Serbian economy.^ Serbia was an almost purely agrarian country through-out this period. As late as 1910, 81 • 4 per cent of the 2 • 9 million inhabitants livedin the villages. Mass small-scale landowTiership, provided for in homestead lawsof 1836 and 1873, was regarded as one of the very bases of the state's existence.*Although a rural proletariat was beginning to emerge, the census of 1905 showedthat the land was still divided remarkably evenly, as there were about 370,000holdings, whose mean size was about 5 • 3 hectares, and 94 per cent of privateland was in the hands of holders of 50 hectares or less.*

Thin settlement in the early years, and poor communications, resulted in thepredominance of pastoral farming, and as late as 1862, this was refiected in anexport trade at least 80 per cent of whose value was composed of pastoral produce.The produce of cultivation represented less than 5 per cent.^ Most peasantscultivated no more of their land than was needed to supply domestic require-ments. But the inexorably mounting pressure of settlement forced farmers tocultivate a rising proportion of their lands and to market cultivated rather thanpastoral products. The process was facilitated by the modernization of waterwayand land communications. By 1911, exports from the pastoral sector had fallento less than 25 per cent of all farm exports," and even these contained a significantcomponent of meat which had been fattened on the produce of the arable.

Not only were farm exports profoundly changed in structure, but also their^ For Serbia, see sources for Table i below, p. 588, for the U.S.A. (1904-7 only). Department of Com-

merce, Aaíiíííca/Jèrireci ofi/is U.S. in igif (Washington, D.C. 1915), p. 419, which also indicates (p. 155)that California was the preponderant source of supply, and for Bosnia, see Report for the year igo8 on theTrade andCommerae of Bosnia and the Herzegovina (Par!. Papers, 1909, xcn), p . 17.

^ However, by the time this appears in print, the gap may well have been filled by work of Dr John P>..Lampe, now nearing completion.

^Jelenko Petrovic, Prelaz Seljaka u Varosi i Radnike (The transfer of peasants to the towns and intoworkers) (Belgrade, 1924), pp. 7 if. (Hereafter Belgrade is assumed to be place of publication unlessotherwise indicated.)

* The basis for this calculation is data supplied to the Belgrade Chamber of Industry by the statestatistical direction and printed in Industrijska Komora Kx. Srbije, Izvestaj 0 radu i stanju industrije u igis iI9'3 godini (Report on the work and condition of industry in 1912 and 1913) (1914), p. 90, as modifiedby me in my thesis 'The Influence of Commerce on the Changing Structiire of Serbia's Peasant Economy,1860-1912' (unpublished Ph.D. thesis, university of Edinburgh, 1976), table i.io and note, pp. 42-3.

* Calculated from 1862 export statistics in Drzavopis Srbije (Statebook of Serbia), i.6 From export statistics for 1911 in Srpske JVovine (Serbian News) (hereafter, S.JV.), 23 Feb. 1912.

584 MICHAEL PALAIRET

aggregate volume per head of the farm population appears to have risen byabout 55 per cent between 1861-6 and 1902-6, before falling slightly in conse-quence of Austro-Hungarian trade sanctions in the period 1906-1 o. The frailtyof Serbian statistical materials discourages any attempt to estimate the growth oftotal farm production before World War I, but farmers' market production wasgrowing somewhat faster than the export trade, and their purchasing powerwas growing significantly faster still.

Commercial development imparted a sufficient dynamic stability to the ruraleconomy to hold the peasantry within the farming sector, and, as tariffs werelow till 1905, stimuli for the development of modern industry (except in respect offood processing) were rather weak. The gross output of mechanized industr)'- aslate as 1893 has been calculated at only 21 raillion dinars (,¿'840,000) and eventhis was largely comprised of mill inputs and the turnover of the state tobaccomonopoly. Nevertheless, industrial output had grown fourfold by 1911, by whichtime it represented the estimated equivalent of about 15 per cent of C.N.P.^ Butthis exaggerates its significance, for half this output was still of the basic foodindustries whose value added was much smaller than gross production.

It is therefore perhaps surprising that the only scholar to have subj ected Serbia'seconomic development to a serious and objective modern analysis has concen-trated on this rather inconsiderable industrial sector and on the modernizinginstitutions which affected its emergence. This approach was underpinned bythe declaration that: "Industrialization, after all, lies at the heart of the mostcommonly accepted definition of economic development. . ."* The agriculturalsector is treated essentially as a backward backdrop to the industrializationprocess. The implicit infiuence underlying this industrialization approach isthat of Gerschenkron's model of extreme backwardness, in which only a policyof substitutions (with a leading role accorded to the state) is sufficient to initiatethe first industrial "spurt" on which the development process then depends.^

The Balkan states—^particularly Serbia—forbore to exert sufficient pressureon their farmers to induce a "spurt" strategy. This, at any rate, prevented themfrom doing the harm to agriculture which the Russian experience shows to havebeen unavoidable. And this perhaps was just as well, for the strategy may(largely) fail, leaving behind little but an artificially retarded agrarian sector, asthe Bosnian experience under Habsburg rule would seem to demonstrate." So,unless agriculture had been irredeemably stagnant, the "spurt" strategy could

•*• See Palairet, thesis, table i .8, p. 37. On the commercial war thestandard work is Dimitrije Djordjevic,Cannsh Rat Austro- Ugarske i Srbije, igo6—i i (The customs war of Austria-Hungary and Serbia, 1906—11 )(1962).

^ This conclusion, which must, however, be qualified by several caveats, is indicated by calculationsin my thesis, pp. 36—54.

*John R. Lampe, 'Financial Structure and the Economic Development of Serbia, 1878-1912'(unpublished Ph.D. thesis. University of Wisconsin, 1971), table 1.2, pp. 22—3, and p. i8. See also hischapter 'Serbia, 1878-1912', in Rondo E. Cameron, ed. Banking and Economic Development (New York,1973).

* Lampe, thesis, p. 20.^ The allusion is to A. Gerschenkron. Economic Backwardness m Historical Perspective (New York, 1963),

particularly the title essay and the study of early Bulgarian industrialization, and his restatement inEurope m the Russian Mirror (Cambridge, 1970), pp. 97-126. Dr Lampe's views are broadened to comprisean overview of Balkan industrial development, with an emphasis on demand side failure, in 'Varieties ofUnsuccessful Industrialization : The Balkan States before igi^.,'Journal of Economic Histoiy,iiKXV (1973), i.

* See Peter F. Sugar, Industrialisation of Bosnia-Hercegovina, 1878—1918 (Seattle, 1963).


as well have retarded as accelerated overall development. Now, although un-deniably ver)' backward by most criteria, Serbia's farm economy was by nomeans devoid of dynamism (and the same may be said ofthat of Bulgaria duringthe period which Gerschenkron analysed) . So a careful examination of thesources of growth and retardation within the agricultural sector may prove moreilluminating for the dynamics of development than an emphasis, possibly mis-placed, on industrialization or industrial "failure".

At least until the beginning of the twentieth centur}-, the driving force behindthis growth %vas not to be found in the basic cropping and stockraising systems.Though the arable surface probably expanded from the i86o's rather faster thanpopulation, on the one hand it is unlikely that yields per hectare improved, andon the other neither the structure of cultivation, nor the trend in grain prices,encouraged the application of much in the way of labour-substituting investment.Only after 1900 did farming systems undergo any perceptible improvement;then, according to the published state and Austrian consular statistics, cerealyields per hectare improved at an annual rate for wheat of 3 • i per cent, for maizeof 2 • 9 per cent, and for barley of 4 • 3 per cent.^

This was a very late development, but the Serbian farm economy was by nomeans stagnant in the meantime, thanks in part to the introduction of a range ofnon-cereal cash crops which are commonly, if erroneously, regarded by historiansas sidelines to the main effort of the farmers, and of which the plum was by farthe most important. The most significant aspect of such cash crops was that theyprovided a relatively high money yield in terms of land usage, and therefore analternative to, or a shortcut towards, intensification. Their adoption could beintegrated into peasant agriculture more easily than the complex techniques andorganizational changes required for the spread of integrated arable-livestockhusbandry. The experience of the Balkans, of Dalmatia, Bulgaria, and Mace-donia, as well as of Serbia and Bosnia, suggests that areas which successfullyadopted the cultivation of non-cereal cash crops (especially plums, wine, tobacco,opium, and olives) were associated v/ith above-average rural prosperity.

II

The spread of the plum was fairly rapid during the period from 1847 to 1908,though the estimates are necessarily approximate. There were, however, about13-4 million stands in Serbia in 1847, and about 25 • 8 million within the same

^ Bulgarian farm output appears to have grown at 2 per cent p.a. in 1892—1911 and at 4- 2 per cent p.ain 1924-39.—Â. Iaj-anoff. La Bulgarie Économique (Lausanne, 1919), p. 87; A. Cakalov, NadonalnijatDohod i Razhodna B'lgarija, 1324-43 (Sofia, 1946), p. 117. The sources of output growth are exammed inP. Tait, 'Bulgarian Agriculture, 1919-39' (typescript. University of Edinburgh, 1976).

^ Tabulated irs Palairet, thesis, p. 214.3 Based on statistics on 16 out of 17 nahije in Ùca Sreckov' List ' za Srbske êmljedeke (öica Srecko's broad-

sheet for Serbian agriculturalists) (hereafter C.i'. Lisf), 11 (1848), 7,50; 8, 58:9, 67:10, 74; 11, 87: 12, 90:13,98; 14,105; i5,132; 17; 19,147; 20, 155; 2Í. 161; 22,171; 83,178; 24, 186. Some include only plums,some itemize all fruit individually, some give only a total offrait trees. Where full details were given plumsaccoiinted for 90 per cent of all fruit trees, and the remaining figure were appropriately adjusted. Thefigure was then adjusted upward by 5-59 per cent to take account of Jagodina nahija, on the basis of :ts5-29 per cent share in the area under plums recorded in the 1867 census of cultivation, for which seesummary in \'ladioir Jaksic, 'Stanje Zemljoradnje u Srbiji' (The condition of agriculture in Serbia),Glasnik Srpskog Ucenog Drustva (Voice of the Serbian Scientific Society) (hereafter Glasnik S.V.D.),


area in 1897.^ Area statistics are much less reliable, for they are subject to improb-ably large year-to-year fluctuations, but the whole area under plums appears tohave increased from 98,000 hectares in 1897 to 150,800 in 1906-1 o, or by 53 • 9 percent. During the period 1900-8 mean yields were 28 quintals per hectare. Thus onthe assumption that yields per hectare did not change over time (the only possibleassumption in the absence of contrary information), the 1840's crop for the post-1878 area was about 142,500 tonnes, compared with 530,000 recorded for 1908.^

Plum growing is sensitive to climatic and soil conditions, and where thesewere adverse, yields were likely to be poor and too irregular to make it worth-while. This resulted in such a sharply defined regional concentration of plumgrowing that it is possible to speak of a "plum belt", covering about half thecountry.^ In 1904, for example, eight out ofthe 17 okruzi, into which the country-was administratively divided, in which dwelt 46 • 7 per cent of all farm pro-prietors, produced 86 -5 per cent ofthe crop.* The plum belt extended westwardfrom beyond the Bosnian frontier (the Bosnian plum-producing region beingcontiguous),^ and included the whole ofthe Sumadija, while its eastward limitwas the valley of the Great Morava river, on both sides of which there wasintensive plum cultivation.

The very substantial output ofthe plum orchards even in 1847 sustained onlya trifling export of plum-based produce, and most of it was used for the self-consumption ofthe producers. Inits raw state very little ofthe crop was saleable,for it was highly perishable, bulky in relation to its value, and voilnerable todamage on the rough roads it had to traverse by oxcart. The principal purposefor which the orchards were harvested was for distilling the frmt to a weakalcoholic spirit called rakija sljivovica, a task which was usually performed by theproducers themselves with crude distilling equipment of fairly general availa-bility.^ Though this process, which reduced the bulky, perishable plum to a stableconcentrate, made the product much easier to transport, it did not open the doorto more than a small regional commerce as no world market demand for rakijaexisted. There was some internal trade in it,' as well as an export which grew toa plateau level of 24,000 hectolitres in the late 1850's. Between 90 and 99 per centof this was sent to Turkey.^ But neither trade seems to have enabled producers

•"• The 1897 figure is the total for Serbia as in Statistika Kr. Srbije, xvi, 366, reduced by 415,000 stands inthe annexed territories (Vranje, Pu'ot, and Toplica okruzi, and Nis and Svrljig srezovi of Nis okrug), whichtogether account for only i • 6 per cent ofthe total.

^ For comparative reference, orchards in 1905 accounted for 11 • 2 per cent of total crop area. Calcu-lated from area and yield data in Statistika ... xvi, 92 (for 1897) ; Statistich Godisnjak Kr. Srbije (Statisticalyearbook ofthe kingdom of Serbia) (hereafter 5.G.), 1900, pp. 186-92; iS.G. 1901, pp. 225-30; 1903, pp.233-8; 1904Î PP- 253-8; 1905» PP- 243-8; 1906, pp. 243-8; 1907-8, pp. 243-54; k.k. Oesterr. Handels-museum, Serbien. Wirtschaftliches Verhältnisse. .. 1910 (Wien, 191 ï) (hereafter Handelsmuseuni, 1910). p. 13.

^ See map, on p. 582, on which is superimposed the boundary oîvery intense cultivation (upwards of 15stands per head of farm population) in 1897. However, its limits would be subject to perceptible year-to-year fluctuation.

* S.G. 1904, pp. 253-8.^ Cons.-Gen. Freeman, Report on the Trade and Commerce of Bosnia and ihe Herzegovina for IQ03 (P.P. 1905

LXXx\Î), p . 14.8 There were 20,729 distilling kettles in Serbia in 1867.—Drzavopis Srbije, v, 115.' Statisticki pregled saobracajmh rezultata Srpskih Drzavnih êleznica u igo8 god (Statistical review of the

traffic results ofthe Serbian State Railways in 1908) (1910), table xxx; also see Olga Sa\dc, Krusevac iAjegova Uticajna Sfera (Krusevac and its sphere of influence) ( 1969), p. 91.

^ S. Dj. Milosevic, IÔ/;'K« Trgovitia Srbtje od 1843-^3 godine (Foreign trade of Serbia from 1843 to 1875)(1902), p. 13.


substantially to monetize their crop. In the north-west of Serbia, according to areport of 1848, the consumption of rakija was enormous, but the entire output wasself-consumed, and in the view of the reporter the effective retiu'n to producersseemed hardly commensurate with the effort of producing it.^

Apart from liquor, the orchards provided the peasantry with a substantialsource of human food and, particularly when the crop was too large to disposeof otherwise, an important ancillary source of grazing. As land was still fairlycheap and abundant at mid-century, and as little care needed to be devoted tothe upkeep of the orchards, there was little pressure on the plum grower to divertthe resources they represented to alternative ends. But so explosive was the growthin the aggregate export of plum products after about 1865 that it is hard to doubtthat there was a good deal of repressed commercial supply available in the pre-ceding period. It was not on the basis oí rakija, however, but on two other stableconcentrates with a wide acceptability on the international market, prunes andsubsequently/ig^/ne^ (jam), that the ensuing boom in the export of the plum croptook place. These new products transformed plum raising from a peripheral non-money activity, which was maintained only for lack of presstu-e on the resourcesit used, to a high-yield, highly commercialized form of production which becameworth expanding energetically despite increasingly severe pressures upon landedresources.

All these concentrate products had a high ratio of value to weight. The valueof IOO kg. of wheat on Belgrade in 1901 was 13-65 dinars, whereas the sameweight of prunes traded at 32 dinars, pekmez fetched 43, and rakija, 90.* Railcarriage after 1884 may have facilitated the growth of trade, but the previousdependence on road transport does not appear to have inhibited it, other thanunder exceptional circumstances.* In 1904, 72 per cent of all prune exports leftthe country through the non-rail ports of Sabac and Obrenovac,^ much of thesupply ha^dng come up from the deep interior, rather than from the riverainplain, which was not an area of intense plum production. A'luch of this may havetravelled up to 100 km. by road.®

The course of development of the plum-based export trades is shown inTable i. Much the most significant element in the impressively expansionarytrend was the export of prunes. In 1904, as shown in Table 2, the prune exporttrade yielded 149 dinars (nearly £6) to each of the 66,700 producers within theplum belt, while the sale of fresh plums to exporters, consumers, and jam manu-

^ C.S. List', 2 March 1848, 67-8.^ F. Kanitz, Serbien. Historisch-ethnographische Reisestudien aus den Jahren 185g—68 (Leipzig, 1868), p . 594;

R. T. Nikolic, 'Poljanica i Klisiira. Antropogeografska Pi-oucavanja' (Poljanica and Klisura. Anthropo-Géographie study) ; JVasetja Srpskih Zemalja (The settlements of the Serbian lands) (hereafter JV'.S., .), m(1905), 48; Ljubica Trajkovic, ed. Valjevo i Okolina (Valjevo and environs) (1956), p. 48; 'Susenje Sljiva,n' (The drying of plums, n), Videlo, iv (1883), 17.3, col. 3.

ä S.G. 1901, pp. 272, 377, 279.* Such as heavy flooding in very remote areas, see B. Jela\'ich, 'Serbia in 1897. A report of Sir Charles

yiliot', journal of Centrat European Affairs, :s.\in (1958), 188.^ Statistika Spoljasne Trgovine Kr. Srbije ... igo^ (Statistic of the external trade of the kingdom of Serbia

...1904), pp. 186-7.* Obrenovac WEIS regarded as the outport of Valjevo, the main prune-trading centre of this region.

60 km. from the Sava river. The Valjevo—Obrenovac road sustained a very active export trafiSc.—Belgium. Recudí Consulaire, Lxxv (1892), 60-r. A substantial part of this originated in the Sokol region.Lj. Pavlovié, 'Sokolska Nahija' (Sokol region), Xaselja i Poreklo Stanovnistva, xxvi (1930), 357.


Table i. Gross Export of Plums and Plum Products, i843¡5i-igo'/jiiAnnual export {in ooo tonnes)

Period

1843-511852-611862-61867-711872-5

1879-811882-61887-911892-61897-19011902-61907-11

Fresh*n.a.n.a.0 - 2

0 - 30 - 3

n.a.0-70-95-7

'4-326-0

' 4 -7

Prunes

0-10-1

0 - 52 - 2

5-0

— VVa13.7

25-626-722-3

33-734-031-6

Pekmezn.a.n.a.

———

ir period—O - I

o - i

2 - 0

3-77-9

13-1

8-9

Rakijaf0 - 51-8

' - 92 - 0

2 - 4-no data

I - 2-2 - 60-4-2-80-3-2-90-4-3-10-6—3 - 60-3-5-30 - 3 -

• Totalt{equivalent

in fresh plums)

n.a.n.a.12-3i8-931-6

56-7- 63-795-7-108-5

104-1-118-098-1-112-4

166-3-182-2200-8-227-6163-I-

Value{000 dinars) §

n.a.n.a.

6901,2303,210

5,160- 6,0I0;¡7,700— 8,6607,304- 8,2406,580- 7,820

13,170-14,24013,220-14,780'5.-520-

Sources ; ( i ) Export statistics. To 1861 : S. Dj. Milosevic, Spoljna Trgovina Srbije od 1843-75 godine ( 1902).1862-75: Drzavopis Srbije, i, n, m, vi, x. 1879-1910, 1912: Ministarstvo Finansija, Carinsko Odeljenje(from 1909 Carinska Uprava) Pregled Spoljne Trgovine Kr. Srbije za 1888 and similar titles, with 1884-7data amplified in Drzavopis Srbije, xiv, xv. For 1911, see Srpske Novine, 23 Dec. 1912. (2) Turnover ofrakijain Cacak and Uzice okruzi, 1898-1908, see table headed 'Kolicina proizvoda premerenih naopstinskim merilima u 1898 godini, a. Pregled po okruzima', S.G. 1898, pp. 423,/iai«ffl.

* Includes all fresh fruit but is composed predominantly of plums.f The higher estimate in each case includes an allowance for smuggled exports oîrakija, after the appli-

cation of near prohibitive tariffs on Serbian rakija entering Turkey. Each year for which there are data(1898-1908) very large amounts oîrakija were sold on the markets in Uzice and Öacak okruzi. Local pro-duction could not have sufficed to supply these markets on the scale observed, so a large part of what wassold must have travelled in a south-westerly direction, which can only mean it was on its way to Turkey.The annual turnover oîrakija in these two okruzi has therefore been xised as an approximate measure ofthe smuggling trade, and estimates have been made for the period 1880-97 by interpolation between theactual pre-1880 rakija export and the estimated illegal export of 1898-1908.

% Calculated by multiplying prune and/leime« export volumes by 3 - 63 and 3 - 36 and those for rakija by5-29 (1904 figure). See Palairet, thesis, pp. 478, 506.

§ Higher figure in each case takes smuggled rakija at unit price of declared exports.|: Excluding fresh fruit.

facturers, and the sale of home-produced rakija sljivovica yielded as much againand more, so that total receipts fi-om plum growing and processing amounted to307 dinars for each of these farmers. By 1902-6 plum-based products amountedto at least 19-6 per cent of Serbia's total exports. (Within the plum belt itself thispercentage would nearly double.)

It is nevertheless evident that the growth of export volume so far outpaced thegrowth of output that it made significant inroads into the level of per capitadomestic consumption of plum produce. Between 1847 and 1908, domestic con-sumption, the residual after deducting exports from production, rose from about140,000 tonnes to 231,000-268,000 tonnes of raw plum equivalent, mainly asliquor. In the former year, population was about i - 093 million, in the latter,about 2-841 million, implying that per capita consumption fell from 128 kg. to81-94 kg. However, more than two-thirds of actual exports could have beenachieved without a fall in consumption, and, as much of the crop had been under-utilized in the earlier years, to the point that it had been regarded virtually as afree good, it may be doubted whether the sacrifice of utility from self-consump-

PLUM-BASED TRADES

Table 2. The igo4 Plum Crop, as at Farm Gate

589

Total cropPrunes soldRakija soldSolàîoi pekmezSold fresh

468,000 tonnes47,000 tonnes

173,000 hl.51,000 tonnes27,000 tonnes

Self-consumed, fresh and rakija

Prunes

N.W. Serbia* 272W. Sumadijat 139E. Sumadijat 57Plum belt § 149Rest of Serbia 24Serbia 103

Total

Percentageof crop

—36-419-5

5"9l27.3

1 0 0

REGIONAL BREAKDOWN

Cash income per producer from:

Rakija Plums{dinars)

74 24149 71lOI 65104 5335 978 37

Total

370359223

30768

218

Value{m. dinars)

—10-98-3

3 '9—

23-1

Mimher of producers

Absolute

22,20016,90027,30066,70039,200

105,900

As percentageof rural

households

513340

412 1

30

Sources: the above was calculated from Serbian state agricultural production and output value, dis-tilling, export tradej market scales and price statistics for 1904, as well as miscellaneous datafor establishingparameters and ratios from Miljutin Savic, Sljiva. Gajenje i Upotreba sa Predlozima za Unapredjenje (Plums.Rearing and utilization with proposals for improvement) (1900), pp. 86, 126, 127, and other contem-porary sources. Considerations of space preclude setting out source data and calculation procedures,which may, however, be referred to in my thesis, tables 7.7-8, and in app. to ch. vii, pp. 505—19, wherethe data are broken down on an okrug-hy-okrug basis.

* Okruzi of Podrinje and Valjevo.f Okruzi of Belgrade, Rudnik, and Cacak.{ Okruzi of Kragujevac, Mora va, and Krusevac.§ North-west Serbia and east and west Sumadija.Gerarat note: prices and outputs are calculated to exclude any process or value addition other than by

the farmi sector. The year 1904 was selected solely on the grounds of statistical convenience (being theonly year for which both port-of-exit data and rakija statistics are available). In relation to 1902-6, it wasa year of above-average output, but of 5 • 2 per cent worse-than-average export value on account of lowprices.

tion was perceptible ; once the opportunity arose, producers were probably onlytoo eager to monetize part of their existing crop, and subsequently expandedcultivation as their cash needs increased. So in addition to their earnings throughthe market, plum growers continued to derive a diminished but still substantialnotional income from self-consumption of ra%v fruit and rakija, amounting in1904 to 27 per cent of the crop.^

This expanding sector of the Serbian economy was observed by many con-temporaries to give rise to considerable prosperity in the plum-growing \dllages,though to a precarious dependence on a highly volatile harvest.^ It was also veryusefully located, for the orchards throve in the hill villages rather than in the

1 See Table 2.^ See, for example, D. Jovanovic, 'U Carstvu Sljiva i Rakije' (In the empire of plums and rakija),

PrivredniPregled, III (1923), 46.3 ; Lj. Pavlovic, 'Kolubara i Podgorina' (Kolubara and Podgorina regions),jV.5.;^, IV (1907), 420; T. Radivojevic, 'Lepenica. Antropogeografska Ispitivanja' (Lepenica. Anthro-pogeographic examination), jV.Á'. . vn ( 1911 ), 317 ; Mihailo Avramovic, Mase Seljacko Gazdinstvo (1928),pp. 24-5.


fertile river valleys,^ and supplemented the product of the arable, instead of com-peting with it for space. First-class arable (44 per cent of all arable) on the eve ofWorld War I was valued at 1,980 dinars per hectare, and orchand land (un-planted) at only i ,200 dinars, the price at which second-class arable was valued.-Thus the orchards displaced the produce of only relatively unproductive land.Notwithstanding the inferior land at their disposal, plum-growing peasants inthe plum belt probably earned larger cash incomes than the average peasant whoraised cereal and livestock for the market. Within the eight principal okruzi ofproduction, in 1904, one farmer in 2 4 raised plums commercially from i -63hectares of land^ and, after setting aside plums and rakija for self-consumption,earned 307 dinars from the crop. The mean landholding was of 5 • 3 hectares* andthe 5-hectare peasants in 1911 who raised cereals and livestock took 290 dinarsfrom this produce in cash,^ but this would have realized only about 181 dinarsat 1904 prices.*

The achievement of relatively high cash yields from plum growing, despite thelow basic quality and value of land suitable for orchards, resulted from therelatively intensive application of capital and labour to this land. To the 1,200dinars per hectare of unplanted orchard land value should be added 750 dinarsof capital formed by the planting and rearing of the stands upon it. This made thevalue of the orchard as a whole about equal to that of the same area of first-classarable or i -41 times the value of arable land in general.' Moreover, the produc-tion of plums and their derivatives was probably also more intensive of labourthan was arable farming. This was not because of any great intensity of labourinput in maintaining and harvesting the orchard—indeed, contemporariesthought the reverse.^ But a significant part of the earnings from the plum camefrom processing it on the farm to prunes and rakija, which were normally manu-facured, not by the trade, but by the producers themselves. In 1904, a tonne ofplums sold as raw material realized 47^9 dinars, but, as prunes, fetched 64dinars, and as rakija, 91. As a result, on-farm processing earned for the producersabout 6 • 7 million dinars or 29 per cent of their cash receipts.

I l lThe transformation of plum raising through the introduction of the large-scaleexport of prunes was by no means a spontaneous reaction on the part of producers

1 Lj. Pavlovic, 'Antropogeografija Valjevske Tamnave' (The anthropo-geography of ValjevskaTamnava), N.S.^. viii (1912), 443; S. M. Mijatovic, 'Temnic. Antropogeografska Studija' (Temnic. Ananthropo-geographical study), N.S.^- ni (1905), 291; K. Jovanowc, 'Gornje Dragacevo . . .' (UpperDragacevo...), N.S.^. v (1908), 335.

2 Srpski Centralni Komitet, Srbija u imovnonipogledu pre, za même, iposle Svetskog Rata, 1Q14-18 (SerbianCentral Committee, Serbia in its property aspect before, during, and after the World War, 1914-18)(Geneva, 1918), pp. 36-7.

^ The area figure is derived from the 1905 land census, see S.G. 1907-8, p. 238.* See above p. 583. ^ Avramovic, op. cit. p. 35.* Adjusted according to index of export prices, 1862-1912, see Palairet, thesis, table 1.8, col. 6, p. 37.' Srpski Centralni Komitet, op. cit. pp. 36-7. This is in line with the results of the 1905 land survey,

which indicates that m the eight plum-belt okruzi, orchards were worth i • 53 times as much as the samearea of arable. S.G. 1907-8, p. 241.

* 'Sljivarska Trgovina' (The plum trade), Trgovinski Glasnik (hereafter T.G.), v (1895), 219, i, col. i ;Radivojevic, loc. cit.

PLUM-BASED TRADES 59I

to the need to monetize the produce of their orchards, or of merchants seeking tobroaden their turnover beyond the constraints which limited the trade in rakija.This trade was in the hands ofthe wine merchants, and these do not appear tohave diversified their activities;^ indeed, when their trade with Turkey washindered after 1879 by the imposition of heavy import duties, their reaction wasto exploit the weakness of enforcement by carrying on in contraband, to theextent that by the beginning ofthe twentieth century about 2-3 million dinarsa year were being earned from it.^ No attempt was made, however, to promotethe consumption of this beverage in unfamiliar markets, nor, despite the beliefof some contemporaries as to the possibilities of "educating" the German market,does it seem likely that Germany could have been induced to imbibe about ahundred million litres of this rather fiery potation.* On the other hand, theequivalent in prunes or cheap jam could readily be taken up. But it was not thewine merchants who introduced these trades.

The innovation of prune drying and exporting did not have far to travel, forthe plum orchards of Bosnia had been exploited commercially for prunes longbefore the trade crossed the Drina river and penetrated Serbia. In 1858 the Savariver ports of Brcko and Banja Luka were sending 4,100 tonnes of prunes throughTrieste as far afield as the U.S.A. and Brazil. Yet a mere 47 tonnes left Serbiathat year, and her export was not to exceed a thousand tonnes until 1866.* It ispossible that the relatively early establishment of a trade in prunes from Bosniamay have been influenced by the need of the dominant Muslim population toutilize the plurn other than for alcohol. While exporting prunes, Bosnia importedSerbian rakija (presumably for sale to the Christian element), and within Serbiaitself, one ofthe earliest centres for the diffusion of plum-drying techniques wasthe Muslim enclave of Sokol, near the Drina frontier.^ Nevertheless, the trans-mission of the trade to the Serbian plum belt required the intervention ofmerchant activity, and, as the world market was not yet cognizant of Serbia'spotential as a supplier, it was left to indigenous firms to link up the supply withthe demand of consumers abroad. The w ays in which this was achieved were ofinterest, for the undertaking called for resources of capital, credit, organizationalability, technical knowledge, and foreign market contacts such as few merchantsin the Serbian interior enjoyed. This is clear Brom the circumstances in whichthe trade was pioneered.

Diffusion, when it came about, awaited the transference of enterprise andlabour skills from Bosnia, at a time when Serbia's commercial prospects lookedincreasingly attractive to the Serbs of Bosnia, while conditions in that territory

' Archive du Ministère des Affaires Etrangers (Paris), Correspondance Consulaire et Commerciale,Belgrade (hereafter A.A.E. C.C.—B.), 17 dispatch, 3 Sept. 1888, fo. 353.

^ A French estimate of 1903 put the contraband in rakija sljivouica at three times the official export.—Archi\'e Nationale, Paris (hereafter A.N.), F 12.7179, 'Rapport sur le travail de la récolte dès prunes enSerbie', 19 Oct. 1903. This was almost certainly an underestimate. See Table i, note t. The contrabandin rakija is also mentioned in S. Igiyic, Uzice i Okolina (Uzice and en-sdrons) (Titovo Uzice, 1967), p. 87.

^ See Lj. V(ulovic), 'Jedna Misao—Kako da se Pomognemo?' (A thought—^How can we help oux-íébífs'í),PodrirgskeXo!iine (Sabac), 26Feb. 1906, 112-13, 116-18.

* Report of Mr Jams .. .in Bosnia on the commerce . . . of that province (P.P. 1859, Sess. 2, xxx), pp. 457-9;Milosevic, op. cit. p. 10.

^ B. Milojevic, 'Radjevinaijadar. Antropogeografska Ispitivanja' (Radjevina andjadar. An anthropo-geographic examination), X5.^ . ix (1913), 665, 731, 740, 758, 766, 768.


deteriorated. The beginnings of the Serbian prune export are associated stronglywith the firm of Krsmanovic-Paranos, and with Rista Páranos, its most dynamicmember. He was a native of one of the Trebinje villages in the barren Herce-govinian karst and, like many of these peasants, the want of fertile land causedhim to participate in the overland trades between the Adriatic and the BosnianSava ports. It w- as thus that he travelled to Brcko where he took employment inthe store of Mica Krsmanovic, whose main business was in the import of"colonials" through Trieste.^ The energetic Páranos rose speedily in the firm,married his employer's daughter, and was given a partnership, in about 1852.On the death of Mica Krsmanovic, in the mid-1850's, his sons, and Páranos(who became the driving force behind the business), moved from Bosnia and re-established the firm at Sabac and Belgrade. Some years later, by which time thepartners had amassed enormous wealth from the Danube trades in salt andBulgarian grain tithes, the firm initiated the export of Serbian prunes.^ Severalindependent sources affirm that Krsmanovic-Paranos was the first firm in Serbiato do so, and that the subsequent rapid development of the trade was heavilydependent on its enterprise and activity.^ Paranos's widow went even further,to claim that:* "In the first years, and later, only the fiim of Krsmanovic andPáranos exported [dried] plums from Bosnia and Serbia. On the initiative of RistaPáranos, the firm of Krsmanovic and Páranos was the father of the trade in dried plums inBosnia and Serbia." (The italics are in the original.)

Most of the other names which became prominent in the early days of thetrade had strong links with this firm. Rista Damjanovic, later to become a leadingplum exporter, and reputedly the richest merchant in Sabac, a town w-hich"exported millionaires", went into business after having served with Krsmano-vic-Paranos in Bosnia,^ and Luka Celovic Trebinjac, wealthy Belgrade banker,merchant, and prune exporter, served the firm in Belgrade between 1878 and1880 before opening his own business with its assistance.^

^ Istorijski Arhiv Beograda K-V 2-4 Milivoje Kostic, 'Podaci o zivotu i radu beogradskih privrednikatrgovaca i zanatlija xix i xx' (Data on the life and work of the Belgrade businessmen, merchants, andcraftsmen in the nineteenth and twentieth centuries) (hereafter I.A.B. Kostic, 'Podaci...'), fo. 76 (BracaKrsmanovic i Páranos) ; N. R. Djordjevic, 'Rista Páranos. Uspomene iz pncanja pokojne Ristine zeneVasilije, rodjene Krsmanovic' (Rista Páranos. Memories from the telling of the late Rista's wife Vasilija,née Krsmanovic), T.G. XLHI, I 12, 30 April 1933, 5; J. Dedijer, 'Hercegovina' N.S.Z. vi (1909), 65.

^N. R. Djordjevic, loc. cit.; I.A.B.Kostic,'Podaci...', fos. 76-9 (Braca Krsmanovic i Pai-anos), 255/2(Kxagujevacka Kompanija): Sponwnica Beogradske Trgosacke Omladine, 1880-1930 (Memorials of theBelgrade Junior Chamber of Commerce, 1880—1930, hereafter Spomenica B.T.O.) (1931), p. 62, col. 2;A.A.E. C.C.—B. t 3 dispatch, 11 Sept. 1863, fo. 132; M. D. Milojevic, Macva, Sabacka Posavina i Pocerina.Privredno—Geografsko Proucavanja (The Macva, Sabacka Posavina and Pocerina. An economic-geographicstudy) (196a). p. 65.

3 ¿ivorad Popovic, Kosta D. Glavinic (in Serbian) (Sabac, 1939), p. 5; Spomenica B.T.O. p. 62; ArhivSapea (Sabac) (hereafter A.S.), L.O. 127, stenographic copy of a lecture by K. Clavinic to 'SabackiNarodni Univerzitet', dated 30 May 1938; 'Berba Sljiva—nekoliko zanimljivih podataka' (The plumharvest—some interesting information), Stampa, x (1911), 247; I.A.B. Kostic, 'Podaci . . .', fos. 76—7(Braca Krsmanovic i Páranos). While some of these sources could have copied information given byothers, Gla\'inic at least was intimately concerned with the prune trade, and is probably completelyreliable. Milivoje Kostic may have acquired his information from Gla\'inic, but he would also have beenable to evaluate it from his encyclopaedic knowledge of the Belgrade carsija.

* N. R Djordjevic, loc. cit.^ D. J. Popovic, 0 Cincarima (About the Cincars) (2nd edn, 1937), p. 346; M. S. Djuricic, Sabac kao

Kulturna îza Srbije XIX i XX veka (Sabac as a cultural focus of Serbia in the nineteenth and twentiethcenturies) (Sabac, 1937), p. 28.

^ I.A.B. Kostic, 'Podaci...', fo. 59 (Luka CeloNric Tiebiajac); Spomenica B.T.O. p. 161, col. 2.


The Krsmanovic-Paranos firm's infiuence also extended to the importantprune market of Valjevo, where the trade was dominated by Ranko Godjevacand his associates. Godjevac, whose family was also of recent Bosnian origin,^has been claimed as pioneering the prune trade in Serbia, but it has been notedthat he "began propagandizing the drj-ing of plums under the influence of[un-named] merchants from Bosnia".^ These were m.ost likely to have beenKrsmanovic and Páranos, for the families were closely connected with theGodjevci by marital and business links.* The only prominent merchant in theplum trade of western Serbia who was identifiably of Serbian birth, and notlinked with Krsmanovic-Paranos was Joca Jovanovic Sapcanin. He was success-ful, but it was concerning his difficulties that the following comment was made :*

The export trade in that period was by no means an easy and congenial task. Themerchant exporter was left entirely at his OV TI risk. Alone he carved his routes toother people, alone he maintained relations abroad, alone he opened himselfcredits. For the successful conduct of the export business were needed greatcapabilities. . .

The establishment of plum-drying capacity required the transfer of the tech-nique—it could hardly be described as technology—^from Bosnia, where it wasrelatively long established. It entailed the building and opei'ation of large butsimply-constructed mud-brick stoves which contained a number of trays,stacked one above another, on to which the plums were loaded for drying, andunderneath which a wood fire was maintained.* This stove, or pusnica ("smokeoven") was commonly to be found in the Bosnian plum-producing villages. Itafforded a much quicker and more efficient processing system than sun dr\'ing,the technique which was occasionally used in Serbia to prepare prunes for self-consumption, and it yielded a qualitatively superior product.*

Despite the siraplicity of construction of the pusnica, Serbian farmers seem tohave been unable to build their own ovens and needed the services of Bosnianspecialists for this work. Moreover, skilled men firom Bosnia were also needed tooperate them. The reason for this probably lay in the very crudity of the pusnica'sconstruction. The rate of drying called for nicety of judgement. The pluras had tobe raised very slowly to about 7o°G. and maintained at an even temperature. Theline between incomplete drying and damaging the fruit by scorching was a fineone, and for this reason all subsequent improved designs incorporated a thei mo-meter set in a mndow. But this refinement would greatly increase the price ofihe drier, so skill was effectively substituted for capital.' Thus migrant Bosnian

^ Lj. Pavlovic, 'Istorija i Duhovne Osobine Vaznjih Porodica—Godjevci' (The history and spiritualfoundations of the more important families— the Godjevci), Glasnik Geografskog Drustva, iv, Sv. 5 Nov.1920, 341.

^ Ljubica Trajkovic, op. cit. p. 48.^ I.A.B. Kostic, 'Podaci . . .', fos. 78, 81 (Braca Krsmanovic i Páranos), 24/96 (Ranko Godjevac).* Spomenica B.T.O. p. 160, col. i.* A.N. F is.'/i'jQ:T.Biajiicom,Cart£s Commerciales, 4, i-ère série. Royaume de Serbie (Paris, i885),pp. 27—8.8 L. R. Iovajiovitch, L'Agriculture en Serbie. Monographie composée pour l'Exposition Universelle de igoo

(Paris. 1900), p. 45 Sun-dried prunes were saleable in Budapest in the 1870's at a 14J per cent discou.ataccording to a Budapest merchant's price list of 1875—see enclosure in Muzej u Smederevu, SavaStankovic correspondence (hereafter M.S. S.S.), 1228. 70, 20 May 1875.

' K. Glavinic, 'Susenje Sljiva' (The drying of plums), T.G. x, 190, 28 Aug. 1901, 1 ; 'Lujova Susnica'(Louis's drier). Stamps, xi (1912), 161, 2. A thermometer was also an essential component of the GlaNrinicoven, about which see A.N. F 12.7179.


and Sokoljani builders and pusnica operators found themselves in great demandin the early years of the Serbian prune export boom. The two skills were probablycombined.^ "The Bosnians," reported a British consul in 1873, "seem to have amonopoly in the art of drying plums which they do in rude ovens, and numbersof peasants are annually hired to go into Austria and Servia to dry the plumsproduced there".^ They did more than merely respond to the demand for theirservices ; they were also instrumental in creating it—as did one Bosnian masterwho settled near Valjevo, hvdlt pusnice, dried plums, and traded them through hisown warehouse;^ or as did two Muslim brothers from Sokol, who introduced thesystem in the i86o's to one Serbian village by leasing its orchard and drying theproduce.* The skills of building and operating the pusnica were, in time, trans-planted, for the Bosnian masters took assistants from among the resident popula-tion, and many settled permanently in western Serbia. By the end of the century(and probably well before) Serbia's own upland villagers provided the necessar)'labour.*

But in the early days of the trade, such manpower was hard to come by, andits importation owed much to the efforts of Krsmanovic-Paranos, whose firstconcern was to set up a system for getting the produce dried.^ They probablydried much of the fruit they handled thenaselves, and this still seems to have beena frequent practice of the trade in later years.' Paranos's widow claimed thateven in Bosnia, the people had dried their plums ' ïn a primitive way", whereuponPáranos "began to perfect a special kind of dryer for the drying of plums, whichthe people adopted very qmckly".^ Whatever we may make of this claim,Krsmanovic-Paranos seem to have been known in business circles as the peopleto address if you had plums to dry, and needed to hire workers with the requisiteskills.«

Establishment of a drying system was only one of the items of infrastructurethat concerned the prune-exporting firms. A further problem, which related tothe difficulty of organizing small-scale peasant production to meet world marketstandards, arose from the heterogeneity of the fruit grown in the Serbian plumorchards. Though all variants were good enough for distilling, only one, theMadzarka or Pozegaca, was sufficiently sweet and fieshy to be really suitable fordrying.^" Quality was all-important, for the prune sold in its main markets as asemi-luxury product, so the trade established big price differentials between the

1V. Karic, Srbija. Opis Zemlje ... (Serbia. A description of the country...) (1887), p. 413; Trajkovic,op. cit. pp. 48-9; B. Milojevic, loc. cit.

^ Report by Consul Holmes on the Trade and Commerce ofBosna Serai for theyear 1873 (P.P. 1874, LXVI), p.607.

^ Trajkovic, op. cit. p. 49; 'Izveätaji komisija za pregled sljiva' (Reports of the commissions for theinspection of plums), S.M. L (1882), 224.

* B. Milojevic, loc. cit. 740. ° Ibid. 789, 791 ; Pa\'lovic, 'Kolubara i Podgorina', 423-6.* I. A.B. Kostic, 'Podaci.. .'fo. 76 (Braca Krsmanovic i Páranos).'' A.S. L.O. 127; Iovanovitch, op. cit. p. 43; Dragisa Lapcevic, PolozajRadnicke Klase iSindikalni Pokret

u Srbiji (The condition of the working class and the s^Tidicalist movement in Serbia) (1928), p. 291.® N. R. Djordjevic, loc. cit.s See certain letters of the firm of Despinic, in which their Smederevo agent is trying to recruit man-

power to dry a consignment of plums. M.S. S.S. 937/67, 16 Aug. 1876; 884/67, 27 Aug. 1876; 364/66,30 Aug. 1876; 576/66, 26 Aug. 1876. I am grateful to Dr Leontije Pavlovic, director of the SmederevoMuseum for bringing this source to my notice.

1" La Serbie à l'Exposition Universelle de 1911 à Turin (1911), p. 100; Karic, op. cit. pp. 333-4.


better and the inferior grades.^ Between the best that Serbia exported and thecommon "merkantil" quality, the price per kilo varied by upwards of ioo percent.^ In 1883, Germany was taking only prunes of the better grades, refusing thecheaper ones.^ The American market was no less choosy.* So the Kxsmanovic-Paranos firm attempted to get its suppliers to raise better fruit, and brought in"large numbers of plum seedlings for improving the orchards in the \dllages,firstly in Valjevo and Sabac okruzi, and later, further afield"." After drying, thefruit had to be warehoused, sifted to French trade specifications, and packedappropriately, processes which needed skilled supervision, which the firm was tocarry out to much higher standards than others who were drawn into thetrade.*

The strength of the firm's financial resources was brought early into play. Itsturnover was dependent on the activity of its network of up-country agents andstorekeepers in purchasing the produce from the peasants.' Credit was neededby them, for in Bosnia, "the peasant . . . in the spring calculates on receivircgadvances [on his plum crop] from the merchants,"* and trading conditions inthe Serbian villages seenx to have been similar. Only by contracting with theproducers was the merchant able to ensure himself a supply. Thus Krsmanovic-Paranos reputedly financed the trade by extending interest-free loans to thesuppliers who worked with them,^ and who often packed and graded the producefor them as well.^" This was probably a common practice.^^

In addition to extending finance backward down the production chain,normal trade credit had to be extended forward. At this time, the nascent Bel-grade money market could not supply credit except at usurious rates, and it islikely that the firm financed its operations through Trieste, with wiiich it hadstrong links. It may therefore have been for this reason that the early plummerchants were actively involved in the organization of financial institutions.Among other banking interests, the Krsmanovici were powerful shareholders inBeogradski Kreditni âvod, and Jovan Krsmanovic became Serbia's first centralbanker in 1883. ^ Other pioneer plum merchants were also energetic organizersof banks, which were particularly active in the primary product export trades.^*

Strong contacts were also needed with world markets, which were generallylacking to the Serbian merchant class. According to his widow. Páranos was firstmade aware of the opportunities in the prune trade on a business trip to Germany,while the firm was still trading from Bosnia. The story has an apocryphal ring

^ Miljutin Sa%'ic, Sljiva. Gajenje i Upotreba sa Predhzima za Unapredjenje (Plums. Rearing and utilizationwith proposals for improvement) (1900), pp. 54-5; T.G. xxi, 206, 24 Sept. 1911, i,col. i.

2 A.N. F 12.7179; Miljutin Savic, op. cit. p. 89. The French trade specifications were noted in JovanKrikner, Industrie undIndustriepoktik Serbiens (Halle, 1913), p . 141.

3 'Susenje Sljiva, i' Videlo, iv (1883), 16, 3, col. 2.* René Millet, La Serbie Économique et Commerciale (Paris, 1889), p . 51.^ I.A.B. Kostic, 'Podaci . . .', fo. 76 (Braca Krsmanovic i Páranos).* Ibid. fos. 76-7; A.S. L.O. 127."^ I.A.B. Kostic, 'Podaci. . .', fo. 76 (Braca Krsmanovici Páranos).^ Report by Consul Holmes on the trade ofBosniafor the year 18/1 (P.P. i872,Lvm),p. 1331.* Spomenica B. T.O. p. 39, col. 2. -^ Djuricic, op. cit. pp. 28-9.^ For example see I.A.B. Kostic, 'Podaci . . .', fo. 85/1 (Djordje Vuco).^ Ibid. fos. 77, 79,83 (Braca Krsmanovic i Páranos) ; Spomenica B. T.O. p. 57, col. 2.1 I.A.B. Kostic, 'Podaci...', fos. 60/2-66/8 (L. CelovicTrebinjac) ; fo. 89/3 (Dj. Vuco) ; Kostic, 'Auto-

biografija', fo. 24 of transcript in my possession; Spomenica B.T.O. pp. 160, col. i, 162, col. i.


about it but does serve to emphasize the firm's pre-existent market connexionsin Germany and initial awareness of demand as well as supply potential:^

As soon as he became a member of the Krsmanovic and Páranos firm, Ristabegan to take up direct trade links and to procure goods at first hand from lowerGermany. On one occasion when he was doing business in Berlin, setting goodsaside, he was invited to lunch by a certain manufacturer. . . After the lunch,cooked prunes were served. The manufacturer asked Rista if he liked cookedprunes, Rista said he did, and asked him where he got them from. The manu-facturer replied: from California. How much a pound, asked Rista. Replied themanufacturer, ten marks a pound. Rista asked him if he could sell even betterdried plums at five marks a pound. The manufacturer said he could.

But although the German market always absorbed a significant share ofSerbia's plum output, the main consumer in the early years (till California dis-placed all competitors in the 'nineties) was the U.S.A. According to an Americanestimate of 1883, the U.S.A. absorbed at least half of Serbia's annual export,while a later (1889) estimate put the proportion at two-thirds.^ This trade passedthrough Trieste, and about 1880, Rista Paranos's son Sima entered into partner-ship with Celovic-Trebinjac, so that while Celovic could handle affairs inBelgrade, Sima Páranos could operate from Trieste, the better to maintaincontact with the American market.^ Subsequently Sima Páranos establishedhimself still closer to the market in New York, whence he was trading andreporting back to Serbia in 1883.*

IVAfter the initial boom in prune exports which lasted until about 1886, subsequentexpansion ofthe plum trade was accompanied by continued structural change.Its central feature, however, that of primitive on-farm drying, remained intact,despite the introduction of machine processing. By the end of the period thereappear to have been 21,000-46,000 pusnice in the country,^ which were probablyprotected against the competition of large-scale centralized machinery by thepoor qualit\' ofthe transport network.^ The persistence in the use oithe pusnica asthe standard means of drying the fruit was commonly regarded as the cause ofthe alleged low standing of Serbian prunes on the international market. It wassaid that the system imparted a smoky taste to the fruit and dried it imperfectly.'^

^ N. R. Djordjevic, loc. cit.^ Cons.-Gen. E. Schuyler, Foreign Commerce of Servia, Athens, 29 March 1883. House Misc. Docs. 48-1.

vol. 4, no. 12, pt I, Consular Reps. 31 v. 10, p . 95; Rapport Commerciale et Économique (Baron Guil-laume), Belgrade, 4 Oct. 1889, Recueil Consulaire, Lxvni, 275. These estimates cannot be verified directlyfrom foreign trade statistics because of complications arising from the intermediary' role ofthe Austrianmarket.

3 I.A.B. Kostic, 'Podaci . . . ' , fo. 60/2 (Luka Celovic Trebinjac).4 GlasnikMinistarstvaFinansija (hereafter G.M.F.), 11 (1883), 41,656.ä The lower figure is an estimate of Glavinic, A.S. L.O. 127, and the upper is derived from reports for

1908—9 that there were 10,981 driers in Podrinje okrug and 5,121 in Uzice okrug, see 'Okruzni EkonomniIzvestaji' {Okrug economic reports), Izvestajipodneseni Ministru Norodne Pnvrede . . . za igo8 i igog godinu(1911) (hereafter Izvestaji M.JV.P igo8-g), pp. 1019, 1142.

8 Milivoje M. Savic, J\fasa Industrija i Zanati (Our industry and crafts), 11 (Sarajevo, 1922), a-3, notesonly one prune-processing plant which took on labour to stone plums, indicating that they were beingpurchased in raw condition.

' A.N. F 12.7179; Miroslav D. Popovdc, Kragujevac i J^jegovo Privredno Podrucje (Kragujevac and its


With the object of improving quality, the state therefore sought to promote theuse by growers of generally high-priced "French" stove systems, \\\hich proved,predictably, far too expensive for any but a handful of producers to take up.^Whether such systems were much used in the French département of Lot-et-Garonne which, supplied the top end of the international market is doubtful, forhere the farmers dried the fruit in simple kilns after which it was reprocessed bythe trade, using large-scale techniques.^ In any case, Serbian prunes were not ofparticularly low quahty. Worse than the French, they were claimed to besuperior to the Galifornian,^ and from the point of view of quality control, thelabour-intensive techniques of the small producer were not necessarily disad-vantageous.* It appears that the fundamental determinant of the quality of thecrop lay in the chance conditions of the harvest. Sometimes the output wassuperb, and sometimes barely edible. Little appreciable effect of a beneficialnature was achieved by the institution of qualitj'-control commissions, whichinspected the prunes at the point of export. Their operations achieved an unen-viable reputation for incompetence and corruption.^

Even if capital shortage—or simple technical backwardness—rendered thehighest qualit}' of initial processing unattainable, Balkan prunes could still beimproved by redrying as in France. Redrjáng plant was established in Bosniavery successfully as early as 1888 (though the simultaneous attempt to encouragethe use of improved ovens by producers was a predictable failure).* It did not,however, encourage emulation in Serbia, despite fears of the threat it posed toSerbian exports, as much of the produce was I'edried in Austria-Hungary beforereaching the German consumer market.*^ It seems likely that this arrangementwas favoured by the Austro-Hungarian tariff structure. Only two redryingplants were estabhshedin Serbia befbre 1906 (one of them by the Páranos family,

economic zone) (1956), p. 99; for a sample of adverse comments on drying practice, see 'Ozbiljnaopomena naSim slj-'varskim trgovcima, Berlin Mart 1896' (An earnest reminder to our plum merchar ts,Berlin, March 1896), Tezak, xxvii (1896), 29, 292, col. 2.

1 For details of government policy and promotion, see La Serbie.. .à Turin, pp. 90-1 ; La Serbie à l'Expo-sition Universelle de igo¡ àLiège (igo^), p. 100; Bianconi, op. cit. p. 28, col. 2 ; 'Nova Susnicau Arandjelovcu'(The new drier at Arandjelovac) G.M.F. i (1882), 16, 247; S.A'. 8 June and 19 Dec. 1890; Miljutin Savic.op. cit. p. 84. Milivoje Kostic and K. Glavinic claimed that by 1912 there were 10,000-15,000 improved(Glavinic system) stoves in the country, but partial statistics for 1909 show that in that year theirnumbers were negligible. See I.A.B. Kostic, 'Podaci . . .', fo. 251/79 (Kosta Glavinic); A.S. L.O. 127;'Okruáni Ekonomni Izveätaji', loc. cit. pp. 1019, 1142.

^ Glavinic, 'Susenje Sljiva'; L.-A. Janitch, La Serbie an Point de Vue Économique (Paris. 1910), p. 20;V/. R. Heam, Report on the Preparation of French Plums (P.P. 1901, Lxxx), pp. 3—5.

* Janitch, op. cit. p. 20.* Bosanac Emigrant (pseud.), 'Sljiva i Njen Promet' (The plum and its trade), âstava (Novi Sad), x

(1875), 69, 2.ä See as evidence of year-to-year quality fluctuations 'Sljiva' (plums), T.O. xxi (1911), 269; 'Jedan nas

uspeh' (Our one success), Stampa, iv (1905), 304, i, coL i; Handelsmiiseum, 1910, p. 16; IndustnjakaKomora Kr. Srbije, Izvestaj 0 Radu i Stanju Industnje u igii godtne (Report on the work and condition ofmdustry ini9ii)(i9i2),p.22. Critical insights into the effectiveness or otherwise of the commissions maybe gleaned from 'Izvestaj izaslanika za pregled hrane, pekmeza i suvih sljiva 1909 godine' (Report of thedelegates for the inspection of food, pekmez, and dried plums in 1909), Izvestaji M.JV.P. . . . igo8-g, pp.35-8, 47; 'Ekonomija i Trgovina—iz sljivarske trgovine' (Economy and trade—from the plum trade),Potitika (1910), 2432,1, col. 4; 'Berba Sljiva...' loc. cit.

® Sugar, op. cit. pp. 158-9 (Sugar describes the units as canneries). Also see E. B. Freeman, Report onthe Plum Crop in Bosnia for 1887 and 1888 (P.P. 1889, Lxxvii), p . 2.

" A.A.E. C.C,—^B. 18 dispatch, 31 Oct. 1891, fo. 93 ; Milivoje Savic, op. cit. 11, 5.

MICHAEL PALAIRET

always in the forefront) when the onset of commercial war between Serbia andAustria-Hungary removed access to the services of Austrian intermediaries, andresulted in the estabhshment of four new redrying units,^ and plans for furtherexpansion still.^

Of greater significance to the evolution of the countrj 's commercial structurewas the outcome of the protracted struggle which began to get under waybetween domestic business and importer competition, after the opening of themain-line railway in 1884 placed the Sumadija (at Kragujevac) in direct contactwith Budapest. Budapest interest in Serbian plum supplies lay more in the pro-curement of cheap jam (pekmez), which was sold for working-class consumption incentral Europe, than in encouraging the production of prunes.^ It appears tohave been almost wholly through the intervention of Budapest houses that thisnew export trade developed. Itinerant gangs of Slavonian pekmezari, financed byBudapest, toured the Sumadija, in particular those parts of it which were con-veniently located for the railway, to buy up plums from the peasantry for con-version on the spot intopekniez- It is important to note that the grower was entirelydependent on the pekmezar to get the produce on to the market, for whereas mostpeasant producers could manufacture prunes (and thereby retain the valueadded by manufacturing) the capital cost of the "imposing batteries" of equip-ment that the pekmezari used cost about 10,000 dinars—as much as that of manysmall "factories".* Austro-Hungarian demand and tariff discrimination alsostimulated the rail freighting of substantial supplies of unprocessed plums frommuch the same areas for distilling inside the imperial tariff. Many growers,particularly the smaller and poorer ones, probably welcomed the opportunitythat Austro-Hungarian intervention created, to monetize their output withoutthe delay or capital cost which was necessitated by drying or distilling.®

The competition of Budapest firms was much feared in Serbian commercialcircles, for the former were understood to enjoy access to far better credit facilitiesand stronger market contacts. According to one writer of 1905, the Serbianplum merchants were gradually being reduced to purchasing agents for theBudapest commercial houses.'

But native competition for a bigger share in the dealing profits did result indevelopment of the Serbian commercial system by a means peculiar to thissituation. The institutions which would likely possess suitably strong foreigncorrespondence connexions and ample credit resources would be the banks,particularly those of Belgrade and the primarj^-produce exporting centres. As

^ Milivoje Savic, op. cit. 11,2-3 ; Trgovinsko-Zanatlijski Sematizam za 1902-3 (Commercial-craft directoryfor 1902-3), p. 290; D. Djordjevic, op. cit. pp. 381-2; M. D. Popovic, op. cit. p. 296.

2 Istorijski Arhiv Valjevo (hereafter I.A.V.),ValjevskaStedionicaKnj. 137, kopijapisama, Stedionica-Duveaux Frères, 12 Nov. 1920, fo. 280.

^ M. D. Popovic, op. cit. pp. 296-7, 363; Milivoje M. Kostic, Srpska Izvozna Trgovina od 1893-1903godine (Serbian export trade from 1893 to 1903) (1905), p. 54; M. Marko\'ic, 'Glasovi iz naroda—Kragujevac' (Voices from the people—Kragujevac), T.G. xvii (1907), 216, 2, cols. 2-4; R. D. G. Mac-donald. Report on the Trade and Commerce of Seroia for the years i8gy—8 {?.¥. 1899,011),p. 17.

* Miljutin Savic, op. cit. pp. 124—7 ; A.N. F 12. 7179 ; 'Mere za bolju proizvodnju pekmeza' (Measuresfor the better production oí pekmez), T.G. xvi ( 1906), 144, i, col. 3 ; ¿a Serbie . . . à Turin, p. 93 ; O. Sa™,op. cit. p. 99, n. 53, and text.

5 'Izvoz Sirovih Sijiva' (The export of raw plums), T.G. xvii (1907), 192.^ K. Jovanovic, loc. cit. 335. " Kostic, Srpska Izvozna Trgovma... p. 52.


already noted, the pioneer plum merchants were active bank organizers, andseveral new banks were created in Belgrade and the plum-growing regions forthe express objective of providing credit for the local export traders. ValjevskaZadruga (of Valjevo) was founded in 1888 with the object of extending credit toexporters, particularly of prunes, the town's staple trade at this period, and simi-lar motives probably explain the establishment of the two other Valjevo banks.În 1912, the merchants of Arilje township (Uzice okrug) set up a savings bank{stedimica) in order to assist the export trade in fruit. Two Belgrade banks werealso founded fi-om similar but more ambitious motives. Srpska Trgovacka âdrugawas founded in 1900 by several Belgrade export houses wath the aim of cartellizingthe export trades, to organize the "undirected" Serbian exporters and protectthem from "heartless outsiders".* This in turn spawned Izvozna Banka (ExportBank) of Belgrade to support this objective which arose from jealousy of the com-manding position of Budapest market in the Serbian export trades. The IzvozxMBanka projectors solicited government aid in the form of tax concessions byadvancing essentially "patriotic" arguments.* Patriotism consisted of divertingthe dealing profits from Budapest to Belgrade hands. Other banks appear to havebeen promoted for similar "patriotic" purposes.^

From supporting the trade with credit it was only a short step, though a riskyone, for banks to enter the export trade themselves, as intermediaries. This theybegan to do around the turn of the century by establishing brokerage depart-ments which placed produce held by the merchants on the export market againstpayment of commission.

The acti\dty of the European "Universal" bank as industrialist has been wellexplored, but its analogous role as substituter of commercial enterpi-ise hasreceived little attention. This development was by no means pioneered inSerbia; in Bohemia-Moravia the sugar brokerage business was dominated bybank enterprise to the extent that it effectively relieved the sugar manufacturersof their selling function. Hungarian banks were also actively engaged as inter-mediaries in the produce trades.* The technique would scarcely have been diffi-cult to transmit to the Balkans where bank correspondence connexions andcredit resources made good a most obvious deficiency.' In Serbia, bank brokerageor commission business did not confine itself to handling plums ; at the grain portof Smederevo, the old established Smederevska Kreditna Banka opened a grainbrokerage department in 1908, and competed with several Belgrade banks whichalso traded grain at that port. Beogradska Zflàrtiga and Izvozna Banka engaged incommission transactions in livestock.® But the banks found the plum trade paj--

^ I.A.V. Secondary material in t>'pescripts headed 'Valjevska Zadruga, 1888—1948', 'ValjevskaStedionica', and 'Valjevska Trgovacka Banka'.

^ Igajic, op. cit. p. 89. ä Spomenica B.T.O. p. 160, col. t.* Ibid. ; I.A.B. Kostic, 'Autobiografija', fos. 21—5 ; idem, Srpska Izvozna Trgovina ... pp. 33—6.^ RadPrve Koriferencije Izaslanika Trgovackih i Trgovaíko-Zanatlijskih OmJadina Kraljevine Srbije (The woik

of the first conference of the delegates of the commercial and commercial-craft junior chambers ofcommerce of the kingdom of Serbia) (1907), pp. 64—3.

^ Richard L. Rudolph, 'The Role of Financial Institutions in the Industrialization of the Czech Cro^vn-lands, 1880-1914' (unpublished Ph.D. thesis. University of Wisconsin, 1968) pp. 202-7; I.A.B. Kostic,'Autobiografija', fos, 17-18; idem, Srpska Izvozna Trgovina . . . p. 54.

' Note the Einalogous activity of the Bulgarian Agrictiltural Bank in the silk trade. Vladislav Savic,Bugarska. Proslost-Buducrwst (Bulgaria. Past-Future) (1933), p. 64.

* Report to members oí Smederevska Kreditna Banka at 36th A.G.M, in Spomenica Pedesetogodisnjeg Rada


ticularly receptive to the services they could offer. W' hile the rival Belgrade Pro-duce Bourse languished, the trade speedily channelled itself into the hands ofthebankers.^ International connexions are what are stressed most heavily in thefollowing advertisement, directed to the Serbian merchant community by the\ve\l-run Sabacka Trgovacka Banka (of Sabac) in 1902:^

The . . . Bank (founded in 1898) completes Banker's business, besides which italso practises brokerage business abroad, at a moderate commission with Serbiandried [plums] (packed in sacks) and double stove dried plums (packed in boxes),pekmez, foodstuffs, etc. It has strong business connexions abroad. It guaranteessolid service in every aspect.

Even a small bank like Valjevska Stedionica, which engaged in prune brokerage,maintained a wide correspondence network. In the 1911 export season it placedonly 954 tonnes of prunes, but these were sent to 19 firms in 13 towns as farafield as Vienna, Eger, Munich, Mainz, Prague, Berlin, Duisburg, Ulm, andDanzig, as well as Budapest.^ Similarly, the banks tried also to strengthen theirnetworks at the supply end. Izvozna Banka, one ofthe largest firms in the producebrokerage business, which in 1907 was exporting to Wârsaw, also dealt throughbranch offices at Sabac, Obrenovac, and Kragujevac, all towns whose trade wasmainly in plum products, and two other Belgrade banks maintained branchoffices at Sabac for the same purpose.*

V

The development of trade in plum products after i860 has been shown to havehad powerful beneficial effects on the economic life of a significant portion oftheSerbian peasantry, particularly as those regions which came to depend mostupon the plum harvest were not particularly fertile. Because ofthe advantagesresulting from their adoption, plum-dr>dng techniques were probably bound toreach Serbia sooner or later, but it should not be assumed that, as the techniquesemployed were rather primitive, and only had to be transferred from a neigh-bouring territory, their diffusion would inevitably be swift and easy. On thecontrary, to surmount the problems entailed in introducing the commerce indried prunes into Serbia, it appears that entrepreneurial resources of a high orderwere called for. In this respect, it is also significant that diffusion came aboutthrough immigration of enterprise from the territory where the trade had origin-ally been established, rather than through the intervention ofthe world marketimporter, for if the original stimulus had had to wait upon the interest of thelatter, it might easily have been another twenty years before the Serbian plum

Smederevske Kreditne Banke, i8yi-igsi (Memorials ofthe fifty years of work ofthe Smederevo Credit Batik,1871-1921) (Smederevo, 1929), p. 386; Kostic, Srpska Izvozna Trgovina . . . p. 56; Trgovacka Komora zaKr. Srbije (Chambers of Commerce for the kingdom of Serbia) Izxestaj za Godinu igii. (/) Izvestaj 0trgovini za igii (Report for the year 1911 (i) Report on trade for 1911) (i9i2),pp. 10, 14.

1 Vladislav Milenkovic, Ekonomska Istorija Beograda (Economic history of Belgrade) (1932), pp. 116-182 In Trgovinsko-Zanatlijski Sematizam za igog-3, p. 297. The claim appears to be confirmed by 'Pred-

stavka Sabacke Trgovacke Banke Ministru Narodne Pri\'rede' (Representation ofthe Sabac CommercialBank to the Minister ofthe National Economy), T.G. xvii (1907), 102, supp. i, cols. 1-2.

ä I.A.V. Valjevska Stedionica. Knj. 137, kopija pisama, fos. 1-70.* Ignjic, op. cit. p. 87; Kostic, Srpska Izvozna Trgovina . .. pp. 56-7.

PLUM-BASED TRADES 6oi

orchards were given over to serious exploitation. Even then, exploitation mightonly have been for pekmez, a commodity whose trade would have been of muchless value to most plum producers than that of prunes, because they would nothave earned the value added by on-farm manufacturing.

The Serbian experience also demonstrates that peasant production, despiteits admitted qualitative defects, and a necessarily obsolete processing technology,did not need to become unviable on either account, as reprocessing could remedyto a large extent those defects which would most likely cause rejection by aquality-conscious consumer market.

Finally, the key role of the banking system is apparent, in substituting its ownorganizational capacities, correspondence networks, and financial resources forthose lacking in the commercial sector of a backward economy, in a way whichparallels its better-known role in substituting the same deficiencies in industrialenterprise in conditions of analogous industrial backwardness.

University of Edinburgh

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