Ukrainian Cooperative Movement - History - Under Austrian Rule

Under Austrian Rule

The Ukrainian cooperative movement originated in Galicia, a western Ukrainian region that was part of Austria–Hungary. Initially, the Ukrainian Prosvita society which had been dedicated to educational and cultural efforts attempted to organize credit unions, stores and warehouses. Its ability to do so was limited, however, by lack of experience in economic matters. The need for an experienced organizer was fulfilled by Vasyl Nahirny, who had spent a decade in Switzerland studying that nation's well-developed cooperative systems. In 1883 he organized Narodna Torhivlia ("People's Trade"), whose goal was to buy and sell products in large quantities, eliminate middlemen, and pass the savings on to the Ukrainian villagers. Through this cooperative Nahirny hoped to familiarize Ukrainians with commerce.

Many other cooperatives followed. In 1899, Silsky Hospodar, whose aim was to teach the peasants modern farming methods, was founded. By 1913 it had 32,000 members. Dnister, an insurance company, was established in Lviv and by 1907 had 213,000 policyholders. Most important, however, was the rise of Ukrainian Credit unions. Although some existed as early as 1874, the Vira credit union was the first to be stable and well-regulated. Typically charging approximately 10% interest for loans, hundreds of credit unions sprung up throughout Austrian-ruled Ukraine. They helped put traditional moneylenders out of business. In 1904, a central association of Ukrainian cooperatives was formed, which had 550 institutional affiliates and 180,000 individual members.

The Ukrainian Greek Catholic Church and its clergy were heavily involved in the cooperative movement, and an association of priests formed whose focus was on improving the peasants' socioeconomic conditions. Many priests took part in organizing cooperatives. The Church's leader, Andrei Sheptytsky, taught that the poor needed more than merely money and that the educated or well off had a duty to help the poor learn how to raise themselves from their circumstances - "teach them, show them how to improve their lot."

The rise of the cooperative movement in late 19th century Ukraine had several effects. It helped to bring about a close and harmonious relationship between the intelligentsia of western Ukraine and the peasantry, something that the intelligentsia in Russian-ruled Ukraine was not able to accomplish. Because the cooperative movement was largely the project of Ukrainophiles (those western Ukrainians with a patriotic Ukrainian national orientation), its practical help to the Ukrainian population contributed to its allegiance to the Ukrainian national movement rather than to the competing pro-Russian orientation. Indeed, improvement in economic standards developed concurrently with the increase in Ukrainian national consciousness. Because the professions of moneylending and shopkeeping had traditionally been Jewish vocations in western Ukraine, the cooperative movement also created financial hardship for the local Jewish community, by eliminating many Jewish jobs. The financial hardship caused antagonism between the two communities and was a cause for Jewish emigration from Galicia.