Maslosoyuz's activity — a survival strategy or economic collaboration?

ID: 221
During WWII cooperative movement developed dynamically. What were the actions by Maslosoyuz? What were its tasks? 

This story elaborates on the theme Collaboration, that was prepared as a part of the program The Complicated Pages of Common History: Telling About World War II in Lviv.

The trade department of the Maslosoyuz, one of the most successful projects of the Galician Ukrainian cooperative movement, was located in the premises of the Narodna Hostynnytsia, at vul.  Kostiushka 1a.

The history of the Galician Maslosoyuz began in 1904 in the village of Zavadiv (now Stryj district, Lviv region), when the first dairy was opened at the local organization Prosvita. At the origins of the dairy cooperative, along with Yevhen Olesnytsky, a public and cooperative activist in Galicia, Ostap Nyzhankivsky could be seen, a Greek Catholic priest, better known as a composer than as the initiator of such a large-scale project of dairy cooperative movement.

Nyzhankivsky headed the Regional Economic and Dairy Union until the beginning of World War I; at that time, the cooperative consisted of more than 100 dairy unions, to which peasants delivered milk.

The further fate of the cooperation is connected first of all with the activities of Andriy Paliy, who was elected director and who took over the trade affairs, and Andriy Mudryk, who was responsible for technical equipment, product quality and modernization of production. In March 1924, a general meeting was held, a new directorate was elected and the main directions of the union's activities were adopted as well as a plan of radical reforms. In 1925, the Regional Economic and Dairy Union officially became the Maslosoyuz, literally, Butter Union, which had 39 dairies and produced more than 41.5 thousand kg of butter per year, increasing trade turnover from 200 thousand zlotys in 1924 to 860 thousand zlotys in 1925, modernized its production and opened professional training courses.

Of all the dairy products of the Maslosoyuz, butter was the main one. The union produced four categories of butter. The best and most expensive was the first category butter — the so-called "Famous butters", the second category included "Very good butters", the third — just "Good" ones, and the fourth was called "Bad". Interestingly, the cooperative butter, produced more than three days previously, was already considered second-rate. All types of butter and other products were sold in the union's branded stores, ten of which were in Lviv. The Maslosoyuz trademark was an oblong rectangle, in which between the letters "M" and "S" a green four-leaf clover was depicted.

In 1926 the export of butter "with a clover" began, and in 1927 the central office of the Maslosoyuz moved from Stryi to Lviv and was called "The main trading agency of the Maslosoyuz in Lviv"; an entire "dairy" quarter with offices, refrigerated warehouses, and a transport pool was built in the area of modern vul. Brativ Mikhnovskykh and vul. Holovatskoho. Before World War II, the trade turnover of the Maslosoyuz exceeded 12 million zlotys, and the organization had branches not only in the cities and towns of Galicia, but also in Katowice, Bielsko, Lutsk, and other regions.

While the history of the Maslosoyuz in the interwar period is well known and covered in public space, the information on the union activities during World War II is usually limited to two sentences telling that the Soviet government nationalized the company and that in 1944 the Maslosoyuz was finally liquidated. However, the activities of the company and its management during the war are worth attention and discussion.

At the beginning of the Soviet occupation, the entire management of the Maslosoyuz remained at work because, according to Andriy Kachor, the author of memoirs about the company's activities, he hoped "for the possibility of some coexistence with the new regime." However, fearing arrests, the Maslosoyuz directorate crossed the San river before the end of January 1940 and remained in the Nazi occupation zone.

In contrast to the Soviet government, which nationalized the Maslosoyuz's property together with its headquarters and changed the structure of the enterprise according to its needs, the situation in the territories occupied by the Reich was more optimistic for the cooperative movement. The Ukrainian cooperative movement expanded from 212 cooperatives in 1939 to 995 in early 1941. The Polish cooperative movement experienced a similar dynamic growth in the German-occupied territories: from 3,560 in the late 1939 to 5,374 in the late 1943. The growth was associated with the coercion of agricultural farms to cooperation in order to facilitate the collection of contingents and to increase the cooperative movement activists’ own initiative.

In the territory of the General Government, the Nazis pursued different policies towards national groups, and it was the Ukrainians who were made some concessions to by the occupying regime. The Nazis hoped to deepen the local ethnic conflict to strengthen their power and thus created prospects for national development for Ukrainians only. More Ukrainians began to be placed in administrative positions, and the Ukrainian cooperative movement, as an important component of the Ukrainian national idea, was freed from the restrictions that had existed in interwar Poland.

Despite the fact that the head office of the Maslosoyuz remained in the Soviet zone of occupation, it was possible to organize independent Audit Departments of the Union of Ukrainian Cooperators in Krakow, Lublin and Jarosław (in interwar Poland, the Maslosoyuz never received permission to open a branch in Jarosław, it became possible only during the Nazi occupation).

With the beginning of the Soviet-German war, the Union's management returned to Lviv with the hope of recreating the pre-war structure and scope of dairy cooperation in Galicia. However, this was impossible because the Nazis did not allow the cooperatives to pursue an independent economic policy in the territories previously under Soviet occupation and also refused to merge the Lviv Maslosoyuz with the cooperatives of the districts of Krakow and Lublin, not to mention the Volyn branches, which found themselves in the Reich Commissariat Ukraine.

The Maslosoyuz directorate in Lviv focused on preserving the organizational and trade system and property of the Ukrainian dairy cooperative movement from the pretensions of the Germans, who were in no hurry to return the property nationalized by the Soviet authorities and planned to turn it into a branch of the German structure. The decisive role was played by Andriy Paliy, who obtained permission from the German occupation authorities for the legitimate activities of the Maslosoyuz and district dairies at the cost of disbanding the organizational and technical department, which was responsible for organizing production. The supervision of production was taken over by the state-run (i.e., Nazi-controlled) Regional Union for Dairy and Butter Farming, headed by German Commissioner Roschman; however, the Nazis appointed as his deputy Mykhaylo Khronovyat, one of the Maslosoyuz managers, who was actually a mediator between the occupying authorities and the Ukrainian dairy cooperative movement from that time on.

Already after the war, abroad, Andriy Paliy in his memoirs argued his decision to cooperate with the occupation regime by the need to preserve the Ukrainian cooperative movement’s property. In the book entitled The Men of the Idea there is a direct speech by Andriy Paliy:

Despite the fact that it was a foreign occupation power with an intolerable regime, which in essence denied the independent development of cooperation for a further purpose, we decided to fight for its existence for the following reasons:

1. It was hoped that the occupying rule would not last forever and the cooperative superstructures would remain the property of the people.

2. It was necessary to use the opportunity to purchase dairy machines from German sources and transfer as much investment as possible in the devalued currency.

3. It was necessary to provide jobs for as many workers as possible in order to protect them from forced deportation to Germany.

4. And finally, and this was the most important thing, it was necessary to protect the peasant population from excessive contingents and repression by the German authorities and German firms, infamous for their exploitation, that worked wherever there was no cooperative self-defense.

So, it was decided to work and keep what would be possible. According to Yulian Pavlykovsky, the then head of the Patronage of the Ukrainian Cooperation in the General Government and chairman of the Maslosoyuz Supervisory Board, in 1943 the Maslosoyuz trade turnover exceeded 10 million zlotys. As the front approached, the Maslosoyuz directorate decided to go to the West, to Vienna; the Maslosoyuz ceased to exist with the return of the Soviet rule in the summer of 1944.

Research on cooperation with the occupying regime usually distinguishes between political, military, administrative cooperation, as well as personal and cultural and artistic cooperation. Economic cooperation in the occupied territories also deserves special attention. It is difficult to say whether the activities of the Maslosoyuz during the Nazi occupation should be considered in terms of economic collaboration or in terms of strategies for survival and preservation of enterprises. On the one hand, the main argument of the cooperative movement management in favour of the cooperation with the Nazis was to provide jobs for the Ukrainian population, to preserve production as well as movable and immovable property. On the other hand, the active development of the Ukrainian movement in the General Government took place with the "blessing" of the Ukrainian Central Committee, an official body in the occupying regime’s structures, and Volodymyr Kubiyovych, chairman of the UCC, saw the Nazi economic policy toward the Ukrainian cooperative movement as crucial to liberating contemporary trade from the "Jewish hands" of prewar trade, "aimed primarily at the exploitation of the Ukrainian peasant," that is, officially supported the Nazis in their activities. Perhaps the history of Ukrainian cooperation during World War II and further discussions on the activities of the Maslosoyuz and other Ukrainian cooperatives will help to determine the terminology, to understand the facts of cooperation and to properly assess them.

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Vul. Kostiushka, 01-01a – Lviv Regional Customs office (former residential building)

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1. Андрій Качор, Мужі ідеї і праці: Андрій Палій і Андрій Мудрик творці "Маслосоюзу" і модерної української молочарської кооперації в Західній Україні (Канада: Видання "Братства маслосоюзників", 1974), 344.
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4. Halina Trocka, Spółdzielczość polska w kampanii wrześniowej i antyhitlerowskim ruchu oporu na terenie Generalnego Gubernatorstwa (1939–1945) (Warszawa: Spółdzielnia Pracy Czasopisma "Spółdzielca", 2004), 129.

Cover photo: House at vul.  Kostiushka 1 and 1a, where the Maslosoyuz was located, 2014. Photo by Ihor Zhuk. Source: Interactive Lviv, Center for Urban History.
Inna Zolotar
Translated by Andriy Masliukh