As a result of the development of capitalism in the region, Shushi being cut off from the new trading routes, lost its predominant position in the economical life of the region. The trading families ceased to guard the movements of caravans from the height of their town. The prosperous merchants and manufacturers, sensing a new massacre, left the country taking their capitals with them. Some residents, with their courage and willingness to engage in enterprises, undertook to build a railway and restore the former fame of Shushi. In 1906 the applied to one of the magnates of oil industry Alexander Mantashian set up a joint stock company for the purpose. The publisher Tigran Nazarian set up the “Reciprocal Land Credit Company”, whose “economic and moral growth will prevent all kinds of rough forces from disturbing us”.1

Soon the schools were re-opened in Karabakh. The Karabakh diocese supervised 42 Armenian schools the Nukhi region’s educational institutions included. The number of periodicals and magazines published in the region was increasing. New publishing presses were founded. The destroyed factories and workshops were being restored all over the country, new ones were being built. In 1908 the wealthy industrialist Arakelian undertook to build the large Shushi real school.

Various political parties and societies, drawing their inspiration from the Russian committees, published their newspapers. Even the Kadet party, with the membersip of 7 men, had a newspaper of their own. The population of Shushi was 40 thousand in 1917, with an Armenian majority.2

In late 19th century two mighty political doctrines were taking shape in the Ottoman Turkey, aiming at uniting of all the Turanian peoples of Asia around the Turkish core under a single rule. The first movement intended to establish a “Muslim Union”. The second one intended to unite the closest relatives of Ottoman Turks – the Caucasian Tatars and the Turkic people of Persia and set up a “Turkic Union”. Their theorizing was far from being harmless.

By early 20th century the pan-Turkism became the ideology of a most powerful “Young Turks” militants. In 1907 this group founded the “Ittihad” or “Committee for Union and Progress” party, which is popularly known as Young Turks. The Task of the organization was to Turkicize all the minoities of the Ottoman Empire, and then turn to Caucasus or to its Turkic tribes. Taking advantage of the growing dissatisfaction of the Caucasian Tatars the Russian authorities, the theoreticians of the party aroused a Tatar anxiety about the Armenian “threat”, hostility to the privilaged wealthy Armenian element within their midst and a feeling of connection to other Muslims, particularly Turks. Law literacy, inadequate schooling and poverty among the Tatars, slowed the development of a Turkic intelligentsia, but the few political activists adhered to the pan-Turkic ideology and participated in the revival of Muslim organizations. The Tatars espoused the nationalist and pan-Islamist ideology of the “Muslim Democratic Musavat Party”, founded in 1911. The Turkish politicians intended to abolish the Iranian religious influence on the Transcaucasian Muslims, which becoming in early sixteenth century Skii rather than Sunni, continued to develop under Persian not only religious but also social and cultural influence. The theoreticians inspired the Tatars imagining themselves as part of a continuous Turkish tradition. The pan-Turkic leaders patronized the Musavat (equality) party, which served a kind of agency for Turkey in Transcaucasia. The Great Soviet Encyclopedia described the party thus: “The project of the Musavat party was to unite the Muslim world under the leadership of Turkey”.3 Professor of London University David Marshall Lang and writer and researcher Christopher J. Walker write in the book “Armenia and Karabakh”;

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