It did not work. Merchants were Russia’s pariahs, a largely mistrusted class. Russian playwright Aleksander Ostrovskiy described the world merchants inhabited as “the land of darkness.” Ostrovskiy, a child of one of Moscow’s main business districts, believed that cultural ignorance, limitless greed, immoral conduct, and sheer stupidity ruled the entire class. He wrote about it repeatedly in his plays, beginning in 1849 with It’s A Family Affair, a tale of Bolshov the merchant, who pretends to be bankrupt to escape his sizable debts. He transfers his assets to his daughter and son-in-law only to have them run off with the money. The betrayal leaves Bolshov penniless and ultimately in “the pit” or debtors’ prison, which the writer contends, is exactly where such cheats belong.
Literary giants from Tolstoy to Nikolay Gogol to Anton Chekhov to Ivan Turgenev joined Ostrovskiy in his ridicule. They, too, created the shadiest of characters out of rotten merchant cloth. Fyodor Dostoevskiy wrote: “A merchant is ready to join any Jew, to betray everyone and everything, for the sake of income.”3
Russia’s general contempt for its merchantry echoed similar though less strident sentiments from other parts of Europe. But it was in Moscow, more than any other place, that the antagonism worked like a translucent fence, isolating the country’s future business leaders. This fledgling community occupied a veritable no-man’s land, cloistered behind heavy walls and bolted gates that were more like fortresses than homes. For the most part, merchants avoided social gatherings and public events that took them away from their routines and insular lives. They had no place in the schools and little involvement in civic affairs. Even peasants considered them baldly corrupt, happy to have them confined to their capitalist ghettos. “A merchant in Russia occupied a rather low rank in the social hierarchy,” explained Dostoevskiy. “And, being frank, he didn’t deserve more.”4
Nor did the merchants seem to want more—at least not yet. They were not particularly interested in challenging the gentry, whom they dubbed lazy and unjustifiably snobbish. Years later, many of the wealthiest and most successful merchants concluded that it was the merchants—not the nobility—who represented the future pinnacle of society. Pavel Tretyakov, one of Moscow’s premiere textile merchants and a leading philanthropist for whom the Tretyakov Museum in Moscow is named, strongly opposed his daughter Vera’s marriage to pianist—and nobleman—Aleksander Ziloti. Tretyakov objected to Ziloti’s frivolous artistic profession, convinced that the musician was after his money. He would have much preferred his daughter to choose a fellow merchant—aristocrat or not. Tretyakov failed to dissuade his daughter from her choice, but he did structure her wedding settlement in a way that prevented anyone he found “distasteful” from getting it. Tretyakov’s contemporaries seemed to have come to the same conclusions. “Have you heard that this young boy, Ziloti, already a bright pianist… made a brilliant match in the sense of fortune: 400,000 rubles in her dowry?” composer Pyotr Tchaikovskiy was asked in a letter.5 Tchaikovskiy, a distant relative by marriage, attended Vera’s wedding.
To Arseniy, though, becoming a merchant had nothing to do with politics or class warfare. It was about liberty and free enterprise. It was, quite unashamedly, about Pyotr.
Arseniy, the aging ex-serf, set out early on April 30, 1858, hoping to beat the long lines he expected to encounter on the way to obtaining his merchant license.[12] Pyotr, sensing the import of his father’s mission, joined him. They both wore long, dark frock coats atop trousers tucked into long boots, aiming to look decent and traditional. The duo made small talk as they walked. Even though they were both giddy about their business prospects, neither spoke a word about it. Like so many others in Russia, they were superstitious and did not want to jinx their prospects.
It was just a fifteen-minute walk from Ivan’s home, down noisy Varvarka and through Red Square to the Moscow State Chamber. There Arseniy would proclaim his finances, pay his taxes, and buy the necessary licenses and tickets required to operate a business. The building was a maze of bureaucratic agencies. It housed the state treasury department, tax collection agencies, and some military offices. Arseniy headed to the “Second Census Department,” which handled merchant affairs.
Despite its important official functions, nothing about the building was plain or governmental. The Moscow State Chamber was located in a grand classical mansion that once belonged, ironically, to a wealthy noble family. The rooms still dripped with the riches usually reserved for the highest echelon of the upper crust; there were ornate marble interiors and extravagantly painted ceilings. Pushkin and other leading intellectuals had visited there before the home was sold to the state in 1845.
Now Arseniy and Pyotr stood inside, awed by the building’s majesty. Little else, however, felt intimidating. Low-level civil servants scurried from office to office like the cogs they were. Peasants, merchants, and aristocrats with various matters that needed attending shuffled about, rarely taking the time to ingest their impressive surroundings. For Arseniy, this moment was a means to an end: He needed the proof that he paid city and social taxes; he needed certificates that would allow him to open a wine shop. And he also needed a few extra rubles to “tip” the men as he made his way through the bureaucracy. The entire process took the better part of a day, but Arseniy got what he came for.
Things were not as easy two weeks later when Arseniy made his way to the Moscow City Society’s house—the Merchant Department. This organization managed the merchant guilds themselves. It was an excessive, hierarchical bureaucracy, which operated more like an exclusive country club than a professional organization—and not just anyone could become a member.
Arseniy got an early start again on May 14. The sky was clear and it was already warm by the time he walked down Varvarka Street toward the Moscow City Society. It took Arseniy only about seven minutes to reach Yushkov Lane, a nondescript speck of a street with little to boast about except for a rather lovely church that stood directly in front of the municipal building. Arseniy, walking alone this time as Pyotr needed to work, instinctively paused before this church, crossed himself and softly mumbled a prayer that God would help him succeed on this momentous day. Then he walked through the iron gates and entered the building.
Arseniy needed an officially stamped application, the guild certificate, to obtain a merchant license. He cleared his throat, stood up as straight as a pencil, and made the inquiry. The man behind the wooden counter looked every bit the part of the clerical worker he was, hair slightly disheveled, eyes bloodshot from too much booze, and a face like a road map. Menial pay and sheer boredom had turned him indifferent to his job and to the people he addressed. The clerk looked up, almost sneering. Great, he thought, wiping the beads of sweat from his brow with a dingy kerchief, another village nobody come to Moscow to seek his fortune.[13]
It was indeed a trend. The number of serfs and ex-serfs filing into Moscow had grown exponentially after the end of the Crimean War. Some, like Arseniy, were looking to jumpstart the freedoms they saw unfolding. Others sought better seasonal work in the factories and industries that had begun to sprout up all over Russia.
That will be 1.80 rubles, the gatekeeper said.[14] Arseniy was ready. The application was supposed to cost 90 kopecks—the sign said as much. But everyone knew you had to pay double, and no one ever asked where the money went or why. Arseniy tugged at his wallet and handed over the money; in return, he received the application. Arseniy smiled and nodded his thanks. The man pointed up and Arseniy headed to the second floor.
Unlike the décor of the Moscow State Chamber, the cast-iron stairs and the iron railing looked overused. Everything in the building did, including the people. Arseniy, however, boyish in his quest, was the exception. He climbed the stairs, turned the corner, and walked into a waiting area outside the chancellery. Arseniy’s fate would be determined here.
He took a seat on a worn bench against the wall, glad to sit down and rest his legs. He did not even bother to try to fill out his application in his rudimentary sc
ratch, preferring like everyone else in the room to rely on officials to do the writing.
The chancellery was decidedly more pleasant than the downstairs had been. The room was quite large with wood floors and wooden tables covered by nondescript broadcloth. On the walls hung several portraits of unnamed officials in gilded frames. Five immense windows sucked in the outside breeze.
Arseniy had to wait his turn to see the most senior official here, known as a table head, a common title that stemmed from the fact that he literally sat at the head of a table. This man was clean-shaven, according to the law, and wore the state uniform. He commanded authority within the small army of bureaucrats that pecked away around him. This man could single-handedly determine how pleasant—or unpleasant—to make the day’s procedures. His decisions were often sound and reasonable, but they could also seem arbitrary and casual.
As each man made his way to the front of the line, the table head dictated his answers and then signed his name at the bottom of the application. In this way, Arseniy was no different from the others that day, putting his barely legible signature to paper when it was his turn. But he did have an edge over the other men because he had important family ties to the guilds. By this time, Ivan was one of only 1,916 merchants in the first guild and knew exactly how to work the system. He had revealed everything to Arseniy.
The table head looked closely at Arseniy’s application, checking for any inaccuracies or opportunities that might yield a few extra rubles from the applicant’s pocket. Arseniy, knowing better than to take a chance with his future, did not let the man wait for long. Nonchalantly, he had hidden a little something for him between his documents.
The official found everything in order. He waited for Arseniy to unveil his purpose and justify his intent. He had heard so many stories from the never-ending stream of merchant wannabes who darkened his doorway. This one, he yawned, would be the same as all the others. Still, toying with these poor, ex-serfs could be amusing. Arseniy would have presented an ideal target. The exchange might have gone something like this: Why do you wish to be a merchant? Isn’t it a bit late for you? the official would ask, smirking as he eyed Arseniy’s mostly gray beard and lined, sagging face.
Like my brother Ivan Smirnov before me, I was once a serf. Now I am my own man. I look to create a better life for myself, for my family, and for my community, Arseniy would have replied in his well-rehearsed imagined exchange.
And how will you make such a change? Going to shave that beard of yours? the man might mockingly inquire.
Arseniy would have shown no emotion. He had expected as much from his inquisitor. I will do what my family does best: I will sell wine. I will sell tobacco. I will sell kefir. My brother Ivan has done this for more than two decades. My brother Grigoriy did it as well. I believe I can do it as well. I believe it is in my blood.
The table head would be skeptical. He had heard this kind of answer so many times before—outsized ambition trounced by ineptitude. He stared at Arseniy. This one seemed sane enough; he did not look stupid; he was clean and respectful; he was even a bit literate. Arseniy had also understood how to play the game. The table head tucked his ten-ruble tip deeper into his pocket.
Everything seems to be in order, the table head would declare, signing his name to Arseniy’s application. Go pay your fees and I will see that you get your guild certificate.
Arseniy moved quickly through the chancellery into another room where officials sat, collecting fees and registering capital announcements. Arseniy settled his accounts there and proclaimed his capital to be 2,400 rubles, or roughly $1,800 in 1858, the minimum allowed to enter the merchant estate at the time.[15] He was then encouraged to contribute to the “poor fund.” Arseniy threw in several kopeks to satisfy the officer, who then handed him a certificate. It was Arseniy’s ticket, the one that would set him on the path already crossed by his brothers.
Arseniy returned to the chancellery. The last paper Arseniy signed that day was an oath. “I, Arseniy Aleksiyev, a peasant freed by Lady Demidova, added to the Moscow Merchants third guild, put my signature in the house of the Moscow City Society which obliges me to pay all the state and city taxes without delay. I pledge not to do anything that may bring harm to my rank. My family and I are of the Russian Orthodox faith. We’re neither eunuchs, nor dukhobors, nor molokans,[16] nor Jews nor any other especially insidious sect. Furthermore, I will bear responsibility if this should prove false.”6
The Smirnov men, all of whom were covered by Arseniy’s application, could now cast off their serf history like a heavy coat in summer. They had become Russian merchants.
BACK AT ONE of Ivan’s shops where Pyotr was working, the conversation flowed. Indeed, it overflowed. In all likelihood, Arseniy and his son rambled on about finding just the right spot from which to peddle wines. They batted around ideas for running the business, what exactly they would sell, and how they would sell it. They even discussed the possibility of distilling their own vodka. The Smirnovs were now poised to enter the vodka fray. And the vodka industry was getting ready for them, too.
Problems in the vodka business had been bubbling for some time. It was a complicated—and especially corrupt—aspect of Russian life. The government relied on revenue from vodka sales. By the late 1850s, an eye-popping 46 percent of the state’s budget came from taxes on vodka.7 This revenue gave the tsar and his top lieutenants every incentive to encourage drinking. The more the people drank, the more the state collected.
The nobility, which enjoyed the exclusive right to produce grain alcohol, had no reason to quarrel with the state’s position. They too benefited from prolific drinkers. Then there were the tax farmers. In Russia, these were the two hundred or so enterprising entrepreneurs, often merchants, nobles, or members of the petite bourgeoisie, who paid the government for the rights to distribute vodka within specific regions. They bid on these rights at auctions held every four years. The winner received the vodka, at a fixed price, and a license that allowed them to trade it and collect taxes. It was risky for the licensees because they had to buy their entire lot of vodka and hope to sell it all.
Still, the contracts were as precious for the state as they were for the tax farmers. Demand for vodka was endless while supply could be controlled. Given the stakes, would-be distributors would do almost anything to win the auction, including bribery. It was estimated that successful tax farmers paid off as many as 90 percent of the officials in the vodka trading chain of command. The costs of these payoffs by just one farmer to local officials, according to a study published by the minister of finance, amounted to more than 17,000 rubles a year.8
It was clearly worth the extra payoff since anything a tax farmer collected above his contract went directly into his own account. One estimate put the annual income of tax farmers in the 1850s at 800 million rubles.9 The system practically invited criminal activity, which the government tended to ignore as long as revenue continued to flow its way.
One of the most harmful consequences of the tax farming system was the production of dirty, diluted alcohol. To increase supplies and bounty, tax farmers would water down the vodka they sold and use an array of foul additives, from soap to copper to the toxic jimsonweed, to keep the liquor from tasting too bland. This practice not only sickened (and in some cases killed) tipplers but also compelled them to buy more of the bad booze to achieve the desired goal of drunkenness. Making matters worse, the government increased taxes on vodka while farmers routinely charged customers significantly more than the legal, state-mandated price. By the late 1850s, many Russian peasants were paying more than ten rubles for a bucket of vodka—or more than three times the established rate.10
The situation was not sustainable and something had to be done. By the end of 1858, just months after Arseniy’s triumph at the merchant’s department, something was done. Outraged peasants, who paid the dearest price for the vodka trade’s corrupt practices, fought back. They began to take oaths of sobriety. Entire communities collective
ly vowed abstinence. In the southern town of Balashov, for example, townspeople gathered in the main square and prayed on their knees. “With tears of repentance and joy, repenting of the great sin of drunkenness, they then took an oath of sobriety, after which guards were posted at all the taverns, and punishments were established for those who broke the oath.”11
The protest, of course, did not stem from any moral awakening that liquor was bad. Rather it grew simply out of a desire to force tax farmers to sell better—and cheaper—vodka. As one observer explained: “Vodka in itself is alright…. The real harm is done when it is costly, and of poor quality, when in order to get ‘carried away’ you’ve got to give the tavern keeper your over-coat, hat, axe, and cart as security, and the vodka itself is such that it only makes you feel bad, like a poison. This is what the people could not bear. This is why they boycotted vodka.”12
The movement, which soon spread to thirty-two provinces throughout Russia, tore at the foundation of the country. Newspapers reported about it in a special section titled “The Spread of Sobriety.” The state, tax farmers, grain harvesters, and tavern owners fretted about what to do. Some tax farmers relented, lowering the price of vodka and improving its overall quality. It was an important first step, albeit a small one, in the direction of a more open, market-driven vodka economy. But it was not enough to overcome the people’s growing unrest—and raw bitterness.
In May 1859 the vodka boycott turned violent. People attacked and destroyed drinking houses, smashing bottles of liquor and furniture, and beating up police and state officials. In just one three-day period, sixty-one pubs in the southeast province of Penza were crushed. That was just the beginning. The riots spread quickly, unleashing a torrent of pent-up anger to some thirty-eight different regions or districts in Russia. By the end of that year, 260 liquor establishments had been attacked in two hundred different communities. Nearly eight hundred people were arrested and prosecuted for their participation in the violence, as the government and its army moved in and, eventually, brutally suppressed the offensive.13
The King of Vodka Page 6