The King of Vodka

by Linda Himelstein

  But the point had been made. The antiquated, thoroughly corrupt system that had ruled vodka commerce in Russia for more than one hundred years was broken, a crippled reminder that reforms were well past due. Like serfdom, tax farming had to go.

  WHILE TSAR ALEKSANDER II formulated what later became known as “the great reforms,” Pyotr and his father prepared for the coming change. Pyotr had stopped working for his uncle in 1859 and was spending his time making plans with Arseniy. They had limited capital and were restricted in the scope of their merchant license. But nothing could quell the enthusiasm shared by the two men. It was a happy time for them. And Pyotr had a new woman in his life.

  Her name was Nataliya Tarakanova. She had much in common with Pyotr, according to local records. She, too, was a former serf from the Yaroslavl region, having been ransomed from her landowner in 1853. Her father, like Pyotr, had come to Moscow to pursue the merchant life. Shortly after joining the guild in 1853, Nataliya’s father died, leaving her and her mother to tend the family’s affairs. For her time, she was an able businesswoman, competent and serious. This ability must have been appealing to Pyotr, now eager to find a partner who could understand, support, and promote his ambitions.

  He may also have liked Nataliya’s appearance. She was young and innocent, probably no more than nineteen years of age when they met (Pyotr was twenty-seven). Her exact features are unknown because no photographs, drawings, or paintings of her exist. More than pleasant looks, though, Nataliya offered a winning combination of intelligence and gentleness. For Pyotr, she would make the perfect spouse—and mother of their children.

  The two married in either late 1858 or early 1859. Pyotr could now truly separate from his Uncle Ivan—and wasted no time doing so. The couple rented space from a wealthy merchant who owned several homes, according to real estate records. It was right next to the home Pyotr would eventually buy and inhabit for the rest of his life. The living quarters were in a pale yellow, two-story building that the Smirnovs shared with a spice-cake shop. The smell of these glazed cookies, a kind of national sweet, permeated the entire neighborhood. It did not take long for Nataliya to become pregnant, as her belly swelled by the middle of 1859. She delivered Pyotr’s his first daughter, Aleksandra, at their home in December 1859.14

  Aleksandra did not survive for long, dying six months later from measles. The death of his second child must have left Pyotr distraught and Nataliya inconsolable—a state that prompted the couple to move again. This time, Pyotr and his wife sought solace and comfort. They found it in the home of the sexton for St. John the Baptist Church, the same place that would host Pyotr’s funeral years later. It was located in the Zamoskvorechye district, a hub for merchants in general and immigrants from Yaroslavl in particular. Their street was not the bustling thoroughfare of Varvarka. But it was an up-and-coming trading center, ideal for newly minted merchants.

  Pyotr felt at home there. It was as close to village life as he was going to get in Moscow. Familiar faces, similar values, sympathetic, devout neighbors. It was also only a five-minute walk to the infancy of an empire.

  ARSENIY OPENED HIS first wine cellar in a house in the Pyatnitskaya district. The business was known as a renskoviy pogreb, meaning “the Rhine cellar.” The Rhine valley in Germany was the region from which much of the wine in Russia during the eighteenth century had come. In Smirnov’s time, wine came from all over, but the term “Rhine cellar” was still used, generically, to refer to any place selling alcoholic drinks. The street-facing entrance to Smirnov’s shop was marked by an oil lantern and a green sign inscribed with gold letters that read: RHINE CELLAR OF ARSENIY SMIRNOV. Though the business carried Arseniy’s name—and he was the official owner, he handed over much of its operation to Pyotr and his wife.

  Arseniy knew comparatively little about the backbone of the spirits industry—its suppliers, pricing, manufacturing. Pyotr, by contrast, knew it all. Years under his uncles’ tutelage had taught Pyotr such essentials as where to find the best liquor and to how profit from it. He had contacts all the way north to Uglich as well as right in the heart of Moscow.

  The father and son began small—as they had to. Legally, they couldn’t distill their own spirits or serve hot meals in their establishment. The Smirnov renskoviy pogreb likely sold grape wines by the glass and in bulk, which patrons could choose to drink on the premises or to carry out. They sold vodka, too, produced elsewhere. Wishing to solidify ties to their community, they allowed customers to linger in their small, smoky cellar. But Pyotr was careful not to allow his thirsty customers to drink too much. Unlike some other establishments, his was to be respectable. He nursed his reputation, wanting to be known as someone who cared as much about his patrons as he did about racking up sales. It was an early and unusual commitment to responsible drinking—and the beginnings of a highly cultivated image Pyotr would nurture throughout his career.

  Within months, Arseniy and Pyotr added tobacco and kefir to their product line. And by 1861 they opened two trading shops and one cellar, which sold these items, along with liquor for takeout.15 They worked diligently and prospered more than most, considering the constraints of their time.

  Historically, the tsarist regime had always had trouble loosening its tight grip on the economy. Availability of capital was a problem, and incentives for entrepreneurship were almost nonexistent. In addition, foreign investment was scarce. Labor lacked basic protections, benefits, or productivity models. And no real rule of law was in place to govern free enterprise. In that environment, few corporations had been founded—just sixty-eight existed in all of Russia in 184716—and even fewer survived for long, particularly in the government-controlled areas of manufacturing, heavy industry, and transportation.

  The tsar knew this scenario could not continue if Russia were to flourish. He had to find a way to jumpstart the nation’s most enterprising citizens, to give them incentives to create businesses and work harder. On February 19, 1861, six years after his coronation and after a great deal of discussion, Aleksander II, later known as the great reformer, locked himself alone in his office and signed the manifesto abolishing serfdom. Some 22.5 million serfs, or 40 percent of the nation’s population, were granted some civil rights, a structure to own their own land, and the ability to engage freely in any gainful employment they chose.[17] At about the same time, the government announced that the production, distillation, and wholesale and retail sale of vodka and other spirits would be open to all. The tax farm system would be no more, replaced within two years by an excise tax system. The idea was to end the corruption that had raged among vodka makers and sellers for years while, at the same time, growing government revenues through hefty taxes.

  These two gigantic reforms had an extraordinary effect on Russia—and on Pyotr Smirnov. Within months of the tsar’s proclamation, signs of progress, modernization, westernization, were everywhere. Memoirs of Muscovites at the time describe a city that transformed from a drab backwater into a hot spot. Old-fashioned carriages disappeared, replaced by sleeker models with coach boxes. Gas was pumped into private homes by huge gas-transporting vans that seemed almost American. Schools for women opened, as higher education came into vogue. Even the press had more freedom. “Something new was in everything,” recalled one Moscow resident. “The streets and buildings were the same. But there was no sign of former Moscow. The features of the sleeping kingdom had disappeared.”17

  In its place, liberalized citizens smoked on the streets and wore long, rebellious hairstyles. Men traded in their stodgy top boots for imported low boots. Women donned European fashions purchased from elegant shops that opened on Tverskaya Street. Crowds, once fearful of Moscow’s darkness, came out into the night, as new kerosene lamps brightened the city’s squares.

  It was an environment and mind-set that exhilarated most Russians. The effect on merchants, like the Smirnovs, was palpable. Although they were still discriminated against, their status and self-image improved. Pavel Buryshkin, a well-known Russia
n merchant who chronicled Moscow’s nineteenth-century merchant estate, wrote: “Beginning in the 1860s, every day life of [the merchant districts] shifted. Children started receiving education. Young merchants studied not only in the commercial academy but in the university as well. Merchants’ daughters started to speak English and play Chopin nocturnes. Stubborn, dumb despots were reborn into businessmen who realized their material power.”18

  It was as if hope had seeped into the water supply, showering an entire population with the promise of better days. Pyotr Smirnov drowned himself in the mood. In Russia’s quest to modernize and industrialize, he saw opportunity for himself and his family. In the tsar’s acknowledgment that merchants had key roles to play in Russia’s economic rebirth, Smirnov might have believed the emperor spoke directly to him. In the call for entrepreneurship, Smirnov did not hesitate.

  He marched down to the Moscow City Society, filed his papers with the officials, announced his capital, and walked out with his own merchant license. He joined his father as a member of the merchant’s third guild. Unlike his time in Yaroslavl, Smirnov was now completely untethered, ready to mold his own future.

  It was 1862 and Pyotr Smirnov had heard the unmistakable pop. For the first time in his life, he seemed to believe that anything was possible. Now he set out to prove it.

  Chapter 4

  The Vodka Maker

  It did not take long for the real Pyotr Smirnov to emerge. A man transfixed by opportunity, as tireless and determined as a missionary, Smirnov was making up for lost time.

  Life was a veritable frenzy of activity. Smirnov had taken over almost every aspect of the business from his father. Arseniy was likely so convinced that his boy was on the way to a fruitful future that he gave up his status as a merchant and moved down a rung on the social ladder to the petite bourgeoisie class. He saw no reason to maintain appearances—or continue paying dues to the guild or taxes to the state. Pyotr could take on those responsibilities for the family as it was he who truly reveled in his rapidly improving position. He was consumed by running the three alcohol-trading outlets the family now operated, and he made plans for expansion. At the time, according to a profile compiled for a commercial exhibition, the business employed nine workers, including Pyotr, Nataliya, and Arseniy. But Pyotr could see it would not be long before this small group would be overwhelmed by more and more business.

  The spirits industry was booming. After emancipation and the end of tax farming, prices of vodka dropped by 65 percent, from as much as twenty-five rubles per pail to eight rubles sixty kopeks. The intoxicating liquid was then commonly referred to by consumers and in the media as the “cheap stuff.”1 Quality was up, too, as incentives to water down or dirty-up the booze fell away. Consumption skyrocketed: Russians soaked up every drop of alcohol produced and came back for more. They spent 300 million rubles more on alcohol in 1863 than they had in 1862.2 “It became the conventional wisdom that the reform had led to an orgy of drunkenness,” wrote David Christian, a contemporary Russian historian.3

  Part of the torrid tippling could be explained by the sheer availability of liquor. In the same year, from 1862 to 1863, the number of drinking spots in Moscow alone swelled from 371 to 3,168.4 These dingy watering holes could be found everywhere—near monasteries, hospitals, cemeteries, and schools. Indeed, there were more pubs per person than doctors. The same was true for all of Russia, which went from having 78,000 pubs before emancipation to more than 265,000 by the end of 1863. The reason was simple: Licenses to operate cellars and pubs had gotten cheap, creating a quick, easy way for the lower classes to upgrade their standard of living. The price to peddle grape wines, for example, was the equivalent of a paltry $27.

  Russia suffered under the ill effects of drinking, to be sure. Alcohol-related arrests in Moscow swelled, from about 7,000 in 1842 to almost 12,000 in 1863. Health concerns grew, too. According to official records and historians in 1863, deaths from alcohol poisoning and other liquor-induced diseases were so numerous as to be “too hard to count.”5

  Still, these negative by-products were easily swept aside. It was the euphoria emanating from Tsar Aleksander’s II’s series of liberalizing reforms that commanded people’s attention. In addition to emancipation and the abolition of tax farming, the tsar introduced a form of local self-government known as the zemstvo. These civic organizations, which primarily addressed local economic and cultural issues, brought together citizens from across the societal food chain. This spectrum included the gentry, clergy, merchants, and peasants. The zemstvo had no real authority and was dubbed by contemporaries as “a building without a foundation or a roof.”6 But at first, it gave many people a sense of empowerment, a feeling that their country might be moving to a more constitutional, democratic model.

  In 1864 a set of judicial reforms, including the creation of public jury trials, replaced the old feudal system. The move brought together people from across the economic spectrum to pass judgment on other citizens, helping establish at least the appearance of a rule of law that treated people—and businesses—evenhandedly. The nobility no longer held all the advantages. Other reforms followed in the ensuing years, including decreased censorship, military overhauls, and the establishment of decentralized governmental bodies that included representatives from all classes.

  The period of the so-called Great Reforms, which lasted from 1861 to 1874, offered up a special moment for Russians. The era saw the greatest number of corporations ever chartered by the tsarist regime, as well as a commercial banking boom. Technological advancements, a central part of the effort, were made at lightning pace. Perhaps most noteworthy was how much the reforms helped spur the Russian spirit of entrepreneurship and enthusiasm for strong economic development. If the nation had not run headfirst into the litany of domestic problems that later fueled the Bolshevik Revolution, some contemporary historians concluded that Russia might have stayed on a capitalist course, perhaps surpassing leading economies in the West.

  It is unlikely that Smirnov understood how these political and social dynamics affected his immediate circumstances. Nonetheless, he capitalized on them.

  IN SOME WAYS, Smirnov’s boyhood had been a never-ending series of acting lessons. Outwardly, he had to appear respectful and earnest, a standard bearer for the unquestioned obedience and diplomacy expected of a proper peasant’s son. Inwardly, though, Smirnov was reeling, quietly plotting for what might come next. Now in his thirties, Smirnov was repeating the pattern.

  He was a small-time liquor peddler, a man doling out an assortment of drinks plus sauerkraut and pickled cucumbers to a group of mostly middle-and lower-class customers. But he ached for much more. Smirnov wanted to join the small but growing list of ex-serfs who relied on innate intelligence and business savvy, rather than birthright, to become some of Russia’s most prominent self-made moguls. The names were well known to most Russians, including textile baron and financier Morozov, chocolate maker Abrikosov, and textile manufacturer Konovalov. These people had tucked away their humble beginnings like old photographs, never looking back at the fading images. They had stumbled on good fortune and made the most of it, launching their enterprises at a moment when the state needed them and few competitors existed.

  The successes of these moguls could indeed have been the model for Smirnov. They chose to enter industries that were in demand. They grew these businesses by relying on family and friends—and to a lesser extent the state, for manpower, money, and advice. They also invested in and utilized cutting-edge technologies, such as rapid transportation and updated machinery. And last, Smirnov probably noted, they maintained high-profile positions in charitable and religious groups to soften their rich public images and strengthen ties with influential city leaders and aristocrats.

  In evaluating the triumphs of these other ex-serfs, Smirnov might have realized the sweet position in which he now found himself. Demand for liquor, specifically vodka, was a bottomless pit. Competition was weak: There were roughly a dozen vodka pr
oducers in Moscow in 1864, most with fewer than ten employees. And the price of entry, both in terms of money and human capital, was within his reach.

  Smirnov knew that to replicate the prestige and power of men like Morozov or Konovalov he had to think bigger than small pubs and wine cellars. He would have to take on the greedy middlemen who supplied the liquor he sold. Smirnov had plenty of connections to produce his own stuff—a route that would enable him to control his vodka’s taste and quality. He could also sell to other pub owners, increasing his revenues and profits. Eventually, he could export to other Russian territories, too. Moscow was at the center of the country’s developing railroad hub, making it an ideal location from which to ship products.

  Smirnov embraced the obvious: It was time to start making vodka. The year was 1864, the same year that Smirnov’s future nemesis, Tolstoy, was writing his epic masterpiece, War and Peace.

  SMIRNOV SCOUTED THE perfect spot for a vodka distillery in the dwelling of fellow merchant Aleksey Shekhobalov. The location was near Smirnov’s home at the time, between Ordynka and Pyatnitskaya streets. The cramped, dank space was already set up to produce alcohol. A metal still was there, along with a steam boiler and a storage area. It was perfect for making wines, vodka, liqueurs, and sweet nalivkas, the fruity vodka mixes for which Smirnov would later became famous.