When it came to the vodka monopoly in particular, Witte also could count on the tsar’s personal commitment. In his memoirs Witte contends that controlling liquor sales was one of Aleksander III’s primary objectives. “He was very grieved that the Russian people squandered so much money on liquor and saw a liquor monopoly as a means of reducing drunkenness…. He was ready to take the bold step of replacing the excise tax system with one under which the government, as the exclusive purchaser of liquor from distilleries, could regulate liquor production and then be the sole seller of liquor to the public.”4
Although Witte was more fiscally than morally motivated, he embraced the mandate. Almost immediately following the tsar’s official approval of the monopoly on June 6, 1894, Witte moved into offense. He continued the state policy of playing down the government’s budgetary needs and emphasized once again the more popular notion that the monopoly would “put an end to the grievous influence of the retailers of spirits on the moral and economic condition of the people.”5
Smirnov, not the intended target of the minister’s insults, nonetheless had to have recognized that his support from the monarchy was on the wane. His spirits industry was being singled out—by the tsar and his top lieutenants, all of whom wholeheartedly backed the monopoly, as did the church. Clergy were more and more taking up the cause of sobriety, organizing and leading temperance groups throughout Russia. The anti-alcohol message was a cornerstone of the church’s fledgling movement aimed at improving the deteriorating lives of workers and peasants. Strikes, some supported by a young and determined new leader, Vladimir Lenin, reappeared with the industrial boom of the 1890s. These incidences increased steadily, and like a mutating virus became more and more immune to the state’s efforts at suppression.
It seemed that the one thing on Smirnov’s side now was time. The vodka monopoly could not escape the quagmire of politics and government bureaucracy. Implementing such drastic reform would not be accomplished overnight. The state had to set up mechanisms for collecting new taxes and fees; it had to hire locals free from any association with the private spirits industry to monitor liquor supplies and their quality; it had to educate officials and citizens about the details of the new measure; and finally, it had to assume responsibility for a gigantic, unwieldy industry. This monopolization would include the building of more than 350 distillation warehouses and the opening of up to 18,000 state wine shops by 1899 alone.6 Witte recognized the enormity of the task and determined that he should seed the reform first in places where both alcohol consumption and vodka revenue collected by the state were historically low. In this way, the government would exercise more control over the reform rollout and not be overwhelmed by it. He could also see whether the monopoly would indeed capture more money for the monarchy and reduce drunkenness at the same time. Four eastern provinces—Samara, Orenburg, Perm, and Ufa—were selected as testing grounds.
This methodical rollout became Smirnov’s advantage.
FROM 1893 TO 1895 Smirnov turned outward. Russia was changing quickly throughout the decade, and Smirnov realized his personal and commercial longevity depended on his doing so as well. No longer could he be singularly focused on his own image—whether he appeared pious enough, charitable enough, or honored enough. A variety of troubles loomed on the horizon, above and beyond the pending monopoly. Smirnov had to grapple with a shifting business environment as well, which under Witte was moving swiftly toward more expansive industrialization and more Westernized business practices. A variety of capitalistic institutions, from commercial banks to stock exchanges to ventures with private shareholders, were multiplying across the country. Industries from oil to iron to transportation were undergoing enormous growth.
Closer to home, there was the man himself, who at the age of sixty-two in 1893 was beginning to show signs of his advancing years. The debonair vodka king, though still quite distinguished, was losing his sharp features, particularly around his bluish gray eyes. In place of the taut gaze was a more haggard look. Puffy bags drooped from Smirnov’s eyes, stretching it seemed for the floor where they could rest. But they could not rest—not yet. Smirnov had three grown sons with varying interests and abilities to consider and for whom he must make plans—not to mention five daughters and two younger sons. He also had to think about Mariya, a woman swirling within high society who at thirty-five was still beautiful, energetic, and full of want for aristocratic pleasures.
Turning to his family, Smirnov might have found himself wondering where he had gone wrong. He had given his children everything, including a deep and often tender love evidenced in letters he wrote to them.7 They had first-class academic, religious, and cultural educations, as well as rich social lives. They had traveled abroad to destinations throughout Europe, often as a family.8 They had never known hardship, certainly not the kind that had defined Smirnov in his youth. In a world so limited for so many, the opportunities for Smirnov’s children seemed boundless. Taken together, the Smirnovs should have been the idyllic family.
But as Smirnov’s children grew into adulthood, their differences and potential shortcomings began to fracture the family. Perhaps it was the stereotypical consequence of wealth’s corrupting influence, or the natural result of having fathered children by different mothers, or simply the nature of life in nineteenth-century Russia. Whatever the reason, Smirnov’s plan for a smooth transition to the next generation was in jeopardy.
Smirnov could and did depend on his eldest son. In most ways, Pyotr Petrovich was the model heir. At age twenty-five, he was serious, hard-working, driven, and full of promise. Smirnov did not hesitate to put his eldest boy in charge of his operations in St. Petersburg, dispatching his son to the capital city for two years to oversee a large cellar and vodka warehouse. While in St. Petersburg, Pyotr demonstrated not only his managerial prowess but also his own entrepreneurial zeal, opening and operating a popular teashop on top of his other duties.9
Smirnov was more than pleased with his son—except for one thing. While in St. Petersburg, Pyotr had an illicit affair with a married woman. Few details are known about the romance between Pyotr and Eugeniya Ilyinichna, an elegant woman believed to have been married to a doctor when the two met. According to family lore, Pyotr fell desperately in love with Eugeniya, and despite the threat of scandal they carried on a passionate relationship. Eugeniya ultimately chose to leave her husband for Pyotr, risking the deep-seated stigma and disgrace attached to divorce in pre-revolutionary Russia. The couple married in 1893, according to church records, the same year Eugeniya gave birth to a daughter, Tatiana.
There is little doubt that the sordid affair angered Smirnov. It went against his rigid religious convictions and strict moral compass. He may have ordered his son to end the relationship or face serious repercussions. The conflict between Pyotr and his father was mentioned briefly in a letter to Aleksandra, Smirnov’s youngest daughter, by a suitor who was having trouble gaining Smirnov’s blessing for his own attempts at courtship. The suitor asked to meet Pyotr to get some advice on how to deal with what he regarded as Smirnov’s fanatical and unflinching disapproval. “Tell your older brother [Pyotr] to set a date when I could come and speak to him about some things…I would like to know, because your brother suffered from him [because of his affair], to what extent your father’s despotism may spread and what I should beware of.”10
Smirnov could be tyrannical in business and at home, though with age his stronghold had begun to loosen. Pyotr was unquestionably Smirnov’s best shot at an enduring legacy, and he probably knew it. In a highly uncharacteristic act, the father, whose threats went unheeded, essentially condoned the son’s affair. He appointed Pyotr to handle a vital restructuring of his business in 1893. In a letter addressed to “my dear son, Pyotr Petrovich,” Smirnov granted his son the right to represent the elder’s interests. Confidence in the young man was unwavering. “I trust you in all the acts which will be done by you according to the laws. I will not argue nor will I contradict you,” wrote
Smirnov.11
He wanted Pyotr to spearhead the establishment of a joint-stock company, a tool used widely in other developing nations and an increasingly popular one employed by Russian businesses. The structure allowed for ownership stakes to be distributed among a select group of directors. Until this time, Smirnov’s vodka business was managed like most other family-run operations in his country: as a vast, one-man show. But Smirnov and other progressive business leaders could see they needed to move beyond this antiquated, autocratic model. When the vodka maker applied for his joint-stock company in 1893, there were just 522 of them with a capitalization of about 600 million rubles. By the end of the century, the number had swelled to 1,996, according to the Ministry of Finance, with overall capital estimated at nearly 2 billion rubles.12
Along with issuing stock, which required approval from the tsar, Smirnov took the unusual step of asking the ruler to allow him to pass all his personal awards and honors to his company, including his cherished title of Purveyor to the Imperial Court.[30] This request, believed to be the first of its kind for a vodka enterprise in Russia, proved yet again Smirnov’s foresight and ability to craft innovative measures before others. Smirnov was arming his business for the post-Pyotr Arsenievich era, concerned that his decades of hard labor, which had made him one of the wealthiest and most prominent businessmen in Russia, would evaporate with his passing. Smirnov’s assets at the time included nine houses in Moscow, a dacha (country home), and a vodka factory. In addition, he leased twenty-one warehouses for his liquors.
Witte personally signed off on Smirnov’s restructuring in 1894, which valued his company at 3 million rubles, roughly $39 million in today’s dollars. Newspapers carried the announcements informing the public that Smirnov had selected his son Pyotr, and Nikolay Venediktovich Smirnov, a cousin, to serve alongside himself on the company’s new board of directors. Mariya, Smirnov’s wife, took on the post of alternate director. The omission of Smirnov’s two other eldest sons from the slate of directors was telling. They were still quite young, of course. Nikolay was just twenty then and Vladimir eighteen, but Smirnov had other reasons to keep them removed from his commercial affairs.
Nikolay had often been cause for concern. He began life when his mother, Nataliya, died. Physically, he appeared fit and robust. His face was long like his father’s, and his dark handlebar mustache and goatee were full. He was handsome, though he lacked the confident air about him that both Pyotr and Vladimir had in abundance. In school, according to records, Nikolay received average marks. Whether these factors contributed to what family members later described as his unstable, neurotic temperament, remains a mystery, but it appeared that Nikolay did not possess a sense of responsibility and was therefore ill prepared for the demands of business—at least in his father’s mind.
His brothers stated in legal documents some years later that Nikolay had battled alcoholism for years. He tried, to a large extent successfully, to keep his outsized appetite for liquor in check for the sake of his disapproving father, but he had a propensity for dangerous and deviant conduct. Later, Nikolay’s freewheeling spending of his father’s fortune would cause problems. He once purchased a diamond necklace made by Fabergé for a favored lover, an extravagance that cost 16,000 rubles ($195,000 today).13 He also purchased a silver chamber pot for 200 rubles, or more than $2,500 today. A regular around Moscow’s raging nightclub circuit, Nikolay often shepherded different women on his arm. He was not interested in gainful employment of any kind, preferring instead to spend his time more playfully.
Not surprisingly, Smirnov found his son’s destructive and erratic behavior disgraceful, viewing Nikolay like a raft with a small leak in it. Smirnov, who did love his son, could not afford to allow Nikolay to take his company down with him. His son’s drinking binges could be lethal, playing right into the hands of temperance advocates and monopoly proponents. If Nikolay Smirnov could not control his thirst, how could helpless peasants be expected to? Smirnov, always the pragmatist, made the practical choice. He kept Nikolay away from his business, focusing instead on finding him a mate able to help control him.
Vladimir, handsome, charismatic, and talented, presented a different conundrum for Smirnov. “Vladimir looked like his mother—blond, with blue eyes, well proportioned, well put together, and tall. He was naturally charming and always elegant.”14 He was in some ways the ideal heir. He had a smoothness about him that stemmed from supreme confidence. He was smart, conversant in at least three languages beyond his native tongue. He was quick-witted and artistically and musically gifted. He also had a powerful advocate in his mother, Mariya, who was devoted to securing her eldest son’s place in the family hierarchy.
Vladimir, too, had his vices. Like Nikolay, he had a passion for unsuitable women, a love of gambling, particularly horse racing, and a spending problem. He often sought out the company of actresses or singers. Unbeknown to his father, Vladimir loved to pass time at a fashionable restaurant in Moscow that played host to the best gypsy singers in town. It was a party hub, attracting many fellow playboys. According to the memoirs of Vladimir’s third wife, Tatiana Smirnova-Maksheyeva, this pen chant for the carefree, somewhat debauched lifestyle, cost Vladimir a great love and drove a wedge between son and father.
He was 18 years old when, secretly from his father, he became a regular customer at the famous Moscow restaurant called Yar, where a gypsy choir sang. Vladimir made friends with the choir members, learned how to play the guitar, and often stood behind the choir, singing along with pleasure. Among the gypsy women soloists was a young girl named Katya. He fell in love with Katya and signed promissory notes for a large sum to a Moscow money-lender to purchase lots of brooches, bracelets, earrings and rings, decorated with diamonds. He gave all this to Katya and, as was required, paid the choir 50,000 rubles for her. His involvement with Katya and his prank with the promissory notes soon became known to Pyotr Arsenievich. He became upset, calling the money-lender, paid him for the promissory notes, and forbade him to ever show himself again and threatened to sue him if he ever lends money again to any of Smirnov’s sons.
After this, Pyotr ordered Vladimir be locked up in his room and not allowed to leave or to go anywhere. Before this, they had a confrontation. Vladimir pleaded with his father, saying that he had “fallen in love with Katya forever and could not live without her.”15
It is impossible now to verify Tatiana Smirnova-Maksheyeva’s remembrances of her husband’s youth in Moscow, but plenty of evidence confirms that Vladimir adored women, loved the good life, and squandered money. It is also certain that Smirnov saw his third son differently than he saw Nikolay. He was more optimistic about Vladimir’s future prospects and took steps to set him on a more respectable path, suggesting that he seek work experience and adventure away from his homeland.
I [Smirnov] have decided to send you on a business trip for a year to China to deal with some affairs of our firm. If your love endures the separation, I will allow you to marry your gypsy woman. For now, you will sit in your room, locked up. [Smirnov told his son.]
Vladimir was in complete despair but had to obey his father’s wishes. Sitting in solitary confinement, he burnt the letter “K” above his elbow, using a very hot pin. This “K” remained on his arm for the rest of his life.
Soon, Pyotr Arsenievich sent his son to China, under the guardianship of his own brother to whom he [Smirnov] gave a sum of money for the trip. Pyotr allowed his son to say good-bye to Katya. She came to the train station when the train was about to leave. They were both crying. That was their last meeting.16
Vladimir’s granddaughter, Kira Smirnova, who lives in Moscow, believes her grandfather went to China.[31] She has an incense burner she says Vladimir purchased during his time there, a keepsake that has been handed down to her. The trip also would have been in keeping with Smirnov’s image as a strong patriarch, decisive and authoritative when it came to his children’s upbringing and social standing. He did not tolerate indecent behavior, par
ticularly when it could undermine his company or his own finely sculpted image. What’s more, the trip abroad might have been part of an effort to expand Smirnov’s global presence prior to Russia’s enactment of the vodka monopoly. Indeed, Smirnov opened up in markets where liquor was traded more freely—from Japan to China to France. In the 1890s his liquors were on the menus in fine hotels across Europe and in other locales where wealthy Russians might be found. He also became purveyor to the royal courts in Sweden, Norway, and later, Spain.
Vladimir likely spent his year in China, building relationships with local traders and learning more about the Chinese liquor industry. But according to his third wife, the journey did not mellow Vladimir—at least not right away. Almost immediately after leaving port, he reverted into his old habits.
On the steamship to China, Vladimir was bored and got involved in a card game, losing a large sum as a result. He had to ask his uncle for help. The uncle became upset and categorically refused to pay for his nephew’s losses. What was to be done? Without giving it a second thought, Vladimir took up the guitar he had taken with him on the trip and started singing gypsy romances, walking around the deck and at the dinner table during meals. He was a great success. People stuck cash into the round opening of his guitar. Each performance was followed by loud applause. He paid back the money he had lost in the card game in full but did not play cards again, suspecting that he had been the victim of card sharks.17
The King of Vodka Page 17