The King of Vodka

by Linda Himelstein

  The gambling was one thing; Vladimir’s weakness for women was another. After arriving in the country, he began romancing a married woman. The doomed affair ended abruptly when Smirnov called his son back to Russia. It had been exactly twelve months since Vladimir had gone away. Upon returning, he pleased his father by involving himself more in the company’s affairs and business operations. Still, though, he thought of the woman who had so thoroughly captivated him. He went to Yar in search of Katya. Instead of finding her, Vladimir learned that she had married and suffered a mental breakdown after giving birth to a stillborn child. Her body was later found in a ravine. “It was never known whether she had committed suicide or fell prey to a murderer.”18

  THE MONOPOLY STILL loomed for Smirnov. It was like an immense gray cloud in the distance, blackening as it made its approach. It was advancing, slowly though, bogged down in a thicket of logistics. The big question for Smirnov was how much damage it would cause.

  In the meantime, the vodka maker prepared himself. More exposure to his name and products on the world stage was imperative, if only to remind the monarchy of its pride in Smirnov’s brand. Witte, in particular, was sensitive to Russia’s economic reputation, desirous that the world see his country as a leader among modern industrialized nations, ready to embrace new technologies and more capitalistic institutions. That was likely one reason behind Smirnov’s decision to send a sizable collection of his rum, vodkas, liqueurs, and cordials in 1893 to the World’s Columbian Exposition: the famous Chicago World’s Fair. It was a highly visible platform internationally and an ideal location for affirming Smirnov’s goods as Russia’s best. In a company profile submitted for the fair, Smirnov stated that he employed 1,200 men, produced 2,000,000 pails of 40-degree vodka each year, and had annual revenue of 15 million rubles ($180.3 million today).19

  Russia sent plenty of other representatives to the exposition, including a delegation from the monarch himself and more than 1,000 exhibitors. Products ranged from furs to samovars to silks. The fair also boasted a variety of firsts, including an entire building devoted to electrical exhibits crafted by the likes of Thomas Edison and Nikola Tesla. The fair debuted the Ferris wheel, Juicy Fruit gum, and Aunt Jemima pancake mix. For Smirnov, who likely did not attend the event personally, the agenda at the fair was simple and self-serving. He got what he wanted, receiving top honors for his liquors.

  This strong showing in Chicago was significant. Russia, under Witte’s direction, was pursuing a broad economic agenda, hoping to improve the domestic economy and buttress the nation’s international stature. Protectionist policies, inspired and developed by renowned chemist Dmitriy Mendeleyev, best known for creating the periodic table of elements, helped fuel heavy industry growth at home. Sectors ranging from iron to steel to railroads thrived as a result of dramatic influxes of cash collected from steep import tariffs. By 1895 Russia had become the largest producer of oil in the world. Foreign investment was up almost fourfold in the decade. Moscow was booming, too, as villagers flooded the city in search of work in factories and on construction projects.

  The 1890s were a healthy period overall for most Russian businesses. New technologies and modern infrastructure kept the marketplace buzzing. Smirnov, too, advanced his manufacturing capabilities, adding electricity to his factory operations. Though not claiming to be first, Smirnov advertised that he was among the first to install electrical lighting in his factory, demonstrating to the Imperial Palace his willingness to embrace progress no matter the cost.20 Smirnov wanted to be seen as part of his country’s economic future, somebody who could thrive in and adapt to a changing environment. The Chicago fair and cutting-edge facilities helped make the point.

  Smirnov also expanded his philanthropy, cementing his reputation as an upstanding, charitable merchant and strengthening his ties with the monarchy. Among other acts, he paid for the renovation of twenty-eight sterling silver arks containing bones of Russian saints. The project, which included the building of a reliquary made of metal and thick glass in the church where Smirnov served as church warden, was important enough that it had to be approved personally by Aleksander III. The newspapers wrote about Smirnov’s gift and the sanctification of the reliquary, noting that the priest called Smirnov “a God-loving donator.”21

  The attention to Smirnov’s largesse benefitted his cause, but it was the Imperial Court’s personal support of the vodka maker that mattered most. Unfortunately, just days after the reliquary’s sanctification, Aleksander III died of pneumonia. Prayers had been said for the tsar’s failing health at one of Smirnov’s bulk wine warehouses as well as at other operations throughout Russia, but it was not enough. Nikolay II, the last Russian tsar, prepared to assume the throne.

  His ascension was a wild card for Smirnov—and Witte. The new tsar was relatively unknown and untested. The New York Times described him as a “slender young man, something under the middle height, with narrow, sloping shoulders and an awkward carriage of the neck and head. He has yellowish hair and a beard which is trimmed so as to produce an almost grotesque resemblance to his cousin, the Duke of York…. The Tsar Nikolay has small furtive gray eyes, unpleasantly close together.” An interview with a royal tutor in the same article suggested Nikolay II was less interested in autocratic rule than his father, Aleksander III, had been. The tutor commented that the new tsar was “an amiable, light-hearted youngster of extremely limited brain power…. He detests the military life and is bored by politics. The notion of authority and personal power rather repels than attracts him.”22 Of course, other commentators of the time hailed the new leader, praising Nikolay’s strength of character and looking on his future rule with great optimism. They predicted that he would serve as a formidable champion of a strong monarchy.

  It is unclear how Smirnov viewed the leadership shift and what it might mean for Russia. He had been through these royal machinations before, but he had never before been in such a precarious situation. With the monopoly just months away from its trial run, Tsar Nikolay II’s loyalties and intentions would be pivotal in determining how quickly the private vodka trade might come under attack.

  Witte, who had been a close confidante of Aleksander III, still looked on Nikolay II as a youngster, someone too immature to lead Russia. Witte, nevertheless, was hopeful his new boss would be a strong partner, even if he adopted a different blueprint for the government than his father had. “When Emperor Nikolay II ascended the throne, he had, if one may put it this way, an aura of resplendent good will. He truly desired happiness and a peaceful life for Russia, for all his subjects, whatever nationality they might belong to. There is no question that he has a thoroughly good, kind heart,” Witte wrote in his memoirs.23 This meant that the new monarch would likely be sympathetic to any effort to rid Russians of their liquor dependency. This again was Witte’s focus when he stated in 1894: “The reform must be directed, first of all towards increasing popular sobriety, and only then can it concern itself with the interests of the treasury.”24

  Looking at its details, much of the reform was focused on combating drunkenness. It banned consumption in retail shops, requiring customers to leave as soon as they had completed their purchases. Liquor could be sold only in sealed bottles. Pictures of the emperor and of saints were to be posted on the walls of state wine shops. Organized sobriety was also a feature of the monopoly. In 1895, Witte established the Guardianship of Public Sobriety. Its mission was to oversee the quality and quantity of liquor sales and advocate moderation in drinking.

  The problem with the state’s more altruistic emphasis was that it was overshadowed by its monstrous financial appetite. When the monopoly was launched in four provinces in 1895, the government took over the wholesale and retail trade of pure vodka, making it the only legal buyer of vodka from state or private distilleries. Anyone wishing to trade other spirits in territories covered by the monopoly, such as flavored vodkas, liqueurs, grape wines, or beer, would be permitted to do so, but they had to remit to the governme
nt 15 percent of the revenue earned. This tax resulted in a surge in state revenue. In one province alone, Ufa, income from alcohol sales grew from 2 million rubles in 1894 to 3.6 million rubles in 1895.25 “As a fiscal system, the government spirits monopoly was truly a stroke of financial genius,” wrote one observer.26

  Critics pounced on the hypocrisy of the double-edged policy, blasting the state for trying to curb alcoholism as it peddled alcohol. Lenin dubbed the reform “monopoly capitalism.”27 Tolstoy’s opposition to it was more cutting. Witte had tried to entice the writer into backing his, Witte’s, sobriety organization, believing that Tolstoy’s endorsement would lend it credibility. Tolstoy, though, refused even to meet with Witte, instead asking his brother-in-law, Aleksander Kuzminskiy, to convey his displeasure to the minister. In a letter to Kuzminskiy, Tolstoy outlined his position. “In my opinion, if the government really was making every effort for the good of the people, then the first step should be the complete prohibition of the poison which destroys both the physical and the spiritual well-being of millions of people…. Thus, the temperance societies established by a government that is not ashamed that it itself sells the poison ruining the people through its own officials seem to me to be either hypocritical, silly, or misguided—or perhaps all three.”28

  Witte knew the monopoly would attract plenty of detractors, but he also knew the vast majority of Russians welcomed it. Smirnov, too, knew it and he had prepared well. When the monopoly took hold in 1895, Smirnov could see that its impact on his own operations would be negligible. The four trial provinces represented a miniscule piece of his business. The vodka maker had also sought out new avenues to reach customers. His vodka, particularly the popular #21 and other unflavored vodkas, continued to be the favorite, especially in Russia’s heavily populated central provinces. It was the drink of choice for Russia’s military as well after Smirnov landed a contract to provide #21 to soldiers. The drink was consumed “everywhere, in all the regiments, in the officers’ canteens, in soldiers’ tearooms, and also in the Russian Navy, in both the Baltic and Black Sea.”29

  Smirnov also beefed up production of other liquors. Throughout the 1890s, he expanded his product menu, focusing in particular on unregulated beverages. He introduced a variety of new flavored vodkas (nastoykas), including ashberry flavor, an instant consumer favorite. He also increased his production of grape wines. This diversification, along with his new global reach, minimized the effects of the monopoly after its introduction. His business did not suffer greatly in those first years, when the monopoly covered only a handful of provinces.

  The government, though, was enthused by what it saw. Witte personally toured the four provinces where the monopoly made its debut and reported back to the tsar that drunkenness was down while revenue to the state was up. The preaching of the moderation had taken hold, Witte concluded, and he told Nikolay II that “a peace came to families, harmony came to spouses…. Wives no longer have to look for their husbands in drinking places and then bring them home in a horrible condition…. There was a notable shift to a better life.”30

  Such enthusiasm made the government impatient. The state initially planned to test the reform in the four provinces for three years, but the tsar, at Witte’s urging, quickly scrapped the old timetable. Instead, the government accelerated the monopoly’s rollout, introducing the reform in nine provinces in 1896, six in 1897, and another four in 1898, which included St. Petersburg. In the face of such an unrelenting assault, Smirnov might have given up, but that was not his nature. The government’s aggressive anti-vodka campaign emboldened him, setting in motion one of the greatest and most satisfying triumphs of his life.

  Chapter 12

  The Tsar and 3,000 Flashing Bottles

  Nizhniy Novgorod, a commercial center located 250 miles east of Moscow, sits at the juncture of major trade routes and two grand Russian rivers, the Volga and the Oka. At the turn of the century, it took more than eleven hours to get there by train from Moscow, longer by ship. Despite the lengthy journey, most who made the trek annually, like Smirnov, did so without reservation. It was that important.

  Since 1817, the city had come alive from July to September with the arrival of thousands of merchants and traders representing almost every industrial sector in the Empire. They invaded this commercial hub, hawking commodities ranging from wool to metals to rice to leather. Smirnov, who had been the largest buyer of grape wine at the Nizhniy Novgorod Fair for years, contributed to the 416 million rubles worth of transactions consummated there annually.[32] “The prices established at the fair constituted the benchmark values for the entire commercial year. So important was the fair that when it was open, financial and commercial establishments often shifted their operations entirely to its territory. It was also there that the Moscow merchants carried out their largest annual transactions, thus confirming the centrality of the fair.”1

  Nothing before, though, could compare to the late spring and summer of 1896 in Nizhniy Novgorod. That year the city of almost 82,000 people hosted the All-Russia Industrial and Artistic Exhibition, one of the most spectacular technical achievements in the history of the country. The tsar, Witte, and Russia’s top business leaders pledged to use the exhibition, the first of its kind in fourteen years, to demonstrate to the world that the nation’s economic power was vast and its industrial development expansive. It was to be the marketing event of the century, a show of fortitude so undeniable that it would inspire even the most skeptical observers to concede Russia’s status as an industrial superpower. “Russia grows, its productive forces grow, and with them grows the wealth of the country, its powers, and the recognition of its strength,” proclaimed Witte at the opening of the exhibition on May 28.2

  No expense had been spared to create just the right atmosphere. The government pledged 3 million rubles to pay for a new transportation system, new buildings, a modern sanitation system, pavilions for entertainment, and a variety of other attractions. Private industry contributed another 7 million rubles, constructing eye-popping exhibits and cutting-edge facilities. When all was done, the site boasted 172 separate buildings. Electric streetlights replaced kerosene lamps. A theater big enough for almost nine hundred people had been erected, complete with steam heating, electric lights, and a sophisticated ventilation system. The first funicular railway in the country had been installed there, too, which guided two trams shuttling visitors to and from the exhibition grounds. A magnificent new park provided respite from the daily commotion, complete with fifty-one fountains and artificial ponds containing swans. “The exhibition is the most important business for the entire state, a result of activity of more than 100 million people who have been working for fifteen years, counting from the Moscow exhibition of 1882,” wrote famed writer Maxim Gorkiy, a native of Nizhniy Novgorod who covered the event for a local newspaper.3

  Beyond the infrastructure, the displays were also designed to impress. Among the most technical advances unveiled at Nizhniy Novgorod was the first Russian automobile, which topped out at a speed of 13.5 miles per hour. The first hyperboloid steel tower, created by architect Vladimir Shukhov, was constructed and shown there. A tractor with a steam engine made its debut, too. Technical presentations by an array of esteemed scientists, including Mendeleyev, botanist K. A. Timiryazev, and scientist/inventor A. S. Popov were also featured. The parade of serious achievement was enough to entice a slew of foreign dignitaries, ambassadors, some 180 Americans, and nearly one million Russians.

  They came to witness and evaluate Russia’s industrial prowess, to be sure, but it was the most fanciful exhibits, including one by Smirnov, that truly delighted. Henry Brokar, the tsar’s perfume purveyor, made columns out of transparent soap. Electric lights inside the soap lit up the structure, giving it a luminous, magical quality. He also put up a tent made out of roses carved from soap. Another exhibitor showed a belfry constructed completely out of stearin candles. There were railroad booths made out of chocolate, a grotto made of 108 different gems
tones and rocks, and a two-headed eagle made out of dried fish.

  Smirnov would not be outshown by these other participants, particularly not when the tsar, the empress, and Witte were among the fair’s visitors. Smirnov occupied a superior position at the exhibition—at least among the sixty-six vodka makers and distillers. His display was right at the entrance to the vodka department, signaling to everyone his supremacy in his industry. His showcase was unparalleled, a true reflection of Smirnov himself: a potent combination of master showman, ingenious marketer, and Imperial loyalist.

  As visitors approached the vodka section, they were awe-struck. A colossal arch built entirely out of bottles and little wine barrels greeted them. The bottles, 3,000 of them, were the colors of the Russian national flag—white, blue, and red. Light bulbs inside those bottles flashed on and off, creating a fluorescent, glowing, and utterly patriotic spectacle. The symbolism was not lost on journalists who covered the exhibition. They wrote about Smirnov’s “fiery effect.”4 Nor was it lost on the exhibition’s officials. Smirnov, his exhibit, and his company received a huge write-up in the exhibition catalog. The vodka king was praised for his fine products and continuing success, particularly in the face of the liquor monopoly, which the catalog authors euphemistically described as “new conditions in the market.”5

  As laudatory articles at the exhibition proved, Smirnov’s business was still on a tear. His revenue now topped 17 million rubles annually, with 9 million rubles going straight into the state treasury. His pure vodka production was up to 120,000 bottles a day, or 45 million annually. This required some 3 million kilograms of charcoal per year, which was used to rectify the vodka. Smirnov contracted with seven different glassmakers, each one supplying an estimated seven million bottles a year. The 60 million labels and tags needed annually came from four printing factories. Corks alone cost 120,000 rubles each year. Smirnov’s nastoykas required purchases of huge lots of raspberries, currants, strawberries, bilberries, cherries, cranberries, and ashberries. Sales of foreign and domestic grape wines also increased to 100 million bottles per year.6