The King of Vodka (7 page)

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 1847
¹⁶
—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.
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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.”
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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 Russian 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.

I
t 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.”
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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.
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“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.
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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.”
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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.”
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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.

 

I
N 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 producers 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
.

 

S
MIRNOV 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.

Smirnov did not manufacture his own pure-grain alcohol, known then as bread wine. That was the job of distillers, who took raw materials, such as wheat, rye, or potatoes, to make spirits. Smirnov would buy this base alcohol directly from select
suppliers he knew, then concentrate instead on the more profitable end of the business, that of mixing the alcohol with water, fruits, and other additives to create the tastiest, most flavorful vodkas money could buy.

Smirnov's entry into the world of vodka making came naturally. He had no need to hire a master brewer. Pyotr, with the support of Nataliya, Arseniy, and a handful of other workers, assumed the role. He was already well-skilled in the art of distillation. Besides, it was not going to take much to produce the small amounts needed at first: approximately twenty pails-worth of vodka at a time, an amount just large enough to fill an average-sized bathtub.

The process was straightforward. First, Smirnov put on a long white apron and gloves. He then tested the vodka he bought from his suppliers. The strength of the liquid was often variable depending on the temperatures used to produce it—and because distillers often fibbed about the quality of their liquor. He used a common but complex spirit-measurement instrument, known as a hydrometer, to calibrate the percent of alcohol by volume in the spirit. Smirnov relied on this information to determine how much water needed to be added or subtracted from the liquid to achieve whatever strength of alcohol he deemed suitable, usually 38 percent for pure vodka and far less, about 20 percent, for his signature flavored vodkas.
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Once finished, Smirnov followed a simple recipe, producing a wide array of flavored vodka drinks.

One of the most common flavors in the 1860s was anise vodka. For this variety, Smirnov would have needed one-half pound of fresh anise, which was ground into a powder. The powder was put into a vat and mixed with nine
shtofs
, or 10.8 liters, of spirit. The liquid would then be poured into a large glass container and allowed to sit idle for nine days. On the tenth day, Smirnov
would transfer the liquid into a metal still and heat it under a slow fire until it was fully distilled. What was left was nearly five
shtofs
, or six liters, of a highly pungent alcohol. But the taste still needed refining. Sugar and more fresh water were added to the liquid, giving it a slightly milky hue. An egg white was folded into the mixture as well, after which the liquid would be run through a charcoal filter and then stored in a bottle for sale.
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This kind of vodka was but one of many offerings from Russia's nineteenth-century vodka makers. Smirnov's must have been at least as good as anyone else's out in the market, for his business took off. Demand outstripped supply—especially for the liquor Smirnov was making. Word had begun to seep out among locals that Pyotr Smirnov cared about the taste and the purity of his drinks. Stories surfaced that he selected the purest water, finest spirits, and freshest ingredients for his mixtures. Smirnov exploited these stories, suggesting to his mostly lower-class customers that he alone was devoted to making high-quality, affordable liquor.

Whether these were mere rumors hatched by Smirnov himself, nobody knows. But the result was the same: Smirnov's business—and financial well-being—swelled far beyond expectations. More wine cellars opened, and by 1867, within three years of opening his vodka factory, Smirnov had enough money to purchase a two-story stone house on the corner of Pyatnitskaya Street near the embankment of the Moscow River. The house was a mansion with a spacious backyard. It was somewhat worn at the time and displayed few of the trappings of wealth that would later stop pedestrians in mid-stride.

The house was large enough for the controlling Smirnov to maintain a constant eye on every aspect of his expanding business empire, which now employed roughly twenty-five people. The first floor of the home worked as a cellar and retail outlet. The second floor, spacious as it was, proved ideal for Smirnov's private office and the living quarters for his brood, which now
included four young daughters. The backyard, which featured an uninhabited structure, could be used for everything from storage to housing workers. There was also a deep basement, ideal for preserving wine and liquor.

The location of the house, too, was superb. It was across from the Kremlin and stood at a well-traveled intersection that exposed any passersby to the vodka maker's name, which he proudly displayed above the corner entrance to his shop.

Smirnov's expansion and growing business platform mirrored what was happening all over Moscow. The city had become the heart of Russia's industrial revolution. Factories were sprouting up everywhere. Food producers—from makers of sausage to chocolate to spaghetti—set up shop throughout the city, establishing Moscow as the food-industry capital of Russia. Textile and paper manufacturers flourished, too, attracting capital and laborers in unprecedented waves. Railroad construction was almost constant. Even private banks opened for business, marking the first time the state encouraged independent financial investment in Russian industry. The Merchant Bank, for example, was launched in Moscow in 1866 with a stated mission to create “an establishment promoting industry and trade.”
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The vodka industry was growing more intense, too. Within four years of Smirnov launching his factory, the number of producers in Moscow had tripled.

According to one writer, “Capitalism changed Moscow in those years much more strongly than it changed any other Russian city, including St. Petersburg. In St. Petersburg, the court, officials, and military men still defined the main atmosphere of the city. Moscow, on the contrary, was regenerating from a noble city into a capitalist one.”
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This new money also fed the beginnings of a cultural renaissance. St. Petersburg dominated Russia's artistic scene; nobles and state officials patronized a litany of unparalleled cultural offerings there. But the capital city was tied to traditional values and more conventional think
ing about what constituted art. Moscow, with its influx of the newly wealthy and transient multiclass workers, was developing a more liberal attitude about literature, theater, and other artistic endeavors. A genre known as agricultural poetry, for instance, written by peasants and migrants, surfaced in Moscow in the 1860s. New theaters opened, welcoming avant-garde productions. The Moscow Conservatory, which attracted such giants as Pyotr Tchaikovskiy, was founded in 1866 by pianist and composer Nikolay Rubinstein. Its sole mission was to promote greater musical education to the populace. New publications emerged as outlets for some of Russia's most prominent writers, including Tolstoy, Dostoevskiy, and Turgenev.