The King of Vodka (26 page)

 

N
IKOLAY ENJOYED STUD
farming as well, though he concentrated more on raising carriage and work horses, at least to the extent that his condition would allow.
¹⁶
Despite the firm presence of guardians and a stay at an elite alcohol treatment center, Nikolay's destructive behavior continued without interruption. He kept up his drinking binges, which were now intermittently accompanied by hallucinations. Complicating matters further was his continued association with “dark personalities.” In a report filed with the Moscow Orphanages Court, his guardians claimed that these unsavory characters went beyond just cheating Nikolay out of his money. Now, they were tutoring him on how to break the law. The guardians alleged that Nikolay had been taught how to bypass his financial restrictions by issuing fraudulent promissory notes. In one case, Nikolay wrote to his wife from the treatment center asking that she get 30,000 rubles for him from someone to whom he had issued a promissory note.
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The problem was that Nikolay backdated his guarantee to a time before his guardians were put into place. And this act was not the first backdating ploy; Nikolay repeatedly took money from lenders under suspicious circumstances only to find himself unable to repay the loans when they came due.

Pyotr and Vladimir realized Nikolay's troubles and extravagances were not going to disappear any time soon. Moreover, if their brother was not competent enough to manage his personal finances, relationships, or alcohol dependency, then he was certainly not competent enough to serve as a member of the trading house. It was time to cut Nikolay loose. An agreement,
blessed by the court, was reached between the brothers and Nikolay's guardians by the end of 1904. It was signed on January 28, 1905, a little less than three weeks after Bloody Sunday. In short, Nikolay Petrovich Smirnov, “who has been limited in his legal capacity for over-extravagance,” would receive 500,000 rubles (more than $6 million today) over a five-year period, plus interest.
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In exchange, Nikolay gave up any and all claims to his father's company and its assets.
¹⁸

Nikolay was not the only Smirnov to opt for—or be forced into—a hefty payout. Vladimir also cashed out, although the reasons behind his departure are less clear-cut than his brother's. It is undisputed that Vladimir was never devoted to operating or managing his father's empire since his interests lay more in theater, horses, hobnobbing, and in other less structured, less business-oriented activities.

The brothers had perpetually struggled with the liquor business ever since the monopoly took hold. The financial data for 1905 is not known, but it was clear that things were not going well for anyone selling vodka in Russia other than the tsar. One of Smirnov's chief competitors, Bekman & Co., a large St. Petersburg-based outfit, described its “huge losses” resulting from the monopoly. Despite reporting decent sales from other products ranging from flavored vodkas to champagne, Bekman, like Smirnov, could not replicate anything close to its earnings prior to the state's takeover.

The prospect, then, of a windfall large enough to underwrite anything Vladimir might choose to do for the rest of his life, without the headaches of business hassles, would have been an immense temptation. Looking at all the evidence, Pyotr and Vladimir seemed to have enjoyed a warm relationship, they trusted and understood one another. Vladimir might have rea
soned that his father's company had a better shot at survival under Pyotr's firm, singular control. He agreed to sell his third of the family business to his older brother at the end of 1904 for 500,000 rubles to be paid in installments over eight years, plus some additional payments.
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In addition, and perhaps more importantly, Vladimir gave up his right to everything—from the factory equipment and buildings to the company trademarks, according to the agreement.

When the ink dried, only one Smirnov remained atop the once omnipotent vodka empire; it was a circumstance that would have saddened their father. His valiant efforts to preserve the company for his five sons had failed. Worse, perhaps, the woman with whom his first son had once carried on an illicit affair was now a shareholder in her own right. Pyotr had made the appointment official as soon as his brothers vacated their posts: “I, Pyotr Petrovich Smirnov, remain the sole and entire owner of the said Trading House and the entire business with all its active and passive capital. I will continue to manage its business under the same trademark and to invite new partners in replacement of those who have left. My wife, Eugeniya Ilyinichna Smirnova, will become a partner with conditions described in this agreement and a separate agreement to be prepared. However, the right to administer and manage the complete business without exception of acts and documentation belongs to me.”
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The second tangle over control of Smirnov's firm was over. Like the dizzying strife swallowing up Russia, this tussle had been emotional and contentious. In the end, though, Moscow had a new vodka king. His name, not surprisingly, was still Pyotr Smirnov. And Russia, thanks to the October 1905 “October Manifesto,” which was a comprehensive guarantee of civil rights, had the beginnings of a democracy. The tsar, under extreme pressure, agreed to grant his subjects such liberties as the freedom of speech, conscience, association, and assembly. In addition, he established the State Duma, the people's representa
tive with authority to approve—or reject—laws backed by the monarch.

Whether either newfangled institution, the state's or Smirnov's, would flourish was an open question. Both were committed to trying, unsure of which steps to take next. On the night after signing the manifesto, Nikolay II wrote in his diary: “After such a day, the head is grown heavy and thoughts are confused. May the Lord help us save and pacify Russia.”
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Pyotr might have written the same.

I
t did not take Pyotr long to come up with a plan. Like so much else at the time, it was laden with risk. He must have determined that he had few alternatives—and he sensed a unique opportunity. Public sentiment regarding the vodka monopoly was in a downward spiral following the events of 1905. Religious leaders, women's groups, peasants, intelligentsia, and others were all adopting anti-alcohol mantras. They, like so many Russians, were increasingly appalled by the hordes of cash being channeled from vodka sales into the state's kitty. These critics, who referred to the monopoly as the state's “drunk budget,” did not need to look far to make their case.
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By 1909, 760 million rubles (720 million rubles from vodka sales and 40 million rubles from other nonmonopoly alcohol sales) came into the treasury annually, two-and-a-half times more than the amount collected the year before the monopoly's enactment.
²
In addition, a sharp spike in alcoholism horrified much of the populace. “It was not a rare phenomenon to
see drunkards totally passed out on the street. Commentators of all political orientations cited alcohol abuse more than any other factor as a sign of moral degeneracy and social decay.”
³

The situation regarding alcohol abuse had deteriorated so greatly that the State Duma took up the topic in 1907. Sixty-five members urged the tsar to reduce his dependence on revenue generated from liquor. They argued that Russia could no longer rely on an immoral and destructive habit to fund its government. Resentment, they said, was building almost daily inside Russia. Abroad, the state's central role in peddling alcohol was attracting more than its share of unwelcome attention. “The most important thing for Russia at the present moment is not the Duma or freedom or a responsible Cabinet,” wrote the
New York Times
in 1908, “but the question of vodka…[t]he whole empire is becoming more drunken, and the government is directly interested in the increased consumption of liquor because in Russia vodka is a state monopoly. The more the people drink the more revenue the government gets.”
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These assessments underscored the increasingly hard-line stance adopted by leftist members of the Duma when it came to the matter of vodka. Although it did not yet advocate repeal of the monopoly or an outright liquor ban, the Duma considered a number of measures aimed at sobering up its citizens, including shortening the hours spirits shops could operate and selling liquor only in small containers. The political body also established the Commission on the Struggle Against Drunkenness, an organization dedicated to finding solutions to the deterioration of society. Among other things, the commission proposed limiting the sale of alcohol to one bottle per customer and banning liquor concessions at train stations and piers. The Ministry of Finance rebuffed these measures, arguing that they would encourage more illegal, more hazardous vodka making.
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Still, Pyotr was emboldened. Going against his own father's history of political neutrality, he readied for an imperial battle.
Of course, he, too, ardently opposed the vodka monopoly, believing it had created more problems than it had solved. He and a cadre of other vodka insiders argued that the quality of liquor had plummeted while consumption had soared, and the result became an unhealthy and dangerous mess for the government and its people. Their solution to this crisis was self-serving and predictable, though not entirely without merit: Give control of the vodka trade back to the private sector.

The real question was how to make that happen. Pyotr turned to a decidedly Western strategy for the answer: lobbying. He and other industry leaders brought together members of Russia's alcohol trade to form an organization dedicated to promoting its interests. The Central Bureau of Wine and Beer Industry and Trade was, in every sense, an experiment in modern-day influence peddling. The bureau would pursue its agenda through two means. It would lobby key decision-makers in the Duma and Imperial Court, and it would seek to persuade the public by disseminating a periodical devoted to topics important to liquor businesses. The bureau's first assignment was to issue a report on the state of the vodka monopoly. Pyotr pledged 500 rubles of his own money to fund the research and the publication of a special brochure.
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One of the most intriguing and bizarre arguments advanced by the bureau was the idea that beer, grape wines, cognacs, and flavored vodkas were “healthier” than 40-degree, pure vodka. “You can't evaluate the following drinks to be equally harmful: three-degree beer, 14-degree grape wine, or 25-degree flavored vodka in comparison to 40-degree vodka or 90-degree spirit.”
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The bureau went further, claiming increasing production of these other beverages and lifting restrictions imposed by the state on the amounts of them that could be sold would help sober up Russians.

This argument was not a popular one inside the palace gates. That Pyotr, the tsar's own purveyor, would make it, though,
let alone sponsor a group openly critical of a key policy of the monarchy, illustrates both the worsening state of Smirnov's business and of the times itself. Following the events of 1905, there was, albeit briefly, a period of more openness, a greater willingness by top officials to hear competing viewpoints. For example, a law passed in March 1906 granted people the right to form unions and associations. Some 123 such organizations in Moscow and St. Petersburg alone were officially recognized in the two years following Bloody Sunday. A variety of professions organized unions, including medical workers, pharmacists, and barbers. Businesses, too, from the railroads to candy makers, galvanized their collective strength.

That's not to say that the tsar tolerated outspoken radicals or those he deemed to be his most virulent adversaries. His administration suppressed the activities of the monarchy's ardent foes, prosecuting and imprisoning tens of thousands of revolutionaries, including such luminaries as Leon Trotskiy. By April 1906 the government had executed 14,000 members of the opposition, and another 950 people had been sentenced to death by military courts. The Duma, too, had to rein in its conduct. It was repeatedly formed, dissolved, and re-formed based on how Nikolay II and his top lieutenants evaluated the political leanings and intentions of its representatives.

Of course, Pyotr Petrovich was not a wild rebel but rather a shrewd businessman. Like his father, he believed in doing whatever was necessary to further his business interests as long as he remained within the boundaries dictated by Russia's long-standing hierarchy and traditions. He viewed the monarchy as his ally, an essential guide to navigating Russia, and like his father he believed that perception was a vital ingredient in persuading the nobility and the tsar to see things his way. He painstakingly cultivated an image of supreme integrity, a benevolent business leader who gave as much of himself to good works and religious endeavors as he did to his business pursuits. An elder at
several churches, he gave generously to other charities, such as a hospital for the blind, a shelter for weak and sickly children, and the Moscow Archeological Institute.
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Beyond that, Pyotr earned a number of coveted titles and honors, including the same Order of Vladimir that his father had also received.
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As a model merchant with a pedigree that Nikolay II could understand and appreciate, he had a shield of sorts from whatever backlash might result from his association with the Central Bureau.

Beyond building up his own credentials, Pyotr also distanced himself from an unexpected threat: his brother Sergey. Ever since the three eldest brothers had clashed with him, their relations had strained. Sergey was now a bona fide Smirnov outcast, and he had begun to act every bit the part. He derided his family's devotion to what he viewed as the trappings of Old Russia, and he began to pursue reform. In late 1906 or early 1907, Sergey invested nearly $1 million in a daily, liberal-leaning newspaper
Stolichnoye Utro
, (“Morning in the Capital”).
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The newspaper, with a circulation of roughly 30,000 in Moscow, used its pages to criticize the tsar, report on revolutionary activities, and advocate for more civil rights. Stories depicting the woes of laborers and the harsh conditions faced by peasants were routine, as were stories about student activism and the socialist movement at home and abroad. The newspaper, whose top editorial post was held by a Jew, touted the idea that Russia's future rested on a break with its past.

It was a risky venture for Sergey. It was common knowledge that the emperor's henchmen kept a close watch on the media, never hesitating to shut down or vandalize publications if the anti-tsarist rants went too far. The individuals who contributed to such editorializing faced retaliation as well.
Morning in the Capital
was not among the most radical newspapers at the time, nor was it a champion of the complete abolition of the monarchy. Instead, it promoted the idea of a constitutional monarchy. Still, Sergey, who cared about the future of his country, made himself
a target. He may have felt free, even compelled, to express his liberal opinions, as he knew he was dying. Around the time of the 1905 uprisings, he had contracted tuberculosis, a common disease in the early 1900s that killed more than 360,000 Russians annually.

It is not clear whether the other Smirnovs knew about Sergey's illness. Still, none of them, particularly Pyotr, would have been pleased with the message Sergey's newspaper trumpeted or that officials in St. Petersburg might link that message back to his family. Their displeasure became apparent after Sergey's death on November 16, 1907, at the tender age of twenty-two. His death left Yelizaveta Nikolayevna, his common-law wife, and his two young sons, Oleg and Viktor. He was buried in the same cemetery as his father, mother, and grandparents, though
next
to the family plot, not within it. No one knows why his siblings chose to banish Sergey in this way, even though there were plenty of reasons from which to choose. The most likely possibilities included their earlier dispute over Smirnov's vodka empire, the siblings' disapproval of Sergey's low-class spouse, and his sponsorship of
Morning in the Capital
. Even one of the death announcements placed by his brothers depicted the family's schism, mentioning Sergey's children and siblings, but not Yelizaveta.
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Yelizaveta might have looked for moral support from Sergey's younger brother, Aleksey. After all, guardians for the two boys had taken the same position against the eldest brothers during the feud for control of the family business, and Aleksey had a true gentleness and innocence about him. Unfortunately for Yelizaveta, though, Smirnov's youngest son was not equipped to defend the interests of his brother's children. As Vladimir later recalled, Aleksey was “feeble-minded.”
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His life existed largely outside the main sphere of the Smirnov clan, and he had a guardian to help him manage his affairs. A few years after Sergey's death, he married Tatiana Mukhanova, a woman from
the lower classes who demonstrated none of the cultural or intellectual polish expected from someone in the Smirnov's social strata. This coupling possibly limited Aleksey's influence and aggravated the already chilly relationship he had with his family—much as a new marriage in Nikolay's life had.

Nikolay's new wife, Mariya Ivanovna, was the daughter of a retired file clerk. She suffered from an unknown and costly medical condition. Less than three months after Sergey's death, and probably at the behest of his new spouse, Nikolay filed a petition to have his own guardianship removed. He offered multiple arguments for his request, claiming that he had been sober for three years and that he no longer squandered money. Mariya Ivanovna testified that he was now a model family man. Moreover, Nikolay asserted that his guardians had not represented him well financially, selling his interest in the family's business as well as his real estate for prices well below their value. Nikolay claimed his home, for instance, had cost him 100,000 rubles but was sold at auction for 35,000 rubles.
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Nikolay's guardian, his father's cousin Nikolay Venediktovich Smirnov, protested, but various others backed up the younger Smirnov's assertions. His doctor, his valet, and a lawyer all swore that Nikolay had indeed stayed sober. His doctor, who saw him three times a week, testified that his patient led a quiet life, absent of alcohol or extravagances.
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These assertions did not stop Nikolay's new father-in-law, Ivan Volkov, from stating otherwise. He sought to take over his son-in-law's guardianship, arguing that Nikolay was as reckless and irresponsible as ever. He told the court that Nikolay's drinking binges had not ceased. As evidence, he pointed to a five-day period during which he said Nikolay was so incapacitated from nonstop tippling that he, Ivan, had had to take away all his immediate access to money and jewelry to prevent him from frittering it all away.

The back-and-forth biting went on for months, with all sides spewing venom at one another. Volkov offered more evidence of
Nikolay's wastefulness, demonstrating that he had pawned his wife's diamond earrings and rings, and had lost the furniture in his flat due to an unpaid debt. Nikolay, in turn, claimed that his wife had married him only for money and that he had spent more than 25,000 rubles to pay for her medical treatments. Other doctors testified that while Nikolay tried to stay sober, he sometimes slipped back into his old habits. In the end, the court declined to change the status of Nikolay's guardianship, reasoning that his situation was still too unstable to go unmonitored.

Neither Pyotr nor Vladimir appeared to have taken any active role in the year-long dispute over Nikolay's guardianship. They may have been war-weary from their previous battles with both Nikolay and Sergey, preferring instead to leave the wrangling to his guardian and the court. They also may have been too preoccupied with other matters. While Pyotr was running the vodka business and playing a leading role with the Central Bureau, Vladimir was cultivating an entirely new chapter in his life. This one took him to St. Petersburg.