Peter the Great (141 page)

increase the production of national wealth, thus increasing the tax base.
To
achieve this goal, the Tsar hurled himself and the power of the state into every aspect of developing the national economy. Peter viewed himself as personally responsible for the strengthening of the national economy, but at the same time he understood that private enterprise and initiative were the true sources of national wealth. His goal was to create a class of Russian entrepreneurs who would assist and eventually replace the sovereign and the state as producers of this wealth. It was not an easy task. By tradition, Russian noblemen looked disdainfully on any involvement in trade and industry and were determined not to invest their capital in commercial enterprises. Peter employed a combination of persuasion and force, preaching the dignity and usefulness of commerce and making trade and industry an honorable form of state service—like service in the army, navy or civilian bureaucracy. The government, through the College of Mining and Manufacturing, provided initial capital in the form of loans and subsidies, granted monopolies and tax exemptions, and sometimes simply erected factories at Treasury expense and leased them to private individuals or companies. These arrangements often were compulsory. In 1712, the state constructed a group of cloth factories to be managed by private merchants. "If they do not wish to do this of their own free will," declared the order, "then they must be forced. Grant them facilities to defray the cost of the factory so that they may take pleasure in trading."

Not all of the new enterprises flourished. A silk company formed by Menshikov, Shafirov and Peter Tolstoy was granted generous privileges and subsidies and still managed to fail. Menshikov quarreled with his partners and resigned, to be replaced by Admiral Apraxin. Eventually, having swallowed all of its original capital, the company was sold to private merchants for 20,000 roubles. Menshikov had better luck with a company formed to fish for walrus and cod in the White Sea.

The most productive partnership between state and private industry was in mining and heavy industry. When Peter came to the throne, Russia possessed some twenty small state and private iron foundries around Moscow, in Tula and at Olonets on Lake Onega. Declaring that "our Russian state abounds in riches more than many other lands and is blessed with metals and minerals," Peter began early in his reign to develop these natural resources. Among the foreigners employed by the Great Embassy for service in Russia were numerous mining engineers. Once the war began, the ironworks at Tula, founded by the Dutch father of Andrew Vinius and owned in part by the crown and in part by the ironmaster Nikita Demidov, were expanded to provide muskets and cannon for the entire army. The city of Tula became an immense arsenal, its various suburbs populated by different categories of armorers and smiths. After Poltava, Peter sent prospectors throughout the Urals looking for new deposits. In 1718, he established a College of Mining and Manufacturing, to encourage location and development of new mineral sites. In December 1719, a decree threatened with the knout any landowner who concealed mineral deposits on his lands or who obstructed prospecting by others. The rolling hills of the Urals, especially in Perm province, revealed themselves to be astonishingly rich in high-grade ores: the ore taken from the ground produced almost half its weight in pure iron.
To
help develop these rich veins, Peter turned again to Nikita Demidov. By the end of Peter's reign, a vast industrial and mining complex consisting of twenty-one iron and copper foundries had risen in the Urals, centering on the town of Ekaterinburg, named in honor of Peter's wife.* Nine of these works were owned by the state and twelve by private individuals, including Demidov, who owned five. Their production constantly increased, and by the end of the reign more than forty percent of all Russian iron was coming from the Urals. Within Peter's lifetime, Russian output of pig iron equaled that of England, and in the reign of Catherine the Great, Russia supplanted Sweden as the largest producer of iron in Europe. These flourishing mines and foundries made the state strong (16,000 cannon were in the arsenals at Peter's death) and Demidov enormously rich. On the birth of the Tsarevich Peter Petrovich, Demidov presented the infant with 100,000 roubles as "tooth-cutting money." In 1720, the infant's proud father made Demidov a count, a title which lasted until the end of the dynasty.

To
facilitate trade, Russia needed more circulating currency. New Russian coins had been minted since Peter's return from the West with the Great Embassy, but coins were so scarce that merchants in Petersburg, Moscow and Archangel borrowed them at fifteen percent interest simply to keep their business operating. One reason for this scarcity was the ingrained habit of all Russians, from peasant to noble, of quickly hiding any money on which they could lay their hands. As a foreign visitor explained, "Among the peasants, if by chance one happens to gain a small sum, he hides it under a dunghill, where it lies dead to him and to the nation. The nobility, being afraid of making themselves noticed and obnoxious to the court by the show of their wealth, commonly lock it up in coffers to molder there, or those more sophisticated send it to banks in London, Venice or Amsterdam.

*
In 1918. Ekaterinburg was the site of the murder of the family of the last Russian Emperor, Nicholas II. Today, the city is named Sverdlovsk.

Consequently, with all the money thus concealed by nobility and peasants, it has no circulation and the country reaps no benefit from it." At the beginning of the war, a decree declared that "the hoarding of money is forbidden. Informers who discover a cache are to be rewarded with one third of the money, the remainder to go to the state."

Another reason for the scarcity of coinage was an insufficiency of precious metals. Gold- and silversmiths who came to Russia became discouraged and went home, and many freshly coined roubles were defective as to both alloy and weight of metal. Peter knew this and it worried him, but as the mines simply were not producing enough gold and silver, he was forced to allow the debasement to continue. In 1714, to preserve the nation's economy, Peter forbade the export of silver, In 1718, merchants leaving Russia were searched and any gold, silver or copper coins found were confiscated. On the least suspicion, customs officers would dismantle the carriages or sledges in which merchants were traveling. In 1723, this regulation was strengthened by adding the death penalty for anyone caught exporting silver. On the other hand, the import of gold and silver was vigorously encouraged; there was no duty on these metals. And when Russians sold their goods to foreigners, they were not permitted to accept Russian money in payment, but had always to receive foreign money.*

Peter's commands, issued impatiently from above, often were received without the slightest understanding of what was wanted or why. This compelled the Tsar not only to supervise everything closely himself, but also to employ force to get things done. Traditionally conservative, Russians balked at innovations, and Peter told his ministers, "You know yourselves that anything that is new, even if it is good and necessary, our people will not do without being compelled." He never apologized for using force. In a decree in 1723, he explained that "our people are like children who never want to begin the alphabet unless they are compelled to by the teacher. It seems very hard to them at first, but when they have learned it, they are thankful. So in manufacturing affairs, we must not be satisfied with the proposing of the idea only, but we must act and even compel."

Commerce is a delicate mechanism, and state decrees are not usually the best way to make it work. In Peter's case, it was not simply the element of compulsion that detracted from the success of his efforts—he himself was not always sure what he wanted. When his attention wandered or he was distracted, those below

*All
this has a familiar ring to foreigners who live or travel in the Soviet Union today.

him, uncertain as to his desires, did nothing and all activity stopped. Peter's methods were strictly empirical. He tried this or that, ordering and countermanding, seeking a system that worked, sometimes without thoroughly understanding what was needed or the nature of the obstacles confronting him. His constant changes in direction, his minute regulations leaving no scope for local adjustment, confused and drained initiative from Russian merchants and manufacturers. Once, when the Dutch ambassador was pressing for Russian approval of a new commercial treaty and had been frustrated by repeated delays, he was told by Osterman, "Between ourselves, I will tell you the truth.
We
have not a single man who understands commercial affairs at all."

There were occasions when enterprises foundered simply because Peter was not present to give instructions. His temper could be so fierce and unpredictable that, in the absence of specific orders, people were unwilling to take initiative and simply did nothing. In Novgorod, for example, a large number of leather saddles and harnesses had been stored for the army. The local authorities knew that they were there, but because no order to distribute them had come down from above, they were left until "eventually, moldy and rotten, they had to be dug up with spades." Similarly, in 1717, many oak trunks brought from central Russia through the canals to Lake Ladoga for use in building the Baltic fleet were left to wash up on the shores and bury themselves in mud, simply because Peter was away in Germany and France and had not left specific instructions for their use.

To
bridge the gap between the innovative Tsar who, despite his consuming interest, was often occupied with other matters, and the uncomprehending, unwilling nation, there were the foreigners. None of Peter's work in developing the national economy would have been possible without the foreign experts and craftsmen who poured into Russia between the time of Peter's return from the West in 1698 and his death in 1725. The Tsar engaged more than a thousand foreigners during his first visit to Amsterdam and London, and thereafter Russian envoys and agents at foreign courts were urgently commissioned to search out and persuade local artisans and technicians to enter Russian service.

Foreign craftsmen, foreign ideas and foreign machines and materials were at work in every sphere of industrial, commercial and agricultural activity. Vines, brought from France, were planted near Astrachan to produce wine which a Dutch traveler pronounced as "red and pleasant enough." Twenty shepherds, arriving from Silesia, were sent to Kazan to shear the sheep and

teach the Russians there how to make wool so that it would no longer be necessary to buy English wool to clothe the army. Peter saw better horses in Prussia and Silesia and ordered the Senate to establish stud farms and import stallions and mares. He observed Western peasants reaping grain with a long-handled scythe rather than the short-handled sickle which Russian peasants had always bent to use, and decreed that his people must adopt the scythe. Near Petersburg was a factory which turned Russian flax into a linen as fine in every respect as linen from Holland. The flax was spun in a workhouse where an old Dutch woman was teaching eighty Russian women how to use the spinning wheels, which were little known in Russia. Not far off was a paper mill run by a German specialist. Throughout the land, foreigners were teaching Russians how to build and operate glass factories, brick kilns, powder mills, saltpeter works, ironworks and paper mills. Once in Russia, foreign workers enjoyed numerous special privileges, including free houses and exemption from taxes for ten years. Surrounded by suspicious and xenophobic Russians, they lived under the Tsar's personal protection, and Peter sternly warned his people not to harm or take advantage of them. Even when a foreigner failed, Peter usually treated him with kindness and sent him home with a sum of money.

Behind this policy was not a frivoulous love of everything foreign. Instead, Peter had a single, firm purpose: to use foreign technicians to help build a modem Russia. Foreigners were invited and privileges granted to them on a single condition which was part of every contract: "that they instruct our Russian people properly and conceal nothing." Occasionally, foreign experts did attempt to conceal trade secrets. In one such case, English tobacco curers, departing from Russia, used violent means to prevent their special technology from falling into Russian hands. Astonishingly, Charles Whitworth, the English ambassador, not only countenanced this violence, but committed it himself:

The great secret which the Muscovites desire to know is the liquor for preparing and coloring the tobacco. . . . The Russian laborers were dismissed and the same evening I went to the workhouse together with Mr. Parsons, my secretary, and four of my servants. We spent the best part of the night in destroying the several instruments and materials, some of which were so strong that they obliged us to make a great noise in pulling them to pieces. There were cloven barrels about a quarter full of the tobacco liquor which I caused to be let out.
...
I
likewise broke the great spinning wheel, and above three score reels for rolling; I then destroyed three engines already set up for cutting tobacco and took away the plates and cranes for two more; several engines for pressing the tobacco into form have been pulled to pieces, their screws split, the
wooden moles broken, the copper carried away, and about 20 fine sieves cut to pieces. . . . The next day my servants returned and burned all that remained of wood.

Had Peter discovered the ambassador's role in this violent, nocturnal episode, Whitworth's stay in Russia would certainly have been cut short.

On another occasion, however, a Russian outwitted a secretive foreigner. Peter had established a ribbon factory near Petersburg, staffing it with young Russian apprentices; the master was a foreigner. At the end of a year, Peter found that one young man, the most skilled of the young Russians, could make any kind of ribbon once the materials were set upon the loom, but that neither he nor his companions could begin unaided because the master always placed the work upon the loom himself and forbade anyone to watch during this operation. Peter instructed the Russian apprentice to discover this secret and promised a reward if he succeeded. Accordingly, the apprentice bored a small hole in the ceiling of the workshop and lay quietly on his stomach, observing the master as he set the looms. Having learned the technique, he informed the Tsar, who had set up a loom in his presence in the palace. When the apprentice succeeded, Peter kissed him, gave him money and made him the new master.