As Peter's reign progressed, the power of his royal favorite steadily grew, and after Poltava it knew few bounds. Menshikov was Governor General of St. Petersburg, First Senator, knight of the Order of St. Andrew, Prince of the Holy Roman Empire, and bore tides from the Kings of Poland, Denmark and Prussia. It was commonly said that he could travel across the empire from Riga on the Baltic to Derbent on the Caspian and always sleep on one of his own estates. His palace on the Neva housed a glittering court of gentlemen, chamberlains, pages and Parisian cooks who prepared dinners of 200 dishes served on golden plates. Making his way through the streets in a fan-shaped carriage with his coat of arms emblazoned in gold on the door and a golden crown on the roof, drawn by six horses caparisoned in red and gold, he was always accompanied by liveried servants, musicians and an escort of dragoons to clear a way through the crowds. Yet, although Peter in affection and gratitude had endowed Menshikov with enormous wealth, it was never enough. Like many other man raised from nothing to vast power, he cared greatly for the trappings which would display that power. When not enough came in as bribes and gifts, he stole rapaciously. Despite the huge fines fixed on him by Peter, he was always rich and, after a brief period of disgrace, always returned to renewed favor. To the foreign ambassadors, expecting that each successive scandal would be Menshikov's last, then seeing him rise again, radiant and awesome, the Prince seemed a phoenix.
Often, Peter simply overlooked Menshikov's behavior. At one point, the Senate found evidence of irregularity in Menshikov's purchases of ammunition. They asked the Prince for an explanation, but Menshikov arrogantly brushed them aside, refusing to answer in writing or sign his name to anything, sending instead a junior officer with an oral reply. The senators then drew up a list of the principal charges and evidence against Menshikov and placed the paper on a table in front of the Tsar's chair. When Peter came in, he picked up the paper, ran his eye quickly over it and put it back on the table without a word. Finally, Tolstoy dared to ask what his reaction was. "Nothing," replied Peter. "Menshikov will always be Menshikov."
Nevertheless, Peter's indulgence had limits. Once, when he had deprived Menshikov temporarily of his immense estates in the Ukraine and compelled him to pay a fine of 200,000 roubles, Menshikov retaliated by taking down all the brocade and satin hangings and removing all the elegant furniture from his palace on the Neva. A few days later, when Peter came to visit, he was surprised to find the house almost empty. "What does this mean?" he asked. "Alas, Your Majesty, I was obliged to sell everything in order to settle with the Treasury," said Menshikov. Peter stared at him for a minute. "I know better," he roared. "None of these games with me. If when I come back in twenty-four hours your house is not furnished as becomes a Serene Prince and Governor of St. Petersburg, the fine will be doubled!" On Peter's return, the palace was furnished more magnificently than before.
Peter's first warning to Menshikov came in 1711 after the Prince was accused of extortion during his command of the army in Poland. (Menshikov excused himself by arguing that he had taken only from the Poles.) "Mend your ways or you will answer to me with your head," Peter threatened, and for a while Menshikov obeyed. In 1715, he was charged again, and again he escaped by paying a fine. Nevertheless, after the 1715 trial Peter exhibited a new coolness toward his old friend. He continued to go to Menshikov's house and wrote him amiable, even affectionate letters, but never fully trusted him again. Menshikov circumspectly adjusted to this new relationship. In his own letters, he dropped the familiar forms of address he had always used to Peter and switched to a more formal, respectful style as became a subject addressing an autocrat. He was abjectly apologetic, invoking Peter's old friendship and his own past services whenever the Tsar's mood darkened. The Prince had a powerful protector in Catherine, who was always ready to intercede on his behalf. On one of these occasions, Peter acceded to his wife's pleas, but warned her for the future: "Menshikov was conceived in iniquity, brought into the world in sin and will end his life in deceit. Unless he reforms, he will surely lose his head."
Menshikov was not out of trouble for long. At the beginning of January 1719, new charges were brought against him. He was summoned before a military court-martial, along with General-Admiral Apraxin and Senator Jacob Dolgoruky, and charged with maladministration of Ingria and embezzlement of 21,000 roubles meant for the purchase of cavalry horses. Menshikov admitted taking the money, but explained in his defense that the government still owed him 29,000 roubles which he had never been able to collect; therefore, when this money came into his hands, he had pocketed it in partial repayment. The court accepted the extenuating circumstances, but still condemned him for violating military laws. Both he and Apraxin were sentenced to the loss of all their estates and honors, and ordered to give up their swords and confine themselves in their homes until confirmation of the sentences by the Tsar. Both men went home to await the blow. Peter first confirmed the sentences and then, a day later, to everyone's surprise, canceled them in recognition of former services. Both men were restored to full rank. They paid severe fines, but nothing more. Peter simply could not afford to lose them.
For the time, it seemed, Menshikov was subdued. Soon after, the Prussian minister wrote, "The good Prince Menshikov has been well plucked. The Tsar asked him how many peasants he possessed in Ingria. He confessed to seven thousand, but His Majesty, who was much better informed, told him he was welcome to keep his seven thousand but he must give up all above that figure—in other words, eight thousand more. Menshikov, from anxiety and wondering what will happen to him next, has grown quite ill and as lean as a dog, but he has saved his neck once more and been pardoned till Satan tempts him again."
Nevertheless, true to Peter's prediction that "Menshikov will always be Menshikov," the Prince continued to swindle his master. In 1723, he was caught again and brought before an investigatory commission. He had been granted Mazeppa's estates near Baturin, and in 1724, he was accused of having concealed there over 30,000 serfs who had either fled the obligation of military service or run away from their landowners. Menshikov relied again on the advocacy of the good-natured Tsaritsa and presented a petition to Catherine at her coronation in which he laid the blame on Mazeppa, saying that the concealment of serfs had been done before he inherited the estates. Again, he was forgiven in greater part, but investigations were still continuing when Peter died, after which they were quashed by Catherine.
Peter, a man of simple tastes, was distressed and disgusted by the shameless rapacity of his. lieutenants clutching at every opportunity to rob the state. On all sides, he saw bribery, embezzlement and extortion, and the Treasury's money "flowing from everybody's sleeves." Once, after hearing a Senate report listing further corruption, he summoned Yaguzhinsky in a rage and ordered the immediate execution of any official who robbed the state of even enough to pay for a piece of rope. Yaguzhinsky, writing down Peter's command, lifted his pen and asked, "Has Your Majesty reflected on the consequences of this decree?" "Go ahead and write," said Peter furiously. "Does Your Majesty wish to live alone in the empire without any subjects?" persevered Yaguzhinsky. "For we all steal. Some take a little, some take a great deal, but all of us take something." Peter laughed, shook his head sadly and went no further.
Yet he persevered to the end. Now and then, as with Gagarin, he made an example of a prominent delinquent, hoping to deter the smaller ones. Once when Nesterov asked, "Are only the branches to be cut off or are the roots to be cut out?" Peter replied, "Destroy everything, roots and branches alike." It was a hopeless task; Peter could not compel honesty. In this sense, the Tsar's admiring contemporary Ivan Pososhkov was right when he wrote, "The great monarch works hard and accomplishes nothing. The Tsar pulls uphill alone with the strength of ten, but millions pull downhill."
59
COMMERCE BY DECREE
In Russia, before Peter's time, there was little that could be called industry. Scattered through the towns were small factories and workshops for household implements, h
andicrafts and tools which met the needs of tsar, boyars and merchants. In the villages, the peasants made everything for themselves.
Upon his return from the West in 1698, Peter determined to change this and for the remainder of his life he labored to make Russia richer and its economy more efficient and productive. At first, with his country plunged into a major war, Peter's attempt to build industry related entirely to the needs of war. He developed cannon foundries, powder mills, factories to make muskets, leatherworks for saddles and harness, textile mills to weave woolen cloth for uniforms and make sails for the fleet. By 1705, the state-owned textile factories in Moscow and Voronezh were doing so well that Peter wrote to Menshikov: "They are making cloth and God gives excellent results, so that I have made a caftan for myself for the holidays."
After Poltava, the emphasis changed. As the demands of war diminished, Peter became more interested in other kinds of manufacturing, those designed to raise Russian life to the level of the West and at the same time to make Russia less dependent on imports from abroad. Aware that large sums were being drained out of the country to pay for imports of silk, velvet ribbon, china, and crystal, he established factories to make these products in Russia. To protect the fledgling industries, he placed high import duties on foreign silk and cloth which doubled their price for Russian buyers. Basically, his policy was similar to that of other European states at the time, which can generally be described as mercantilism: to increase exports in order to earn foreign currency, and decrease imports in order to stem the flow of Russian wealth abroad.
Peter's industrialization policy had a second purpose, equally important. His tax collectors were already wringing the Russian people lifeless to finance the war. The only long-term way to extract more revenue from his people, Peter realized, was to
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 go
ld 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."