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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, handicrafts 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 businesses 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. 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 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 frivolous love of everything foreign. Instead, Peter had a single, firm purpose: to use foreign technicians to help build a modern 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.

Having constructed a new capital on the Neva, Peter was determined that it should be more than an administrative hive for his bureaucrats and a parade ground for his Guards regiments; he meant St. Petersburg to be a great port and commercial center. To endow it with importance and build it into a major commercial center, he took steps to divert trade to the Neva from other ports, in particular from the lengthy, circuitous Archangel route. This arbitrary commercial upheaval was achieved only by overriding the pleas and cries of many—Russians and foreigners alike—who had invested heavily in that route. Nevertheless, Peter gradually increased the pressure. The struggle continued until 1722, when he finally forbade the shipping of any goods from Archangel other than those actually produced in that province or along the banks of the Dvina. That year, St. Petersburg finally prevailed over Archangel and became the leading port on Russian soil, although its trade was still not as large as Riga’s. By the end of Peter’s reign, the volume of Russia’s foreign trade exceeded the wildest of Peter’s early dreams. Overall seaborne commerce had quadrupled in value. In 1724, 240 Western merchant ships arrived in St. Petersburg, while 303 visited Riga. In 1725, 914 foreign ships called at Russian Baltic ports.

But Peter failed in another objective: the creation of a Russian merchant marine. He had hoped that Russian goods could be carried to the West in Russian merchant ships, but this effort ran into an old prejudice, long inflicted by Western maritime nations. In the time of Novgorod, when Russian merchants had desired to export their produce in their own ships, the merchants of the Hanseatic League had joined against them to insist that they would buy Russian goods only in Novgorod and then be responsible for shipping them themselves. At a later time, an enterprising merchant of Yaroslavl took a cargo of furs to sell in Amsterdam, but, by concerted arrangement among Dutch buyers, he was unable to sell a single fur and had to carry them back to Archangel. There, they were bought immediately at a good price by the Dutch merchant who owned the vessel which had carried the furs back to Russia.

Early in his reign, Peter resolved to change this pattern and instructed Apraxin, as Governor of Archangel, to build two small Russian ships which would sail to the West carrying Russian cargoes under the Russian flag. Knowing that their arrival would provoke opposition, he pondered where to send them. Dutch and English merchants would be vigorously opposed, while in France, the Tsar felt, the Russian flag might not be respected. At last the ships were dispatched to France, but already Peter had retreated: They sailed under the Dutch rather than the Russian flag. One of the ships was confiscated by the French, and its return became the subject of a lengthy argument. In general, Peter never succeeded in this effort, and in shipping—and even in the handling of foreign commerce in Russian ports—Dutch and English merchants retained their virtual monopoly.

Despite this failure, Peter bore no grudge against foreign captains or seamen. On the contrary, he was delighted when foreign merchant ships arrived in Russian ports, welcoming them grandly and treating the captains as brother mariners. As soon as a foreign ship appeared in the harbor of Kronstadt or St. Petersburg, Peter arrived on board to walk its decks, examine its structure and rigging and look for new developments in its construction. His visits were so common, especially among the Dutch captains who came annually to St. Petersburg, that they looked forward to sitting down with the Tsar in their cabins with brandy, wine, cheese and biscuits to answer his questions about their voyages. In return, Peter invited them ashore to attend his court and all its celebrations; it was seldom that they returned sober to their ships. As one observer noted: “It is easy to conceive how much this reception was to the taste of people in that line of life and with how much pleasure they steered their course for St. Petersburg.”

Nothing was allowed to spoil this relationship. In 1719, when new customs regulations were drawn up for the port of St. Petersburg, the first draft presented to Peter for approval declared that ships that carried contraband or concealed dutiable goods should be confiscated. Peter struck out this article, explaining that it was much too early in the life of the port for such drastic action; he had no desire to frighten ship captains and merchants away.

The Emperor allowed visiting captains to speak to him on terms of familiarity which shocked his Russian favorites. When one Dutch captain said he still preferred Archangel to St. Petersburg and the Tsar asked why, the captain cheekily replied that there were no pancakes in St. Petersburg. “Come to court tomorrow,” Peter replied, “and you will have your fill of pancakes.”

When foreign seamen became embroiled in disputes with Russians, Peter hurried to the defense. Once, a Dutch merchant vessel, maneuvering into the crowded harbor of Kronstadt, accidentally rammed a Russian frigate, breaking its accommodation ladder. The Russian captain was furious, although the apologetic Dutch captain offered to pay for the damage. Un-appeased, the Russian sent a guard of Russian soldiers and sailors on board the merchantman and demanded ten times the appropriate sum. Peter was at Kronstadt and, hearing of the commotion, rowed out to the frigate to inspect the damage. Seeing that no harm had been done except to the ladder, which could be repaired in a few hours, he became enraged at his frigate captain. “In three hours,” he said, “I will return and I expect to see the ladder of your ship repaired.” Three hours later, the Tsar returned to find the ladder repaired but unpainted. “Paint the ladder red,” he commanded, “and in the future, let foreigners receive nothing at your hands but marks of politeness and friendship.”

It was typical of Peter’s character that in the middle of a war, with a new army, a new navy, a new capital and a new national economy all under construction, he should also begin to dig a new system of canals at different points in Russia. It was not that they were unneeded. The distances in Russia were so vast and the roads so poor that commercial goods as well as individual travelers faced almost insurmountable obstacles in moving from place to place. This problem had always bedeviled the effort to bring products from deep inside the giant nation to the seaports for export; now, it presented itself even more acutely in the form of transporting the quantities of grain and other foodstuffs which were needed to feed St. Petersburg. The solution had been provided in large part by nature, which had equipped Russia with a magnificent network of rivers—the Dnieper, the Don, the Volga and the Dvina. Although all these rivers except the Dvina flowed south, it still remained possible to haul goods northward, upstream, by the sheer brute force of human and animal labor. What remained was to connect this far-flung tracery of natural water routes with a system of canals which linked the rivers at vital points.

Peter’s first herculean effort was to try to link the Volga with the Don and thus, by his possession of Azov at the mouth of the Don, give most of the Russian heartland access to the Black Sea. For more than ten years, thousands of men labored to dig a canal and build stone locks, but the project was abandoned when Peter was forced to return Azov to the Turks. The growth of St. Petersburg inspired a second vision: linking the whole of Russia to the Baltic by connecting the Volga to the Neva. By extensive surveying, Peter located in the region of Tver and Novgorod a tributary of the Volga which ran within less than a mile of another stream which flowed, through many lakes and rivers, into Lake Ladoga, which emptied into the Neva. The key was a small canal at Vyshny-Volochok. It took 20,000 men four years to dig the canal with the necessary locks, but when it was finished, the Caspian Sea was linked by water with St. Petersburg, the Baltic and the Atlantic Ocean. Thereafter, a stream of flat-bottomed barges loaded with grain, oak timbers and other products of southern and central Russia, along with the goods of Persia and the East, moved slowly but continuously across the face of Russia.

Naturally, there were difficulties and opposition. Prince Boris Golitsyn, assigned to oversee the first of these projects, grumbled that “God made the rivers go one way and it was presumption in man to think to turn them another.” The flow of river traffic was sometimes impeded when the stone locks of Vyshny-Volochok canal silted up and had to be redredged. But this was a minor obstacle compared to the hazards faced on Lake Ladoga. The surface of this mighty inland lake, the largest in Europe, was sometimes whipped by wind into a violence worthy of an ocean, and often the waves overwhelmed the unwieldy, flat-bottomed river barges which had to have an exceptionally shallow draft to pass through the Vyshny-Volochok canal. When storm winds howling down from the north caught these clumsy river craft on the open lake, the boats either capsized or were driven onto the southern shore of the lake and broken in pieces. Every year, gale winds sank or drove ashore hundreds of barges, with the loss of their cargoes. Peter ordered the construction of a special fleet of lake boats with hulls and keels deeper than the shallow barges, to be used for the passage across Lake Ladoga. But this required unloading and reloading which were far too expensive and time-consuming with cargoes such as grain, hay and timber. His next move was to look for a way of avoiding the lake passage. In 1718, he decided to cut a canal through the swampy land along the southern shore of the lake from the River Volkhov to the mouth of the Neva at Schlüsselburg. The total distance would be sixty-six miles.

The project was first entrusted to Menshikov, who knew nothing of engineering, but was anxious to accept any assignment which might win him favor with Peter. Menshikov spent more than two million roubles and squandered the lives of 7,000 workmen, who died of hunger and disease because of bad administration. A great deal of needless work was done even before the basic decision had been made whether it was better to dig the canal in the earth behind the shoreline or to try to wall off part of the lake with dikes. The Tsar was on the point of abandoning the work when he encountered a German engineer, Burkhard Christopher von Munnich, who had had extensive experience building dikes and canals in North Germany and Denmark. Once Munnich took over, the work proceeded more efficiently, and in 1720 Weber wrote: “I am credibly informed that this work is in such an advanced state as to be ready next summer and that consequently the trade between the Baltic and the Caspian Sea, or between all Russia and Persia, will be upon a sure foot, though still with the inconvenience that ships coming from Kazan might be near two years on their way.” Weber was badly misinformed, and by 1725, when Peter died, the Emperor had seen only twenty miles of the great canal (it was seventy feet wide and sixteen feet deep) actually dug. After Peter’s death, Menshikov frowned on the engineer, and it was not until 1732, in the reign of Empress Anne, that the canal was finished and Munnich triumphantly escorted the Empress in a procession of state barges along the entire length of the prodigious waterway.

Today, the great canal system of Russia initiated by Peter forms a giant artery of commerce for the Soviet Union. The canals permit large ships to pass to and fro, up and down the rivers of Russia from the Black Sea and the Caspian to the White Sea and the Baltic. During the White Nights in Leningrad, one can sit on the Neva embankment and, after midnight, when the city’s bridges have gone up, watch a long procession of ocean-sized cargo ships pass like silent mammoths up the river, bound for the interior of Russia a thousand miles away.

Everything had to be paid for. Relentlessly and remorselessly, the war and the great construction projects sucked up the lifeblood and treasure of Russia. Although Peter repeatedly emphasized to his officials that taxes should be levied “without unduly burdening the people,” his own constant demand for funds overruled this sentiment. Taxes crushed every article and activity of daily life, yet the state never collected enough money to pay its mounting expenses. In 1701, the army and navy swallowed up three quarters of the revenues; in 1710, four fifths; and in 1724, even though the war was over, two thirds. When money was short, Peter slashed the salaries of all officials, temporal and spiritual, excepting only those most necessary to the realm: “foreign artisans, soldiers and sailors.” In 1723, there was so little cash that some government officials were paid in furs.

The only solution, until growing commercial and industrial activity could expand the tax base, was to lay still heavier taxes on the burdened nation. Hitherto, the basic tax had been the old household tax, determined by a census taken in 1678 during the reign of Tsar Fedor. This tax was laid on every village and landowner according to the number of houses and farms possessed (and made for crowded living because, to avoid taxation, as many families and people as possible crowded under one roof). In 1710, believing that the population must have increased, Peter ordered a new census. To his astonishment, the new census showed that in thirty years the number of households had decreased by from one fifth to one quarter. There was some real justification for this: Peter had drained off hundreds of thousands of men into the army, the shipyards at Voronezh, the work on the canals and the building of St. Petersburg, while thousands more had fled into the forest or to the frontier. But the new low figures also represented the helplessness of the government to overcome the stratagems of both nobility and peasants who were determined to evade taxes. Bribing the commissioners who counted the houses was a preliminary gambit. If this failed, the peasants simply removed their houses from the commissioners’ sight. Russian peasant houses were largely made of logs or timbers notched at four corners. Thus, they could be un-notched in a few hours and either removed to the forest or scattered about. The census takers and tax collectors knew the trick, but there was little they could do about it.

Upon his return from France, Peter decided to approach the problem differently, replacing the household tax with a version of the individual head tax he had observed in France. The tax-paying unit of this new poll tax was to be the “soul”: that is, every male from infant to grandfather in every village, town or peasant commune. But before the new tax could be levied, a new census was required. On November 26, 1718, a decree ordered that every Russian male except noblemen, churchmen and certain privileged merchants (all of whom were taxed differently) be inscribed. Again, opposition was intense but by 1722, a census had been compiled, listing 5,794,928 male “souls” and in 1724 the soul tax was collected for the first time. Peasants were assessed at 74 kopeks or 114 kopeks per year, depending on whether they worked on private or state land. In terms of revenue, the tax was an enormous success, producing half of the state income that year and continuing in use through most of the nineteenth century until 1887, when it was abolished by Alexander III.

The soul tax solved Peter’s problem of revenue, but at the cost of placing an even heavier burden on the peasants and strengthening the bonds of the serfdom that tethered them to the land. In earlier times, Russian peasants had been free to move where they wished, a right that made it difficult and sometimes impossible for landowners to meet their needs for labor. This crisis intensified in the middle of the sixteenth century when Ivan the Terrible conquered Kazan and Astrachan, opening to Russian colonization vast regions of virgin black earth previously inhabited by nomads. By the thousands and hundreds of thousands, Russian peasants abandoned the forest to the north and poured into this flat, rich country. Farms and villages in central Russia were left uninhabited; whole provinces were semi-deserted. Landowners, threatened with ruin, appealed to the state, and the state, unable to collect taxes from empty villages, reacted. Beginning in the 1550’s, decrees forbidding peasants to leave the land were issued. Runaway peasants were pursued, and in 1649 it was declared that any person who harbored them was liable to their landlord for his losses. In Peter’s time, over ninety-five percent of the people were serfs; some were state peasants and some belonged to private landlords, but all were bound for life to the land they worked.

Peter’s new soul tax placed the peasants even more firmly in the hands of the landowners. Once the population of a district had been counted by the census, the landowners and local authorities were responsible to the state for producing the tax revenue based on that population; actual collection of the money was left up to them. To assist landowners in keeping track of their peasants and extracting these taxes, Peter decreed in 1722 that serfs could not leave a landowner’s estate without his written permission. This was the origin of the internal-passport system which continues in use in the Soviet Union today. Eventually, the power placed in the hands of the landowners—to collect taxes, to control movement, to dictate work, to punish infractions—made each landowner a little government unto himself. Where his ability to enforce was threatened, he was supported by the intervention of army regiments permanently billeted throughout the countryside. In time, to increase the controls on peasant movement, any serf wanting to leave the land was required to get not only the landowner’s written permission, but written permission from the army as well. The result was a hereditary, all-embracing system of permanent servitude.

Most Russian serfs were bonded to the land, but not all. One great obstacle to persuading Russian noblemen and merchants to open new factories had been the difficulty of finding labor. To overcome this, Peter decreed in January 1721 that factory and mine owners could have factory serfs—that is, laborers permanently attached to the factory or mine in which their labor took place. Underscoring the key importance of building new industry, the Tsar also waived the strict rules about returning runaway serfs. Those serfs, he declared, who had fled their landowners to find work in factories should not be returned, but should remain where they were as permanent industrial serfs.

In the end, Peter’s tax policies were a success for the state and a massive burden for the people. When the Emperor died, the state did not owe a kopek. Peter had fought twenty-one years of war, constructed a fleet, a new capital, new harbors and canals without the aid of a single foreign loan or subsidy (indeed, it was he who paid subsidies to his allies, especially Augustus of Poland). Every kopek was raised by the toil and sacrifice of the Russian people within a single generation. He did not float internal loans so that future generations could help to pay for his projects, nor did he devalue the currency by issuing paper money as Goertz had done on behalf of Charles XII of Sweden. Instead, he laid the entire burden on his contemporary Russians. They strained, they struggled, they opposed, they cursed. But they obeyed.

* 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.

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