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On the banks of the Neva: British Merchants in St Petersburg before the Russian Revolution: in the final article in our series on Britain and Russia, Swart Thompstone visits the long-lasting community of Britons in the Russian capital.

FOR TWO CENTURIES after the foundation of St Petersburg ha 1703, the British merchant community- exercised a remarkable influence over the city's economic relations with the wider world. This community operated as a 'City of London' in miniature, and where the merchants led others--diplomats, travellers, soldiers, sailors, engineers, craftsmen and others--followed.

The St Petersburg Exchange, built in the early 19th century and painted in 1891 by Alexander Beggrov. Englishman Edwin Coates working in the works' manager's office of Thornton's thread mill. St Petersburg, shortly before the First World War.

To the English in the sixteenth century the idea of a northern route to the Indies had a particular appeal, and in 1553, in search of such a passage, the Edward Bonaventure cast anchor off the southern shore of the White Sea. For England, this venture established a thriving trade with Russia through Archangel; for Russia, it offered the prospect of secure and direct commercial links with Western Europe. The ship's return to England heralded the formation in London of the Muscovy Company, which sent annual cargoes of cloth, silks, tropical and Mediterranean goods in return for pelts, wax, tar and pitch. Finding it more economical to export Russian hemp in a processed form, English merchants set up a rope works near Archangel. It soon enjoyed a high reputation.

By the mid-seventeenth century Anglo-Russian commerce was stagnating, due partly to Dutch competition and partly to the Baltic option of transit trade through the Swedish-controlled port of Narva. But towards the end of the seventeenth century the Russian market became more interesting again to the British, who realised that the Scandinavian monopoly of naval stores could be broken by tapping Russian supplies. There was also a short-lived belief that Russia might be a profitable market for tobacco exports. British merchants now made a determined effort to break the monopoly of the Russia Company, as the old Muscovy Company was now termed. In 1698 Parliament abrogated the Company's monopoly including its lucrative right to license the Narva trade. Two years later, though, the outbreak of war between Russia and Sweden blighted the immediate commercial opportunities. Begun largely for economic motives, namely the control of Riga and Narva, the war dragged on until 1721. But Russian military success enabled Tsar Peter the Great to found his new capital, St Petersburg, in 1703. Its geographical position, allied with the exclusive right, granted in 1713, to trade in such export staples as hemp, hides, caviar, tar and potash, soon enabled it to become Russia's preeminent trading centre. The development of a canal network enhanced the port's commercial hinterland.

Although some British merchants chose to remain in Archangel or Moscow, most relocated to St Petersburg, exchanging their comfortable residences for the spartan conditions on the marshy banks of the Neva. The Muscovy Company too elected in 1720 to move its base to the new capital. Supplemented by members of the English colony from Narva which disintegrated under the impact of the war, St Petersburg's British community rapidly assumed a prominent economic and social position.

As the new capital grew in splendour, Britons acquired or rented some of the city's finest residences. At the end of Catherine II's reign the city's first grand embankment along the Neva between the Senate (later Decembrist) Square and the New Admiralty Canal came to be known as the English Embankment. Describing for his father in England the impressive three-storey houses, the young merchant James Brogdan, in St Petersburg between 1787 and 1788, observed that:
   You have some idea of the English
   line, but by all accounts this as well as
   every other
   part of
   the Town
   is very
   much
   altered
   since you
   were here. The
   banks of the
   Neva, the whole
   length of the
   line, which is
   exactly a
   verst, is lined with granite and ornamented
   with a small parapet and a
   footpath of the same materials, which
   makes a delightful promenade ...


Over time many mansions became the property of British residents. Number 6 was purchased by Edward Cazalet in the 1860s. In 1882 it became the premises of the St Petersburg International Commercial Bank, of which Cazalet was a director. At the end of the eighteenth century Number l0 was bought by Margaret Chamberlain, whose lather had established a large cotton printing and dyeworks near St Petersburg in 1753. From around 1858 Number 38 was in the ownership of the Clarke family, who established a company soon prominent in the grain export trade. Number 44 purchased in 1789 by Thomas Warre, a partner in one of the lading trading houses; until 1802 he also owned Number 46. One of the first owners of Number 60 was the physician to Catherine the Great, the Scot, John Rogerson. Rogerson also lived for a time at Number 21. Number 74 was purchased by another Scot, Alexander I's chief surgeon, Sir James Wylie. Number 70 had various English owners, including Robert Thornton (1763-89) and Samuel Gwyer (1870-79). Gwyer was a general merchant, who diversified into banking, and is today remembered for his mosaic memorial panel in the Anglican Church at Number 56.

The privileges British merchants gained under the 1734 Anglo-Russian Commercial Treaty, allied with the importance to Britain of Russian supplies of naval stores and the trade in Russian tallow and in bar iron which broke Sweden's monopoly, provided a vibrant commercial environment. For Britain, trade with the Baltic was more important than that 'with the whole of the tropics'. In the second half of the eighteenth century one author opined that were supplies of Russian tallow to be cut off for one year, 'thousands of manufacturers will literally beg for bread'. Edmund Burke considered Russia to be the 'most useful ally Britain had in the commercial sense'.

The British government maintained a close interest in the trade, and the Russia Company, like the East India Company, wielded considerable political clout at a time when other chartered companies had lost their influence. This commercial-government nexus manifested itself in the involvement in British politics of merchants prominent in the Russia trade. Important in this respect were such parliamentarians as Edward Forster (1730-1812), and the members of three families, the Porters, the Wilber-forces and the Thorntons: in the 1780s they had seven members of their various firms in the House of Commons. In the late 1790s, Russia Company members were prominent in the successful campaign to reverse William Pitt's policy to force Russian withdrawal from the Ochakov fortress, recently captured from Turkey.

Although their privileges were eroded by the less favourable commercial treaties of 1766, 1793 and 1797, the eighteenth century was a golden age for St Petersburg's British community. Their commerce was appreciated too by the Russian landed nobility, which benefited from supplying the products of field and forest, and by the government. Prince Potemkin responded to French questioning of the trade privileges granted to British merchants:
   What would you like us to do, to
   behave in a manner detrimental to
   the needs of our merchants and
   landowners? The demand of the
   English for our goods is very great but
   ours for theirs is insignificant ...


As well as contributing to an inflow of gold, to the satisfaction of the Russian treasury, British merchants provided shipping and insurance, and were the main suppliers of credit on the domestic market for products destined for the export trade. As a result most successful firms in Russia's international trade tended to have branch houses both in St Petersburg and an important credit-granting centre in Western Europe--increasingly in London. One such, Hill & Wishaw, also had political influence through Thomas Mitchell, the senior partner of its London agents, who was Liberal MP for Bridport from 1841 until his death in 1875.

Commercial success depended on intimate knowledge of the Russian market, which usually meant one or more of the senior partners being resident in St Petersburg during the trading season. Possible returns on capital employed of around 15 per cent provided a powerful incentive. High returns, an exalted social position in Russia and political influence in London, made life agreeable [or the British merchant in St Petersburg, especially since the seasonal nature of the trade allowed regular lengthy visits to Britain. This elite adopted the lifestyle of an 'aristocratic bourgeoisie'. James Brogdan found the lifestyle in the 1780s 'in regard to variety of eating and drinking, far superior to the common mode of living in England'. The social whirl encompassing dinners and the series of balls held during the winter season attended by most of the Russian nobility, 'all of the English merchants' and, he believed, stone Germans, says much about their exalted position. In 1796 the British Consul observed that he had never seen ' a reception at court more gracious and cordial than what their Imperial Majesties were pleased to give the British Factory' (the umbrella organisation of British merchants). Almost half a century later their privileged lifestyle and their aura of being an exclusive caste still attracted comment. As one German observer put it, they had:
   ... their own church and despising all
   other nations, but most especially
   their protectors, the Russians, they
   live shin up by themselves, drive
   English horses and carriages, go bear
   burning on the Neva, as they do tiger
   hunting on the Ganges, disdain to lift
   their hats to the Emperor himself and
   proud of their indispensableness and
   the invincibility of their fleets, defy
   everybody, find fault with everything
   they see, but are highly thought of by
   the government and by all, because
   they think highly of themselves, and
   reside chiefly in the magnificent quay
   named after them.


Frederick Whishaw, who spent some time in his family's firm in St Petersburg, captured the leisure interests of his compatriots in Russia in his book, Out of Doors in Tsarland (1893). His cousin James Whishaw (1879-1917), though, highlighted an increasing concern about an amateurish approach to business. Reflecting in 1916 on their prewar shrunken influence in the face of German competition, the editor of The Times, D Mackenzie Wallace, described them as:
   Honest, highly respected men of
   the conservative type, who were
   wedded to the traditional methods of
   their ancestors, and never dreamed of
   taking lessons in the subject of their
   pushful German competitors ... most
   of them had been educated in
   English public schools where they
   had imbibed the passion for sports
   and adopted the modes of living
   more luxurious than that of their
   fathers and grand-fathers ...


Geographical advantage alone would have powerfully aided their German rivals, but the dynamics of this process are more apparent than real. The Russian government encouraged foreign traders to take out Russian citizenship in order to benefit from trading privileges, and this was less attractive to the British, heavily involved in the commodity export trade, than to those engaged in the import trade. In fact German traders had dominated Russia's import trade by the end of the eighteenth century and made headway in the export trade too. By 1816 German merchants accounted for almost 60 per cent of European Russia's international trade, compared with 34 per cent handled by their British counterparts. From the 1830s the old expatriate merchant dynasties faced growing competition from commission agents operating on the instruction of traders in the importing market. Profits declined, worsened by the changing pattern of demand in Britain and alternative sources of supply, a search stimulated by the Crimean War.

Technological change played its part too. The telegraph and the steamship enabled the commodity trade to be conducted from the importing rather than the exporting centre. Railways allowed trade flows over the land frontier and through other Baltic ports, and Russia's growing grain export trade through the Black Sea also impacted on St Petersburg's trading position. Nevertheless, timber, flax and perishable agricultural produce remained important there for British traders. And tot traders good links with the cotton towns of Liverpool and Manchester, the city's cotton import trade continued to offer opportunities.

As a result, St Petersburg's old established British merchant families, whose numbers had risen from around 1,000 in the 1790s to some 2,500 in the 1820s, began to decline. Faced with pressure on international trade profits from the 1840s, they followed the general pattern established in eighteenth-century Britain of focusing less on trading activities and more on finance, as insurance and banking offered attractive returns. Even before Russia's quickening pace of industrial development towards the end of the nineteenth century, some British merchants spread their risks by entering the manufacturing sector. A proscription on British machinery exports ended in 1842, allowing some to embark on industrial ventures in the capital, although Alexander Wilson, the British director of the Imperial Aleksandrov Manufacturing Plant, had already managed to circumvent it in the early 1830s to acquire machinery from Manchester and Sheffield. The Hubbard and the Cazalet families now developed manufacturing interests.

The Cazalets had entered the Russian trade when Noah Cazalet (1757?-1800) went to Russia in his early twenties, probably importing silk, with his eldest brother, Peter (1756-1811), as his London representative. His business evidently prospered. He diversified into manufacturing, setting up a brewery and a rope factory in St Petersburg in the 1790s. However, his murder in 1800 put the responsibility for the business onto the shoulders of his young son, Peter Cazalet (1785-1859), who was duly joined in the family business by his own son Edward (1827-83). Under Edward, the business expanded substantially. He set up a thriving candle works, which acquired the right to provide candles to the imperial palaces. In 1851 the factory became a joint-stock enterprise, which took over the Nielsen Company's stearin works in Moscow in the late 1870s to become the Russian Empire's largest tallow processor, with markets abroad as well as in Russia. Another acquisition was the Russian Steam Oil Mill Company. But the jewel in the family's crown was the Kalinkin Brewery, the capital's largest brewery by far. This had been established by a German, Abraham Krohn, in Catherine the Great's time to produce English style ale and porter, for which the Russians had developed a taste when they were imported as ballast for empty ships returning to St Petersburg. It was furthered too by the Anglomania of St Petershurg's social elite. After Krohn's death ill 1827 the brewery passed to his son Friedrich (1798-1874), who linked up with his competitor, Peter Cazalet, in 1848 and they concentrated their plant near the Kalinkin Bridge.

When the Kalinkin Brewery gained imperial sanction as a joint-stock company in 1862, the Cazalet interest in the company was held by Edward. Also involved as a sleeping partner was William Miller (1809-87), a resident in St Petersburg between 1832 and 1854, whose firm had become a flourishing concern, exporting herring from Leith to St Petersburg, an enterprise in which he was assisted by James Marshall from Leith. Miller served for sixteen years as the Honorary British Vice Consul in St Petersburg before returning to Britain in 1854, where developed manufacturing and banking interests. Control of his St Petersburg company passed to Edward Cazalet, who married James Marshall's sister, Elizabeth in 1860. Through an asset exchange, William Miller & Co. obtained shares in the Cazalet manufacturing enterprises. The company was also the promoter of the Dunaburg-Vitebsk Railway. On its establishment in 1864 Edward Cazalet also became a director of the St Petersburg Commercial Bank.

In 1859 Miller was elected to Parliament for the Leith District, and sat as a Liberal, 'independent of party' until 1868. His steadfast if silent support for Gladstone earned him a baronetcy in 1874. With his country seat, Manderston in the Borders, and a town house on the corner o[ Park Lane and Piccadilly, Sir William Miller was numbered among Britain's social elite. His second son married Eveline Curzon, daughter of Lord Scarsdale, and owned the winners of the Derby in 1890 and 1893.

Another branch of the Cazalet family also enjoyed commercial success. Peter Cazalet's half-brother, Alexander (1793-1879), set up his own house, Alexander Cazalet & Sons, which took over the family rope factory. On his retirement in 1875 he handed the business over to his three sons, Clement, Louis and Edward, who continued it until 1890. Edward returned to live in England, where in 1893 he founded the Anglo-Russian Literary Society. The interests in Russian commerce of this branch of the family were maintained by Louis Cazalet. After the death of his first wife he married into the Mirrielees family from Aberdeen. The two sons of this marriage, William Lewis (1861-1953) and Frederick Archibald Cazalet (1871-1945), ran the trading house Muir & Mirrielees in St Petersburg, later trading under the style of 'Oborot'. However, their most important Russian asset was the celebrated Moscow retail store, Muir & Mirrielees.

The Hubbard, family's links with St Petersburg date from the second half of the eighteenth century, where the founder of the business, William Hubbard died in 1783. His trading business was continued by his sons, John and William. John's son, John Gellibrand Hubbard (1805-89), also entered the family business, running its London end. He became Conservative MP for Buckinghamshire, 1859-68, and for the City of London, 1874-87, when he was raised to the peerage. Regarded as one of the most important figures in Anglo-Russian trade, he was appointed to the honorary position of Governor of the Russia Company. His brother, William Egerton Hubbard (1812-83), ran the Russian end of the firm, residing in St Petersburg from 1829 until 1842. Like St Petersburg's other leading trading houses, the Hubbards graduated into banking, manufacturing and into timber concessions. They began cotton spinning in their Petrovskii Mill in 1842 and later bought the nearby Spasskii Mill; in 1867 they diversified into cotton printing.

Under the next generation the Hubbard enterprises enjoyed mixed fortunes and on several occasions the business had to be rescued from possible bankruptcy. William Egerton Hubbard Jnr. looked alter the Russian end of the business until his death in 1918. His cousin, the Hon. Evelyn Hubbard (1852-1934), combined running the London end of the business with politics, sitting as Conservative MP for Brixton from 1896 until 1900 when he was forced to devote himself more fully to the troubled business. After financial restructuring in 1910 the Russian manufacturing side enjoyed improved fortunes--its post-revolutionary claim for its sequestered assets was of the order of 2.5 million [pounds sterling].

By the early twentieth century the ranks of St Petersburg's British community had been considerably thinned. James Whishaw's memoirs paint a picture of its rapid change:
   The English colony (especially those
   in society) was a large one and could
   dine out practically every evening
   without meeting the same family
   twice. It was to decline all too rapidly
   in this respect, for the senior
   residents either retired or died off,
   and by the time of the Great War very
   few of the old families remained.


It was to be expected. They were concerned to give their children an English education, so as to avoid--amongst other things--their acquiring the rather curious sing-song accent that the British brought up ill St Petersburg tended to have. There were fewer eligible marriage partners as a result. From the eighteenth century a few had married foreigners in the capital's other expatriate communities and, in the second half of the nineteenth century, in the Russian nobility too. The large families of 'Lancashire, Yorkshire and Scotch mill managers and foremen' who swelled the British community from the 1850s were not considered suitable marriage partners for the scions of the old mercantile elite. But in the final analysis it was probably the economic motives that proved decisive for returning home. Britain's incentive to import particular products from Russia had gone. And the provision to Russia of financial services could often be managed, as could much commodity trading, from outside Russia. The financing of St Petersburg's trade was a lucrative business for the City of London until the First World War.

Increased competition and technological advance made it more difficult for firms to straddle both trade and manufacturing, particularly in such competitive arenas as the textile sector. The development of joint-stock banking in St Petersburg did provide openings for the old British trading families; otherwise opportunities for them ill the new wave of British investment in Russia were few. The exploration companies flooding into Russia in the decade before the First World War were active in Siberia and the southern periphery of the Russian empire. The expertise required of their Russian-based management was scientific rather than commercial: geologists and chemists rather than bankers and traders. Raising the enormous volumes of capital required for such enterprises was beyond the resources of the old merchant firms, as the traditional partnership system could not raise such huge sums as could be acquired through public issues. Capital raising as a result happened primarily in the City of London.

Up to 1917 St Petersburg remained an important manufacturing centre, particularly for light industry. The British played a part in this. But increasing competition for its foreign-owned textile industry came from the Central Industrial Region around Moscow. The companies best able to meet it were those with specialist management and technical expertise, like the Novyy (new) Cotton Spinning Mills Company set up in 1844; in 1897 it employed over 1,800 workers. Many Russian textile mills had British supervisors and managers, mainly down-to-earth practical men, who had acquired their expertise in Britain: men following in the tradition of Charles Baird (1766-1843), whose enterprises in St Petersburg in the early nineteenth century were among the largest in the Russian Empire, producing some of the intricate ironwork that adorns several prominent buildings in the city.

One of the Empire's largest woollen mills had been established in the city by James Thornton (no relation to the earlier Thorntons in St Petersburg), the son of a Yorkshire woollen mill owner who had gone to Russia in 1823 to work in Count Kamarovsky's woollen mill at Ochta near St Petersburg and became a mill manager in 1829. Around 1840 he founded the Thornton Woollen Mills, which by the end of the nineteenth century employed 2,200 workers. In another sector of the city's textile industry, thread manufacture, the British interest was represented by J & P coats from 1889, who purchased a small mill which they modernised and enlarged. They subsequently purchased two other mills.

Even before the October Revolution gave the coup de grace to British commercial enterprise in St Petersburg, the labour unrest of the 1905 Revolution and the trade blockade of the First World War had destabilised the survival strategies of the few British merchant families who remained. Yet for two hundred years these families had played a crucial part in linking St Petersburg to the international economy.

FOR FURTHER READING

A. Cross, Anglo Russica: Aspects of Cultural Relations between Great Britain and Russia in the Eighteenth and Early Nineteenth Centuries (Berg, 1993); J. Bater, St Petersburg: Industrialisation and Change (Edward Arnold, 1976); P. Dukes, The Caledonian Phalanx: Scots in Russia (National Library of Scotland,1987); J. Garrard, The Eighteenth Century in Russia (OUP, 1973); M. Leigh, (ed), James Wh13haw, A History of the Whishaw Family (London, 1935); M. Daunton, 'Inheritance and Succession in the City of London in the Nineteenth Century', Business History, vol.XXX (1988), pp.269-286.

Stuart Thompstone is Lecturer in Russian History at the University of Nottingham.
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Author:Thompstone, Stuart
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Geographic Code:4EXRU
Date:Dec 1, 2003
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