Chapter 25: Decision on Alcohol Monopoly
In the haze of alcohol, everyone let go of their worldly troubles.
The men sang loudly, while the women carried barrels of wine, pouring drinks for their brothers, husbands, and fathers who were reveling.
When they got tired of singing, they danced. Drunken men jumped onto the dining tables, dancing and drawing cheers from the crowd.
The folk songs were mostly about love between men and women, though there were also work songs that had to be shouted out, and hymns led by elderly villagers praising God and the Tsar.
The cultural entertainment of the village farmers left a deep impression on Nicholas. Despite their meager living conditions, they still found joy in their hardships.
"We work hard all year just to celebrate! And celebrating means drinking!"
The farmers' love for alcohol was evident in their every word and action.
"Witte, you were there too. If you try to help my father stop the people from drinking, it will only cause more unrest."
Ending his recollection, Nicholas shared his thoughts with the silent Witte.
"But from every perspective, excessive drinking is immoral."
Since Nicholas's words echoed the long-standing resistance to monopolizing alcohol, Witte could only counter from a moral high ground.
"I don't think you're a moralist, Witte. My father might have been saddened by the people's drinking, but you must have another motive…"
"…"
Nicholas seemed to have struck a nerve, causing Witte to sigh after a moment of silence.
"The great famine of 1891 wiped out the meager profits that Vyshnegradsky had managed to maintain in previous years. According to the government's most pessimistic estimates, last year's crop yield was the lowest this century, and the treasury is empty."
"Speaking of which…"
Witte's words reminded Nicholas of some concerns expressed by Professor Bunge when he had approached him earlier.
"Have you been issuing more paper money lately?"
"Yes, it seems Professor Bunge has already mentioned this to Your Highness."
As the current Chairman of the Council of Ministers and a member of the State Council, Bunge still held a nominal position at the peak of government power, though in reality, he handled many trivial and insignificant matters.
However, Bunge was not without support; he had many disciples and followers.
Bunge was once a professor at Kyiv University and even served as its president for a time. Many government officials were graduates of this university, including Witte.
This is why Witte referred to Bunge as "Professor."
In a way, Witte was a member of this loosely defined faction led by Bunge.
These conclusions were drawn by Nicholas himself, based on bits and pieces of conversations and the information he had gathered. His experience came from his previous life, navigating the complexities of a large corporation, reading between the lines, and engaging in office politics.
Although he was just a novice, his skills were at least usable. Moreover, even if his analysis was wrong, his status as the Crown Prince afforded him a significant margin for error.
"Professor Bunge has expressed to me his concerns that the over-issuance of paper money might negatively impact Russia's economic environment."
Nicholas was well-acquainted with the concept of America's "nuclear-powered printing press." However, many ideas that modern people take for granted seemed like fantastical notions to those of this era, with paper money and quantitative easing being prime examples.
Many of the discussions were exceedingly dull. In short, people of this era couldn't fathom the concept of fiat money, considering it a "rogue policy" that maliciously depleted the wealth of the populace.
After all, this was the era of the gold standard, where the value of currency was a given.
"Professor Bunge also approached me… much like he did with you, Your Highness. He believes that issuing more paper money is a road to self-destruction… but it's the only way to quickly gather enough funds to pay officials and soldiers. The treasury is empty now, and if we can't pay salaries by September 20th, the resulting chaos will be far worse than printing more money."
September 20th was Russia's payday.
Witte emphasized that this was a temporary measure, taken out of necessity.
"Hmm…" Nicholas had no strong opinion on quantitative easing or the "nuclear-powered printing press" since, from his modern perspective, the devaluation of paper money was normal. "So… you plan to acquire new funds for the treasury through a monopoly on alcohol sales?"
"Increasing government revenue is not the purpose of this reform."
Although Witte repeatedly insisted on his original intention, Nicholas sensed a bit of stubborn denial.
"But you can't deny that a monopoly could bring significant profits to the government, can you?"
Despite being continually contradicted, Nicholas remained unruffled. This patience was a quality that had earned him a reputation over the past year; many in the government speculated he might become a moderate Tsar in the future.
"In the short term, perhaps, but if alcohol consumption decreases, the revenue from the monopoly will decline as well. This is not the outcome His Majesty would want."
Because Nicholas was approachable, Witte felt free to speak openly.
"Hmm, it's difficult… If the goal is to curb drinking, I think it's almost impossible. But if the goal is to increase revenue, then it's a good strategy…"
Whenever the topic of increasing government revenue through monopolies came up, Nicholas thought of tobacco. This, in turn, reminded him of Humphrey's classic line from "Yes, Prime Minister."
Cigarettes kill a hundred thousand people each year. What do we get in return?
Forty billion pounds!
Twenty-five thousand jobs in the tobacco industry, a booming export sector, effectively balancing trade.
Another twenty-five thousand jobs in retail, packaging, trade, and various other fields...
Tobacco taxes make up a third of our public health funds. We save so many lives because these smokers willingly sacrifice themselves to save their fellow citizens.
Smokers are the benefactors of our nation!
Similarly, citizens who enjoy drinking are also the benefactors solving Russia's financial problems!
"So, Your Highness, will you support my work as His Majesty does?"
Witte understood that Nicholas's perspective was more pragmatic, which was a positive trait for the future Tsar of Russia. Therefore, he sought Nicholas's support, knowing their ultimate goals might differ, but their methods were aligned.
"Yes, I will support you just as my father does."
Afterwards, Nicholas chatted casually with Witte about some government affairs before leaving.
Nicholas's decisions might sound cold-blooded, but he never intended to be a paternalistic figure for the people. Unlike his father, Alexander III, Nicholas did not "love" his people in the same way.
Nicholas's ideal was to build a society of freedom and equality, without the need for a paternal figure, and without "big babies" who needed constant supervision.
When Nicholas returned to the Winter Palace and walked through its opulent rooms, he unexpectedly encountered his father, Alexander III, in the Malachite Hall.
The Malachite Hall, situated in the northwest corner of the Winter Palace, served as the nexus between the palace's state and private quarters. Through the massive crimson curtains, one could see the Neva River outside, and it was also the route Nicholas had to take to get back to his quarters.
The splendor of the Winter Palace was overwhelming to Nicholas when he first entered, but after the initial shock, it gradually became commonplace. This style, with its extensive use of gold, white, and silver, had been overused in modern bars, upscale clubs, and even private homes. While the Winter Palace's quality was undoubtedly superior, it did have a bit of a gaudy feel to it.
Nicholas preferred modern, avant-garde, and industrial styles, so he rarely paid attention to the palace's decor.
"Ready to meet those bothersome relatives of yours?!" Alexander III's blunt assessment of their European relatives was characteristic of his caustic remarks about outsiders.
In the past, Alexander III had deemed his eldest son a "weak, effeminate dandy." While his view had since softened, he still considered Nicholas a "rebellious fool."
"I was just on my way to prepare," Nicholas replied, saying more than usual.
"Good. Do you have anything else to tell me?"
Alexander III could tell Nicholas had something on his mind, so he prompted him to speak up.
"Um… it's about your idea of a state alcohol monopoly…"
"Do you have any 'new' thoughts on it?"
Alexander III's style was always direct. He had previously dismissed Nicholas's new ideas as impractical, but he still sat on the leather-padded sofa against the wall, patting the seat beside him for Nicholas to join.
Some politically astute ministers had privately expressed concerns to Alexander III about the Crown Prince's unorthodox views, but they were often met with a brusque, "Mind your own business!" or "Focus on your duties!"
"It's not exactly new… mainly…"
Nicholas, still figuring out how to phrase his thoughts delicately, hesitated, which irritated Alexander III.
"Nicky! Don't try to fob me off with Byzantine roundaboutness! Speak plainly!"
Alexander III disliked bureaucratic double-talk, referring to it as "a Greek vice."
"Yes."
Nicholas, somewhat startled by his father's reprimand, quickly collected his thoughts and stated his point concisely.
"I believe a state monopoly on alcohol won't curb excessive drinking among the populace, but it can generate significant revenue for the state. If you want to protect the Russian people from the harm of alcohol, the revenue from the monopoly should be used to subsidize education. Only an educated populace can understand the dangers of alcohol without resenting the government for imposing abstinence."
The first part of Nicholas's statement was premeditated, while the second part came to him in a flash of inspiration. Nonetheless, he felt it was a valid point, as government revenue should ideally benefit the national economy.
"...Is this your own idea? ...Don't lie!"
"Yes, it is."
Nicholas, startled by his father's intensified tone, quickly confirmed his statement.
"Hmm, you have a point... I'll handle it."
Alexander III, after a moment of silence, calmly responded.
"So, does this mean you're considering it?"
"Who is the Tsar here?!" Alexander III playfully knocked Nicholas on the forehead. "Now, go and complete your tasks. I'll make my decision."
"Yes, Commander Sasha."
Nicholas's father retained a patriarchal style, communicating gently with subordinates and descendants but not as equals. He disliked being contradicted or deceived, a form of interaction Nicholas found familiar and manageable, though he did not aspire to be that kind of leader.
Alexander III, pleased with Nicholas's obedience, patted his shoulder and reminded him to maintain decorum during their European trip and not to embarrass the Russian royal family. "But don't cater to those nitpicking relatives either; show them some backbone on important matters."
The "nitpicking relatives" referred to Kaiser Wilhelm II of Germany, known as Willy among the European relatives.
Willy did not sit well with Alexander III, who regarded him as an arrogant young dandy, meddlesome and self-important, believing everyone adored him.
Alexander III viewed Wilhelm II as a childish, overactive monkey.
"Understood," Nicholas replied, touching his nose, a habit when he felt uneasy. "I'll be mindful."
"Off you go, then."
"Hmm."
After taking several steps, Nicholas turned back involuntarily. Alexander III, preparing to leave the Malachite Hall, stood with his back to him.
The "giant" figure in Nicholas's memory seemed capable of shouldering the entire Russian Empire, yet he now appeared diminished and worn.
"…"
About ten days later, a prepared Nicholas waited outside his mother's boudoir.
In European parlance, a "boudoir" referred to a space for upper-class women to retreat from family and servants to socialize, gossip, and partake in traditional feminine activities.
Nicholas felt somewhat unsteady, having recently spent considerable time with his lover, Mathilde Kschessinska, whom he hadn't seen in months.
The details were straightforward and crude, involving typical romantic engagements.
Nicholas could tell that the Polish ballet dancer had fallen for him, even dreaming they would end up together.
Unfortunately, their affair was destined to end.
His kind uncle Alexei provided a place for their trysts, leading to nights of uninhibited passion, young and vigorous, like a wolf seven times a night.
However, the lack of moderation left Nicholas feeling as though he were "walking on air."
"Nicky? Why are you so unsteady?"
"No… Mother, I'm fine, just a bit sleep-deprived."
Empress Maria intended to visit her close sister in England, so mother and son would travel together on the Romanov royal yacht, the "Polar Star."
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