Bread upon the Waters: The St. Petersburg Grain Trade and the Russian Economy, 1703-1811

Chapter 2. Selling Flour in St. Petersburg

32 Chapter 2 R Selling Flour in St. Petersburg Provisioning eighteenth-century St. Petersburg presented the imperial government with two distinct but closely connected worries: bringing or attracting a sufficient quantity of cereals to the city and ensuring that consumers could afford to buy them. The first goal argued for high food prices, while the second argued against them. Prices had to be high enough to cover the costs of moving grain and flour over long distances and to reward the growers, dealers, and retail vendors who provided the city with its sustenance, but the government did not want them to rise above that level. Suspicious of speculators and profiteers, the government initially sought to control prices by regulating and policing the marketplace, but in the second half of the century it relaxed its controls and allowed the private market to function with less regulation and interference . At the same time, however, it instituted a granary to provide a public safety net by storing flour as a safeguard against shortage and a brake on runaway prices. Influenced by liberal economic theories emanating from France and Britain , the Russian government gradually came to see that a freer market in grain could help the government deal with its problems even if it could not be left to deal with them alone. selliNg floUr iN st. PetersBUrg 33 poliCing the MarKetplaCe On January 14, 1725, the government of Peter I promulgated new regulations for marketing food in St. Petersburg. Having issued a number of ad hoc injunctions on that subject over many years, Peter now wanted to replace them with a more thoughtful, comprehensive statute. Enacted just two weeks before his unexpected death, the new law would be Peter’s final effort to regulate food sales and the starting point for his successors’ efforts to do the same. Peter’s law of 1725 restricted the sale of uncooked food to officially designated public markets and prescribed fines for selling it anywhere else. The law required local growers to bring their produce to the markets themselves and sell it directly to consumers in small quantities at posted prices until midday. Only then could they begin selling to merchants and retailers in larger quantities at negotiated prices. Middlemen and resellers of food were likewise restricted to buying in the official markets. They were forbidden to purchase foodstuffs in the city’s rural environs or to establish commercial relations directly with producers. To protect consumers, the law stipulated that flour, meal, and malt were to be sold by weight rather than volume because weight was a more reliable safeguard against chicanery and deception. It also required the elders (starosty) of the food markets and the head of the city magistracy to report the price of flour in the markets at regular intervals so that the police could determine the maximum allowable prices for baked goods sold to the public. The police were to appoint inspectors to watch over the sellers of baked goods and arrest those who violated the legal norms of price, weight, or quality as specified in the law. Upon conviction , the offenders were to be whipped publicly in the marketplace, and their wares were to be confiscated and sent to the hospital.1 Peter’s marketing regulations reflected not only his personal views of merchants but also the persistent and widely held belief that high food prices arose from merchant chicanery and market manipulation rather than an imbalance of supply and demand or some other impersonal force. Peter distrusted merchants and held their money-grubbing activities in contempt, but he also knew that they had talents and skills that he needed. He had come to understand that their self-interest and pursuit of profit led them to perform some tasks better than government officials following orders would, but he also understood that even when their interests coincided with his, they were not identical, and he resented that just as he resented his dependence on them and their activities. With some variations, a distrust of merchants similar to Peter’s appeared in marketing regulations across Europe. Consumers expected a steady supply of bread and other foods at affordable prices, and their first response to shortage or a sudden price increase was often to blame the retailers and wholesalers and sometimes to attack them physically. Governments and consumers distrusted vendors and middlemen and accused them of price gouging, colluding, hoarding, and 34 selliNg...