1646 and in 1649 by depriving the British of their remaining tax immunities and of
permission to reside in the interior (this was also in protest at the execution of King
Charles I). The 1649 Lawcode codified rules against foreigners owning shops or
engaging in retail trade and imposed higher fees for transport, customs, and
licensing.
After 1649 Muscovite trade policy became more emphatically protectionist, but
remainedflexible. Decrees of 1653 simplified taxes and customs on all trade, setting
a 5 percent basic rate for Russian merchants, but imposing on foreign merchants an
extra 2 percent transit duty within Russia. The 1667 New Commercial Code,
intended specifically to bring in bullion in the aftermath of the successful but
expensive Thirteen Years War (1654–67), simplified and standardized in an effort
to eliminate foreign merchants from the Russian interior. Restrictions would be
applied to all foreigners, with no individual monopolies offered. Fees were raised
and were to be paid up front, regardless of the subsequent success of the venture.
Customs duties were to be paid in silver or gold, but export duties were forgiven if
they purchased such goods in bullion. Prohibitions against retail trade were
reiterated and wholesale sales tax rates for the interior were hiked up for foreigners.
Foreigners were limited in their ability to own land in Russia and, to further the
goal of simplification,flat rates for transit of goods were defined. Foreigners were by
and large kept to border towns—the Dutch and English to Arkhangelsk, the
Swedes to Novgorod and Pskov; eastern traders to Astrakhan; those trading
overland to the Baltic and Poland-Lithuania to Smolensk; trade with Left Bank
Ukraine to Putivl’.
The effect of the 1667 New Commercial Code was many-fold: it succeeded in
bringing in specie and it protected domestic merchants and trade. In particular it
reined in trade on the Volga, limiting foreign merchants’access north of Astrakhan.
It also forced foreigners to work with Russian merchants to bring goods to the
interior; smuggling also soared. The example of tobacco is most telling: by 1634
tobacco sales were forbidden, Russia having calculated that, as Romaniello shows,
importing such a potentially popular consumer item would drain more specie than
it brought to the state in fees. But illegal trade continued, with British and Chinese
imports leading the way. Tobacco trade was legalized in 1697 by granting a
lucrative license fee to a group of British merchants. At the same time, the state
was not fully protectionist when it suited its purposes, indicated by the fact that
the New Commercial Code’s restrictions were generally not applied in Siberia.
Bukharan merchants maintained their privileges in the China trade and in access to
the domestic market.
Muscovite merchants failed to take advantage of their favorable position, how-
ever, because of dearth of credit and capital, lack of economic infrastructure, and
lack of a labor market. There was insufficient capital and expertise, for example, to
found a native Russian merchant marine; the only shipping done in Russian boats
plied the Baltic from Livonia to Sweden in modest vessels. Only Europeans had the
technological know-how and resources for the large ships required for White Sea
and Baltic passages. Russia’s successful merchants were constantly vulnerable to
being drafted into state service in one of the three corporations of merchants, as we
198 The Russian Empire 1450– 1801