how the timber industry replaced the beaver trade. When steamships replaced canoes, it turned out that agriculture was entirely viable, and the export of timber and paper also increased. The sawmills and paper factories used the same water routes as the beaver trading posts had done, and the same agricultural lands provided them with food. But every change of staple created new ecological-economic problems. Tree felling and rafting turned rivers into marshland. Felling activities and sawmills had to be situated further and further upstream. Large cities developed on the sites of the trading posts; where there had once been beaver ponds, there were now power plants. Canals and then railways were constructed to streamline the routes for transporting raw materials, which had formerly followed the bends in the rivers. The Atlantic ports, built for fishing and then for the fur trade, now exported timber, paper and grain to Europe and the USA. As Innis wrote, Canada emerged not in spite of geography but because of it.19 This is also true of Russia and other resource-dependent countries. The vast expanses of Russia and Canada were equally formed by the fur trade.
The sea otter
In the middle of the eighteenth century, fur was still the major Russian export to China, which bought every sort – even hundreds of thousands of cat pelts a year. Catherine the Great turned the state monopoly on fur into a private one, transferring the running of the fur trade from the Siberian office to her private cabinet. But the sable was almost extinct and squirrel was out of fashion. After the Seven Years’ War, Catherine sent her best sailor, the British-trained Captain Vasily Chichagov, to map the northern extremity of Siberia. He failed to find the Northern Passage to the Pacific but heard rumours about incredible animals that would make your fortune if you could catch them. In 1774 Grigory Shelikhov, a Siberian merchant, made a voyage to the North Pacific. He founded a colony on the island of Kodiak, which had abundant animals and spruce forests. The island made an excellent base for ship repairs and for mounting new expeditions to the east. The native Aleutian population were dispersed with cannon shots; hundreds were killed, but the survivors agreed to exchange pelts for beads and vodka. The Aleutians had always used their prisoners as slave labour – now the Russians put themselves at the top of this hierarchy. In 1786 Shelikhov returned with pelts of the sea otter, or sea beaver as he called it; his cargo was valued at the astronomical sum of 300,000 roubles. To develop the colony he wished to double the sum and asked for a monopoly on all Russian trade on the American coasts. Catherine refused – she had been reading Adam Smith and believed in the free market. But she dispatched four battleships to Alaska and ordered Captain Grigory Mulovsky, another British-educated seafarer, to sail them round the world. George Forster, one of Captain Cook’s companions, agreed to join the voyage as a scientist. But yet another war broke out against Sweden, and Mulovsky was killed in battle. The ambitious expedition came to naught.
English and French ships were already plying between Kamchatka and Alaska. All of Europe was reading the memoirs of the American John Ledyard, a member of Cook’s final expedition. Cook’s sailors had traded glass beads in exchange for a few sea otter pelts, which they sold in Macao for £2,000. This unusually thick fur was especially prized in China, where the pelts were used to make imperial robes. Ledyard was so enamoured of sea otters that he tried to reach Alaska overland, travelling alone from St Petersburg across Siberia. He travelled many thousand miles by sledge but was arrested in Yakutsk in 1788. The experienced Shelikhov used other tactics. The turnover of his fur business was the equivalent of a tenth of the Russian budget, and he raised more capital after registering several companies on the St Petersburg stock market. Preparing for his new voyage, he hired British sailors. He even recruited Samuel Bentham, the brother of Jeremy Bentham. Since 1783, Samuel had been in the service of the Russian government – he supervised the mines in Olonets, inspected the Ural factories of the Demidovs (see chapter 6), built ships for Prince Grigory Potemkin and even established a school in Siberia. He also had a secret plan for seizing America. In 1790, he went through Siberia with his Cossacks, intending to sail across to California and win it for his boss, Prince Potemkin. This plan was cut short by the death of the prince, and Samuel returned to Europe.20 Shelikhov fared better – he reached the Pacific coast and built a frigate in Okhotsk. But English ships were already anchored in the bays of Alaska, and in 1790 they drove off the Spanish ships. That was bad news: before Shelikhov could start skinning sea otters he would have to fight the British fleet.
In 1794 a young officer from Siberia, Nikolay Rezanov, married Shelikhov’s daughter. Rezanov was one of the most remarkable people in Russian history, but his fourteen-year-old bride didn’t have any inkling of this. She died a few years after the wedding, one of the richest heiresses in the empire. Shelikhov and Rezanov now jointly controlled a great part of the Chinese-Russian trade in fur and tea.21 All this massive volume of trade went via Kyakhta, south of Lake Baikal. An old transit point on the Great Silk Road, this town was the only legal customs post on the Chinese-Russian border, the longest in the world. Trade was done mostly by barter; it was only in 1762 that Catherine allowed private trade in Kyakhta. More than a million chests of tea entered Siberia from China every year, as well as gunpowder, paper and silk. The Russian merchants mostly traded fur, but also hides and horses. The English were a threat to this trade: they had already taken American furs to Canton (Guangzhou).
Catherine died, and after much manoeuvring the young emperor Paul I signed a statute for the creation of the Russian-American Company. The documents were drafted by Gavriil Derzhavin, the president of the Collegium of Commerce, who is better remembered as a powerful poet. Rezanov was a student of Derzhavin’s and had served in his office. The collaboration between Derzhavin, Shelikhov and Rezanov resulted in the most ambitious global project ever known to the Russian Empire. The Russian-American Company obtained a monopoly on a huge territory to the east of Siberia and to the north of Japan, including Alaska. Rezanov’s plan encompassed the colonisation of these lands, their settlement by peasants and Cossacks, the building of ports, wharves and towns, the extraction of minerals and furs, and trade across two oceans. He intended the Russian-American Company to expand south as far as California and Sakhalin and planned a naval base at the estuary of the Amur. If his plans had been accomplished, the Pacific Ocean would have become a lake within the Russian Empire. In the meantime, Russian roads, bad as they were, ran out at Irkutsk, in the centre of Siberia. The winter route from there to the Pacific coast took seven months, and all the time in the world would not suffice to make the route possible in summer. To provision its colony in Alaska, the empire sent ships from Odessa round Africa: this journey across three oceans turned out to be quicker, cheaper and safer than the overland route through Russian territory. In 1805 a pud (16 kilograms) of flour cost 50 kopecks in Irkutsk, 10 roubles in Okhotsk, 40 roubles in Kamchatka, and even more in Alaska.
The establishment of the Russian-American Company closed a large circle in which the plans of world empires were codified according to the spirit of corporate capitalism. The Muscovy Company, which had been established by Sebastian Cabot and John Dee in 1533, was one of the first joint stock companies founded for long-distance trade (hemp and timber); then came the English East India Company (tea and opium), the Dutch East India Company (tea and spices), the Hudson Bay Company (fur), and a number of Prussian, Danish and even Latvian projects. The Russian-American Company was another institution of resource-oriented expansion based on a state–private partnership. Triangular trade in the Atlantic was bringing unheard-of wealth to the merchants and state treasuries. The Russian-American Company would create an equally massive trade in the Pacific. American-manufactured goods would be traded for Alaskan fur, fur bartered for Chinese tea, and the tea sold in the Russian Empire and the Americas.
With credit from the tsar, the Russian-American Company bought two old English frigates and hired a British crew. Rezanov was appointed the expedition’s commander and the tsar’s representative in Russian America. The captain was Ivan Krusenstern, and the rivalry between these two powerful personalities started immediately.22 When the ships reached Russian America, the expedition’s doctor, Georg Langsdorf, was horrified: ‘The Russians kill everything that moves, for the sake of an instant profit. They don’t realize that they are permanently depriving themselves of a potential source of wealth.’ Steller’s sea cow, a helpless source of meat, became extinct. Seals had no fear of people, who beat