After leaving Rykov I went to see Krestinsky, the
Commissar of Finance, the curious little optimist whose
report on the Extraordinary Tax I had heard at the last
meeting of the Executive Committee. I found him in the
Ilyinka street, in the Chinese town. I began by telling him
that I did not believe that they meant to pay the loans. He
laughed and gave me precisely the answer I had expected:--
"Of course we hope there will be a revolution in other
countries, in which case they will repudiate their debts and
forgive us ours. But if that does not happen we know very
well that we shall have to pay, and we are prepared to pay,
and shall be able to pay, in concessions, in raw material
which they need more than they need gold."
Then, being myself neither an economist nor a theoretical
socialist, I put before him what had been said to me in
Stockholm by an Englishman who was both one and the
other; namely, that, being isolated from European finance,
the Soviet Government of Russia was bound to come to an
end on economic and financial grounds alone.
He said: "That would certainly be so, if rising prices, rising
wages, were to mean indefinitely increased demands on the
printing machines for paper money. But, while we are at
present forced to print more and more money, another
process is at work which, in the long run, will bring this state
of things to an end. Just as in our dealings with other
countries we exchange goods instead of paying in money, so
within our own frontiers money is ceasing to be the sole
medium of exchange. Gradually the workmen are coming to
receive more and more in other forms than money. Houses,
for example, lighting and heating are only a beginning.
These things being state monopolies, the task of supplying
the workman's needs without the use of money is
comparatively easy. The chief difficulty is, of course, food
supplies, which depend on our ability to keep up an
exchange of goods with the villages. If we can supply
the villages with manufactured goods, they will supply us
with food. You can fairly say that our ruin or salvation
depends on a race between the decreasing value of money
(with the consequent need for printing notes in ever greater
quantities) and our growing ability to do without money
altogether. That is of course, a broad view, and you must
not for a moment suppose that we expect to do without
money in the immediate future. I am merely showing you
the two opposing tendencies on which our economic fate
depends."
I will not set down here what he said about the
Extraordinary Tax, for it was merely a repetition of what I
had heard him say in committee. In connection with it,
however, he admitted that capitalism and profiteering were
hard things to root out, saying that they had great difficulty
in getting at what he called "the new bourgeoisie," namely
the speculators who have made fortunes since the revolution
by selling scarce food products at fantastic prices. It was
difficult to tax them because they carried on their operations
secretly and it was next to impossible to find out who
they were. They did not bank their money, and though
an attempt had been made to get at them through the house
committees, it was found that even these committees were
unable to detect them. They will, however, be made to
disgorge their ill-gotten gains when the measure first proposed by
Sokolnikov last summer is put into practice. This is a
general exchange of new money for old, after which the old
will be declared invalid. "Of course," said Krestinsky, "they
will cheat in every possible way, scattering out the money
among a number of friends and relations. But something
will have been done in cleaning them up, and that process
will be completed by a second exchange of money later on."
Fifteen milliards of new notes for the first exchange are
already printed, but they think that twenty milliards will be
necessary.
I asked if the new money was better looking than the old, if
it looked more like money that was worth having than the
wretched little notes printed by the Provisional Government
and scornfully called "Kerenkies" by the populace.
Krestinsky said he was afraid not, but that the
second and final exchange would be made in notes
which they expected to be permanent. They did not expect
the notes of the first exchange to circulate abroad, but the
notes of the second would carry with them state obligation
and they expected them to go into general currency. He
added, smiling that the words "Proletariat of all lands, unite,"
were to appear on the notes in eight languages. The
question of the look of the notes, of their ability to inspire
confidence by their mere appearance, is of real importance
in a country where so many of the peasantry will judge their
value by nothing else.
I reminded him of the hostility roused in some villages by
mistakes in the assessment and collecting of the
Extraordinary Tax, mistakes which (so other Communists
had assured me) would cost them more, politically, than the
tax was worth to them, and asked him, "Will you not have
great difficulty in getting the exchange made, and are you
not running the risk of providing the reactionaries with a
new profitable basis of agitation?"
He said that of course they would not make the attempt
unless they felt sure they were politically strong enough
to carry it through. "If it is properly explained to the villages
there will be nothing to fear, because the measure will not
threaten any but the rich and therefore the small minority of
the peasantry. It would be a different matter if the same
thing were to be tried by the counter-revolutionaries,
because they would not discriminate in favour of the poor.
If Kolchak and Company overthrow us and try to substitute
their money for ours, their action would affect rich and poor
alike, minority and majority together. If there were not a
hundred other causes guaranteeing the insecurity of their
position, the fact that they will be unable to get rid of our
money without rousing the most violent opposition in the
masses throughout the country would alone be sufficient to
do it."
I asked whether that was the reason why they intended to
print on the notes "Proletariat of all lands, unite," so that the
counter-revolutionaries, unable to tolerate money bearing
that hated phrase, should be forced to a step disastrous for
themselves.
He laughed, and said that he did not think
counter-revolution in the least likely unless brought
in by invasion, which he did not think politically possible.