ends the entire reform of uniting the treasuries with the institutions
of the Bank.
This reform constitutes the greatest revolutionary departure, in strict
accordance with the instructions contained in the party program. Prior
to the completion of this reform, the old pre-revolutionary principle
continued to prevail—that of opposition of the State Treasury to the
State Bank, which was independent financially, having its own means,
operating at the expense of its capital stock, and acting as a
depository for the funds of the State Treasury and as its creditor.
Insofar as the new scheme of our financial life has been realized, this
dualism, has finally disappeared in the process of realization of the
reform. The Bank has now actually become the only budget-auditing
savings account machinery of the Russian Socialist Federal Soviet
Republic. At the present moment it is serving all the departments of the
state administration, in the sense that it meets all the government
expenditures and receives all the state revenue. It takes care of all
accounting between the governmental institutions, on the one hand, and
the private establishments and individuals on the other. Through the
hands of the People’s Bank pass all the budgets of all institutions and
enterprises, even the state budget itself; in it is concentrated the
central bookkeeping which is to unify all the operations and to give a
general picture of the national economic balance.
Thus, we may consider that the fundamental work, i.e., "the
monopolization of the entire banking business in the hands of the Soviet
Government, the radical alteration and the simplification of banking
operations by means of converting the banking apparatus into an
apparatus for uniform accounting and general bookkeeping of the Soviet
Republic"—has been accomplished by the Commissariat of Finance.
IV
As regards the carrying into practice of a number of measures intended
to widen the sphere of accounting without the aid of money, the
Commissariat of Finance has, during the period above referred to,
undertaken some steps insofar as this was possible under the
circumstances.
As long as the state did not overcome the shortage of manufactured
articles, caused by the general dislocation of industrial life, and as
long as it could arrange for a moneyless direct exchange of commodities
with the villages, nothing else remains for it than to take, insofar as
possible, all possible steps to reduce the instances where money is used
as a medium of exchange. Through an increase of moneyless operations
between the departments, and between the government and individuals,
economically dependent upon it, the ground is prepared for the abolition
of money.
The first step in this direction was the decree of the Soviet of
People’s Commissaries of January 23rd, 1919, on accounting operations,
containing regulations on the settling of merchandise accounts
(products, raw material, manufactured articles, etc.) among Soviet
institutions, and also among such industrial and commercial
establishments as have been nationalized, taken over by the
municipalities, or are under the control of the Supreme Council of
National Economy, the People’s Commissariat for Food Supply, and
Provincial Councils of National Economy and their sub-divisions.
In accordance with this decree, the above-mentioned accounts are to be
settled without the medium of currency, by means of a draft upon the
state treasury for the amount chargeable to the consuming institution,
and to be credited to the producing institution, or enterprise. In the
strict sense, the decree establishes a principle, in accordance with
which any Soviet institution or governmental enterprise requiring
merchandise, must not resort to the aid of private dealers, but is in
duty bound to apply to the corresponding Soviet institutions,
accounting, producing or distributing those articles. Thus, it was
proposed, by means of the above-mentioned decree, to reduce an enormous
part of the state budget to the mere calculation of interdepartmental
accounts, income on one side and expenditures on the other. In other
words, it becomes possible to transact an enormous part of the
operations without the use of money as a medium of exchange.
As regards the policy of the Commissariat of Finance in the domain of
the circulation of money, one of the most important measures in this
respect was the decree of the Soviet of People’s Commissaries of May
15th, 1919, on the issue of new paper money of the 1918 type.
This decree states the following motive for the issue of new money:
“this money is being issued with the object of gradually replacing the
paper money now in circulation of the present model, the form of which
in no way corresponds to the foundations of Russia’s new political
order, and also for the purpose of driving out of circulation various
substitutes for money which have been issued due to the shortage of
paper money.”
The simultaneous issue of money of the old and new type made it
impossible for the Commissariat of Finance to immediately commence the
exchange of money, but this in no way did or does prevent it from
preparing the ground for such exchange, in connection with the annulment
of the major part of the old money in a somewhat different manner.
Creating a considerable supply of money of the new model (1918) and
increasing the productivity of the currency printing office, the
Commissariat is to gradually pass over to, in fact has already begun,
the issue of money exclusively of the new type. A little while after the
old paper money has ceased to be printed, the laboring population, both
rural and urban, as well as the Red Guards all of whom are not in
position to accumulate large sums, will soon have none of the old money.
Then will be the time to annul the money of the old type, since this
annulment will not carry with it any serious encroachment on the
interests of the large laboring masses.
Thus the issue of new money is one of the most needed first steps on the
road to the preparation of the fundamental problem, that is the
annihilation of a considerable quantity of money of the old type,
reducing in this way the general volume of the mass of paper money in
circulation.
We thus see that here, too, the Commissariat of Finance followed a
definite policy. It goes without saying that from the point of view of
Socialist policy all measures in the domain of money circulation are
mere palliative measures. The Commissariat of Finance entertains no
doubts as to the fact that a radical solution of the question is
possible only by eliminating money as a medium of exchange.
The most immediate problem before the Commissariat of Finance is
undoubtedly the accomplishment of the process which has already begun,
namely, the selection of the most convenient moment for the annulment of
the old money. As regards the part which currency generally (at this
moment of transition) plays, there can be no doubt that now it is the
only and therefore inevitable system of financing the entire
governmental machinery and that the choice of other ways in this
direction entirely depends upon purely economic conditions, i.e., mainly
upon the process of organization and restoration of the national economy
as a whole.
V
The explanatory note, attached to the budget for July to December, 1918,
thus depicts our future budget: “When the Socialist reconstruction of
Russia has been completed, when all the factories, mills and other
establishments have passed into the hands of the government, and the
products of these will go to the government freely and directly, when
the agricultural and farming products will also freely flow into the
government stores either in exchange for manufactured articles or as
duty in kind ... then the state budget will reflect not the condition of
the monetary transactions of the State Treasury ... but the condition of
the operations involving material values, belonging to the State, and
the operations will be transacted without the aid of money, at any rate
without money in its present form.”
It is clear that at present the conditions are not yet fully prepared
for the transition to the above-stated new form of state budget. But, in
spite of this, the Commissariat of Finance has taken a big step forward
in the direction of reforming our budget.
The budget of the Russian Socialist Federal Soviet Republic, adopted by
the All-Russian Central Executive Committee on May 20, 1919, represents
the experiment in effecting a survey not so much of the financial
activity of the state, as of its economic activity, even though it is as
yet in the form of money.
In the work of reforming the budget, the Commissariat of Finance has
come across two obstacles which are a heritage of the pre-revolutionary
time: the division of revenue and expenditures into general state and
local, and the hesitation on the part of some to include in the budget
all the productive and distributive operations of the Supreme Council of
National Economy and of the Commissariat for Food Supply. Both, the
first and second obstacles have been somewhat surmounted, and the
above-mentioned (third) revolutionary budget is already different from
the two preceding budgets in many peculiarities which are very typical.
These consist in a complete account of all production and distribution
which the state has taken upon itself. This experiment is by no means
complete, but the achievement should nevertheless be judged as
considerable. The concrete conditions for making out the budget, as is
stated in the explanatory note, have already made it possible to enter
upon the road of accounting for the entire production and distribution
of the nation, and that thereby the foundation has been laid down for
the development of the budget in the only direction which is proper
under the present conditions.
The budget of the first half of 1919 has followed the same fundamental
principles for the construction of the state budget by including the
expenditures of the entire state production and distribution as well as
the sum total of the revenue-in the form of income from the productive
and distributive operations of the state. In other words, this budget
for the first time takes into account all the transactions of the
Supreme Council of National Economy and of the Commissariat for Food
Supply.
The further development of the budget will be directed toward the
working out of the details of this general plan, and, in particular,
toward differentiating revenue and expenditures: (1) direct, actual
money received or paid, and (2) transactions involved in the accounting
of material and labor, but not involving any actual receipts of money,
or requiring any actual disbursements in money.
VI
In the field of taxation one must bear in mind first that the entire
question of taxation has been radically changed with the beginning of
Communist reconstruction.
Under the influence of the combined measures of economic and financial
legislation of the Republic, the bases for the levying of land, real
estate, industrial taxes, taxes on coupons, on bank notes, on stock,
stock exchange, etc., completely disappeared, since the objects of
taxation themselves have become government property. The old statute
regulating the income tax (1916), which has not as yet been abolished,
was in no way suitable to the changed economic conditions. All this
compelled the Commissariat of Finance to seek new departures in the
field of taxation.
However, it was impossible to give up the idea of direct taxation prior
to the complete reformation of the tax system as a whole. Our work of
Communist reconstruction has not been completed; it would be absurd to
exempt from taxation the former capitalists as well as the newly forming
group of people who strive for individual accumulation. This is why the
system of direct taxation, which has until recently been in operation,
was composed of fragments of the old tax on property and of the partly
reformed income tax law. However, beginning with November, 1918, to this
old system there were added two taxes of a purely revolutionary
character which stand out apart within the partly outgrown system “taxes
in kind” (decree of October 30, 1918) and “extraordinary taxes”
(November 2, 1918).
Both decrees have been described as follows by Comrade Krestinsky,
Commissary of Finance, at the May session of the financial
sub-divisions:
“These are decrees of a different order, the only thing they have in
common is that they both bear a class character and that each provides
for the tax to increase in direction proportion with the amount of
property which the tax-payer possesses, that the poor are completely
free from both taxes, and the lower middle class pays them in a smaller
proportion.”
The extraordinary tax aims at the savings which remained in the hands of
the urban and larger rural bourgeoisie from former times. Insofar as it
is directed at non-labor savings it cannot be levied more than once. As
regards the taxes in kind, borrowing Comrade Krestinsky’s expression,
“it will remain in force during the period of transition to the
Communist order, until the village will from practical experience
realize the advantage of rural economy on a large scale compared with
the small farming estate, and will of its own accord, without
compulsion, _en masse_ adopt the Communist method of land cultivation.”
Thus, the tax in kind is a link binding politically the Communist
socialized urban economy and the independent individual petty
agricultural producers.
Such are the two “direct” revolutionary taxes of the latest period. In
regard to the old system of pre-revolutionary taxes, the work of the
Commissariat of Finance during all of the latest period followed the
path of gradual change and abolition of the already outgrown types of
direct taxation and partial modification and adaptation to the new
conditions of the moment, of the old taxes still suitable for practical
purposes.
At the present moment the Commissariat of Finance has entered, in the
domain of direct taxation reforms, upon the road toward a complete
revolution in the old system. The central tax board is now, for the
transitional period, working on a project of income and property
taxation, the introduction of which will liquidate all the existing
direct taxes, without exception. The single tax which is being proposed,
is so constructed that it covers the very property of the citizen, i.e.,
it constitutes a demand that the citizen yield that part of his savings
which is above a certain standard, etc.
In closing the review of the activity of the Commissariat of Finance
during the two years of its existence, one must note briefly the great
purely organizational work, conducted by it on a natural as well as a
local scale.
The reform has been definitely directed towards simplifying the
apparatus and reducing its personnel as far as possible.
Finally, with this reform, the Commissariat of Finance has been
organized in the following manner: the central office, the central
budget-accounting board (former People’s Bank and Department of State
Treasury) and, finally, the central tax board (former Department of
Assessed Taxes and of Unassessed Taxes). Upon the same pattern are also
being modeled the local financial bodies.
-----------------------
DOCUMENT IV—A, B, C
From _Economic Life_, (Nov. 7, 1919). The official organ
of the Supreme Council of National Economy
Finance, food, trade, and industry
------------------
A—OUR METAL INDUSTRY
The two years that have passed since the November Revolution have been
marked by civil war, which still continues. Russia’s isolation from the
outside world, the loss and, later on, the recapture of entire provinces
of decisive importance to her industries, the feverish, and therefore
unsystematic, transfer of the industries to a peace basis, and then,
during the last year the reorganization of the industries, the unusual
conditions of transportation, the fuel and the food questions, and as a
result of these, the question of labor power growing more acute—this is
the sad picture of conditions under which the Russian proletariat has
organized and maintained the nation’s economic life.
And though these familiar conditions of actual life have affected all
branches of industry, the greatest sufferer in this respect has been the
metal industry, which forms the basis for our defence and the foundation
for all our industrial life.
We might add here that the metal industry, and in particular the metal
working industry as its most complicated and many-sided phase, both in
assortment of products and in the nature of production, was by no means
strong in Russia even under the rule of the bourgeoisie. As compared
with the more developed capitalist countries, the metal industry in
Russia has been at a disadvantage because of the very geographical
situation of its centers, remote from the sources of raw material and
fuel, artificially built up and having suffered all the consequences of
an unsound foundation. As a result of these conditions, there is lack of
specialization and poor development of large scale production which
means a lack of the necessary prerequisites for successful production.
These are the external conditions under which the administration of our
metal industry has been compelled to work.
The first and most fundamental problem has been that of systematic
monopolization of industry. Only under this form of industrial
organization—if freed from all the negative features of the capitalist
trust,—is operation possible, even on a reduced scale, so that later on
we might lay the solid foundations for new constructive work in the
organization of the nation’s economic life of Socialist principles. The
process of monopolization may be considered as complete by this time.
Large associations have been formed, such as the trust of united
government machine shops “Gomza,” amalgamating the largest mills
producing the means of transportation and machine construction, and the
large metallurgical mills, the trust of state copper working factories,
the trust of government automobile works, the trust of government
aviation work, the trust of government wire nail, bolt and nut
factories, the trust of the Maltzoff Metallurgical mills, the
association of the Kaluga metallurgical mills (cast iron, utensils, and
hardware), the trust of the Podolsk mechanical and machine construction
shops the Petrograd mills for heavy production, the Petrograd mills for
medium machine construction, and the Petrograd mills for heavy output
(production on large scale) are united under individual district
administration boards.
Not all the enterprises consolidated within the associations have become
closely bound up among themselves during this transitional period. In a
matter of such gigantic proportions mistakes have been, of course,
inevitable and they will have to be rectified. However, the results of
the experience of the last two years are sufficient ground for the claim
that the working class has solved the problem of consolidating industry.
The central administration of the Gomza mills thus characterizes the
significance of this consolidation: "The consolidation of the mills
working on transportation equipment, working with the metallurgical
group makes it possible to utilize most efficiently all the resources
available, such as fuel, raw material, technical forces, and the
experience of the various mills with a view to obtaining the best
possible results under the existing conditions. The amalgamation of the
mills has already, during the past year, made it possible to distribute
among them in the most rational manner, that inconsiderable quantity of
metal products and mineral fuel, all products included, which the groups
had in its possession. This enabled the mills to adapt themselves to the
usage of local fuel. The concentration, even though only partial, of
some of the branches of the metallurgical industry, also of the
blacksmithing and iron foundry branches, was made possible entirely by
the amalgamation. The specialization of the mills, according to the
types of steam engines, Diesel or other machines, has been decided along
general lines, by the Metal Department of the Supreme Council of
National Economy, and the question is being worked out in closest
cooperation with the Technical Department of the “Gomza.” The
amalgamation of the mills will make it possible to carry out gradually
this specialization and utilize its results.
The central administration of the united mills states, in a report of
its activities, that owing to the consolidation of the mills, the
problems of supplying them with raw material, fuel and labor power, were
solved in a fairly satisfactory way, thus placing production on a more
or less constant basis. The mills entering this combination, if left to
their own resources, would have been doomed to a complete shutdown.
The trust of the airplane building works has so completely amalgamated
all the mills, which entered the combination that it now would be at a
loss to determine in advance which of the mills would perform any given
part of its program of production; to such an extent are these mills
bound up together through constant interchange of fuel, raw material,
supplies and even labor power.
The process of concentration of the industries in the Ural region is
being successfully carried out by the Bureau of the Metal Department,
through the organization of district and circuit officers.
Outside of the combine only those mills remained where production is
merely organized: the Moscow works “Metal,” “Electrosteel,” “Scythe,”
“Aviation Outfits,” and the Satatov mill—“Star” (Zwezda). These works
are temporarily in the immediate charge of the Metal Department.
The Gomza trust during the entire period of its existence, up to July
1st, 1919, has produced 69 new locomotives and repaired 38 old ones; it
has produced 1,744 new and repaired 1,040 old coaches; it has completed
670 small cars; 261,327 poods of axles and tires; 7,543 poods of
switches; and 118,659 poods of various locomotive and car parts. The
table given below representing the output for the first six months of
1919, as compared with the same period for 1916 and 1918, of the Vyxunsk
Mining District, gives an idea of the work of the Department of
Metallurgy of our largest trust:
------------------------------------------------------------------------
Output in Thousands of Poods Ratio
I II III IV IV:I IV:II IV:III
January January July January
to to to to
June, June, Dec., June,
1916 1918 1918 1919
------ ------ ------ ------ ------ ------ ------
Standard bars 86,7 91,4 74,2 133,6 154 146,1 179,9
Roofing iron
and billets ... ... 37,3 37,3 ... .. 100,0
Sheet iron and
boiler
plates 112,1 59,3 3,5 10,9 9,7 18,4 321,1
Plough shares
and
mould-boards ... ... ... 7,7 ... ... ...
Pipes 225,4 125,0 56,4 61,1 24,7 78,8 108,2
Wire 255,2 106,7 4,9 22,6 8,8 21,2 455,1
Nails 114,9 117,4 79,3 51,4 44,8 43,8 64,9
Pitchforks ... 2,8 3,7 1,0 ... 36,6 27,2
Shovels 6,6 6,0 4,5 2,2 33,7 37,3 50,5
------ ------ ------ ------ ------ ------ ------
800,9 508,6 263,8 327,8 40,9% 64,5 124,2
------------------------------------------------------------------------
It is apparent from the data given in the above table that the total
output for the first six months of 1919 was almost 41 per cent of the
total output for the corresponding period of 1916, and 64.5 per cent of
the total product for the first half year of 1918, and 124.2 per cent of
the last six months of 1918. The figures expressing the ratio of the
total output of metal for the same periods are respectively—91.4 per
cent, 120.6 per cent and 153.2 per cent.
Taking into consideration the extremely difficult conditions of
production, the results may be considered satisfactory.
If we turn to the production of another of our trusts—“Central Copper
Works” (Centromed), we note that during the period of October to
December, 1916, the main Tula factory has produced 73.4 per cent of its
capacity, during January to June of 1919—89.9 per cent, and finally
during July and August of this year (1919)—about 87 per cent. The
Kolchugin works have produced the various articles of their manufacture
during the same periods in quantities which amounted to from 16 to 48
per cent, 30 per cent to 77 per cent and 20 per cent to 36 per cent of
the quantities it was scheduled to produce, while the samovar factories
have produced 44 per cent of the scheduled output.
The mills entering the association of the Central Aviation Works have
produced 36 per cent to 180 per cent of the quantity they planned to
turn out, while during July, August and September of 1918 this
percentage ranged in the various mills and branches of production from
26 per cent to 120 per cent.
A comparatively considerable increase of production has been noted on
the works combined in the automobile trust
It would be absolutely impossible, within the limits of a newspaper
article, to amplify the illustration of the above statements by means of
statistical data, especially in view of the fact that the data
pertaining to the latest period has not been arranged systematically.
However, the figures cited above, we trust, give some idea of the
process and results of the concentration of industry and permit the
deduction that the productivity of labor in our large works, insofar as
it did not completely depend upon conditions which under the present
circumstances are insuperable,—has increased as compared with that for
the preceding year, and in some exceptional cases, it has even arisen to
the pre-war level.
Nevertheless, our large industry has been getting into even greater
difficulties. A number of crises weighing on it are breaking down its
last forces. Of these the most acute and serious are the fuel and food
crises, the latter demoralizing labor. This enforced comparative
idleness has been thoroughly utilized during the revolutionary period,
for the purpose of preparing for the time when the external conditions
would permit our large industries to run at full speed.
In addition to the work of adapting our industry to modern conditions of
production (altering the mills to suit them to the usage of wood fuel,
by changing the construction of the furnaces and cupolas) the Technical
Council of the Metals Department of the Supreme Council of National
Economy is conducting the enormous work of standardizing the industry
and specializing the mills by means of a detailed study of the
individual branches of industry. It is also engaged in the restoration
of the old, and in the organization of new, industries on the basis of
specialized labor and production on a large scale. This latter task has
been carried out by a number of commissions organized by the Metal
Department of the Supreme Council of National Economy.
The Technical Council of the Metals Department conducted its work
chiefly on the plane of standardizing production within the metal
industry, reducing to a minimum the types of construction of the same
article. Under capitalist conditions of production the law of
competition frequently led individual manufacturers to deliberately
flood the market with a multitude of various constructions of the same
machines in order to compel the consumer purchasing a machine or
implement at a given mill, to buy all the parts and often have his
machine repaired in the same shop. It is needless to point out to what
extent this increased the cost of production and, what is still more
important, the cost of exploitation. The Technical Council has tackled
the question not from an abstractly scientific viewpoint, but from a
practical standpoint, working in close cooperation with our metal works.
Every master part, every detail is being worked out on the basis of data
collected at the mills by subcommittees consisting of specialists. Then
the project is submitted to the mills where the necessary changes and
coordination are suggested. The comments given by the mills are compiled
and revised, before this or the other table or drawing is introduced;
the same applies to the technical specifications and assortments.
Master parts of three categories are being worked out: (1) for the
production of metal ware on a large scale, (2) for general machine
construction, (3) for the construction of Diesel engines, which is now
developing into a general division of thermo-technics.
In addition to this, a project is being completed for a lathe designed
for the needs of home industries, and for repair work. A project is
being worked out for a series of lathes of all sizes, required for
machine construction shops.
Besides work on the standardization of industry, efforts are also being
made to lay down the technical conditions.
Of the above mentioned committees, the following deserve special
mention:
(1) The committee on steam turbine construction is distributing orders
for the construction of turbines of various types. The Petrograd metal
works and the Putiloff wharf have already completed part of their
orders. In addition to this, the committee has investigated the
construction of steam turbines in Russia.
(2) The committee on tractor construction has redistributed and again
alloted orders among the Obukhov factory, the Mamin mill and the
Kolomenksky mill for 75, 16 and 30 horse-power tractors. The drawings
for the latter type of tractor have been worked out by the committee.
Out of the number of tractors ordered at the Obukhov works, the first
three Russian-made tractors are already completed. The others will be
turned out in January and in June of 1920. It is proposed to organize
the production of tractors on a large scale at the new Vyxunsk mill, the
building of which is being completed.
(3) The committee on the construction of gas generating installations
which has determined the basic type of gas generating engine most
suitable for the conditions of Russian machine construction, has
standardized the normal power of the engines; it has also outlined the
preliminary measures for the adaptation of certain mills to large scale
production of gas-generating engines.
(4) The committee for the development and improvement of steam boiler
construction in Russia, has prepared the material and worked out
detailed conditions for a contest of stationary water-tube boilers, the
cheapest as to cost of production and the most economical in operation
to be adopted by the committee. The committee also prepares the
conditions for a contest on the production of a mechanical stoker,
having investigated possible productivity and modern methods of
production of steam boilers in Russia.
(5) The committee on the construction of refrigerating machinery
ascertained the requirements for 1919–1920 in the line of refrigerating
machinery; it is laying down and determining the types of refrigerating
machines and apparatus that would be most desirable; it is working out
the construction of the same, etc. Finally, it has drawn up plans for
the construction of refrigerator-barges to sail regularly on the Volga
between Astrakhan and Rybinsk.
In addition to the above-mentioned commissions, the Metal Department has
a number of committees now functioning, such as the committee in charge
of supplying the country with high grades of steel, having a technical
convention of its own the committee on the organization of the Ural
industries, the committee on locomotive construction, etc.
As we have mentioned before, simultaneously with rendering support to
large industries and taking steps for their conversion to normal
conditions, particularly careful attention had to be given to the
intermediate, small and home industries.
Intermediate industry comprises almost all of the agricultural machine
construction, under the direction of the agricultural machinery section
of the Metal Department of the Supreme Council of National Economy. This
section operates in close contact with the local governing bodies in
charge of the people’s industries: provincial, councils of national
economy. According to the data of the section, covering the period of
October 1st, 1918 to October 1st, 1919, the following simple as well as
complicated agricultural machines and implements have been produced:
147,453 ploughs
3,717 winnowing machines
1,440 straw cutters
11,451 harrows
98,689 scythes
684,420 sickles
11,980 harvesting machines
For the purpose of organizing the production of scythes in the most
efficient manner possible the agricultural machine section created a
special Scythes Bureau, which is investigating this line of production,
ascertaining the possible amount of productivity if manufactured in the
machine shop manner or according to the home industry method, both in
the central provinces and in the Ural region. The bureau has laid down a
plan for radical change in the nature of production by means of
splitting it into two fundamental processes: the metallurgical—the
rolling of steel of worked out profile; and the finishing process in the
mills and shops. For the purpose of rolling the metal it has been
proposed to utilize the Vyxunsk mill, which has been requested to
include in its program the rolling of steel for the production of
scythes.
In the field of home industry production on a small scale the committee
on metal products and apparatus of the Metal Department is working in
close cooperation with other government institutions, having organized
agencies in Pavlovsk, Tula, Murom, and Vladimir, for the purpose of
financing artisans and distributing raw material among them on the one
condition that they turn in their product to the government stores for
organized distribution. The results of this work can be judged by the
following approximate data on the cost of manufactured products, the
stock on hand from previous year returned to the factories and
enterprises of the Murom, Pavlovsk, Tula region, as well as to the group
of cast iron foundries of the provinces of Kaluga and Ryazan.
The Murom district, manufacturing cutlery and to some extent also
instruments, has turned out, during the period following the
organization of the government agency, 15 million roubles’ worth of
goods, while the total worth of it, including remnants returned, amounts
to 25 million roubles; the Pavlovsk district engaged in the manufacture
of cutlery, locks and instruments,—among others, surgical
instruments—has produced since October 1st, 1918, 70 million roubles’
worth of merchandise; including the remnants, this would aggregate to
100 million roubles. The Tula district (hardware, locks, stove
accessories, samovars, hunters’ rifles), has produced since May 1919, 30
million roubles’ worth of goods, which, including the remnants, amount
to 60 million roubles. The cast-iron foundries of the Kaluga and Ryazan
districts (manufacturing cast-iron utensils, stove accessories and
various other castings) have produced since October 1st, 1918, 50
million roubles’ worth of merchandise, including the remnants.
Thus, the total amount of goods produced amounts to 165 million
roubles,—or to 235 million roubles, if the value of the remnants is
added,—taking 40 as the co-efficient of its value according to
peace-time prices.
The central administration could not take upon itself the direct
organization of home industries to the full extent. Its best assistants
in this matter are the local institutions of national economy—the
provincial and district metal committees, which have been brought in
close contact with the central administration by the conventions of the
representatives of the district and provincial metal committees. These
conventions were being called at regular intervals for the purpose of
working out and ratifying their programs concerning production and
distribution of metals, and financial questions.
We must also mention the fact that all the measures in the domain of the
metal industry are being carried out with the close and immediate
cooperation of the workers’ producing association—the union of metal
workers.
Thus, as has been proven from practical experience, the methods and
forms of organization of the metal industry have turned out to be
correct. Their application is therefore to be continued and widened,
strengthening the ties binding these organizations with the local
administrative bodies, such as the provincial and district metal
committees and with the central management of the amalgamated
enterprises.
The great obstacle in the path of future development in our metal
industry is the food question, which carries with it the dissolution of
labor power. Considering the fact that circumstances have compelled our
industry in general, and particularly the metal industry, to supply
chiefly the needs of national defence, to which it is necessary to give
right of way over all other interests, the authorities and the labor
organizations must do everything in their power to avert the food crisis
threatening the metal workers, even if this be to the detriment of the
population.
It is necessary not only to cease all further mobilization of laborers
and responsible workers, but also to select a considerable portion of
those already mobilized for the purpose of transferring them from the
army into industry.
The course of work of the metal industry during the past two years gives
us reason to hope that these measures, if introduced systematically,
might make it possible to cope with the difficult external conditions
and furnish a mighty stimulus for preparing the metal industry for the
needs of peaceful construction.
M. VINDELBOT.
------------------
THE DEVELOPMENT OF THE RURAL INDUSTRIES
B—FROM “ECONOMIC LIFE,” Nov. 7, 1919.
The Supreme Council of National Economy has put into practice the idea
of nationalization of all our industries: at present there is not one
mill or factory of any considerable size that is not the property of the
people.
During the second year of its existence, the Supreme Council of National
Economy has made some headway in the work of nationalization of land. As
a particular instance we might cite the fact that it was upon the
initiative and due to the energetic efforts of the Supreme Council of
National Economy that the land fund for the sugar industry has been
nationalized. The total area of land nationalized for the sugar industry
amounts to 600,000 dessiatins.
The sugar-beet industry has furnished the initial step in the
development of the rural industries, since this particular industry has
been better preserved during the transitional period of the Revolution.
The alcohol industry occupies the next place. Its development has been
begun by the Supreme Council of National Economy during the last few
days.
These two large branches of rural industry are followed by a number of
lesser significance, such as the production of starch, molasses, butter,
milk, tobacco, medicinal herbs, the group of fibre plants, etc. The
Supreme Council of National Economy is now laying a solid foundation for
the development of all these industries.
What then is the program of action of the Supreme Council of National
Economy for the development of the rural industries? In the first place,
to supply definite land areas for the cultivation of certain plants, the
introduction of definite forms of agricultural labor, and of uniform
management for the manufacturing and agricultural industries, the
establishment of close connections between the industrial proletariat
and the citizens engaged in the rural industries.
Among the problems enumerated above, foremost is that of uniting the
industrial proletariat with the rural workers. The Supreme Council of
National Economy has already begun to work on this task. Thus the
industrial proletariat is now officially in possession of 90,000
dessiatins of land, on which communes have been organized. The crops
from these estates go to satisfy the needs of the associations in whose
name the estates are registered. At the same time, the industrial
proletariat, through participation in agricultural labor, is introducing
new ideas into the rural industries.
The Supreme Council of National Economy is mining the coal from the
depths of the earth and exploiting the peat deposits. In order to
utilize the resources completely, it is paying particular attention to
the conversion of swampy areas and exhausted turf deposits into areable
land, transforming the bottom of the exploited turf areas into vegetable
gardens, the sections bordering upon the swamps into artificial meadows,
and the uplands into fields. During last summer similar work was
accomplished on a considerable scale on the lands of the central
electric station, in the Government of Moscow, the Ilatur electric
station, in the Government of Ryazan, Gus-Hrustalny, in the Government
of Vladimir, and the Gomza estates in the Government of Nizhni-Novgorod.
Thus, during last summer, the work was organized in four central
provinces, abounding in large areas of land, which cannot be
conveniently used for agricultural purposes.
Simultaneously the improvement of dwellings, and the building of
garden-cities is being given careful and immediate consideration. This
work is being carried on by the Supreme Council of National Economy at
the electric station of Kashirsk, the Shatur station and the Central
Electric station.
In order to unify rural industries the Supreme Council of National
Economy has formed the central administration of agricultural estates
and industrial enterprises, assigning to it the task of uniting and
developing as far as possible, the work of the rural mills.
The Central Administration of Agriculture considers it one of its
immediate problems to propagate widely the idea of nationalization of
land for all rural industries and the opening of new districts for those
industries.
In apportioning the land, especially valuable districts should be set
apart, such as the meadows, flooded with water from the Don river, fully
suitable for the cultivation of tobacco, fibre plants, and olives, on a
large scale.
These lands, if distributed among the peasants will never yield such
wealth as they could do were they nationalized for rational
exploitation.
Next on the program of the Central Administration of Agriculture is the
building up of new branches of rural industry, such as the working of
sugar beets into molasses and into beet flour, in the northern
districts, the production of ammonium sulphate out of the lower grades
of peat, the preparation of fodder out of animal refuse, the production
of turf litter material, the preparation of new sources of nitrate
fertilizer out of peat, etc.
Electric power must be utilized for the cultivation of land. The
practical realization of this problem has been started on the fields of
the electric power transmission department. This Fall we succeeded in
tilling the ground by means of a power-driven plow.
In order to build up the rural industries, practical work must be
carried on, simultaneously with that which is being done on the
particularly important lands, also on such lands as will not be the bone
of contention between the proletariat and the peasantry.
What lands are these? The swampy areas, the forest-covered lands, those
districts where the people are starving, the dry lands, the scarcely
populated districts, etc.
These are the brief outlines of the program. The foundations of
absolutely all of the development of rural industry mentioned have been
laid down. The practical steps for the materialization of the plans have
to some extent already been, or are being, undertaken.
All of this work the Supreme Council of National Economy had to carry
out under extremely difficult conditions. Prior to that, a considerable
part of the sources of raw material for the rural industries has been
completely torn away from the Soviet Republic. Another serious hindrance
was the insufficient number of already existing organizations, which
would be capable of fulfilling the tasks outlined by the Council. A
considerable amount of harm has been done to this work by
interdepartmental friction.
But difficult as the present conditions may be, and no matter how strong
is the desire of the former ruling classes to turn back the tide of
life, this is impossible and can never take place.
CENTRAL ADMINISTRATION OF AGRICULTURE.
------------------
NATIONALIZATION OF AGRICULTURE
C—FROM “ECONOMIC LIFE,” Nov. 7, 1919.
The nationalization of agriculture is one of the most complicated
problems of the Socialist Revolution, and perhaps in no other country is
this problem as complex as in Soviet Russia.
At the time when the decree on Socialist land management was made
public, the fundamental elements of nationalization had hardly begun to
take shape: the territory affected by nationalization was by no means
defined; there was not the personnel necessary for the creation and
enforcement of any plan concerning production; the large masses of
laborers hardly understood the idea of nationalization and in some
instances were hostile to the measures by means of which the Soviet
power was carrying out the program of nationalization.
In order to summarize the results of the work, which began on a
nation-wide scale in March, 1919, and to estimate these results, one
must first realize the conditions which formed the starting-point for
the work of the People’s Commissariat of Agriculture at the time when it
commenced to carry out the nationalization of agriculture.
The extent of the capitalist heritage, which our organized Soviet
estates now have at their disposal, amounts to 615,503 dessiatins or
areable land, situated in the Soviet provinces and formerly in the hands
of private owners. Eighty-five per cent of the areable land, which
formerly belonged to the landed aristocracy was taken over for the
purpose of both organized and non-organized distribution—chiefly the
latter.
The equipment of the various estates was diminished and destroyed to no
lesser extent. Instead of the 386,672 privately owned horses, registered
in the Soviet provinces, according to the census of 1916, the Soviet
estates in the hands of the People’s Commissariat of Agriculture
received 23,149 horses—a number hardly sufficient for the cultivation of
one-third of the area under cultivation now belonging to the Soviet
estates. Of the 290,969 cows—only 43,361 came into the possession of the
Soviet estates. The entire number of horses and cows will yield
sufficient fertilizer for only 13,000 dessiatins of fallow land, i.e.,
about 10 per cent of the area intended to be converted into areable
land.
The supply of agricultural machinery and implements was in the same
condition.
The Soviet estates had almost no stocks of provisions. The workmen were
compelled either to steal or to desert for places where bread was more
abundant.
The winter corn was sowed in the fall of 1918 on very limited areas (not
over 25 per cent of the fallow land), very often without fertilizer,
with a very small quantity of seeds to each dessiatin. In 13 out of 36
Soviet provinces (governments) no winter corn has been sowed at all.
A considerable portion of the estates taken over by the People’s
Commissariat of Agriculture could not be utilized due to the lack of
various accessories, such as harness, horseshoes, rope, small
instruments, etc.
The workers were fluctuating, entirely unorganized, politically
inert—due to the shortage of provisioning and of organization. The
technical forces could not get used to the village; besides, we did not
have sufficient numbers of agricultural experts familiar with the
practical organization of large estates. The regulations governing the
social management of land charged the representatives of the industrial
proletariat with a leading part in the work of the Soviet estates. But
torn between meeting the various requirements of the Republic of prime
importance, the proletariat could not with sufficient speed furnish the
number of organizers necessary for agricultural management.
The idea of centralized management on the Soviet estates has not been
properly understood by the local authorities, and the work of
organization from the very beginning had to progress amidst bitter
fighting between the provincial Soviet estates and the provincial
offices of the Department of Agriculture. This struggle has not yet
ceased.
Thus, the work of nationalizing the country’s agriculture began in the
spring, i.e., a half year later than it should have, and without any
definite territory (every inch of it had to be taken after a long and
strenuous siege on the part of the surrounding population), with
insufficient and semi-ruined equipment, without provisions, without an
apparatus for organization and without the necessary experience for such
work, with the agricultural workers engaged in the Soviet estates having
no organization at all.
According to our preliminary calculations, we are to gather in the Fall
of this year a crop of produce totaling in the 2,524 Soviet estates as
follows:
Area in
Poods Dessiatins
Winter crop 1,798,711 54,000
Spring corn 4,765,790 97,720
Potatoes 16,754,900 23,754
Vegetables, approximately 4,500,000 4,659
Of the Winter corn we received only a little over what was required for
seed (in a number of provinces the crops are insufficient for the
consumption of the workers of the Soviet estates).
The Soviet estates are almost everywhere sufficiently supplied with
seeds for the spring crops.
The number of horses used on the Soviet estates has been increased
through the additional purchase of 12,000 to 15,000.
The number of cattle has also been somewhat increased.
The Soviet estates are almost completely supplied with agricultural
implements and accessories, both by having procured new outfits from the
People’s Commissariat for Provisioning and by means of energetic repair
work on the old ones.
The foundation has been laid (in one-half of the provinces sufficiently
stable foundations) for the formation of an organizational machinery for
the administration of the Soviet estates.
Within the limits of the Soviet estates the labor union of the
agricultural proletariat has developed into a large organization.
In a number of provinces the leading part in the work of the Soviet
estates has been practically assumed by the industrial proletariat,
which has furnished a number of organizers, whose reputation had been
sufficiently established.
Estimating the results of the work accomplished, we must admit that we
have not as yet any fully nationalized rural economy. But during the
eight months of work in this direction, all the elements for its
organization have been accumulated.
We have strengthened our position in regard to supplies, having been
enabled not only to equip more efficiently the Soviet estates (2,524)
already included in our system of organization, but also to nationalize
during the season of 1920 additional 1,012 Soviet estates, with an area
of 972,674 dessiatins. The combined area of the nationalized enterprises
will probably amount in 1920 to about 2,000,000 dessiatins within the
present Soviet territory.
A preliminary familiarity with individual estates and with agricultural
regions makes it possible to begin the preparation of a national plan
for production on the Soviet estates and for a systematic attempt to
meet the manifold demands made on the nationalized estates by the
agricultural industries: sugar, distilling, chemical, as well as by the
country’s need for stock breeding, seeds, planting and other raw
materials.
The greatest difficulties arise in the creation of the machinery of
organization. The shortage of agricultural experts is being replenished
with great difficulty, for the position of the technical personnel of
the Soviet estates, due to their weak political organization, is
extremely unstable. The mobilization of the proletarian forces for work
in the Soviet estates gives us ground to believe that in this respect
the spring of 1920 will find us sufficiently prepared.
The ranks of proletarian workers in the Soviet estates are drawing
together. True, the level of their enlightenment is by no means high,
but “in union there is strength” and this force, if properly utilized,
will yield rapidly positive results.
In order to complete the picture of the agricultural work for the past
year we are citing the following figures: the total expenditures
incurred on the Soviet estates and on account of their administration up
to January 1st, 1920, is estimated to amount to 924,347,500 roubles. The
income, if the products of the Soviet estates are considered at firm
prices, amounts to 843,372,343 roubles.
Thus, the first, the most difficult year, has ended without a deficit,
if one excludes a part of the liabilities which are to be met during a
number of years, i.e., horses and implements.
Of course, it is not the particular experience which the workers possess
that has caused the favorable balance of the Soviet estates, this being
mainly due to the fact that the productive work in the realm of
agriculture under modern conditions is a business not liable to lose.
And this is natural: industry in all its forms depends upon the supply
of fuel, raw material, and food. Nationalized rural economy has an
inexhaustible supply of solar energy—a fuel supply independent of
transportation of the blockade.
The fundamental element of production—land—does not demand any
“colonial” means of restoration of its productivity. And as for
provisions, these we get from the earth under the sun!
After eight months of work on the nationalization of our rural economy,
as a result of two years of titanic struggle on the part of the
proletariat for the right to organize the Socialist industries with its
own hands,—is it not high time to admit that the most expedient, most
far-sighted, and correct method to stabilize the Soviet power would be
to use the greatest number of organized proletarian forces for the work
of nationalizing our agriculture?
N. BOGDANOV.
Transcriber’s Note
The page reference in the list of Illustrations to p. 54 (LENIN AT HIS
DESK IN KREMLIN, 1919) is incorrect. The photograph appears facing p.
50. The entry has been corrected.
On p. 149, a train station town is variously spelled ‘Kreisberg’ and
‘Kreizberg’. Both are retained.
In the Appendix, the organizational names of various Unions are
variously called ‘Trades’ or ‘Trade’. No attempt was made to make them
consistent.
On p. 257, the quoted passage beginning "The consolidation of the
mills..." has no closing quote, and it is unclear where it might have
been intended.
The following table provides information on the relatively few
typographical errors, and their resolution.
p. 25 Rej[z]istza Removed.
p. 46 sold[i]ers Added.
p. 98 [o/O]ne priceless painting Corrected.
p. 192 I[t/f] at the First Corrected.
p. 207 [(]five groups and 15 Added.
categories)
p. 222 follow[low]ing Line break repetition.
p. 227 con[s]truction Added.
p. 228 Vo[ac/ca]tional Transposed.
p. 232 Commit[mit]tees Line break repetition.
p. 256 econo[o]mic Line break repetition.
p. 274 territor[it]y Removed.
End of Project Gutenberg's Barbarous Soviet Russia, by Isaac McBride