APPENDIX (continued 2)

3. The furnishing of the proletariat with the products provided for it by the government plans of distribution, must be insured through the appropriation of a special fund for the purpose on the plan adopted for the army. The special department of the Commissariat for Provisioning which is in charge of the planning, calculating, and distributing of the products intended for the workers, must be organized in accordance with an understanding between the All-Russian Council of Vocational Unions and the Council of Workers’ Cooperatives, and it must not form its own technical and economic apparatus.

4. In order to help the methods of proletarian work to permeate more fully the entire system of the provisioning institutions it is necessary to inject into their midst representatives of Vocational Unions and Workers’ Cooperative Societies, particularly representatives of the All-Russian Council of Vocational Unions and the All-Russian Council of Cooperative Societies, into the Collegium of the People’s Commissariat for Provisioning.

In the matter of preparing the products which are subject to monopoly, by government counter-agents (as per decree of January 21st) the central workers’ cooperatives (city) and all centralized workers’ cooperative organizations (regional, provincial and all-Russian) are to be called upon to help, while the matter of preparing the products not subject to monopoly should be entirely given over to the cooperative societies, headed by the Workers’ Cooperative Society, the management to be given over to the Central Buying Committee (Tzentrozakup) and a corresponding portion of the products is to be set aside for the needs of the army.

5. In order to create a solid basis in the matter of supplying farm products and with a view to intensifying agriculture and other types of farming it is necessary to call upon the workers’ cooperative societies to properly utilize and organize the large Soviet agricultural establishments and other farming undertakings.

6. For the successful solution of its tasks in the domain of Socialist construction work it is necessary to bring about the closest organizational union and coordination of activity of the vocational unions and workers’ cooperative societies in the matter of raising the class consciousness of that proletariat and, for this purpose, the joint organization of workers’ homes, clubs, institutes for practitioners, and so on.

THE QUESTION OF ORGANIZATION

(Resolution based an M. Tomsky’s report)

1. GENERAL PRINCIPLES

1. Adapting its organizations to the conditions of the economic struggle in capitalist society, the working class in the interests of economy and concentration of its divided forces, gradually passed over from the close narrow guild organizations to the broader vocational and, finally, in the course of struggle against capitalism, building its forces on the principle of more efficient centralization of power for the realization of its war aims (class war aims), it came to form organizations embracing all the workers of a given branch of industry (production) into one union.

The industrial union is one union having the follow-lowing basic characteristics: (a) the union rallies all the workers and other employees engaged in a given branch of production, regardless of his functions; (b) the treasury is centralized; (c) the business of the union is transacted on the basis of democratic centralization; (d) the wage scales and conditions of labor are determined by one central body for all the categories of labor; (e) a uniform principle of construction from top to bottom; (f) the sections are playing the part of technical and auxiliary organs; (g) the interests of the industrially organized workers and other employees of a given industry are represented before the outside world by one central body.

2. The industrial union comprises only the permanent workers and employees of a given industry who are directly engaged in the process of production or serve to aid the same. All auxiliary branches serving not production but the producers and all the temporary and casual help remain members of their industrial union.

3. This principle of construction of our unions recognized by the third Conference of the Vocational Unions, and by the first All-Russian Congress of Vocational Unions, presupposing the union of all the workers of a given industry into one organization (union), can be consistently carried into practice only by means of uniting all the workers and employees (“higher” and “lower”) into one union, which became possible of realization only after the political and economic prejudices separating the laborer from the other employees and from the technical personnel have been done away with.

4. Even if the first Congress of Vocational Unions considered it impracticable to unite into one union all the higher employees and laborers,—at the present moment, after a year of proletarian dictatorship during which a good deal of the antagonism between the different categories of laborers and other employees has been spent, when it has been proved from experience that one union in its turn leads to the eradication of all antagonism in the midst of the workers—it must now be recognized as desirable and necessary to unite into one union all persons who are wage workers engaged in one establishment, one industry or one institution.

Only in such establishments or institutions where the hiring of laborers and other employees and the increase or decrease of their wages is being decided by one member of the administrative or technical personnel, the latter cannot be members of the given union.

5. The industrial principle of union structure as applied to workers occupied in other branches of national industries, than manufacture (transportation, commerce, and farming), and also in institutions fulfilling definite functions of government (postal-telegraph, medico-sanitary departments, education, etc.), must be used to unite the workers of small isolated branches of industry and management into more powerful unions. As a basis for such amalgamation one must take the similarity of conditions of labor and the functions carried out.

6. Categorically defending the consistent introduction and application of the principle underlying production as regards all categories of workers, not accepting into its labor organizations those unions which are built on guild, corporation and narrow trade lines, for the purpose of better serving the economic interests of the most typical industrial groups and categories, the organization of sections on a local and national scale is allowed within each vocational union.

The unions binding together several allied branches of industry have the right to form industrial sections, the same having the right to call independent Congresses in order to decide the questions of their own industry, on condition however, that the decisions of such sectional Congresses, which will be contrary to the rulings of the general Congress or the regulations of the leading organs of the labor union movement, may be annulled by the leading body of the industrial union.

7. Striving towards unity and smooth work in labor union activity and the greatest efficiency in the utilization of the power and means at the disposal of the labor unions, it is necessary to recognize most definitely the principle of centralization of the union organization, based on unity and centralization of union finances and strict inter- and intra-union discipline.

8. With this principle as a starting-point, the organization of the section cannot have the character of open or masked federalism. Under no circumstances could the sections be allowed to have separate sectional treasuries, additional assessment of members of the sections for organization and agitation and generally for any work of the union, neither can they be allowed independent representation outside of the union or to build the leading union organs, committees, on the principle of sectional representation.

9. In exceptional cases of reconstruction of the existing federated unions into a centralized industrial union, only as an allowance for the transitional stage the Executive Committee elected at the meeting of all the delegates or at the meeting of the All-Russian Congress, can be enlarged through the addition of representatives of the sections, who then have no vote, only a voice.

10. All attempts to violate the principle of industrial organization for the purpose of restoring the federated trade unions by means of organization of the inter-sectional bureaus uniting analogous sections of the various industrial unions, must be emphatically condemned.

11. Fighting for the complete annihilation of classes, at this transitional period of proletarian dictatorship, the Russian trade-union movement aiming at the union of all workers into centralized industrial unions for the purpose of subjecting the semi-proletarian elements to the influence of the economically organized proletariat and inducing it to enter the class struggle and take part in Socialist reconstruction; we think it necessary to get the new, and as yet unorganized, strata of government and social workers to join the All-Russian Vocational Associations, on condition of their complete submission to proletarian discipline and to all regulations of the leading central bodies of the trade union movement, and particularly, the principles of organization.

12. At the same time it would be the greatest error at the present stage of development of our trade union movement with its insufficient degree of organization, to infuse into it the craftsmen and small shop owners who due to their isolation and unorganized state, do not allow of proletarian control; the same applies to the labor “artels,” “unions of labor communes” and so-called professional people who are not wage workers.

Being the representatives of the dying crafts and petty bourgeois industry, these elements permeated with the conservative economic ideology of individual and small-scale production (artel), due to their numerical size, are liable to disorganize the ranks of the economically organized proletariat.

13. Considering as the only correct and fundamental basis for the union of the workers into industrial unions, the economic basis (the economic part played by the groups of laborers in the general system of national economy), the All-Russian Vocational Association cannot accept into its midst unions built along national, religious, and generally, any unions not built along economic lines.

14. Uniting the laborers and other employees into unions, independently of their political and religious beliefs, the Russian trade union movement as a whole, taking the position of the international class struggle, resolutely condemns the idea of neutralism, and considers it a prerequisite for the admission of individual unions into the all-Russian and local associations—that they recognize the revolutionary class struggle for the realization of socialism by means of the dictatorship of the proletariat.

15. Regarding the Russian labor-union movement as one close proletarian class organization, having one common class aim—to win and organize the socialist system, one must admit that any member of any industrial union, affiliated with the all-Russian or local union council, who is fulfilling his duties as such, being at the same time a member of the All-Russian General Vocational Association, upon being transferred from one industry to another, joins the proper union with the rights of an old member, without paying any initiation fee. No one must be at the same time a member of two unions.

16. This latter rule wholly applies also to the group transfer of whole establishments from one union to another—no payments are to be made out of the treasury of the unions, nor are to be made either to the members who leave it or to the union into which they are transferred, by the first union.

17. Endeavoring to better the economic conditions of all the workers, regardless of whether they are members of the union or not, the unions taking upon themselves the responsibility for the proper functioning of an establishment or institution, for the labor discipline among the workers and the enforcement of the union regulations of wages and standards of production, the unions must endeavor to introduce compulsory membership in all the establishments and institutions entering into it, through resolutions adopted at general meetings of the workers.

18. Recognizing the necessity of a united plan for the construction of all trade unions as the only condition insuring right relations between the individual local organizations and their centers, also insuring the enforcement of union regulations and union discipline, the second Congress thinks it necessary, for the purpose of creating unity of activity on a local as well as national scale, to adopt a united scheme for the structure of the industrial unions and their combines.

2. THE STRUCTURE OF THE TRADE UNIONS AND SOVIETS:

1. The highest directing body of the all-Russian labor union movement is the All-Russian Congress of Trade Unions and the All-Russian Central Soviet of Vocational Unions operating from one Congress to the other, on the basis of principle regulations adopted by the Congress.

Note. A conference is called only in case it is impossible to call a properly organized congress.

2. All regulations of the All-Russian Congresses, Conferences and the All-Russian Central Council of the Industrial Unions are compulsory not only to all the unions, affiliated with the All-Russian Vocational Association, but for every individual member of a union, as well.

3. Violation of the rules and disregard of the same on the part of individual unions carries with it expulsion of such a union from the family of the proletarian unions.

4. The supreme organ of the All-Russian Industrial Union is its Central Committee; all rulings of that committee which do not contradict the regulations issued by the higher councils of the All-Russian General Vocational Association are obligatory for all of its branches and for each and every one of its members.

5. All local councils of the unions are being constructed according to the plan of the All-Russian Central Council of the Vocational Unions, with a corresponding proportional change of numerical ratio. All congresses of vocational unions are being called on the principle of direct proportion.

6. The rulings of the All-Russian Industrial Unions cannot be nullified by the rulings of the local councils of unions and are obligatory for the organs of the given union in each locality.

7. The local councils of the Vocational Unions being the leading organs of the labor union movement and authorized representatives of the entire proletariat, economically organized within a certain locality, are at the same time guided in their activities by all the rules of the All-Russian Congresses, Conferences and the All-Russian Central Council of the Trade-Industrial Unions, and as regards the branches of the industrial unions, the regulations laid down by their guiding central bodies are obligatory. The rulings of the local Trade Union Councils which are in contradiction to the regulations of the policy of the entire unions or their managing bodies, are not obligatory for the local branches of the industrial unions.

8. The branches of the All-Russian Industrial Unions affiliated with the All-Russian Central Trade Unions Council automatically enter into the local Trade Union Councils.

9. The local Trade Union Councils are to see to it that the unions are properly organized, and that they follow the directions issued by the governing bodies and fulfil their financial obligations towards the unions; they are also to aid and support them in their activities.

10. In the interests of centralization of union activity, the strengthening of the ties between the centers and the local bodies, and in order to place the finances of the unions on a proper plane and bring about closer cooperation and connection between the trade unions on the one hand, and the organs of the Supreme Council of National Economy and the Commissariat of Labor, on the other, in the work of bringing about a uniform structure of the Trade Unions and Union Councils and standardizing the wage scales throughout the country,—one must admit that the geographical (provincial) amalgamations as well as the provincial Union Councils are only unnecessary organs of transmission between the center and the periphery which constitute a nonproductive expenditure of energy and means.

11. The All-Russian Centers, their branches and subdivisions in the various localities, united through the Trade Union Councils, constructed after the pattern of the All-Russian Central Trade Union Council, the Shop Committees or Employees’ Associations (Collective Associations) as the original nuclei of the trade unions—this is the best scheme of organization structure, answering the basic problems at the present moment confronting the trade union movement. Territorial grouping according to divisions and subdivisions should be established by the All-Russian Central body of the given union, depending upon the geographical area and degree of concentration of any given branch of industry, keeping, insofar as possible within the boundaries fixed by the administrative divisions.

Only by observing the given scheme of organization can the finances of the union be placed on a proper level and the centers receive due financial strength, which is a necessary condition for further and more systematic activity.

12. The most suitable principle by which to determine the membership dues during the period of chronic depreciation of paper money would be a proportional assessment. The normal amount of membership dues, the Congress considers is one per cent of the wages earned. Special additional dues or assessments for special needs of the local divisions of the industrial unions are allowed only upon the resolution of general meetings, or meetings of delegates or conferences of a given union.

13. Regarding the Branch of the Industrial Union (within a province or region) as the highest organ of the union in the given locality (government or region), as the first step toward the actual realization of the centralization of the union funds, the Congress considers the following financial relations as necessary:

(a) Fifty per cent of all membership dues of the branches of the All-Russian Central Industrial Union go to the All-Russian Central Committee of the given Industrial Union.

(b) The divisions (district and sub-regional) of a branch (government or region) of a Union work according to the budget approved by the latter.

(c) Ten per cent of all the funds remaining at the disposal of a branch of a union goes to the local Trade Union Council.

(d) The local bureaus of the Trade Unions (in small towns) exist on 10 per cent of the budget appropriated by the branch of the industrial union to its divisions.

(e) The local unions which are not affiliated with any all-Russian union associations are to give 10 per cent to the local Trade Union Council, and 10 per cent to the All-Russian Central Trade Union Council transferred through the local Trade Union Council.

14. All trade organizations as well as members who have not met their financial obligations within three months without sufficient reasons, are automatically expelled from their union and from the All-Russian Trade Association, and can be reinstated only upon payment of the sum they owe plus the usual initiation fee.

15. The following initiation fees are to be fixed: (a) half a day’s wages for individual members entering the union, (b) the All-Russian Trade Union upon entering the All-Russian Central Trade Union Council pays 10 per cent of all the initiation fees collected from the total number of its members, (c) the same amount is paid by all the branches of the All-Russian Trade Unions upon their admission into the local Trade Union Council, (d) the local unions which have no all-Russian trade union pay upon entering the local council 10 per cent of the initiation fees collected, a half of which amount goes to the All-Russian Central Trade Union Council.

16. In the interests of the development of union activity with the present character of the Russian trade union movement, all special funds which cannot be touched, such as the strike fund, the reserve funds, etc., must be annulled as such and added to the rest of the union’s general treasury. The fund for the aid of unions outside of Soviet Russia is being created by the All-Russian Central Trade Union Council for which purpose special collections and contributions are to be used.

17. In the interests of the proper arrangement of the control system, the simplification and systematization of the union’s business, we must make it obligatory to have a single uniform system, as worked out by the All-Russian Central Trade Union Council.

18. The basic nucleus of the Industrial Union on the spot is the Factory Committee or the Collective Association of the office employees in the form of an Office Workers’ Union.

19. “Regulations of the Factory and Mill Committees” adopted by the Moscow Trade Union Council and approved by the All-Russian Central Council of the Industrial Unions coordinated with the resolutions of the present second All-Russian Congress of Trade Unions must be used as the basis for the determination of the part, the tasks and interrelations of the Factory and Mill Committees with the other organizations.

20. As a basis for the regulations governing the Employees’ Associations (Collective Associations), in addition to the general principles which form the basis of the “Factory and Mill Committee Regulations,” the following principles are to be laid down:

(a) Participation in the hiring and dismissal of employees, (b) obligatory participation in the Wage Scale Committees and endeavor to see to it that the wage scale regulations be carried out in practice, (c) the recognition of the collective association and its rights to exist only as an organ of the corresponding union, (d) participation in the organization and improvement of the technical apparatus of the given institution, (e) non-interference with the general direction of the activities of the state and social institutions.

The All-Russian Central Trade Union Council is authorized within the shortest time to work out and publish the regulations of the Factory and Mill Committees and the Employees’ Collective Associations.

21. To avoid mixing up of terms and ideas regarding the character of the union organs we must recognize the uniform terminology of the same, as carrying out the same functions, namely:

(a) All-Russian Central Trade Union Council retains its name, (b) the leading organs of the All-Russian Trade Unions are called “Central Committee of the Trade Unions,” their executive organs are to be called: “Presidium of the Central Committee of the Trade Unions,” (c) their government (province) organs—“The management of the government (province) or regional branch of the All-Russian Trade Union,” (d) the Local Government Trade Union Councils are called: “Such and such Government Trade Union Council,” and the district councils as well as the small town councils “Such and such District Trade Union Bureau,” “Such and such Trade Union Bureau.”

22. All-Russian Central Trade Union Council on the basis of the principles laid down, must work out in the shortest possible period the following sample by-laws which are to be obligatory for all trade organizations affiliated with any of the following All-Russian Trade Associations:

(a) The All-Russian Trade Union, (b) local union having no corresponding all-Russian association, (c) Local Trade Union Council, (d) Trade Union Bureau.

23. The All-Russian Central Trade Union Council must work out and enact through the People’s Commissariat of Labor and the Soviet of National Economy or the All-Russian Central Executive Committee, the regulations governing the coalitions on the following basis: (a) the right to be called a union is given only to trade unions affiliated with the All-Russian Central Trade Union Council, registered and published by the latter, (b) all other organizations of an economic character not affiliated with the All-Russian Trade Association are to be called “societies.”

24. The All-Russian Central Trade Union Council and the government councils must periodically report on all unions registered with it.

25. In accordance with the general principles of organization, adopted at the second Trade Union Congress the corresponding amendments are to be introduced into the by-laws of the All-Russian Central Trade Union Council adopted by the first All-Russian Trade Union Congress.

BY-LAWS OF THE ALL-RUSSIAN CENTRAL TRADES UNION COUNCIL

(Amended and approved by the Congress)

1. The All-Russian Trade Union Congress elects an executive body of the All-Russian Central Trades Union Council—the presiding officers (Presidium), who are to submit a detailed report on their activity to the following Congress.

2. The supreme leading body of the All-Russian Trade-Union Association is the All-Russian Central Trade-Union Council, which is to be guided in its activity by resolutions of congresses and conferences and which is responsible for its actions to the All-Russian Trades Union Congress.

3. All the regulations of the All-Russian Congresses, Conferences as well as those passed by the All-Russian Central Trades Union Council are obligatory to all unions affiliated with the All-Russian Trades Union Association as well as to every union member. The violation of these rules and disobedience of the same carries with it expulsion from the family of proletarian unions.

4. The All-Russian Central Council is to fulfil the following tasks:

(a.) It is to maintain and establish a connection with all the existing and newly arising trade union organizations;

(b.) It is to aid in the creation of local all-Russian vocational unions as well as the amalgamation of all trades;

(c.) It is to establish connections with the central trade union bodies of all countries;

(d.) It is to carry out all the necessary work connected with the preparation and calling of All-Russian conferences and congresses, it works out a program of business to be transacted by the congresses, it takes care of the preparation of reports, and it publishes the fundamental principles;

(e.) It appoints the time for the calling of conferences and congresses;

(f.) It periodically publishes in the press reports on its activities;

(g.) It issues its bulletin (periodical organ);

(h.) It connects, and acts as representative for the entire trade-union movement before the Central government institutions and social organizations;

(i.) It aids the unions in their work of organization and guides that work, for which purpose it issues various by-laws, instructions, forms of accounting (book-keeping), etc.;

(j.) It takes part in organizations and institutions, serving the interests of cultural and educational activity among the proletariat;

(k.) It aids in promoting the development of the trade union movement, by means of verbal and written propaganda and agitation.

6. In order to accomplish its tasks successfully, the All-Russian Central Trades Union Council organizes the necessary departments.

7. The funds of the All-Russian Central Trades-Union Council consist of the following: (a) 10 per cent of the membership dues collected by the Central Committees of the All-Russian Trade Union Association; (b) five per cent of the revenue coming from the local unions not affiliated with the All-Russian Trade Unions, but affiliated, through the local Soviet, with the All-Russian All-Trades Association, (c) out of appropriations designated by the organs of the Soviet Government for specific purposes.

8. The All-Russian Central Trade Union Council is composed of the following:

(a) Nine members elected by the Congress, and

(b) Representatives of the All-Russian Trade Unions, on the basis of one delegate to every 30,000 to 50,000 workers, and one more delegate to every additional 50,000 dues-paying members.

Note. All-Russian Trades Unions whose membership is below 30,000, send their representative, who has a voice, but no vote. Unions whose dues-paying membership is below 30,000 may unite and send a delegate to the All-Russian Trades Union Council, who will then have the right to vote at the meetings.

9. The nine members elected by the congress are to be the presiding officers of the All-Russian Central Council; in order to effect a change in the composition of the presidium, a vote of not less than two-thirds of the general number of members of the All-Russian Central Council is required, or if the All-Russian Associations demand the recall of that body, the total membership of the associations demanding such recall must exceed one-half of the entire membership of the All-Russian Association comprising all trades.

Note. The members of the presidium (executive committee), are to be replaced (in case they resign or are recalled) at the plenary session of the All-Russian Central Trade Union Council.

10. Such recall and election of a new executive body may take place only in extraordinary cases when the general conditions do not permit the calling of an extraordinary congress or conference.

11. A plenary session of the All-Russian Central Council takes place at least once a month. The All-Russian Central Council at a meeting of all its members elects an auditing committee and other committees and responsible officers, leaving to the executive committee (presiding officers) to organize branches (departments), to invite workers to join them, etc.

12. The All-Russian Conference of Trades-Unions is to consist of all the members of the council (Soviet), and of representatives of provincial trades-union councils—one to every 25,000 members.

Note. Representatives of All-Russian Associations who are admitted to the plenary session (plenum) with only a voice and no vote, have the right to vote at the conference.

13. The All-Russian Central Trades Union calls congresses of the trades unions at intervals not longer than one year. Extraordinary congresses are called at the decision of the All-Russian Central Council, at the demand of All-Russian Associations, or in cases where the All-Russian Associations having not less than half the total membership affiliated with the All-Russian Workmen’s Association, demand that an extraordinary convention be called.

14. The right to representation at the Trades-Union Congresses is restricted to those unions which in their activity are guided by the principles of the international class struggle of the proletariat, which are affiliated with the local councils of the trades unions and which pay their dues regularly.

15. The following have a right to vote at the congress:

(a) The local trades unions having a dues-paying membership of no less than 3,000, are entitled to one delegate, and those whose membership exceeds 5,000 are entitled to one delegate for every 5,000 dues-paying members (complete 5,000 only, not for any fraction thereof).

(b) The central All-Russian Associations are entitled to one delegate each; but in case the total number of workers affiliated with them exceeds 10,000 they are entitled to two delegates.

(c) Petrograd and Moscow send three delegates each.

(d) Local unions having under 3,000 members may amalgamate for the purpose of sending their delegates.

16. The following have a voice, but no vote:

(a) Representatives of the central bodies of Socialist parties; of the All-Russian Central Executive Committee of the Council (Soviet) of Workers’ and Peasants’ Delegates; individuals and institutions at the invitation of the All-Russian Central Council or the Congress itself.

(b) All members of the All-Russian Central Soviet.

17. The rules of procedure for the congress (convention) are worked out by the All-Russian Central Council and are subject to approval by the congress.

18. The order of business (program) to be transacted at the convention is to be made public at least one month before the congress is convened. Individual organizations have the right to introduce new points into the order of business not later than two weeks prior to the meeting of the congress, of which changes the All-Russian Central Council immediately notifies, through the press, all the trades unions.

ORDER OF ADMISSION OF ALL-RUSSIAN TRADES UNIONS INTO THE ALL-RUSSIAN CENTRAL TRADES UNIONS COUNCIL

19. An All-Russian Trades Union, desiring to enter the All-Trade Association must submit to the presidium of the All-Russian Central Trades Union Council the following documents:

(a) the by-laws,

(b) information on the number of dues-paying members,

(c) information on the existing branches and number of dues-paying members of each of them,

(d) minutes of any convention or conference at which the central committee of the organization has been elected,

(e) financial report,

(f) sample copies of such publications as the All-Russian Trades Union has published, and all other material shedding light on the character of the union’s works.

20. An All-Russian Trades Union may be registered with, and admitted into, the All-Russian Central Trades Union Council on the following conditions:

(a) the by-laws and the structure of the union are to be brought into accord with the general principles of organization as adopted by the convention and carried out by the All-Russian Central Trades Union Council;

(b) the character and activity of the union must not contradict the resolutions of the All-Russian Trades Union Convention or the general tendencies of the Russian trades union movement;

(c) the payment of a corresponding initiation fee;

21. An all-Russian union may be expelled at a plenary session from the All-Russian Central Trades Union Council on the following grounds:

(a) failure to obey the general rules of discipline obligatory to all trades union organizations;

(b) failure to pay membership dues within three months, without any reasonable cause.

22. The All-Russian Central Trades Union Council, in cases where the central committee of the All-Russian Trades Union violates the decisions of the convention, conference, or All-Russian Central Trades Union Council, may dissolve the same, and must immediately call an All-Russian convention or conference of the given trades union for the purpose of electing a new directing body.

November 7, 1919.

THE FINANCIAL POLICY AND THE RESULTS OF THE ACTIVITIES OF THE PEOPLE’S COMMISSARIAT OF FINANCE

(1917–1919)

I

When the Soviet Government was first organized, a number of purely financial questions arose which necessitated the utilization of the services of the old financial-administrative apparatus in the form in which it existed prior to the October Revolution. It is quite natural that the first period of work in the domain of finance, that is, between the October Revolution and the Brest-Litovsk Peace, had of necessity to be marked by efforts to conquer the financial apparatus, its central as well as its local bodies, to make a study of its own functions and, somehow or other, to adapt itself to the requirements of the time.

While in the domain of the Soviet Government’s economic and general policy, this period has been marked by two most far-reaching and important changes which, strictly speaking, had been prepared prior to the October Revolution—the nationalization of banks and the annulment of the government debt; the financial policy, in the narrow sense of the word, did not disclose any new departures, not even the beginnings of original constructive work.

Gradually taking over the semi-ruined pre-revolutionary financial apparatus, however, the Soviet Government was compelled to adopt measures for the systematization of the country’s finances in their entirety.

This second period in the work of the People’s Commissariat for Finances (approximately up to August, 1918) also fails to show any features of sharply marked revolutionary change. From the very beginning the authorities have been confronted with a chaotic condition of the country’s financial affairs. All this, in connection with the large deficit which became apparent in the state budget, compelled the Commissariat of Finance to concentrate its immediate attention on straightening the general run of things and, thus, prepare the ground for further reforms.

In order to accomplish the systematizing of the financial structure, the Government had to lean for support on the already existing unreformed institutions, i.e., the central department of finance, the local administrative-financial organs—the fiscal boards tax inspection, treasuries, excise boards—and, more particularly, the financial organs of the former local institutions for self-government (Zemstvos, and municipalities).

Such a plan of work seemed most feasible, since the apparatus appeared suitable for fulfilling slightly modified functions; but the local government was not yet sufficiently crystallized or firmly established, neither was any stable connection established between that local government and the central bodies.

Under such circumstances, the old institutions, which by force of habit continued to work exclusively at the dictate of and in accordance with instructions from the central bodies, seemed to be the most convenient and efficient means of carrying out measures which the central authorities had planned to straighten out the general disorder prevailing in financial affairs.

However, this idea soon had to be discarded, the local Soviets insofar as they organized themselves and put their executive organs into definite shape, could not and did not have the right to neglect the work of the old financial organs functioning in the various localities, since the Soviets represented the local organs of the central government as a whole, and since it was upon them that the responsibility for all the work done in the localities, rested.

Under such conditions friction was inevitable. In accordance with the principles of the old bureaucratic order, the local financial institutions neither knew nor had any idea of subordination other than the slavish subordination to the central authorities which excluded all initiative on their part.

Under the new conditions, these local financial institutions were to constitute only a small component part of the local Soviets. Acute misunderstanding of the local authorities among themselves and between the local and central authorities on the subject of interrelations among all of these institutions, have demonstrated the imperative necessity for a reorganization. With this work of reforming the local financial organs (September, 1918) a new period opened: the third period in the activity of the commissariat, which coincides with the gradual strengthening of the general course of our economic policy. The economic policy definitely and decisively occupies the first place which duly belongs to it, while the financial policy, insofar as it is closely bound up with the economic policy, is being regulated and directed in accordance with the general requirements of the latter.

II

The financial policy of Soviet Russia was, for the first time, definitely outlined by the eighth (March, 1919) Convention of the Russian Communist Party.

The eighth party convention clearly and concretely stated our financial problems for the transitionary period, and now our task consists in seeing to it that the work of the financial organs of the Republic should be in accord with the principles accepted by the party.

These principles, briefly, are as follows: (1) Soviet Government State monopoly of the banking institutions; (2) radical reconstruction and simplifications of the banking operations, by means of transforming the banking apparatus into one of uniform accounting and general bookkeeping for the Soviet Republic; (3) the enactment of measures widening the sphere of accounting without the medium of money, with the final object of total elimination of money; (4) and, in view of the transformation of the government power into an organization fulfilling the functions of economic management for the entire country,—the transformation of the pre-revolutionary state budget into the budget of the economic life of the nation as a whole.

In regard to the necessity for covering the expenses of the functioning state apparatus during the period of transition, the program adopted outlines the following plan: “The Russian Communist Party will advocate the transition from the system of levying contributions from the capitalists, to a proportional income and property tax: and, insofar as this tax outlives itself, due to the widely applied expropriation of the propertied classes, the government expenditures must be covered by the immediate conversion of part of the income derived from the various state monopolies into government revenue.”

In short, we arrive at the conclusion that no purely financial policy, in its pre-revolutionary sense of independence and priority, can or ought to exist in Soviet Russia. The financial policy plays a subsidiary part, for it depends directly upon the economic policy and upon the changes which occur in the various phases of Russia’s political and economic order.

During the transitional period from capitalism to Socialism the government concentrates all of its attention on the organization of industry and on the activities of the organs for exchange and distribution of commodities.

The financial apparatus is an apparatus subsidiary to the organs of production and distribution of merchandise. During the whole of this transitional period the financial administration is confronted with the following task: (1) supplying the productive and distributive organs with money, as a medium of exchange, not even abolished by economic evolution, and (2) the formation of an accounting system, with the aid of which the government materialize the exchange and distribution of products. Finally, since all the practical work in the domain of national and financial economy cannot and should not proceed otherwise than in accordance with a strictly defined plan, it is the function of the financial administration to create and compile the state budget in such a manner that it might approximate as closely as possible the budget of the entire national economic life.

In addition to this, one of the largest problems of the Commissariat of Finance was the radical reform of the entire administration of the Department of Finance, from top to bottom, in such a manner that the fundamental need of the moment would be realized most fully—the realization of the dictatorship of the proletariat and the poorest peasantry in the financial sphere.

III

The work of the financial institutions for the solution of the first problem of our financial policy, i.e., the monopolization of the entire banking business in the hands of the Soviet Government, may be considered as having been completed during the past year.

The private commercial banks were nationalized on December 14, 1917, but even after this act there still remained a number of private credit institutions. Among these foremost was the “Moscow People’s Bank” (Moscow Narodny Bank) a so-called cooperative institution. There were also societies for mutual credit, foreign banks (Lion Credit Warsaw Bank, Caucasian Bank, etc.); and private land banks, city and government (provisional) credit associations.

Finally, together with the Moscow People’s Bank there existed government institutions—savings banks, and treasuries. A number of measures were required to do away with that lack of uniformity involved and to prepare the ground for the formation of a uniform accounting system.

A number of decrees of the Soviet of People’s Commissaries and regulations issued by the People’s Commissariat of Finance, have completed all this work from September 1918 to May 1919.

By a decree of October 10th, 1918, the Societies for Mutual Credit were liquidated; three decrees of December 2nd, 1918, liquidated the foreign banks, regulated the nationalization of the Moscow People’s (Cooperative) Bank and the liquidation of the municipal banks; and, finally, on May 17th, 1919, the city and state Mutual Credit Associations were liquidated. As regards the question of consolidating the treasuries with the offices of the People’s Bank, this has been provided in a decree issued on October 31st, 1918; the amalgamation of the savings banks with the People’s Bank has been affected on April 10th, 1918.

Thus, with the issuance of all the above-mentioned decrees, all the private credit associations have been eliminated and all existing Government Credit Institutions have been consolidated into one People’s Bank of the Russian Republic. The last step in the process of reform was the decree of the People’s Commissariat of Finance which consolidated the State Treasury Department with the central administration of the People’s Bank. This made possible, by uniting the administration of these organs, the enforcement of the decree concerning the amalgamation of the treasuries with the People’s Bank. The decree of the People’s Commissariat of Finance of October 29th, 1918, issued pursuant to Section 902 of rules on state and county financial organs, practically 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 to June, 1916 January to June, 1918 July to Dec., 1918 January to June, 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:

Poods Area in 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 categories) Added.

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.