In the early spring of 1917 the deficiency in supplies for the Army and for the towns was rapidly growing. In one of its appeals to the peasants the Soviet said: “The enemies of freedom, the supporters of the deposed Czar, are taking advantage of the shortage of food in the towns for which they are themselves responsible in order to undermine your freedom and ours. They say that the Revolution has left the country without bread....” This simple explanation, adduced by the Revolutionary Democracy in every crisis, was, of course, one-sided. There was the inheritance of the old régime as well as the inevitable consequences of three years of war, during which imports of agricultural implements had come to a standstill, labourers were taken from the land, and, as a result, the area under crops was diminished. But these were not the only reasons for the food shortage in a fertile country—a shortage which in the autumn was considered by the Government as disastrous. The food policy of the Government and the fluctuation of prices, the depreciation of the currency and a rise in the price of commodities entirely out of proportion to the fixed prices for grain also largely contributed to this result. This rise in prices was due to general economic conditions, and especially to a very rapid rise in wages; to the agrarian policy of the Government, the inadequacy of the area under crops, to the turmoil in the villages, and to the breakdown of transport. Private trade was abolished and the entire matter of food supplies was handed over to Food Supply Committees—undoubtedly democratic in character, but, with the exception of the representatives of the Co-operatives, inexperienced and devoid of a creative spirit. There are many more reasons, great and small, which may be included in the formula: The Old Régime, the War and the Revolution.
On March 29th the Provisional Government introduced the grain monopoly. The entire surplus of grain, excluding normal supplies, seed corn and fodder, reverted to the State. At the same time the Government once again raised the fixed price of grain, and promised to introduce fixed prices for all necessary commodities, such as iron, textiles, leather, kerosine oil, etc. This last measure, which was universally recognised as just, and to which the Minister of Supplies attributed a very great importance, proved impossible of application owing to the confused condition of the country. Russia was covered by a huge network of Food Supply Institutions, which cost 500,000,000 roubles a year, but could not cope with their work. The villages, on the other hand, had ceased to pay taxes and rents, were flooded with paper money, for which they could get no equivalent in manufactured goods, and were by no means anxious to supply grain. Propaganda and appeals were of no avail, and, as often as not, force had to be applied.
In its Proclamation of August 29th the Government admitted that the Country was in a desperate position; the Government stores were emptying; towns, provinces, and armies at the Front were in dire need of bread, although, in fact, there was sufficient bread in the country. Some had not delivered last year’s harvest; some were agitating and preventing others from doing their duty. In order to avert grave danger, the Government once more raised the fixed prices and threatened to apply stringent measures against the offenders, and to regulate prices and the distribution of articles required by the villages. But the vicious circle of conflicting political, social and class interests was narrowing, like to a tight noose, round the neck of the Government, paralysing its will-power and energy.
The condition of industry was no less acute, and it was steadily falling into ruin. Here, as in the matter of supplies, the calamity cannot be ascribed to one set of causes, as happened when the employers and the workmen levelled accusations against one another. The former were charged with taking excessive profits and having recourse to sabotage in order to upset the Revolution, while the latter were blamed for slackness and greed and for deriving selfish gains from the Revolution. The causes may be divided into three categories.
Owing to various political and economic reasons and to the fact that the old Government did not devote sufficient attention to the development of the natural resources of the country, our industries were not placed on a solid basis, and were to a great extent dependent upon foreign markets even for such material as might easily have been found in Russia. Thus in 1912 there was a serious shortage of pig-iron, and in 1913 of fuel. From 1908 to 1913 imports of metals from abroad rose from 29 to 34 per cent. Before the War we imported 48 per cent. of cotton. We needed 2,750,000 pouds[18] of wool from abroad out of a total of the 5,000,000 pouds produced.
The War unquestionably affected industry very deeply. Normal imports came to a standstill. The mines of Dombrovsk were lost. Owing to strategical requirements, transport was weakened, supplies of fuel and of raw materials diminished. Most of the factories had to work for the Army, and their personnel was curtailed by mobilisations. From an economic point of view, the militarisation of industry was a heavy burden for the population, because, according to the estimates made by one of the Ministers, the Army absorbed 40 to 50 per cent. of the total of goods produced by the country. Finally, the War widened the gulf between the employers and the workmen, as the former made immense profits, whereas the latter were impoverished, and their condition was further aggravated by the suspension of certain professional guarantees on account of the War by the fact that certain categories of workmen were drafted by conscription to definite industrial concerns, and by the general burden of inflated prices and inadequate food supplies.
Even in these abnormal circumstances Russian industries to some extent fulfilled the requirements of the moment, but the Revolution dealt them a death blow, which caused their gradual dislocation and ultimate collapse. On the one hand, the Provisional Government was legislating for the establishment of a strict Government control of the industries of the country and for regulating them by heavily taxing profits and excess war profits, as well as by Government distribution of fuel, raw materials and food. The latter measure caused the trading class to be practically eliminated and to be replaced by democratic organisations. Whether excess profits disappeared as a result of this policy, or were merely transferred to another class, it is not easy to decide. On the other hand, the Government were deeply concerned with the protection of labour, and were drafting and passing various laws concerning the freedom of unions, labour exchanges, conciliation boards, social insurance, etc. Unfortunately, the impatience and the desire for “law-making” which had seized the villages were also apparent in the factories. Heads of industrial concerns were dismissed wholesale, as well as the administrative and technical staffs. These dismissals were accompanied by insults and sometimes by violence, out of revenge for past offences, real or imaginary. Some of the members of the staffs resigned of their own accord, because they were unable to endure the humiliating position into which they were forced by the workmen. Given our low level of technical and educational standards, such methods were fraught with grave danger. As in the Army, so in the factories, Committees replaced by elections the dismissed personnel with utterly untrained and ignorant men. Sometimes the workmen completely seized the industrial concerns. Ignorant and unprovided with capital, they led these concerns to ruin, and were themselves driven to unemployment and misery. Labour discipline in the factories completely vanished, and no means was left of exercising moral, material or judicial pressure or compulsion. The “consciousness” alone of the workers proved inadequate. The technical and administrative personnel which remained or was newly elected could no longer direct the industries and enjoyed no authority, as it was thoroughly terrorised by the workmen. Naturally, therefore, the working hours were still further curtailed, work became careless, and production fell to its lowest ebb. The metallurgical industries of Moscow fell 32 per cent. and the productivity of the Petrograd factories 20 to 40 per cent. as early as in the month of April. In June the production of coal and the general production of the Donetz basin fell 30 per cent. The production of oil in Baku and Grozni also suffered. The greatest injury, however, was inflicted upon the industries by the monstrous demands for higher wages, completely out of proportion to the cost of living and to the productivity of labour, as well as to the actual paying capacity of the industries. These demands greatly exceeded all excess profits. The following figures are quoted in a Report to the Provisional Government: In eighteen concerns in the Donetz Basin, with a total profit of 75,000,000 roubles per annum, the workmen demanded a wage increase of 240,000,000 roubles per annum; the total amount of increased wages in all the mining and metallurgical factories of the South was 800,000,000 roubles per annum. In the Urals the total Budget was 200,000,000, while the wages rose to 300,000,000. In the Putilov factory alone, in Petrograd, before the end of 1917, the increase in wages amounted to 90,000,000 roubles. The wages rose from 200 to 300 per cent. The increase in the wages of the textile workers of Moscow rose 500 per cent., as compared to 1914. The burden of these increases naturally fell on the Government, as most of the factories were working for the defence of the country. Owing to the condition of industry described above, and to the psychology of the workmen, industrial concerns collapsed, and the country experienced an acute shortage of necessary commodities, with a corresponding increase in prices. Hence the rise in the price of bread and the reluctance of the villages to supply the towns.
At the same time Bolshevism introduced a permanent ferment into the labouring masses. It flattered the lowest instincts, fanned hatred against the wealthy classes, encouraged excessive demands, and paralysed every endeavour of the Government and of the moderate Democratic organisations to arrest the disruption of industry: “All for the Proletariat and through the Proletariat....” Bolshevism held up to the working class vivid and entrancing vistas of political domination and economic prosperity, through the destruction of the Capitalist régime and the transfer to the workmen of political power, of industries, of the means of production, and of the wealth of the country. And all this was to come at once, immediately, and not as a result of a lengthy, social, economic process and organised struggle. The imagination of the masses, unfettered by knowledge or by the authority of leading professional unions, which were morally undermined by the Bolsheviks, and were on the verge of collapse, was fired by visions of avenging the hardships and boredom of heavy toil in the past, and of enjoying amenities of a Bourgeois existence, which they despised and yet yearned for with equal ardour. It was “Now or Never: All or Nothing!” As life was destroying illusions, and the implacable law of economics was meting out the punishment of high prices, hunger and unemployment, Bolshevism was the more convincingly insisting upon the necessity of rebellion and explaining the causes of the calamity and the means of averting it. The causes were: the policy of the Provisional Government, which was trying to reintroduce enslavement by the Bourgeoisie, the sabotage of the employers, and the connivance of the Revolutionary Democracy, including the Mensheviks, which had sold itself to the Bourgeoisie. The means was the transfer of power to the Proletariat.
All these circumstances were gradually killing Russian Industry.