"The attitude of the governmental authorities (the bureaucratic departments) toward the work of these non-bureaucratic, but public, institutions (the Unions of the Municipal and Provincial Councils) was one of suspicion and antagonism, and difficulties were put in their way with the deliberate intent to block their activities. The institutions were suspected of pursuing political aims. Only when it became clear that the ruling group in the bureaucracy was consciously allowing the country to drift into a state of anarchy in order to bring Russia out of the war did these leaders venture to risk revolutionary methods of action.
"The president of the All-Russian Union of Provincial Councils, the Zemstvo, was Prince Lvoff, the first Prime Minister of the new Russia after the revolution of March, 1917. In the monthly reports of the work of the All-Russian Union of Zemstva, Prince Lvoff, repeatedly issued warnings of the impending economic collapse of the country. But neither he nor Kerensky was able to liquidate the heritage received from the old régime in time to stave off the series of economic and financial crises of which the Bolsheviki availed themselves."
FOREBODINGS OF RUSSIA'S COLLAPSE
But it was not only foreign observers who were able to detect the prevailing rottenness in Russia's economic status. The following passage from an address made by A. I. Konovalov, a member of the Moscow Stock Exchange, shows that Russian business men were keenly alive to the dangers of the situation as early as April, 1917:
"The old régime has seemingly done everything deliberately to destroy and demoralize the trade-industrial apparatus it took years to build up. As a result the usual course of the country's economic life was stopped, and at the same time, through the peculiarly enforced system of regulations, a wide field for all sorts of abuses and speculations was opened. We must frankly acknowledge that from these abuses and speculations a system of oppression grew up which has called forth fully merited reproach, distrust, and hostile feelings towards the representatives of the trade-industrial class.
"At the same time there can be no doubt but that under present circumstances, lacking most of the necessaries of existence, with the factories and mills forced to cut down their production due to lack of raw material and fuel, with the demoralization of the transportation system, and being compelled, despite all these obstacles, to meet the numerous requirements at the front—there is no other way out but government control of private industrial and mercantile enterprises, and the coöperation of the democratic masses of the population in the matter of regulating the trade-industrial life of the country. In addition to fair distribution it should be the task of all the committees, which are to become parts of the Ministry, also to regulate the prices.
"Closely connected with this question there is another one which I personally consider of tremendous importance. I have in mind the question of limiting the profits of all mercantile and industrial establishments. Undoubtedly a properly worked-out solution of this question would have the tendency to check the unwarranted growth of prices that would appease the masses. The normal effect of a decree limiting profits is of tremendous importance, not only in that it would soften the feeling of ill-will towards the trade-industrial class, but also because it would afford the government a new, convincing proof that the commercial and industrial class is ready to make all possible sacrifices for the common good, a proof which would paralyze the voicing of any new demands on the part of the masses.
"Now, these are the main ideas, the fundamental points of view which the trade-industrial class should consider as a starting point in its efforts to win the confidence of the population and to safeguard that important position which it ought to occupy in the life of the country.
"The situation is becoming all the more difficult because of the ever-increasing famine due to the shortage of means of production as well as of all the necessaries of life; this famine will be felt very acutely, not only on account of the lack of these goods, but also because of the overabundance of paper money."