a few months, until the accumulated stock had been disposed of; then it failed, and had been closed for more than two years. Many of the workers who formerly found profitable employment in the factory had left the city. Those who remained were without means of support.

Experience had taught them that the profits made by the plant were not so much the result of their labor as of the executive skill and direction of the owner. So they were urging him again to take charge of the plant and operate it. He had arranged with the Government for a long-term lease of the plant, paying for its use, in lieu of all other taxes, a turnover tax of one per cent., or a tax on net profits of fifteen per cent.

This manufacturer, while much opposed to the whole socialistic theory and having no faith in the ability of the Government successfully to operate under it, did not hesitate to say that he thought the best thing for Russia was to go ahead under the new policies announced by Lenine. He expressed the conviction that out of it would come a stable government, which would permit the free expression of the individual initiative of the Russian people.

At Saratoff I met a peasant from Norda, a fine, intelligent-looking man who, with different clothing, would easily have passed for an American farmer. He had driven in a yoke of oxen, which he sold that day for six million rubles, or about seventy dollars in American money at the prevailing rate of exchange, and was on his way back to Norda. This peasant had suffered severely through the revolution and during the civil war. questioning him, I found that he was

By

opposed to the nationalization of real estate, and believed in private property and the right of free trade.

"But I believe that Lenine and the Bolshevist leaders realize that a communist government cannot stand in Russia," he said. "We know from things going on around us that the Government is changing, and changing back to the way we want it. We do not want any more communism, nor do we want any more war and revolution. I believe we can work out our affairs with the present Government, which will soon be a sound one, and will open up trade among us Russian people. Also, I believe Lenine will guarantee us possession of our land and admit the right of the people to own their own property."

I discussed with him the new system of taxation under which, instead of requisitioning the surplus food crops, a fixed tax, payable in kind, is levied. He said the new system pleased the peasants very much. I then suggested to him the American system of a money tax on land and property.

"The peasant would not accept this, but prefers a tax payable in kind," he replied. "Under our system, if we raise a large crop, we can afford to pay more. If we raise only a medium crop, we pay less. In a year of crop failure, such as we had this year, we pay no tax at all. Under your American system we could, in such circumstances, pay nothing, and our land would be sold for taxes."

§ 3

The Central Government had recently recommended that instead of allotting the land each year, or at irregular intervals, as is the present custom, the communes should assign the

"We have lived under this system for hundreds of years, and it has worked very well," he said. "The "The peasant is conservative by nature and fears that in any change of the present system may be concealed a plan to get the land away from him, so that it will be a long time before he will agree to any innovation."

Before my departure I spent an afternoon with men who are starting the new banking system in Russia. One of them had been at the head of one of the largest banks in Russia prior to the revolution; the other had been connected with one of the great private banks. Under the new decree establishing banks, the Government was inviting back to Russia men who had operated banks prior to the revolution and was urging them again to take up their work. The bankers told me that many had already come back and that the responses to the invitation indicated that more of them would do likewise.

But they did not underestimate the seriousness of the situation, the long, hard struggle before them necessary to the establishment of a sound banking system. They said the Government had promised full coöperation, and agreed to give them the greatest freedom of action in the conduct of their banks. They hoped to attract foreign capital to Russia, and stated to me that they had already received assurances of help from other countries.

"If I should deposit in your bank

ten thousand dollars in American money, which is as good as gold, would you return to me American money or its equivalent?" I asked.

"We could not do that," they replied, "but would pay for foreign money, or gold deposited with us, Russian rubles at the rate of exchange on the date the money is withdrawn, and in this manner guarantee the depositor against the falling value of the ruble."

I inquired what guaranties or assurances any foreign capital that might come into Russia would have, and they asked me what I meant by this. I told them that I did not believe foreign capital would come into Russia unless the Government would guarantee its protection against such confiscation as had occurred before. They answered:

"You have something better than any government guarantee. The change announced by Lenine in his speech on the new economic order is fundamental; it is a change of heart. We do not care what they say about this being a mere 'strategic move.' The change is permanent. The retreat toward capitalism has set in; it is not temporary. This retreat will continue until capitalism has been established and full assurance given to every one that the rights of contract and private property in Russia will be respected."

Many of the men with whom I talked had suffered most severely at the hands of the Government. Not a single one of them was in favor of its policy, yet without exception they believe the Government will stand; that it is not only idle, but against the best interest of Russia, to talk about revolution or civil war; that every patriotic

Russian should cheerfully give the authorities his support, and that through evolution, not revolution, a sound government would be established in Russia.

84

The Bolshevist officials have used strong-arm methods in dealing with counter revolution and law violation since the second revolution in October, 1917. The Checka, or Russian Extraordinary Commission, about which we have heard much, has not hesitated to inflict the death-penalty not only for political crimes and against those who are inciting counter revolutions, but also against those who violate their oath of office.

A very interesting trial was held in Moscow the week before I left. The facts leading up to it were these:

After the November revolution the Government confiscated all surplus wealth, including the jewelry, furs, and furniture of the bourgeoisie. All this was stored in the Kremlin for safekeeping, and was to be sold only on the order of the Government. A Russian woman residing in Moscow whose jewels had been confiscated saw another woman wearing one of her jewels that she had prized very highly. She appealed to Lenine, who previous ly had promised her that the jewels would not be sold without giving her notice. Lenine assured her that if her jewels had been sold, it had been without the knowledge of the Government, and he promised an immediate investigation.

As a result of this investigation, thirty-five public officials were indicted, charged with stealing and selling a large amount of nationalized property in addition to the jewelry in question.

The penalty for this offense under the Russian law is death. Undoubtedly, all the men were guilty; the proof was conclusive. Nineteen of them were shot; sixteen received prison sentences.

Mr. Tchitcherin was asked why it was that nineteen were shot and the other sixteen let off with prison sentences when all were equally guilty.

"The sixteen who received prison sentences were bureaucrats who had served under the czarist order," he replied. "They did not know any better, but had always plundered and robbed the people. The other nineteen were communists. They should have known better than to betray their trust. We intend to deal with communists who violate their oath of office with greater severity than with others, to weed out with a ruthless hand every communist who breaks faith with the people."

It is generally conceded in Moscow that the leaders of the party, men like Lenine and Tchitcherin, will insist upon a high order of integrity from those under them.

I saw at Saratoff a striking example of the efficiency of the Checka in settling a strike. A food ship of the American Relief Administration was at the docks at Saratoff to be unloaded. Owing to the approaching close of navigation, it was necessary to unload the ship at the earliest possible date. The Russian workers started to unload it, but every evening they concealed in their pockets some of the food and carried it off. Captain Kinney, in charge of the work, took the food away from them. Then they struck, and refused to unload the boat.

Soon the students from the University of Saratoff came down to unload

it. The workers called tham "scabs" and made such a demonstration that the professors in charge of, the university thought it unwise for the students to continue. Captain Kinney then applied to the Checka residing in Saratoff. An official hastened to the wharf where the striking men were assembled.

"I understand you refuse to unload this ship," he said, "because you are not allowed to take some of the food which is intended for the starving Russian children."

They replied that they would not unload it unless they received a ration in addition to their wages.

Government itself, contending that "the end justifies the means."

It is fair to say that at the last session of the All Soviet Congress there was issued a decree to establish local courts, under Russian law and methods of procedure, with which the peasants have long been familiar. These "peoples' courts" are vested with exclusive jurisdiction over cases concerning property, and all other questions at law except such as are of a political nature, jurisdiction of which is still retained by the Checka under certain limitations.

"I will give you thirty minutes to get to work. If you refuse, I will have some of you shot." Immediately they went to work.

The representative added further: "If Captain Kinney furnishes me the name of any one who has taken a single pound of this food, I will have him shot." That ended the matter. The food was unloaded, and none of it was stolen.

The peasants on the lower Volga had been annoyed by bands of robbers. While I was there the Checka sent a squad of soldiers to investigate the situation. They overtook the band of thieves, rounded them up, shot the whole number, nine in all, and buried them by the roadside. Everybody, the peasants especially, seemed to approve this sort of justice.

The Government justified the arbitrary exercise of power by the Checka on the theory that in no other way could have been prevented in the early days of the Revolution endless counter revolutions and the destruction of the

claimed a general amnesty for all who had been exiled or had fled the country, inviting them back to take part in Russia's rebuilding. They are to come back, however, on condition that they are not to incite counter revolutions or spread propaganda tending to alter the Government by violence.

On every hand I saw changes toward the capitalistic order. The Government has not only established a wage system, but the wages are adjusted according to the service rendered; also the piece-work system is being established on the railroads and in the factories. In fact, I was told that the premiums for increased production in the International Harvester plant are far greater than the wages paid. Freedom of trade has been established all over Russia, and every day new stores are springing up on the various streets of Moscow and other cities.

Banks are being established; interest and rent, twin children of capitalism, are being charged everywhere.