of the village, as well as with the home-workers and tradesmen. In respect
lo trade, and then also in respect to finance, a certain dependence of the
State industry on private trade capital and financial capital arises during
the years 1921/24, which then leads to a part-redivision of the values
expropriated during 1918/20, among the holders of the power and the
enterprising elements.
The nationalised industry, united into so-called ‘‘trusts” by accidental
characteristics, increases its productivity up to 259% of pre-war time, im-
proves slightly its inner organisation, in part re-establishes discipline in the
process of production, and absorbs within itself many of the old technical
forces and administrative elements at the beginning of this period. The
first period of the new economic policy has therefore created the illusionary
impression, as if the communistic power had turned to purely capitalistic
principles, as if it had turned in the direction of reconstructing the free
sconomic systems, only hampered by the belated opposition of the expiring
radical elements of the communist party. During this period of a still
andisturbed development of the new economic policy, the State industry
and the transport system of the State, were working at a great loss; firstly
because, the capacity of production — coupled with enormous working
expenses and charges —, after all, did not reach more than a 1/4 of the
capacity of production of pre-war time; and further, the working capital
having become diminished by plundering and squandering, the industry
was compelled to have recourse to dotations from the State exchequer, or
to pay enormous interest for moneys supplied by semi-governmental com-
panies as loans on reciprocal security. Secondly, the industrial concerns,
‘acking appropriate economic leadership, and being quite dependent on
departments of the State perfectly incapable and ignorant in the domain
of industrial activity, became a booty of the covetous endeavours of the
so-called “Red Directors” and of their surroundings. And finally, in the
most liberal period of the new economic policy, the Government was
aevertheless compelled — for mere political reasons — to raise the wages
to the amount of pre-war time (nominally), and in addition to this, to
write off large amounts of the funds of industrial concerns for social
guarantees.
The second period of the new economic policy begins, in trade and
industry, in 1924. Its characteristic feature is the increasing pressure of
the State power on the small enterprises in the industry, in trade and in
the home-work, as well as the attempt to subordinate the country to the
own by diverse means.
At the outset the chief instrument for realising this policy, was the
system of taxation, which, in perfectly arbritary forms, was directed at
extorting means from rural and small urban economic undertakings. The
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