course of which, the entire level of the Russian economic life was depressed 
to a minimum unbearable for the population. Thereupon followed: the 
rising at Kronstadt (March 1921), the labour riots (Petrograd — February 
1921), the peasant-riots in different parts of Russia (in the gouvernements 
l'ambow, Woronesh, Poltava, Pensa, Novgorod, etc.). The State organisation 
having an enormous capital at its disposal which it had seized at the moment 
of nationalising the banks, the industry and the large private possessions, 
had already spent these funds during the first years of its existence; even 
lo the most fanatic representatives of the new order of things it became 
»bvious that a further existence on the basis of a decadent economy bereft 
»f all productivity, was impossible. 
In Spring 1921, the Communists consequently turned away from the 
system of collective organisation of the entire economics, to which the 
whole country had already been sacrificed, and decided — to liberate, in 
part, the private economic forces, and to reconstruct the capitalistic 
axchange of goods although in a somewhat disfigured form. 
This reaction shows its outward manifestation in the following facts: 
t) The above mentioned “plan for distributing foodstuffs” is abolished, and 
is replaced by “a taxation in foodstuffs” (which is carried out by de- 
liveries in kind). 2) Private trading is permitted. 3) A comparative freedom 
is extended to the retail trade, to handicrafts and to home-work. 4) The 
duty of performing enforced work and of enforced transport service, is 
gradually done away with. 5) A commercial re-organisation of trade and 
of large industries is Inaugurated, (‘“Khosrastchot”’, i. e., economic cal- 
culation), which, however, is to remain in the hands of the State, and to 
operate with nationalised capital. 6) The State finances are separated from 
the economic branches which have been transferred to economic calculations, 
and the attempt is made to build up a State budget. 7) The personnel of 
the administration of the State is partly reduced, and attempts are made 
for the adjustment of its organisation. 
The governmental power has retained as points of support: a) The 
nationalised industry, b) The foreign trade monopoly, ¢) The monopoly 
of the big home trade. These organs have been officially designated as the 
‘pinnacles of command” of the communist party. 
The first period of the New Economic Policy (NEP), is characterised by 
a rapid growth of the individual economic activity of the population, a 
gradual coalescence of the home trade, a growth in the private retail trade, 
and of the home industry, and by an accumulation of private property — 
at first rapidly, but then slowly — among the most active and most 
:nterprising of the town population. During the first years of the new 
economic policy, these elements tried to get into contact — and with con- 
siderable success too — by round about ways with the producing elements 
7q