THE SUPREME COUNCIL OF PUBLIC ECONOMY

February 20th.

To-day was an unlucky day. I felt tired, ill and hungry, and had arranged to talk with both Rykov, the President of the Supreme Council of People's Economy, and Krestinsky, the Commissar of Finance, at such awkward times that I got no tea and could get nothing to eat until after four o'clock. Two such talks on an empty stomach (for the day before I had had only a plate of soup and a little scrap of fish) were a little too much for me, and I fear I did not gather as much information as I should have collected under better conditions.

I had a jolly drive, early in the morning, through the Chinese Town, and out by the gate in the old wall, up Myasnitzkaya Street, and round to the right to a building that used to be the Grand Hotel of Siberia, a loathsome place where I once stayed. Here in the old days provincial merchants put up, who did not mind high prices and a superfluity of bugs. It has now been turned into a hive of office work, and is the headquarters of the Supreme Council of Public Economy, which, controlling production and distribution alike, is the centre of the constructive work going on throughout the country.

This Council, the theorists tell me, is intended to become the central organization of the state. The Soviets will naturally become less and less important as instruments of political transition as that transition is completed and the struggle against reaction within and without comes to an end. Then the chief business of the state will no longer be to protect itself against enemies but to develop its economic life, to increase its productivity and to improve the material conditions of the workers of whom it is composed. All these tasks are those of the Supreme Council of Public Economy, and as the bitterness of the struggle dies away this body, which came into being almost unnoticed in the din of battle, will become more and more important in comparison with the Soviets, which

were in origin not constructive organizations but the instruments of a revolution, the hardest stages of which have already been accomplished.

It is perhaps worth while to set out here the constitution of this Council. It is considered at present as the economic department of the All-Russian Central Executive Committee, to which, and to the Council of People's Commissaries, it is responsible. It regulates all production and distribution. It reports on the various estimates of the state budget and, in conjunction with the Commissariats of Finance and State Control, carries out the financing of all branches of public economy. It consists of 69 members, and is composed as follows:--Ten representatives from the All- Russian Executive Committee, thirty from the All-Russian Industrial Productive Union (a union of Trade Unions), twenty from the ten District Councils of Public Economy, two from the All-Russian Council of Workers' Cooperative Societies, and one representative each from the Commissariats of Supply, Ways of Communication, Labour, Agriculture, Finance, Trade and Industry, and Internal Affairs. It meets as a whole at least once in every month. The work of its members is directed by a Presidium of nine members, of which it elects eight, the President being elected by the All-Russian Central Executive Committee, and enjoying the rank of a People's Commissar or Minister.

I had a long talk with Rykov, the President, or rather listened to a long lecture by him, only now and then succeeding in stopping him by forcing a question into the thread of his harangue. He stammers a little, and talks so indistinctly that for the first time (No. The first time was when Chicherin gabbled through the provisions of the Brest Treaty at the fourth All-Russian Assembly.) I felt willing to forgive normal Russians, who nearly always talk as if they were in Petrograd and their listener in Vladivostok.

Part of what he said is embodied in what I have already written. But besides sketching the general aims of the Council, Rykov talked of the present economic position of Russia. At the moment Russian industry was in peculiar difficulties owing to the fuel crisis. This was partly due to the fact that the Czechs and the Reactionaries, who had used the Czechs to screen their own organization, had control of the coalfields in the Urals,

and partly to the fact that the German occupation of the Ukraine and the activities of Krasnov had cut off Soviet Russia from the Donetz coal basin, which had been a main source of supply, although in the old days Petrograd had also got coal from England. It was now, however, clear that, with a friendly Ukraine, they would have the use of the Donetz basin much sooner than they had expected.

The Brest peace and the deprivations it involved had made them consider the position of the industrial districts from a new standpoint, and they were determined to make Petrograd and Moscow as far as possible independent of all fuel which had to be brought from a distance. He referred to the works in progress for utilizing water power to provide electrical energy for the Petrograd factories, and said that similar electrification, on a basis of turf fuel, is planned for Moscow.

I asked how they were going to get the machines. He said that of course they would prefer to buy them abroad, but that, though this was impossible, the work would not be delayed on that account, since they could make a start with the machines they had. Turbines for the Petrograd works they still hoped to obtain from abroad when peace had been arranged. If the worst came to the worst he thought they could make their own. "That is one unexpected result of Russia's long isolation. Her dependence on imports from abroad is lessening." He gave an example in salt, the urgent need of which has led to the opening of a new industry, whose resources are such as to enable Russia not only to supply herself with salt, but the rest of the world as well if need should be.

I asked what were their immediate plans with regard to the electrification of Moscow. He said that there was no water power near Moscow but big turf deposits which would be used as fuel. In order not to interfere with the actual lighting of the town from the power-station already in existence, they are taking the electric plant from the Provodnik works, which will supply enough electricity for the lighting of the town. As soon as that is set up and working, they will use it for the immediate needs of Moscow, and set about transferring the existing power-station to the new situation near the turf beds. In this way they hope to carry out the change from coal to turf without interfering with the ordinary life of

the town. Eventually when things settle down they will get a larger plant.

I said, "Of course you have a double object in this, not only to lessen the dependence of the industrial districts on fuel that has to be brought from a distance, and of which you may be deprived, but also to lessen the strain on transport!"

"Yes," he said. "Indeed at the present moment the latter is our greatest difficulty, hampering everything we would wish to do. And transport we cannot put right without help from abroad. Therefore we do everything we can to use local resources, and are even developing the coal deposits near Moscow, which are of inferior quality to the Donetz coal, and were in the old days purposely smothered by the Donetz coal-owners, who wished to preserve their monopoly."

I asked him if in his opinion Russia could organize herself without help from abroad. He said, "I rather think she will have to. We want steam dredgers, steam excavators, and locomotives most of all, but we have small hope of getting them in the immediate future, because the effects of the war have been so serious in the disorganization of industry in the western countries that it is doubtful whether they will be in a position to supply even their own needs."

While we were talking Berg, the secretary, came in. I asked him how his Soviet matches were progressing, and he said that the labels were being printed and that the first lot would soon be ready. They will be distributed on the card system, and he had calculated that they could sell them at twelve kopecks a packet. I paid a rouble for a box of ordinary matches at Bieloostrov, and a rouble and a half here.