THE REVOLUTIONARY AGE Saturday, March 29, 1919 Financial Problems of Soviet Russia (Continued from page the budget as a disastrous omen and believed that all efforts should be strained in order to avoid a deﬁcit and that expenses should be cut in all branches. This is not right. In the transitory epoch of revolution, which we are now going through, deﬁcits are unavoidable. We must expend immense sums on the organization of socialistic industry. Like expenses are required for war and the support of the proletariat in foreign countries. At the same time, simultaneously with the liquidation of the bourgeoisie, the sources of revenues are diminished. We must be very careful in drafting our budget, not to reduce productive expenses, and expenses necessary for the meeting of real wants but to see that expenditures are in accord with expediency and limited to real necessity. Every necessary expense. resulting in the acquisition of necessary material goods, must be made, because simultaneously, with the creation of such material wealth we are working tow ard a converting of the deﬁcit. At present we have taken possession of productive capital; but we must take into consideration the existence of ﬁnancial capital. There is in the country a. great quantity of paper money. We know how much of that was issued how much cash is in the People Bank, in the government treasury; we may for the sake of expediency deduct something for bills, now in the Ukraine, in Siberia, in the Volga district, but about 25 30 billion of these bills are still in Soviet Russia and most of them put to no productive use. We therefore considered it possible to introduce a large income tax which would swallow all these unproductive means. This experiment could not have been carried out in a capitalist country.
We also may have recourse to such a tax only once more. perhaps, because by the imposition of this tax we annul the unproductive money means which are the object of taxation, preserving, however, such means as are expended in a productive manner. may communicate to you some results arising from the introduction of this 10 billion roubles tax. We adopted this tax in haste and divided it among the individual provinces in a rather superﬁcial manner, computing all statistical data with those materials which we had available. The levying of the tax should be completed about December. This term, if we consider the time of the adoption of this tax, our distances. and some irregularity in the mails, was chimerical, but around the middle of November, telegrams were arriving telling of the operation of this tax: requests were being received also regarding prolongations. Insofar as these requests were accomplished with some motivation, they resulted in prolongations of weeks or months duration. Prolongations were granted to the Kazan.
Kostroma. North Dvina, Mohilev provinces. to the city of Ryazan, to the Buzuluk county. considerable prolongation was granted to the city of Saratov. Later on came request as to the reduction and removal of the taxes. Several such requests came from the volost communities, from one or two counties, and from two provinces. The Commissariat for Finance did not consider itself competent to look into the requests coming from the volost communities because this matter belongs to the provincial executive committees, which. if they ﬁnd that the request is worthy of consideration, may reduce the amount of the assignment without redistributing it among the other parts of the province. Two provinces. the Kursk and Kazan. were granted a reduction of the amounts required from them. After a time. communications were received as to the termination of the levy. as well as a number of inquiries: is it admissible to transfer the tax to a current account: does the tax refer to subjects of foreign countries, in which manner to levy the tax on incomes of Soviet workers. receiving more than 500 rubles a month. The paragraph concerning the taxing of Soviet workers is. in the opinion of the People ommissaire for Finances. in general a failure: ex perience has already showri that in the provinces it created misunderstandings; for the peasants who are subject to taxation cannot help considering the salaries of the Soviet workers who are exempted from taxation as extremely high. The reports from various localities clearly prove that the tax is being realized.
Punt this tax constitutes for us. for the Soviet power.
the touchstone by which ourstructurc, in the ﬁnancial field will be tried. In reconstructing our ﬁnancial machinery we compel it. at the same time, to perform that great and serious work which requires penetration into the depths of the population. This tax will serve also as a measure of discipline. It is the ﬁrst general state tax for two years. which is levied in the provinces, and which creates. despite some unpleasant, possiblv even hostile. relations with the tax payer, a consciousness of the state power. Besides. by absorbing paper monev from the populace. it raises its value here. Thus from being a declarative tax. for which it was ﬁrst taken. it become a real tax. In fact, one must not resort to declarative taxes. for the collapse of a declarative tax would mean bankruptcy. hould like to combine this tax with another one.
whch was levied on the same day asthe above. It is a tax in kind and refers to tolls upon the products of agriculture: a tax, the operation of which has as a matter of fact not yet started because of certain technical difﬁculties. The grain supply campaign is at present still under way, and a considerable part of the peasantry is delivering grain to the Commissariat for Supplies. The supreme Council of National Economy proposed that the tax should not apply this year to those peasants who present certiﬁcates of a veiluntary delivery of grain, without permitting at the same time any indulgences with regard, to those who should not be holders of such certiﬁcates. corresponding amendment to. the decree on these tolls is carried out by the Central Executive Committee. To the Northern district this toll applies only in part, none the less some provinces will be touched by it.
This tax is generally not of the character of a special tax. It is not an easy nutter to take away hidden money. The decree regarding a compulsory keeping of books would remain a dead letter at present. The only way to introduce compulsory accounts is in the exchange of paper money. We shall now adopt this measure. But now it will not be connected with devaluation. as it was formerly believed, because devaluation strikes in the same measure both the rich and those who have moderate savings. It means a proportional but not a progressive taxation. Ve shall therefore issue new money and shall announce the date for the surrender of the old. In exchange for small sums new paper money will be issued to the full amount. If the cash» of any person exceed the determined limit. he will nzceive a certain minimum in cash and the rest will be added to his current account. Later we shall have recourse to a new surgical operation.
and the bourgeoisie of the Soviet era will be assessed witha new special tax. This measure. for technical reasons. is difficult to carry out. But the matter has its political aspect. part of Russian territory is at present not under the Soviet power. In order that all paper currency may be surrendered to the People Bank. it is imperative that we advance successfully into Ukraine. for the ﬁnal consolidation of the Soviet power. At any rate. we are already nearing the time when we shall proceed to carry out this exchange of paper Clll Cll.
In concluding my speech let me dwell upon the conuection between this transitory moment. that we are now living through. and the deﬁcit feature of the udget. AMnuey. after the completion of a cycle of economic measure. will be abolished and replaced by natural exchange. it will he of no concern to us then if the ruble is worth nothing at all. But it is important that we should maintain ourselves until then. The Russian u orkingmcu and peasants believe in the strength of. our economic organism. Our immediate neighbors do not doubt it either: some are glad and others are angry over the unavoidable victory of the Soviet Socialist power in Russia. We receive information as to rise in the quotation of the Russian rublc. and this indicates that abroad they believe in our strength and in our victory. The deﬁcit shown in Pam lhlrlx and Books of Real Importance THE SOCIAL REVOLUTION IN GERMANY ih Lotus liItAINA rmum rllcmiw studv of the revolution. which is ml qunll.
ulionary Sn in the purpnscs and policy of revolInS pug rs; 25c r; tul y THE CRISiS IN THE GERMAN SOCIAL DEMOCRACY Bv KARL Linnkmar u rlinmz hililllthu u ld Rum L! nmm. rith u Sulllt mouth» nltc the war. Ihis pamphlet is a splendid. de of ncialism and war.
Ll. ugrr: 35c a copy CHAPTERS FROM MY DIARY 3v LEON Tuorzxv (lvscriptiuu of events during two and a half years of the with interesting information on Sociallsts attiludc. 43 val r3: Inc u can REVOLUTIONARY SOCIALISM Ilv Lotus FRAINA This ltnuk considers the fundamental problems of Ilupcrml id Tx cvultui mary Socialism war. mod( illl Srcln mu. tlu Socialist collapse. the nation. State Capila sm. unionism and mass action, proletarian dictatorship, clx.
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5N; our budget is computed incorrectly. There are not indicated there any receipts from nationalized industries, which will surely amount to a sum of billion rubles. Furthermore, billions were assigned to the Commissaniat for Supplies as a circulating fund This sum for circulating expenditures may be considered as only a temporary deﬁcit. number of expenses, inserted in the budget for the ﬁrst half of the year, which was approved only at the end of the second half of the year, has been transferred to the budget of the second half of the year, because of the closing, on August 31, of all credits and unexpended assignments.
Thus it came about that there were expenses uotcd twice to an amount justifying the reduction of e dc; ﬁcit by a further billions. The real deﬁcit, in this manner, would be about billions. The amount of this deﬁcit is smaller than the deﬁcit for 1917, which was lived through under the reign of the Czar and under the government of Kerensky.
In November, in notes cementing on the budget, we asserted that there was no foundation for a budget pessimism. Now, with the whole world in commotion, and on the eve of a. we rld revolution, we may with greater justiﬁcation still feel conﬁdent that we shall carry through till the time of a world revolution.
The German Revolution (Continued from page which sent troops to suppress Communistic Russia and restore the bourgeoisie, is careful not to allow a revolutionary Germany to assist Russia, even morally; and Vom aerts ever the lackey of the powers that be, ﬁrst of Willlelm andnow of the Entente is terribly agitated against the proposal of Russia to send representatives to the German Congress of Workers and Soldiers Councils. Var wants, the bourgeois pres: and the government all combine to inspire the population with fear of the Entente threat, and to paint the economic situation as black as possible. They thus hope to stiﬂe the revolutionary will of the workers and it is beyond doubt that they will be successful with a considerable section of the masses, There is little doubt but that the Congress of Workers and Soldiers Councils called for December 16, will support, by a big majority, the bourgeois government of Ebert Haase. These councils are not by any means pure proletarian institutions: in the Soldiers Councils are the oﬁicers; in the Workers Councils are the Trade Union and party leaders. These men will not allow the revolution to go any further if they can prevent it.
But there are other objective, material factors that will force the workers from the bottom up. In the ﬁrst place the opposition between capital and labor the ﬁrst assault brought the proclamation of the eight hour day and the establishment of the Workers Councils in the factories. Now that the reaction is setting in the manufacturers are endeavoring to take back.
these concessions and reduce wages, while, on the other hand, the workers are demanding further reforms. Here and there clashes. in the shape of strikes, arc occuring which require extraordinary efforts on tho part of the Independent agents of the government In muciliate. This will eventually compel the government to act and force it to choose between press ing the bourgeoisie or having further sections of the masses arrayed against it. In the second place the economic Want will effect the government still more.
The misery and deprivation the war has brought has been so horrible that ti. workers will not be able to carry any further burden and if the government does not actively assist them and this means that it Inusl take from the possessors then the revolutionary spirit will receive fresh impetus among the masses.
In times of want. such as confront Germany now and in the coming years only a government which by its deeds. and its viewpoint will not be opposed to the people masses can exist. Consequently it is not to he expected that the present government of (Semiany will be successful in conﬁning the revolution to its present purely political reform character, but the attitude of the masses now is assisting the government to a great extent and is therefore sterngthening the bourgeoisie and will increase their power of resistance in the coming civil war.
Much depends on the class instincts of the coming: Congress of Workers and Soldiers Councils. if they will lay the foundation for power, the power of the workers and soldiers. then the proletariat will be well armed for the coming struggle.