Saturday, June 21, 2014

5 A.Goulevitch Czarism and revolution

helped to create a self contained and self-supporting chemical industry which would doubtless have further developed under normal conditions of peace.
  Before closing this chapter, I shall briefly mention a few branches of Russian industrial activity of secondary importance but nevertheless worth noting, such as the dressing of furs, processing of fats, perfumery, the cutting of precious stones, gold and silversmith work, the manufacture of fine china and porcelain. The articles produced by the Imperial Porcelain Factory at St. Petersburg, founded in 1746, were on a par with those of the famous factories of Copenhagen, Sevres, Meissen and Berlin.
  The remarkable advances made by Russian industry in the last 20 or 30 years preceding the First World War will not have escaped the reader. It was a period of sustained expansion and, for those of us who witnessed the last decade of this period, breathlessly exciting. Under our eyes a transformation was taking place which year by year increased the prosperity and wealth of our immense and much loved country. All of us realized that it would inevitably be brought to a temporary halt by the war, but we foresaw an even greater surge forward after the termination of hostilities. The tragic events of 1917 and the ensuing mismanagement and fanatical pursuit of doctrine by the Soviet Government all but brought Russia to economic disaster. At present intensive industrialization is the "mot d'ordre" of Moscow and much indeed has been achieved in recent years. The price paid is the ruin of agriculture and the sacrifice of millions of innocent lives.(5)
  Whether the new industries would be as efficient as their predecessors was, for a time, a matter of doubt, but the inexhaustible wealth of Russia in raw materials, the brains and skill of her scientists and technicians, were inevitably bound to place her in the forefront of the industrial world.
(1) The statistical figures presented in this chapter, dealing with industry
proper, should be linked with the quite considerable output of the "Koustari,"
or  rural  craftsmen.   Their work  was   a  Russian  speciality  and  was   mainly
pursued in the northern provinces, where the long winters condemned the
peasants to months of enforced inactivity. The "Koustar" is a peasant who
supplements his normal income from agriculture by manufacturing at home
with the help of his family, certain articles of trade easy to produce and of
general  utility.  A  reverse  definition  might  perhaps  be   even  more   correct,
as in many cases the income thus derived by far exceeded the "Koustar's"
earnings from the soil.
  Often these craftsmen would leave their homes and spend large parts of the years in the cities where they banded together into "Arteli" or small productive cooperative societies. Quite apart from these there was also in Russia a fluctuating population of semi-agricultural laborers who, for similar reasons, plied different trades according to the seasons. The very nature of this kind of work made it quite impossible to assess its true value. Our best authorities in economics placed it at 2500 or 3000 million roubles on the eve of war and estimated the number of "Koustari" permanently or semipermanently engaged in the crafts, at 15 million.
  The most important and popular rural industries were carpentering, wood carving, weaving, embroidery, the making of lace and leather work. These industries were encouraged and financially supported by the government, the Zemstvos and private individuals. There were over 250 government art schools in which the peasants were instructed and properly trained in art designing, embroidery, lace making, wood carving, etc.
  The International Exhibition of Paris in 1900 first brought the work of our rural craftsmen to the attention to the West. The genuinely artistic value of their work was much appreciated and lead to a steady export trade, particularly in carved wooden toys.
(2) The Caucasian wars are an epic of military history on both sides. Many
of our generals gained fame in those mountains, while the names of the tribal
leaders have come down to us in ballad and song. The last and greatest of
them, Shamil, united the tribes into a confederation and lead a holy war,
"Gazawat," against us for many years, until final capture and exile. My Eng
lish readers will not take it amiss if I say that much English gold was spent
to keep up the resistance of the tribes, or that they were frequently equipped
with arms manufactured in England.
(3) The distillation of alcohol had always been fairly widespread in Russia
and in some places was pursued on a relatively large scale.  The national
drink of "Vodka" is a spirit, 40% proof, brewed from potatoes, which replaces
other kinds of spirits and wines consumed abroad.
  The sale of "Vodka" was controlled by the State and was a government monopoly. It was founded on January 1st, 1895 and lasted until July 30th, 1914, when it was abolished by Imperial decree and the whole country was placed on a "dry" regime. (The sale of wines was not prohibited) This monopoly of the sales of spirit by the government had been for many years the subject of controversy and sustained criticism. M. Ed. Thery, the author of the book I have previously mentioned, made a special study of the manner in which the monopoly operated, of its effects on the health of the people and its financial aspects. After showing the revenue derived from the sale of "Vodka" (p. 63), he goes on to say . . . "the fact that sales are controlled by government agents is an important factor, as it does away with any possibility of fraud or adulteration, a point of hygiene to bear in mind." In spite of an increase in output, the actual quantity of alcohol consumed per head showed very little change, the balance being largely exported abroad. Between 1900 and 1911 these exports rose by 945%, while the increase in output amounted to 43% and consumption per capita by 14.5%. The last figures compare favorably with the 48% rise in the consumption of sugar, mentioned earlier in this chapter.
  Judging by what one hears and reads abroad it is easy to imagine the average Russian as an inveterate drunkard. It was in keeping with the usual policy of our revolutionaries to seize upon the introduction of the state monopoly as an effective weapon of propaganda. "The Czar was inebriating his people;" "drunkenness, encouraged by the State, was widespread and Russians were drinking more than anyone else in the world." In actual fact the opposite is nearer the truth. For confirmation see "The Russian Year Book" pp. 262-264, London, 1911; "The Times Russian Supplement," 1914; A. Raffalovitch, "Russia, Its Trade and Commerce," pp. 431-432, London, 1918.
  M. Thery compares individual consumption of alcohol in Russia with the amount consumed in France which was twice as great and says he would gladly see a similar monopoly introduced if it could ensure comparable results. (Ibidem, P. 64).
  A few more details about the monopoly: The role of the State was confined to that of selling agent or distributor of a uniform, perfectly rectified and triply distilled form of alcohol throughout the Empire. It was on offer to the public in the minimum number of state controlled premises, on the minimum number of days in the year and during a minimum number of hours of an average working day. From 1900 to 1908 the price of all food commodities, especially sugar, showed a steady decline. The price of spirits, of the only kind on sale in Russia, rose by 20%. Further, this price was uniform throughout the whole of the Empire and did not vary, whether spirits were bought wholesale or retail, sold over the counter in the State Monopoly shops or in private establishments. In most countries the sale of liquor is highly profitable and
yields anything from 25% to 100% to the vendor. In Russia it was the item which afforded the merchant, or saloon keeper, the smallest profit, consequently neither he nor the salaried employees of the monopoly were in any way interested in pushing or increasing the sale of "vodka."
  A powerful temperance movement, organized and directed by the Church, together with the purely commercial factors I have just mentioned, contributed to reducing drunkenness and keeping Russia well down the list of alcohol drinking nations.
  The general effects of the Monopoly are best judged from a statement made by Count Kokovtsev, Minister of Finance, in his explanatory notes to the budget of 1913. "While the State Monopoly in the sale of spirits has not eradicated drunkenness, it has directly: (a) caused the disappearance of adulterated spirits and done away with the dishonest saloon keeper who sold them; (b) put an end to the sale of spirits on credit and the practice of payment in alcohol in lieu of salary; (c) permanently closed an outlet for the produce of illicit stills and imports of contraband liquor; and lastly (d) brought an increase of revenue to the State."
  Commendable as all this may have been, the Emperor inclined toward total prohibition. Mr. Bark, the new Minister of Finance in 1914, was ordered urgently to enquire into possible means of implementing the attendant loss to the treasury. The declaration of war in July 1914 presented the Emperor with an immediate solution. By Imperial Decree, prohibition was at once introduced, not as a temporary measure, but by a "ukaz" which later would become State Law.
  One of the first acts of the leaders of the 1917 revolution was to rescind this decree and re-introduce the State Monopoly so strongly criticized by them while in exile. According to the Soviet Press of today drunkenness has become a national scourge. The new "upper classes" now drink "Vodka" by the glass where good wine was once enjoyed with discernment, while the "happy" Russian people drown their misery in drink.
(4) In 1912 a Russian car, driven over 2000 miles of snow-covered and ice
bound roads, won the Grand Prix d'Endurance in the Monte Carlo Rally. The
car was a racing model of the "Russo-Baltic Works" of Riga. It was Russian
built throughout and shod with "Provodnik" tires.  The whole run was  ac
complished  without  a  single  mechanical  breakdown   and   without   a   single
puncture.  As the car was  a two-seater racing model  and  consequently not
eligible for the "Concours d'Elegance," the driver, the late Mr. A. Nagel, a
pioneer of Russian motoring, though first to reach Monte Carlo, was debarred
from the Grand Prix.
(5) The industrial achievements  of  the  Soviets  are  afforded much prom
inence today and the impression is gained that the Soviet regime took over the
government of a country still floundering in a morass of mediaeval agriculture.
  The general outline I have drawn depicts the considerable scope and wide range of Russian pre-war industry and the statistical figures I have presented stress the growing tempo of industrialization within the last decades of Czarism. This expansion was proceeding normally and at a pace which favorably compares with the industrial development of the United States in the eighties and nineties of the last century.
  The rate of progress in Soviet Russia today differs but slightly from the days of "reactionary and feudal" Czarism, the capitalist system and private ownership, in spite of all the technical advances of modern science, the nationalization  (or expropriation) of the means of production and slave labor.
  This is confirmed by an article published in "Rousskaia Mysl," Paris, Sept. 8, 1956, by V. Tatarinov, who quotes some interesting figures from a paper on pre-revolutionary Russian Industry read by E. M. Allais to the French "Academie des Sciences Morales et Politiques." M. Allais is a mining engineer of considerable repute and reader of Political Economy in the "Ecole Superi-eure des Mines," as well as author of several works on science statistics.
  M. Allais analyzes in his paper the period from 1880 to 1913 and bases his comparative figures on production in 1880. Within this period the production of coal rose by 9.5; oil, by 23.5; general industrial power by 12.5; steel, by 16.
  The latest available official figures give the following increase in production between 1913 (the last year of normal conditions under the Czarist regime) and 1955; coal 13.5; oil 7.4; general industrial power 11.3; steel 9.4.
  The course of early Russian history was shaped to a great extent by the flow of trade between the Baltic and the Black Sea and the pursuit of commerce was held in great esteem by the people and the old noble families of Moscow. (1) A lively and active commercial intercourse was in operation long before the slow expansion of agriculture, so repeatedly arrested by the many invasions I have earlier mentioned. The whole period of greatness and decline of Kiev, as well as the rise of Moscow, was to a large extent governed by the trends of trade and commerce, while it will be remembered that the solid basis on which Peter the Great founded industry rested upon the trading capital of the old Muscovite merchant families.
  The remarkable expansion of Russian trade in the years preceding the First World War and the Revolution, consequent upon an increase in the variety and volume of production, was mentioned in the previous chapter; the origin of this expansion lies in the economic evolution then taking place in Russia and the growing prosperity of the nation. Though both these factors may be accepted as overall and inner reasons, there were others which directly contributed to the increase of our trade turnover: the decentralization of commercial credit, the setting up of local exchanges and the formation of committees and associations with a view to regulating the flow of merchandise both at home and abroad.
  The increase in bulk, from 85,246,000 tons in 1900 to 258,426,000 tons in 1912, of commercial goods annually handled inside the country, demonstrates the changes taking place in our internal and external commercial dealings. During the

same period the number of trading concerns rose from 861,000 to 1,221,000. And here I must mention the astounding development in Czarist Russia of the most democratic form of commerce, the consumer cooperative marketing societies. In 1900 there were 200; in 1913, 1589; and 20,000 on January 1, 1917, with a total membership of over seven million.
  From an economic viewpoint Russia, perhaps, is best described as an autarchy. Nevertheless, her external trade, like that of the United States, was rapidly expanding in response to increased economic activity at home. During the second half of the 19th century, the volume of foreign trade rose by 108% from an annual average of 525.3 million roubles between 1850 and 1874 to 1,092 million between 1875 and 1899. After the close of the century, the rate of acceleration was even more marked: in 1898 the total volume of Russian international trade was valued at 1,340 million roubles. By 1913 it had risen to 2,895.3 million, an increase of 116% in the brief course of fifteen years.
  Taken by itself, this is an impressive figure; it is enhanced if we consider that during this period the increase of the population amounted to 35%, thus bringing the per capita increase in foreign trade to 60%, a remarkable achievement for a country with a growing birthrate. It is, of course, understood that Russian and American per capita exports should not be compared with those of predominantly trading nations, like Belgium, the Netherlands or Britain.
  On the other hand, the dependence of Russia on her trading relations with foreign countries was limited and made her relatively immune to those fluctuations which disrupt the economic life of nations dependent for their existence on commerce with the external world.
  An important feature of Russia's foreign trade was the maintained excess of exports over imports; this favorable trading balance facilitated the payment of commitments on foreign loans and other currency obligations both by the State and private interests.
Russian External Trade Between 1899 and 1913

(Million Roubles)

  Ninety per cent of our exports went abroad over the land frontiers of the Empire. Our chief customers in order of importance were Germany, Grfeat Britain, the Netherlands, France and the United States. The advantages derived by all the countries concerned were mutual: a remunerative market for the West and a very profitable outlet for our own exports. The varied nature of these exports was detailed in the previous chapter on industry and particular attention drawn to their increase in pre-war years.
  The average value of our export trade, divided on broad lines into groups, between 1909 and 1913 is shown in the table below.

Million roubles
% in relation to total
Articles of food (bulk and processed)
Raw materials  and  semi-finished  goods
Manufactured   goods
  Before the First World War, Russia was the largest grower and exporter of cereals in the world and was justly referred to as the "Granary of Europe." She was also the main source of supply of a number of other commodities such as flax and oil, while a virtual monopoly was enjoyed by Russia in platinum, manganese and matchwood.
  From exports we now pass to imports. Special importance is attached to this section in view of the "colonial" theory regarding Russia, contradicted in Chapter IV. It is still popularly accepted abroad but, like the majority of current notions on our past, is unsound.
  The important point to consider is the nature of the goods we imported. The bulk of these goods was not, as commonly supposed, intended for consumption or direct use, but was essential to the requirements of industry and mainly consisted of ores, metals and associated manufactured articles, textiles, certain kinds of fuel, bitumen and tar. The distribution of imports under this heading was as follows:

% in relation to

total imports
Ores, metals and related

manufactured articles
Fuel, Bitumen and Tar
  There followed a category, intermediate in nature, of goods concerned with means of production, various animal products, foreign timber, pottery, etc., amounting in all to 19% of our total imports.
  Lastly, consumer goods proper, such as articles of food, clothing, stationery, etc., amounted to 18.3%.
  The whole range of imports is summed up in the following table:

% in relation to

total imports
Category 1. General  industrial  needs
Category 2. Intermediate
Category 3. Consumer goods
Total 1,220.4 100.0
  The preponderance of imports governed by the requirements of industry thus becomes apparent. Instructive information is derived from a comparison of increased imports in their respective categories between the years 1906 and 1912, given below, when the importance of category 1 is further emphasized.


Imports in
million roubles

Ores, metals, etc.
Increase Category 1, industrial

Animal products
Increase Category 2, intermediate

Articles of food
Increase Category 3, consumer goods

  The relative insignificance of the last figure, compared with the combined total of 365.7 million roubles in the first two categories, substantiates what has been said above.
  The whole structure of Russia's foreign trade, which had more in common with the American pattern than any other, was governed by and exemplified the whole system of the nation's economy. The Russia of yesterday was an agricultural country with a well developed industry, geared to the needs of a vast internal market not only capable of absorbing the entire national industrial output but also of utilizing goods manufactured or purchased abroad. In this connection two salient features of our external trade should be noted: the variety and volume of our food exports and the somewhat astonishing fact that we imported a larger amount of raw materials that we ourselves sold abroad.
  The economy of Russia constituted a homogeneous entity in which the development of agriculture was accompanied by a parallel development of industry. The combined progress of these two branches served to raise the standard of living of the rural population. Further, the purchasing power of the countryside increased in direct proportion to the growth of industry. This interdependence of agriculture and industry was strength-
ened by that typically Russian peculiarity, where a large section of the rural community derived a considerable income from work wholely unconnected with the soil.(a) There was also in pre-revolutionary Russia a striking coincidence between the formation of industrial capital and the progressive growth of our exports of an entirely agricultural nature. This is witnessed by the simultaneous improvement in the standard of living of the peasants due to industrialization and the extension of our trading relations with other countries. In future years this would have led to sustained harmony in our commercial dealings with the rest of the world, as our external trade was based on lasting and permanent foundations determined by the normal evolution of our national economy. In peaceful conditions these fundamental principles would have continued to exercise their beneficial influence and raised our trade to heights undreamed of in the past. Speculation on what might have been is profitless, but the continued and amazing expansion of the American export trade in the years following the 1914-1918 war to the present day may, to some extent, serve as a pointer to our former export potential, as well as the fact that by 1914 Russia was the sixth largest trading country in the world.
  At the present time our country is no longer a governing factor in international trade. The reason lies in the economic policy of the Soviet Government which has not only ruined agriculture in Russia but severed its connection with industry. The links connecting town and country are broken for good.
  The loss to the world is immense and is acutely felt by all nations, particularly those of Western Europe for whom the restoration of the Russian market is an urgent and vital necessity. How else can one explain the repeated and often frustrated attempts of the West to come to an understanding with the emmissaries of the Soviets?
Slowly the world is beginning to recognize that the dis-
(a) Vide Chapter IV. Note (1) "The Koustari."

appearance of the Soviet regime is the condition sine qua non of universal economic (not to mention political) stability; that this longed-for stability can only be achieved by the reintegra-tion of a peaceful Russia into the orbit of international relations. The rehabilitation of Russia's economy will require colossal investments both in capital and goods and will offer a remunerative field for commercial activity to the West. Vast resources will have to be diverted to agriculture in particular and the countryside, blockaded by the Soviets, will be wide open to the influx of imports from abroad.
  Because of her immense natural riches, Russia is still a "new" country. HumaS capital and material wealth have been insanely squandered by her present government. In the Russia of tomorrow a brilliant future lies before East and West in friendly and productive economic collaboration.
(1) Commerce was repugnant to the feudal mentality of the West. In ancient Moscow, on the contrary, some of the oldest branches of commerce and industry were handled by the great boyar families, as, for example, the trade in furs which was the particular domain of the Shuiskis. Foreigners who visited Russia in the 17th and 18th centuries were struck by the flair and aptitude for commerce of the Russians as a whole. "Everyone, high and low, is busy acquiring riches here, there and everywhere," says de Rodes in his "Reflections on Russian Commerce in 1653." Another foreigner, the Dane Haven, in 1740 was so impressed by the business acumen of the Russian peasants that he went as far as comparing them with the Jews. These observations do not tally with the repeated assertions of some modern authors about Russian incompetence in business or the disdain of the upper classes for trade.
  In the 17th cenutry, visitors from abroad were astounded by the number of shops and variety of goods to be found in Moscow. According to German sources, Amsterdam and Venice, then in their hayday, were not so wealthy as Moscow with its "Gosti," those famous Russian merchants, so honored by the Czars.
  Under the circumstances one is inclined to ask why Peter found it necessary to lecture his subjects on the advantages of trade. The reason lies in his fear lest the youthful members of his nobility become contaminated by Western views on the indignity of commerce and his desire to encourage a national trait useful in furthering his ambitious plans for industry.
  The importance of an efficient system of communications in a country like Russia need hardly be emphasized, yet we have suffered from a dearth of good roads all through our history because of the difficulty of building roads with a lasting surface, owing to the nature of the soil and the lack of stone for metalling. (1) This drawback might have been overcome by the abundant waterways, but here again nature seems to have conspired against us, for our rivers and numerous watercourses are icebound during many months of the year, even in the southern parts of the country. There remain the railways, more vital to us than to other countries, as the distances are enormous and the coasts far removed.
  As in France, the first railway in Russia was built in 1837. It was a surburban line, 16 miles long, and linked St. Petersburg to Czarskoe Selo and Pavlovsk. Initially, progress in railway building was slow and the first trunk line, linking the two capitals, St. Petersburg and Moscow, was opened in 1851, a dead straight line, in compliance with the expressly stated wish of Nicholas I. Ever since, "The Nicholas Railway" has taken pride in being the premier line in Russia and as late as 1917 was described by the American expert Stevens as one of the best built and best maintained in the world.
  The Nicholas, and subsequently all other Russian railways, were built and operated by Russian engineers. This fact is important, as recently I have come across the following lines in a French technical publication dealing with present day conditions on the Soviet railways: "Before the war (1914) most of

the railroad engineers in Russia in the administration, building and repair shops were foreigners."
  The article explains the prevailing chaos on the Soviet railways by the absence of these engineers. The above quotation is quite contrary to the truth and the initial disorganization in Russia after the 1914-1918 war and Revolution was caused by a lack of properly qualified technicians and engineers who were either massacred or who had fled the country.
  Up to the year 1857 the railways were built and operated by the State. The results were judged unsatisfactory and another policy was adopted. Recourse was had to private companies, sponsored by the Government and subsidized either by guaranteed profits or enforced subscriptions, while the State limited itself to the building of a few small lines.
  This policy of subvention, pursued with great vigor after 1867, resulted in a rapid expansion of the railway network. However, its drawbacks soon became apparent. By 1881 only 7% of the entire railway network was owned by the State; the remaining 93% were in the hands of 43 private companies, with divergent operating policies and all competing against one another. Freight and passenger tariffs were chaotic and the burden of minimum guaranteed profits was a heavy drain on the Treasury. Efficiency of construction left much to be desired.
  A remedy to these ills was sought in a new approach to the question. The State again reserved to itself a leading position in the operation and construction of railways and the provisions laid down in 1881 remained in force, with temporary modifications, up to the Revolution of 1917. It was during this period that railway construction reached its peak.
  Between 1881 and 1891 no further concessions were granted to private interests. In addition to building the majority of the new lines, the Government bought back 4300 miles owned privately and by 1890 held 29% of the network.
  A uniform tariff was introduced and a law, passed in 1899, made it illegal to impose new tariffs without prior sanction by the relevant offices of the Ministry of Finance.


  The problem of freight and passenger charges was common to all countries at the time. While it took the French and Germans some 20 years to introduce an orderly system of tariffs, the Russian railways solved their difficulties in just under five. In 1893 a tariff regulating the carriage of slow and fast freight was introduced and a year later this was followed by one for passenger traffic. Both were founded on a preferential and progressively diminishing scale. The charges then fixed, with the exception of a slight rise in passenger fares in 1913, remained unchanged up to 1917 and were the lowest in operation anywhere in the world.
  Between 1891 and 1901 the same policy of buying out the private companies was followed by the Government and a further 10,953 miles of railway lines were acquired. The State now owned 69.6% of the entire national network, including all the newly laid lines, thus leaving 30.4% in private ownership; the balance between State and privately controlled companies remaining virtually unchanged throughout the following years up to the Revolution.
  Henceforth the attention of the Government was mainly centered on the construction of the Asiatic network. (2) In European Russia several large amalgamated companies now maintained the existing private railways, scrapped obsolete and non-paying lines, constructed new ones and established a uniform and easily administered system. The six companies (a seventh was taken over by the State in 1912) were responsible for 97% of privately owned railways. They were all formed between 1891 and 1895 and were still operating in 1917.
  At the beginning of this century the railways were faced with a very difficult situation. The rapid extension of the network over European Russia was reflected by a marked economic development and resulted in a consequent increase in railway traffic which the carrying capacity of the railways could no longer meet. Between 1908 and 1914 this annual increase amounted to 6.5% in Russia while in France, Germany and the United States it was between 2.5% and 3%.


  In 1911 the Government under Count Kokovtzev brought out a five year plan for the construction of 20,000 miles of railways. This plan was never realized because of hostilities which broke out in 1914. Nevertheless, the mileage completed in two odd years of peace and during the war bears witness to the earnest intentions of the Government.
  Railways operated by the State and private companies in European and Asiatic Russia from 1844 to 1914. (The Finnish, East Chinese Railways and local lines are excluded.)

Triennial Periods
Mileage completed
Total mileage

during period
operated at end

of period
  The overall position on January 1, 1916, according to the latest statistics of the Czarist period was as follows:

State Network Miles
Private Network
Fully operational
Partly operational
Under construction
Authorized construction
Finnish Railways
East Chinese Railway
Local Lines
  After the Revolution some 6000 odd miles of railways were handed over to the countries which separated from Russia.
  During the war, from 1914 to 1917, a total of 6700 miles of new lines was completed and brought into operation. These included the famous Murmansk railway, 928 miles long, which linked Petrozavodsk with the ice-free port of the Kola Peninsula on the Arctic Ocean, the doubling both of the single track Vologda-Archangel line and the whole of the Trans-Siberian line. The building of the Murmansk railway merits special attention. It was, indeed, a remarkable feat of engineering completed in one year across marshes and wastes previously considered impassable and great was the pride of the builders when the first locomotive shrilly announced its arrival on the shores of the Arctic in 1916. The London "Times," writing on the subject called it a "gigantic task" and considered Russia's pride in a remarkable achievement fully justified.
  In 1912 the rolling stock of the Russian railways consisted of 25,505 locomotives; 29,268 passenger coaches; and 535,654 goods wagons. Only two lines, the Nicholas and the Southeastern, possessed building yards of their own. Otherwise, the entire stock, both State owned and private, was built by big private engineering works located in the large manufacturing centers.


Annual Production of Rolling Stock

Goods Wagons

and Fuel Tankers
1307   Complete production figures subsequent to 1918 are not now available, but in 1918 the Commissariat of Transport of the USSR estimated the output capacity of these works at 1402 locomotives per annum.
  A table showing the operation of Russian Railways (State and private network) in 1902 and 1912 is given below:

Number of passengers
(Millions)   per "versta"(a)
Goods (thousand poods)
per "versta"
Total Receipts
(thousand   roubles)
Receipts per "versta"
Total expenses
(thousand roubles)
Cost per "versta"

          Coefficient of
While passenger and freight charges in Russia were extremely moderate, in fact the lowest in the world, the accommodation on the trains was excellent and even luxurious on the great trunk lines. Though our network of railways was far less de-
(a) A Russian "versta" is equivalent to 3500 English feet.
  (b) Formula  establishing relation  of  costs  to  revenue.  The  Russian  co
efficient was lower than that in other countries. France, Conceded network
59.5%,  State  Retreat 85.8;   Germany  70%;   Great Britain   63%;   Austria  78%;
Belgium 70%; Italy 96%; Netherlands 70%; Switzerland 67%;  Serbia 75%; Fig
ures relate to 1913.


veloped than in Western countries and the volume of traffic per mile less heavy, one nevertheless looks back with pride at the efficiency of the system in the "old days" and pays tribute to the high degree of competence of the railway industry.
  To complete the analysis of our railways, let us look at the relation between capital expenditure and net revenue so as to establish the interest earned on the money invested.

Capital Investments
Cost of

(State and Private)


  An interesting sidelight on the importance of the net yield of the State owned railways is obtained by relating it to the annual charges of the public debt. The capital value of the State Railways in 1912 amounted to 5,389 million roubles, though its actual financial value, capitalized at the rates paid by the State on interest and amortization of the public debt, amounted to 7,380.6 million roubles, while in the same year the entire public debt totalled 8,857 million roubles. In 1912 the net yield of the State owned railways amounted to 321.5 million roubles; the charges on interest and amortization of the public debt included in the budget to 384.5 million roubles. Thus 82.9% of the Russian public debt were covered by the net yield of the State owned railways.
  During the war the whole operational system of our railways was subjected to the severest possible strain and passed the test with flying colors. The mobilization of our armies went through in perfect time and normal traffic was barely interrupted, while in the next two or three years a marked increase in civilian and freight services was registered. The German economist Seraphim, in a fundamental survey of Soviet Railway Administration  ("Eisenbahnwesen in Soviet Russland")  rec-
ognizes the efficiency of the pre-revolutionary system and comments on the way the Russian railways were able efficiently to meet and surmount all the many difficulties occasioned by the war, proving a high standard of organization and quality of maintenance. If any further proof were required one has only to study the brilliant manner in which the railways handled the appalling chaos which resulted from the desertion of the front by entire armies bent on reaching their homes in time to divide the spoils of wholesale robbery, euphemistically called "egalitarianism."
  Soviet management was apparently the only instrument capable of wrecking a system so well and truly laid. We are told that matters are now improving and earnestly hope this is so. One is, however, entitled to certain misgivings when one reads the most recent descriptions of journeys in Soviet Russia, generally couched in lyrical terms, where travel on Soviet railways is presented as a form of slow torture in primitive conditions and a total lack of elementary comfort. Further, one is, I think, entitled to ask why, given previous figures, the railways should now operate at a loss, the permanent way be incapable of really fast traffic or the number of accidents be so unreasonably high, when, in proportion to the volume of traffic and length of lines, Russia had at one time the lowest accident rate in the world. The answer to these questions lies, perhaps, in the concluding sentences of Mr. Seraphim's book: "An end to the crisis of the Soviet Railways is as improbable as a truly healthy and sane system of Soviet economy or fiscal policy."
  As far back as 1926 I drew attention to the Soviet Government's mismanagement of its railways in an article published by "The Wall Street Journal" on June 15th. I based my figures on Soviet statistics and deplored the acknowledged 50% increase in the rate of accidents. I further estimated the probable cost of restoring the system to any degree of efficiency at something like 500 million dollars and added that this amount did not take into account the replacement of the existing rolling stock,

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