RUSSIAN ECONOMICS

Dominion, Volume 30, Issue 300, 15 September 1937, Page 13

RUSSIAN ECONOMICS

Industry Controlled By

the State

ROTARY CLUB ADDRESS A striking feature of the Russian Revolution was that no forethought or planning was given to the economic results of the revolution, pointed out Colonel 0. H. Weston in an address on the Russian economic system given to the members of the Wellington Rotary Club yes tcrtl tty • The first revolution among the Russian people took place in 1905, said Colonel Weston, but it was suppressed, and it was not until March, 1917, that another, though not wholly successful, attempt was made by the Russians to obtain their freedom. A third revolution took place in October of that year, and it was by this revolution that control of the country was finally obtained. Having achieved control of Russia, the people did not know what to do, and for four years after 1917 the Russians passed through a period of deep tribulation. During these years private ownership was still permitted, but the State decided against its continuance, and it was immediately put down. The present position of Russia was that everything was owned by the State with the exception of money and the personal belongings of the people. The only thing a Russian was able to do with his savings was to buy personal things, put the money in a State savings bank or buy State bonds. There were still a few farms in Russia under private ownership, but most of the farming in the country was carried on by the State or by a system of collective farming. These collective farms were carried on by a committee, who portioned out the work. No mail was allowed to lend money; the only money-lender in the country was 'the State. Russia was also practically a closed country for imports, Colonel Weston said. What imports there were were of no importance, and the country could be considered entirely independent of other nations.

The State offered every encouragement to the people to use the State bank. There was an 8 per cent, return on money invested, and investors were also freed of the inheritance tax which was usually about 100 per cent. This State banking system was the only system which could be compared at all with the New Zealand banking systems.

All the other banks in Russia were more like the New Zealand Treasury Department. Their duty was to see that money placed at their disposal was S'pent in the correct way. It could be considered as the accountancy branch of a big business; it played the part of a checking institution. All the money received by the State came either from taxation—a remarkably small drain on the people—a turnover tax, appreciation on State loans, the printing press and the State savings bank.

“There is no such thing as equality of wages,” said Colonel Weston, in pointing out that the Russians believed in giving money commensurate with the work performed. Piecework was encouraged, but this tended to lower the standard of Russian workmanship. The internal price level was a matter of great concern in Russia to-day. The State was against any increase in wages because of the increased rise in costs that would result. There had been a rise in the cost of goods, however, without a rise in wages and this had meant that the people had had to do without many things. In spite of this, however, there was a great credit due to those controlling Russia to-day. They had set themselves a tremendous task and, in spite of the poor instruments with which they had had to work, they had achieved a partial success. The character of the people was against success, but the State was attempting to improve the character of the people by propaganda. “Russia is a country of contrasts,” said Colonel Weston. “The people have very good intentions, but don’t seem able to carry them out. The system of the State has not been fairly tested owing to the unsuitability of the people.” There were many other things also in the way of success. Colonel Weston was thanked for his lecture.