Everybody had lightheartedly ignored the problem, but now everybody woke up to it, some because they were officially concerned, others looking for profit, and yet others out of a sense of civic duty. Not a single item of foodstuff escaped public scrutiny, and the government was swift to intervene: this was the year in which the Russian army found itself without shells and the public began to wonder whether “that government” would also reduce it to hunger. It was indeed strange that, although exports were suspended and production had increased, prices for some reason had begun to rise.
A new term now appeared for the first time in Russia—"food procurement.” The problem arose so suddenly and so alarmingly that there was no time to consider whether to let it work itself out or to draw up a general plan—and if so, who were the best people to do that? Those who had been buying foodstuffs for decades—brokers, wholesalers, merchants, the zemstvos, cooperatives—were now ousted by the “plenipotentiaries” who descended on the countryside like a plague of locusts. The Ministry of Agriculture, which previously had always occupied itself only with land use and amelioration, was now required, without extra staff or funds, to procure foodstuffs. It hurriedly dispatched unqualified people to buy up farm produce, while the army authorities, and even individual units, also lost no time in sending out procurement agents and commission agents of their own. With government agencies and public organizations zealously competing, many ad hoc committees, loosely supervised by “special plenipotentiaries,” were soon operating.
The situation became so alarming that as early as 2 March 1915 a law was enacted authorizing local officials to prohibit exports from or even requisitioning within their districts. Governors invested with full powers were not slow to take advantage of this authorization. They girded their provinces with checkpoints and prohibitions, and stemmed the flow of grain and foodstuffs generally to other areas. So that if, say, the cooperatives of Shuya had previously been quick enough off the mark to buy grain and send it to Kineshma to be ground, nothing could now be brought out of Kineshma and Shuya could not get its own grain back. In a matter of months the restrictive laws destroyed the natural connections between producers and consumers which had existed for many years, and the work of a hundred-thousand-strong network of grain merchants, large and small, with a lifetime of experience, some of them carrying on an inherited business. The plenipotentiaries were given the right to spy on the grain dealers’ movements, threaten them with requisitioning, reduce their prices, or simply close down their business. Honest trade was crippled and disappeared from the market, ousted by speculators prepared to flout restrictions and carry goods through roadblocks, resorting if necessary to bribery.
As a result, food prices rose rapidly. By the beginning of 1916 they had doubled all over the country. The public convened conferences to discuss the fight against price inflation, while the government set up committees to combat it. Every provincial and every town governor fought against it to the best of his ability within the limits of his jurisdiction. The hyperactive Minister of the Interior, Khvostov (the nephew), devised a measure that would become only too popular in the years ahead—"relieving congested railway junctions” by rounding up black marketeers.
The problem confronting Russia loomed so large that the regime balked at it and, instead of bypassing the distrustful public, in the summer of 1915 invited its most farseeing and best-educated representatives to take part in a Special Conference on Food Supplies, presided over by the Minister of Agriculture. This new body naturally reinforced itself with its own Price Inflation Commission, its own provincial and district committees, and its own plenipotentiaries (by now plenipotentiaries in chief) for particular products—sugar, butter, leather … Thus, in all the big cities—Kiev, Kharkov, Samara, Saratov, Nizhny—the food supply passed into the hands of Progressists.
The Special Conference could and should have looked into other possibilities. They might have noted that in some provinces—Saratov and Voronezh, for instance—much land belonging to the Peasant Land Bank was lying idle, and turned it over to homeless and jobless refugees as temporary settlers. They could have directed their efforts to Volynia, by then recovered from the enemy but still not rehabilitated after the ravages of war, because the Ministry of Agriculture refused to provide funds, or to the lands previously owned by Germans resident in Russia, which had ceased to be productive as soon as they were confiscated—these too could have been handed over to the Peasant Land Bank, or to the zemstvos, or to the war-wounded, and put to work again.
But no, working along these lines was too slow to appeal to the Special Conference, in which not a single ministerial decision was taken without approval of the lay members. These representatives of the liberty-loving Russian public, brought up to think mainly in terms of class and economic warfare, had been given an inspiring opportunity to defend the interests of the patriotic urban population against the greed of the benighted “agrarians”—a term which had come from the West, but was readily adopted by the Russian intelligentsia: agrarians were those in possession of the land, meaning in the first place the gentry landowners, but for want of anywhere else to put them, the peasants, with four-fifths of the land under cultivation, had to be included in this category. The agrarians could be curbed, and Russia saved, only by fixed prices. The landowners must not profit from rising grain prices, even it this meant stifling the peasants.
Who first suggested price fixing? The government and the politically conscious public were rival claimants to the honor, but whoever it was could point to the example of Germany, which had begun to fix prices a year earlier. It might be thought that there was no need for fixed prices in a country like Russia, where food was abundant and the producers would themselves bring prices down to undercut each other. But the Special Conference, the political activists among the public, and the lazy government plenipotentiaries began loudly demanding fixed prices, and in 1915 Krivoshein, then Minister of Agriculture, was reluctantly compelled to introduce them—for oats to begin with, then for other cereals. Prices, however, were fixed only for government transactions—the purchase of supplies for the army—somewhat above current market prices, and at just the right time, toward the end of the harvest, when the crop was, in accordance with age-old custom, already on its way to market. Private traders could maintain cereals at less than the fixed prices, and the plenipotentiaries did not try to put a stop to it, enjoying as they did lower prices themselves. The army was adequately supplied, and the free market was able to obtain all the grain it needed, transport it to its own mills, grind it, and satisfy the whole of northern and central Russia. The country got through the winter of 1915–16 without a food shortage.
Throughout 1916, however, prices rose steadily and the purchasing power of the ruble was halved between January and August. The “public” bestirred itself, and resolved that grain prices must remain fixed whatever happened; the enrichment of the agrarians and the impoverishment of the towns must be blocked.
So as early as the spring of 1916 heated and confused arguments broke out in the Duma, in the press, and everywhere else, about the level at which grain prices should be fixed for the coming year, and how to prevent them from rising. Answering these questions required the widest possible consultation. Zemstvo statisticians interrogated producers and analyzed production costs, while gatherings of landowners and cultivators at the district and provincial level produced their own estimates. Conferences of urban activists—officials and ordinary citizens—arrived at figures much lower than those produced in rural areas. The independent (liberal and financial) press publicized this disparity, inveighing against the prodigious appetites of the agrarians. Agrarians were simply greedy! Landowners were self-centered! These were the charges leveled against them by left-wing (in other words by all) urban activists. They were out to grab all they could, to batten on the people’s sufferings. They were incapable of subordinating proprietorial interests to those of the state.
The Progressive Bloc’s main thinker
s and orators in the Special Conference on Food Supplies were Voronkov and Groman. Voronkov, adhering to his class principles, opined that the peasants would gain by selling more cheaply and that only the landlords wanted higher prices. If fixed prices were raised, how would the peasants in non-grain-growing areas, who had to buy from elsewhere, manage? Only concern for the peasants dictated his demand for the lowest grain prices—at the level set in Poltava province—throughout Russia. The like-minded Groman, a liberal academic economist who had nonetheless done a great deal of damage when working for the Penza provincial zemstvo, found different theoretical arguments to support the same conclusion. Since the purchasing power of money had declined, the peasant would not be seduced by high prices. He would be able to satisfy all his needs by selling two or three poods. (There were no taverns now, so he wouldn’t sell grain to buy vodka.) He would not need to take grain to market, and might well stop sowing. Whereas low fixed prices would create want in the countryside, and the towns would get enough bread as a result. (A great future lay ahead of Groman. He was to be Zinoviev’s “supply dictator” and would concoct the First Five-Year Plan for the Bolsheviks. That, however, was not a great personal success for him—it landed him in jail.)
The Voronkov-Groman line was supported by representatives of commerce and industry (themselves bread eaters and nongrowers) and by the urban middle class choir in unison.
The chorus muffled and drowned out the voices—so few and far between in the Duma and so hateful to the public ear—of landowners and peasants protesting that fixed prices were a means of forcibly confiscating grain, that once you set foot on that path you would never leave it. They pointed out that while the ruble had fallen to half its previous value the price of grain had risen only by a quarter or a third: in real terms grain had become cheaper, not dearer. (Ah, but we townsfolk still have to dig deeper into our pockets!) Low fixed prices would affect the peasants just as much as the landowners, and were equally unfair to both groups. If an oak provides acorns you shouldn’t ask for its roots as well! The pursuit of cheapness by fixing prices at the Poltava level for Russia as a whole would lead to the ruin of agriculture, or to the disappearance of grain from the market. (Is that a threat? Do you mean that it will disappear? Or that you won’t surrender it? If that’s it, say so! Anyway, the peasants will readily surrender theirs—the market will be flooded with it!)
Prices must be fixed at a level such that they will readily market their grain, since to devise artificial, let alone forcible measures for extracting grain from the 18 million holdings in which it is located is too difficult a task and perhaps beyond our capabilities.
Landowners sought to disguise their “greed” with all sorts of petty special pleas that prices should take into account the rising cost of transport, that it was absurd for unknowledgeable townsmen to slap unreasonable prices on seed grain, for instance, of which you got half a pood to the pood; that a local crop failure, as in Kursk province, automatically doubled production costs—and how could fixed prices compensate for this? Not just prohibitions but measures to strengthen the rural producers were needed to stabilize production, bearing in mind that 11 million workers had been taken from rural Russia into the army, and that it had been given only 600,000 prisoners of war in return, yet was required to produce the same harvest as before and at unchanged prices.
The rural population’s defenders (meaning the right) said:
Russia is made strong not by a poverty-stricken but by a rich and efficient peasantry. How they dread overpaying the peasant! How they dread pouring into the reservoir which they are forever draining!
In educated Russia it had, of course, been the case for half a century past that defense of the rural economy meant exclusively defense of the peasantry. And that was now the tenor of speeches made in the Duma and the Special Conference by landowner deputies. Apart from public statements there was, of course, clandestine resistance. The whole of 1916 was abuzz with discussion of fixed grain prices (but prices refused to settle down). Naumov, the Minister of Agriculture, who favored them, was supported by the Bloc, but was dismissed in June, and Count Bobrinsky, who succeeded him after an interval, was against them, and in no hurry to act.
The argument was not just about the principle, and the level, of fixed prices but also about how widely they should be applied. They had originated in 1915 only for army procurements. For some time afterward other transactions were unaffected and the old disincentive system remained in being. Anyone who could conceal his grain from the plenipotentiaries, from requisition orders, and from provincial boundary patrols, and so avoid selling at fixed prices, could bide his time and sell his grain quite legally at higher free-market prices.
The insufferable agrarians took the argument still further. Why was only grain under discussion? Why should prices be fixed only on grain? In Germany, fixed grain prices were low, but then so were the fixed prices for all manufactured goods. The village could buy as cheaply as it sold. In America grain was even dearer than it was in Russia, but manufactured goods, on the contrary, were cheaper. Whereas in Russia kerosene, iron, and agricultural implements now cost ten to fifteen times their prewar prices. That was why the Russian village felt as if the town was snatching the food out of its mouth. The agrarians had the nerve to point out that their entrepreneurial profit never exceeded 3 percent. While the incomes of industrialists (for instance, that of Konovalov, one of the most prominent members of the Progressive Bloc) had soared out of control during the war, reaching a 200–300 percent return on basic capital, or in some cases 500 or even 1,000 percent. Where, one might ask, could such profits have come from, when the cost of raw materials and labor had risen? Only from robbing the consumer. There was no other conceivable source. Oil companies, if they wished, could hold up production in anticipation of a rise in oil prices, undeterred by the fact that mills were brought to a standstill. While Russian banks, pawnshops, and joint-stock companies, unlike their German counterparts, could keep goods of any sort whatsoever hidden in their repositories until a rise in prices made it profitable to sell. In short, price control should apply to industrial goods as well as to agricultural produce. If profits were to be limited, why should banks be an exception?
The main orators of the Progressive Bloc turned a blind eye to the doings of industrialists, bankers, joint-stock companies. The industrialists were lashed by the Social Democrats and upbraided by the rightists, but never by the liberal center and its leading economists.
So the problem grew and grew, until it affected every aspect of life on the home front. To Russian minds it was difficult, and frightening, to imagine their country tied hand and foot like Germany, but now that the country seemed to be suffering from excessively lax rather than too tight controls, it found itself pushed by events in this direction. A concept previously strange to Russia began to creep in—that of dictatorship. The parliamentary democracies of England and France were ahead of us and already introducing it, but here even our rightists objected that “attempts to regiment a country like Russia are futile,” while the Progressive Bloc stood out against extralegal coercion of a free society. In July 1916 the Chief of the General Staff, General Alekseev, presented the Emperor with a plan to establish a “civil dictatorship,” to which the ministries and the military alike would be subordinate. The defense industries would be militarized, and so free from strikes, while workers’ families would be guaranteed soldiers’ rations at low prices, and so released from the daily struggle to obtain food. The freedom-loving Russian factory owners, supported by the Kadet and socialist elements of the public, indignantly repudiated the intrusion of military high-handedness into industrial matters. The Emperor was in any case incapable of taking any firm and wholehearted decision. He wavered a while and then set up a few ineffective interdepartmental committees.
While all these arguments were going on, as month followed month in 1916, fixed prices for cereals and only for cereals struck deep roots in Russian life on the home front. The military,
the civil authorities, and the urban public all agreed that they were essential. Their scope widened from month to month: purchases at fixed prices could be made by the plenipotentiaries of arms factories, those of the two capitals and other major cities, and suddenly the dual price systems became intolerable. Congresses of plenipotentiaries, Duma deputies, people active in local and municipal government demanded that the absurdity of free trade should be banned completely, and even the rightists saw no other solution, now that free trade had in any case been fatally disrupted.
The introduction of fixed prices in 1916 went like this. All Russia—literate or illiterate—knew that prices were to be fixed, but their level was a matter of dispute. It should have been announced early in the summer, as grain procurement begins in the south at the end of June and gradually moves northward. But the whole summer was spent in argument. The prices were finally announced in September (at the insistence of the consumer members of the Special Conference they were quite moderate), but right from the start no one had any faith in them. Battle was joined: the town side claimed that a ruble and a half for a pood of rye was inordinately high, the landowners insisted that it was unfairly low. Since the newspapers hinted that three ministers thought the prices too low, rural Russia was not at all sure that the argument was over and that it could not expect higher prices. The landowners’ grain was coming in because they had no way of interrupting the traffic, but supplies from the peasants were suddenly at a standstill. Before prices were fixed millers could replenish their stocks at local markets and feed the population. But as soon as the prices were announced the peasants cursed and turned their carts homeward.
November 1916 Page 117