part of all the legislation that goes through the Congressional mill. But the veterans were almost unanimous in favoring immigration exclusion, a favorite policy of the Legion, — and were practically unanimous in the compromise Johnson Immigration bill which became law. The veterans were a unit in urging the enactment of the bill creating the Veterans Bureau from an accumulation of small welfarebureaus within three Federal departments and placing it outside the influence of any cabinet officer. They unanimously supported a series of eighty-one bills this year to remedy apparent defects of the Veterans Bureau. They lent every possible assistance to the Senate investigation of the Veterans Bureau in 1923. They are practically unanimous in favor of the universal draft. There was some defection within their ranks when the Congressional minority attempted to amend the bonus bill this year to provide cash payments, but none of the veterans took the amendment to the floor, as did Senator Copeland, who is not a veteran.

On the outside, but of real assistance to those inside, have been the legislative lobbies maintained by the veteran societies. John Thomas Taylor, the Legion's principal representative at Washington, won recognition for his handling of the bonus campaign; yet he has handled other veteran drives on Congress with even more ready success. He knows how to capitalize the balance of power held by the veter

ans who are Congressmen. Taylor learned politics as secretary to Boies Penrose.

In time the demands of the veterans upon Congress will become more and more emphatic and the veterans' organizations will be larger and more influential. If the Legion follows the cycle of the Grand Army of the Republic, it should grow from the present 700,000 members to 2,000,000. Having acquired a political following by serving their late comrades, those veterans who lean toward politics will never lack influence. The highest offices in the land await them.

When the bonus fight was at its height, the American Legion caused approximately a million letters and telegrams to descend upon Congress in a period of about two weeks, asking that the bill be passed. Imagine the effect of the correspondence that would come from an organization of two millions!

And imagine the effect of the political wrath of such an organization! Today, the veteran wrath is feared. Say what you will, that is why the bonus was passed over the President's veto. The veteran vote is negative, not positive. Because the veto was unsuccessful and the bonus passed, the soldier vote may never be directed against President Coolidge. Victors hold few grudges. But if the bonus had failed there is no doubt that the soldier vote would leave its mark on the November results, as assuredly it will do many Novembers to come.

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PRESIDENT MASARYK of Czechoslovakia once characterized Bolshevism as a political and military success, but an economic failure. This seems a premature judgment to pass on a social system that has not yet run its historical course; and a Russian Communist might retort that Masaryk's Czechish legionaries, together with the other forces which took part in the intervention, must bear a considerable share of responsibility for Russia's present shattered economic condition.

However, Masaryk's remark contained a kernel of suggestive truth. Acting Premier Kamenev declared at the last Soviet Congress that the Soviet Government now has no political problems, only economic ones, and this observation really sums up the present situation in Russia.

Politically the Soviet Government now appears stable almost to the point of stagnation. There are no 'politics,' in the ordinary sense of the word, in Russia to-day. There are no opposition political parties; no hard-fought election campaigns; no anti-Government newspapers. Behind the transparent façade of the Soviet Constitution, the dictatorship of the Communist Party, an organization which now numbers approximately 600,000 members, functions with clockwork regularity.

This dictatorship passed through two severe tests last winter and emerged from both apparently unshaken. There was first the internal Party contro

versy, in which Trotzky assumed a position in opposition to that of the majority of the members of the Political Bureau of the Central Committee, the highest executive authority in the Party. This controversy ended without any open break; Trotzky withdrew from public activity for a time and has now returned, apparently ready to cooperate with the Central Committee on the same terms as before. The second test was the death of Lenin. Here again the strength of the Party organization made itself felt. The machinery of government continued to function without a sign of creaking. Public order remained undisturbed.

The unbroken political calm in Russia can be ascribed in part to such positive factors as the closely knit, well-disciplined organization of the Communist Party and to its dictatorial control of all such sources of power as the army and the police, the legislative bodies and the courts, the schools and the newspapers. It is also due to certain negative factors. The many Russians who are opposed to Communist rule are helpless in their lack of any common programme or organization. The old social classes about which the anti-Bolshevist movements of Kolchak, Denikin and Wrangel centred, the Tsarist landlords and military and civil officials, have been smashed by the Civil War and the social upheaval in village and city. New self-conscious classes with political

and economic interests in opposition to the policies of the Soviet Government have not had time to develop, although the new economic policy has created a basis for such classes both in the country districts and in the towns. However, for the time being, the Soviet Government has easy sailing, so far as the matter of preserving its political domination is concerned.

Economically, on the other hand, the situation is quite different. It is no accident that most of the space in the Russian daily newspapers is given over to discussion of economic problems. Under any conditions the material reconstruction of Russia, after years of steady deterioration, would present colossal difficulties. But the usual difficulties are complicated and enhanced by the fact that the Soviet Government is attempting to apply, in a peasant country with a shattered industrial system, Marxian economic theories which are based on the assumption of a high degree of mechanization both in industry and in agriculture.

II

Broadly speaking, the Soviet Government is now faced with two main reconstruction problems. There is first the problem which confronts every government, especially every dictatorship, the problem of securing tolerable living conditions for the masses. Then there is the second problem, peculiar to Russia, of directing the country's revival along State Socialist lines.

Judged by almost any statistical test Russia has experienced a notable material revival during the last three years. Industrial production has risen in volume from ten or fifteen per cent of the pre-war figure, the low level which it touched during the worst years of civil war and blockade, to approximately thirty-six per cent at

the present time. Among the more important industries oil and textiles have led in this recovery. Russia's export trade, which disappeared entirely during the years of blockade, rose in value from approximately $40,000,000 for the year ending October 1, 1922, to $100,000,000 for the following year. This year the export programme of the Commissariat for Foreign Trade anticipates a volume of exports to the value of more than $200,000,000. The deficit in the State budget has steadily diminished, and in February the Government was able to stabilize the currency, although this measure still demands the greatest vigilance and economy in order to ward off the danger of a new inflation.

The daily life of the population has also improved, as compared with the conditions of three or four years ago. People are gradually getting more food and more clothing. The cities are no longer half starved. The famine conditions which prevailed in the Volga Valley in the winter of 1921-1922 and, to a much smaller extent, in the southern Ukraine in the winter of 1922-1923, have been overcome. The fearful cholera and typhus epidemics of the period of civil war and famine have ceased.

One should not exaggerate the tempo of Russia's recovery. The economic situation still presents many unfavorable aspects. As a result of several factors, loss of livestock through war and famine, high taxes and disproportionately high prices for city products, the material condition of the great majority of the peasants is still very bad. The heavy industries, such as mining and metallurgy, lag behind the general pace of industrial recovery; and it seems doubtful whether they can be restored to anything like pre-war productivity without the expenditure of hundreds of millions of dollars for

reconstruction purposes. The impoverished Russian State treasury is, of course, altogether unable to furnish such sums, and no large-scale agreements have been made with foreign capital. During the last eighteen months there has been a perceptible, steady growth of unemployment, due to several causes: the reduction in the number of workers employed in various Government institutions, the demobilization of the former huge Red Army, the influx of peasants from the povertystricken villages into the cities. This influx has proceeded faster than the reviving industries were able to take on new workers, and has contributed considerably to the growth of unemployment. The total number of unemployed is now estimated in round numbers at about a million.

Still the favorable symptoms in Russia's material development generally outweigh the negative factors. Starting from an almost incredibly low level, the country has been going through a slow and painful, but steady, process of recovery, uninterrupted by any such catastrophic setback as Germany experienced in connection with the Occupation of the Ruhr.

The problem of advancing Russia's material reconstruction, difficult as it is, has probably given the Soviet Government much less concern than the problem of guiding this reconstruction along State Socialist lines. The struggle between State Socialism and private Capitalism, a struggle that is constantly assuming new forms, is perhaps the most vital and absorbing manifestation in Russian economic life at the present time.

Blockade, intervention, and civil war pushed the Soviet Government into adopting a programme of thoroughgoing Communism, which involved the nationalization of all industry, the forbidding of all private trade, and the

industrial conscription of all citizens. Much of this was doubtless inevitable during the Civil War: for it was essential, from the standpoint of the Government, to get food for the cities and the army; and it was impossible, in view of the acute shortage of fuel and raw materials and the concentration of most of the factories upon military production, to turn out enough manufactured goods to give the peasants in exchange for their food. However, this complete Communism proved utterly impracticable as a system of production in time of peace; and in the spring of 1921 the Soviet Government, under the pressure of peasant revolts against the requisitions, desperate food conditions in the cities, and the general economic breakdown of the country, went over to the so-called New Economic Policy, or 'Nep.'

The most important feature of the Nep was the substitution of a fixed tax for the previous requisitioning of the peasants' grain, and the legalization of private trade within Russia. This was accompanied by a number of less significant changes, such as the restoration of a monetary system, the granting of a larger measure of autonomy to the coöperatives and the reorganization of the State industries along lines which imposed greater responsibilities and authorized a larger degree of initiative on the part of their managers.

The Soviet Government realized that the reintroduction of private trade would pave the way for the rise of a newly enriched bourgeois class and eliminate the material equality which had prevailed, on paper at least, during the period when the city population was rationed as to food and clothing and the peasant was allowed to keep only as much grain as he needed for his own use. With a view to preventing the private capitalism which was inevitably bound up with the New

Economic Policy from assuming a commanding position and thereby bringing about a complete economic counter-revolution which would certainly entail political consequences, the Soviet Government marked out a number of economic key-positions which should, under no circumstances, be surrendered into private hands. These key-positions, or economic bases of Soviet power, have been described several times: by Trotzky, for instance, at the Communist Party Congress in April, 1923, and, more recently, by Rakovsky in his opening speech at the London Conference. It is well to bear them in mind, for it is by the maintenance or surrender of these key-positions that an outside observer can best judge the success or failure of the State Socialist reconstruction programme.

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The first of these key-positions is State control and operation of transport and essential industries. This is designed to prevent the successful merchant or speculator from investing his capital in industry and getting a grip on the processes of Russia's basic production. The second key-position is State monopoly of foreign trade. This institution, from the standpoint of the Government, has several advantages. By insuring a favorable trade balance it helps the Finance Commissariat in its difficult struggle to stabilize the currency. By creating a centralized apparatus for carrying on commercial relations with other countries it enables the State to direct Russia's exports and imports along the lines which are believed to be most advantageous for the country's development. Finally the State monopoly acts as a barrier between the Russian private merchant and the foreign firms with which he might otherwise open up

connections. This deprives the new capitalist class in Russia of another possible source of added wealth and economic power.

A third key-position is the Soviet Land Law. This law is based upon the principle that use is the only legitimate title to property in land. The village land allotments are based upon the number of workers in each peasant family; and, while the leasing of land for productive purposes is permitted over limited periods, no one is legally permitted to acquire anything in the nature of permanent title in land which he does not propose to till himself. This law is designed to prevent the rise of a class of wealthy peasants upon the ruins of the old landlord system. It should also operate as an effective obstacle to the buying up of land from impoverished peasants by the newly enriched classes in the cities.

Besides holding these most important economic key-positions the Government controls Russia's banking system and maintains State and cooperative stores in competition with those which have been opened by private individuals. One might think that under such conditions private capitalism had little opportunity to develop, especially as the Government does not hesitate to banish or imprison, with scant legal formalities, any merchant or speculator whose activities it considers obnoxious. But there are other factors in the case that modify the effects of the Soviet Government's theoretical programme and help to explain the rapid development certain forms of speculative capitalism.

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A régime of State Socialism, in order to function effectively, must have a trained and reliable economic. Civil Service staff, consisting of engineers, production managers, accountants, technical and financial experts, and others. The Communists scarcely had