FINAL REMARKS ON THE REPORT REGARDING CONCESSIONS
Comrades! From the very outset, the question was raised as to whether our differences concerning concessions were truly substantial—and, among other things, Comrade Shlyapnikov expressed a desire for a more systematic review of each individual agreement. I fear that this is simply not feasible, given purely technical constraints. Take, for example, the peace treaties with individual powers: after initial directives had been formulated with extraordinary detail, we soon adopted a tacit understanding regarding a standard model of peace treaty with bourgeois states, while the vast majority of specific details were left to the representatives entrusted with the task of signing the agreements. And it is highly likely that the great majority of these members of the Sovnarkom and the Central Committee remain entirely unaware of those minutiae. The same holds true here: what concerned us was a matter of principle—and we perceived a real risk that disagreements might arise. For this reason, the Party Congress felt compelled to intervene; and it was precisely for this reason that this gathering—limited exclusively to Party members—was convened as a forum for mutual enlightenment. We have read to you what the Sovnarkom has decided.
The decision adopted by the Sovnarkom was made in direct opposition to the proposal put forward by two highly distinguished professional experts.74 So what other means is there for informing the majority of members of the Communist faction—other than through a gathering such as this one? It turns out that the actual degree of disagreement was far less than we had anticipated. This is a source of great satisfaction for us.

MEETING OF THE COMMUNIST FRACTION OF THE VTsIK is most desirable. No official record of this meeting will be kept, nor do we intend to publish its proceedings. Our goal has been achieved.
In informing you of the Sovnarkom’s decision, we are also clarifying how we implemented the Party Congress’s resolution. The remaining differences are no greater than those that naturally arise in the course of day‑to‑day work on various issues—and which are resolved through simple voting, without ever becoming an obstacle to productive activity. Subordination to the majority is then not merely a formal requirement, but one that does not impede further progress. It seems to me that we have succeeded in achieving a result whereby no serious disagreements have emerged, and any minor differences will be resolved as the work itself unfolds.
Comrade Ryazanov, by virtue of his particular temperament, sought to link these disagreements with the workers’ opposition. He deliberately chose a phrasing designed to provoke some reaction—but he failed in this attempt, and none of the speakers allowed themselves to be drawn into that line of argument.
One comrade wrote in a note that we are here concluding a second Treaty of Brest-Litovsk. While the first proved successful, he doubts the wisdom of the second. To some extent, this is correct—but the actual treaty represents a middle ground in economic terms, situated between the Treaty of Brest-Litovsk and any agreement with a bourgeois power. We have already signed several such treaties, including a trade agreement with England. The concession agreement will occupy a position somewhere between the Treaty of Brest-Litovsk and similar treaties with bourgeois states.
Then Comrade Ryazanov made a perfectly valid observation, one that I would like to emphasize from the very beginning. He said: if we wish to enter into concessions, it is not in order to improve the lot of the workers, but rather to raise the productive forces. Absolutely correct! We certainly do not renounce our commitment to improving the conditions of the working class. I have a draft agreement prepared by officials of the Sovnarkhoz, in collaboration with the Swedish bearing company “SKF”75 (reads).

This agreement contains no explicit obligations to improve the workers’ conditions. True, the agreement is structured in such a way that the Russian government undertakes to provide workers with all their essential needs—and should it fail to fulfill this obligation, the capitalists are granted the right to import laborers from abroad. As for whether the Russian government can actually deliver on all that it has pledged to the workers under the plan, I believe neither we, nor the Sovnarkhoz, nor the Swedes can harbor any illusions about that. But in any case, Comrade Ryazanov is entirely correct: for at the heart of concessions lies not the improvement of workers’ conditions, but the enhancement of productive forces—and a deal in which we make significant sacrifices in order to increase the volume of output. But what, exactly, are these sacrifices? Some have accused me of either exaggerating or downplaying the costs involved. Comrade Ryazanov, in particular, tried to make light of this issue. I did not downplay these sacrifices—but I did point out that we might well be called upon to grant capitalists not just hundreds, but even thousands of percent in profits. And therein lies the crux of the matter!
If, as I calculated based on expert assessments, we retain 30–40% of the oil—for instance—while the capitalist, out of every 100 million poods of oil he produces, takes 50–60 million poods for himself and, having secured transportation, sells them at a profit—perhaps as high as 1,000%, or even more—then the picture becomes clear. When I attempted to clarify the terms of Krasin’s agreement with him, drawing on his preliminary conversations with businessmen, with the “sharks” of the trade, I asked: “Can we really imagine a type of agreement in which we stipulate a fixed percentage of profits for the capitalist—say, up to 80%?” He replied: “It’s not a question of profit margins, because these bandits are now making not 80%, but 1,000%!”
In my view, the sacrifices will be extraordinarily heavy. We may well be required to bear substantial burdens—if, in the context of concessions, we are to hand over ore or timber, to surrender raw materials that are desperately needed abroad—for example, manganese ore. Now that Soviet Georgia has come into being, the discussion concerns the consolidation of the Caucasian republics into a single economic center: Georgia, Azerbaijan, and Armenia. Oil is produced…

The meeting of the Communist Fraction of the All‑Russian Central Council of Trade Unions
Azerbaijan—this territory must be accessed via Batum, through Georgian lands—so that we may establish a unified economic center.
According to one report, the Georgian Menshevik government had previously concluded a concession agreement that was, on the whole, acceptable to us. I had only just begun to coordinate with our Georgian comrades and, through conversations with Comrade Egnukidze, Secretary of the VTsIK—who himself was Georgian and had personally negotiated a certain agreement, albeit not a concessionary one—with the Georgian Menshevik government: they agreed to cede one-sixth of Georgia to us without resistance, while reserving for themselves the guarantee of territorial integrity over 76.
Following this agreement, signed with Comrade Egnukidze’s participation, they nevertheless chose, despite the guarantee of territorial integrity, to depart from Batum for Constantinople themselves—thus, in the end, we gained both positive and negative outcomes: on the one hand, we acquired a territory—not for Russia, but for Soviet Georgia—namely Batum and its surrounding areas; on the other hand, we lost a considerable number of Mensheviks who set off for Constantinople.
It turns out that the Georgian Revolutionary Committee is quite inclined to confirm the concession for coal mines that had previously remained entirely undeveloped, regarding it as extremely important. Two representatives of foreign powers were present in Georgia and did not leave at the moment of the Soviet coup—the Italian and the German, a circumstance of great significance, since it is desirable to cultivate relations with these powers, among other things, through concessions. Italy even has a concessionary agreement with Georgia, while Germany finds itself in a position where certain German capitalists hold an enormous stake in the Chiatura manganese mines. The question now is whether we can convert this proprietary right into a lease or concession—that is, transfer those mines, which the German capitalists once owned outright, to them under leasehold arrangements. Thanks to the shifting political landscape in the Caucasus, concessionary relationships may well take shape. And for us, it is crucial to chip away at one window after another. The treaty with England was a pact between a socialist republic and a bourgeois state—a treaty that placed a certain burden upon us.
We granted the first state with which we entered into a treaty a far larger share of the gold reserve than we accorded to others. Yet the consequences showed that, thanks to this very treaty, we had managed to open up a small window of opportunity. From this perspective, we must evaluate every concession.
Germany and Italy, compelled by their economic circumstances, are seeking alliances with Russia. For Russia, an alliance with Germany opens up vast economic prospects—regardless of whether the German revolution succeeds there soon. We can negotiate even with the bourgeois government of Germany, because the Treaty of Versailles condemns Germany to an untenable situation, whereas an alliance with Russia offers entirely new possibilities. Since Italy lacks its own fuel resources, it took up coal mining in the Caucasus—mining that no one had ever developed before. It would come as no surprise if the Germans were to turn their attention to oil concessions, given that Germany is completely devoid of fuel.
Someone here remarked that the concession in Kamchatka would do nothing to improve the workers’ lot. This is utterly incorrect. And Comrade Ryazanov made a rather misguided joke when he said that we would “get ourselves into trouble” with Vanderlip. To be sure, we did make one mistake—sending a telegram to Harding—but since we had never before entered into any treaties or maintained any formal relations with America, there was no real error involved; we merely discovered that Vanderlip had been boasting about his connections with the American government. Now, it is quite possible that by sending our representatives to Canada—where we intend to acquire locomotives—we may, through this back door, gain some access to the American market as well.
Negotiations concerning the Kamchatka concessions are now being revived—and it is utterly wrong to claim that these concessions will fail to improve the workers’ situation. If these concessions are realized, then the improvement in workers’ conditions will be

THE MEETING OF THE COMMUNIST FRACTION OF THE ALL-RUSSIAN CENTRAL COUNCIL OF TRADE UNIONS
undoubtedly so, for we will receive a certain percentage-based share—apparently around 2%—but when we have nothing at all, even 2% represents something significant. If we receive 20,000 from a million and use that sum to trade with the peasants, it will provide a portion of the goods necessary for the workers.
Next, I would like to point out that certain remarks you have made to us nonetheless reveal that within professional circles there exist certain disagreements—or, more accurately, certain misunderstandings—which pose the sole danger we must address within our own ranks, perhaps through further discussions among party members. For example, Comrade Marshev argued that payments should be made in hard currency rather than in bonds. As for the Amsterdam group 77—whether they will attack us or not—we must reach a consensus on this matter.
I recently reread my pamphlet, written in May 1918. In it, I quoted the Menshevik newspaper “Vpered” 78, where the Menshevik Isuv accused the Soviet government of pursuing concessions, of entering into agreements with bourgeois states*. This is a well-worn tactic employed by the Mensheviks whenever they seek to criticize us over concessions. Indeed, many groups across Western Europe have already taken a firm stance on this issue. Communists understand that concessions are akin to the Treaty of Brest-Litovsk—a treaty we were forced to accept due to the devastation of a country whose population was overwhelmingly rural. Everyone recognizes that the revival of a nation is impossible without robust heavy industry.
German communists understand why we must make concessions, while the Scheidemannites and the Second International II1⁄2 insist that these concessions prove our downfall—and I recall that last year, at one of our meetings, I cited the American chauvinist Spargo*, who had authored a whole series of books on the Bolsheviks in the same spirit as our own Alexinsky, yet when it came to concessions, Spargo reveled in celebration and triumph. Even then, I stated that this was a complete

* See Collected Works, 5th ed., vol. 36, p. 308. Ed.
** See Collected Works, 5th ed., vol. 42, pp. 24, 43. Ed.

dialectics. Yesterday, international capital sought to strangle us; today, we have a series of treaties with that very same international capital.
We make sacrifices by surrendering millions of the most precious materials to foreign capital—materials upon which they can reap profits running into the hundreds of percent. These are the sacrifices we willingly bear. Yet we must also recognize that while we allow them to pocket whatever profits they may desire, we must at the same time secure the benefits we ourselves require—namely, an increase in the volume of products and, where possible, an improvement in the conditions of our workers, both those employed in concessionary enterprises and those who remain unoccupied.
At this point, Comrade Shlyapnikov suggested that it would be wise to grant concessions to Russian workers. But such a proposal is nothing short of absurd. To do so would require us to guarantee supplies of fuel and other essential resources—and we cannot even guarantee these for our own most vital enterprises. Our situation with regard to fuel is dire. While any agreement on concessions with Russian workers is, in principle, entirely permissible, such a resolution of the issue is hardly serious for our large-scale industry: we simply cannot offer them any guarantees, whereas foreign concessionaires can import everything from abroad. This is precisely the fundamental difference between agreements with foreign capitalists and those with domestic partners. Foreign capitalists have access to a global market; we, by contrast, lack a secure economic hinterland—and it will take no fewer than ten years to build one. This is the sober reality we must bear in mind. All our comrades have demonstrated this understanding in their work on this very question.
We know that the electrification plan represents the most economical approach. We cannot lease our major factories to Russian workers. Instead, we must focus on small-scale industry, developing it while refraining from criticizing our prodrazvyorstka policies—as Comrade Ryazanov does, or as the author of that pamphlet does, who claims that we are implementing anarchosyndicalist laws.
In terms of developing small-scale industry, we must take several decisive steps: for without state guarantees, we can achieve certain gains right now—and since we cannot even guarantee the most

MEETING OF THE COMMUNIST FRACTION OF THE VTsIK our most advanced enterprises, we must devote all our efforts to fostering small-scale industry; it will provide us with certain products that are indispensable to the peasant.
On the question of chistogan—or bonds—I would say this: when capitalists held power, it was truly terrifying. But for us, such fears are unfounded, for we control all factories, enterprises, and railways—and to date, we have not leased even a tenth of our assets to capitalists. I repeat: bonds pose no threat to us, because capitalists will be obliged to stock the goods we specify—not just salted fish, as has been suggested here, but rather this and that. Once we adopt the standard of living enjoyed by workers abroad, we know that, according to that standard, they receive even more and better products than Russian workers.
Comrade Shlyapnikov remarked: “We’ve seen what concessions can bring.” Yet both Comrade Shlyapnikov and many practitioners fall into this same error. I have often heard people say: “You judge concessions only in broad strokes. Capitalists always outsmart the most experienced Russian lawyers.” Of course they did—when state power lay in the hands of the capitalists and all the real force rested with them. What, then, did state power actually represent? The Committee for the Affairs of the Ruling Class—that was state power. The Committee for the Affairs of Landowners and Capitalists—that was the capitalist government. But if, with the majority of our factories, plants, and railroads in our hands, and with a party at our helm—comrades working from the bottom up and communists leading from the top—if we still fail to defend our interests, then we might as well end our lives by suicide. That, indeed, is panic!
But I believe that, however poor our circumstances may be, we are not so weak as to let ourselves be deceived. And if, to date, we have concluded several agreements under which the governments of France and England relied on the services of first-rate bourgeois diplomats—and if, despite these conditions, we have never once been duped—then why should we panic, as though we were about to be swindled by bonds? Let us recall the Treaty of Brest-Litovsk. What made the Treaty of Brest-Litovsk so difficult? Where lay the true challenge of its defense? When people asked me whether I hoped we would succeed in deceiving the Germans, I was duty-bound to reply that I did not. But now the Treaty of Brest-Litovsk has passed into the annals of history.
I do not know whether the pamphlet prepared by Comrade Kamenev—whose pages discuss Ludendorff—has been published, but I do know that no one else but Ludendorff himself penned a brilliant memoir, in which ten full pages are devoted to the Brest negotiations. When Kamenev and I read that chapter, we said: “Herein lies the finest defense of the Treaty of Brest-Litovsk.” There, Ludendorff recounts how Trotsky and others pressed them hard during the Brest talks, how they were outmaneuvered, and so forth. It was then that we recognized the need to translate those pages and publish them—with a brief preface by Comrade Kamenev. If this has still not been done, it is a telling example of the Soviet government’s helplessness. Now consider this fact: it is well known that Comrade Ioffe, our ambassador to the German government, was expelled from Germany on the eve of the German Revolution. After that, let us refrain from predicting who will deceive whom. Let us not presume how many days will pass between the conclusion of the first concessionary treaty and the outbreak of the first great European revolution. Therefore, regarding treaties, I maintain that our comrades are utterly mistaken. Such matters are no cause for alarm to us at all.
The contract will specify exactly which goods they are required to supply and at what price. We can certainly agree to various forms of bonds and ration books. Should they violate the terms of the contract, we retain the right to terminate it immediately. A contract is a civil transaction. As for the question of what kind of arbitration should be used and who should adjudicate disputes, I have yet to fully resolve that issue—but I will review the initial draft of the contract with the Swedish Society in just a moment. The document states: “Disputes shall be resolved…”
Here, academics have been brought in, and they will endeavor to enlist the aid of legal experts. I remember Bebel’s words: “Lawyers are the most reactionary of all people—and, at the same time, thoroughly bourgeois.” Of course, we can find ways to address this, but there is nothing inherently alarming about it. If concessionaires were to insist on this condition, we could readily accept it. Once the contract is properly drawn up, specifying that such-and-such…

The Meeting of the Communist Fraction of the All‑Russian Central Council of Trade Unions
Goods and ration books are paid for in such and such a way—so we can proceed along these lines, and there is nothing to fear in either vouchers or ration books for the socialist republic. Then it was argued that Item 9 was problematic because we were diverting our attention from the International Council of Proletarian Trade Unions.79 Lozovsky warned that the Amsterdamists would come down hard on us—but even so, they would continue to outmaneuver us on every single issue; and as has always been the case, in the end it would be they who ended up on the losing side.
Recall how the Mensheviks once threatened to punish us for making even the slightest concessions to the capitalists. When we sought to overthrow capitalism, they claimed we could only do so for a few days at most; yet when we succeeded in toppling it for several years, they again set traps for us. They strive to lure their opponents into situations where defeat is all but certain.
At first they branded us utopians; then they urged us to leap headfirst from the fifth floor. We know full well that we have a large number of small-scale enterprises. The petty proprietors are our adversaries. The petty‑proprietorial mindset is our most dangerous foe. Concessionaires and tenants are lesser foes. Bureaucracy is also an enemy—and so too are bureaucratic distortions.
Regarding the point raised by Comrade Lozovsky, let me say this: listen carefully to what he has to say. He states: “Trade unions have no right to demand that Russian wage scales be applied to such workers, nor that Russian hiring regulations be enforced.” Here, the discussion concerns the Russian trade union; yet I am being told about the international one. Of course, when capitalists see Russian conditions, they dismiss them as communist—absurd, they claim—and insist that Russian trade unions have no right to demand Russian hiring terms that supposedly contain some “supernatural” element. But they are perfectly entitled to invoke international trade union agreements. That alone is sufficient. Nowhere here does it say that strikes are prohibited. One must learn not to reveal everything prematurely.
As for improving the lot of the Russian worker, Comrades Marshev and Tartakovsky attacked this idea and claimed that you would never succeed in managing the workers or in getting them to work, for if you provide for one-fifth of them, the remaining four-fifths will refuse to labor under worse conditions. Are we really dealing with workers who are so utterly unreasonable, uncultured, and undisciplined? If so, then of course we ought to panic and take our own lives. If a hundred workers are going hungry and we tell them that we can feed twenty, but no more, would they really turn away from that offer? Yet we have never encountered such a situation. We have managed, to some extent, to feed workers in certain major industries—but not all of them. And still, not all workers fled those enterprises; whereas from other factories, everyone did flee. Has the Russian worker become so corrupted by the mistakes of Soviet power that he is incapable of calculating that it is better to feed just twenty than to force the entire hundred to starve? There is much here that should not be discussed prematurely. Why not arrange things so that capitalists take turns working? Workers could labor for six months, receive proper clothing and footwear, then step aside and make room for others to be fed. Of course, we must combat ingrained prejudices.
When concessionaires come to us, we must temper the demands of our trade unions so that they do not ask for the impossible. You know that standard contract durations are short. In Europe, long‑term contracts are virtually unknown; the usual term is six months. Thus, workers can be fed, provided with shoes and clothing, and then move on to make way for others.
Is it absolutely impossible to organize things so that after working for half a year, receiving adequate nourishment, and being outfitted with American shoes and clothing, workers yield their place to others? Of course, this will be challenging—it requires greater organization and discipline than we currently possess—but it is not impossible. If we managed to hold onto our workers against the onslaught of foreign capital during three years of terrible famine, then surely we can manage it here as well. I am fully aware of the difficulties that lie ahead. That is why I say that concession— The Meeting of the Communist Fraction of the All‑Russian Central Council of Trade Unions
does not herald the advent of class peace; rather, concession is a continuation of class warfare.
In the past, war meant that I would starve you out until you received nothing at all; now, I will say that I wish to provide each worker with a pair of shoes—but only if they work for six months. And we will fight to ensure that all workers receive footwear. We do not renounce the strike; all of this remains within our grasp—if only we remain reasonable and strive to highlight, precisely now, those aspects that can be used to attract capitalists to our side.
Some say it is terribly frightening that he will come and deceive us—but I maintain that this is not something to fear, and that, in fact, it is desirable for productivity to increase if he comes, for he possesses a superbly organized rear area and excellently equipped factories where we can order the parts we need instead of purchasing them on the open market—because the open market offers nothing but junk. On first‑class factories, orders are booked out several years in advance. Even if we were to pay with our own gold, we would still receive nothing; but the syndicate member will get everything. And we are not averse to paying him a bit extra—provided we can secure improvements for even a small fraction of workers and peasants, for every additional unit of output will be exchanged for bread for the peasants, thereby fostering a stable relationship between the working class and the peasantry.
In closing, I urge professional experts to refrain from engaging in fundamental debates or endless disputes. All of this is mere empty rhetoric, pure scholasticism—let us cast it aside. Instead, we must focus our attention on the practical terms of concessionary agreements, from which, if we are not foolish, we can derive great benefit for ourselves. Professional specialists and party leaders must demonstrate their ingenuity and practical understanding of these conditions—conditions we cannot and will not discuss in print, for capitalists keep a close watch on the Russian press, just as we did not disclose, during the Treaty of Brest‑Litovsk, the specific assignments given to Comrade Ioffe. In practice, we will turn our attention to those practical methods from which we can reap real benefits.

for the betterment of the working class and the peasantry. Any such improvement is of immense significance to us. This is precisely what professional experts should focus on. We must ensure that no friction, no prejudice, remains. The task is a difficult one. At present, no one yet wishes to grant concessions to us; all are waiting for us to put forward demands that are impossible to fulfill.
Therefore, we must unconditionally devote every effort to securing several such agreements. Of course, we will make a number of mistakes—this is a new undertaking. Up to now, no socialist republic has ever entered into concession agreements with capitalists. But we need the professional experts to lend us their support. Here lies vast scope for interpretation and pressure, extending even to strikes—which remain firmly in our hands.