improvement of the economic situation, if we do not apply a policy of concessions, if we do not renounce prejudices, local patriotism, partly guild patriotism, partly that which we ourselves supposedly "investigate." It is necessary to be ready to make a whole series of sacrifices, deprivations and inconveniences, to break with habits, perhaps even with illnesses, only in order to produce a serious shift and improvement in the economic situation in the principal branches of industry. This must be achieved at all costs.

At the Party Congress all attention was drawn to the question of policy toward the peasantry and the question of the food tax, which occupies the first place in legislation generally and has occupied Party attention as the central political question. On the question of the food tax and of relations with the peasantry, we have come to understand that we are not in a position to raise the productivity of large-scale industry so rapidly as would be necessary to satisfy the needs of the peasants, without resorting to such crutches as the revival of free trade, free industry. And now we must, with the help of at least these crutches, rise up, for to anyone not out of his mind it is obvious that without these crutches we cannot keep pace with the demands of life, for the situation continues to grow more acute — owing at least to the fact that the timber rafting this spring for a whole series of reasons, chiefly natural ones, has been disrupted over an enormous area. A fuel crisis is approaching. Then spring threatens a new harvest failure, again because of climatic conditions, shortage of fodder, which could reduce still further the supply of fuel. And if drought appears again, then the crisis threatens to assume a completely extraordinary character. One must understand that under such conditions all the words of our programme, which speak first and foremost of increasing the quantity of products at all costs — are written not in order that we should admire them and manifest love for various resolutions, which is what communists occupy themselves with extraordinarily assiduously, but in order that we should provide the increased quantity of products at all costs. We cannot do this ourselves, without the help of foreign capital. For anyone who, without self-deception, looks at reality, this must be obvious. This is why the question of concessions has acquired such significance that the Party Congress had to concern itself with it.

After some debate the Council of People's Commissars adopted the basic principles of the concession agreement. I shall now read them and point out all the principles which have particular significance or give rise to disagreement.

Party members, especially leaders of the trade union movement, the leaders of the organized proletariat, if they do not understand the present situation, if they do not draw the appropriate conclusions from it, then of course we cannot seriously speak of any economic construction. I shall read point by point the basic principles of the concession agreement as adopted by the Council of People's Commissars. I must add that to this day we have not yet concluded a single concession. We have managed to express principled disagreements — we are great masters at that — but we have not concluded a single concession. There may be found such people who will rejoice at this. If there are, it is sad, for if we do not attract capital to concessions, it means we have no economic efficiency whatsoever. But for a communist there remains considerable scope in resolutions. The remnants of paper can be filled with them as much as one likes. The first point*.

1. *The concessionaire is obliged to improve the situation of workers employed in concession enterprises (compared with other workers employed in analogous enterprises in the same locality) up to the average foreign norm.*

We insert this fundamental provision into the agreement in order to bring communists and the leaders of our economic institutions immediately to the center of the question. What is most important to us in concessions? Of course, the increase in the quantity of products. This is self-evident. But it is also especially important, if not still more important, that we can achieve immediate improvement in the situation of workers employed in concession industries. These provisions of the concession agreement were adopted after a series of discussions of the question, in particular on the basis of a series of discussions which some authorized representatives of the RSFSR, especially comrade Krasin, conducted abroad with some of the financial kings of contemporary imperialism. It must be said that we, of course, as you yourselves know, have an enormous majority of communists