The purpose of the present article is to put before British working-class readers the facts concerning the development, of Capitalism in Russia. Once these facts are realized, it will be seen that to pretend that Russian Capitalism is some kind of Socialism is ridiculous. Russian industry has been entirely capitalistic for a long period. There exists in Russia to-day a propertyless class of wage earners, a class of capitalist investors, and concessions worked by foreign capitalists.

The Manchester Guardian for July 27^th, 1928, reported that the internal loan issued by the Russian Government for the purpose of financing industry and agriculture that year was £52,000,000. It represented half of the total amount devoted that year by the Russian Government to economic development. Half the 1928 loan carried 6 per cent. interest plus lottery prizes. Half carried no interest, but there was a premium on repayment.

The Sunday Worker on August 12^th, 1928, referring to the amount of money that the Soviet Government intended to spend on creating huge State farms in opposition to peasant proprietorship, declared that it was anticipated that “ good and secure wages “ would attract the poorer peasant to the State concerns.

Note the reference to wages and to the poorer peasants.

The Soviet Union Year Book is issued “ to provide business and public men with reliable information on the economic and political life of the U.S.S.R.” There is no need to visit Russia to learn about conditions there, and this work can be consulted in almost any public library. It supplies facts and figures that establishes the reality of Capitalism in Russia. From its columns we learn that the Concession Companies make staggering profits out of the Russian worker. In 1926–27 the average profit was 81 per cent on the capital invested. In 1927–28 it was 96 per cent. One has only to consider when reading this book of facts that the Bolshevik slogan of 1917 was “ Down with the Foreign Bondholder.”

The Soviet Year Book shows how foreign bondholders have been replaced by home bondholders, without any noticeable benefit to the workers. There is a new increase in national debt. There are five categories of income tax. The fifth grade applies to those whose incomes are derived from “ ownership of industrial and trading enterprises, from money investments, dividends on shares “ and “ rent.” There is also an “ excess profit tax “ above “ normal profits.”

Imagine a year book of a Socialist Republic referring to “ normal profits.”

The Soviet Union Year Book also says : ” Soviet law recognizes the right of inheritance, irrespective of the amount involved.” There is a graduated inheritance tax. A person who inherits £200 has to pay £10 to the State or 5 per cent. A person who inherits from £20,000 to £50,000 has to pay 90 per cent. on all over £20,000.
The Sunday Worker, which could not be accused of being an anti-Soviet paper, since it was a subsidized organ of the Communist movement, in its issue for February 11^th, 1928, published the following paragraph : —

BIG CHANCE FOR INVESTORS.

Soviet 9 per cent. Rail Loan on English Market.
The Russian State Bank has placed on the English market’ a 9 per cent. railway loan, issued by the People’s Commissariat of Ways and Communications, and guaranteed by the Government (writes a correspondent).
This loan is issued to the amount of £6,000,000. Its redemption will commence on March 1, 1929, and be completed on September 1, 1934. A summary of the revenue offered by this loan shows the following — 9.47 per cent. on invested capital; 0.4 per cent. from further invested receipts on coupons; 1.18 difference between purchase price and nominal value. The total yearly revenue on bonds of loan will amount to 11.05 per cent.
High yielding loans are usually not available for public subscription especially with the security this offers. The profits on the railways last year would cover the loan four times.

That there may be no doubt about the authenticity of this Capitalist development the reader is referred to the Moscow Daily News for September 25^th, 1922, a daily paper printed in English in Moscow. Under large headlines, in this issue there appeared an article inviting the foreign investor to subscribe for Soviet bonds. We quote the opening paragraph of that article : —

“ SOVIET BONDS FOR THE FOREIGN INVESTOR. ”

“HOW MANY PEOPLE KNOW THAT SIMPLY BY AN ORDER TO THEIR OWN BANKERS THEY CAN INVEST IN A SOVIET GOVERNMENT LOAN THAT PAYS TEN PER CENT. INTEREST, AND IN WHICH THEY CAN REALIZE THEIR CAPITAL AT ANY TIME THEY LIKE?
“ The method was explained to Moscow Daily Press by a member of the collegium of the People’s Commissariat of Finance.
“ ‘ Of course,’ he said, ‘ you must understand that this is an internal loan subscribed chiefly by the workers and peasants of the Soviet Union. We do not issue a prospectus for people living abroad nor any other literature; but since it is a gold loan there is no reason why foreigners should not invest if they want to. CONSIDERING THE STATE OF AFFAIRS IN OTHER COUNTRIES, IT IS HARDLY NECESSARY TO POINT OUT THAT THIS IS PROBABLY THE SAFEST AND BEST YIELDING INVESTMENT IN THE WORLD TO-DAY.’

“THREE ISSUES.”

“ The loan is called the Five Year Plan Loan, and there are three issues. The first is the ‘ Five-Year Plan in Four Years,’ and the second the ‘ Third Decisive Year.’ These loans are both of a premium and interest-bearing character, and are not sold abroad.
“ The third issue is called the ‘ Fourth and Concluding Year ‘ and the bonds are of two kinds — one premium, and the other interest-bearing. The second kind can be held abroad.
“ The procedure of buying is simple. One can send the money direct to the State Bank of the U.S.S.R., Neglinnaya 12, Moscow, or give an order to any bank abroad which is in correspondence with the U.S.S.R. State Bank — and all the most important foreign banks are.

“CERTIFICATE WITH COUPONS.”

“ Against the investment the State Bank gives a certificate to which are attached coupons, one coupon for each year up to 1942. Interest is paid once a year on December 1, and it is necessary to send the corresponding coupon to the State Bank with directions as to payment ; or the certificate can be deposited at the State Bank and the interest will be paid automatically each year, either through one’s own bank or by whatever method one chooses — and in any currency desired.”

The article then explains that this is a” gold loan” and details the particular advantages to the investor that result from this fact.