Russia in NEP

Political System

In 1920s the dictatorship of Bolsheviks Party - a variant of political system of one politic party - was firmly established on almost all the territory of former Russian Empire (except Finland, the Baltic States, Western Ukraine and Belarus, Bessarabia). In the beginning of the decade the other, so called soviet parties - Mensheviks and Socialist Revolutionary Party (S.R.) were either liquidated by the RCE (the All-Russian Commission on Emergency) or declared dismissal, and in 1921 Bund also declared its dismissal.

In summer 1922 in Moscow the S.R. leaders were put on open trial for counterrevolutionary terrorist activity. Protests on the side of world community made the Bolsheviks refuse the idea of the similar 'trial of Mensheviks'. The organized political opposition to bolshevist's regime was done with.

In the years of the Civil War Bolsheviks Party took the form of militarized organization. This status was approved by the X Congress RCP (b)(Russian Communists Party of Bolsheviks) (spring 1921), at which any fraction activity was prohibited. In fact, the Politic Bureau (Politbureau) of the Central Committee (TSK) of the RCP became the real governing body of the country. In 1921 G.Y.Zinoviev, L.B.Kamenev, V.I.Lenin, I.V.Stalin, L.D.Trotsky were the members of the Politbureau, and N.I.Bukharin, M.I.Kalinin, V.M.Molotov were the candidates. All the important political and economical problems were discussed and solved in the Politbureau, and only after that they were got through the appropriate government organs.

Assigning in 1922 I.V.Stalin as General Secretary of the TSK of the RCP fastened the process of centralization of the Party. The structure of the Party committees of different levels was unified, the secretaries, who were to deal with the Party affairs only, became the Heads of the committees.

In 1920s the original 'technology of authority' formed: assigning to any amenable post in the field of government and economical management, culture and others was prerogative of the appropriate organs of the Party - the TSK, regional, city, district committees.

In those conditions the process of formalization of the organs of Soviet authority, which had began in the years of the Civil War, continued. In 1920s, as a matter of fact, the same pre-revolutionary structure of authority was being restored: the firm vertical of the Party secretaries (in tsars Russia - governors-generals), surrounded by the structure of local representation - soviets (before the Revolution - zemstvos) with tens (if not hundreds) of thousands of peasants' meetings as a base (in 1920s the general part of population of Russia lived in village, just like before the Revolution).

The one-party system worked in a comparatively 'mild' way. The members of the Bolshevists Party occupied the key posts in organs of authority. The state really functioning in accordance with law wasn't built, but terror quickly grew less. During 1922 Criminal Code and Civil Code were prepared and approved, the judicial reform was conducted (revolutionary tribunals abolished, the institution of public prosecutors and barristers established) and censorship was constitutionally approved, the RCA of time of the Civil War was transformed into the State Political Administration (SPA), and later into the United State Political Administration (USPA) attached to the Council of People's Commissars (CPC) of the USSR.

The regime conducted punitive policy towards the Church (especially the Orthodoxy Church) and some trends of Art. Having chosen the way of compromises in the field of economics, Bolsheviks, despite militant declarations heard from time to time and outbursts of terror, had to accept certain compromises in politics too, in particular, in national policy.

By the end of the Civil War and foreign military intervention the territory of connected by military-political union of soviet republics was formed: Russian Soviet Federative Socialist Republic, Ukraine, Belarus, Azerbaijan, Armenia, Georgia Soviet Socialist Republic, Bukhara and Khorezm Soviet Peoples' Republics (in November 1922 Far East Republic became the part of RSFSR).

In most of these Republics national Communist Party were in authority in 1921-1922.

Each Republic had its own constitution, organs of authority and governing. In 1921-1922 economical and political uniting of Soviet States in Federal Union started. It was conducted by concluding agreements and union treaties between the RSFSR and other Republics. However, this system appeared to be not effective, that brought to different conflicts between leaders of the RSFSR and some republics (Ukraine, Georgia).

In December 1922 the RSFSR, Belarus, Federation, which in March 1922 united Azerbaijan, Armenia and Georgia, having signed Union Treaty formed the Union of Soviet Socialist Republics. The treaty differentiated the competence between new governing organs of the USSR and republican organs.

The new Central Executive Committee of the USSR was elected; on Lenin's proposal it was to have four chairmen (M.I.Kalinin, N.N.Narimanov, G.I.Petrovsky, A.G.Chervyakov), representing each of the Union Republics. In 1922-1924 working out the base of structure of state was being continued, after the numerous discussions it was formulated in the new Constitution accepted on January 31, 1924. The Constitution of the USSR for each Republic left the right to leave the Union freely, and the territory of a republic couldn't be changed without receiving its agreement.

Created with the use of administrative-political pressing the USSR was formally federative but in fact unitary state. National-territorial formations mostly had only cultural-national autonomy. In 1920s considerable number of national schools, theatres, newspapers were established; the literature in languages of different nations of the USSR were published; many nations for the first time received the system of writing worked out by scientists.

The Struggle Inside the Party

The years of NEP were marked also by the unstable and contradictive situation inside the Bolshevists regime. Strict authoritarianism could be effective only in case of implicit obedience of the representatives of the lower level of the authority hierarchy to the representatives of its higher levels. To obtain this the 'top' should have had indisputable authority recognized by the masses. Such an 'authoritative top' in the Party and Government pyramid became the historic leader of Bolshevism, the chairman of the CPC of the USSR Vladimir Ilyich Lenin.

The most ambitious bolshevists leaders - G.Y.Zinoviev, I.V.Stalin, L.D.Trotsky - recognized his domination. For the Party masses (and not only the Party) he was the bearer of ultimate truth. After Lenin's death (January 21, 1924) the situation radically changed. The paradoxical situation arose - authoritarian regime without authoritarian leader together with 3 approximately equally influential trends: left - L.D.Trotsky's supporters; center - supporters of L.B.Kamenev, G.Y.Zinoviev and the member of the Politbureau I.V.Stalin; right - supporters of N.I.Bukharin, A.I.Rykov and M.P.Tomsky.

Contradictions existing at the 'top' were disorientating the lower level of the hierarchy of authority, representatives of which sometimes didn't know opinion of which leader take into consideration in practical politics. This confusion among politicians could paralyze authoritarian regime.

Impartially, there were two possible ways of developing events: either abolition of the decision of the X Congress of the Party about prohibiting fraction in the Communist Party, transition to social-democratic model of the Party, allowing co-existing inside it different officially recognized trends and platforms, and ultimately - to pluralistic political model, or nominating the new leader. Transition to social democracy was extremely unlikely. Ambitions of the bolshevists 'oligarchs' prevented from nominating the new leader. As a result, the Party appeared in confusion.

In the conditions of tangled party, government and economical power struggle of candidates for the leadership took the form of competition of different social-economic programs, appeared mostly in the periods of economical difficulties (in 1923, 1925, and then - in 1928-1929).

The Lefts believed complete building socialist society in the USSR, a background country concerning technical and economical development, to be possible only in case of win of the world (or at least European) proletarian Revolution.

The Rights thought it to be possible to built socialism first in one country - the Soviet Union. To achieve it, it was necessary to allow small private capital; in their opinion, the policy of planned economy shouldn't be too strict, the plan should be rather advisory then obligatory. Not being formally against democratization of the Party, in fact they strengthened basic structure of apparatus of officials inside the Party.

Stalin maneuvered between these two trends. That was he who created and in every way strengthened the apparatus of the Party hierarchy. Consequently, struggling with Trotsky, he received the support of real vertical of authority representatives of which were annoyed with the utopian (if not demagogic) projects of the Lefts on democratization and labour democracy together with preserving authority regime. During 1921-1925/26 Stalin supported social-economical line of the Rights. On the other hands, since the second half of 1920s he was more and more inclining to the Lefts positions in the field of economics and social relations. Later, Stalin declared that in the first years after the Civil War the country should have cured its wounds, restored economics and only after that the plans of industrialization on the expense of peasantry could be performed.

With the help of Kamenev and Zinoviev Stalin managed to discredit Trotsky, then leaning on Bukharin and Rykov pushed back Kamenev and Zinoviev in order to defeat a little bit later the Rights with the help of Ordjonikidze, Kuibyshev, Voroshilov and others. After each round of inner-Party discussion the number of the potential 'Lenin's heirs' grew les.

During the inner-Party struggle the contour of the new leader was becoming more and more recognizable. It was Stalin.

New Economical Policy (NEP)

The need to normalize relations between city and countryside made the Party-Government leaders abolish requisitioning of the farm produce, change it by tax in kind, the rate of which was considerably less than plan of requisitioning. In 1923-1924 tax in kind was allowed to be paid by products and money (at will of peasants). It 1924-1925 transition to cash taxation of countryside. Legalization of market relations in countryside was bringing reconstruction of the whole economical structure.

Small plants and factories, acquired by the State after the Civil War, became private property. Strict centralization was characteristic for trust systems. The Council of National Economy (CNE), board of directors, revision commission was the organs of managing and revision of trust. The Higher Council of National Economy(HCNE) conducted planned trust management. Trust board of directors was obliged to perform functions of efficient management. Revision commission, controlling trust activity, gave report to the HCNE. Enterprises were practically deprived of any kind of economical independence. The didn't have the rights of juridical person (i.e. couldn't act independently on the market), balance and accounting. Relations of trusts and enterprises, constituting them, preserved military-communistic base throughout all the period of NEP.

When transiting to NEP, metallurgy, fuel and energy complex and partially transportation at first remained on the government finance. However, wage leveling, characteristic for the times of the Civil War, was changed with the new tariff policy, which took into consideration workers' qualification, quality and quantity of produced goods. The system of rationed supply step by step was interchanged with money wage. General compulsory labour and labour mobilizations were abolished.

All-Russian market was being restored. Large fairs were being also restored: the fairs of Nizhny Novgorod, Baku, Irbit, Kiev and others. Commodity exchanges were opened. Some freedom of private capital in industry and trade was allowed. Concessions and cooperation were developing: consumers', agricultural, producers'. As for conditions of economical activity (prices, credits, taxes, supply and so on), cooperation received more favourable conditions than private capital. At the end of 1923 - the beginning of 1924 consumers' cooperation was transmitted to voluntary membership.

In 1921-1924 the bank system was established: the State Bank, the net of cooperative banks, the Bank of Commerce and Industry, the Bank of Foreign Trade, the net of local municipal banks and others. Emission of money as the main resource of the state budget income was interchanged with the system of direct and indirect taxes.

NEP reforms were being braked by the unstable currency. Since 1921 the work on adjusting monetary system to the conditions of market economy. In 1922-1923 two denominations were conducted. At the end of 1922 hard currency - chervonets - was put in circulation, used for short-term crediting in industry and trade. Financial reform was finished in 1924: copper and silver coins and treasury note were issued instead of soviet banknotes. It was managed to liquidate budget deficit during the reform.

Establishing of hard currency made the connections between industry and agriculture in the sphere of turnover stronger. However, financial reform couldn't remove structural contradictions between large centralized industry and extremely scattered (as a result of agricultural revolution) farming. The decrees of the XVI Conference of the Party (April 1925) and the XIV Congress of the RCP(b) (December 1925) pushed aside the string of obstacles on the way of increasing of agricultural production: hiring of manpower in countryside was made easier, land lease was allowed. However, the growth of large industrial trade rural economy was restrained by the government tax policy in countryside.

Thus, NEP model included the following structural elements:

1) minimal connections with world economics, consisting in foreign trade on the base of state monopoly (in 1920s the concession capital brought less than 1% of industrial production);

2) strict government managing almost all the industry(trust self-financing);

3) non-equivalent exchange with countryside (free requisitioning a part of production as the agricultural tax, then with the help of 'price scissors' for agricultural and industrial goods in favour of industry);

4) braking the growth of large individual farming.

Problems of NEP Economics

In the course of restoration period NEP model became clear to need serious correction. First of all, maintaining the same figures of industry development was turning impossible. Considerable rate of industrial growth in the time of NEP were explained by so called restoration effect: already existing but standing idle as a result of economic dislocation of the time of the Civil War equipment was assigned to work. When, in the end of 1920s those resources exhausted, the country faced the need of large investment in industry in order to reconstruct old plants and create new industries.

Meanwhile, the situation developed when Soviet government couldn't take in its disposal even those small funds, found in the country, because people were afraid of showing their welfare and instead of keeping money in saving-banks or government loans kept them at home or used for profiteering.

Foreign investments for industrialization also weren't found.

The situation with accumulating resources inside the government sector developed rather unsuccessfully.

The degree of agricultural sector participation in modernization of Russian economy considerably decreased in comparison with the pre-revolutionary time. Because of the low export rate of agricultural sector the country couldn't afford buying industrial equipment abroad, so the plans of industrialization to remained unrealized.

In 1925 the government tried to make an appropriation for industry development. But the results could be observed only in several years. As a result of numerous credits the amount of circulating money increased, but goods supply remained the same; as a result 'hard' chervonets was depreciating. The trust to it was decreasing inside the country as well as abroad. In summer 1926 chervonets export and operations with it were stopped. Soviet currency stopped being free, having turned into the mean of domestic circulation. Repudiation of golden standard in less than 2 years after its introduction made harm to the reputation of the Soviet Union in the world.

As a result of those processes economical lag of Russia behind the progressive western countries was growing.

Having faced the lack of state financial resources for industry development, not having managed to mobilize domestic and foreign private capitals, since the middle of 1920s Bolsheviks chose the way of centralization of financial and material resources of the country. Since that time the policy of exclusion of private capital started working. As a result private and concession industry, giving gross output of 1467 million rubles in 1923/24 economical year, 2478 million rubles - in 1925/26 economical year, since 1926/27 started to cut production down; and by 1928/29 gross output was 1975 million rubles. The same processes took place in the sphere of trade, during 1925/26-1928/29 private sector in mediator trade turnover went from 6100 million rubles down to 3110 million rubles.

According to the new statute about government industrial trusts, established by All-Russian Central Executive Committee on June 29, 1927, trust activity were to submit the planned tasks of the organ under which jurisdiction a trust was, and deriving benefit as the aim of trust activity was excluded from the definition of a trust.

Choosing further way of development of Soviet economy was defined by the complicated combination of social-economical and political-ideological factors.

The first were:

1)weakness of the domestic private enterprise, being a sequent of its long (since 1917) prohibition or intensive government regulation; as a result, even if had the most favourable turn of government policy, private capital wasn't able to modernize quickly Russian background industry;

2) unfavourable world economical background; in 1929 the acutest, unseen before economical crisis burst out in the West, which made the perspective of considerable intake of foreign capital in Russia very vague, even in case of government policy promoting it

Social-Political Processes and Public Idea

In 1920s the development of " a civil society " took place under vigilant control of the VCP (b) (the Military Communist Party of Bolsheviks) and the OGPU (the United State Political Administration). Any attempts of opposition political activity were stopped. Political parties, except for VKP (b), in the country were missing.

Positions of Bolsheviks in trade unions became stronger. The development of NEP (New Economical Policy) altered functions, forms of work of the trade unions, which got back to the system of voluntary individual membership. The range of functions of trade unions included protection of interests of workers of state, cooperative, private enterprises, participation in management of economy, including discussion of production plans, promotion of nominees on administrative posts, participation in the sanction of labour disputes; direct interference of trade unions in the production management was rejected.

Extensive development of the volunteer societies, the cultural and educational, sports organizations could be observed in the years of NEP. It was totaled over 10 million people consisting in all volunteer societies. Widely developed the chief movement (in the beginning of 1926 over 1200 thousand men), the movement of workers'-and-peasants' correspondents (by August, 1925 - 190 thousand correspondents of the central and local press) etc.

"Marxism - Leninism" held the leading position among ideological, world outlook currents in 1920s. Alternative tendencies at best existed as half legal, at worst their representatives were either imprisoned, or banished from the country. Quite exceptional against this background was the situation of 'smenovehovstvo'.

Passing to NEP brought to life the movement of "smenovehovstvo" (change of milestone), which involved a part of Russian intelligentsia, recognized the deeply Russian character of the revolution, pointed out coincidence of interests of the Soviet authority and the needs of the Russian state, and as considered by the followers of the movement, despite utopianism of the revolutionary goals, it was Bolsheviks who actually cleared the way to evolutionary process towards capitalism. Ideas of "smenovehovstvo" during many years eased coming over of the intelligentsia to the side of the Soviet authority.

Restoration of the industry in 1920s created certain conditions for improvement of the financial position of workers. In 1925-1926 average duration of a working day of industrial workers was 7,4 hours. All workers and employees had the right for an annual paid holiday for not less than two weeks. To 1925-1926 the average salary of workers in the industry made 93,7 % of the pre-war level.However, growth of the living standards in the city was delayed by goods shortage and advance of prices. During all the period of NEP unemployment was increasing. On the eve of the 1st five-year plan the unemployed made 12 % of the number of workers employed in the national economy and employees.

The serious conditional problem for workers was accommodation. According to the data of the census of 1926, 7,8 % of the workers living in Moscow, had less than 2 sq.m. of the area per person, i.e. actually had no space for a bed, 18 % of people in working families had from 2 up to 3 sq.m. per person and only 21,5 % of members of working families had more than 6 sq.m. per person.

The feed of the peasants in the country improved to better, than before the revolution. However, growing discontent of peasants was caused by the goods shortage which they experienced stronger, than townspeople (under general shortage of manufactured goods the bigger part was bought up in places of manufacturing, a little reached village).

The agrarian overpopulation turned to a serious problem: the multi-million mass of the "excess" population subsisted in the country, in essence, latent unemployed, which were hardly making ends meet. Each year hundred thousand of those "were thrown out" by the country to the city, filling up the numbers of the unemployed there.Thus, acceleration of industrialization besides only economic reasons (exhaustion of reserves of the equipment, shortage of goods) was also dictated by social imperatives (growth of the latent and evident unemployment, shortage of accommodation).

Culture of 20s

The census of 1920 revealed 54 million of illiterates, thus liquidation of illiteracy was one of the main tasks of the state educational policy. In 1923 the All-Russian Voluntary Society ' Away with Illiteracy' with M.I.Kalinin at the head was organized. Thousands of schools and centers of liquidation of illiteracy (likbezi) were supported by the funds of the society.

Together with liquidation of illiteracy propagandistic the tasks of assigning of communist ideology in the masses were accomplished. The Main Politically Enlightening Committee was in charge of this work. Since 1923 the system of working clubs, village reading rooms and libraries was growing. Special series of popular brochures on anti-religious, political, economic, life, historical and revolution topics were published, stating the official point of view. Since 1924 propaganda of 'the foundation of Leninism' was spread.

An acute shortage of financial resources forced the state to reduce in the beginning of 20s budgetary provisions to schools and render them to local budgets financing. In 1921-1922 were periodically carried out subbotniks and the "weeks" of help to school, the population voluntarily collected funds for educational needs. In 1921 the tuition fee was introduced as a provisional measure.

By the middle of 20s the school education was represented by the following system: primary 4-year school (the 1st level), 7-year school in the city, the school for peasant youth (SKM), the school of apprenticeship (FZU) on the basis of primary school, the school of the 2nd level (5th-9th grades) with professional 8th-9th grades at a number of schools. In some regions and republics separate schools for boys and girls (in Dagestan, Middle Asia), religious schools (maktabe, madrasah) continued existing, terms of training also differed, boarding schools were founded. Vocational education was under authority of the Glavprofobr (the Central Administrative Board of Professional Education).

The mass form of professional training in 1921-1925 was the school of FZU. No less than 3/4 of students of which were children of workers. Staff of the lowest and average technical and administrative personnel (masters, foremen, mechanics) was trained in technical schools, special professional schools, on short-term courses. The principal types of professional educational institution were technical-industrial, pedagogical, agrarian, medical, economic, juridical, art schools with a three-year training.

In 20s the special form of higher education appeared - work faculties (rabfac). The government pursued the class policy in the field of higher education, creating favorable conditions for entering the institutes of higher education of workers and peasants. In the beginning of 20s the subjects of historical materialism, the history of the proletarian revolution, the history of the Soviet state and law, the economical policy of dictatorship of proletariat were introduced.

The contradictions of economics and politics, the complexity of the social processes of the period of NEP found the vivid reflection in the works of literature, art, architecture and theatre.One of the influential literary groups ' Serapionovy Brothers ' (1921) united mainly prose writers (K.Fedin, Vs.Ivanov, M.Zoshenko, V.Kaverin and others). The literary group ' Pereval ' (passing) (1923) was created, attached to the magazine ' Krasnaya Nov ' (the red virgin soil). The writers M.Prishvin, A.Vesely, P.Pavlenko and others belonged to it. Its members came out in favor of preservation of succession with the traditions of the Russian and the world literature against rationalism and constructivism.

In the beginning of 20s a group of writers (N.Poletaev, F.Gladkov and others), which came out of the Proletarian culture society, created the association ' Forge '. In 1923 the Moscow association of proletarian writers, and since 1924 the Russian association of proletarian writers (RAPP) were founded. The representatives of the ' Literary center of constructivists ' (I.Sevilsky, V.Inber, N.Aduyev) propagated ' the soviet westernizm '. Another literary group ' the Left front of arts ' (LEF, 1922) included poets V.Mayakovsky, N.Aseyev, S.Kirsanov and others, negating artistic invention, psychological aspect. Some prominent writers and poets didn't belong to any groups or associations.

In the beginning of 20s poetry was in the lead of literature (literary soirees, concerts, disputes). In 1921-1923 came out new tales and novels by outstanding masters of pre-revolutionary realistic prose. Against the background of revolutionary epoch works of symbolist and formalistic trends (by A.Bely, E.Zamyatin, A.Remizov) took the prevalence.

By the middle of 20s the genre of novel again took the lead in the literature: there were written ' The Artamonovs' Affair ' (1925) by M.Gorky, ' Iron Flow ' (1924) by A.Serafimovich, ' Chapaev' (1923) by D.Furmanov, ' Defeat ' (1926) by A.Fadeev, etc.Satiric novels built on adventurous and social-utopian topics were wide spread.

In the field of art there also existed a great number of counteracting groups and tendencies: 'the Association of artists of the revolution' (AHR, 1922), 'the Society of easel painters' (OST, 1925), the society of artists of 'the 4th art' (1924), 'the Society of Moscow painters' (1927), 'the Masters of the analytical art' (1927), etc. Similar processes took place in the field of architecture, sculpture, and theatre.

Thus, in 20s there existed relatively favorable conditions for development of modernist tendencies in literature and art. Way more tragic was the fate of the artists focused on the values of traditional Russian culture. The outstanding painter V.M.Vasnetsov died in poverty. The great Russian poet S.A.Yesenin died under obscure circumstances. The greatly talented playwright and writer M.A.Bulgakov and others suffered keen persecution.

Foregn Policy in the Period of NEP

The quite difficult internal situation of Soviet Russia, coming to authorities of the Soviet foreign policy of pragmatically adjusted old, pre-revolutionary experts, first of all G.V.Chicherin, also contributed to the change of the foreign policy course of the country.

From 1918 to 1928 Chicherin was at the head of the National commissariat of foreign affairs, and substantially due to his experience, qualification, knowledge of international law and communications with foreign departments the relations between Soviet Russia and foreign countries gradually began to establish. Leading western countries as were convinced, that the Soviet authority in Russia is 'seriously and for a long time', also made attempts of establishment of interstate relations.

These two counter processes resulted in the beginning of 1920s in cautious and inconsistent steps of establishment and development of diplomatic relations between the Soviet state and countries of the West. Normalization of relations of the Soviet state with European countries started with the trade. The Soviet-English agreement of March 16, 1921 was one of the first agreements of the Soviet country with leading countries of the world. On the 6th of May, 1921the Soviet-German trading agreement was signed, in which Berlin recognized RSFSR de facto (i.e. actually) the only lawful assign of the Russian state. Similar agreements were soon made with Norway, Austria, Italy, Denmark and Czechoslovakia.

In summer 1921 famine started in the Volga region. The Soviet government addressed to the International Red Cross and the American association of help (ÀRÀ) with the request for help. The question on rendering assistance to the Soviet country was considered in October 1921 at the Brusselles conference of the heads of leading western states. The conference recommended the governments to grant a loan to Soviet Russia for struggle against famine only under condition of its acknowledgement of debts of former regimes and the admission of the commission of control of the distribution of products .

The international economic and financial conference was held in Genoa (Italy) from April 10 till May 19, 1922. Representatives of 29 countries participated: RSFSR, Great Britain, France, Italy, Belgium, Japan, etc. The ambassador of the USA in Italy assisted as an observer. An attempt of the Soviet delegation to put for a discussion the problem of disarmament (carrying the non-constructive character) was rejected by other delegations. Positions of the western powers included requirements of payment by the Soviet government of all the debts of the imperial and the Provisional governments, restitution of the nationalized property to foreigners or payment of compensation for the damage or loss of property, granting foreigners with an opportunity to be engaged in the Soviet country trade and economic activities with rights which they had in other countries. The western countries suggested creating the commission of the Russian debt, which would control the payment of the debt, returning or compensation of the nationalized property.

Counter-claims of the Soviet party included compensation of the damage caused to Soviet Russia by intervention and blockade (39 billion gold roubles). Representatives of powers of Entente refused to recognize the Soviet claims, referring to absence of the financial documents made according to the international law.The mutual consent wasn't achieved. Therefore the decision was made to pass consideration of all points at issue to the conference of experts, held in Hague in June 26 - July 19, 1922 which also went off with no results.

December 12, 1922 the conference on reduction of armaments was held in Moscow in which the representatives of Latvia, Poland, Estonia, Finland and RSFSR took part. The offers of the Soviet state on serious reduction of armies of the countries - participants of conference was rejected first by 75 %, and then by 25 %.

Participation of the USSR in Lausanne peace conference (November, 20, 1922 - July, 24, 1923) on which questions of peace settlement on Near East were considered, also showed incompatibility of positions of Soviet Russia and the western countries. The Lausanne convention was held on the basis of the English offers and provided an opportunity of pass to the Black sea of the military ships of all countries. Though the Soviet delegation had also signed the text of the convention, the USSR refused to ratify it.

Bylateral relations developed more successfully for the USSR. During the conference in Genoa the bilateral contract between the Soviet Russia and Germany was signed on the 16th of 1922 in the suburb of Genoa of Rapallo. The Rapallo's contract provided reestablishment of diplomatic relations between RSFSR and Germany, mutual refusal of the parties of compensation of military damage, charges on the maintenance of prisoners of war. October 12, 1925 the trading contract and the consular convention with Germany were signed. April 24, 1926 the USSR and the German republic signed the nonaggression pact and neutrality. In 1926 the USSR made a long-term loan from Germany in 300 million marks partly guaranteed by the German government.

The relations of the Soviet Russia with Great Britain were more complicated. As a result of work of the English-Soviet conference on August 8, 1924 the General contract and the Contract about trade and navigation were signed between Great Britain and the USSR.

The serious aggravation of the Soviet-English relations took place in 1926 during the general strike in England and the strike of the English miners, which started on May 1, 1926. The Soviet government through the Soviet trade unions rendered significant financial and material help to the Federation of miners of Great Britain. In June 1926 the English government accused Moscow of intervention in the internal affairs, and in the note of February 23, 1927 - of breach of the English-Soviet trading agreement. In spring the wave of anti-soviet actions swept in England, including the raid of the English police of the London apartment of ÀRÊÎS (the English-Russian cooperative society), which purpose was withdrawal of seditious documents. May 27, 1927 the English government broke off diplomatic relations with the USSR and cancelled trading agreement of 1921.

More stable relations were maintained with other countries. Diplomatic relations between Italy and the USSR were established on February 7, 1924 and the Italian-Soviet contract of trade and navigation was signed. Within 1924 the Soviet Union established diplomatic relations with Norway, Austria, Sweden, Greece, Denmark. Normal (at ambassador level) diplomatic relations with France were established on October 28, in January 1925 - diplomatic and consular relations with Japan.

September 28, 1926 the Soviet-Lithuanian contract confirming the Riga peace treaty of 1920 was signed. Among great powers only USA did not establish diplomatic relations with the USSR in 20s, refusing to carry on any negotiations before payment of debts and indemnifications for the nationalized property.In 20s the USSR started to carry out the more active policy concerning the Asian countries, first of all bordering.