At the end of December, 1918, Rykov, president of the Supreme Council of National Economy, reported to the Central Executive Committee, according to _Economicheskaya Zhizn_, “Now almost all the large and medium-sized establishments are nationalized.” A few days later an article by Miliutin, published in the same paper, said: “A year ago there were about 36 per cent. of nationalized establishments throughout Soviet Russia. At the present time 90 per cent. of industrial establishments are nationalized.” On January 12, 1919, the same journal reported that nationalization had become general throughout Russian industry, embracing the textile and metallurgical industries, glass-making, printing, publishing, practically all commerce, and even barber shops. We are, therefore, in a fair position to judge the effects of nationalization upon the basis of subsequent reports. It is not as well known as it ought to be that the Bolsheviki, even under nationalization, continued the practice, established under czarism and maintained by the Provisional Government under Kerensky, of subsidizing factories from the central treasury of the government. Bad as this practice was under capitalism, it was immeasurably worse when applied to industry under Soviet control and to nationalized industry. It was not only conducive to laxity and bad management, but it invited these as well as being destructive of enterprise and energy. The sums spent for this purpose were enormous, staggering in their total. A few illustrations must suffice to show this. According to _Economicheskaya Zhizn_ (No. 50), in the month of January, 1919, the Metal Department of the Supreme Council of National Economy distributed among the various nationalized metallurgical works 1,167,295,000 rubles, and the central organization of the copper industry received 1,193,990,000 rubles. According to a report of the Section of Polygraphic Trades, published in _Pravda_, May 17, 1919, nineteen nationalized printing-establishments lost 13,500,000 rubles during 1918, the deficit having to be made up by subsidies from the central treasury. At the Conference of Tobacco Workers, held on April 25, 1919, it was reported, according to _Severnaya Communa_, that the Petrograd factories alone were being operated at a loss approaching two million rubles a month. It was further stated that “the condition of the tobacco industry is bad. The number of plants has been decreased by more than half, and the output is only one-third.” In the report of Nemensky on the audit of the Centro-Textile, from which we have already quoted, we read: