From the report of the Supreme Council of National Economy, March, 1919, we learn that in the vast majority of the branches of Russia’s industry the labor required for production had increased from 400 to 500 per cent. The Congress of Salesmen’s Unions, held at the end of April, 1919, adopted a resolution, published in _Izvestia_ (No. 97), which said, “The nationalization of commerce, owing to the pell-mell speed of the methods employed in carrying it out, has assumed with us extremely ugly forms, and has only aggravated the bad state of affairs in the circulation of goods in the country, which was poor enough as it was.” These statements show that in the early part of last year the Bolshevist régime was in a very critical condition. Demands for the “liquidation” of the system were heard on every hand. Instead of this, the resourceful rulers of Soviet Russia once more revolutionized their methods. The period of nationalization we have been considering may be described as the first phase, the period of the rule of industry by the professional politicians of the Communist Party. When, in March, 1919, Leonid B. Krassin[53] undertook the reorganization of the industrial life of the nation, Bolshevism entered upon a new phase. [53] Krassin’s first name is usually given as “Gregory,” but this is an error. His full name is Leonid Borisovitch Krassin. He is a Siberian of bourgeois extraction. X THE NATIONALIZATION OF INDUSTRY--II The second phase of nationalization may be characterized as the adoption by a political state of the purest capitalist methods. Krassin was not a Bolshevik or a Socialist of any kind, so far as can be learned. He severed his rather nominal connection with the Socialist movement in 1906, it is said, and, thoroughly disillusioned, devoted himself to his profession and to the management of the Petrograd establishment of the great German firm of Siemens-Schuckart. He is said to have maintained very cordial relations with Lenin and was asked by the latter to accept three portfolios, namely, Commerce and Industry, Transports, and War and Munitions. He agreed to take the appointment, provided the Soviet Government would accept his conditions. He demanded (1) the right to appoint specialists of his own choosing to manage all the departments under his control, regardless of their political or social views; (2) that all remaining workers’ committees of control be abolished and that he be given the power to replace them by responsible directors, with full powers; (3) that piece-work payments and premiums take the place of day-work payment, with the right to insist upon overtime regardless of any existing rules or laws.