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 toes, and gets in exchange large quantities of grain, cattle, and other commodities vitally needed by the army, the city dwellers, etc. The essence of the exchange is that the Government puts in a little printed matter and takes out great masses of substantial products.

Last year this process netted the Soviet Government 250,000,000 gold rubles' worth of commodities. And thus, in fact, the deficits in the national budget have been made up every year since the revolution. What the Government has been unable to realize from the output of its nationalized industries and from direct levies in kind upon the independent producers it has always made up by the "sale" of its paper money. Through the medium of the monetary system it has been able to extract indirectly from the money-loving petty bourgeois elements large amounts of supplies which, with all its armed power, it could hardly take from them directly by taxes.

Of course, the peasants and other independent producers object to the flood of paper money and at each fresh torrent of it they hastily raise prices accordingly. But they are always too late. The scientific Socialists at the head of the Soviet Government understand the laws of economics far better than they and are always able to take from the "money market" the tax so necesssarynecessary [sic] to the country's maintenance. Because of this fact, because it is a very potent means of making the non-revolutionary elements contribute taxes, Communist financial experts consider the issuance of paper money as a most important revolutionary weapon, especially in agricultural countries. Indeed, without it, the Soviet Government would probably have collapsed long ago.

Naturally the phenomenal increase in the volume of money in circulation has brought about an enormous depreciation in the value of the ruble. Before the war two rubles were worth an American dollar; now it takes 30,000 rubles to buy one. In other words, the ruble has fallen 15,000 times in value. In capitalist countries such an abysmal depreciation of the currency would completely destroy the financial system and paralyze everything. But in Russia, where most of the industries are nationalized and thus freed from the influence of financial control, no such effect is produced,