Moscow from ARA to NEP

Walter Duranty, Moscow from ARA to NEP. 1923


Moscow had changed during my three weeks’ absence on the Volga. Everywhere dilapidated and half-ruined buildings were being refurbished and restored, and the fronts of the houses cleaned and painted. Shops, cafes and restaurants were being opened in all directions. Scores of shabby one-horse victorias like the old French fiacres had appeared, and traffic on the streets had increased tenfold. The city was full of peasants selling fruit, vegetables and other produce, or transporting bricks, lumber and building materials in their clumsy, creaking carts. Suddenly goods began to appear from unexpected corners, hidden or hoarded, or perhaps if the truth were known, simply mislaid or lost in the fog of bureaucratic red tape.

For a month or six weeks after its inception NEP. must have seemed too good to be true to most of the people of Moscow. The population of the city had shrunk to little more than 1,250,000 in the three “hard years.” Of this number, not more than two per cent were Communists and only a comparatively few of the non-Communist working-class population received any material benefit from the new regime. It might please the working masses to be told that they were the sovereign proletariat and that every man Jack of them was better than his former Master, but these fine words did not put food in their bellies or clothes on their backs. Of the remaining Muscovites nine-tenths had lived before by trade, and one-tenth had been the leisured-class officials, nobles, landlords and rentiers with their servants and parasites. This last fraction had suffered most from the Revolution. From its abounding luxury and power under the Tsars it had been reduced to penury and danger. On the night following the attempt to assassinate Lenin five hundred members of the former ruling class in Moscow had been torn from such homes as were left to them, attics or cellars in their former mansions, and shot before dawn, not for any guilt of theirs but as a symbol of the Red Terror.

For these former aristocrats and rentiers NEP. was a respite from pressure, to restore perhaps a semblance of the respect and position they had lost, and if the fates were kind, a chance to escape abroad. To the Communists and to the small group of proletarian leaders who had benefited by the Military Communist period NEP. was doubtless repugnant, but to the mass of the workers it brought jobs that would henceforth be paid in money instead of valueless paper or moldy rations, and the certainty that with money they could buy the food and necessities of life that bad previously been lacking. To the traders NEP. meant opportunity and the dawn of better days. Until August 9th it was technically a crime to possess goods of value, gold or silver or jewels or foreign currency, and a crime to buy and sell anything. It is true that many people continued to own valuables and that buying and selling was practiced more or less overtly, even in public markets, but the latter were continually raided to “suppress speculation” and any owner of valuables might find himself denounced, arrested, and his property confiscated. The NEP. decree changed all that, and the people of Moscow, after a pause of bewilderment, seemed to realize NEP’s possibilities simultaneously, and rushed at them like famished swine to a feeding trough.

The most striking features of NEP. in this early stage were its rapid acceleration, its confusion, its opportunities for quick and easy profit, and the immense stimulus it gave to employment of all kinds. Not to mention its growing contempt for the rules and restrictions which had previously been enforced by the Bolsheviks. The first twelve months of NEP. were like the old Roman Saturnalia, when for three days each year slaves and underlings might usurp with impunity the pleasures and privileges of their masters. Its waves, thick with greed and eagerness to tear from life the joys which had been denied so long, swept over Moscow and the rest of Russia like a flood which the Bolsheviks were powerless to check. They stood aghast before this Frankenstein of their own creation, which was changing with startling velocity laws and values they had accepted as immutable. Their leaders watched the flood and let it roll, serenely conscious that it was bringing a new silt of energy and growth to Russia’s frozen soil. Others, less far-sighted, strove to resist the current and were engulfed. Some plunged into it headlong and swam lustily to capture the spoils that floated on its surface.

Ill-informed foreigners like myself naturally saw first the superficial phases of NEP., its reckless gambling and easy money, its corruption and license; which were real enough, but were not all the truth, because the years of NEP’s flourishing, the last quarter of 1921 until the end of 1923, were also years of national recovery and development. But the seamy side was uppermost, as I soon had proof. Amongst our flock of American wage-slaves there was one white crow in the person of Herbert Pulitzer, the principal owner of The New York World, in whose vineyard he then chose to labor as a mere reporter. The knowledge of his wealth must have reached Moscow, for one day a Russian came to his room at the Savoy, where I was sitting, and by circumlocution invited him to buy a carload of sugar. I think the price was $1,200, and the Russian, who had a note of recommendation from the restaurant in the Arbat where we always took our meals, declared that it could be sold immediately for $5,000. There would be some small commissions, he smiled knowingly, but we could count on a clear profit of at least 200 per cent. I was interested, but the rich Pulitzer asked crudely, “Who owns the sugar now, and where is it?” “Oh,” said the Russian airily, “it is Government property stored in freight cars at one of the Moscow depots. But they’ve forgotten all about it, and of course some of it would go to sweeten the only official who knows anything. I assure you there is not the slightest risk.”

Apart from the fact that the death penalty for theft of Government property was still in force incidentally, after being repealed for ten years, this law was restored again in 1932, which speaks volumes-the Russian may have been right, but we said primly that we didn’t believe that our papers would like us to engage in such transactions. The Russian shrugged his shoulders and retired, but we met him again that evening at the restaurant, reinforced this time by some friends and some excellent French champagne. I may add that Prohibition of all spirits, wines and beer was still in force.

Thus fortified the Russian returned to the charge and ended by borrowing half the money from us, $500 from Pulitzer, and $100 from me as a strict loan with no strings to it, to be paid without accretion in four days. He and his friends were apparently able to raise the rest among themselves. I felt badly about this the next morning and kissed my $100 good-by, although that wine was nearly worth it, but sure enough three days later the proprietor of the restaurant led us aside at lunch-time and announced that the deal had gone through and that its happy perpetrator was giving a banquet that evening in an upper room, at which, he added, Citizen Pulitzer and myself would be honored guests.

It was a big jump from the starving children in Samara to this banquet of forty covers with a dozen courses, everything from fresh caviar to peaches and coffee, from vodka and vintage wines of France and Germany to benedictine, fifty-year-old cognac and real fragrant coffee. “I can’t believe it’s true,” said the girl on my right, as she sipped her coffee. “Do you know that in the last four years, more than half the people here tonight have been in prison, that I haven’t tasted wine or coffee for more than two years, that we’d forgotten what fresh caviar looks like, and salmon and chicken and burgundy; I can’t believe it’s true.”

Pulitzer and I were the only foreigners present. The others were Russians, nearly all Muscovites, not nobles or people of former importance, but members of what would be called in England “the upper middle class,” business and professional men, engineers, lawyers and former civil servants. Our host, .who had successfully handled the sugar coup (before the party began he punctiliously repaid the $600 Pulitzer and I had advanced him), was a rising barrister when the Revolution occurred, who had been exempt from military service because the law firm for which he worked was engaged in 1914 in litigation on behalf of one of the Tsar’s uncles, and he was needed to plead the case, which he duly won in 1916. “1 got a bonus for that of 50,000 rubles,” he told us, “but it didn’t make me feel half so good as the $1,000 1 made from this sugar business. After the way we have lived in the last four years, it is wonderful to have a real party again.”

The proprietor of the restaurant told me afterwards that the dinner cost $500 and added proudly, “I mean that was what it cost, because of course I didn’t make any profit on it; these people are all friends of mine. And you know it wasn’t easy to get all that wine and the caviar and coffee and things on such short notice; I had to scour half Moscow. My God!”–he interrupted himself suddenly—“do you know that a year ago to-day I was arrested because someone told the Cheka that I had five ten-ruble gold pieces hidden in my mattress. I don’t know who told them, but the bastards came and took it and put me in prison because they thought I had some more. I hadn’t luckily, and I suppose they believed me, because they let me out at last.”

“What did you do then I asked.

“Oh,” he said, “I went down to the country and worked on a farm. One of the peasants in the village was the brother of my mother’s old cook and he was vice-president of the village Soviet and let me live in his house. It was hard work but at least I had enough to cat. And as a matter of fact that’s how I came to start this restaurant. This summer before NEP. began I had been selling chickens and eggs and things in the Moscow market and made a little money. When the decree came out I suggested to this old peasant that he would send stuff in fresh every two or three days, the village is only thirty miles away, and that I’d give him better prices for it in my restaurant than he could get at the market, which is true. I’m making money, hand over fist, and- if your friend,” he nodded towards Pulitzer, “would like to take a share in a larger place, I have an option on four rooms near Theatre Square; it wouldn’t cost more than 10,000,000 rubles to fix it up and start us going. We’d get that back in the first week at the rate I’m doing business here.” Ten million rubles was about $2,000 at that time, and the rate was fairly stable for several months, although later it dropped rapidly as the printing-presses went to work to deal with the new volume of business produced by NEP. As a matter of fact the Bolsheviks cut three or more zeros off their currency every year, so that when the ruble finally was stabilized in 1924 at the ratio of 500,000 to the dollar it really should have been 50,000,000-1,000,000 if all the zeros had been left untouched. At the beginning of each year it was announced that the new notes of say 1,000 rubles would have the same value as the old notes of 1,000,000 rubles and it was done, as easily as that.

Everybody at the banquet, men and women, talked excitedly about business and ways, mostly dishonest or anyway illegal, of making easy money. No one seemed to bother about the hardships of the past or have any anxiety for the future. They were Russians, you see, whose racial quality it is to live intensely in the present and dismiss doubts or fears or horrid memories with the easy insouciance of children. “Nichevo”-“what of it” or “no matter”-has been for centuries the Russian national watchword, and the general spirit of indifference to which it bears witness is an element both of strength and of weakness. I had further proof of that before the evening was over, for after dinner they began to play chemin de fer. Pulitzer had an amazing run of luck, and when at last we went home about five o’clock he had won over $1,000 and held IOU’s from most of the company for at least twice as much more. Few of them were paid in cash, but for weeks after he received goods, furs or pieces of jade or porcelain, a jeweled dagger or a silver teapot, from his debtors. The host rapidly lost the whole of his sugar profits but showed no signs of distress. He made $1,000 in one day and all of it had gone, nichevo, there was more where that came from. In his case it proved true. I didn’t see him again but I was told that he made $40,000 or $50,000 in the next few months by speculation in goods, then prudently retired with it to Paris. Passes to leave Russia were easier to get than in later years, and in any case the frontiers were loosely guarded. A great deal of smuggling went on between the Soviet and Finland, Estonia, and Latvia, and some of the smugglers would convoy passengers at a regular rate of from $150 to $250.

The restaurant proprietor was a typical case of the earlier MAN.-man. He began to speculate in apartments and furniture and made a lot of quick money. At one time he had a fine eight-room apartment of his own, no less than three automobiles, two mistresses and a large amount of gold, foreign valuta and jewels. His niece told me that he reckoned himself worth $100,000 and was gradually getting it into liquid form prior to flight abroad when he was arrested by the GPU, which made short work of him. All his property was confiscated and he was sentenced to ten years’ imprisonment on the lonely isle of Solovetskii in the White Sea.

Without going so far as to say that the authorities approved or encouraged NEP’s excesses, there is no doubt that for a time they deliberately “took the lid off” in many respects. Gambling hells and night clubs had no difficulty in getting licenses from the municipality on condition that part of the receipts was reserved for the State in the same way as in the Casinos in France. It was estimated that the receipts of the Moscow Soviet from this source were 4,000,000 gold rubles in the year 1922, which was used for much-needed repairs to the streets, sidewalks, drainage and lighting systems.

The biggest gambling establishment was a place called Praga at the corner of Arbat Square. In the main outer room there were two roulette tables both with zero and double zero, two baccarat tables and a dozen games of chemin de fer. Banks at baccarat frequently ran as high as $5,000, a dozen different currencies were used, from bundles of Soviet million notes to hundred-dollar bills, English five- and ten-pound notes, and most surprising of all, no small quantity of gold, Tsarist ten- ruble pieces, English sovereigns, and French twenty-franc coins. As in France, there was an “inner cercle privÀ,” where only baccarat was allowed and play was higher, with banks of $25,000 or $30,000.

It was a strange sight, this Praga, in the center of the world’s first Proletarian Republic. Most of the men looked like what they were, the low-class jackals and hangers-on of any boom, with fat jowls and greedy vulpine features; but there were others of a better class, former nobles in faded broadcloth and Red Army soldiers in uniform, back from fighting Moslem rebels in Central Asia or from “liquidating” Makhno’s anarchist movement in the Ukraine, eager for Moscow’s fleshpots and a flutter at the tables. A smattering, too, of foreigners, fixers, agents and the commercial vanguard of a dozen big firms attracted by Lenin’s new policy of Concessions, hurrying to find if the report was true that Russia might again become a honey-pot for alien wasps. And women of all sorts, in an amazing variety of costumes, mostly daughters of joy whom NEP. had hatched in flocks, noisy and voracious as sparrows. Later in increasing numbers the wives and families of MEN.-men, the new profiteers, with jewels on their stumpy fingers and old lace and ermine round their thick red necks. And one night I saw a grand dame of the old regime, spare and prim in a high-necked silk frock that she had worn maybe at the Court of Queen Alexandra of England. I had made her acquaintance some weeks before at the open-air market where she was selling the last of her trinkets, as she -told me in fluent French. But the high-born lady took readily to commerce and found, she said, genuine satisfaction in the whirl of exchange, intrigue, and petty “combinations” that was NEP. This night at Praga she opened a bank at chemin de fer with two English ten-pound notes, “passed” seven times with impassive countenance, then left the game with the equivalent of £1,000. “Plus amusant que le marchÀ et moins froid,” she whispered as she went past me to the door, “mais le public laisse Àgalement et desirer.”

Then there was a restaurant called “Bar” not far from the Savoy Hotel. In the winter of 1921-22 it sold good, simple meals in one large dining-room where there was music in the evenings. The following summer “Bar” blossomed out with small private dining-rooms in sheds in a back-yard. It simultaneously acquired upstairs premises by remodeling a derelict hotel, and an era of naughtiness began. At first clients who took a girl friend or two to one of the private dining-rooms would receive a modest hint from the waiter that there were rooms upstairs if they were in no hurry to go home. Then “Bar” started a cabaret and it was understood that the artists were ready to solace the evening of a lonely MAN.-man, and would doubtless not refuse to spend the night with him. By the fall of 1922, “Bar” was doing a roaring trade as a snappy restaurant, night club and brothel all in one. The sale of wine and beer became legal that year, but at “Bar” there were vodka and liquors as well. In the winter of 1922-23 they went further and cocaine and heroin were to be had, for a price by clients in the know.

A merry little hell it was in the spring of 1923, although the American colony tended to boycott it because one of our number had been robbed there in a tough and flagrant way, which indicated all too obviously police connivance and “protection.”

In the end the game was spoilt, not by police interference, but by a tax collector who somehow nosed out the fact that “Bar’s” profits were much greater than reported. An investigation was held and within a week all the “Bar” directors were in jail, and there were a number of arrests among police officials of the precinct in which the place was situated. The gang had been paying taxes on a declared profit of $1,000 a week, but the probe revealed that the weekly profits from all sources, including dope and girls and a most remunerative sideline in blackmail, were upwards of $10,000. 1 do not think any of the people concerned in this affair were shot, and at that they were mighty lucky, but they all received long-term imprisonment.

No better than “Bar,” if less flagrant and luxurious, less “protected” and profitable, was the Red Light district, which sprang up near the Trubnyi Square off one of the boulevards which encircle the city of Moscow like green belts, with -their grass and trees and a broad central alley where people can walk and children play without fear of traffic. In the Trubnyi district there were a dozen big tenement houses, regular rabbit warrens with deep communicating cellars, which for some reason became the haunt of an alien population-Chinese, Gypsies (the celebrated Russian tsygane), and a host of so-called students of both sexes. There were corridors in these buildings where the rank, sweet smell of opium smoke hung, one might say unnoticed, day and night, and where beside the name and number of the small cell-like rooms was tacked a photograph of its fair occupant in the scantiest of costume. Worse still were the famous “Catacombs,” as they were called, the cellars and two lower stories of an unfinished brick building right in the middle of town where now stands the central post and telegraphic office. The latter building now occupies a whole city block, but in the days of NEP. there were only rusty ruins in the middle of a muddy field. The “Catacombs” was a notorious haunt of thugs, robbers, and the lowest street-walkers, and ten murders a week was supposed to be its average. I myself saw a corpse there in the field one morning, naked, gashed and unheeded. For a year or more its denizens lived as they pleased, with little save occasional molestation by a police squad armed to the teeth, when some unusually atrocious crime had stirred authority to action.

Yet all these sooty manifestations of NEP. could not hide the fact that it was a period of genuine growth and expansion. I had proof of this under my own eyes. Pulitzer and I soon wearied of the Savoy and secured from the Moscow Soviet a small apartment which had been. a ruined restaurant. We got it rent free for three years on condition that we mended the floor and windows, fixed the stoves and plumbing, and generally put it in good repair as dwelling quarters. It cost us the equivalent of $1,000 if I remember rightly, and when you think that our example was being followed all over Moscow, or rather that we were following the general example, it is easy to gauge the extent of the building “boom,” which always means prosperity to any city.

One morning at the top of my street I saw a man sitting on the sidewalk selling flour, sugar, and rice on a little table formed by two boards across trestles. He explained in German that his stock was part of an ARA. food-packet which he had received from his Finnish relatives in Helsingfors. These food-packets contained ten dollars’ worth of flour, sugar, cocoa, rice and tea at American wholesale prices, which the ARA. delivered in Russia on order and payment abroad. In 1921 they were worth from thirty to forty dollars in Russian values, sometimes far more than that in the famine areas, and they formed the foundation of many small businesses, especially amongst the Jewish population of the southwest, where many people had relatives in America.

The Finn’s venture flourished, for at the end of a week his .”table” had doubled in size and he was selling fresh eggs and vegetables. That was October, and by mid-November he had rented a tiny store across the street, handling milk, vegetables, chickens and the freshest eggs and apples in Moscow at prices below those of the markets. By the following May he had four salesmen in a fair-sized store, to which peasants brought their produce fresh each morning. As his own middle-man he paid them more than they could get at the market, which he continued to undersell. In July he opened a dry-goods section, then added hardware. In October, after a year’s trading, he sold out to a cooperative and returned to Finland with enough money, be told me.) to buy a farm and live independently for the rest of his life. I gathered that, starting from nothing, he had made $20,000 or $30,000 clear profit, but the point is that his enterprise stimulated scores of peasants to fatten chickens and little pigs, or plant vegetables, or fashion wooden bowls and platters and forks and spoons and produce clay pots and the rest of village handcraft. The same thing was being done all over Russia and the effects were amazing. In a single year the supply of food and goods jumped from starvation point to something nearly adequate, and prices fell accordingly. This was the rich silt in NEP’s flood, whereas the gambling and debauchery were only froth and scum.

Source: Walter Duranty, I Write as I Please (New York: Simon and Schuster, 1935), pp. 138-150.

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