The Russian Review/Volume 1/March 1916/Russian Industries and the War
Russian Industries and the War.
The Russian Ministry of Finance has prepared an interesting report on the condition of the Russian industries during the War. The report covers the whole Russian Empire, with the exception of the territory occupied by the Germans. It sums up all the official information that has been gathered concerning the effects of the War upon Russia's industrial life and forms and interesting, though not an exhaustive, study of the subject.
According to the statistics gathered by the Ministry, there were during 1914, 1,960,860 persons employed in those industries which come under the provisions of the Factory Control Regulations. This figure shows a slight decrease when compared with the figure for 1913, which was 1,966,144. The decrease, of course, is due to the fact that the last five months of 1914 formed the first period of the War. The actual decrease is, perhaps, greater than is shown by the above figures, since the number of industrial enterprises which came under the Factory control Regulations increased from 13,863 in 1913, to 14,047 in 1914.
Yet, despite this decrease in the number of persons employed, Russian industries show a distinct growth during the War. The report points out several specific causes which were largely responsible for this development. The most important among these are the presence of large government orders and the decrease in the consumption of alcoholic drinks. The government is in the market for enormous quantities of articles which are needed for war operations, and this has caused a large increase in the activities of metal factories, machine and boiler shops, car, gun, and munition works. There is also a noticeable increase in the production of cloth, linen and weaving factories, leather and cotton-goods works.
The question of the discontinuance of the sale of alcoholic drinks is given special attention in the report. The results of this measure are already evident in two ways. In the first place, the productivity of labor throughout the country has increased very noticeably, and in the second, sickness and inability to work have shown a decided decrease. Proofs of this are found in the accumulation of unused funds in hospitals and clinics, a decrease in the number of fines for spoiled work in factories, an increase in the output, and an improvement of the quality of factory production. There is also a considerable increase in the peasants' purchasing power, as well as a constantly growing demand among them for goods of industrial production.
The report discusses in detail two Russian industries, viz., the metal industry and the textile industry. The development in the first of these is due largely to the government war orders. It is noticed that the available supply of labor is inadequate for the needs of the industry. This is especially true in the case of skilled labor.
An interesting phase of the matter is that this increased activity is noticeable mostly among larger enterprises. The smaller ones are often compelled to go out of business altogether. While the report offers no explanation of this phenomenon, it is most probably due to the present conditions of the Russian money market. These conditions are highly unfavorable for a successful existence of smaller enterprises.
Together with the increased productive activity of those metal works which are adapted for the production of war materials, there is a noticeable decrease in the activity of works producing agricultural implements. The difficulty again lies in the financial side of the enterprises. Lack of free capital, the increased cost of iron and coal, and the impossibility of shipment by rail, especially over long distances, as to Siberia, for example,—all these conspired to reduce very considerably the productivity of these factories.[1]
Again, due to the introduction of temperance, the machine shops, which formerly produced apparatus for alcohol refining and for beer brewing, found themselves in great difficulties. Many small shops, whose chief work consisted in repairing such apparatus, have also been compelled to shut down. This condition is especially noticeable in the Baltic provinces, where a large part of Russia's supply of alcoholic drinks was formerly produced.
Yet, the increase in the productivity of the whole industry, due mainly to war orders, has been more than sufficient to overbalance these difficulties. The statistics concerning the metal industry show that in 1914 there were 1977 enterprises in this industry, employing 346,989 persons, as against 1897 enterprises, employing 327,822 persons in 1913. Thus, the number of enterprises has increased by 4.1 per cent, while the number of employees shows an increase of 5.6 per cent.
The textile industry exhibited a condition of noticeable decline at the beginning of the War. But this lasted for only two or three months, after which the activity in the industry began to show a steady rise, until, towards the end of the year, the increase was already plainly evident in the larger number of persons employed, the elimination of many non-work days, the introduction of "overtime" and holiday work. This increase in the activity of the textile industry is due largely to the war orders of the government Supply Department, the Red Cross, and the Zemstvo and Municipal Unions.
The increase of activity affected mostly those enterprises which produced the poorer grades of goods. On the other hand, the production of the higher grades of goods shows a decided decline. The greatest increase is shown by the factories producing heavy cloth, enormous quantities of which are needed to provide uniforms for the immense Russian armies.
The report contains interesting, though brief discussions of such interesting topics as the growth of railroad construction in Russia, the activity of the Rural Credits Bank, the condition of the money market, the immediate problems of the coal and oil industries. Unfortunately, the treatment of the last two industries is very superficial, while the great importance of the industries would call for a very thorough study.
One great defect of the report is that it does not even attempt to present a more or less definite, concrete plan of the great economic reforms which are so imperatively demanded by the conditions brought about by recent events. The report contents itself with the following conclusion:
"It is, therefore, evident, that Russia, in her economic life, is face to face with new and difficult problems, a satisfactory solution of which will largely depend upon the outcome of the War, although the abundant supply of natural wealth within the country, and the tremendous productive possibilities of Russia's sober population are also important factors in the possible solution of these problems."
- ↑ It is interesting to note, in this connection, that at the beginning of the War, the majority of enterprises in the Russian machine industry in general, and in the agricultural implement industry in particular, found themselves in great financial difficulties. They petitioned the government for assistance, but, before their request was finally granted, over a half a year after it was made, almost eighty percent of these works had either shut down, or had already been transformed into munition works.