THE STRUGGLE FOR CONTROL By the beginning of 1924 the New Economic Policy may be said to have justified itself as a practical measure. Currency had been restored to a gold basis, production was approaching pre-war standards, and agriculture had recovered from the effects of the famine and civil war. Much of the improvement had been due to the "Nepmen," or private traders, in the towns, and their counterpart, the "kulaks," or richer peasants, in the villages. They formed a new bourgeoisie, whose wealth and influence were steadily increasing.
The outer world seemed ready to believe that Russia had now entered upon an evolutionary process similar to that which fol lowed the French Revolution under the Directory, and was eager to share in the development of the country's vast resources. It failed to reckon, however, with the fanaticism of the Communist Party and the tenacity of their Marxist faith. The Party had accepted the New Economic Policy, not as a volte-face but as an expedient. It refused to abandon its ideal of a universal Revolu tion and a world Socialist State. To that ideal it was determined to hold the Soviet Union, whatever difficulties might result at home or abroad.
Thus began a struggle for control between "Left" and "Right"; that is, between Marxist internationalism and the process of evolu tion, which raged with growing intensity through the coming years. Had Lenin lived, the struggle might have been less acute or avoided altogether. His authority and sense of realities were so great that it is probable that he could have maintained the New Economic Policy as the delicate adjustment between two oppos ing forces which he originally conceived it to be. His sudden death on Jan. 21, 1924, destroyed the balance which was gradually being reached.
The Period of Recognition.—The effect of Lenin's death had been discounted abroad because of his long illness and ab sence from public affairs. The growing prosperity of the Soviet State had stimulated the interest of foreign business men, who were beginning to feel that trade would be improved by the estab lishment of regular diplomatic and consular relations with Russia. Germany had taken this step two years before. The new Labour
Government in England had promised to do the same as one of the means of diminishing unemployment, and the energetic Fascist autocracy of Italy was seeking fresh fields for commercial expan sion. France was still preoccupied with the memory of her lost loans to the Tsarist Government and with her own reconstruction problems, but her hostility to the Soviet had to some extent diminished.
On Feb. I, 1924, the British Government recognized the Soviet de jure. Other countries followed in rapid succession, and by the beginning of 1925 all of the Great Powers except the United States and Latin America had established diplomatic relations with the Soviet Union. The order was as follows : Japanese recognition had been delayed by their claim to com pensation for a massacre of Japanese soldiers by Red "partisans" in the Siberian town of Novy Nikolayevsk in May 1920. Although they had evacuated Vladivostok and the mainland in Nov. 1922, they retained northern Sakhalin until their claim should be satis fied. After two failures negotiations were resumed in Aug. and recognition was granted on Jan. r, 1925. A supplementary agreement on Jan. 20 pledged the Japanese to withdraw from Sakhalin before the end of May and gave them important oil and coal concessions in the Russian half of the island.
The establishment of normal diplomatic relations led to an increase of foreign trade, but the absence of a settlement of tsarist debts, war debts and private claims prevented any exten sion of loans to the Soviet. Nevertheless short-term credits were soon arranged in many countries, and the regularity with which Soviet bills were met gradually overcame distrust. A number of important English firms gave terms of credit running from three to five years. In 1925 Germany provided a State-assisted credit of 300,000,00o marks for a period of three years. The French and Americans were more cautious, but heavy annual purchases of cotton in the United States on a short-term credit basis were made possible by longer credits elsewhere and by the general im provement of Russia's economic situation.