Moreover, their output programme for the economic year has to be sanctioned by the Supreme Economic Council, which can ex pand it or curtail it in line with the general State plan of produc tion for the year; and the Commissariat of Trade has power to fix maximum selling prices for the Trust's products. The Trust has power to enter into contracts, like any ordinary firm. It can use its working capital for this purpose; and on the security of this working capital (securities, stocks of goods, cash balances) it can raise credits from the banks or issue bonds. But it cannot pledge its fixed capital (plant, land and buildings) for this pur pose, and the State is not responsible for the debts it may incur. In practice it makes its own contracts for purchase of raw mate rials, pays wages on the basis of a collective contract with the trade unions, and enters into contracts with trading organs for the disposal of its finished output. If it desires to renew or extend its plant or to erect new factories, it can do this either by capital ising its reserve fund, by raising a loan, or by securing a direct grant from the State for this purpose.
The basis on which such federations are organised is exceedingly flexible In some cases, as in the metal industry, a Trust may be based on a vertical amalgamation of a group of large enterprises at various stages of production (e.g., from mining to finished en gineering), either in the same locality or in different parts of the country. In other cases it may be a horizontal grouping of a few similar factories and workshops in a small provincial town. Some of the textile Trusts are vertical groupings of cotton factories from spinning to finishing processes ; others group together linen and wool and cotton mills where these are found together in a particular locality. Already by the winter of 1922 nearly Soo Trusts had been formed, covering some 75 per cent of the workers in nationalised industry. On the average each Trust covered 2,200 workers; but while 41 of the Trusts were large concerns covering 12,500 workers, with an average of 90o workers in each factory, about half the total number of Trusts were quite small and local in scope, employing an average of only 36o workers Trade: Internal and External.—In the first year of their formation the Trusts experienced considerable difficulties in the marketing of their produce, owing to the absence (as a legacy of "war communism") of any developed commercial apparatus. The cooperative wholesale organisation, Centrosoyus, suffering from lack of working capital and from the disorganisation of the war period, was still unable to handle more than a minor proportion of the total trade between village and town. The Trusts, accord
ingly, under the urgent need to sell their products to realise work ing capital, utilised private traders and agents wherever possible, and in numerous cases instituted their own retail establishments or even stalls and booths at local markets and fairs. The upshot of this situation was the interesting experiment under which the Trusts on their own initiative combined together to institute common marketing organisations, or Syndicates. These are similar in constitution to cartels or syndicates in capitalist countries, and are generally joint stock companies of which the capital is owned by the participating Trusts.
These Syndicates, with two exceptions, possess no legal monop oly of the market, and while as a rule they cover a major part of the industry, a certain number of producers, both State and private, usually exist which market their products independently. The Syndicate, as the sales organisation for the member firms, then arranges contracts of sale with Centrosoyus, State wholesale companies or private traders, or sometimes deals direct with the provincial unions of consumers' co-operatives or even with the local retail organisations. In all some 23 Syndicates have been formed, the syndicated Trusts constituting in number about half the total industrial Trusts and covering about four-fifths of the man-power in State industry. In addition to the Syndicates the sphere of wholesale trade is covered by Centrosoyus, private traders and certain State trading bodies. These latter are generally special trading companies such as Mostorg, Ukraintorg, insti tuted by a local or provincial Soviet or a group of State depart ments, which hold the majority of the capital of the company. The following table shows the relative importance of the different types of organisation in wholesale trade and illustrates the ten dency for private capital to occupy a decreasingly important place.
1924-25 1926-27 State and Co-operative 90% 95% Private 1 o% 5% In retail trade the consumers' co-operative stores play a much greater role than any State body ; and it is here, as one would expect, that the private trader, particularly in the villages, has survived to the greatest extent. In retail trade State organisations (as part of their policy) participate only to a very small extent. A few Syndicates, such as the Textile Syndicate, own retail shops in the towns, and the State trading company, G.U.M., occupies the big arcades which traverse the east side of the Red Square in Moscow. The following table shows the relative proportions in which the turnover of retail trade is shared between the State, the cooperatives and the private trader.