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64 RUSSIA AND PEACE
It goes without saying that an improvement
of transport facilities which induced an increase
of local production would react favourably on the
financial position of the whole railway system.
According to a report that Bogdanov, president
of the Supreme Council of National Economy,
kindly sent me, the Russian railways of the third
rate of importance run at a loss, and their working
must be expected to give a deficit of 29 million
gold roubles in 1923. The desirability of closing
them for three years has therefore been discussed,
but has been abandoned after calculation that not
only would the resumption of work cost nearly
85 million gold roubles, but also that the income
of the railways of the first and second class would
fall to the extent of nearly 12 million gold roubles
a year if their goods traffic was deprived of the
supplies passing over the third class lines.
Every increase, therefore, in the quantity of
goods transported in Russia really entails a reduc
tion of the railways’ deficit, for the railway organ
ism costs less when it is working at full power.
I must add that though I was struck’ by Dzer
shinsky^ logic and sense for the practical, but
though his efforts to organise the transport system
on a purely commercial basis appeared to proceed
from a very sound (and not at all " State ")
appreciation of the economic circumstances, I can
not entirely share riis opinion of the real condition
of the Russian transport system.
According to what he says, it would almost
seem as if the railways, which he has succeeded
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