ALL trade and commerce were nationalized by the decree of June 28, 1918. This meant that trade was declared a monopoly of the state, being taken out of the hands of private individuals and placed in the hands of the proper department of Government. Free trade, in the sense of exchange of commodities for money at prices fixed by the seller or arranged by the buyer and the seller, was officially abolished. The Government became the seller; it fixed the prices and arranged the conditions of exchange. Under this system most of the stores taken away from their former owners were placed in the hands of local Soviet authorities, mostly municipal bodies. Since production was rapidly diminishing, these municipalized stores had very little business to do, and still have very small amounts of commodities passing through them.
However, selling in the cities is but a small phase of the whole process of distribution, for that process is national in its scope. And in an agricultural country like Russia, the main problems of distribution are those concerned with the exchange of commodities between the cities and the villages. The Soviet Government, during the first period of its existence, i. e., up to the end of 1918, found no way of handling this larger phase of