to make peace
with the revolution on a just and reasonable basis--perhaps
a unique opportunity.

3. If the blockade is lifted and supplies begin to be
delivered regularly to soviet Russia, a more powerful hold
over the Russian people will be established than that given
by the blockade itself--the hold given by fear that this
delivery of supplies may be stopped. Furthermore, the
parties which oppose the communists in principle but are
supporting them at present will be able to begin to fight
against them.

4. It is, therefore, respectfully recommended that a
proposal following the general lines of the suggestion of
the Soviet Government should be made at the earliest
possible moment, such changes being made, particularly in
article 4 and article 5, as will make the proposal
acceptable to conservative opinion in the allied and
associated countries.

Very respectfully submitted.

WILLIAM C. BULLITT.

* * * * *

APPENDIX TO REPORT

TRANSPORT

_Locomotives_.--Before the war Russia had 22,000 locomotives.
Destruction by war and ordinary wear and tear have reduced the number
of locomotives in good order to 5,500. Russia is entirely cut off from
supplies of spare parts and materials for repair, facilities for the
manufacture of which do not exist in Russia. And the Soviet Government
is able only with the greatest difficulty to keep in running order the
few locomotives at its disposal.

_Coal_.--Soviet Russia is entirely cut off from supplies of coal.
Kolchak holds the Perm mining district, although Soviet troops are now
on the edge of it. Denikin still holds the larger part of the Donetz
coal district and has destroyed the mines in the portion of the
district which he has evacuated. As a result of this, locomotives,
electrical power plants, etc., must be fed with wood, which is
enormously expensive and laborious and comparatively ineffectual.

_Gasoline_.--There is a total lack of gasoline, due to the British
occupation of Baku. The few automobiles in the cities which are kept
running for vital Government business are fed with substitute
mixtures, which causes them to break down with great frequency and to
miss continually. Almost the entire fleet on the great inland waterway
system of Russia was propelled by gasoline. As a result the Volga and
the canals, which are so vital