In November 1917, almost immediately after the Bolshevik takeover, Lenin set up a government called Sovnarkom, short for ˜Council of Peoples' Commissars, and made himself chairman. During the next few weeks, soviets throughout Russia joined in the revolution and took over control of most towns and cities. By the end of 1917, nearly all of Russia was in soviet hands. However, this did not mean that Lenin and the Bolsheviks had complete control of Russia. Not all the soviets were run by Bolsheviks and, in the countryside, most peasants supported the Socialist Revolutionaries. In November and December, Lenin issued a set of decrees.
To start with, Lenin's biggest problem was war. He had pledged to end it, and the people of Russia expected him to keep his promise. This caused the army's morale dropped rapidly. Many Russian soldiers deserted and, knowing the peace was imminent so their fighting would be futile, went back home. This represented both good news and bad news for the Bolsheviks. The good news was that the army could not be used against them by bitter Generals, but the Germans were now free to walk into Russia and talk what they wanted. Peace negotiations began on December 22 1917; a week after an armistice had been confirmed between Russia and Germany. Foreign Secretary Richard von Kulhmann represented Russia, but the German General, Max Hoffmann, was clearly the most important figure in shaping the peace. The German demands were excessive. Trotsky, the Bolshevik negotiator, withdrew from negotiations stating there would be "neither war nor peace ", meaning that the Russians would not fight the Germans but would not sign the treaty either. Russia would lose 62 million people, 27% of farm land (including some of the best in Russia), 26% if railway lines and 74% or iron ore and coal reserves if they signed the treaty. They would have to pay reparations of 6 million marks to Germany.