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  Transcripts from the Soviet Archives VOLUME I  1903-1926   

Transcripts of the meetings of the Politburo of the Central Committee of the RCP B ‐ October 26, 1925

source: Transcripts of the meetings of the Politburo of the Central Committee of the RCP (b) ‐VKP (b) 1923‐1938. Moscow. ROSSPEN. 2007. Volume 1 1923‐1926. P. 319‐366

Archive: RGASPI. F. 17. Op. 163. D. 529. L. 1‐141 (uncorrected transcript); D. 530. L. 1‐135 (transcript with copyright correction); D.

533. L. 1‐13 (verbatim report).

October 26, 1925 1

Chairman Kamenev. Letʹs start with the first question ‐ ʺOn specific measures in connection with the procurement campaign.ʺ Comrade Sheinman has the floor for the report.

Sheinman. The members of the Politburo probably remember that the original plan of procurement was drawn up at 780 million poods. 2 This was the sum of the state and cooperative procurement, when we proceeded from a total harvest of 4 billion 200 million poods. Probably, comrades remember that then there was a dispute with the State Planning Committee, which calculated the gross harvest at 4 billion 700 million poods, but we agreed on the figure of marketable grain in the amount of 1 billion [100] 200 million poods. As you know, recently there have been changes in the weather, which delayed the harvesting of bread in many places, which, naturally, affected the quantity and quality of the harvest. Currently CSO, Gosplan, mine 3 and other institutions are finalizing the definition of the gross and marketable size of the crop. Work at the CSO and elsewhere is not over. In Vnutorg we define that [commodity] the gross part of the crop, thanks to these unfavorable conditions, decreased by 220, perhaps 250 million poods. In accordance with this, the procurement plan is to be changed. But the procurement plan does not change in such a direct dependence on the total harvest, because in those places where less grain is harvested, peasant consumption also decreases accordingly.  Therefore, a number of amendments are being made, and our data currently determine the state grain procurement at 680 million poods. for 100 million poods. less than we initially thought. This, of course, is still an assumption. This issue has not been resolved anywhere; these are our calculations. Moreover, we got this figure due to the fact that we introduce Siberia and the Urals as essential and active items. Harvesting in Siberia should increase, according to our assumptions, by 20 million poods. [20] 10 million poods. But at the same time, an even worsening situation is outlined in the Bashkortostan Republic and in Central Asia, where the size of the crop failure looms more than one could have assumed at first. But the rearrangement of the harvest figures is unevenly reflected in different crops, in different places the harvest of crops is different ‐ some crops will be harvested less, others more than expected. If [I take] we take the main crops, then the harvesting of rye is affected ‐ for 20 million poods. downward. Also, for wheat at 20 million poods. Decrease by the remaining 60 million poods. falls on other cultures. [The remaining 60 million poods. fall on other crops, which in turn are offset by a slightly increased yield of other crops.]

The main difficulty is that both the original plan, [which cannot be called a tentative plan, that is,] and the assumptions that I now have, are calculated on the basis of balances. We assume that the peasantry will have so much free marketable grain and that it will have to throw this grain onto the market. These balance calculations, because we have no reserves, by which we could operate and manage makes its own amendments, the peasantry pricing policies and demand, and [this plan] now gives the market the bread rations 4... It cannot be said that today there is a sign that the peasantry will not give the amount of grain that we expected, or there is a sign that the peasantry will give this amount of grain. [Plan for] The procurement of the first quarter gives 160 million poods. (in round numbers). 35 million poods. give the first half of October. Until January, if we go at the same pace as now, we will take [220 million poods. plus 160 million, ie] 380 million poods. In the second half of the year will remain, thus, according to my calculations. 300 million poods. We take in this case about 60% of the annual [harvest] of the plan.

Stalin. How long does it take?

Sheinman. By January 1st. This is my minimum plan ‐ if we go at the same pace as now. This will be approximately 60% of the 680 million poods figure. The main difficulty lies in the fact that the peasantry keeps us on rations and deprives us of the opportunity to operate on the demand market. Our initial summer supposition that the peasantry would sell their grain and receive Soviet money for grain was opposed by the peasantry. The peasantry sells its grain to the extent that it needs money, partly for financial needs: taxes, vodka, etc., partly to the extent that there are goods on the market. This circumstance can now be considered almost established. I have expressed these views on several occasions in recent times. Some comrades laughed ironically at me. I think that the last session of the All‐Russian Central Executive Committee5 confirmed with absolute evidence these views. The peasants do not hide this, they say: we sell bread to the extent that we need it to receive certain funds, to satisfy our needs. We will not produce more than this amount of bread, because we are not sure that we will receive the goods subsequently at reasonable prices, i.e., that money will not fall in value. In other words, money has not yet become that universal commodity, in exchange for which any commodity can be obtained at a fixed price.

The peasantry keeps us on rations. Under these conditions, going to the peasantry and trying to get grain under conditions of increased prices does not in any way solve the problem for us, because, since it turned out that the peasantry does not want to keep a lot of money, which it cannot immediately realize, the increased prices mean a decrease in the total amount of blanks. I will dwell on this issue in detail, because in some places, both in our press, and even within our apparatus, I encounter resistance. In some places, at least in the Ukraine, they want to explain the insufficient intensity of procurement by insufficiently high prices and reason that if we put up the price of grain, the peasantry will be lucky with grain. I am convinced that this is not the point, but that the peasantry sells grain to the extent that it needs money.

Stalin. And for 2 rubles. 50 kopecks will sell?

Sheinman. He will sell, but, of course, not the 600 million poods that we need, since the money will depreciate. Since the peasantry does not sell all 600 million poods at once, at least two and a half, but sells every day, gradually, until the time when we collect not only 600 million poods, but 300 million, the process will begin falling money. This is how I argue that the solution to this issue does not lie in the way of increasing prices. In recent months, the Labor and Defense Council has been quite active in not putting up with the increased prices, which we were forced to accept both by domestic demand and the fulfillment of our export obligations, and therefore the STO issued a directive to reduce prices and reduce them to the directive

6.

A decrease in our demand for bread in the absence of even the most insignificant reserves at our disposal could go exclusively along the line of reducing the export plan, since the exposure of the domestic market, the consumer market, further aggravated the discrepancy between our demand and peasant supply and aggravated in the worst forms, forms of demand consuming areas. Therefore, the service station adopted a number of measures, which in the field of procurement were reduced to the fact that the plan was reduced 7... Reducing the plan is of no small importance to us. Our procurement apparatus is bureaucratic, and as an apparatus that sits at the procurement sites and is cut off from sales markets, it is extremely oblique. He receives outfits in the form of a planned assignment and does not stop at anything in order, if, although not to complete the outfit completely, then as close as possible to its implementation. This circumstance makes organizations compete with each other, and competition is not reduced to the area of commercial competition, i.e., to the area of cheaper purchases and more expensive loss, to the purchase of better‐quality bread, and competition is in the area of procurement, in the area of quantity, they all compete with each other, just to buy more grain, and all the work comes down to the fact that the bread that the peasant brought to the bazaar is torn from each other,

The first measure was a reduction in the plan and, in accordance with this, a reduction in lending. At the same time, it was stated that this plan is indicative, especially for the two main crops ‐ rye and wheat. If these crops were supplied in larger quantities against the plan at reasonable prices, then all the grain that needs to be prepared would have been procured, and the funds for this would have been allocated. The next measure in this part is to reduce the export plan and organize the export of grain so that sales are adjusted to the progress of procurement, to the state of domestic prices, to the progress of shipment to ports, and not to be carried out mechanically only on the basis of a pre‐established plan for the export of grain that is still in peasant barns. The rest of the activities are financial and organizational activities. Among them, mention should be made of the prohibition of state producers to buy bread from individuals and through individuals, because we have achieved a very harmful phenomenon in this direction, namely, the main procurers carried out most of their work through private intermediaries who have commission agreements with them. In the same way, it is envisaged that less funds should go to the peasantry from any other source.

Some local authorities have issued such a regulation that when corn is contracted, the peasantry is paid the full value of the goods. If the peasantry receives all of it for the corn which it surrenders in February‐March of the next year, then it will have no incentives to export food crops. At the same time, the bulk network of grain procurers has been significantly reduced, namely: from 1738 points it has been brought to 1270 points, i.e., the network has been reduced by 27%. I believe that this reduction is still far from sufficient, that our procurers have gone too far into the depths, our procurers are sticking out in the villages, they are waging a fierce war against cooperation, but the moment when the question should be raised of both the reduction of the procurers themselves, and of the reduction of their network has not yet arrived.

In particular, in relation to two regions, the Urals and Siberia, the STO gave me the right, following the example of last year, either to limit the number of procurers and to reduce the distribution network, or to create a syndicate of the main procurers. Measures of this kind should be coordinated by me with the regional executive committee and the revolutionary committee according to their affiliation.

In the area of procurement prices, instructions were given to strive to reduce to the guideline prices, and in this part, these instructions gave a reduction in demand. I will not dwell on this in detail today. In any case, these measures gave known results. So, for example, out of 100 percent of the points that we observed, half of the points have stable prices; in a quarter there are venal ones with a slight downward trend. In the rest of the quarter, an increase is noticeable. It is necessary to clarify the question, what is the difference between the limit 8 and the guideline prices. The difference lies in the fact that the directive price also has commercial measures: a decrease and an increase in demand. [When at limit prices there is a decrease in prices, then the demand for goods decreases, but in the implementation of planning considerations ... * with well‐known commercial measures.] (* So, in the document) At directive prices, the desire to reduce prices is accompanied by a decrease in demand. In addition, the directive price at its other end rests, in any case, must be based, with well‐known commercial measures, on consumer prices. Now the demand for bread is significantly decreasing, the plan is being cut, etc. This is necessary in order to achieve the directive prices. Reducing the directive prices for other crops is necessary so that they can be exported abroad.

I pass on to this main question. In my opinion, we in this part in most regions have now reached prices that, although they exceed the directive prices by 10‐15%, are acceptable for the domestic market. There is one defect in the directive prices, which is that we equal them mainly to world prices. Meanwhile, with regard to crops such as rye, we can hardly equal [commercial] world prices. If we were equal to these prices, we would have to pay 50 kopecks for rye. per pood, because the price that has been established on the world market for rye, barley and oats is transitional, temporary, and because this year not only the Balkan countries, but also Poland, Germany, etc., are involved in the export of these crops, and these prices are in no way linked to the agricultural economies of even these countries. I suppose we cannot take out a lot of rye, we can take out 20 million poods, and in the first half of the year there are about 13 million poods. Rye is the most basic consuming crop on the domestic market, especially among the peasantry, and the price, set at 1 ruble. 40 kopecks. for a pood of flour, is very acceptable for the domestic market, and therefore, when constructing directive prices, we are actually most forced at the present time to equalize with the domestic market. Due to our lack of reserves, we do not have that instrument of demand that can affect the peasant economy, and under these conditions we can give instructions to the regions so that they do not strive at all costs to bring prices to the directive, because these prices, even increased by 10‐15% against the directives are quite acceptable for us. Lowering prices for rye will not give the increase in procurement, which is required to increase the export plan.

With regard to the financing of grain procurements, measures have been taken so that money is barely available and issued in accordance with the progress of procurements and so that free money from procurers cannot influence the price increase. Special measures have been taken in the area of saturation of the domestic market. These measures boil down to the planned delivery to the consuming regions and to the establishment of sales prices there at an acceptable level for us. It should not be concluded from this that all is well in the consuming regions. This is not quite the case. We have relative prosperity in certain main points: in Leningrad, Ivanovo‐Voznesensk, Tver, Moscow and Tula. Elsewhere, we have failed to supply and satisfy the market in the way we would like. But in the near future, if the blanks do not fall, we will achieve this. 195 million poods were prepared for October 15. It could be considered, that with such procurements, the domestic market will not be satisfied. It should be taken into account that 60 million poods of this amount need to be discarded, which were shipped for export, and thus the figure of 135 million poods remains, which seems to be used for the needs of the domestic market. But at the same time, it should be taken into account that by the beginning of the new campaign our main points were left without supplies with exposed mills and that at least 100 million poods. you need to fill these recycling channels and set the whole mechanism in motion. Until this process is completed, the blanks cannot enter the domestic market in full, but will get stuck in the commodity‐producing and processing channels. At the same time, we observe that the demand for manufacturing jobs has increased significantly. If last year it was possible to give outfits and they were carried out, then this year the situation is much more difficult. First of all, the places require the satisfaction of their needs and even the formation of good stocks. Thus, of this amount, 195 million poods. a significant part is spent both on the consumption of the producing regions themselves and on the formation of reserves.

I started my post by pointing out that all our calculations are balance calculations. In the field of finance, you can hardly think of anything other than what is invented.

Agricultural tax will have to be levied rather harshly; loan also; the semssud is recovered; regarding vodka, we turned to face the village. At the moment, we cannot talk about a tax increase. The incentive for the export of grain by the peasantry lies in manufactured goods in two sections: one section ‐ the quantity of goods, and the other ‐ the price of goods. This is not only a matter of quantity, but also of price. If the price is as high as it is now, then the peasantry can do without certain commodities, since it is not profitable for them to sell grain at a cheap price, but to buy commodities at a high price. The situation with the supply of goods in our country is now relatively safe. The fact is that in the summer goods were not produced due to vacations, but in October the consignment of goods that was moved to the village was twice as large as the one that was moved in September. and the implementation of the plan became more organized. Now there is no need to complain about the failure of the plan. I don’t know further how things will go. The same is the case with questions of prices. Attempts by the producing bodies and syndicates to violate the established prices and earn in excess of the norm are gradually getting rid of. The increase in the wholesale index by one and a half to two percent is explained by the fact that some trusts are not quite willing to obey not only us, but also the Supreme Council of the National Economy, conduct their own policy and do not follow instructions on the release of goods at fixed prices. The task of Moscow ends from the moment when the goods are released at the prices set by the government, and then the task of places begins. Further, we see predatory resale, desperate speculation and everything that contributes to the fact that the goods released from Moscow, in general, at relatively acceptable prices ‐ of course, not equal to the pre‐war prices, but, in any case, acceptable for the peasantry ‐ reaches the peasantry at absolutely impossible prices. If you compare the selling and selling prices, you get a difference of 100, and in some places, 200%. Moreover, we have here a far from desirable approach on the part of the authorities. Local people say: our cooperation is poor, why canʹt they make money on this business? Resale permits and private individuals are often observed. On our line, we gave an order, on the Soviet line, the last resolution of the STO puts responsibility for this entirely on the local executive committees, imposing this responsibility on them, it also gives them quite extensive rights for the delivery and distribution of goods in the regions9. But a cruel party directive is needed here. We do not have almost a single district, the best in the party relation, where no exceptions are made for this or that regional cooperative, for this or that regional internal organization.

The issue of credit institutions stands apart. Here, in spite of the decision of the STO, the same orgy continues. All banks, starting with the State Bank, ending with the City and Industrial Bank ‐ and the Moscow City Bank is protected by the Moscow Council, and I declare here with full responsibility that Comrade. Uglanov is sincerely upset when we interfere in the activities of the Moscow cooperation or the Moscow City Bank ‐ they are engaged in speculation. Why not cash in on credit transactions? With regard to the Moscow City Bank, we have cases of selling calico with an additional assortment in the form of cocoa, coffee, high‐quality tobacco, etc. Whether Turkish tobacco is good, we have not figured out in this matter, but, in any case, the peasants cannot smoke high varieties of tobacco.

Now I turn to the issue that needs a directive, namely, that strict regulation is needed not only in the economic but also in the administrative line. In relation to our cooperatives and the Moscow City Bank, so that they, together with the manufactory, do not throw away other assortments unacceptable for the peasants, economic regulation is not enough, administrative regulation is necessary.

Molotov. Both.

Sheinman.Regarding both, it is difficult for us to carry out, since we do not have goods, and those goods that we have, we must deliver to the places as soon as possible. Those comrades who are sitting in Moscow and in the localities should not be engaged in resale, and it is necessary that they understand the political significance of this issue, here it is impossible to confine ourselves only to the circulars of the Internship, you can always have time to execute the circular. They must understand that this cannot be done politically, and that they can only be approached by one administrative and political method, because economic regulation in relation to those who should not be engaged in this will not be enough. In the same way, economic regulation cannot be used to approach a tobacco syndicate that does not recognize regulation, which has embarked on the path of a private shop, saying that tobacco is sold for 30 kopecks. a sheet of smoking paper costs 5 kopecks to it. A carriage of makhorka costs so much, and two boxes of smoking paper cost so much to it.

Rykov. A man smokes a newspaper, why does he need smoking paper.

Sheinman. The peasant does not buy this paper, but the cooperative must buy it.

Rykov. It is necessary.

Sheinman. They say itʹs an assortment. Something must be done here, or I am really mistaken that economic regulation does not apply to our peopleʹs commissariats and their subordinate bodies. Some other measures must be opposed here. The regulation in relation to our bodies, of course, must be administrative.

Sokolnikov. But, unfortunately, it does not happen in an airless space.

Sheinman. I am not saying that I will carry it out, but let everyone go along their own line. Comrade Sokolnikov says about the airless space that Sheinman will only regulate. No, let Comrade. Sokolnikov regulates banks, comrade. Pyatakov ‐ industry, etc.

In general, all the measures that have been outlined in recent years boil down to the fact that in the field of grain we are reducing demand, reducing, of course, to such an extent that, on the one hand, is acceptable for the peasantry, on the other hand, not lower than that. degree, which is caused by our objective situation. There are empty stomachs in a number of localities that are in high demand versus what we wanted. In the field of manufactured goods ‐ greater rigidity and greater responsibility for local and state bodies. In general, I think that the situation is not so bad, because even if the plan is reduced, as we have outlined, from 780 million to 680 million poods, we will get a decrease in exports by about 70 million poods, as I believe that the 30 million decrease will fall on other graphs. We will have an absolute export plan of 310 million poods.

Kamenev. With oilcakes?

Sheinman. I say 310 million with oilcakes, and I reduce exports by 70 million, and 30 million fall to the reserve fund and other funds. Still, in this case, the reserve fund will amount to about 70 million poods, and if we break the peasant, we can increase this fund even more, but it is still premature to talk about it. Rykov. The rains cannot spoil anything.

Sheinman. Here we are faced with new factors. Our grain procurement campaign has been dragging on for a whole year. This campaign will not last 6‐7 months, as we expected, but 12 months. I remind you that we started the 1923 grain campaign around December 23, on the eve of Christmas the first contract was concluded, we were trading grain until July and even in August, so there is nothing particularly terrible here. Of course, we will have to slightly change many conclusions regarding the import plan. There is a strong stretch in the pace, which is reflected in the pace of our imports.

Stalin. A few questions. 780 million poods. ‐ the initial procurement plan. Now you assume 680 million poods. What percentage of this prospective harvest would you originally have had by January 1st?

Sheinman. 70%.

Stalin. Now are you thinking of achieving 60%?

Sheinman. Yes, thatʹs right.

Stalin. Then you said in your report that prices in terms of exports and in terms of domestic consumption collide, you had to equalize at the expense of the domestic market. How was this reflected in the service station, what was the way out there?

Reducing the overall plan from 780 million poods. up to 680 million poods., you referred that the calculation of the gross collection was incorrect. What were the factors here? Another question. Is it not known what the procurement was really equal to in the second decade of October? The first decade gave a figure that did not coincide with the plan. The second decade, apparently, also does not coincide, where did you get 90 million in October? Obviously there will be less?

Sheinman. 70 million

Molotov. The question of the roles of cooperation in grain procurement.

Stalin. And one more question about a united front of procurers. Molotov. What role has the cooperation played so far in grain procurement, and what is the further role of cooperation in this matter, how do you assess this role? And then, in terms of bringing industrial goods to the countryside, how do you think this case should be regulated?

Rudzutak. At a meeting of the STO, Comrade Sokolnikov showed me a table according to which the fixed fixed agricultural tax was lowered in relation to the well‐to‐do part of the peasantry. The tablet that Comrade Sokolnikov showed me indicates that this yearʹs tax will mainly fall on the poorest section than on the well‐to‐do section, and this percentage, even the absolute amount of tax paid by the well‐to‐do section, will be lower than last year. If we take into account that 14% of the peasants will throw 60% of the marketable grain on the market, is it not possible to take any measures here besides the general measures that Comrade Sheinman proposes? Is it possible to take measures in this direction in order to force this well‐to‐do part to be thrown away without affecting the entire mass of the peasantry?

Sokolnikov. Of the 310 million poods, which you are planning to procure within a year using the reduced version, how much will be prepared by January 1? I am asking this about export bread.

Tsyurupa. What considerations does Comrade Sheinman have on the following question: we have delayed the sale of bread abroad, at this time our competitors are placing their bread abroad where we should have placed, thus, the capacity of this market is decreasing. If his assumption that we will operate on the foreign market throughout the year is correct, then will we be able to accommodate those 310 million poods that we propose to collect for export? Perhaps Comrade Sheinman has some calculations.

Sheinman.780 and 680 million. This is the answer to the first question. I am approaching from the point of view of gross collection, I say that this is a balance sheet figure, I estimate this figure in terms of gross collection. Of course, it is not a law for a peasant to throw 680 million or more bread on the market if he has an incentive to do so. You need to know that there is a graph in our balance sheets: how much bread a man leaves on his farm. If he receives the goods he needs for bread, he can, of course, leave less bread on his farm. He will leave a smaller maneuverable fund if we give him the goods he needs. If we do not give him this product, then naturally he will leave a larger maneuverable fund. These figures are statistical balance figures, we proceed here from the amount that a man should leave approximately on his farm under current conditions. I want to remind you that when the SRT and Politburo adopted the figure of 780 million poods, I wrote a letter and said that it was 50‐60 million poods. we are, perhaps, exaggerating this figure. But precisely on the basis that it is impossible to know how much grain each farm will keep, I did not consider it possible to argue, just as now I will not argue if you say that a peasant will give not 680 million poods, but 620 million This figure will depend on how much we produce, how much vodka, etc. A man is not obliged to sell bread. This is an indirect answer to the question of Comrade Rudzutaka. Just a well‐to‐do peasant cannot be forced to sell grain by any measures; he will find thousands of means and tricks to dodge it. The well‐to‐do part of the peasantry can be forced to give grain for tractors, for complicated villages cars. The scream comes from everywhere and mainly on the part of the well‐to‐do peasantry, who agree to sell their grain and pay 50% in cash for tractors, for complex agricultural production. machines, but simply, in vain, this part of the peasantry will not sell their grain. Since the question of agricultural activity has been raised. tax, then I often have to come up with this issue, in separate conversations with the peasants, with individual comrades, I explain so that our policy of postponing the deadlines is the correct policy, because if this were not the case, then if the harvest campaigns we would press on taxes and we would be in big trouble. But we would not have been able to squeeze the kulaks and the well‐to‐do, because they are very strong. For example, if our bodies at certain points lack several thousand rubles, they receive this money from the kulaks.

Comrade Stalinʹs next question is how much we assumed with the plan of 780 million poods. prepare by January 1. 545 million (70%). Now we assume 60%. 10% from 780 million poods. ‐ this is 78 million poods. of bread. Now I have taken exactly this minimum figure for half a year. 380 million poods, and I count October not 90 million poods, as in the plan, but 70 million poods. I now consider this plan a realistic and to a certain extent, if you will, a minimal plan. In the first s.‐kh. half a year we are supposed to take out 110 million poods. instead of the expected 170 million poods, or something like that.

The next question is the gap between the domestic and foreign markets in relation to some cultures. How was the question resolved? There were big battles, it is true, not with Comrade Sokolnikov, but with a certain collegium of defenders and advisers who worked under Comrade Kamenev. Can we carry out foreign exchange export, i.e., unprofitable export, or not? As if they agreed that we cannot carry out unprofitable exports, that, in any case, it is too early to raise the issue, because we are not talking about the sale of grain purchased at a fair domestic price, but at a price accepted outside. Despite the fact that you prove to the peasant that foreign exchange export is an unbearable thing, for me it is possible that we will do such a trick in relation to this or that particular culture that we will allow to export several tens of millions of poods of this or that culture, even at a loss.

Voice. Bread product at what price does currency buy.

Sheinman. At the price of 9 rubles. 50 kopecks but since Comrade Sokolnikov or someone else for these 9 rubles. 50 kopecks will buy cars or manufactures abroad, which cost 39 rubles in our country, then such an operation is permissible in exceptional cases. At the session of the All‐Russian Central Executive Committee, this loss was discussed. For me and all those present, of course, it is clear that if the situation develops in such a way that it will be necessary to remove 30‐40 million poods. this or that particular culture, we will do it. But we cannot give such a slogan, especially since it is not forced by the situation now. There is a well‐known correction to this: Ukraine ‐ on purpose, and in relation to some other regions it is necessary to give an explanation: do not strive at all costs to reach world prices, because the domestic market can bear these prices by 20 kopecks. above. In relation to rye, go to a man with a price of 50 kopecks. for a pood we cannot. I forgot to say,

Chairman. Show your tables.

Sheinman * (* Along this paragraph there is AL Sheinmanʹs note:

“Talk with Kamenev.”). (Shows tables of domestic and world prices) ** (** Tables were not saved.). Thick lines are guideline prices. The extreme top is overseas prices, sales prices overseas. The directive price has a line that should be in accordance with the foreign price, there is a small deviation, our directive prices are in general equal to foreign ones. Those lines and lines that are above the guideline price indicate the prices that we have.

Amenev. Let me explain. Here is the guideline price, i.e., the one that we count [along all three lines: world price, world budget] acceptable, based on the world price and the replacement price for the peasantry; fair price from 1 rub. up to 1 rub. 10 kopecks Here is the world price. The difference between them is the difference in overhead costs. Here is the approximate breakeven price that we can pay the guy. The difference here is 56 kopecks. ‐ this is transportation, transport, etc., etc. Hereʹs what we wanted to pay off. With such a foreign price, we would be able to cover our costs and get some profit. If we paid the peasant at this price, then we could sell at this price without loss, but also without profit. But the real prices, they are higher than the directive and near the break‐even, and in some places they exceed the break‐even (Armavir).

Sheinman. Question of Comrade Molotov. Has consumer cooperation justified itself in grain procurements? The Center has shown great caution in applying for the plan. Agricultural cooperation goes lower, since it is in a state of anarchist construction ‐ it is everywhere and everywhere, but it is not there yet. Consumer cooperation is in a better position, because it has been working for many years, it has tightened up a bit, in addition, Tsentrsoyuz has

imports, this organization is richer.

With regard to manufactured goods. Of course, no matter how much we scold the cooperation (and today we scold it too), on the one hand, it plays a major negative role in the implementation of all our plans, but, on the other hand, it also plays a positive role, since it works, despite what is cheaper than a private seller. But a greater order must be introduced into this matter. At the session of the AllRussian Central Executive Committee there was a unanimous cry that the private sector should not be provided with goods at all. The peasants demand that all goods be carried through the cooperatives.

Question Comrade Tsurupa that the capacity of the European market is shrinking. Europe this year is poor, it does not buy in stock, it buys only for current needs. So, on the one hand, we have nothing to worry about.

Voice. She has her harvest.

Sheinman. No matter how much it has of its harvest, it does not export from surplus ‐ it is purely foreign exchange export. Romania acted smarter.

We entered this campaign with some difficulties. Of course, if there is an intelligent apparatus (I am not raising organizational issues now), we will overcome these difficulties.

Chairman. Comrade Sokolnikov, would you like to answer the question? Since all questions rest on imports, I think it would be more rational to hear the report of Comrade Sokolnikov, then open a general debate on both reports.

Comrade Sokolnikov, you have the floor for an answer.

Sokolnikov. I understand the question comrade. Rudzutaka thus: if the surplus grain accumulates at the strongest part of the economy and if the tax is lightened for this part, then the tax pressure on this grain turned out to be minimized. According to the data reported from Ukraine, this is the case. I instructed to check this in some districts of the USSR.

Voice. The poor got worse instead of relief.

Sokolnikov. I think that we are now discussing the issue not in this plane. If we discuss the issue of agricultural tax, we will also talk about this. Has the tax pressure on the top that holds the bread really decreased? I was sent a certificate from Ukraine. There this issue was discussed at a session of the All‐Russian Central Executive Committee. The certificate concerns 6 districts: Sumy, Umansky, Belotserkovsky, Proskurovsky, Vinnitsa and Izyumsky. We are talking about the amount of tax that this year has been presented for payment. I take a group of farms with 4 heads of cattle: last year in the Sumy region 199 thousand rubles were presented for payment. tax, this year 59 thousand rubles. In the Uman district, farms with 4 heads of cattle paid 66 thousand rubles last year. tax, this year ‐ 33 thousand, i.e., in that district (Sumy) there was a decrease by almost 4 times, here by 2 times. [In the Belotserkovsky district last year, 4head officials paid 34 thousand rubles, this year ‐ 8 thousand. In the Proskurovsky district last year ... this year 59 thousand rubles.]  In the Vinnitsa district last year ‐ 142 thousand, this year ‐ 40. In the Izyum district last year ‐ 447 thousand, this year ‐ 208.

Voice. Does this give the big picture?

Sokolnikov. I am giving data by group. [The group with 3 heads of cattle (these data are taken by districts), this follows from the mechanism of the changes introduced by the agricultural tax.]  For the group with 3 heads: in the Sumy district last year the tax was 408, this year ‐ 206. In Umansky last year ‐ 612, this year ‐ 320. In Belotserkovsky district last year ‐ 872, this year ‐ 462, etc. in all other districts. A group of farms without livestock: last year in the Sumy District, the tax for them was 196 thousand rubles, this year 197. In the Uman District last year 453, and this year 536.

Tsyurupa. The situation distorts reality.

Sokolnikov. I am giving you the figures presented for tax payments. In the Proskurovsky district last year ‐ 494, and this year ‐ 482. In Vinnitsa last year ‐ 208, this year ‐ 182. In the Izyum district last year ‐ 336, this year ‐ 313. If you take the percentage of the sum tax paid for each district by different groups, then for all districts this year we have such results that the group of farms without livestock and with one head of livestock pays more than last year. The 2‐head group has stabilized, and the 3‐4‐head group pays less tax than last year.

Voice. How about crops?

Sokolnikov. I am not talking here about groups by crop area, I am talking about groups of farms by head of livestock.

Voice. You need to get data on the sown area.

Sokolnikov. This can be argued in another plane. I want to find out and check to what extent this phenomenon is general, since there is no doubt that farms with a large number of livestock are also farms with a large crop, and it can be concluded that they also have a greater amount of surplus. We can say that this way of doing things leads to the fact that our tax pressure is especially weak in relation to this group [and we would have to get close to them to get them to throw bread on the market].

Chairman. How are we going to continue our work? Will we hear the report on the plan and then will we hold a general debate?

Rykov. Exports depend on procurements, procurements depend on exports, and the fight against commodity shortages depends on exports and imports.

Voice. And the development of industry depends on imports.

Rykov. You can discuss it separately, but you need to hear the second report to get a picture.

Stalin. Everything is connected with each other. If we are talking about a procurement campaign, then what does the export have to do with it, it would be better to discuss the issue separately.

Rykov. The amount of exported grain depends on our procurement bodies.

Chairman. Comrade Sokolnikov, you have the floor.

Sokolnikov. Of course, the discussion of the procurement plan would benefit if it were separated and discussed separately, but here we must outline some measures and define our policy with regard to grain procurements. This can be done only if you approach from the point of view of procurements for the domestic market and grain procurements for export [in the sense of measures that need to be understood].

 [ Rykov. It should be discussed separately, but for the party line to come together.]

Stalin. We will hear first comrade Sokolnikov, and we will divide the discussion of general issues (accepted).

Sokolnikov. I present my report in the following way: first, I want to give a picture of those specific difficulties that arose at the end of the 4th and the 1st quarter in connection with exports and imports; then provide an analysis of our currency position due to export‐import difficulties and changes; then touch on the issues that arise from this provision and the necessary measures or at least the general direction in which to act.

If we turn to the difficulties that we have now created in terms of exports, then I must say that the picture seems to me nevertheless less smooth than the one that seemed to have emerged from Comrade Sheinman. We had the following position: during the last quarter of last year, during July, August and September, a rather forced procurement program was carried out, including for export at a very high level of grain prices. Then, when it became clear that it was impossible to maintain such a high level of prices, we began to carry out a significant reduction in grain procurement and the export program in the current quarter. Since exports make up a significant amount in our export plan for the first quarter, this circumstance turned our export, and then our import plan, upside down. It was originally supposed that the export of bread during the first quarter will amount to 175 million rubles, but this amount is 175 million rubles. the plan was not included, and there figured

155 million rubles.

Stalin. We are discussing the export‐import plan, why isnʹt Comrade

Krasin here now?

Sokolnikov. I will report on the export‐import plan in connection with our currency situation. The export‐import plan is a sale and purchase in foreign currency, and therefore every export‐import operation is a foreign exchange operation. I will not dwell specifically on assignments for groups of raw materials, manufactures, etc. The figure is 155 million rubles. was included in this plan, then the need to reduce this figure became clear. [Initially, it was planned to reduce the plan of receipts from grain exports in the first quarter to 100 million rubles.] But since this overturned the entire economy of the export‐import plan and currency settlements, we in the service station and in the commission where this issue was discussed experienced very large fluctuations, we did not want to go to the figure that would have to be changed upward, and the Council Labor and Defense stopped at the figure of 110 million rubles. ten If my memory serves me correctly, vol. Krasin and Frumkin seemed to be proposing to stop at the figure of 90 million rubles. The progress of further procurements at a reduced‐price level (and this is especially important because it should be borne in mind that in the 4th quarter of last year, procurements were sold at high prices, and the current price level was still far from being reduced enough) showed that the possibility of export has greatly decreased, and Eksportkhleb thinks that the actual proceeds from the export of bread will not exceed 60 million rubles. In the face of this statement, we had to reconsider our export‐import plan and check the statements made by Exportkhleb. Reduction in the figure of foreign exchange earnings from grain exports by 60 million rubles. was based on the fact that, firstly, it is not known whether the grain concentration in the ports will be fully 100% fulfilled in the first quarter, and secondly, if the entire program is fulfilled, will all the bread be sold by January 1 and the currency received. Finally, during the preceding quarters, there were large makings for a large export program. Since the large export program begins to decline, we cannot take further advance payments for such a large program, and Eksportkhleb believed that it would be necessary to pay for the operations performed from the amounts received in the 4th quarter. The commission that worked on behalf of the STO and which included all the interested departments ‐ Narkomvneshtorg, Narkomvnutorg, NKZem, VSNKh, NKF ‐ this commission still did not dare to reduce this amount of receipts from grain exports to 60 million and took more a high sum of 75 million. No one in the commission defended a larger figure. This figure of 75 million for the export of bread is now included in our export plan.

ll export receipts, foreign exchange receipts, should amount to 190 million rubles. Thus, the initial assumptions were: [165] 155 million from grain exports and 115 million on all other items. Now instead of [150] 155 million in bread we have 75 million rubles. and 115 million for other items. We examined the question of whether this figure of 115 million rubles will change, whether it is possible to increase the second part of our exports during the first quarter, and in the commission we came to such a conclusion, which I will continue to defend, that maybe [it is possible will receive a little more than 115 million rubles, although] will be on some items to increase exports. but. on the other hand, there are dubious items in the 115 million (I draw the attention of the Politburo to this, we have an increase in the price level not only for bread, but also for other export items, for which export becomes unprofitable, impossible). So, I repeat that the 115 million have dubious articles. Thus, the import‐export, licensing and payment plans have had to be revised several times in recent weeks. We had several options. According to the original version, when it was assumed that the export of bread would give this maximum amount of 155 million rubles, it was supposed to issue licenses for 560 million rubles. The issuance of licenses determines the program of purchasing and ordering abroad. When it turned out that the export of grain would not give such results, then the licensing program was reduced to 524 million rubles. We tried to fight in such a way that instead of falling grain exports, we could tighten the use of credit, and we managed to raise the issuance of licenses to 552 million, but when it turned out that this was not feasible, we switched to the number of issuing licenses for 512 million rubles. Thus, against the original plan, we reduced the license plan by 50 million. This means that the program of purchases abroad for raw materials, for semi‐finished products, mainly for agricultural machines, and, to a certain extent, also for consumer goods, is changing. Moreover, this reduction is only the beginning of the reduction. The import‐export plan for the first quarter is already in such a position that a number of steps have already been taken, and purchases have already begun. Even with unfavorable prospects for the export of grain, still [export and] import [will give several billion rubles, as we assumed, i.e., about 1 billion for exports and 1 billion for imports, and] will be about 800 million rubles per year. So, if we issue licenses within the limits of [ 612] 512 million rubles, then within the framework of the annual plan it will be possible to cope, but the main reduction will fall on the following quarters: II, III, IV. If grain exports are further reduced, then in the future we will face more significant obstacles.

The conclusions are as follows. We already had to start revising the compiled production programs. The SRT was supposed to speak out in favor of reducing the programs for the import of cotton (which is partially offset by a better cotton harvest in our country than we expected). This has already led to the need to revise the program of the cotton industry. But the same will be true for a range of industries. [This question is being raised now, if there are no changes in the grain market in November‐December, then we will have to significantly revise all the programs of economic deployment in our country during the year.] A licensing plan is not yet equal to a payment plan. If an institution is issued a license for a known amount, it has the right to place orders abroad, pay an advance payment and then calculate in the future. It will be important from the point of view of our calculations to find out how much we can pay during the first quarter. Here we have the following amounts: according to the first option of the service station commission, it was assumed that we could pay 192 million, now, according to the second option, we found out that we could only pay 142 million rubles, i.e., our payment resources decreased by 50 million rubles. Since export grain decreased by 80 million rubles, it follows that we compensated 30 million through the use of loans, through the use of gold reserves, etc., but a decrease of 50 million rubles. turned out to be completely inevitable.

More about those imperfections that are present in all plans. Here you see a huge tension: licenses are issued for 500 million rubles, and we can pay 140 million rubles. This circumstance points to the risk, to any difficulties that we will have in this matter. There may be underestimation of terms, some discrepancy with our calculations. This always threatens that one day we will be presented with demands for large payments. In the same licensing plan, which I spoke about and which is set by the STO in the amount of 512 million, there are licenses that are issued during the I quarter and, on the other hand, this plan includes licenses that were issued in the IV quarter of the last financial year against I quarter of this year. Then, in the payment plan, in addition to those payments that we must make for orders made again, there are payments for the old obligations of the last year. It became clear that no one can say exactly how much we have to pay under the old obligations.

An amount of 50 million rubles was named, but this amount is controversial. There were well‐known loans, deferred payments, etc. on operations last year. No one kept an accurate record of these payments, which are due to us in the near future under the obligations of the last year. For new orders, we have to give certain makings, etc. And we do not know how much we will be charged under the old obligations; we cannot name this figure. [The data are with the NKVT and other bodies, which one day may come out and tell us that, they say, we need to pay such and such an amount. We do not have exact and more or less correct numbers in this part.] The NKVT should know this, which should monitor the state of its organs, the state of cash registers, payments, etc. No attention was paid to this, and this circumstance for the near future may vary significantly worsen our situation, because if the figure is 50 million rubles. we are reserved in this export‐import plan, then, on the one hand, we reduce possible payments for new orders, and on the other hand, it may turn out that these 50 million rubles. will not be enough to pay last yearʹs commitments. The matter may be complicated by the fact that, perhaps, there are a number of economic bodies in relation to which the NKVT has some favor, leaving them more currency than other bodies. But we definitely cannot say this, we could not verify this, we have no instructions. STO instructed to clarify this issue. [This is all from this point of view, and these are just flowers.]  However, even with these cuts, we are moving at a pace that may not be justified if it turns out that in November and December [will force us to reconsider our export and import plans] there will be no turning point grain procurements for the better.

What did the changes I talk about boil down to in individual industries? The main thing is the following. For raw materials. Here I will report on the figures of two options for our commission: Option 1, which assumed that the export of grain could be kept by 150 million, and Option 2, according to which this amount dropped to 70 million.

Stalin. Is it before January 1?

Sokolnikov. Yes, this is until January 1st, this refers to the quarterly plan. The question now is to revise the export‐import annual plan. It should be revised, but this will have to be done when we have certain possibilities of final judgment regarding the possible prospects of the export plan. In this situation, which we are now in, I think we should pay attention to the following: we are already fulfilling this import plan for the current quarter to a large extent at the expense of loans, more or less short‐term. We have no long‐term loans. Short‐term loans allow us to spin, but at the same time, we undoubtedly have elements of great difficulty in the future: either we, as we expect, will continue to always be able to renew these short‐term loans, [or expand them,] or we will further align our currency position. If neither one happens, [or we will correct our currency position, or, if both happen] then at a certain moment we will be tied to a thread, i.e., we will be placed in a certain dependence on the creditor, more or less heavy dependence. But, in any case, when we go for this policy of increasing short‐term foreign loans, then, in order not to fall into completely fatal mistakes and a difficult situation, at the same time we must have countermeasures to somewhat strengthen our currency position, to strengthen the reserve. It becomes absolutely necessary. If we go for foreign shortterm loans and collect loans for 100 million rubles, then we must definitely increase our reserves by 25‐30 million rubles so as not to be tied up and not find ourselves in a position where we will stand or face the prospect of complete bankruptcy, before stopping the delivery of goods to us, or before the need to seek the continuation of loans [normal time] on bonded terms.

I must report that in terms of our monetary position, we have undoubtedly experienced a deterioration over the past six months, which I now think to report to you in all seriousness, because things cannot continue this way. Why did this deterioration in the currency situation happen? The reason is the poor harvest last year. This crop failure forced us to use our gold reserve, and we used 115 million rubles. gold. Compared to the old days, we are now at the minimum of our gold and other foreign exchange funds. The danger of the situation lies in the fact that, while the entire economic machine is on the rise, while in the monetary area we are making giant strides, since we have set in motion the development of credit within the country, we get a kind of ʺscissorsʺ, that is, ... gold foreign exchange reserves, which are a prerequisite for the stability of the monetary mechanism, are reduced. I could show how this affects the whole situation. This is not only about the formal provision of banknotes with gold. Last year we had to reduce our gold fund by about [775] 10Q million rubles. Last year, as of October 1, the Treasury fund had 155 million rubles, and now only 50 million rubles, i.e., reduction by 105 million rubles.

Stalin. Except for all coatings and provisions?

Sokolnikov. Except for what is available in the State Bank.

Of these, there is foreign currency 26 million rubles, which are in the accounts of the State Bank and are actually not available in cash. These are the obligations of the State Bank.

Rudzutak. And what about 50 million, by which the fixed capital of the State Bank was increased?

Sokolnikov. This is our currency, which is in the current account with the State Bank.

Voice. Do you calculate this as a decrease in our currency?

Sokolnikov. Comrade Rudzutak, as Peopleʹs Commissar of Railways, should know that we have a gold fund located in the State Bank, and there is the main fund of the state treasury, which, according to the resolution of the Politburo adopted at the beginning of 1922, can never be less than 150 million rubles. ... [But formally, we can say that this resolution is being respected, since there is another 150 million rubles. claims against various economic bodies, to which we gave gold, and received from them chervonets. I am not, of course, talking about the State Bankʹs gold fund.] We have 26 million rubles. foreign currency in the State Bank, but if I told the bank ‐ give these 26 million, he could not give them. Then we have 10 million gold and 12 million platinum. Platinum is not an easy commodity right now. We have come here, as they say, to the handle. Everything that could be pledged, we pledged, we are pledging platinum in London, we are trying to pledge in America. It all boils down to 10‐11 million gold.

Voice. And Gokhran?

Sokolnikov. We have been selling Gokhran funds for 5‐6 years now, every year we pay several tens of millions of rubles abroad. [We have now realized the fund of valuables that we had.]  Jewelry and stones have been used to a large extent, and now we no longer have liquid funds for valuables, which we had two or three years ago. There are trifles left in Gokhran, things that we sell to the domestic market through stores.

Therefore, our calculation should be such that, strictly speaking, the Treasury fund, with the exception of the State Bankʹs resources, has

10‐11 million rubles. gold plus 12 million rubles. platinum.

Concerning the resources of the State Bank. As of October 1, last year, its gold resources in round numbers amounted to 240 million rubles, now they amount to 263 million rubles. Thus, the gold provision of the State Bank for the year increased by 23 million rubles. This, of course, cannot be compared with the increase in money circulation, paper circulation within the country, where during this time we have issued hundreds of millions of rubles in paper, not backed to an appropriate extent by gold. What does the State Bank have abroad for its payments? All his accounts and cash abroad now amount to 19 million rubles. In addition, from this gold fund of 263 million rubles, 41 million rubles. laid abroad. [If we compare the situation last year and this year, it turns out that formally the gold fund has increased, but gold is sent abroad in large quantities, because going abroad gold in order to be there] Selling gold abroad would be to show a formal decrease in the gold reserve. Since we do not want this, we resort to some veiled shading, we lay the gold in London, in Berlin and now we assume in Vienna.

What is the situation with foreign exchange resources? We return like a squirrel in a wheel, on the one hand, there is a decrease in our gold reserves as a whole, on the other hand, an increase in any obligations that we take abroad. If things continue like this, we will face the danger of a serious order. What were we calculating for? We had a calculation that this yearʹs harvest will improve last yearʹs business. The whole difficulty of the situation lies in the fact that now this amendment turns out to be much more complicated, because if, in fact, grain exports this year more or less in a significant amount falls, then we will not be able to carry out an improvement program in the course of this year. currency situation and, with the accelerating pace of our entire money circulation machine, we will find ourselves in a difficult situation. [The currency plan of 1925/26 in the certificate distributed to the members of the Politburo is given with a significant arithmetic error. We have 220 million rubles for the asset. This is an export‐import plan, a currency plan. The error is this: there are two numbers, 220 and 270, and 370 is printed. This is on the second page, next to Kamenevʹs signature.]

How do we calculate the currency plan for 1925/26? In the table in front of you, you see: 35 million rubles, not trade transfers (these are transfers that come from America in dollars from wealthy relatives); new bank loans ‐ 45 million rubles, new trade loans (increase in the balance by the end of the year) 60 million rubles; expenses of foreigners coming to the USSR, 5 million rubles.

Stalin. Is it not a little, is it well calculated?

Sokolnikov. This figure is approximate: more will be allowed in ‐ more money will be brought in.

Concession, license, and other payments 15 million rubles, purchase of gold and platinum 60 million rubles. Total RUB 220 million foreign exchange earnings. On the liability, a program was drawn up that was supposed to ensure a firmer currency position. Issue provision needs to be increased by 100 million rubles. money circulation is growing ‐ from October 1925 to October 1926 it will grow by about half a billion rubles. Partially treasury bills (small denomination) will be issued, and therefore we are limited to increasing the gold collateral by only 100 million rubles. The increase in the free resources of the State Bank abroad ‐ 20 million rubles, this is cash. Restoration of the gold fund of the Treasury (return to the Treasury of gold that was spent on the import of grain) ‐ 100 million rubles, administrative expenses for the currency list ‐

20 million rubles. This figure is perhaps an understatement.

Stalin. Is not it too much?

Sokolnikov. These are business trips, sending sales representatives. [The figure for administrative costs may be higher.] This figure was determined on the basis of experience.

[Payment for trade, payment for contraband. I, of course, do not mean that we will pay the smugglers, this is an extradition for the fight against smuggling and for competition with them.]  20 million rubles. ‐ payment for non‐trading operations. ‐ regulation of the internal foreign exchange market, etc. So, the total expense is 270 million rubles. Passive balance 11 ‐ 50 million. These 50 million rubles. must be covered by the foreign trade surplus. As you can see, this calculation is being constructed very carefully in the sense that it leads to the requirement that by the end of the year we have a surplus of only 50 million rubles. The weak side in this case is that we have 100 million rubles if there is a calculation for receipts from a foreign loan. If we cannot get 50 million rubles, then the minimum currency plan is violated.

Now let me say a few words about how this currency situation relates to the general economic situation. First, if we had to spend 115 million rubles last year. to export grain, [but this does not mean that we had to spend our gold resources. With this, we wanted to prepare ourselves at the expense of foreign currency (inaudible), direct it either to the purchase of raw materials abroad, or to the import of consumer goods, or to equipment, but somehow spend it in such a way as to soften the course that was last autumn. What were the results?] this also had the result that we do not have the means to prepare for the autumn campaign through imports. We did not have the opportunity to speed up production in a timely manner and received an aggravation of the commodity shortage, and this is an increase in the level of prices within the country. [Of this reduction in our gold reserves, a little must be spent on the purchase of bread. Bread prices remained high. With regard to industry prices, they are rising. If there was a loan on favorable terms, we could fight against a commodity shortage with imports, and since this is not the case, the fact of a commodity shortage should be regarded differently.] However, it is one thing to have a commodity shortage under conditions of a lean year; it is another thing to have a harvest, when 1 billion poods, 800‐700 million poods, there is grain. Therefore, I must say bluntly here that I regard the situation that has now been created as a situation that is already, undoubtedly, a step towards the possibility of some inflation. There is already a foreword to inflation 12. [Now the whole point is to open the doors further, so that, no doubt, to roll further along this path. Where the element will pull us in different directions, it is already clear.] Now there is still no such situation that now we have to say that we have already had a crisis, catastrophe, collapse and so on, we already feel more stable in all sectors. If earlier we were given a fist on our side and we fell to the ground, now we step over a little and stand in such cases in a slightly inclined position, but that we are standing in a somewhat inclined position is clear to me. What will happen next during the year ‐ it largely depends on the situation, which is beyond our will, i.e., on the deployment of the grain campaign, how it will proceed in early November, how it will proceed in December, on the one hand, and on the other hand, much depends on our own policy. What are the indicators of

deterioration? I believe that the indicators are, first, our current level of grain prices. [Among other things, it is the first indicator] If there is such a high level of prices in such a basic industry that works for export as bread, if we cannot overcome it, then this will mean a slight decrease in the purchasing power of money. Maybe more or less long, more, or less short, but dangerous, no doubt about it. Hence what is the conclusion? This depreciation of money in relation to grain threatens us with higher prices for other agricultural products. If we take oil, we have the same phenomenon. On the sunflower line, we have now found ourselves in a situation where we cannot export sunflower oil, since prices on the domestic market have jumped so that sunflower oil becomes unprofitable for export to foreign markets. In the commission, we fought over sunflower oil. When in Moscow sunflower oil rose by 75% in one week and can jump even more, then it becomes unprofitable for export. If our exports, in fact, begin to decline in this way, then our situation will continue to deteriorate and deteriorate, and we will have to further reduce our import opportunities. There is nothing funny in such a perspective, and here the most decisive, fierce struggle to lower the price level is needed, agricultural. primarily. With industrial prices we have found ourselves in a situation where a commodity shortage is the result of high grain prices, one thing gives rise to another. Since in the spring of this year, small or large holders of bread dictated usurious prices for bread, since these prices were kept and are still very high, this results in an increase in the amount of money in the hands of those who hold the bread, and an increased demand from them goes, puts pressure on the market and sets higher retail prices for manufactured goods. I do not quite agree with what Comrade Sheinman said about the administrative impact on prices. At a certain level, the contradiction between the market position and administrative measures begins to paralyze administrative regulation measures, and if Comrade. Sheinman says ‐ I want to regulate administratively, I take such and such measures and so on, but they do not obey me, that, in particular, the Moscow City Bank finds protection in the person of Comrade Uglanov, ‐ this proves that the market is beginning to disrupt administrative regulation, putting a limit on it. Here it is necessary to treat the matter at the root.

It was said here that we can easily get out of this difficulty in such a way as to take it out at a loss. This is the main question we must ask ourselves. If we, in fact, went to such a policy, if we went to export at a loss, while maintaining a high level of prices within the country, then we would hopelessly get stuck and ruin everything, because it’s not a loss: we are a loss we can pay, we in some cases carried out such a policy, for example, we exported rails for V.‐K. yellow dor. * (* Apparently, this refers to the Chinese Eastern Railway ‐ the SinoEastern Railway.) at a loss to keep the order, [but we said that this system is only suitable for industry] we did this in relation to coal to help development of coal exports. [our industry, we can take such measures] but can we propose this measure for bread? No. It means ruining yourself hopelessly. The point is not that we will pay a certain amount from the treasury, but maintaining and securing such a high level of prices for bread inside the country means strengthening the commodity shortage, and the consolidation of the commodity shortage is consolidating the process of price increases, wage increases, etc. ... [Unfortunately, I cannot procrastinate and talk about the activities that we will have to carry out during this year, I do not dare to claim that I can offer any program developed to the end.] I I think that one thing should be clear: with regard to the prices of grain and other agricultural products, we will have to take an absolutely firm line in the sense of the need to lower the market level of prices. We must speak out completely openly on this issue both on behalf of the Soviet and on behalf of the Party organs because high prices are largely supported by the spontaneous speculation of the peasantry, which is holding back grain in the hope of higher prices. They are holding back the grain of the farms that do not need to sell it immediately. The easier it is for us to get it, the less you support the illusion that high prices for bread will be provided in April or May. The more decisive you are and the harder you take the line, the easier it will be. Secondly, I think [If we now took the path that we expose such a plan of blanks that is as close as possible to the old plan, etc., it would be the best. But nothing can be done, you need to put up a small plan.] The main thing is not how much grain we procure; the main thing is to lower the prices of grain. The amount of bread required for current consumption has been provided for us even under the present unfavorable conditions. But you have seen very well how, when we put forward a huge plan, what happens, how a race begins between grain procurers, how fierce competition between procurers develops on this basis, and how prices start to jump. The lowering of the plan is the beginning of reducing this ridiculous competition. A reduction in this competition is the beginning of a decline in prices. We must absolutely condemn, finally reject those procurement methods that have been proposed and are being carried out this year. These methods of making bread have led to a very difficult situation for us. There can be no dictatorship of the trade plan, no return to the NKProd policy, you cannot make a firm plan regardless of what the market situation is. We found ourselves in the current difficult situation because we drew up a firm plan, forced the State Bank in an unacceptable, from the point of view of a correct credit and currency policy, to throw on the market tens of millions of extra rubles for grain procurement, had colossal competition from our grain procurement authorities. All these circumstances have led to the fact that we have lost control over grain prices. After all this, we have the most difficult situation from which we must get out, in particular, with regard to grain procurements, by a decisive rejection of the method of a firm plan. We need to provide ourselves with the ability to maneuver. I think that this is, should be, not about defects in the grain procurement campaign, but about what we owe for ourselves, given the minimum amount of reserves, [But this is already adjacent to other questions, so I will end here.]

Chairman. Are there any people willing to speak on this issue?

Krasin. I asked to speak, but, unfortunately, I was not present at the lectures.

Rykov. We agreed that we would hear the question of the grain market,   the          grain      procurement      campaign and        additional information about the connection with the foreign market, and that we would discuss both issues separately: how, how much and where, under what conditions grain was procured, and after that we would discuss the issue of imported ‐export plan and settlement balances.

Stalin * (* The stenographerʹs note in the transcript is: ʺT. Stalin spoke very quietly, spoke to the other side of the stenographer and walked all the time, why almost nothing was heard.ʺ). There are two groups of critical issues here, namely, we need to discuss the issue of procurement and then the issue of the export‐import‐currency plan. These are very complex and very important questions. If we discuss these questions thoroughly, then [the first question will take us an hour and a half] it will not be possible to exhaust them at one meeting. I think, therefore, that we should focus our attention on one, on the first issue, [I think that we should discuss the first group of issues.]  And postpone the discussion of another issue to the next meeting.

If we accept this order of discussion, then let me take the floor on the first question.

[ Kamenev. Yes.]

Chairman. Comrade Stalin has the floor.

Stalin * (* In the transcript with the copyright correction, the text of IV Stalinʹs speech was amended, probably, by A.N. Poskrebyshev. The text of the speech with the copyright correction was preserved in Stalinʹs personal fund. (RGASPI. F. 558, Op. 11. D. 1105. L. 6976.)). Listening to Comrade Sheinmanʹs report or reading Krasin’s messages, one might get the impression that we have a great confusion with the prices of bread and a great confusion for agricultural products. Here we have a big jump, a big rise in prices for these products (hereinafter the stenographerʹs remark: the whole phrase was not heard.) Asked to go in this question] Vneshtorg or Comrade Kamenev, you can get the impression that we are present under the action of geological factors that do not depend on our will. It turns out that this is not about the shortcomings of our bodies, but about geological layers that are outside our power and will, outside the power of these bodies. The rise in the price of bread, the reduction in procurements, etc. — all this, it turns out, is a field of geology, not economic regulation. This is, of course, not true. Therefore, I will turn to the question of those factors in the action of which we participate and on the course of which we can, one way or another, influence, influence.

I think that our mistakes or our miscalculations in this area, in the area of blanks, manifested themselves along three lines.

The first line is that our export plan was too inflated, and in this regard, our procurement plan for January 1, for the first quarter ‐ this plan was also excessively inflated. Draw up a plan so that we can 70% of 780 million poods. preparations for the year, 70% of this plan to finish in the I quarter, i.e., by January 1926, this means unreasonably inflating our possibilities and not reckoning with difficulties. The plan was taken too high: to try 70% of the annual plan of 780 million poods. to prepare for the first quarter ‐ this means creating all the preconditions for the inflation of bread prices for this quarter. Accordingly, a plan for procurement work and sales abroad was built, i.e., also exaggerated, and bloated. What is the situation here? And such that the peasant was completely crazy when they began to press on him with the demand for an unreasonably large amount of bread, he took it all into account and began to break down, broke high prices. Thanks to this, the prices for bread began to rise, these prices began to jump up. A situation arose that some procurement bodies began to run in front of each other, raise the prices of bread in order to seize more grain and justify the sales already made. [There are too many sales, and the plan is too hyped. The existing situation, the structure of the peasant economy, etc., were not taken into account. Made up a bloated plan. This exaggerated procurement plan ‐ to collect 70% in the first quarter ‐ led to the fact that competition between state procurers was revealed and prices jumped terribly. This is perfectly clear. This is the first line of our shortcomings, which led to an exorbitant inflation of prices for agricultural products.]  As a result, prices jumped so high that it became unprofitable to work for exporting grain, procurements decreased, and the cities were threatened with lack of grain. And what about a united front of procurers? He was gone. It was replaced by covert and overt competition between them.

The second line of shortcomings. There was no maneuvering in the regions by the procurement organizations and by the center, which was in charge of this campaign. They threw all the means and the apparatus into two regions ‐ the North Caucasus and Ukraine, forgetting about the Volga region and Siberia. I understand that it is easier to deal with the regions adjacent to the Black Sea, but forgetting completely about two large regions, the Volga region and Siberia ‐ this could not be done. It was necessary to throw funds there, it was necessary to maneuver. Since you worked in two regions ‐ in the North Caucasus and Ukraine, you definitely should have done something in relation to the Volga region and Siberia, where prices were lower. There was no such maneuvering in the regions. This also increased the severity of our pressure on the North Caucasus and Ukraine, and this overload led to an even greater increase in prices in the Black Sea region.

The third line of our shortcomings, which also led to price inflation, is that prices in the domestic and foreign markets, and hence the interests of the foreign and domestic markets, were not coordinated. Vneshtorg tried to export grain with might and main, regardless of the consequences on the domestic market. The intensified export of agricultural products led to price inflation on the domestic market. Oil, for example, is more expensive here than abroad. Vneshtorg was cut off [from domestic trade. The fact that NK Vneshtorg pulled its own way and spat on the domestic market led to the fact that prices inside inflated and export opportunities were reduced, which caused the Vneshtorg Commissar to suffer] from Vnutriorg, exports from the domestic market. As a result, both the interests of Vneshtorg and the interests of Vneshtorg suffered.

These are, in my impression, the three main lines of shortcomings along which our work on procurements proceeded and which led to the fact that prices jumped high, while procurements and exports decreased.

What to do? We must get rid of these shortcomings. It is necessary to draw up a real, not a bloated plan of procurement, corresponding to our capabilities, and take all measures to force the peasant to throw bread on the market. I heard out of my ears that a number of events have been scheduled by the service station that can force a man to throw bread on the market. It is necessary [to move the vodka to the peasant so that he can spend more money, to take bread to the market, to get money for vodka. Move the time frame for obtaining agricultural. the tax is closer to press on the peasant, then to collect the tax, etc. All these events and a number of other events, which I will not dwell on, because I am not well informed, should force the guy to throw the bread into the market. But the most important thing is that you need to get rid of shortcomings along three lines] to discuss these measures and, upon approval, to carry out, it does not matter whether it is a question of the timing of collection of the agricultural tax, or of the collection of insurance premiums and contributions for the semester. It is necessary to connect the internal and external markets, Vneshtorg and Vnutriorg, stronger, so that the price policy on the domestic market does not overturn the interests of exports and vice versa, so that measures are found that, without inflating foam inside, would not undermine the possibility of developing exports. Then, it is time to establish a united front of procurers for our regulatory bodies, to keep a course firmly on the destruction of competition between grain procurers. [ A number of procurement workers argue that if we do everything for this (further ...) resolution, we should pay attention to this. Obviously, we had some kind of organic defects. Then maneuvering through the areas.] Finally, it is time to take measures against the bacchanalia of raising retail prices for manufactory by our trading bodies and cooperatives.

Hereʹs everything I caught and what I can offer.

Then, a particular question about Comrade Sokolnikov, about the fact that in our country the agricultural tax is not an income tax and that therefore the burden of agricultural the tax fell mainly on the poor. I think that Comrade Sokolnikov is not accurate here, or rather, wrong. First, there is a Politburo decree that the lower strata of the peasantry are completely exempt from tax 13. There is a resolution on this not only on the party line, but also on the Soviet line. If this is not done, then it is not the center that is to blame, but the practice of the NKF bodies. I think this practice should be tailored to our policies. The other day I handed out to members of the Politburo some materials about how the NKFin of the RSFSR, Comrade Milyutin, quite rightly decided to exempt from petty agricultural fees. tax on small peasants, from fees [above] below the ruble, and how Comrade Sokolnikov later canceled this correct decision. Why did he overturn this right decision, taking into account the interests of the poor? The Central Committee has a protest from 15 provincial committees demanding the abolition of these petty fees, amounting to only about 300 thousand rubles, and not even covering the costs of their collection. Comrade Sokolnikov, since he spoke about the poor peasants, should know that [ it is not the Politburo, which made such a decision, and not the Soviet bodies that followed this line, but the NKFin, which introduced a practice that does not correspond to the established policy, is to blame for this] the tax policy of the center takes into account the interests of the poor. And if this policy is not always carried out, then the practice of the NKFin bodies is to blame, which does not always correspond to the established policy. [I would like to note one more side of the matter, this side of the matter rests on the report of Comrade Sokolnikov and concerns Comrade. Krasin. Quite correctly, that there are no plans ‐ neither procurement nor export should be drawn up without strict consideration of our exportimport balance. It is often said that the business is going great, the export one is billion and so on. But we must take into account ... First, as exports expand, we become more vulnerable ... 200 million in flax, we can delay fluctuations for 2‐3 months, and then all our plans will fly upside down. That is why I think that no procurement, export plan can be considered realistic, given our methods of trade. The more export and import works, the more vulnerable we become. I also know that it is necessary to take into account the fact that our last yearʹs balance was passive. The balance must be cost effective. It didnʹt work, we imported too much bread. It is in this area that we must take a course towards absolute rigor, otherwise Comrade Sokolnikov is right when he says that the currency can jump down, and this is a big danger, because we are not capitalists, but uniting states. If a financial crisis begins, it is not only a financial crisis, if it is a commercial crisis, it is not only a commercial crisis if an industrial crisis is again not so simple. Here we are not dealing with a private trader, but with the government. The trade, financial crisis is a general crisis. Absolute care, flexibility, the proportionality of those parts of the plan with the general plan is absolutely necessary.]

Two more comments. We often say that export‐import is increasing, and we are doing great in this respect. This is not entirely true. It must be borne in mind that the more we export, the more we become dependent on foreign capitalists, the more vulnerable our economy becomes to attacks from outside. It is enough, for example, for 100 or 200 million to boycott us the export of, say, timber, flax, grain ‐ and this is easy for them to do ‐ for our economic plans to become unusable and require their revision. Therefore, we need special flexibility and discretion in foreign trade, and we must always reserve ourselves a significant reserve to insure ourselves against surprises. This disadvantage in our growing exports must always be in front of our eyes.

The second point concerns our trade balance. By the decision of the XIII Party Congress, we had to have for 1924‐1925. trade surplus 14. In fact, we ended up with a passive balance, which could not but negatively affect our settlement balance and the fate of our chervonets. We were forced to import a lot of grain due to crop failure, and the balance turned out to be passive. But not only this explains the passive balance. Our regulators had a miscalculation here. Now we have a harvest, and we must, we must, in view of this, set a course for an active balance. We must correct the miscalculation. Otherwise, we risk a financial crisis. In this area, our regulators must set a course for absolute rigor, otherwise the currency could jump down and we face great danger.

This circumstance must also be taken into account by our regulators if they want to make plans correctly.

Chairman. Comrade has the floor. Krasin.

Krasin. Two words about the Peopleʹs Commissariat for Foreign Trade: if you do not trust, they beat you, if you turn over, they beat you. If you sell little of goods abroad and export surpluses remain in ports, unsold, you are scolded for keeping unsold goods if you sell ahead, as, for example, this year we sold wheat and a number of crops, they say you are pursuing a risky policy ... I note that NKVT made all purchases and sales under direct pressure from higher authorities, in particular, the STO and the Politburo demanded sales from us due to currency difficulties. I, in particular, was against the conclusion of a barley agreement with Dreyfus 15, because I considered it unprofitable. We were forced to do it because we needed money at the time.

Voice. Have you been on the commission?

Krasin. I was not a member of the commission. Iʹve been abroad 16. Comrade Frumkin was here, and on his part statements were made four times during August and September 17: he objected to the accepted grain export plan. In October Iʹll have three times raised the question of the revision of the export plan to decrease, and also the reduction of foreign exchange earnings, which are expected of us 18. They tell us: we wonʹt give you bread, because procurement is unacceptable and may lead to higher prices, but still give the currency completely, because it was decided in August.

Voice. This is not true.

Krasin. First they demanded 150 million, then they reduced it to 115 million. Under extreme stress, we could have given 60 million in the first quarter, but despite all our arguments, we were assigned 75 million. I would suggest that Comrade Stalinʹs proposal be fixed. The export program really needs to be revised, it is necessary to revise both the program and foreign exchange earnings. I have the impression that in the area of export we have far from used everything we could. Not used due to the definitely defeatist line, which is being conducted in this area by NKVnutorg. It boils down to the fact that not only can I not export, but that I simply do not want to export. Narkomvnutorg simply neglects export.

We are told: let NKVneshtorg get the money as it wants. Others say: we will get a loan. What does a loan mean? Even under good conditions, we have to pay after a certain number of months. Our main difficulty is that the import plan for 1 billion is already a reality, we have begun to implement it. If you say that the export business is hopeless, I propose to discuss how you mean to pay for the import plan. Perhaps Comrade Sokolnikov has such a purse that can withstand?

Voice. Only a reduction in the import plan.

rasin. Yes, then hurry up to reduce imports because purchases are already underway. Once you gave us the import program, we execute it extremely quickly, and every day of delay leads to the fact that we issue promissory notes worth millions of rubles, which will need to be paid. The revision of the export and foreign exchange plan, as well as the import plan, must be put on full scale and in all seriousness. Meanwhile, what do we get? It turns out that our procurement program at each meeting of the Bread Committee 19 cut further and further, while foreign exchange requirements for Vneshtorg remain unchanged. The procurement figure, put forward for November, was 86 million poods. At a meeting of NKVnutorg, it was decided to lower this figure to 82 million poods, but after a brief exchange of views, the Bread Committee decided to reduce this figure and reduce the procurement plan in November to 70 million poods. From 86 million poods. at one meeting, they were first reduced to 82, and then immediately to 70 million poods. [ It turns out that we are going further with cuts in terms of exports, and thus, in terms of the department of exports and its execution, we are dealing with a sort of happy socialist country, which itself dominates its consumption and satisfies 1/6 of the export.] We are cutting exports with might and main, as if the highest policy of foreign trade is to reduce them to zero. I have here a table of the distribution of procurements in the first quarter by domestic consumption and by export concentration. It turns out that wheat for domestic consumption in percentage terms is fulfilled against the plan by 131%, rye ‐ 106%, barley ‐ 90%, other crops ‐ 70%, on average ‐ 105%. Thus, the consumption plan has been fulfilled in excess. As for the preparations for export, wheat is fulfilled ‐ 75%, rye ‐ 79%, barley ‐ 86%, other crops ‐ 50%, on average only 75%. This means that you have for export only 1/3 of procurement wheat, 1/6 of rye, 1/6 of barley and 1/3 of other crops. Since we have payments for old orders and a large import plan, our currency situation is desperate. Here definitely a certain pressure on the Peopleʹs Commissariat for Foreign Trade is necessary along the line so that those export opportunities, those export crops, the export of which is not associated with any catastrophe in the domestic market, in order for them to be exported, it is necessary to plug this hole, this gaping abyss before us. The reproach made by Comrade Stalin, that we inflated the price of the domestic market by our sale abroad, is wrong. The fact that[I] myself, Comrade Stalin pointed out that domestic prices are higher than overseas, shows that the rise in prices is the result of ugly speculation and stupid price policy, which we conducted incorrectly, and not at all the result of our overseas sales.

Stalin. There is no link between foreign and domestic trade.

Krasin. The linking of foreign trade is given to you by the prices of the world market, either you sell at these prices or not, thatʹs the whole linkage. Order us to detain the bread in our ports ‐ we will, it will be much easier than looking for consumers.

Pyatakov. Do you think that we do not influence the prices of the external market? You are wrong.

Krasin. We influence by lowering prices. The very fact that we are entering the foreign market lowers the price of bread. NKVnutorg is pursuing some kind of incomprehensible policy of increasing national consumption, i.e., in other words, a policy of driving grain for manure. Do we need this policy? I think we need to twist the other way.

Stalin. How to screw up if the price of bread has jumped and you have nothing to export?

Rykov. From the discussion of the questions raised here, I got the impression that now the possibility of the development of elements of the crisis in our economy is not excluded. These elements boil down, first, to the real threat of inflation; secondly, to a possible bankruptcy in relation to payments on foreign obligations (Comrade Krasin said at the last Politburo meeting that we must pay for orders, but we have no currency) 20 and, finally, thirdly, to the question of scissors and the danger of their spread. It is rather difficult to discuss in isolation the issue of grain procurement policy, since it is part of the general question of how to avoid a crisis that could erupt if such prices for bread are kept, how to avoid new scissors for us, how to dodge the impending bankruptcy of foreign payments ... Here are the highlights. As for the causes of this crisis, in my opinion, Comrade Stalin is not quite right that the main mistake was in the exaggerated plans for the autumn preparations. It should not be forgotten that in the past, most of the bread supply fell in the fall. This year, as a result of a good harvest, a lot of bread should have appeared on the market, but this did not work out for us. It did not work out because, in fact, for the first time a peasant ʺfreelyʺ enters into economic contact with the city, almost without any administrative and tax pressure. It is more profitable to procure grain in the fall for two reasons: from the point of view of selling grain abroad and from the point of view that the peasants themselves can consume a significant amount of this grain before spring. Therefore, the very desire to procure more grain in the fall was absolutely correct. The mistake was made in the fact that they refinanced, refinanced the grain procurers. When prices began to rise rapidly, it was necessary to turn back as soon as possible: it was necessary to reduce funding, reduce the number of banknotes in peasant circulation, and reduce grain procurements. The fact that we were late for a month or two is extremely dangerous and entailed a number of adverse consequences. I donʹt know how much was thrown away [how many tens or hundreds of millions] of excess money, but there is no doubt that if this circumstance had been taken into account in advance, we would not now face the danger of inflation. Now it seems perfectly clear. What Comrade Krasin is talking about came to light with complete clarity. [Of course, he is not responsible for our domestic prices from the point of view of the state, which has 2 million turnover abroad, that such a situation needs to be created if we want to make this turnover so that external prices put pressure on our domestic ones.] However, he does not answer with what measures to ensure consistency between internal and external prices. But there is no such correspondence: Comrade Sheinman is sitting in one room, Comrade Krasin is in the other, and Comrade Sheinman buys butter for 30 rubles, and Comrade Krasin sells for 28 rubles. It is necessary that this does not happen. Can we establish such a position that internal prices match external ones? We would better establish this if our procurement apparatus were to a greater extent connected with abroad. The disorganization of our internal market is the greatest. Regardless of the means used in this regard, what has been done during this time in a number of cases, in my opinion, could have been done differently. Comrade Scheinman proposes to essentially restore the limits. I asked the question, is this the old system of limits or not? These limits are unknown to anyone. Today T. Sheinman explained that these are the same old limit prices, only firmer, that is the difference. But it is rather unpleasant to deal with a peasant on the line of limits. The current ideology of Comrade Sheinmanʹs opinion that economic measures are obligatory in relation to the peasant, but not obligatory in relation to the grain procurement authorities, is untenable. Our trusts and syndicates cannot be deprived of all initiative in the sphere of circulation if we do not want to introduce radical changes in the existing system. Your proposal boils down to the fact that methods of economic influence have led nowhere and cannot lead to anything, it is necessary to apply methods of administrative pressure. You say that you will not put administrative pressure on the peasant directly. But itʹs pretty obvious [When I come to the store and buy, and the “administration” is around me, this does not work favorably on me ... There is no distinction. The fact that we cannot issue an order to the peasant “sell that much bread”, we can only give an order to the grain procurers. We have to take the peasant administratively.]

Of course, there is no need in principle to abandon administrative measures. Now, perhaps, we could not achieve the desired result by other measures. These measures could bring results if they were started a month or two earlier. Has there been any social and political agitation for the implementation of the economic plan in connection with the harvest? She wasnʹt there. Until now, she has not been explained, no one knows almost nothing about her. If the question is really that we have started inflation, that we are on the eve of a crisis abroad, then it is necessary from the Vnutriorg and the government to give a program of basic measures and organize all possible forces on their implementation. What is the situation with the domestic market now? You will set, for example, such and such a price for bread, and the Kazan Council of Peopleʹs Commissars 21 declares that he will not do so. T. Mikoyan and Comrade Eismont 22 are imposed on each pood of grain goods for 3 kopecks. Comrade Lashevich 23 declared that he would impose oil, furs, etc. The Kyrgyz come and declare that they will impose on every head, skin, tail, and horns. You say that the economic bodies are clerks and that administrative pressure can be put on them. You press so hard that all plans are thwarted. What conclusions should be drawn from this? The conclusion is that our domestic market is now not organized to any extent. There were no cases of complaints about violations or non‐compliance with directives, but, nevertheless, everywhere, and everywhere they declare that our internal market is completely disorganized. We have such a situation that whole areas split off in relation to the policy of regulation of the internal market, declaring ʺtheirʺ policy. Here we have some kind of ʺfeudalism of places.ʺ Mikoyan, for example, has imposed 3 kopecks since August. on a pood presented for the transportation of bread. September 13, at the request of Comrade. Kamenev said that they have been collecting these fees for a month and a half. Railways accept receipts from any grain collector that this tax has been paid, and provide the purchaser only in this case with the required wagons. I cite this as an example of the complete disorganization of the domestic market. It is necessary to take the most decisive measures, otherwise the market will be taken away completely and entirely.

I would gladly welcome the decision that is proposed here regarding the revision of the entire export program if it were said here what will happen with the ʺscissorsʺ, with a shortage of goods, which is completely ignored. [Product hunger will be the predominant economic phenomenon for a number of years.] The issue of the export‐import plan is largely related to the resolution of this issue. The peasant has significant surpluses, and if we want to get something from the peasant, then we must give him something. If a peasant has a billion surplus, we must oppose a certain amount of goods against this billion. The opposition is not a billion, but much less ‐ hence a significant part of the difficulties this year. Probably, it will be the same next year, with the difference that the man will have surplus not a billion, but one and a half billion. To get bread from there, you need to give goods there, and if you give nothing but money, this is called inflation. The fight against inflation in case of a shortage of goods should be that behind the money there should be some amount of goods that can be obtained for this money, since we cannot give the goods, we must reduce the amount of money and lower prices in other ways. In this respect, I have not received any definite answer here. I ask you to answer me in my closing remarks.

Kamenev. If we take seriously what Aleksey Ivanovich says about the crisis and feudal complications, then one can really imagine that God knows what is going on here. But, in my opinion, two things need to be distinguished. From the very beginning of autumn, I was reproached for painting gloomy perspectives. I think that it was necessary to point out the difficulties that lay ahead, but here I see that I am much more an optimist than Comrade Rykov, because the crisis in the country, which Aleksey Ivanovich is talking about, is one thing, the divergence of our plans is another. with what appears in reality. These are two different things. The discrepancy between our plans and what we can do is very large, but we must not forget that we have now bought 70 percent more bread last year, and, despite the fact that we have less export than we expected, it is also much more than last year. It cannot be said on this basis that we have a crisis. This is our situation. I said at the plenum of the Central Committee24, that the man is holding us by the hand, we wanted to take out 70% of the bread by January 1, and this would be beneficial for us and for the man. The peasant did not understand this, he did not give us the required amount of bread, held our hand. But from this it is still impossible to draw the conclusions that Aleksey Ivanovich makes. The conclusion will be only what we need and will have to step in our development more slowly. I said at a meeting of the STO ‐ less often a step! But still, if we wanted to reach 91% of the pre‐war level in industry, and reach 80%, we cannot say that we are in a crisis. It so happened that the little man [out of his stupidity] did not give us the required amount of bread, but kept it with him. It seemed to him more profitable to hold back the bread, he does not know about any Canada, Argentina, or America; does not know when they enter the market, but sees that there is no product and holds back the bread. As a result of this situation, our plan for the annual deployment will not be 100% fulfilled, but 8085%. and Comrade Pyatakov even looks more optimistic and says that it will be realized by 90 percent. Of course, in October I do not know what will happen, say, in July. The time frame will undoubtedly be extended. Regarding the discrepancy between our plan, our assumptions and what is in reality, I already at the first discussion said about the Gosplan control figures that these figures are too optimistic. But they turn out to be optimal if we take our conjectural calculations, and not the position that was, say, [... Here we see that the peasant has screwed us up in this respect.] There is a “crisisʺ, but by no means in the sense that instead of going forward in our development, going further, we will go back. This is not the case. The peasant held our hand, and we are forced to move forward not as quickly as we expected. But we will go forward, and will not go back and will not stand still, so there is no crisis here.

The present situation appears to me in the form of a triangle. In one corner there is the Peopleʹs Commissariat of Trade, at the top of the NKVneshtorg, which is to be taken out, and in the third corner of the Supreme Council of the National Economy, which in exchange for grain exported abroad must receive machines for industry to increase production and provide the peasantry with goods. Where is the minimum at this point? The minimum is in grain procurements. We cannot obtain a sufficient amount of grain; therefore, we cannot export enough grain abroad, and therefore the Supreme Council of the National Economy cannot obtain the number of machines it needs for its industry and cannot develop a sufficient output of goods.

At what point did it become clear that our plan was too optimistic? And is Comrade Rykov right when he says that this plan should have been broken as quickly as possible. The plan of procurement, the plan according to which we had to export 70% before January 1, we set in the month of July. It started raining in August. Was it necessary then to talk about a significant change in this plan? Of course, it was impossible to say that it was impossible to panic. [And now we can say what October‐November will give us? We cannot tell. We cannot say what is being carried out to what extent. Here the situation may turn out that if you take what we proposed in October‐November, and then look at what we actually managed to do in January, then there will be a difference, like from earth to sky.] In July, we proceeded from the assumption that the bread would tumble in bulk, the trouble would be that the price of bread would fall below the level and the man would get angry. The Politburo then said firmly ‐ the average price of 1 ruble. 25 I admit that perhaps it was necessary to abandon this prospect at the end of August, and not at the beginning of September. But how it follows that we have lost tens of millions of rubles on this is completely unclear to me. You shouldnʹt panic. Look how much bread is prepared. In the first quarter (July, August, September), 90% of the plan was prepared. Only three weeks have passed since the second quarter. In the first quarter, a man corrected us in terms of crops and gave us barley instead of rye. But the barley had to be bought. I agree with Comrade Sokolnikov, who said that it is necessary to take the purveyor on stronger financial reins. It is right. And now, when the Urals and Siberia are asking for money from us, we do not give them in full, they gave only 5 million rubles, ʺfor pocket moneyʺ for tens of millions of poods of grain.

Regarding limits and guideline prices. Comrade Rykov says that he understood that the guideline price is the limit price. What was the disadvantage of the limit price? It was bad because it turned into a state price, and the peasant understood this: the Bolsheviks gave orders for more than 70 kopecks. donʹt pay. What is the situation now? We want to procure 600‐800 million poods. We, the buyers of grain, when we enter the peasant market, must know at what price we want to buy. Collusion needed. The buyer of bread, counting on the purchase of 500‐600 million poods. bread must know at what price he will buy. The Politburo said: the price should be about a ruble. We give a figure that varies from 80 kopecks. up to 1 rub. 15 kopecks. But do you need to have some common price for all who are under the leadership of Comrade Shainman? When we see that prices are going up, i.e., Sheinman does not give an order not to buy above such‐and‐such a price, but he removes the procurers, reduces demand. He can do it. There used to be a compulsory price, we refused it. But this does not mean that we can enter the market on the basis of complete freedom of procurers. It would be a free market, and we want to carry out state regulation of the market. We cannot refuse this.

The next question is about linking Vneshtorg and Vnutriorg. I think that since we will have such a situation as now, when we are surrounded by capitalists, there will always be a fight between those who take out and those who care about internal supplies. This cannot be done otherwise than in the manner of an ordinary Soviet ʺfightʺ. The question is where the ʺfightʺ should take place. This happens either in the service station, or in operational commissions, meetings with me. Comrade Krasin seeks to export more abroad, while Comrade Sheinman says: until we regulate the domestic market, until we satisfy the domestic market, we will not supply abroad. Do you know what numbers are being disputed now? Comrade Sheinman and I have determined that for the month of November it is necessary to give 1 million poods for export. wheat, and Comrade Krasin struggles to give two and a half million poods. Comrade Krasin wants to fulfill the agreement on the supply of bread to the Greek and Norwegian governments. We gave up the chartered steamers and forbade chartering from now on.

Rudzutak. 80 steamers are still in the Black Sea.

Kamenev. Well, it means that not everyone has yet been driven out. And it was like this. When I received business from Comrade Tsyurupa, he spoke of the most difficult question whether we would be able to seize a sufficient number of steamers at a cheap price for our grain export. The merchant fleet is in the hands of the capitalists, we chartered these steamers, then we ran aground, it was impossible to let these steamers go or load them, and now comrade Krasin was ordered to break off all contracts and pay a forfeit for the freight. Now we are paying the price for not linking the July plan with the real policy of the peasants. I think that the competition between exports and the satisfaction of the domestic market needs to be reinvented.

Rykov. Within the framework of one person.

Kamenev. I do not say “within the framework of one person,” but perhaps within the framework of one collegium.

[Comrade Rykov was right at the end of his speech.]  Why did we not hurry as quickly as Comrades demanded? Frumkin and Krasin, revise the procurement plan? Firstly, because in July alone the plan was set at 680 million poods, in August at 780 million poods. In September they say ‐ give a new figure. [CSO] NKVnutorg today gives a new figure ‐ 680 million poods. It is necessary to revise these new figures, it is necessary to make the new figures, finally, more, or less real. Secondly, when we say: this and that amount of grain must be procured, thereby we say: such and such a rate of expansion of industry, such and such a rate of supply of goods to the peasant market, and such and such rate of inflation reduction. When they tell me: cut billets, export, cut imports, industry, I say: letʹs be more careful, because if today we accept the figure that Comrade Sheinman is talking about, then we must immediately give Comrade Pyatakov, etc. Clearing orders are ordered to review all of their production plans. Therefore, some caution is needed here. [We must collectively say that the hard figure directive must be given.]

My conclusions, formulated on the basis of the debate, are as follows (in such a meeting of the Politburo we cannot enter into separate points, details, we must give a general directive):

1)                   “To recognize it is necessary to revise the annual plan of procurement, export and import in connection with the new calculation of the gross harvest, possible commodity surpluses.

2)                   Approve a decrease in the export of grain exports, considering it necessary to strengthen other export items in every possible way, considering that the preservation of grain exports within the range of 300‐350 million poods. and its profitability remains. ʺ

Weʹve cut it now by 50% for this quarter. We need to revise our annual plan and approve a 50% cut this quarter. We rely too much on bread. They believed that we would plug all the holes with bread. At the same time, I consider it wrong if, under the influence of this circumstance, we forget to think about the export of grain, about 42% of our export, then we will slaughter the entire industry. You shouldnʹt go so far. It must be added that maintaining the export of grain in the range of 300‐350 million poods. remains, and exports should be cost‐effective. Of course, if we have bread only in the month of May, we will take it in May. But now we cannot admit defeatist sentiments in the matter of exports, since there is a tendency towards this, then Comrade Frumkin, Comrade Krasin, and Comrade Pyatakov are right against this tendency.

3)                   ʺTo recognize the correct and absolutely necessary measures to reduce prices to the directive, proceeding from the future to the regulation of the internal market, primarily from prices acceptable for the internal market.ʺ

A party directive is needed here. You will have to argue a little with the peasant. [The directive prices, which were last year, are no longer a measure.]  If we do not reach the directive prices, then we need to develop a campaign so that every worker clearly knows that the fate of the further expansion of the industry is whether we are a peasant with bread squeeze, or he will squeeze us in price. The reduction of prices to the directive ones also proceeds from the interests of the domestic market, and we must proceed from prices that are acceptable for the domestic market. They say that we put world prices at the forefront and reckon too much with world prices. Why the hell is it considered when already now actually the prices of billets give the export is not profitable. We reckon with world prices in paper, but this is not the case on the market. We are going to the edge of profitability.

4)                   “The inevitable reduction in imports should be made in such a way as to affect the import of raw materials and equipment for industry and agricultural products as little as possible. The plans for the expansion of industry should be adjusted in accordance with the revealed reduction in imports”.

5)                   “To approve the policy of firm regulation of imports of manufactured goods, setting as the main task, on the one hand, the burden of cooperation as the main conductor of manufactured goods, on the other hand, a broad fight against the discrepancy between wholesale and retail prices and the growing role of private capital on the basis of a commodity shortage. To oblige the Supreme Council of the National Economy and the cooperation to include in the general contracts a clause on a certain cape for the goods transported by it. ʺ

6)                   “Considering the possibility of inflation as the biggest danger, instruct the Soviets, when considering credit and financial plans, to take all necessary measures to prevent inflation.”

How to do it? I see two active directives for this moment. The first is to press the guy to give him bread, and the second is to cut the difference between the wholesale and retail prices.

Voice. How to click on a guy?

Kamenev. How to get a man to throw out this bread? What recipes can there be?

Tomsk. This is clear.

Kamenev. No, Comrade Tomsky is mistaken. Itʹs not that simple.

Voice. Ask Comrade Tomsky to clarify.

Kamenev. Vodka needs to be promoted to the village, but it goes there poorly. 75% of the issue was spent on drink in Moscow. The tax deadlines cannot be moved, we swore at all the congresses of the Soviets that there would be no travel, since one third had to be paid by the first of November. As for insurance premiums, we took measures, gave strict instructions to take as much as possible.

Voice. It is not enough to take; you need to know from whom.

Kamenev.  [Well, thatʹs none of my business.]  Regarding retail prices. How to cut off monstrous retail capes? Cooperation? But she makes a fortune herself. Yesterday I was told that Comrade Ter, the deputy of Comrade Khinchuk, at the plenum of the representatives of the Central Union of the Union said directly: how can we not cash in on goods a little, we must use the conjuncture! Comrade Pyatakov should not be very happy, because each of your trustees also thinks how to make money.

Pyatakov. It has fixed prices; the fact of the matter is that we regulate trusts.

Kamenev. Do you regulate syndicates, do you regulate retail trade?

Comrade Khinchuk also tells us that he regulates cooperation.

Sokolnikov. Trusts make money too.

Kamenev. [ The method of struggle indicated by Comrade Dzerzhinsky is correct.] We obliged the industry to conclude a general agreement with the cooperatives, according to which 70% of manufactory necessarily goes through cooperation, but in this general agreement we did not envisage including the following clause: if you receive 70% manufactory, then you have to sell it to a peasant with a cape of 20‐25%, as it was before the war. It is necessary to include such a clause in the contract. And if you don’t sell, then you need some kind of penalty. Here is a measure that I can propose, apart from party measures, etc.

We are facing a review of quarterly plans. It is necessary to give a firm directive, the meaning of which is such as to hold back inflation at all costs. The Politburo must say that. If you give us such a directive to reduce prices to directives, revise the procurement plan and the export and import plan, reduce imports for industry, but, if possible, not to touch the main line of unfolding and establish a certain level of retail prices, and order that in the coming quarter inflation did not work out, then it will come out that there will be no crisis, there will probably be little inflation, difficulties, of course, will be, but, in general, we will be able to fulfill our plan.

Chairman. I give the floor to Comrade Quiring.

Queering. The question is now clear to everyone: The State Planning Commission miscalculated the control figures. The proposals that have been announced here generally indicate a way out. I would like the Politburo to further take a firm decision on the question of grain procurers. As if it is perfectly clear that we have too many of them. We took too many grain procurers ‐ 6 or 8 main grain procurers, gave them a lot of money, and they, having large export orders, began to compete with each other in front of the peasant. The state was at the mercy of its own apparatus. If we do not raise the question of reducing the number of grain procurers and do not eliminate competition between them, then we will not resolve this issue for the future.

Now regarding the directive prices for bread. It was said here that the directive prices should be linked to world prices and should break even our exports. I think that in this form the directive would be one‐sided, for you cannot separate agricultural prices from the prices of manufactured goods, you cannot separate the foam for grain from the retail prices for flour and baked bread. If we turn to the relation between the prices for grain, which we paid to the peasant, with the prices for flour and for baked bread and for manufactured goods, then there is no correspondence between the jumps in these prices. During the present grain procurement campaign when grain prices rose to 1 ruble. 70 kopecks. for wheat in some areas ‐ now in these areas they have dropped to 1 ruble. 40 kopecks. How did this affect the prices of flour and baked bread? No way.

Kamenev. It is sold at a loss.

Queering. In all markets, baked bread is sold at these prices.

Kamenev. In the cities of Leningrad, Moscow, Ivanovo‐Voznesensk, it is sold at a loss.

Queering. After all, private grain procurers procure about half of all wheat. They pay the peasant more than we pay, and they support domestic prices. That is why I think that the tough directive, of which Comrade Kamenev spoke, is to bring prices down to the directive prices, pressing the peasant, risks hanging in the air. They say that the first is the date of payment of the tax, that it is necessary to recover from the peasant the debts on loans that are available, but all this is trifle in relation to the amount of grain that the peasantry has.

Rykov. Low prices for manufactory is one of the methods. Queering. We must exert pressure on the prices of flour and baked bread, and at the same time exert a combined pressure towards lowering the retail prices of manufactured goods. Only under these conditions will we achieve real results. The peasant now believes that for a pound of bread he should have a shirt, this is a general formula.

Kamenev. And the pants?

Queering. Pants are more expensive. Now, for a pood of bread, he has one meter of calico, i.e., 1/3 of a shirt, so that the existing bread prices per se, if we take into account their ratio with the prices of manufactured goods, are not so high, and the peasant thinks that he is offended, that the city offends him. To illustrate how we are conducting price reductions ‐ comrade. Kamenev says that we need to push and achieve that from 1 rub. 40 kopecks. to reach the guideline prices ‐ I want to give a message about how the price cut was made at the end of September. I have a message from 5 comrades whom we sent as correspondents of the ʺTrade and Industrial Newspaperʺ 26to grain procurement districts so that they can check how much the peasant buys goods and, in passing, get acquainted with the prices of bread. From the Kuban, they report that September 24 was a historic day for grain procurers: in one day the price of wheat was reduced by about 30%, and after that procurement stopped. The same is confirmed by a comrade who was in the Melitopol district, in the Alexandria district in the Ukraine. There, too, after receiving a directive from here that prices should be lowered, prices were sharply reduced in one day. This led to serious discontent among the peasantries. Procurers usually give the peasant sacks in advance, since there are not enough sacks, and agree with him on the prices at which they should bring the bread. The next day, the peasants of the district villages arrive with bags of grain procurers and with an agreed price, and they are told: no, we are not paying you 1 ruble. 60 kopecks, and 1 rub. 15 kopecks. I have a message about how one head of the collection point had to flee from the peasants. If we carry out this reduction in this manner, then there will be nothing but aggravation of relations with the peasants.

I would very much ask Comrade Sheinman to provide us with data on the movement of grain procurements in the North Caucasus until approximately September 20 ‐ for the third decade of September and the first and second ten days of October, in order to check how such a sharp drop in prices affected the progress of grain procurements. Therefore, I believe that we will not achieve lower prices for bread by unilateral administrative or other measures. Therefore, our measures to reduce prices should go alongside the actual reduction in retail prices for manufactured goods.

Sokolnikov. That will never take place.

Queering.The situation is such that the peasants, since we are talking about the well‐to‐do peasants of the North Caucasus Territory and Ukraine, can wait until spring, it is more profitable for them. I must also say that about the jumps in prices ‐ first increases, then decreases ‐ the peasants say that ʺit is our government that is hesitating.ʺ The peasants view state procurers as direct representatives of the state and direct executors of state directives. The peasants see that in one day prices immediately fell by 40 kopecks. for a pood and see that it was done by the state procurers, and the state procurers means the state; the peasants say that our state is vacillating, which means that it is not strong. I say that the situation is such that a significant part of the peasants are waiting until spring with a significant amount of their grain, perhaps in the spring prices will rise even more. But we canʹt wait. Therefore, simply proposing such a policy that now we must definitely achieve directive prices without lowering retail prices for manufactured goods is not good.

Rykov. Why is he waiting for spring?

Clearing. Because it assumes that prices will rise further in the spring. If we find ourselves in such conditions that we will not have any bread and we will have to buy it at any price, then this will have very undesirable consequences.

Chairman. Comrade Smirnov has the floor.

Smirnov A.P. It seems to me that one point should be noted here, where, indeed, there may be some economic error, but otherwise, in my opinion, it is quite rightly noted here, we can only talk about some haste, and as a result, some twitching, but this is not an economic error. An economic error that needs to be fixed is an exaggerated balance, a harvest balance, which has recently been brought up to 4700 million. This is the State Planning Committeeʹs figure. I state that this story must be done away with, because this is not a mistake in haste, a mistake of a planned nature, but an economic mistake that cannot be corrected by anything. I subscribe to the highlights presented by Comrade Kamenev that this is where our mistake lies, and that there are no ideological reasons. There is a mistake in our conscious will, and the other part is outside our conscious will. If there are 3900 million, then you will not make 4700 million. The CSB figure of 4200 million is also exaggerated. Even if we take it without adjusting for the weather, this figure is still exaggerated. In this part, it must be firmly decided to proceed with all the relevant calculations of commodity balances from a figure that is real.

Kamenev. How much do you count?

Smirnov. I have a figure of 3900 million, a surplus of 680 million. The last figure of a surplus is still 680 million.

Kamenev. For government purveyors only?

Smirnov.I am only talking about the planning part, which we regulate, which is in our hands, both for the regulation of the domestic market and for exports. I think this part needs to be amended. From the point of view of the circumstances that were stated, it is quite clear that we were in a hurry, because we did not want to settle accounts with the peasant. There is also an ideological reason, it was necessary to reckon with him, but we did not reckon and wanted to do what seemed to us the most convenient. The reason is that the implementation plan was deployed too quickly under our conditions. I will not dwell for a long time, since many comrades have already sufficiently discussed this topic that under normal conditions of deployment, such an implementation plan cannot be. I repeat ‐ even under normal conditions. If we are experiencing a shortage of goods, then these are already abnormal conditions, the high cost of goods is also an abnormal condition; there are a number of conditions that will delay this implementation. This is what you need to think about, weigh, etc. In the old days this was the case. Not only the product had to be on the market, but the man would find out what the price of this product was. I’ll say it on my own, although we only sold oats in the Tver province, and even then you go to the bazaar and look at the prices not only for your own goods, but also for other goods. Take a look and go. You think we still have to wait, although it was difficult to wait, because taxes and all kinds of payments were on the neck.

Sokolnikov. Rent payment.

Smirnov. I don’t list ‐ and zemstvo and other payments.

Still, I would have walked and looked, and now it will go to the market, there is no product there, and if there is, then the devil knows what the price is. He will think: I will wait, maybe the prices will be lower. It is impossible to think that under these conditions he will export his grain. So, it was necessary to draw up a plan softer, so that the peasant could be squeezed, pressed on him. What are the means of pressure? Here it was correctly established ‐ the tax is part of the pressure, then the collection of the semester, etc. But all this goes to the poor part mainly, and not to the wealthy. Semssuda was issued for 90% to weak farms. We will get something in this part, and the next push, of course, is the exposure of the buyers themselves. It was noted in this section ‐ limit prices should have an effect. This is true, Comrade Kamenev, you have correctly explained that this is not an administrative order, but this is true only under certain conditions. Here Comrade Rykov is right. If we do not take the domestic market in hand, then this will be an order, when a peasant will bring bread and sell it at a ruble, and next to a private buyer will pay a ten ruble. This will be an order, and the man will understand. Therefore, it must be added: when developing the plan, it is necessary to decisively set the task of organizing its own grain market, so that the Peopleʹs Commissariat of Foreign Trade on the domestic grain market could dictate, to some extent, grain prices. Then your prices, set before the peasant, will not be order prices, for the state reserves and stocks for regulating the market will put pressure on him.

I want to draw your attention to the following. There is a selective census ‐ the prime cost of a pound of wheat is 1 ruble. 90 kopecks. This is with the most significant pressure, with cheap labor, etc.

Suppose the prime cost is 1 ruble. 12 kopecks Of course, forcing a peasant to sell for a ruble is, of course, already a solid pressure towards disadvantage for the peasant. Therefore, the noted comrade. The pressure on manufactured goods by queering and others remains evident if we want to really really force him to go for the prices that are of absolute importance to us. Two words about the impact on such a frantic rise in prices. Here, I think, the mistake, apart from haste, was that the procurers gave the peasant a lot of money. The guy had a lot of money. This must be realized. He kept this money in his pocket, without losing anything on it. This circumstance was one of the important mistakes. The reason was that our procurers fought like dogs for every cart. I have paper, Comrade Molotov has a copy, this is not what is written in the newspapers, but a fact: three procurers at the entrance to the village caught the unfortunate peasant and started a fight among

themselves. This is an official piece of paper.

Rudzutak. How much does he sell bread?

Smirnov. This is a completely different question, it does not apply here, I sell bread at the price that the market gives.

It seems to me that this part should be taken into account as much as possible from the point of view of financing, so that these dog fights of several procurers over one cart would be stopped.

Rykov. (Reads his suggestions) *. (* Proposals by A.I. Rykov have not survived.)

Chairman. The floor is given by Comrade Stalin.

Stalin **. (** In the transcript with the authorʹs revision, the text of IV Stalinʹs speech is absent. Reconciliation was carried out using a copy of the transcript from the personal fund of IV Stalin. (F. 558. Op. 11. D. 1105. L. 62‐67.))

I have a few comments.

The first remark concerns the fact that our procurement plans turned out to be exaggerated. It cannot be denied that the previous annual plan of 780 million and the quarterly procurement plan by January 1926 in the amount of 70% of this amount (780 million) turned out to be unrealistic, exaggerated, exaggerated. These plans need to be revised and reduced. The Narkomvnutorg has another plan: 680 million poods. procurement for the entire financial year and the procurement plan for January 380 million poods. 60% of the reduced amount of 680 million poods. for the entire financial year. This plan is more realistic. There was a miscalculation. This must be admitted. I did not understand Comrade Rykov. I didn’t mean that the peasant sold less bread in the fall and more in the spring. This is an anecdote. Iʹm talking about [that our procurement plan for the entire financial year is exaggerated. It is clear. We must reduce the total amount of procurements for the entire financial year by 100 million poods. If the SRT considers this figure, I donʹt know, it is very possible that it will reduce, and from this reduced amount of the annual rate we can take not 70%, as it was previously projected, but 60%. We must take into account that he was right here ... What was not taken into account, that due to the harvest, the peasant had the opportunity to maneuver, the peasant brings anything to the market, and turns around, waiting for better days, even if there is a large tax pressure in this year was not. How we will operate with the figure of 680 million poods, I do not know, it may very well be that we will have to reduce] that, in view of the general harvest, the peasant prefers to enter the market with by‐products, such as barley, potatoes, dairy products, small livestock, etc., while retaining for the time being more valuable commodities, such as wheat and rye. The fact is that a man also knows how to maneuver, which must not be forgotten. And this circumstance was obviously not taken into account. To think that we can procure 70% of 780 million poods in three months, in the absence of a big tax press this year, means not knowing the man.

Then the second point is about inflation. Is there a danger of inflation? Of course, have. This danger comes from two sides: on the one hand ‐ from the inside, since the prices of agricultural products jump up ‐ and here it is necessary to take measures to reduce prices: on the other hand, the danger of inflation can come from the outside if the trade balance is passive. Here, too, it will obviously be necessary to take measures, to commensurate the minimum of its import with the minimum of its export and to achieve an excess of export. Otherwise, the matter may end badly for the gold piece. We should generally pursue a line on the active balance of our foreign trade, and not on the passive one. We have a directive, adopted by the Thirteenth Congress on the basis of the report of the Central Committee of the RCP, on the obligatory active balance. We cannot ignore this directive, especially now, with a good harvest.

The third point is about the crisis. Do we have a crisis? No. We donʹt have a crisis yet. Comrade Rykov is an exaggeration.

Rykov. Is there inflation?

Stalin. There is certainly a danger of inflation. We do not have real inflation and, I hope, will not, but there is a danger of inflation, this is a fact. And the danger of inflation creates the danger of a crisis. The illusion of a crisis is created when we compare what we have practically achieved with those exaggerated plans that we had. But this is only an illusion of a crisis. But we can run into a real crisis if we do not take into account the danger that leads to inflation, namely, the rise in prices for agricultural products and a reduction in our exports, the passivity of the trade balance. Commensurate the size of the import with the size of the export and thus achieve an active balance, [if we do not carry out these things, then the danger of a crisis, of course, will be, and moreover, the crisis can begin with inflation. All the same, in whatever direction it takes, it will beat the Soviet regime, and not the private capitalist; our state structure is such that the crisis will strike along the entire front. But there is certainly an exaggeration] by lowering the prices of bread and increasing our exports — this is the way in which we can eliminate the danger of inflation. The dangers should not be exaggerated, but they should not be glossed over either.

The fourth point is about “feudalism”. Of course, I do not approve and cannot approve that a 3‐kopeck tax has been introduced in the North Caucasus. [I think that the regional authorities and the republicans will have to decide ... this is a well‐known concrete measure of combining the conclusions of the places with the conclusions of the center. Without such a combination of the conclusions of the localities with the conclusions of the center, we will not achieve any economic upsurge.] In the Urals, they also wanted to introduce a 2‐kopeck tax, but we did not allow it. But from a 3‐kopeck tax to ʺfeudalismʺ is still very far. We do not need a 3‐kopeck levy, but a link between the benefits and initiatives of the center with the benefits and initiatives of the places. It may very well be that a measure of such a combination of interests of the center and localities could be the participation of places in the profits of our procurement bodies. In any case, without such a combination it will be difficult for us to achieve a general and powerful economic recovery.

Fifth remark ‐ [since a man sells, since a man buys a product, it is obvious that a fundamental linkage in the Vneshtorg bodies is necessary here. It is impossible to do so that one body for foreign trade goes without looking at the foreign market, and another body, also infuriated, goes to the other extreme, then there is a mutual disadvantage. Here we are talking about the fact that inside this organ there is a bow of dissimilar elements] about the linkage in the work of Vnutriorg and Vneshtorg. Now Vneshtorg and Vnutorg are pulling in different, directly opposite directions, because Vneshtorg is exporting with might and main, regardless of the domestic market. The internal trade does its own thing, slowing down export. Hence the gap between the domestic and foreign markets. The results are such that our oil in London is cheaper than in Moscow.

And this discrepancy will continue until we unite Vneshtorg and

Vnutriorg into one whole.

The sixth remark concerns the question of a united front of procurers. There was no single front of procurers, Comrade. Sheinman did not show sufficient willpower in this matter. We were given out by procurers. It is impossible to establish a united front with the condition that the collectors run up to each other, if they give the interests of the state, pushing up the price of bread [... Looking to each other, they are undermining us.]  We should think about whether it is possible to reduce the number and clicker establish an unconditional united front between them. Further, it is impossible to wage a decisive struggle to lower the retail prices of goods, for the lowering of the retail prices of goods is the reverse side of the lowering of the prices of bread. Canʹt the state take draconian measures against the procurers to force them to align themselves in the interests of the state?

he seventh point is about the agreement with Dreyfus. I cannot pass by in silence Comrade Krasinʹs statement. On the issue of Dreyfus, there may have been a mistake, but let me remind you [... of the next decision of the Politburo. Whether I was then at the Politburo or not, all the same, I am responsible for this decision] that the decision was taken by the Politburo 27, and the agreement was concluded by a commission from Comrades. Frumkin (Vneshtorg), Sokolnikov and Tsyurupa. There may be a mistake here, but this mistake is our common mistake. The Politburo was then attended by Comrades. Bukharin, Zinoviev, Stalin, Trotsky, Rykov, Dzerzhinsky, etc. If there was a mistake ...

Kamenev. After all, not such a big mistake.

Stalin.  [May be. Everyone was then in such a state that some ...] 

Vneshtorg was involved in this error.

One final note ‐ what to do? I think that Comrade Kamenevʹs proposal and Comrade Rykovʹs additional proposal could be accepted basically so that this case be worked out in a special commission of the Politburo. [Will we be able to create this commission for only one procurement, or will we have to link this commission to the issue of exports, imports, and the currency plan? I dont know. If on Thursday we consider the export and currency plan as the first question, then maybe on Thursday we will be able to create a commission.

Rykov. The Chinese question comes first.

Stalin. Create a general commission that will thoroughly resolve this issue.]

Chairman. Our speakers are listed in the following order: Sheinman, Sokolnikov and Uglanov. I think that comrades should be allowed to speak. Sokolnikov and Uglanov, and Sheinman to give the closing speech. Comrade Sokolnikov has the floor.

Sokolnikov.I have the following comments on this issue. It seems to me that, first of all, it is necessary, on the basis of this lesson, to try to verify the correctness of the methods of calculating the countryʹs grain surplus. We had a harvest of 4 billion poods. What can be called surplus? I tried to find out on the basis of what the surpluses are calculated, on the basis of what consumption rates of the peasant economy. It turned out that our statistics are based on the old, prewar consumption rates. This is a clear mistake. The revolution for the peasant is that he himself eats better and feeds the horse differently. Therefore, our statistics should take this thing into account. We really need to remember the basics, which we forgot about, but which we repeated when we were an opposition party. Now this is not such a surplus that could be calculated with an absolutely hungry consumption rate, which existed in tsarist Russia. We must give our statisticians the task, if they are worth anything, to begin a real check of the actual norms of peasant consumption, as they are. This is the first point.

Voice. We do not know this consumption.

Sokolnikov. These consumption rates are somewhat dependent on the price level, but it is important to find a certain minimum, which is undoubtedly different from the previous minimum. Something you can grope for orientation. I have already said that I think we will have to go with a reduced procurement and export program in the next quarter, but what was the mistake that was made in the previous quarter? It was not only that the plan was too big. If you draw up a big plan, but give little money to your hands and say: we have a big plan, here is the money for procurement of 10 million poods; if these 10 million poods. you buy, then we will automatically give you another 10‐20 million poods for procurement. etc. ‐ this is a certain way of a bank loan, which makes it possible to automatically control the actual implementation of the plan in connection with the actual supply of bread on the market. The fight on the issue of loans for grain procurement was desperate in the service station, I voted in the singular, and they decided to give money to merchants, they did not regret it. I will say frankly: when I came back from vacation in September and saw the state of affairs, at my own risk and fear, I the State Bank to stop any release of targeted loans for grain procurements, to take a course towards shrinking procurements and reducing prices. A few days later, these proposals were duly authorized.

Rykov. It should have been done earlier.

Sokolnikov. We used to take a different path. This error must be taken into account. This brings us to the question of the entire deployment methodology, how to go forward: according to the maximum program, in order to then turn back, or go according to the minimum program and, as soon as we have reserves, add a step. I think that only the second position will now be correct. Now we will discuss the budget: should we go for maximum inflation, or letʹs go carefully at first, and how the money will be, letʹs go ahead. If there was a reserve fund, it is a different matter, but now we have to go carefully, backing up. Comrade Rykov said that inflation and depreciation had already begun in our country. I disagree with that. I remain with my wording: we have a preface to inflation. [Kind of like a reception room. Introduction. What is it? The fact is that, like last year, to a certain extent we rolled out money to the market, but last year the situation was smoother, since the scale was smaller.]  We rolled out 300 million of money to the market in the first quarter. We are compelled from the side of funds to advance the farm in a known manner. The bank issued 300 million rubles. on the development of trade. Where did the inflation risk come from? It arose from the fact that in the fall the trade turnover did not develop to the extent that it was expected according to the plan. We have every reason to believe that we will dissolve this thing within the next 6 months.

Voice. Weʹll pump out the money.

Sokolnikov. No, first of all we will expand our trade. But, of course, if within the next 6 weeks there is no improvement in terms of the ability to confidently respond to the development of trade, then I will have the honor to offer you to reduce money circulation.

Voice. Reduce the budget?

Sokolnikov. Not to reduce, but to carry out some installments in the execution of the budget and set aside the money that will come to us from the tax fund.

Kamenev. Tax money should not be spent, but saved.

Sokolnikov. Our monthly tax and income receipts are RUB 300 million. We are 300 million rubles. under the present order we spend. those. put into circulation. If the commodity turnover does not improve and the state of monetary circulation deteriorates, I will say: allow us 50 million rubles. withdraw from circulation until some discharge of the atmosphere is obtained. This method of influence (and other methods) is still in our hands, and only if it would be possible to talk about inflation, if it were knocked out of our hands. If in the coming quarter to issue new hundreds of millions, as suggested by the Market Council ...

Voice. What is this Market Council?

Sokolnikov. There is such a Conjunctural Council under the State Planning Committee, where the majority of comrades Groman sits, who believes that the way out is to swing around both in terms of emission and to deploy blanks without calculation.

Voice. Instead of reverse gear forward.

Sokolnikov. The minority recognized that there is a danger of inflation, but in the end the majority, led by Comrade Groman, won. However, the Presidium of the State Planning Commission did not agree with the opinion of the majority.

We will be faced with the need to reduce, a very significant reduction in bank emissions over the next quarter, and there will be a number of difficulties with commercial institutions, industry, and banks. Here we will have conflicts because everything is on a different scale, and we must say: be quiet. Comrade Rykov spoke of the devaluation of the chervonets that had taken place. I categorically reject such a statement. The purchasing power of 28 ducats has not yet experienced any significant change. The dynamics of price movement indicates to us possible dangers that must be eliminated in advance, because then it will be too late. But the purchasing power of money is now no less than at the time of the monetary reform. Gold parity 29the gold piece is not shaken in any way. I follow this, have a daily black‐market summary to read.

Rykov. I am sure that Comrade Sokolnikov can be devalued inside and promoted abroad.

Sokolnikov. We have markets where our ten is slightly lower, and in other places by 20‐30 kopecks. more expensive. You, Alexey Ivanovich, are luring me into the distant jungle, and the chairman does not allow me to dwell on this. We will not talk about this. I must say that on the main questions of our monetary policy, we must reach an agreement in the Politburo with complete clarity.

Kamenev. Absolutely correct.

Sokolnikov. Because, obviously, the policy that we have been pursuing for several years is not completely understood and remains my responsibility. They say: what I want, I do, in fact, of course, this is not so. You, Aleksey Ivanovich, said back in the summer of 1923 that by letting the Soviet sign sink to the bottom, then we could ruin the gold piece, and then we would invent something else.

Comrade Quiring spoke of the fact that high grain prices are in line with industrial prices; here you need to put a full stop over the ʺiʺ. We took upon ourselves the program of destroying the scissors, bringing industrial and agricultural prices to the same level. But what does it mean to carry out this program by authorizing highlevel agricultural workers? prices? This means bringing about inflation. If your industrial prices are higher than world prices, and if you raise agricultural prices to the same level, your industrial and agricultural prices will turn out to be higher than world prices, i.e., the general level of prices is higher than world prices, and thus the purchasing power of money is lower than the world one. In this situation, of course, it is impossible to export, and at the same time import. You will have such a position. The scissors program, if considered as a program, which must be carried out by raising agricultural prices to the level of current industrial prices, there is a program for the disorganization of our entire economy. Itʹs time to fix the scissors compression program comrade. Trotsky [his point of view on this issue is incorrect].  We are for the abolition of the ʺscissorsʺ, but it is not necessary that the ʺscissorsʺ be destroyed in such a way as to raise agricultural prices to the level of the now existing high industrial prices. We must continue and follow through with lowering industrial prices through lowering agricultural prices. That is why, comrade. Quiring, your suggestions are helpless, so this issue cannot be resolved.

I would also like to emphasize that this year we need to maintain a trade surplus policy at all costs. Resolution of the XIII Party Congress, which was recalled by Comrade. Stalin remains in the same force. Everyone understands that the resolution of the Party Congress on an active trade balance cannot be carried out in a lean year. But when the year is fruitful, this decree is fully valid, and in order to change such a decree, it would be necessary to first have an agreement on loans, long‐term loans, etc., but since this is not there, we cannot revise it, therefore that to revise it in the context of shortterm loans means to let yourself be tied to a thread. I disagree with Comrade Kamenev that it is necessary to confirm a firm plan for the delivery.

Kamenev. I said firm import regulation is something else.

Sokolnikov. There is a struggle between the Peopleʹs Commissariat of Foreign Trade and the Supreme Economic Council. The point is that it is very good to regulate the import, but we need to leave the opportunity for the market to amend our plans. If this does not happen, then we will have even more blows to the forehead than we have from the side of firm regulation of planned purchases. The level of retail prices is largely determined by the nature of the market, hence the pressure on cooperative prices, etc. Now we have such a situation that goods are brought to Moscow from the provinces.

Sheinman. Long live the private shopkeeper.

Sokolnikov. Not ʺlong live the private shopkeeper,ʺ Comrade. Sheinman, this is a little demagogy, and there is no need for such a policy in the Peopleʹs Commissariat of Internal Affairs, which would enable a private trader to organize unrestrained speculation and which would turn our cooperative and state bodies into actual allies of speculators.

Chairman. The floor is given by Comrade Uglanov.

Uglanov. Comrade Sheinman in his report mentioned some of the activities of the Moscow City Bank, which are speculative in nature. I must state that this is the first time I hear about this from Comrade Sheinman. We will try in the near future to check the activities of the Moscow City Bank and its director, and I will submit the materials in writing.

Voice. Comrade Uglanov is to blame for this.

Uglanov. I do not take this personally, and I think that Comrade

Sheinman did not say this.

Comrade Sheinman said that I grieve about the Moscow consumer cooperatives. If we sometimes listened to complaints from Moscow consumer cooperatives regarding pressure, then only in the part when in Moscow it came to the point that the supply of white flour was only for one day. We did not show any panic, only in the form of personal conversations with comrades. I told Stalin and Kamenev that the situation here is rather slippery. I did not write any papers about this. We received assurances from Comrade Sheinman that Moscow would be provided with bread, and we believe that the question is over. Consumer cooperatives appealed to the Bureau of the MK, whether it is possible to enter the Central Committee with a petition to change the policy of procurement prices. The MK Bureau rejected this.

When I talk about this, I must add that in Moscow we had rye bread for two months, and white for one month. Now we have a supply of black bread for 2 weeks, and white for 7 days. We hold on because we know the difficulties the government is in.

The third question is about speculators in Moscow. Indeed, a lot of speculators have come to Moscow. This is due to the fact that the general plan for the movement of goods into the countryside is directed mainly towards the main grain‐procurement regions, therefore the secondary and tertiary agricultural peasant regions are bare, there are no goods there. In this regard, many speculatorshucksters have come to Moscow, they grab the goods in pieces, several meters each, and take them away in bags. If you bless, we can clear Moscow of speculators a week, and if you authorize, we can set such a crash in Moscow that we will drive all speculators away. This can be done.

Iʹll move on to general questions. I believe that if we look at the situation in the Party and in the country, we must proceed from the fact that the general rate of rapid economic development has mobilized the Party from this angle, and everywhere, in all our economic bodies, provincial and regional, they are making big plans for fast pace of economic development, etc. And now we still see; that with this rate of economic development, which has been created in the country and the party, the situation is somewhat different, as the statistics indicate. Unlike the past meetings of the Politburo or the plenum of the Central Committee ‐ there were no such arguments as today ‐ our entire economic plan, the entire conjuncture, and all paths of further development two weeks after the plenum of the Central Committee were subjected to a more serious test. That is why the point is not that everything is very well with us. Thatʹs why I think that when comrade. Kamenev said that we saw difficulties, then, in my opinion, if we saw these difficulties, it was necessary to consider them not philosophically, but realistically. It was necessary to draw up plans, more or less realistic, which could be carried out. I spoke with Comrade Kamenev and told him that since last year the question of increasing the program of the metal industry four times was considered, couldn’t it have been possible this year not to draw up the programs of the metal industry and other industries in a finished form, and to come up so that within a year, two times ... In the past year, the program of the metal industry was revised four times, and even five times for GOMZ, and this did not work out worse.

At all crossroads, they called and gave promises in the area of prewar wages and everything and everyone. I think that although we are conducting a planned socialist economy, but this is not yet fully achieved, some methods of capitalist economic management must be applied. One comrade who came from abroad said that the capitalists were laughing at us: this is a fool, the harvest is good, so they rang about it everywhere, and now, in connection with this, prices on the market are falling. Now it is not known who will sell bread on the European market before us.

I think that in the future it is necessary to raise the question of establishing statistical accounting. I have carefully read the minutes of the meeting of the Council of Peopleʹs Commissars, at which there was a report on the Central Statistical Office under the chairmanship of Comrade Rykov. The representatives of the economic bodies, keeping their own statistics, severely criticized the work of the CSO. I do not know to what extent this business has been brought, but that the question of the statistical apparatus and accounting is acquiring great importance is a fact, this question must be raised in the near future.

Second question. Now more than ever before, it is necessary to raise the question of linking the activities of Party and Soviet bodies. The Party must be given an orientation in the current economic conditions. The plenum of the Central Committee did nothing on these issues since there were no conclusions. Now only conclusions are drawn from the plenum of the Central Committee. The decisions that will now be taken should be carried out not only along the Soviet line, along the line of the provincial executive committees, but also along the line of the provincial committees. The Politburo of the Central Committee should send out a detailed letter explaining the essence of the decisions made and the essence of the countryʹs economic situation. This will need to be done as best as possible and as soon as possible.

Chairman. Any questions?

Rykov. It has been reported here regarding the pressure on the seed loan installments. I would like to know if it is correct that the seed loan is mainly distributed among the peasant poor? Is such a directive in strict accordance with the decisions of the plenum on aid to the poor 30?

Sokolnikov. The first question is: are grain tax operations being carried out now? Can Comrade Sheinman give a definite answer to this? Are there regulations that would change previous assumptions about how to develop these operations?

The second question: what measures in the area of agricultural credit could be taken, according to Comrade Sheinman, which would ease the situation, since now under p. x. car we are given a 3year loan? Has this issue been discussed?

Krzhizhanovsky. Comrade Sokolnikov said that the point of view of the Presidium of the State Planning Commission and the Market Council was such that the Presidium of the State Planning Commission unanimously admitted that there is no inflation, but there is a danger of inflation. The Market Council insisted on issuing 300 million. I have not heard such a resolution, but its point of view was that the credit plan was 10 million lower than the plan of the Committee of Banks 31.

Stalin. If I’m not mistaken, the decisions or proposals of the

Conjunctural Council were published, and the opinion of the State Planning Committee presidium was also published?

Krzhizhanovsky. The Market Council does not publish its decisions. He only publishes in the ʺEconomic Lifeʺ 32 conjunctures, not proposals.

Stalin. Itʹs all the same.

Chairman. The floor is given by Comrade Sheinman.

Sheinman * (* The transcript contains a note from the stenographer: ʺThe beginning is hard to hear.ʺ). I will first answer the questions that were asked to me about the Semssuda and others. I do not know whether Alexey Ivanovich turned to me or to Comrade Smirnov? I had a peasant and said that they demanded 3 rubles in spring for oats issued to the peasant of the former Yegoryevsky district, I donʹt know which province, I think Moscow. gold for each pood. I have heard complaints that there is no poor policy regarding the Semssud. Yegoryevsky district is listed as one of the poor districts.

Rykov. Does this mean there is no correspondence with the plenum resolution?

Sheinman. I am not the Peopleʹs Commissar of Agriculture and I cannot give detailed information on this part. On the question of Comrade Sokolnikov about grain‐lending operations. They are now being held at a minimum scale and only in the North‐West region, in all other regions they have been suspended.

Voice. According to newspapers, these operations are continuing in

Ukraine.

Sheinman. They notify us that they are not being held, and it is impossible to rely on newspaper information.

As far as agricultural machinery is concerned, we have worked out a question so that next year, in the spring, we can shorten the loan terms. More sophisticated machines, sent to wealthy peasants, if you lend for long periods, then focus the payment on the first term. On the part of collective farms, leave the current system. In the Soviet Republic, you will often find that kulaks are fighting under the guise of poor people. Under our policy, we must look not only at the firm, but also who is sitting under it, but still, the policy of supporting collective farms must be observed. (In one of the district committees in Moscow, they pretended to me that I allowed the collection among employees in favor of the poorest peasants so that their children could go to school. They said: it is not good to help the peasants by collecting. But our country is poor, and the peasant economy is poor, and when this economy suffers a crop failure or the horse dies, the peasant is forced to go with a bag. We cannot abandon our poor policy.) Comrade. Sokolnikov says that a kulak is hiding under the name of a collective farm. Sokolnikov. I want more money to be paid.

Sheinman. And I want the poor not to be poor, so that there is no shortage of goods and there is no question of inflation.

Molotov. It turns out that you are pursuing a poor policy, and everyone else is not.

Sheinman.I now turn to the biggest question, Comrade Rykovʹs question about inflation and how to avoid this thing. The balance of agriculture in relation to the city is active. I reported to the STO and the Politburo about this and said that there were officially published figures for the active balance of 250 million rubles. In fact, it is higher. Under these conditions, there is no way to get away from what in theory is called inflation. If a man collects money and deposits it into a savings bank, at least into his savings bank ‐ a money‐box, then we will avoid the harmful effects of inflation. We are not prepared for this task by holding down prices for manufactured goods. When some unfortunate 40 million rubles were ordered in July. to throw them into these areas, we were able to knock them out only by the end of September, because in the spring there was a mood to sell to the one who pays better, i.e., private.

I propose to fix that in the spring we will have a crisis of building materials and glass, because they gave an order to consider glass as an unplanned product, and a private trader responded by saying that he already buys glass at a price twice as high, and if he paid twice as high now, then in the spring it will be 4 times more expensive. If by this time you have installed the glass industry and there will be glass, then I will say, you caught him, but still the situation is such that he catches you.

Voice. It also happens vice versa.

Sheinman. These are isolated cases in which the Ilyin merchants 33 could have paid off, whom Comrade Sokolnikov caught in a dozen and who are all registered with the GPU, but the peasant judges otherwise, and it is impossible to fool a wide market. Whoever gives the glass will be the master in this market.

The question of inflation and our preparation to fight it. The question of strengthening the currency, improving peasant confidence has not yet been resolved, and only now can we say that we are getting down to this question. We scold cooperation, I scold it first. I do not remember which of the comrades, but to some of those present, I said that it would be bad if the cooperation continued to move as it does now, only relying on our support, but not being driven by a stick (I remembered: I said this in the Politburo and Comrade Stalin). If our directives are violated, what can I do only? Write to the prosecutor. I wrote to the prosecutor and the NKJust of the republic, comrade Kurskiy received no answer.

Member of the board of the NKJust of the RSFSR comrade

Yakhontov told me that one can only answer for this by arrest for 3‐

4 days, because this is not provided for by law.

Rykov. This is what we all say.

Sheinman. Then I repeat that it is good if I learned what everyone was talking about. The peasant economyʹs demand for goods will grow very quickly, because we educated the peasant: what a tractor is, what is coal, etc. If the cooperation is not set up now (it will not stand up itself, but will be set up), then in a year, in the face of the peasant, private capital will develop, because he knows how to trade cheaper. This requires more than just economic regulation.

Stalin. What about draconian measures?

Sheinman. Draconian measures ‐ and they must be taken. This is what seems to be the root of the answer to the disagreement when a man sells bread, in autumn or spring? He sells when it is more profitable for him, and it is more profitable for the peasant earlier, because he can then buy what he needs, and in the spring he doubts whether he can get the right product. We have some inertia in this matter because no one wants to pay attention to this. It would be useful for us to see how the teeth of our machine are connected.

Rykov. Soviet sabotage, or what?

Sheinman. This is not sabotage, but different. Comrade Sokolnikov reproached: what kind of Peopleʹs Commissariat of Foreign Trade are you if you refuse to import goods in the first quarter? But I am not only the Peopleʹs Commissariat for Internal Affairs, but I am also a member of the Council of Peopleʹs Commissars, I am a member of the STO, I am a member of the RCP, and if we have difficulties, currency difficulties, then I say: it is easier to turn, I refuse to import, I, Narkomvnutorg, vote against the internal market and say: donate those millions to hardware. Why? I can explain. I said that in the conditions under which we find ourselves, to engage in the task of saturating domestic markets by importing goods to the detriment of an industry based on imported raw materials and imported equipment is a pursuit of our own shadow. We have industrial goods in which we experience hunger, for which we only need equipment, and we have our own raw materials: cement, timber, bricks. I say: give millions for this thing, and there is nothing counter‐revolutionary and anti‐communist in my statement. I voted correctly when I refused these 20 million rubles. finished goods.

Voice. And what about rayon?

Sheinman. I am not a production worker, I told the service station that maybe artificial silk does not rely on my own raw materials, but I am not a production worker, this is Comrade Pyatakov’s business, he must come and say what they will be used for. I will not argue with him, but I look at the issue from the point of view of the capacity of the domestic market.

On the issue of refinancing. Letʹs agree ‐ I ask Comrade Kuibyshev, because the Politburo cannot do this so that he investigates the issue of funding. After all, what was the financial program based on? To prepare 160 million poods, and we prepared them. What are they scaring us with? After all, I have no disputes with Comrade Sokolnikov about that, and I do not demand to give money earlier, and not depending on the progress of the blanks. Let Comrade Kamenev will testify that there is a fight with your assistants every Monday because of this. If we asked for another 1 million rubles, then we were told: no, sorry, the plan was written for so much, not a penny more. Am I getting it right?

Kamenev. Right.

Sokolnikov. In the fall, we had a disagreement that you do not state.

Sheinman. Everyone has disagreements, and not always only one side is to blame. Refinancing? I do not admit my mistake. Here they talked about what the entire procurement program and the entire financing program were based on. Today Comrade In the evening Kamenev will see that we are not saying: give money earlier, and when the bread arrives, give money, that is, cover the incoming bread. I will leave without comment everything that Comrade Quiring said and draw attention to one circumstance that I said about the teeth of our machine. We have become a parliamentary country, and the parliament is placed not outside, but inside. Outside parliament is an institution outside the government. We agreed that we were sending people, each one of our own, to see what was happening on the ground. Comrade Frumkin sent, Comrade Quiring sent, and Sheinman sent. Receives Comrade Quiring material, but he doesnʹt give me material and says that he needs to use them. The materials say that the local authorities in the South‐East have done this and that. If they did it in the Armavir region, where prices reached 1 rub. 60 kopecks, then this is not news for us. [I] Comrade. Mikoyan said at the plenum that in some areas they held a demonstration. But is this the system of Soviet work? If you receive a report on grain procurements, then you go with this report, as a deputy of the opposition faction, in order to speak with it in due time. It would be better to send this material to a place where it can be used. Do not forget that Sheinman is responsible for the domestic market, no matter what your opinion of it is, you are obliged to reckon with him and are obliged to give him material, just as I think it is not useless to turn to Comrade Pyatakov on industrial issues, and I am applying. Letʹs establish a minimum of normal relationships.

Kamenev. Nobody hopes for a maximum of normal relations.

Rykov. Is this directly related to grain procurement?

Sheinman. Extremely connected.

Regarding what Comrade Krasin says. [I know how you are, comrade Krasin, urging Uglanov. But all the moves to the Politburo, and there we will meet. I will not lose more than shoulder straps.] Comrade. Krasin poses as an innocent person: ʺMy business is to sell.ʺ This is the tragedy that Exportkhleb is a department of the Peopleʹs Commissariat for Foreign Trade or that organization of the Peopleʹs Commissariat for Foreign Trade, which borrows 190 million rubles. 70 million for export bread. This is not even a department of the Peopleʹs Commissariat for Foreign Trade, but something, and operations are carried out regardless of the state of the domestic market: whether the Kuban peasant sells bread or does not sell ‐ we, they say, do not care, we have a plan, and we must fulfill it. You canʹt work like that, itʹs not work. When we have our own state farms and state farm landlord grain ...

Molotov. Why a landlord?

Sheinman. Sorry, state farm bread. In 1923 we traded the Peopleʹs Commissariat for Food and it was so good that in 1924 we sat down. In 1925/26 this cannot be done. With regard to the merger of the Peopleʹs Commissariats, nothing more can be said here against what Comrade Stalin and others have already said. I will not dwell on this.

With regard to the analysis given by Comrade Stalin. In my opinion, this analysis is absolutely correct. I already spoke about this at the plenum. What does Comrade Stalinʹs analysis amount to? They sold too much without considering the situation we have. What was going on? We wrote a plan for 780 million poods. Right. I said that a plan should be drawn up in 600 million poods, I said: what are you afraid of, if we manage to procure more than 600 million poods, our apparatus will still be able to cope with this larger amount of procurement * (* The transcript contains a litter stenographers: “Several people speak at once, it is difficult to understand anything.”).My position in this respect is extremely favorable, voting in the service station is not recorded, but there are reports in the cases, you can view them. Comrade Tsyurupa can confirm that my first plan was 600 million poods. for a year. When they urged me on ‐ write a large amount ‐ I wrote. When the figure of 680 million was proposed, I said if this figure could be reduced by 50‐60 million. But this is not the point. The bottom line is what the harvest will be, maybe 5 billion poods, or maybe, on the contrary, less than the figure we have assumed. A peasant sells his bread not because he wants to sell it, but because he wants to get the goods he needs in exchange for this bread. The increase in export abroad led to an increase in domestic prices. As of October 15, we prepared 195 million poods, including industrial crops. Under pressure from the Peopleʹs Commissariat for Internal Affairs, the contract with abroad was canceled.

It seems to me that the right proposal is to postpone the decision for a week. I have a request to be given all the proposals for today or tomorrow so that I can understand them.

Chairman. The proposal is this: not to make any decisions now, but on Thursday, two days later, to raise the question of discussing Comrade Sokolnikovʹs report that he has just heard and to create a Politburo commission based on these two reports, which will examine all these questions.

Rykov. I am afraid that discussing Comrade Sokolnikovʹs lecture will take up as much time from us as discussing Comrade Sheinmanʹs lecture, then we will not be able to examine the remaining questions. There is a small question regarding the tariffication of state employees, etc., could this small question, which requires its resolution, be raised as the first question, and the second question is the discussion of Comrade Sokolnikovʹs report?

Chairman. The proposal is this: not to make any decision now, not to outline the composition of the commission now, but to outline the composition of the commission at the next meeting. At the next meeting, put first Comrade Rykovʹs question, and secondly discuss Comrade Sokolnikovʹs report.

Accepted 34.

1 RGASPI. F. 17. Op. 163. D. 529. L. 1‐141 (uncorrected transcript);

D. 530. L. 1‐135 (transcript with copyright correction); D. 533. L. 113 (verbatim report). The issue of grain procurements and the export‐import‐currency plan was also considered at a meeting of the Politburo on November 1, 1925 (see later in this volume). A verbatim record has been issued based on the transcripts of these two meetings.

The meeting on October 26 was attended by members of the Politburo ‐ G.E. Zinoviev, L.B. Kamenev and A.I. Rykov, I.V. Stalin, M.P. Tomsk; candidate members of the Politburo ‐ V.M. Molotov,

Ya.E. Rudzutak, G. Ya. Sokolnikov; members of the Central

Committee of the RCP (6) ‐ A.S. Bubnov, E.I. Clearing, L.B. Krasin,

G.M. Krzhizhanovsky, G.L. Pyatakov, A.P. Smirnov, N.A. Uglanov,

A.D. Tsyurupa; candidate members of the Central Committee of the RCP (b) ‐ S.I. Syrtsov, V.V. Schmidt; members of the Presidium of the Central Control Commission of the RCP (b) ‐ M.F. Shkiryatov, N.M. Yanson, E.M. Yaroslavsky, as well as the executive editor of the Izvestia newspaper I.I. Skvortsov‐Stepanov.

2 Resolution of the STO ʺOn the plan of grain procurement and grain export for 1925‐1926.ʺ was adopted on July 10, 1925 and approved by the Politburo on July 16, 1925. The decree established an indicative plan of state grain procurement at 680 million poods. (RGASPI. F. 17. Op. 3. D. 511. L. 4.) On August 19, 1925, the STO adopted a resolution ʺOn increasing the plan of grain procurements and grain importsʺ, according to which an indicative plan of grain procurements for 1925/26 was established 780 million poods. This resolution was approved by the Politburo on August 27, 1925 (Ibid.

L. 4, 11‐13.)

3 This refers to the USSR Peopleʹs Commissariat for Internal Trade.

4Due to the good harvest, the Soviet leadership hoped to carry out significant harvesting volumes as soon as possible. For this, a significant network of procurers was deployed and generous lending for grain procurements was made. Due to a combination of a number of factors ‐ bad weather conditions, competition between procurers, rush to export operations ‐ procurement prices have increased significantly. This stimulated an increase in commodity hunger ‐ a shortage of consumer goods both in the countryside and in the city, which undermined the interest of the peasantry in the sale of grain. Rising prices for bread, as well as capital expenditures in industry were the reasons for the financial difficulties. In JulySeptember 1925, over 296.8 million rubles were put into circulation, which accounted for 70% of the total issue since the beginning of the monetary reform in 1922 (Loevtsky D.A. Money circulation for 10 years / Bulletin of finance. 1927. No. 11.)

5  This refers to the II session of the All‐Russian Central Executive

Committee, held on October 13‐24, 1925.

6  A directive reduction in prices for planned procurers was carried out at the end of September ‐ beginning of October 1925. Prices were reduced by 10‐15%, even more in some regions. (Goland YM Crises that destroyed the NEP. Currency regulation during the NEP period. Edition 2. M., 1998. S. 19‐20.)

7  A gradual decrease in the procurement plan occurred as the monthly plans were refined. For example, the procurement plan for October 1925, approved by the STO on October 21, 1925, was 90 million poods. grain compared with 125 million poods, which were supposed to be received in October according to the initial reduced procurement plan, approved on July 10, 1925.

8  Limit price ‐ the upper limit of the price level for this type of product.

9  The resolution of the STO ʺOn supplying the village with manufactured goodsʺ of September 9, 1925 provided, in particular, ʺin view of the appearance on the market, in connection with a shortage of goods, rush transactions ... instruct the NKVnutorg of the USSR to pay attention to the noted phenomenon and attract those who make such transactions to legal responsibility ʺ. Banks were encouraged to no longer accept orders from individuals to buy and sell goods. Local executive committees received the right to facilitate the conclusion of agreements between cooperatives and trade bodies for the promotion of goods in the countryside, as well as use state retail trade bodies on the terms established for cooperation. (GARF. P‐5674. Op. 1. D. 13. L. 215‐218.)

10                  At the meeting of the STO on September 23, 1925, when discussing the export‐import plan for the first quarter of 1925/26, it was decided to reduce the plan for the export of bakery products from 125 to 110 million rubles. To finalize the plan, a commission headed by Sokolnikov was created. The Commission presented a new version of the plan, which retained the same size of grain exports, at the meeting of the STO on October 14. However, a week later, the commission proposed to reduce the export of bakery products to 75 million rubles, which was approved by the STO (Goland Yu.M. The Crises That Destroyed NEP, p. 106). Further Sokolnikov sets out these circumstances of the revision of the plan.

11                  Balance is the difference between the amount of exports and imports.

12                  According to Professor V.Ya. Zheleznov, by October 1, 1925, the amount of money supply increased by more than 80% compared to October 1, 1924 (Bulletin of Finance. 1926. No. 4).

13                  On April 21, 1925, the Politburo approved the draft resolution on the report of A.D. Tsurupa on a single agricultural tax, which was adopted at the XIV conference of the RCP (b) (April 1925). A significant reduction in the agricultural tax was envisaged in the 1925‐26 budget year, its differentiated distribution among various strata of the peasantry in accordance with the degree of capacity of their economy, and a decrease in rates for the poor and middle peasants. (RGASPI. F. 17. Op. 3.D. 512. L. 1, 5‐8.)

The 14th XIII Congress of the RCP (b), held on May 23‐31, 1924, approved the monetary reform carried out in 1922‐1924 and instructed the Central Committee to uphold the monopoly of foreign trade, develop grain exports and ensure an active balance of foreign trade. (The CPSU in resolutions and decisions of congresses, conferences, and plenums of the Central Committee. T. 3. M., 1984. S. 206.)

15   This refers to the decision of the Politburo of June 11, 1925: ʺAllow the NKVT to complete negotiations with the Dreyfus firm.ʺ (RGASPI. F. 17. Op. 3.D. 506. L. 2.) See note 22 to the transcript of August 2, 1923.

16   February 19, 1925 The Politburo made a decision: ʺ... b) Offer Krasin to leave for Paris without delay.ʺ (RGASPI. F. 17. Op. 3.D. 489. L. 1.) March 13, 1925 L.B. Krasin was approved as chairman of the concession commission at the trade mission of the USSR in France. (Ibid. D. 492. L. 6.) On August 27, 1925, the Politburo made a decision: ʺ... to invite Krasin to leave immediately for Moscow.ʺ

(Ibid. D. 517. L. 3.)

17   On the issue of grain export, deputy. Peopleʹs Commissar for Foreign Trade M.I. Frumkin spoke at meetings of the Politburo on

July 23, August 13 and 27, September 3 and 17, 1925 (RGASPI. F. 17. Op. 3. D. 512. L. 4‐5; D. 515. L. 6; D. 517.L. 6, 11‐13; D. 518. L. 2; D. 519. L. 1.)

18   On the issue of grain export at the meetings of the Politburo L.B.

Krasin spoke on October 26 and 29, 1925 (RGASPI, F. 17, Op. 3, D. 525, sheet 1; D. 526, sheet 1.)

19   In 1924, the structure of state management of grain procurements and purchases was reorganized. The general management of state grain procurements was entrusted to the grain‐fodder administration of the USSR Peopleʹs Commissariat of Trade. The Bread Committee was created under the Peopleʹs Commissariat as the body coordinating centralized grain purchases.

20   Apparently, this refers to the meeting of the Politburo of October 22, 1925, where the question of foreign trade was discussed. (RGASPI. F. 17. Op. 3. D. 524. L. 6‐7.)

21   This refers to the Council of Peopleʹs Commissars of the Tatar ASSR.

22   This refers to the leadership of the North Caucasian Regional

Committee of the RCP (b).

23   This refers to the leadership of Siberia.

24   This refers to the Plenum of the Central Committee of the RCP (Bolsheviks), which was held on October 3‐10, 1925. Kamenev spoke at this plenum on October 9, 1925 with a report entitled ʺThe Next Issues of Economic Policy.ʺ (RGASPI. F. 17. Op. 2.D. 197. L. 62‐67 rev.)

25   This refers to the resolution of the Politburo of July 30, 1925 on the directive prices for bread, which stipulated ʺthat the price to be set for the next period for wheat will not be lower than the ruble.ʺ

(RGASPI. F. 17.Op. 3. D. 513. L. 5.)

26   ʺCommercial and Industrial Newspaperʺ ‐ organ of the Supreme Council of National Economy, published in 1922‐1929. Chief editor of the newspaper M.A. Saveliev. According to N. Valentinovʹs recollections, Torgovaya‐promyshlennaya gazeta “participated in the most energetic way in all the campaigns conducted by the Supreme Economic Council: drawing up correct cost estimates and annual balances of economic enterprises, lowering prices, establishing depreciation funds, increasing labor productivity, fighting for a mode of economy and etc. ʺ (Valentinov N. (N. Volsky) New economic policy and the crisis of the party after Leninʹs death. Years of work in the Supreme Council of the National Economy during the NEP: Memories. M., 1991. S. 339.)

27   This refers to the meeting of the Politburo of June 11, 1925, at which Stalin was present. (RGASPI. F. 17. Op. 3. D. 506. L. 1.) See also note 16.

28   Purchasing power is the ability of a monetary unit to exchange for a certain amount of goods.

29   Parity is the ratio between monetary units, currencies of different countries, established either by their gold content, or by purchasing power in relation to a certain set of goods and services.

The 30 October plenum of the Central Committee of the RCP (b) in 1925 adopted a resolution ʺOn the work of the party among the rural poorʺ, which, in particular, provided for facilitating the access of the rural poor to agricultural and credit cooperation (state assistance in making shares), providing the poor with material assistance through concessional loans and encouraging the creation of collective farms. (The CPSU in Resolutions ... Vol. 3.P. 413‐417.)

On June 12, 1924, the Politburo approved a regulation on the Banking Committee under the Board of the State Bank, which was formed ʺto coordinate the activities of credit institutions and develop general issues of regulating bank lending.ʺ (RGASPI. F.

17.Op. 3. D. 443.L. 4, 19.)

32                  ʺEconomic Lifeʺ ‐ financial newspaper, published in Moscow in 1918‐1941.

33                  We are talking about currency speculators. The Peopleʹs Commissariat of Finance of the USSR was located on Ilyinka Street and at the same time the well‐known ʺblack exchangeʺ (ʺAmericanʺ), where transactions with foreign exchange values were carried out.

34                  The continuation of the consideration of the issue of the exportimport‐currency plan was twice postponed (RGASPI. F. 17. Op. 3. D. 525. sheet 1; D. 526. sheet 1) and was submitted to the meeting of the Politburo on November 2 (see (see the following transcript in this volume).