Creating the material basis of socialism- Industry Recovery

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   The development of the Soviet economy

The period of struggle for industrialization

The country's entry into the period of struggle for industrialization immediately raised the problem of accumulation with all its acuteness. The heavy industry of the capitalist countries was created through an influx of funds from outside: through colonial plunder, indemnities from conquered peoples, and foreign loans. Thus, for example, the industrialization of England took place at the expense of the robbery of the colonies, from which she drew considerable capital to invest in her industry. The industrialization of Germany especially accelerated after the war with France in the 70s of the last century, when Germany received five billion francs of indemnity. Tsarist Russia entered into extortionate loans and concessions for the development of industry. The country of the Soviets could not in principle resort to such dirty sources of obtaining funds for industrialization as the robbery of colonial or defeated peoples. As for foreign loans, this source was closed to the USSR due to the refusal of the capitalist countries to give it loans on terms acceptable to us. The Party resolutely swept aside the path of enslaving loans and concessions. Comrade Stalin pointed out in this regard: 

“This path is also closed to us, because we did not wage a three-year civil war, repulsing all and all interventionists, so that later, after defeating the interventionists, we would voluntarily go into bondage to the imperialists” [Lenin and Stalin, Collection of works on the study of the history of the CPSU (b), vol. III, p. 59.]. The country of the Soviets had to follow a new path, unexplored by other countries, the path of building an industry without credits from outside, on the basis of mobilizing internal sources, on the basis of socialist accumulation. 

Was it possible to solve the problem of accumulation from internal sources, without loans from outside? The fate of socialist industrialization, and consequently, the fate of socialism in the USSR, depended on the resolution of this issue. The Party, led by Comrade Stalin, answered this question in the affirmative. 

In doing so, the Party proceeded from taking into account the enormous advantages of the socialist economic system. The transfer of commanding heights into the hands of the proletarian state made it possible for industry and the national economy to develop according to plan, without competition and crises. The victory of the working class meant the liquidation of the class of capitalists and landlords, who unproductively consumed a huge part of the people's income before the revolution. Profits from state factories and plants, from transport, trade, and banks were no longer used for the parasitic consumption of parasites, but for the further expansion of industry. 

The Soviet government canceled the tsarist debts, on which the people annually paid hundreds of millions of rubles in gold of nothing but interest. By abolishing landowner ownership of land, the Soviet government freed the peasantry from the annual payment of about 500 million rubles to the landowners. gold rent for the land. Freed from all this burden, the peasantry could help the state build a new, powerful industry. The peasants were vitally interested in the development of heavy industry, this basis for the technical reconstruction of agriculture and the national economy as a whole, as well as in strengthening the country's defense capability. All this has created such sources of accumulation that the capitalist economy did not know. 

The most important source of accumulation was socialist industry itself, freed from the fetters of capitalist exploitation. The 15th Party Conference pointed out that the main conditions for increasing intra-industrial savings are the all-round rationalization of industry, its transfer to the rails of new technology, an increase in labor productivity and an increase in labor discipline, as well as a decisive reduction in overhead costs and an increase in the turnover of financial resources. The work carried out by the Party in this direction has yielded brilliant results. During the period from 1925/26 to 1928/29, accumulations within industry amounted to years (in million rubles) [Implementation of the five-year plan for industry. Materials for the report of V. V. Kuibyshev at the XVI Party Congress, Giese, 1930, pp. 132 - 133.]: 

Intra-industrial accumulation 






Depreciation deductions





Net profit










But intra-industrial accumulation alone was not enough for the extensive construction of heavy industry. For the industrialization of the country must be used in a certain amount and the accumulation of other sectors of the economy. The instrument for the redistribution of savings is the state budget. The party turns the budget into an important source of financing for the industrialization of the country, while strengthening the alliance between the working class and the peasantry. From 1925/26 the financing of industry according to the budget began to exceed its contributions to the budget. In 1925/26 this excess amounted to 105 million rubles, and in 1929/30 it was over a billion rubles. Every year the state budget provided ever larger sums for the development of heavy industry [Ibid., p. 137.]. 

The Party also made extensive use of a third source of savings—the mobilization of the population's savings. This was achieved primarily through credit, which the working masses of the USSR widely and willingly provided to their state to finance socialist industrialization. During this period, the party created a new type of loans and new, applicable only in the USSR, methods of placing government bonds, based on attracting public organizations, the Soviet press to the implementation of long-term loans, creating komsods (commissions for promoting state credit) at enterprises and institutions, etc. The Industrialization Loan, issued in 1927 at the suggestion of the workers in response to the threat of a financial blockade by the world bourgeoisie, was the first massive long-term loan of the Soviet government, designed to be implemented among millions of working people. The transition to mass borrowing greatly expanded the base of public credit. From October 1925 to October 1930, the state debt of the USSR grew from 367.2 million rubles. to 2504.8 million rubles, i.e. almost seven times. This means that during this period the working people of the USSR lent their state over 2 billion rubles. for industrialization. 

At the same time, significant success was also achieved in mobilizing the population's funds through savings banks. If on October 1, 1925, 786 thousand people consisted of savings bank depositors, and the amount of deposits was 21.3 million rubles, then on October 1, 1929, the number of depositors increased to 7172.2 thousand people (9 times), and the amount of deposits - up to 315.8 million rubles. (15 times). 

The year 1928/29 crowns the enormous work done by the Party under the leadership of Comrade Stalin to solve the problem of accumulation. In the article “The Year of the Great Turn,” Comrade Stalin wrote: “The past year has shown that, despite the open and secret financial blockade of the USSR, we did not go into bondage to the capitalists and successfully solved the problem of accumulation on our own, laying the foundations of heavy industry. Even the inveterate enemies of the working class cannot deny this now” [Stalin, Questions of Leninism, ed. 11th, p. 266.]. 

One of the most important conditions for socialist accumulation was the struggle for a regime of economy. To implement a regime of economy means to establish such a procedure for the correct spending of all the funds available to the state and accumulated by it, so that not a single penny is spent in vain, unproductively. 

First of all, the austerity regime required a decisive reduction in overhead costs in trade and industrial organizations and enterprises, a reduction in unproductive costs by rationalizing the Soviet apparatus. This meant curtailing swollen accounts, liquidating redundant institutions, simplifying the organization and operation of many institutions, and reducing staffing. The Party understood the austerity regime not only as a reduction in the apparatus, but also as a broader implementation of austerity, which would also cover the issues of rationalizing production, making the best use of equipment, reducing production costs, and eliminating all losses in the national economy. The austerity regime was thus one of the most important methods of accelerating the expanded reproduction of socialist forms of economy. 

A lot of work has been done to reduce, rationalize and reduce the cost of the administrative apparatus. With the general growth of the entire national economy over this period, administrative and management expenses under the unified state budget decreased from 463.9 million rubles. in 1926/27 to 382.1 million rubles. in 1929/30. The share of administrative and management expenses in the single state budget decreased from 8.18% in 1926/27 to 3.29% in 1929/30. Administrative and management expenses in industry were greatly reduced: in 1926 / 27, their share in the value of gross industrial output was 4.4%, and in 1928/29 - 2.9% [Report of Comrade Ordzhonikidze on the work of the Central Control Commission at the XVI Congress of the CPSU (b). Verbatim report of the XVI Congress, vol. I, 1935, pp. 564, 566.]. 

Based on the successful solution of the problem of accumulation, the Party develops the capital construction of socialist industry. Capital construction took place in the previous period as well. However, at that time it was characterized by insignificant dimensions - for the entire period from 1921 to 1925, the fixed assets of industry increased by only two percent. After the Fourteenth Party Congress, extensive capital construction in industry began. The year 1925/26 is a turning point in this respect. Capital investments in 1925/26 were twice as high as those in 1924/25. Since 1925/26, investments in fixed assets of industry begin to sharply—and to an ever greater extent—exceed their average annual depreciation. 

Investments and depreciation of fixed assets of the planned industry, including the housing stock of industry, in 1926/27 prices (in millions of rubles) 


1925/26 _

1926/27 _

1927/28 _

1928/29 _











Investments in % to depreciation





Along with the growth of investments, an ever greater part of them is channeled into the construction of heavy industry. The share of industries producing the means of production in capital investments in 1925/26 was 58.6%, in 1926/27 - 66.6%, and in 1928/29 - already about 74% [ Ibid .]. 

The party's policy of increasing capital investment and accelerating the pace of capital construction met with fierce resistance from class enemies and their agents within the party. The Trotskyists and Zinovievists, who were later exposed as the worst enemies of the people, speaking in words for the policy of industrialization, in fact “... scolded the party’s decision on the victory of socialism in the USSR, mocked the policy of socialist industrialization, demanded that a number of plants and factories be concessioned to foreigners, pinned their main hopes on foreign capitalist concessions in the USSR" ["History of the CPSU(b)". Short course, p. 271.]. 

The attitude of the Trotskyists, who sought to disrupt the industrialization of the country, found its vivid expression in the dynamics of capital investment, which was given in the OSVOK memorandum, developed with the participation of the Trotskyist Pyatakov. This projection of capital investment was based on the wrecking, capitulationist "theory" of the damped curve. For the first years of the five-year plan, the OSVOK project outlined excessive tension in the line of investments, which could only lead to a break in the alliance between the working class and the peasantry, and in subsequent years, when the forces of socialism increased, the capitulators proposed a sharp reduction in capital expenditures. 

Describing the position of the Trotskyists, Comrade Stalin pointed out at the 16th Party Congress: “As for the reconstruction period, the Trotskyists, in terms of pace, are the most extreme minimalists and the most vile capitulators” [Stalin , Questions of Leninism, ed. 10th, p. 415. ]. 

The wreckers from the “industrial party” and from the counter-revolutionary Menshevik organization, who had settled in the Supreme Council of National Economy and the State Planning Committee, followed the same path when developing long-term plans. 

Right-wing capitulators, headed by Bukharin, Rykov, and Tomsky, waged a bitter struggle against the Party line on the industrialization of the country at the time of the development and implementation of the first five-year plan. They openly opposed the socialist industrialization of the country. Thus, in the pages of the Moscow Party press and at Party meetings, the Rights shouted that industrialization was burdensome for the people, that the building of heavy industry was premature. Bukharin's assistant Uglanov opposed the construction of the Dneproges, demanding the transfer of funds from heavy industry to light industry. Uglanov and other right-wing capitulators assured that Moscow should remain calico, that machine-building plants should not be built in it. At every opportunity, the right-wing capitulators opposed the pace of industrial development adopted by the Party and demanded a reduction in appropriations for its capital construction. Bukharin openly opposed the pace of capital construction adopted and carried out by the party, proposing to be equal to the "bottlenecks". 

The struggle of the Bukharinites against the Party on the question of the pace of industrialization was aimed at discrediting the five-year plan, cutting, and squandering appropriations for the development of industry. 

The party, under the leadership of Comrade Stalin, crushed enemy attempts to disrupt the industrialization of the country and organized the development of a truly Bolshevik five-year plan, the core of which was the construction of a socialist industry, which ensured the transformation of the USSR from an agrarian country into a powerful industrial power. The "optimal" version of the five-year plan, adopted by the 16th Party Conference, provided for increasing investment in industry from year to year, significantly exceeding the outlines of all previous five-year plans. 

According to the five-year plan, the following investments were planned for the capital construction of industry: in 1928/29 - 2091 million rubles, in 1929/30 - 2845 million rubles, in 1930/31 - 3451 million rubles, in 1931/32 - 3796 million rubles. and in 1932/33 - 4170 million rubles. - a total of 16.4 billion rubles, and together with investments in electrification - 19.4 billion rubles. 

In fact, the targets of the first five-year plan for capital investment in industry were overfulfilled. For 4 1/4 years - from October 1928 to 1932 - 24.8 billion rubles were actually invested in industry and electrification. (instead of 19.4 according to the plan), including 21.3 billion rubles, or 86% of all investments, in the construction of heavy industry. 

As a result of the development of capital construction, the growth rate of the fixed assets of industry, especially heavy industry, increased. 

By the end of the period of the Party's struggle for the industrialization of the country, the fixed assets of large-scale industry amounted to 10,985 million rubles. against 8105 million rubles. in 1925 [Socialist Construction of the USSR, 1936, p. 3. By the range of sectors taken into account in 1913]. The fixed assets of industries that produce the means of production have grown especially significantly. This growth of fixed assets of industry took place both through the expansion and reconstruction of existing enterprises, and thanks to the ever more unfolding construction of new plants. 

The fixed assets of the industry grew due to the introduction of new technology into industry. In the field of energy, there was an intensive process of replacing the least perfect and economical type of engine, the steam engine, with an advanced type - the steam and water turbine. 

By the end of 1928, the share of steam turbines in the power of all primary engines in industry increased to 28.3%, and at public power plants - up to 76.3%. In connection with the construction and commissioning of hydropower plants, the proportion of water turbines also increased. 

In the coal industry during this period, the first steps were taken to mechanize mining. So, if in 1925/26 in the coal industry of the USSR there were only 90 heavy-type coal mining machines, and light-type coal mining machines and jackhammers were few, then by the end of 1929 there were already 761 heavy coal mining machines, 393 light and 1274 jackhammers hammer; mechanized coal mining increased by more than five times: in 1924/25, the percentage of mechanized mining in the Donbass was calculated in units, and by the end of 1929 it was already approaching 30. 

In the oil industry, one of the first to embark on the path of technical reconstruction, there was an intensive process of mechanization of well drilling and oil production. The backward methods of drilling, rod, and cable were replaced by more modern - rotational. The share of rotary drilling increased from 41.2% in 1924/25 to 78.8% in 1928/29, while the share of percussion drilling fell from 58.3% to 18.8% respectively. In the field of oil production, a transition was made from bailing to a pumping system. In 1924/25, the share of tartan (not counting the flowing production) accounted for another 50.6%, and about 23% of all oil was produced by pumps. In 1928/29, 57.2% of the oil was already produced by pumps; 33.3% of oil accounted for compressor production and only 7% for bailing. Along with this, the electrification of the oil industry has intensified. So, in Grozneft, the electrification coefficient increased from 29.7% in 1924/25 to 87.4% in 1928/29. In the Union as a whole, the electrification coefficient for oil production was 95.3% in 1928/29. Thus, by the end of the period under review, the electrification of production was almost complete. 

Serious shifts have taken place in the field of mechanical engineering and electrical engineering. The machine park was significantly replenished here (to a greater extent due to new imported machines). Mechanical engineering was the first industry that began to introduce the continuous flow method into production. Continuous flow has received the greatest application in the electrical industry and agricultural engineering. 

Capital construction and the technical reconstruction of industry took on a huge scale in connection with the implementation of the construction plan of the first five-year plan. In 1928, and especially in 1929, the construction of a number of large new enterprises of heavy industry began. In 1928, the construction of the Stalingrad Tractor Plant, the Belovsky Zinc Plant, the Ural Heavy Engineering Plant, etc. began. Molotov, the Kramatorsk plant of heavy engineering, the Stalinogorsk and Berezniki chemical plants, the Yaroslavl rubber-asbestos plant, etc. 

A characteristic feature of construction in the first five-year plan was the large size of the new factories and their high technical perfection. 

Party and government resolutions repeatedly stressed the need to make maximum use of the best achievements of world science and technology. For this, foreign specialists and technicians were involved, scientific trips of our business executives and specialists abroad to study modern technology there, wide familiarization with foreign technical literature, and foreign technical assistance in drafting new building projects. 

When developing projects for new factories, the party proceeded from the instructions of Lenin and Stalin on the need to catch up with the advanced capitalist countries in the shortest possible time in terms of the level of technology, focusing on the best examples of the latest technology. So, during the construction of metallurgical plants, an installation was taken for the construction of a blast furnace with a volume of 800-1000 cubic meters, powerful blooming plants, and an installation for comprehensive mechanization. During the construction of tractor factories, American-type factories were taken as samples, based on the mass-flow principle of production, equipped with the latest special machines, with maximum mechanization not only in mechanical assembly, but also in procurement shops. Almost 100% of the products (99.8%) are assembled in the tractor factories of the USSR in a mechanized flow, and in foundries almost 100% machine molding is used. 

And here, too, the wreckers tried to play dirty tricks, tried to frustrate the general line of the Party. During the development of projects for new plants in the first five-year plan, pests who had settled in design organizations tried to turn our construction onto the path of backward technology. The Party gave a resolute rebuff to these attempts to smuggle backward technology into the projects of new factories. 

The wreckers who had settled in the planning and design organizations tried in every possible way to slow down the victorious implementation of the Stalinist industrialization plan, delaying, in particular, the deadlines for designing and ordering equipment. For this purpose, unnecessary redesigns were often made. The pests sought to create a disproportion in the construction of individual branches of production. 

The transition to extensive new construction required a serious development of the material base of industrial construction. It was necessary to expand the production of building materials on a large scale, as well as to create a cadre of construction workers. During the period of struggle for industrialization (1926-1929), a large army of construction workers was created in the process of expanding construction. In 1924/25, there were only 286.9 thousand construction workers, and in 1929 - already 917.8 thousand. During these years, the building materials industry was created: in 1929, cement production increased three times compared to 1925 the production of bricks by five times, the production of glass by more than two times, etc. The production of a number of new building materials was organized. 

While creating new fixed assets of industry, and on an unprecedented scale, the Party at the same time paid great attention to the utilization of existing existing fixed assets. 

Before the revolution, every industrial enterprise adapted to the changing market conditions and was engaged in the production of a huge range of products. So, for example, agricultural engineering plants, which were part of Ukrtrestselmash in 1928, produced in 1914: single-body plows of 172 brands, multi-body plows of 92 brands, cultivators of 41 brands and threshers of 122 brands. 

The diversity of manufactured products, which was still largely preserved by the beginning of the period of socialist industrialization of the USSR, naturally greatly reduced the use of fixed assets. 

In industry, work is underway to revise the range of products. As a result of this work, there is a strong reduction in the number of brands of manufactured products; so, for example, instead of 850 brands of agricultural machines manufactured in 1913 by factories subsequently united by Ukrselmashtrest, in 1926/27 only 93 brands were produced. The reduction in the brands of manufactured products led to a significant increase in labor productivity and a reduction in the cost of production. 

Large reserves in the use of equipment consisted in increasing the time of its operation. A huge role in the fight against inertia and routine in production was played by the continuous production week, introduced by a government decree in 1929. It broke the operating mode of equipment that had existed since the pre-war period, in which almost all industrial equipment (with the exception of certain industries) did not work for about 70 days a year. worked. Continuity has greatly increased the operating time of the equipment and thus contributed to a significant increase in output without additional capital investment. By the end of March 1930, 1,551.4 thousand people were already working on a continuous line in the entire industry. 

A serious means of increasing the operating time of the equipment was also an increase in the shift ratio, i.e., an increase in the number of hours of operation of the equipment in one day. 

Mass rationalization work was of great importance for increasing the use of fixed assets. The Party has repeatedly emphasized the importance of rationalization, pointing out that the broad masses must be drawn into this work. The 15th Party Congress specifically pointed out: “This work on the rationalization of the entire national economy, as its main and decisive prerequisite, has a broad involvement in it of the working and peasant masses” [“VKP (b) in resolutions and decisions of congresses, conferences, and plenums of the Central Committee”, part II , p. 249.]. 

The 15th Party Congress, in a resolution on the report of the Central Committee, pointed out that the rationalization of production, together with the improvement and simplification of the state and cooperative apparatus, is the key task for the coming period. In order to carry out the plan for the industrialization of the country, to overcome the difficulties that stood in the way of socialist construction, the most intense work was needed to rationalize the most important branches of the economy and management. 

The essence of socialist rationalization lies in the improvement of technology and the organization of production, which, in contrast to capitalist rationalization, leads to the strengthening of the socialist system, the growth of the defensive might of our country and the steady rise in the material and cultural level of the working class. Therefore, broad masses of working people participated in rationalization work. The main way to rationalize the entire industry was the construction of new enterprises based on the most advanced technology. Improvement of technical equipment and organization of labor at existing enterprises should have played a significant role. But along with this, the daily work on carrying out a number of measures for the maximum use of the available equipment, better adaptation, and reorganization of it acquired great importance. Participated in this work introducing their rationalization and inventive proposals, a wide range of workers, engineers, technicians. These proposals concerned the most diverse aspects of production and provided significant savings. Work on the rationalization of production and management played a big role in industrialization. 

Socialist emulation, which originated among the masses as a response to Stalin's five-year program of great work, was a powerful lever for fulfilling the five-year plan and overcoming the difficulties associated with the reconstruction of the national economy. As a result of the rapid rise in the creative activity of the masses, the industrial plan of the first year of the five-year plan was not only fulfilled, but also overfulfilled: for oil - by 4.6%, for rolled products - by 5.7%, for copper - by 6.7%, for brick - by 11.5%, for cement - by 2.8%, for tractors - by 8.3%, for cars - by 35.7%, for the mining industry - by 35.2%, etc. industry as a whole in 1928/29, the increase in production amounted to 24% instead of 21.4% according to the plan. 

The results of the first year of the five-year plan have demonstrated the tremendous potentialities of the socialist economic system. The Stalinist policy of socialist industrialization of our country has completely won. 

The technical renewal of fixed assets and their better use, the powerful rise in the production activity of the masses served as the basis for high growth rates of industrial output. 

In 1926, the growth of production was still going on to a certain extent due to the restoration of enterprises and individual workshops. By 1927 this source had been largely exhausted, while capital work in industry had not yet had time to produce a serious effect. But as early as 1928, a significant rise in the rate of growth of industrial output began, especially in the branches producing the means of production. 

Production growth rates as a percentage of the previous year 







All major industry






Group "A"






Group "B"






 The output of large-scale industry grows in 1929 to 19,923 million rubles. against 7739 million rubles. in 1925 and 10.2 billion rubles. in 1913 (in 1926/27 prices) [Socialist Construction of the USSR, 1936, p. railway depots and the fishing industry). In a full circle, including the industries listed, the output of large-scale industry in 1913 amounted to 11 billion rubles.]. In four years - from 1926 to 1929 - the annual output of large-scale industry increased by an enormous amount - 12,184 million rubles - exceeding the entire output of 1913. 

By the end of the period of struggle for socialist industrialization, the successful implementation of the policy of rapid industrial development ensured the predominance of industrial products in the total output of industry and agriculture. 

The ratio of industrial and agricultural products (in%)





large industry








 Significant successes were also achieved in expanding the production of means of production. The output of group A of large-scale industry increased in 1929 to 8,966 million rubles. against 3356 million rubles. in 1925 and 4177 million rubles. in 1913, that is, it was 267% of the level of 1925 and 214.7% of the pre-war level. The share of group A in industrial output rose from 40.7% in 1913 to 45% in 1929. . amounted to 42.9%, and in 1929 - 47.6%.]. 

For individual industries that produced means of production (group "A"), the following growth took place: 

Growth of output in branches of the licensed industry in prices of 1,926 / 27 (excluding work in progress) in 1929 in % of 1925 [National Economy of the USSR, 1932, pp. 2-3.]

power plants


Coal and coke industry


Peat industry


Oil production


Oil refining


Metallurgy of ferrous metals


Metallurgy of non-ferrous metals


mechanical engineering




Agricultural engineering


electrical engineering


Basic chemistry


Mechanical engineering, the core of the country's industrialization, received especially rapid rates of development. In 1929, the output of machine-building increased 3.6 times as compared with 1925. The production of certain types of machine-building products increased even more. 

Manufacture of certain types of products of mechanical engineering and electrical engineering (in kind) 


Product types




1929 in %

by 1913

by 1925

Steam turbines (in thousand kW )


16.2 1

82.0 2 and 3



Steam boilers (thousand 2 )


32.7 1

126.4 2



Diesel (in thousand HP )


18.0 1

69.2 2



Tractors (pieces)

not manufactured




Seeders (thousand units)






Threshers (thousand pieces)

. . .



. . .


Horse plows (thousand pieces)






Electric lamps (million pieces)






 1 1924/25

 2 1928/29

 3 Including the production of incomplete turbines.

 Over the four years of the struggle for industrialization, the production of certain types of machine-building products grows: for steam boilers - almost 4 times, for steam turbines - 5 times, for diesel engines - almost 4 times, for threshing machines - 3.7 times, for tractors - by 8.5 times, for seeders - by 4.3 times, etc. As can be seen from the table, by the end of the period, the output of mechanical engineering leaves the pre-war level far behind. 

A significant increase in output was also achieved in other branches of heavy industry. Pig iron smelting [Here and below, when we speak about the products of individual branches of industry, we mean large-scale industry.] rose from 1.3 million tons in 1925 to 4 million tons in 1929; steel smelting, respectively, from 1.9 million tons to 4.9 million tons; coal mining - from 16.9 million tons to 41.7 million tons. However, the growth in the production of ferrous metals, coal, chemical products, and products of some other industries did not keep pace with the growth in the needs of the national economy. These industries were most destroyed during the period of intervention and civil war, and the process of their restoration dragged on. The restoration of these industries was hindered by the wrecking of the top of the engineering and technical intelligentsia, as well as the presence of serious shortcomings in the economic management. 

The Party and the government paid great attention to these sectors. A number of resolutions of the Central Committee of the All-Union Communist Party of Bolsheviks outlined a program for the rapid expansion of the coal industry, ferrous metallurgy, chemical and other industries. The development of industry in the USSR proceeded under the sign of socialist industrialization, under the sign of the decisive displacement of capitalist elements. By the beginning of the period of struggle for industrialization, the share of the private sector in industry was still significant. True, in large-scale, so-called licensed industry [Census industry includes industrial enterprises with a number of workers of at least 16 with an engine and at least 30 without an engine.] The share of the private sector in gross output was already small in 1924/25 - less than 4%. But, besides the qualification industry, there is a small and handicraft industry, the share of which in the total industrial output was 22.4% in 1926/27. In individual sectors of the light and food industry, small-scale and handicraft industry provided the predominant part of the output. Thus, for example, in the clothing industry, the output of small enterprises in 1926/27 amounted to 72.1%, in the production of leather shoes - 74.5%, in the flour-grinding industry - 61.9%, in woodworking - 29.6% and etc. The share of the socialized sector in the gross output of small industry by the beginning of the period was small - in 1924/25 it was only 23%. 

The conditions of handicraft industry, where cooperation was still poorly developed, provided wide scope for the activity of private capital. In a report at the 15th Party Congress, Comrade Stalin pointed out that "... in the field of handicraft industry in general, in the field of leather and textile industries in particular, there are a considerable number of new millionaires who enslave handicraftsmen and small producers in general" [Lenin and Stalin, Collection works for the study of the history of the CPSU (b), vol. III, p. 238.]. 

While developing large-scale socialist industry, the Party simultaneously develops work to draw handicraftsmen into the co-operatives and intensifies pressure on the private trader. The proportion of trade cooperation and small-scale industry products is increasing sharply. As a result, the share of the private sector in the total output of all industry falls from 19% in 1924/25 to 14% in 1926/27, while the share of the socialist sector accordingly grows from 81% to 86%. 

After the Fifteenth Party Congress, the rate of growth of the socialist sector in industry and the displacement of private capitalist elements increased. At the 16th Party Congress, Comrade Stalin pointed out: “It is clear that the question of who wins whom, the question of whether socialism will defeat the capitalist elements in industry or whether they will defeat socialism, has already been decided in the main in favor of socialist forms of industry. Resolved definitively and irrevocably” [Stalin, Questions of Leninism, ed. 10th, p. 366.]. 

The enormous growth of production, the successes in industrialization and technical reconstruction, the ousting of the private sector from industry - all this determined the need for organizational restructuring of industry. 

In 1926 and in previous years, the VSNKh included TsUGPROM (Central Directorate of State Industry), which was engaged in the operational current management of industry, and GEM (Main Economic Directorate), which was engaged in planning and regulatory work. This organizational structure of the Supreme Economic Council came into conflict with the new tasks arising from the development of socialist industrialization. The technical reconstruction of industry, which was unfolding on a large scale, required the concretization of planning and management and the approximation of planning bodies to individual branches of industry. Therefore, in 1926, the Supreme Economic Council was reorganized. Instead of TsUGPROM and GEM in 1926, main departments and committees for individual branches of industry were organized. At the same time, a consolidated industrial planning body is being created - the Planning and Economic Directorate (PES). He was given the task of working out the key planned problems of industry. Thus, the planning of industry was greatly strengthened. 

The current operational management of enterprises was increasingly carried out directly by the trusts. Trusts in Soviet industry were created at the beginning of the recovery period as organizations operating on a cost-benefit basis. During this period, trusts were predominantly organizations of a financial and commercial nature, the center of gravity of their work was directed to marketing and supply. However, as production grew and economic ties became more complex, sales functions were gradually transferred from trusts to new organizations—syndicates. Special supply organizations were created, a credit center for industry (Prombank) was organized. At the same time, the rapid growth of production sharply brought to the attention of the trusts questions of the organization of production, questions of the work of an individual enterprise. Decree on trusts 9 June 1927, on the one hand, it significantly expanded the operational independence of the industrial enterprise, and on the other, it strengthened the leading planning role of the trusts. The trusts were transformed into production management bodies for industrial enterprises. 

The transition to a broad technical reconstruction required further organizational restructuring of industry. The Decree of the Central Committee of the All-Union Communist Party of Bolsheviks of December 5, 1929, provided for an even greater strengthening of specific planning leadership while increasing the operational independence of the enterprise within the framework of the plan. This resolution stated: “The enterprise is the main link in the management of industry. Therefore, the maintenance of the enterprise, the correct organization of supply, the most perfect organization of labor within the enterprise, the complete implementation of unity of command in production, the creation of the most favorable conditions for the maximum activity of the working collective and technical personnel of the enterprise, the selection of qualified administration, the necessary degree of independence of the enterprise, are the basis for further improvement. management system of socialist industry” [“Directives of the All-Union Communist Party of Bolsheviks on Economic Issues”, p. 641.]. 

All state enterprises were given the task of decisively strengthening self-financing. Enterprises were transferred to an independent balance, part of the savings from cost reduction remained at their disposal and could be used for the household needs of the enterprise. Cost accounting began to be applied to workshops as well. 

In 1929, the system of industrial management was also restructured. Previously, planning functions were separated from the current operational management of enterprises, carried out by syndicates and trusts. In the future, the role of trusts and syndicates increased. The syndicates increasingly intensified their activity in regulating the production of trusts, and increasingly expanded their functions of planning production. The need to direct the technical re-equipment of enterprises, the task of specific operational management, the strengthening of cost accounting - all this required the unification of both planned and current operational functions in a single management, all this required the approach of management to enterprises. 

The main departments of the Supreme Council of National Economy were liquidated and replaced by self-supporting associations created on the basis of syndicates, which combined the former operational work of the syndicates with the planned work of the former central directorates. In a number of industries, no intermediate links were created between enterprises and these associations. Wherever there was a network of dispersed enterprises, trusts remained. 

A PTEU (Planning-Technical-Economic Department) was created in the Supreme Council of National Economy, which led the branches of industry, relying on associations. 

The Decree of the Central Committee of the All-Union Communist Party of Bolsheviks of December 5, 1929 was the final moment in the organizational restructuring of industry during the period of the struggle for socialist industrialization. This resolution ensured the organizational preparation of industry for its solution of the great tasks of technical reconstruction that arose in connection with the implementation of the first five-year plan.