Creating the material basis of socialism- Industry Recovery

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   The development of the Soviet economy

Six Conditions for Victory

The victory of socialism in all spheres of the national economy, the transformation of the socialist mode from the leading to the predominant, the rapid development of socialist production relations, the enormous growth in the size of the working class, and the drawing into the sphere of socialist labor of the vast masses of the collective-farm peasantry have created an entirely new situation in the country. The transformation of socialist emulation and shock work into a mass movement of many millions was a powerful lever for raising labor productivity. The fundamental technical reconstruction of the national economy and the introduction of advanced technology into it have also opened up the greatest possibilities for raising labor productivity and accelerating the pace of socialist construction. 

The old methods of organizing labor and production, and poor management, delayed the fuller use of the available opportunities. The question arose with all its acuteness of a radical revision of the former methods of work and management, of the resolute introduction into the socialist economy of truly socialist principles of the organization of labor and the reproduction of labor power. Elements hostile to the Party clung in every possible way to the old, unsuitable methods, thereby trying to slow down socialist construction. The Party gave them a sharp rebuff, rallied around itself all the best forces of the working class and the entire Soviet people, and achieved a radical improvement in the work of industry and all other branches of the national economy.


 Ways for a radical restructuring of the methods of management and organization of labor and production were outlined in all concreteness by Comrade Stalin in a speech at a conference of business executives on June 23, 1931. Even earlier, in a speech at the First All-Union Conference of Socialist Industry Workers on February 4, 1931, Comrade Stalin drew the attention of business executives on the need to lead in a new way, to get rid of "paper" leadership, to lead concretely, having mastered the technique of one's business. In a speech on June 23, 1931, "The New Situation—New Tasks of Economic Development," Comrade Stalin pointed out six conditions, the fulfillment of which solves the problem of leadership in a new way. In these six conditions of victory, all branches of the socialist economy have found fundamental foundations for restructuring their work and for a correct, truly socialist organization of labor and production. 

Let us consider each of the victory conditions indicated by Comrade Stalin separately. 

1. "... To recruit labor in an organized manner in the manner of agreements with collective farms, to mechanize labor ..." [Stalin , Questions of Leninism, ed. 11th, p. 333. ] - that was the first condition. 

The gigantic pace and scale of the socialist industrialization of the country demanded a huge and rapid growth in the size of the working class. The transition to a seven-hour working day, carried out mainly during the years of the first five-year plan, and the introduction of a five-day production week, in turn, increased the need of socialist industry for new additions to the labor force. The number of workers and employees in the entire national economy of the USSR increased from 12,167,900 in 1929 to 23,681,200 in 1934, i.e., almost doubled. Such a huge increase in the number of employed workers and employees could only partially be due to the new contingents of urban youth and women released from the household. The rest of the need for labor power was to be covered mainly by the influx of peasants from the countryside. 

The collective farms have created for the poor and middle peasant masses of the peasantry, who have become collective farmers, the opportunity to live like a human being in the countryside. The flight of peasants from the village to the city stopped. In the new situation, therefore, it was no longer possible to rely on the free flow of labor power. 

Some business executives were confused, not seeing a way out of the situation. The new situation, however, did not actually narrow, but increased the possibilities for the planned redistribution of labor between industries. All that was needed was a new method of attracting her. In the new situation, it was necessary to switch to an organized recruitment of workers for industry under agreements between economic organizations and collective farms and collective farmers. 

Having reorganized its work on the basis of this instruction from Comrade Stalin, concluding special agreements with collective farms and collective farmers that economically stimulated the organization of seasonal work, socialist industry in the future actually successfully solved the problem of attracting labor power. The overwhelming mass of the multi-million replenishment that poured in over the period 1930-1934. into the ranks of the working class, gave the countryside. According to the State Planning Committee of the USSR, people from the countryside accounted for 68% of the total increase in the number of workers and employees in the first five-year plan. 

A number of other sources were used to meet the needs of industry in the labor force. The party paid great attention to the involvement in production of women and other members of the families of workers who had not previously worked in production. 

But even this measure, which at the same time was also the most important factor in raising the material position of the working class, could not completely solve the problem of manpower. The organized hiring of labor, the involvement of women and other members of the families of workers in production had to be multiplied by such a powerful lever for increasing labor productivity as the mechanization of production, the replacement of human muscle strength in heavy and labor-intensive production processes by the power of mechanisms. Justifying the first condition for victory, Comrade Stalin pointed out that "... the mechanization of labor processes is that new and decisive force for us, without which it is impossible to maintain either our pace or the new scale of production" [ Ibid .]. 

The most remarkable phenomenon in our economy in 1930-1934. is the fact that the doubling of the size of the working class occurred simultaneously with a significant development of the process of mechanization of labor-intensive work both in industry and in agriculture. 

Particularly great were the achievements of labor mechanization in the coal industry. 

Mechanization of coal mining in the USSR (% of total production)















 On the eve of the first five-year plan, manual labor prevailed in coal mining to a large extent. During the first five-year plan, the coal industry was radically transformed in terms of the mechanization of production. By the end of the first five-year plan, the mechanization of haulage still lagged behind to some extent, but even it steadily increased. The level of mechanization of coal mining in the USSR is higher than in England, where coal mining in 1937 was only 62.7% mechanized.

 The mechanization of labor-intensive and heavy production processes developed rapidly in other industries as well. The percentage of pig iron smelted by fully mechanized blast furnaces (total smelting) increased in 1934 to 46.6 against 25.6 in 1932. In 1934, 71.8% of all pig iron was passed through casting machines. In mechanical engineering, 46.9% of finished products were assembled by the flow method in 1934, including 22.5% in a mechanized flow. In 1934, the mechanization of iron molding in mechanical engineering reached 42.7% in iron foundries and 18.1% in steel-forming shops. 

2. “... Eliminate the turnover of the labor force, abolish leveling, properly organize wages, improve the living conditions of the workers ...” [Ibid. , p. 336. ] - such is the second condition for victory indicated by Comrade Stalin. 

The successes of socialist construction, the socialist industrialization of the country and the collectivization of agriculture ensured a steady improvement in the material conditions of the working class. The annual wage fund for workers and employees increased from 9.7 billion rubles. in 1929 to 32.7 billion rubles. in 1932 and up to 44 billion rubles. in 1934. The average annual wage of workers and employees increased in 1932 to 1427 rubles, in 1934 to 1858 rubles. against 800 rubles. in 1929. It was also necessary to achieve the correct organization of wages. 

Considering the decisive importance of such an important lever for raising labor productivity and the standard of living of the working class as the organization of wages, enemies of the people in disguise, the Trotskyist-Bukharin bandits have made no little effort to undermine the foundations of the correct organization of wages. One of the main methods of their subversive work in this area was the introduction of the principle of leveling into the practice of the socialist economy. The old trade union leadership, headed by the traitor Tomsky, stubbornly pursued a convergence of the wages of skilled and unskilled workers, reduced the use of incentive pay systems (piecework), forced a transition to time wages, i.e., cultivated equalization in every possible way. Distribution attempts in 1930 and 1931 production collectives and communes with the so-called socialized wages were also a form of planting leveling, covered with crackling "left" phrases. 

Petty-bourgeois egalitarianism grossly distorted the foundations of the socialist organization of labor, undermined at the root the personal material interest of workers in improving work and raising labor productivity, and caused an enormous turnover of labor power. In most of our enterprises, the composition of the workers changed in 1931 over the course of half a year, and sometimes even a quarter, by approximately 30-40%. Such a large turnover of the workforce has become a real scourge of production. In the new situation, during the period of extensive reconstruction, when the technology in industry became extremely complicated, the fluidity of the labor force generated by the leveling and the lack of interest of workers in raising their qualifications caused especially great damage to production. 

Comrade Stalin, in his speech on the six conditions for victory, indicated the path for a radical restructuring of wages. On the basis of Comrade Stalin's instructions, the old tariff scale was restructured both in the direction of increasing the difference between the highest and lowest ranks, as well as a larger increase in the rate in the higher ranks. 

For example, according to the new tariff scale at the Leningrad plant "Elektrosila" named after Kirov, rate of the eighth category was 3.27 times higher than the rate of the first category, while under the old tariff scale it was only 2.8 times higher. Unlike the old one, in the new tariff scale in the higher ranks the rate increase was greater than in the lower ones. So, for example, when moving from the first category to the second according to the new grid at the mentioned plant, the rate increases by 15%, when moving from the second category to the third - by 14.8%, while when moving from the third to the fourth, from the fourth on the fifth, and so on, the rate is increased by 20%. The reverse ratio took place in the old tariff scale. 

The restructuring of wages was carried out taking into account the role and importance of this industry in the national economy and on the basis of higher wages for leading professions and skilled workers, as well as workers engaged in hard work. A big impetus to the practical solution of this problem was given by the decree of the Council of People's Commissars of the USSR and the Central Committee of the All-Union Communist Party of Bolsheviks of April 8, 1933 "On the work of the coal industry of Donbass", which provides for higher wages for underground workers. Following the example of the coal industry, the wage system was also rebuilt in other industries, raising wages in those areas and for those specialties that are of decisive importance in this industry. 

The implementation of Comrade Stalin's instructions on the restructuring of the old wage system in the direction of eliminating leveling also proceeded along the line of the all-round development of incentive pay systems, primarily piece work. The Trotskyites and Bukharinites tried to slow down the development of piecework by demagogically "proving" that piecework was allegedly incompatible with socialist production relations. In fact, piece work is a wage system that most fully and consistently corresponds to the socialist principle of distribution, according to which the measure of consumption is determined by the measure of labor (ie, the quantity and quality of labor). Piece work most effectively, materially stimulates a systematic increase in labor productivity. 

Comrade Stalin's speech on the six conditions for victory gave a new impetus to the development of piece work. The percentage of piece-paid hours to the total number of man-hours worked increased throughout industry from 58.7 in 1931 to 69.6 in 1934. 

At the same time, the piecework system was improved. The task was to develop the use of unlimited, direct, individual piece work, in order to introduce progressive piece work, which is a very effective weapon in the struggle to increase labor productivity. The spread of individual piecework, especially progressive, was delayed to a large extent by an extremely complex system of payroll calculations. Therefore, payroll calculations have been greatly simplified. 

Comrade Stalin pointed out in his speech on the six conditions for victory that in order to eliminate the turnover of the labor force, in addition to eliminating the equalization of wages, it is necessary to further improve the supply and living conditions of the workers. Enormous work has been done in this direction: along with the growth of the individual wage fund, the funds for social services for workers and employees have also grown steadily. In 1927/28, the state spent 1,630 million rubles on cultural and community services for workers and employees. In 1934, expenditures for these needs increased to 9304 million rubles. [This amount includes 37.9 million rubles. allowances issued by trade unions.], including in 1934 spent on pensions and benefits 1999 million rubles, on education and cultural services - 3314 million rubles, on health care - 2832 million rubles, on scholarships - 1059 million rubles for the fund for improving the life of workers - 100 million rubles. 

In addition, the socialist economy annually allocates huge funds for housing construction. In 1934, the capital investments of the socialized sector for housing construction increased to 1,688 million rubles. against 508 million rubles. in 1929. For the period 1930 - 1934. the socialist sector built and put into operation 32.2 million square meters. m of new living space against 10.2 million sq. m. m put into operation for the period 1926 - 1929. 

The improvement in the cultural and community services for the working class was also expressed in the rapid growth of public utilities. For the period 1930 - 1934. trams were built in 18 cities, water pipelines in 30 cities, sewerage in 23 cities, and bus service was introduced in 99 cities. The number of communal baths has almost doubled. The area of ​​improved pavements has also been increased several times, and the area of ​​green plantings has significantly expanded. 

Much has been done to improve public services in the former workers' quarters and outskirts of cities. “The appearance of our large cities and industrial centers has changed. Slums, the so-called working-class neighborhoods on the outskirts of the city, are an inevitable feature of the large cities of the bourgeois countries, representing a pile of dark, damp, mostly basement, dilapidated premises, where poor people usually huddle, swarm in the mud and curse fate. The revolution in the USSR led to the fact that these slums disappeared from us. They have been replaced by newly built good and bright workers' quarters, and in many cases the workers' quarters look better than the city centers" [Stalin, Questions of Leninism, ed. 11th, p. 457.]. 

3. "... Eliminate depersonalization, improve the organization of labor, correctly place forces at the enterprise ... " [ Ibid. , p. 339. ] - the third condition for victory. 

A proper struggle against depersonalization, as well as against egalitarianism, had not been waged before Comrade Stalin's speech. This was taken advantage of by the class enemies and their agents, who deliberately planted in our enterprises confusion in work and irresponsibility for machine tools, tools, and the quality of work. 

Bezlichka has become especially widespread due to the incorrect use of the continuous line. Before the transition to uninterrupted operation in the vast majority of industries, equipment and mechanisms stood (on Sundays and holidays) for more than 70 days a year. The continuity made it possible to increase the operating time of the mechanisms and thereby achieve an increase in production without additional capital investments. However, the transition to uninterrupted work was often so poorly organized that it gave rise to monstrous depersonalization and irresponsibility for mechanisms, machines, and tools. This was caused primarily by the frequent transfer of workers from machine to machine. The “sliding” worker, the “creeper”, constantly changing his workplace, cared little about the condition of the machines and tools. 

Poorly organized uninterrupted work created difficulties in relation to the repair of machine tools and other equipment. In a number of cases, calendar preventive maintenance was not provided for during the organization of uninterrupted work, while accidents caused interruptions, forced them to break the work schedule, further confusing the organization of work. 

The benefits of uninterrupted work increase when combined with multi-shift work. Multi-shift operation ensures even more complete utilization of the equipment. The transition to multi-shift continuous work required, however, careful preparation, mainly in the area of ​​organizing night shift services. Often, in practice, there was no proper preparation for the transition to multi-shift work. 

The elimination of perversions in the conduct of uninterrupted work was carried out in two directions indicated by Comrade Stalin: 

1) by switching to six-day intermittent work where it was difficult to rationally organize work during uninterrupted and 

2) by improving the organization of continuous work. 

An excellent example of the elimination of depersonalization in the second way was shown by railway transport, where the improvement in the organization of labor (coupled and tripled driving) made it possible to maintain continuity and eliminate depersonalization. In industry, the most expedient method of organizing three-shift continuous work turned out to be the so-called four-team schedule, according to which a certain job is assigned to four workers (or teams), each of whom moves after four days of work from the first shift to the second, then to the third, then back to first shift. "Sliding" is eliminated. Enterprises that were not prepared for non-stop work were transferred to a six-day interrupted work week. 

On the basis of Comrade Stalin's instructions, the party waged a decisive struggle against depersonalization in other directions as well. One of the most harmful factors in the depersonalization of work was the functional division of labor in production, the functional construction of the apparatus, the dispersal of management in dozens of departments and sectors, which bred irresponsibility and confusion in work. Especially much was done to eliminate functionalism after the 17th Party Congress, which concentrated much attention on this task. 

4. "... To ensure that the working class of the USSR has its own industrial and technical intelligentsia ... " [ Ibid. , p. 342. ] - this is the fourth condition for victory. 

In the new situation, the problem of cadres was posed in a new way. The former engineering, technical and command forces of industry were clearly not enough. The task, however, was not only to increase the strength of the engineering and command forces of industry. The socialist economy needs cadres capable of understanding and implementing the policy of the Soviet government. “This means that our country has entered a phase of development when the working class must create for itself its own production and technical intelligentsia capable of defending its interests in production as the interests of the ruling class” [Stalin, Questions of Leninism, ed. 11th, p. 341.]. 

The scale of the training of technical personnel for industry in the period 1930-1934. have increased a lot. In 1934/35, 527.3 thousand people studied in higher educational institutions, 671.5 thousand people in technical schools, that is, in universities by 212.8%, in technical schools - by 254.5% more, than in 1927/28. 

Speaking about the sources of replenishing the cadre of specialists, Comrade Stalin pointed out the need for a bolder advancement to command posts and practical workers who had shown themselves in production. This source of replenishing the cadre of specialists was extremely important for socialist industry, as well as for other branches. Of particular importance was the nomination of practitioners to staff the lower level command staff of industry - headmen and foremen. 

As a result of the measures taken, by the end of the period under review, the engineering and technical forces of socialist industry had grown considerably. In 1929, there were only 97,000 engineering and technical workers in large-scale socialist industry; in 1934, 392,000. 

The transfer of technical education to the economic people's commissariats, carried out on the basis of the decisions of the November plenum of the Central Committee of the All-Union Communist Party of Bolsheviks (1929), also yielded positive results. Technical colleges and technical schools have become incomparably more closely connected with production. This also contributed to a significant strengthening of the material basis of educational institutions (laboratories, scientific classrooms, etc.) and to a much better consideration in the system of higher education of the demands of production to future specialists. On the basis of the decision of the party and the government on higher education, the quality of educational and methodological work was also significantly raised. The "leftist" - laboratory-team methods of study and "team tests", which reduced the level of study, were eliminated, and the lecture method was restored. The social composition of students in universities and colleges has improved. 

Based on the decision of the Central Executive Committee and the Council of People's Commissars of the USSR of September 15, 1933, the system of training skilled workers through the FZU was also radically reorganized. Until 1933, FZU schools, as a rule, replaced general education schools. The reorganization turned the FZU schools into clearly defined vocational schools for the training of skilled workers. 

5. "... Change the attitude towards the engineering and technical forces of the old school, show them more attention and care, more boldly involve them in work ..." [Ibid. , p. 345. ] - this is the fifth condition for victory.

From the first days of the Great October Socialist Revolution, the Party pursued the only correct line of using the old intelligentsia, bourgeois specialists, insofar as they were ready to work honestly for the benefit of Soviet power and socialist construction. Different sections of the old intelligentsia, of course, reacted differently to the Soviet government and its call for cooperation. 

Describing the evolution of the old intelligentsia under the dictatorship of the proletariat, Comrade Stalin pointed out that it consisted of three main parts, the paths of which are different. The rank and file of the least qualified part of it joined the people and followed the Soviet government. The most qualified part of the bourgeois intelligentsia, its top, already in the first days of the existence of Soviet power, began a struggle against it, organized sabotage. Subsequently, most of them participated in espionage and sabotage, and thus crossed themselves out of the ranks of the intelligentsia. 

The longest was the process of political orientation and self-determination of the third part of the old intelligentsia, which occupied an intermediate position between the two above. Compared with the top of the old intelligentsia, this part of it was less qualified, but more numerous. She "... continued to stagnate for a long time, waiting for "better times", but then, apparently, she gave up and decided to join the service, decided to get along with the Soviet government" [Ibid., p. 608.]. The decisive victories of socialist construction, won in the process of industrialization of the country and the collectivization of agriculture, the ideological and organizational defeat of the Trotskyists and Bukharinites, and the exposure and liquidation of wrecking organizations had a particularly sobering effect on this part of the old intelligentsia. Among this part of the intelligentsia, new moods arose, a certain turning point was created in the attitude towards Soviet power and socialist construction. This change in the mood of the engineering and technical forces of the old school created the basis for a change in attitude towards them on the part of the Bolshevik Party and the Soviet government. 

Calling for a change in policy with regard to that part of the technical intelligentsia that honestly joined the work, Comrade Stalin at the same time recalled the need to increase Bolshevik vigilance. 

6. "...Introduce and strengthen self-financing, increase intra-industrial accumulation..." [Ibid. , p. 347. ] - such is the sixth condition for victory. 

The financial system played an important role in carrying out the tasks of the socialist industrialization of the country and the collectivization of agriculture. During 1930 - 1934. the total amount of expenditures of the consolidated (state and local) budget of the USSR increased from 12,609.4 million rubles. in 1929/30 to 52398 million rubles. in 1934, or 315.5%. Expenditures on financing the national economy increased by 355.1%, expenditures on social and cultural activities (including personnel training) - by 269.1%. In accordance with the characteristics of this stage of development of our economy during 1930-1934. the growth rate of budget expenditures on financing agriculture significantly exceeded the growth rate of other budget expenditures: in the last year of the previous period (1928/29), agriculture received 670.9 million rubles from the budget, in 1934 - 6408.2 million rub., rubles from the budget, in 1934 - 6408.2 million . rub., i.e., almost 10 times more. 

The multibillion-dollar funds needed to finance the industrialization of the country and the collectivization of agriculture were mobilized by the budget mainly from the income of the socialized economy. The role of incomes of the socialized economy in the consolidated budget increased from 75.2% of all budget revenues in 1928/29 to 81% in 1934. At the same time, the proportion of mobilized funds from the population decreased from 16.7 to 13.5%, which occurred solely as a result of a decrease in the role of compulsory payments by the population (from 12.1% to 6.6%) and self-taxation (from 1% to 0.8%). Voluntary mobilization of the population's funds through the implementation of mass state loans received significant further development during this period. The total amount of mass loans increased from 652 million rubles. on October 1, 1929 to 11,809 million rubles. on January 1, 1935, i.e. more than 18 times. 

In addition to budget funds, industry, agriculture, and trade received large funds from the State Bank on short-term lending terms. The net debt of the socialist economy to the State Bank increased from 3,769.7 million rubles. on January 1, 1930 to 13922.5 million rubles. on January 1, 1935, or 269.3%. In terms of growth rates of short-term lending, agriculture was ahead of other sectors of the national economy during this period; the net debt of socialist agriculture to the State Bank increased from 167.8 million rubles. on January 1, 1930 to 783.8 million rubles. on January 1, 1935, or 367.1%. 

The main source of funds for the development of the industrialization of the country at first was the savings in light industry, agriculture and from the state budget. With a relatively small scale of industrial construction, these sources were sufficient. With the further development of the industrialization of the country, however, the situation changed: for the implementation of new, more grandiose tasks, the former sources of accumulation turned out to be clearly insufficient. By strengthening the old sources of accumulation, it was necessary to ensure that heavy industry also became profitable.

This could only be achieved by introducing and strengthening cost accounting, by eliminating the mismanagement that has nested in a number of our economic organizations and enterprises, where "... they have long ceased to count, calculate, draw up reasonable balances of income and expenses" [Stalin, Questions Leninism, ed. 11th, p. 346.]. 

The struggle for the implementation of Stalin's instructions to strengthen cost accounting and raise intra-industrial accumulation produced the first significant results already in the period under review. In the first five-year plan, intra-industrial accumulation in heavy industry amounted to 28.5% of budget financing, and in the first two years of the second five-year plan, 35.9%. The savings obtained by reducing the cost of production amounted to 210 million rubles in 1933, and 600 million rubles in 1934. 

The sixth victory condition to a certain extent synthesizes the previous ones. Successful recruitment of manpower, the correct organization of wages and labor, and the successful resolution of the personnel problem—all this ultimately leads to the strengthening of self-financing and the profitability of the enterprise. Genuine economic calculation, genuine control over the ruble, in turn, strikes at leveling, depersonalization, and against every and every manifestation of mismanagement and poor organization of production and labor. 

Before entering the period of socialism, self-financing was associated with the right of an enterprise to independently determine its place in the commodity circulation, independently set the price, assortment, supply, and marketing contractors, etc. After resolving the question of “who wins” in town and countryside in favor of socialism and to trade without capitalists and speculators, to Soviet trade, the competition between socialist enterprises and capitalist enterprises within the country has disappeared. This, however, does not mean that, under the conditions of the USSR's entry into the period of socialism, the importance of cost accounting has decreased. The role of the planning principle has increased enormously. The plan is not automatic. The necessary lever of the plan is self-financing, the contractual system, and control by the ruble. Under the new conditions, the self-supporting independence of an enterprise is aimed at giving the enterprise the right to independently determine in the best way the ways and methods of fulfilling the plan, reducing costs, increasing accumulation, and mobilizing internal resources. 

Of exceptional importance in the struggle to strengthen cost accounting were the credit reform and the reorganization of industrial supply based on the establishment of a system of contractual relations, carried out in 1930 and 1931. 

In order to strengthen self-financing and strengthen the control of the ruble over the implementation of the plans of enterprises and economic agencies, at the beginning of 1930, a credit reform was carried out, which consisted in the liquidation of commercial credit and its replacement with direct bank lending, as well as in concentrating the entire business of short-term lending and organizing cashless payments. Speaking about these measures, Comrade Stalin, in his report at the 16th Party Congress, pointed out that “... these measures will lead (they are already leading) to streamlining the entire credit business and strengthening our chervonets” [Ibid., ed. 10th, p. 403.]. 

At first, major perversions were committed in the practice of the credit reform by the State Bank, which actually reduced its significance to nothing. A group of disguised enemies of the people, headed by Pyatakov, who settled in the State Bank, introduced indiscriminate and automatic lending against the plan, without taking into account the progress of the plan and economic contracts, which made it possible to use a bank loan to cover breakthroughs in the course of the plan. Settlements between economic agencies were also carried out automatically: the State Bank paid the amounts due to suppliers at the expense of buyers without the knowledge and consent of the latter. The automaticity of settlements deprived consumers of the opportunity to control the quantity and range of products, delivery times and payment terms. In addition, the practice of depersonalization of borrowed and own funds of enterprises was introduced. 

The old system of industrial supply also undermined self-financing. By the spring of 1931, the supply and marketing system in industry was characterized by extreme centralization, the concentration of sales and supply in the hands of associations and trusts, and the complete removal of the enterprise from this business. In order to free the enterprise from excessive guardianship, the Council of People's Commissars of the USSR, by a decree of March 20, 1931, replaced the system of excessively centralized supply and marketing with a system of contractual relations between enterprises, consumers, and suppliers. In the business contracts of the enterprise, suppliers and consumers precisely establish their mutual obligations both in terms of terms, quantitative and qualitative indicators, and in the sense of liability in case of violation of the contract. 

In a socialist planned economy, economic contracts are the best means of combining the plan with the principle of cost accounting. The leading economic body plans and organizes supply and marketing by compiling material balances and concluding general agreements, while operational work on marketing and supply is carried out by the enterprises themselves. Considering the enormous importance of economic agreements in strengthening self-financing, the Party raised this matter to a great political height. Everyday control of the ruble by consumers on the basis of economic contracts has become the most important lever for mutual control and linking the self-supporting interests of individual enterprises both among themselves and with the national economic plan as a whole. 

Government intervention eliminated distortions in the credit reform. The Council of People's Commissars of the USSR, by decrees of January 14, March 20 and July 23, 1931, eliminated automatism in lending and settlements and clearly established the objects of short-term bank lending. Settlements between economic agencies were organized in such a way that, without the consent of the buyer, the bank could not transfer funds from the buyer's account to the supplier's account. For this purpose, the obligatory acceptance (inscription of acceptance for payment) of invoices by buyers was introduced, or confirmation of consent to payment in another form. Order was also put in place in lending to enterprises and economic agencies: the principles of material security, urgency and repayment of the loan were established and a different regime was introduced for the use of own and borrowed funds by economic agencies, the movement of which in the bank has since been recorded on various accounts (the first on settlement accounts, the second - on loan accounts). 

Enterprises and economic agencies were endowed with their own working capital necessary for their activities. A bank loan is granted only for the performance of temporary seasonal work (harvesting, rafting, fishing season, etc.), for the time between the shipment of goods and its payment by the buyer, for retail trade (law of August 16, 1933) and for other temporary needs arising from the progress of the plans. The requirement for the material security of the loan and the verification of the availability of this security by the bank, strict monitoring of the maturity of the loan, the prohibition to issue loans to cover breakthroughs, etc. - all this created such a system of lending and financial settlements, in which business executives could no longer rely on that the State Bank will still issue the money, regardless of whether the enterprise complies with the requirements of self-financing. 

To strengthen control over the spending of capital investments, a decree of the Central Executive Committee and the Council of People's Commissars of the USSR dated May 5, 1932 created a system of special banks to finance capital investments in industry and transport, agriculture, trade, and public utilities. 

The tax reform of September 2, 1930 was another major measure in the field of financial policy aimed at strengthening cost accounting. At the beginning of 1930, 86 types of taxes and fees were levied from the socialized sector, and 76 types from the private sector. Given the presence in the trade turnover of a significant private sector, the multiplicity and multi-link of taxation were appropriate, as they ensured a more complete coverage of the objects of taxation and strengthened the regulatory role of the tax system. 

But as the private trader was forced out of trade and the socialist economy strengthened, the multiplicity and multi-tiered nature of taxation lost its original positive meaning. The overly complicated old tax system at the same time hampered the economic activity of enterprises, caused unnecessary expenses, and violated self-financing. 

The new system of taxation, introduced in 1930, carried out the maximum reduction in tax payments in relation to the socialized sector. Instead of many dozens of previously existing taxes, two main forms of payment to the budget were established: 1) turnover tax and 2) deductions from profits. Since that time, the turnover tax, which combined all taxes, as well as fees of a duty nature, has become the main form of payment by socialist enterprises to the budget. The value and share of the turnover tax is clearly illustrated by the fact that it ranks first among all state budget revenues, accounting for 59.6% of the budget revenues in 1934. 

A very effective method of improving work, management and strengthening cost accounting was also the breaking down of excessively cumbersome associations and the reorganization of industrial management. The associations were created in 1929 as centers of sectoral leadership, combining both operational and economic work in the relevant sector, primarily supply and marketing, and its planning. Many associations were cumbersome from the start. As numerous new enterprises were put into operation, the associations became even more cumbersome, sometimes having 100-200 enterprises in their composition, which made it extremely difficult to manage them. 

Already in 1930, Vostok-Stal was spun off from the Steel association; The Soyuzugol association was divided into Coal and Vostokugol. Other associations were also disaggregated. By the autumn of 1932, there were 78 associations in heavy industry instead of 32 in June 1931. As a result of the downsizing, the associations lost their character as industry centers. In the apparatus of the Supreme Council of National Economy, main departments were created as centers for sectoral planning and leadership. 

Since disaggregated associations, existing along with trusts, in most cases turned out to be an extra link, creating an unnecessary mediastinum between the people's commissariat and the enterprise, a significant number of associations were completely liquidated and transformed into trusts by a decree of the Council of People's Commissars of the USSR of October 3, 1932. 

In subsequent years, in a number of cases, the possibility of an even greater reduction in intermediate organizational formations was revealed. In industries where production is concentrated in a relatively small number of large enterprises, mainly in mechanical engineering, it was possible to switch to a two-tier management system: the main office - the enterprise. In 1933, 150 plants and combines were directly subordinated to the head offices of the NKTP. Some large factories (Kramatorsk, Izhora and Ural machine-building plants, etc.) were directly subordinated to the people's commissar. 

A major role in the development of the socialist system of economic management was played by the decisions of the Central Committee of the All-Union Communist Party of Bolsheviks and the Council of People's Commissars of the USSR on the work of the coal industry of Donbass (dated April 8, 1933) and on the work of railway transport (dated July 3, 1933). Remnants of bourgeois-bureaucratic methods of management revealed in the work of the Donbass and railway transport consisted in the dispersal of leadership over numerous functional links, in the centralization of engineering and technical personnel in offices and departments, in remuneration in offices and departments at higher rates than in production, in huge turnover of the workforce, vagueness of leadership.

These phenomena took place to one degree or another in other sectors. By including the main content of the decisions on the Donbass and railway transport in its resolution on organizational questions, the 17th Party Congress thus pointed out the great importance of these decisions for the entire socialist economy. 

Comrade Stalin's instructions on six conditions for victory raised the struggle for cost accounting to a new level. Under the leadership of the Party, the working masses waged a struggle for the introduction of self-supporting relations also in the shops and departments of enterprises. Taking up the initiative of the working masses, the Presidium of the Supreme Council of National Economy, by a decree of November 12, 1931, obliged by January 1, 1932, to transfer workshops throughout industry to self-financing. In the same resolution, the Supreme Council of National Economy established the forms of shop cost accounting. Cost-accounting relations between shops, however, cannot be identified with the cost-accounting of individual enterprises. The completed cost accounting of an enterprise includes the right to independently use a bank loan, make settlements through a bank, and the right to conclude economic contracts with other enterprises. Shops and departments of an enterprise cannot have such self-financing.