The Soviet Economy and the Launching of the Great Terror

R.W. Davies

University of Birmingham [email protected]

PERSA Working Paper No. 29

Political

Department of Economics Economy

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Version: 1 March 2004

THE SOVIET ECONOMY AND THE LAUNCHING OF THE GREAT TERROR

by R. W. Davies

Centre for Russian and East European Studies University of Birmingham Birmingham B15 2TT

e-mail: [email protected]

Paper for presentation to the BASEES Conference, April 3-5 2004

This is a preliminary working paper. Please do not cite it in your own writings without consulting the author.

2

THE SOVIET ECONOMY AND THE LAUNCHING OF THE GREAT TERROR by R. W. Davies1

Ever since the ‘Great Terror’of 1936-8, historians – and the citizens of the former – have searched for a rational explanation of these terrible events.

The opening of the Soviet archives has enabled us to obtain a much more accurate understanding of the character and scope of the terror, its various phases and their interconnection. It is clear that from the beginning of 1936, on Stalin’s initiative, a major change occurred in the approach to the former members of the party oppositions. In previous years some of them were confined to prison or exiled, but many were given posts in the party or in government departments. But in 1936 measures were prepared and enforced which showed that the whole group was to be eliminated.2 The visible climax of these repressions were the public trials of August 1936 and January 1937. Then during the first six months of 1937 the Red Army and of the staff of defence factories were purged. An attack was also launched on the middle ranks of the nomenklatura, particularly the leaders in the regions.3 During the rest of 1937, and in 1938, this was enlarged into a general purge of officials, particularly those on the nomenklatura.

These developments, involving tens of thousands of victims, many of them in key positions, may be categorised as the ‘nomenklatura purge’. We had a general understanding of this purge before the opening of the archives, because many of these actions were reported in the press at the time or publicised after Stalin’s death. 4 But almost nothing was known about the mass purges of ‘anti-Soviet elements’ and ‘counter-revolutionary nationalist groups’. These were undertaken between August 1937 and November 1938, and involved the execution of hundreds of thousands of Soviet citizens and the exile to labour camps, or deportation to remote areas, of additional hundreds of thousands of people.5

1 I am extremely grateful to Dr Oleg Khlevnyuk for his assistance in providing material, and for his comments. I have greatly benefited from discussing this topic and wider aspects of the repressions with Oleg. Valuable comments and suggestions have also been provided by Michael Ellman, Mark Harrison, David Hoffmann and David Shearer. 2 See the information provided in Reabilitatsiya:politicheskie protsessy 30-50-kh godov (, 1991), 176-9. 3 The nomenklatura was a list (or rather a series of lists) of posts, appointments to which were approved by an appropriate level of the party hierarchy. 4 See R. Conquest, The Great Terror: Stalin’s Purge of the Thirties (London and Melbourne, 1968). 5 A large literature has already appeared on the mass terror. Among the publications in English are Stalin’s Terror: High Politics and Mass Repression in the Soviet Union, ed. B. McLoughlin and K. McDermott (Basingstoke and New York, 2003), and the articles by S. Wheatcroft and M. Ilic in Challenging Traditional Views of Russian History, ed. S. G. Wheatcroft (Basingstoke and New York, 2002), 112-46, 147-70. 3

The ‘nomenklatura terror’ and the ‘mass terror’ were certainly interlinked. There is a logic to the escalation of the terror, and the whole process was centralised. These were not chaotic events but planned and initiated by the top leadership, and carried out by decrees issued in Moscow. These circumstances are crucial to an attempt to ascertain the causes of the terror. Purges and terror were utilised to a greater or lesser extent throughout the Stalin era. But the terror of 1936-8 was substantially different from previous repressive measures, and requires a special explanation. In the present paper only one aspect of this topic is discussed: the economic situation in 1936, and its role – if any – in the launching of the repressions. The shift from the nomenklatura terror to the mass terror in the summer of 1937 requires further investigation.

Why was the nomenklatura terror launched in 1936? In her pioneering study of popular opinion, Sarah Davies suggests that ‘popular discontent…appears to have fuelled the momentum of the purges’, and points to the indignation aroused by the cuts in the job rates in the spring of 1936, and also to the loan conversion in July of that year, which deprived the Soviet population of much of its savings.6 But she does not herself find evidence of any serious increase in discontent in 1936, and suggests that the hostility aroused by the Stakhanov movement was dying down on the eve of the purges.

David Shearer, who has made a thorough examination of the social situation in the 1930s, at first assessed the repressions ‘as a response to an ongoing crisis of social order’, but more recently has revised this view, and concluded that they were ‘a prophylactic response’ to the potential threat of a ‘potential uprising in case of invasion.’ He draws attention to Yagoda’s report to Sovnarkom (the Council of People’s Commissars) in March 1936 which concluded that, with a few exceptions, the problem of social disorder had been resolved.7 Donald Filtzer, in his study of the 1930s, concludes that ‘the industrial expansion of 1933 to 1936 was accompanied by a relative political calm’, and that in these years ‘opposition in the countryside and from the workers was gradually crushed’.8

An alternative view, which has recently been widely expressed, is that there was not a social but an economic crisis in 1936, and that this was a major factor in the launching of the terror. Eugène Zaleski, in his classic study of Soviet planning, published in 1971, referred to the economic ‘disproportions which appeared in 1936’, and claimed that these disproportions ‘became the most common accusation in the trial of people that Stalin wanted liquidated (for example, former Deputy Commissar of Heavy Industry Piatakov).’9

Much more recently Roberta Manning has argued in a stimulating article on ‘The Soviet Economic Crisis of 1936-1940 and the Great Purges’ that ‘economic

6 S. Davies, Popular Opinion in Stalin’s : Terror, Propaganda and Dissent, 1934-1941 (1997), 35. 7 D. Shearer in Cahiers du Monde russe, vol. 39 (1998), 119-48, and vol. 42 (2001), 506. Yagoda’s report is located in GARF, 5446/18a/904. Yagoda was the PC (People’s Commissar) of Internal Affairs until he was replaced by Yezhov on September 29, 1936. 8 D. Filtzer, Soviet Workers and Stalinist Industrialization (1986), 128-9. 9 E. Zaleski, Stalinist Planning for Economic Growth (1971), 248-9. Pyatakov was a major defendant in the January 1937 public trial. 4 difficulties contributed substantially to the expansion of political terror’, dating these to the first half of 1936:

Key areas of the Soviet economy were already encountering major problems or stagnating growth rates in the first half of 1936, before the June arrest of Kamenev and Zinoviev.

In particular, she argues, ‘the output of vital fuels and construction materials like coal, oil and timber…stagnated or even declined in the first half of 1936’, and this ‘shortfall in fuel and building materials began to cause havoc in other sectors of the economy by the and of the year’. 10

Was there an economic crisis in 1936?

There is no doubt that in 1936 as a whole the performance of industry was a resounding success. Table 1 reproduces the results for the year which were published with evident pride in Soviet newspapers on January 22, 1937. In value terms, gross industrial production increased by over 30 per cent. This growth was considerably more rapid than in 1934 and 1935; in these generally very successful years the rate of growth was 20 and 23 per cent respectively.11 As Table 1 shows, the rate of growth exceeded 25 per cent in both the capital goods and consumer goods’ industries, and in every industrial commissariat except the People’s Commissariat for the Timber Industry (Narkomles). In her article in Stalinist Terror, Roberta Manning presents production figures for 1936 and 1937. But she claims that ‘the figures listed under 1936 reflect the progress made in 1935 rather than problems emerging in 1936’, on the grounds that ‘the output levels listed are those prevailing on January 1 of the given year.’12 This is an error. The increases shown in her table for 1936 are the actual increases in that year.13

The high rate of growth is confirmed by the data on production in physical terms. 114 products were listed in the confidential monthly bulletins of (the State Planning Commission), issued in a few hundred copies. I have classified these into major product groups. Of the 114 products, the production of 73 increased by 10 per cent or more, and 35 of these increased by more than 30 per cent.

10 R. Manning in Stalinist Terror: New Perspectives, ed. J. A. Getty and R. T Manning (1993), 116-7. Kamenev and Zinoviev, former opposition leaders. were the principal defendants in the public trial of August 1936. 11 Osnovnye pokazateli vypolneniya narodnokhozyaistvennogo plana, December 1936, 2. Throughout this paper the figures in value terms are the official figures for gross production, measured in 1926/27 prices, unless otherwise stated. These tended to exaggerate the rate of growth, but provide a good indicator of the relative growth in different periods. 12 Manning (1993), 126. 13 The percentage increases in 1936 for the items shown in her table are as follows: oil 8.7 per cent; iron ore 3.7; pig iron 15.2; crude steel 30.1 rolled steel 32.9; cement 30.8; commercial timber 9.5. 5

Rate of growth of industrial production by major products and product groups: 1936 as compared with 1935 (whole year)14

Product or Decline +0-9 % +10-19 % + 20-29 % 30 % and more Total number product group of products Fuel and metal 1 5 2 5 13 group Machine 21 4 6 1 12 44 building Building 1 1 2 4 materials Timber and 1 1 2 1 5 paper Chemical 1 1 1 2 5 Light industry 1 2 5 5 8 21 Food, drink 3 6 6 2 5 22 and tobacco

Total 25 16 25 13 35 114

There were problems with capital investment. The final 1936 plan was fixed at an extremely ambitious level. Gosplan originally proposed a very modest plan, 17.7 thousand million . As a result of Stalin’s direct intervention, this was increased to 27.3 in spite of Molotov’s objections; and the final plan was as much as 35.1 thousand million! 15 Not surprisingly, this huge increase was not achieved. Total investment in 1936, measured in current prices, amounted to 31.75 thousand million rubles, as against 24.02 in 1935, an increase of 32.2 per cent. The extent to which this was an increase in real terms requires further investigation. The increase was certainly substantial. While the average number of workers in the building industry was somewhat lower than in 1935, the supply of both building materials and capital equipment increased substantially.16 The size of the increase in output per building worker in 1936 remains to be established.

The sector of the economy managed by the NKVD (the People’s Commissariat of Internal Affairs) in its labour camps and colonies expanded substantially in 1936. Capital investment, measured in current prices, increased by 29.8 per cent, from 2,420 million rubles in 1935 to 3,394 millions in 1936.17 The

14 Derived from Table in Osnovnye pokazateli, December 1936, 16-25. The items for which a decline occurred are worth noting, in particular the decline in the production of iron and steel making equipment, which was a source of the problems in the iron and steel industry which emerged in 1937-9. But most of the items in the machine-building sector where a decline took place are easily explicable: the number of wheeled tractors declined as a result of the painful conversion to caterpillar tractors; the production of locomotives declined after the large increase in 1935; the production of most of the items of horse-drawn agricultural equipment declined. The decline in some other items of production requires further investigation. 15 See R. W. Davies and O. Khlevnyuk, ‘Stakhanovism and the Soviet Economy’, Europe-Asia Studies, vol. 54 (2002), 872-4. 16 The number of building workers declined by 5.5 per cent in the year as a whole (this figure excludes December): Osnovnye pokazateli, December 1936, p. xxxiii (these figures exclude the ).The production of building materials increased as follows (in percentages): building bricks 47.2; cement 30.6; sawn timber (excluding local industry) 13.8; window glass 30.2; industrial ceramics 8.7; lime 37.9; alebaster 15.1 (Osnovnye pokazateli, December 1936, 16-24, 66-8). The production of machine tools (excluding local industry in the Russian republic) increased by 19.3 per cent (ibid. 20-1, 24). 17 GARF, 5446/20a/461, 6; this is the result expected in November 1936 (measured in 1935 estimate prices). An alternative series, dated January 28, 1939, and evidently covering a smaller range of projects, showed an increase of 45.5 per cent, from 1,852 million rubles in 1935 to 2,694 millions in 1936 (measured in ‘actual cost’) (RGAE, 1562/10/582a, 6). 6 prisoners were responsible for constructing major roads, the Moscow-Volga canal, grain warehouses for the Committee of Reserves, and railways in the Far East. The industrial production for which the NKVD was responsible also increased considerably, particularly in the timber industry. 18 The output of gold by the Dal’stroi trust at Kolyma in the Far East increased by as much as 131 per cent, from 14.46 kilograms in 1935 to 33.36 in 1936.19

These results were obtained without an increase in the number of prisoners.20 In fact, in January-March 1936 there was a surplus of prisoners in the , for whom work was not available.21 These surplus prisoners were gradually put to work in April-September 1936.22 (Incidentally, this evidence shows that the escalation of the terror in 1936 was not due to a shortage of Gulag labour!)

The most impressive achievement was in defence preparations. In 1935 the armaments’ industry had great difficulty in producing new weapons to the new standards and by the new methods which had been agreed between the industry and the army. Total military equipment orders measured in current prices increased by only 14 per cent, and Harrison’s index in terms of the number of weapons showed an actual decline. 23 But in 1936 military equipment orders more than doubled, and Harrison’s number-of weapons index showed an increase of 62 per cent.24 In 1936 there were also huge increases in capital construction by the military, and in capital investment in the armaments’ industries.25

In 1936 the railways continued to perform well, as shown by the growth of railway freight. Following the substantial improvement in the previous year, the increase in freight carried in terms of ton-kilometres amounted to 25.3 per cent in 1936 against 25.5 per cent in 1935.

What about the first six months of 1936? This period is crucial for the claim that economic difficulties before the Kamenev-Zinoviev trial in August were a major factor in the escalation of the terror. It is certainly true that, following the big leap in production in October- December 1935, the first months of the Stakhanov movement, coal production struggled to regain the level of December 1935 (see Table 3). The position was roughly similar in the oil industry. And in the crucial first three months of 1936 the production of timber was only slightly greater than in 1935.26 In large- scale industry and in construction as a whole, the indicators of labour discipline revealed a slight deterioration in January-March 1936 as compared with the same quarter of the previous year (see Table 2).

18 GARF, 5446/20a/461, 12-20. 19 A. I. Shirokov, Dal’stroi: predistoriya i pervoe desyatiletie (Magadan, 2000), 103. 20 The number of prisoners in the camps amounted to 725,000 on January 1, 1935, 839,000 on January 1, 1936, and 821,000 on January 1, 1937 (GARF, 9114/1/1115, 2). In the case of the gold production of Dal’stroi, the total number of persons working in the trust (including free labourers) increased by 45.5 per cent, from 50,300 at the end of 1935 to 73,200 at the end of 1936 (Shirokov (2000), 68). 21 GARF, 9114/1/2916, 73-75. 22 Loc.cit. 25-26. 23 See M. Harrison and R. W. Davies in Europe-Asia Studies, vol. 49 (1997), 380, 390. 24 Ibid. pp. 380, 391. the number-of-weapons index does not allow for improvements in sophistication and quality, which certainly occurred in 1936. 25 Ibid. 380, 384. 26 Osnovnye pokazateli promyshlennosti Narkomlesa SSSR za 1936 god (1937), 11. 7

However, even in the coal industry the position was not as unsatisfactory as these figures seem to indicate. A very high level of production was reached in December 1935. In the first six months of 1936 coal output declined only in comparison with the last two months of 1935. In the first six months of 1936 (measured in tons) it increased by 23.2 per cent as compared with the same period of 1935, and in 1936 as a whole it increased by 15.7 per cent, as compared with 16.5 per cent in 1935. Oil and gas production in the first six months of 1936 was higher than at the end of 1935, and was 13.3 per cent greater than in the first six months of 1935. In 1936 as a whole it increased by 8.1 per cent. The third element in the fuel and energy sector – electric power – expanded dramatically.

Moreover, as Table 1 shows, industry as a whole succeeded in maintaining the high production level of October-December 1935. In each of the first two quarters of the year production in value terms exceeded the level of the same period of the previous year by over 30 per cent. The more detailed reports in physical terms in the bulletins of Gosplan showed that this growth was general throughout nearly the whole of industry. For 104 items listed, only 18 declined in the first six months of 1936 as compared with the first six months of 1935, and 37 increased by 30 per cent or more:

Rate of growth of industrial production by major products and product groups: first six months of 1936 as compared with first six months of 193527

Product Decline +0-9 % +10-19 % + 20-29 % 30 % and Total group more number of products Fuel, power 0 1 4 8 7 20 and metal Machine- 12 4 3 2 14 35 building and metalworking Building 0 0 2 1 1 4 materials Timber 1 1 0 3 1 6 products Chemicals 0 0 0 1 2 3 Light 1 1 4 6 6 18 industry Food, drink 4 2 5 2 8 21 and tobacco Total 18 9 18 22 37 104

These data confirm that production grew rapidly throughout nearly the whole of industry. In the first six months of the year, the performance of industry was better than in the year as a whole (compare this and the previous table).

With capital investment, as usual, the position is more complicated. The main building season was in the summer and autumn; investment in January-June almost always amounted to no more than 30-40 per cent of annual investment. In 1936 investment got off to a slow start, as a result of new regulations adopted at the

27 Calculated from data in Osnovnye pokazateli, June 1936, 10-17. For the items which declined, see n. 12 above. 8 beginning of the year which tightened up the requirements for the plans and estimates needed before investment in a project was authorised.28 Even so, for the projects for which returns were available, investment by July 1, 1936, was reported at 32.9 per cent of the ambitious annual plan. This may be compared with the 37.4 per cent of the more modest 1935 annual plan which had been achieved by July 1, 1935. If these partial returns are representative, the increase in investment in the first six months of 1936 as compared with the same period of 1935 amounted in terms of current prices to about 24 per cent.29 As with 1936 as a whole, the supply of building materials and capital equipment substantially increased, but the number of building workers declined.30

So far we have not considered the situation in agriculture. The weather conditions in 1936 were exceptionally poor, and the grain harvest was very low. As Roberta Manning explains in her article, large-scale famine was avoided in the spring of 1937 by releasing part of the grain stocks which had been built up in the previous two years.31 But of course the grain was not harvested until July-September. The first six months of 1936, our main concern here, were the last six months of the agricultural year July 1935 to June 1936, in which the harvest was good. On the eve of the 1936 harvest the prospects on the whole seemed promising.

The apparently favourable position in agriculture, and in the situation on the retail market generally, was reflected in the continual decline in prices on the kolkhoz market. The summary index numbers from the surveys carried out in 95 towns for 32 food products sold on the urban kolkhoz markets in June 1936 are as follows (June 1935 = 100)32: All 32 goods 80.6 5 grain products 71.7 4 fodder products 99.3 Potatoes 59.5 4 vegetables 99.1 Vegetable oil 79.1 17 livestock and dairy products 80.7

The economy in 1936 as reported to the political authorities

Does our generally favourable assessment of the economic situation in the first six months of 1936 correspond to that presented to the central authorities by the officials? On April 10, 1936, Mezhlauk, the head of Gosplan, sent a 19-page memorandum to Stalin, Molotov and Chubar’ on the results of the January-March quarter of 1936. This reported that the People’s Commissariats for the heavy, light and food industries and for local industry had overfulfilled their production plans, and

28 See Davies and Khlevnyuk (2002), 882-4. 29 Osnovnye pokazateli, July 1935, p. 84, and July 1936, 101. 30 See Osnovnye pokazateli, June 1936, 14-15, and December 1936, 209. 31 Manning (1993), 22-3. 32 Osnovnye pokazateli, June 1936, 271 (preliminary figures). Similar results appear from the specific prices given for 13 products in urban kolkhoz markets in 13 towns (op. cit. 279-86). Most sales were of meat and dairy products (according to the data for 28 towns, 69.3 per cent of total sales in April-June 1935 and 71,4 per cent in April-June 1936); sales of grain products were quite small (5 per cent of total sales in April-June 1935 and 2.5 per cent in April-June 1936). Total sales in April-June 1936 were 29.3 per cent greater than in April-June 1935. (Op. cit. 256, 271.) 9 only the timber industry was lagging. He listed numerous product groups which had failed to reach the plan, and numerous others for which the plan was overfulfilled. As usual, he complained that wage payments exceeded the plan and the cost reduction plan was not fulfilled. But in general the report presented a favourable picture of the economy. 33 On agriculture, Mezhlauk wrote in his memorandum that ‘most districts of the USSR are approaching the completion of the spring sowing; on March 31 98 % of the planned repair of tractors had been carried out in the People’s Commissariat of Agriculture (Narkomzem) sector, and 99% in the sector of the People’s Commissariat for State Farms.34

The most critical assessment prepared at this time which I have so far found in the archives was sent by Kviring, deputy head of Gosplan, to Kaganovich in the party central committee and Chubar’ in Sovnarkom (Kaganovich and Chubar’ were deputising for Stalin and Molotov, who were on leave). It was dated August 22, a month after the decision to launch the Zinoviev-Kamenev trial but well before the fateful decision to appoint Yezhov as People’s Commissar for Internal Affairs. Kviring wrote:

Fulfilment of the national-economic plan in the third quarter of this year is unsatisfactory for a number of the most important industries. In total, the output of the USSR People’s Commissariats and the People’s Commissariats for Local Industry in July was 28.5 per cent of the quarterly plan, declining in comparison with the production level in June by 5.3 per cent.

However, even this critical assessment stated that the plans for railway transport and trade had been successfully fulfilled, and proposed a quarterly plan for October- December 1936 which would make up the lag, and result in an output from Union and local industry amounting to 109 per cent of the annual 1936 plan. 35

As in previous years, the People’s Commissariat of Finance (Narkomfin) and the State Bank (Gosbank) sought to persuade Stalin and the Politburo to pay more attention to sound finance. On May 29 Grin’ko and Mar’yasin, in charge of these two departments, sent a joint memorandum to Stalin and Molotov warning that currency issues was exceeding the plan in the April-June quarter, and calling on the government departments concerned with internal trade to increase supplies to the population in order to absorb the excess cash in circulation. 36 However, on July 16 a further memorandum from Grin’ko to Stalin was more optimistic. It estimated that in 1936 as a whole both the plans for both budgetary revenue and budgetary expenditure would be exceeded, and anticipated that the currency issue planned for the year would take place in full, but did not suggest that the issue would exceed the plan. 37 Then on August 23, the day after Kviring despatched his critical memorandum, Narkomfin sent a further memorandum to Kaganovich and Chubar’ which reported an unusually healthy state of public finance. Its figures showed that the growth of currency issue in January-June 1936 was less rapid than in the same period of 1935. The authors of the

33 GARF, 5446/89/48, 2-20. 34 GARF, 5446/29/48, 11. 35 GARF, 5446/26/64, 133-122. 36 GARF, 5446/28/9, 138-141. 37 GARF, 5446/26/61, 275-268. 10 memorandum estimated that the annual currency plan would not be exceeded.38 This would have been a most unusual achievement… 39 The plan actually adopted for October-December 1936 is discussed below.

The members of the Politburo were certainly aware that some industries – particularly the coal industry – were performing unsatisfactorily. At the end of 1935 and in the first weeks of 1936 such defects had been treated as a failure of the Stakhanov movement due in large part to sabotage by class enemies.40 But in the spring of 1936 the weak spots in Soviet industry were thoroughly investigated. In February and March the party control commission of the central committee, which was then headed by Yezhov, investigated the Sverdlovsk region in the Urals, with particular attention to the failure of the plan in copper smelting, coal and timber. Following this investigation, officials of the industrial department of the central committee reported to Andreev, head of the department, that the defects were due not only to accidents and hold-ups but also to the ‘unfounded repression of engineering and technical personnel’.41 Then on March 20 the situation in the region was discussed by the Orgburo of the central committee, with the participation of Ordzhonikidze, Andreev and Yezhov. Ordzhonikidze made only one brief remark on sabotage: ‘any attempts to sabotage the Stakhanov movement will be punished most decisively by the party’. The rest of his eleven-page speech was devoted to criticism in friendly terms of the conservatism of technical personnel, and of complacency following previous successes. Yezhov and Andreev, who later became two of the principal promoters of the under instructions from Stalin, made no reference whatsoever to sabotage, or class enemies in their speeches; and the resolution of the Orgburo also made no mention of sabotage or wrecking.42

These developments all took place behind the scenes. Then on June 2 Pravda published a speech by Postyshev in which he criticised Ukrainian officials for unjustified repressions, and on June 7, 1936, the newspaper published an editorial entitled ‘Lessons of the Donbass’. This attributed the failure of the coal plan not to wrecking but to record breaking conducted for show and to the unjustified persecution of engineers and technicians. Then on June 25-29, at a session of the Council of the People’s Commissariat of Heavy Industry, Ordzhonikidze exclaimed of the engineers and technicians:

They are not saboteurs, but good people – our sons, our brothers, who are entirely and completely in favour of Soviet power. They will die on the front for Soviet power, if this is required. (Stormy and prolonged applause.)…It is not sabotage – this is nonsense – but incompetence [neumenie].43

38 GARF, 5446/26/64, 142-138, and supplementary memorandum on l. 148. This is the archival file which also contains Kviring’s memorandum. 39 In fact currency issues in 1936 amounted to 1,546 million rubles as compared with 1,300 million rubles – certainly a successful outcome as compared with previous and later years. 40 See Davies and Khlevnyuk (2002), 882-4. 41 For these developments see Davies and Khlevnyuk (2002), 884-5. 42 For these proceedings, see RGASPI, 17/114/741, 103-113 (Ordzhonikidze), 114-115 (Andreev), 116- 117 (Andreev), 53-56 (resolution). 43 For the editorial and the Council, see O. Khlevnyuk, Stalin i Ordzhonikidze: konflikty v Politbyuro v 30-e gody (1993), 60-3; F. Benvenuti, ‘Stakhanovism and , 1934-8’, unpublished CREES Discussion Papers SIPS No. 30, Centre for Russian and East European Studies, University of 11

Industry was not alone in this conclusion. In April Kaganovich had taken a similar line in relation to the railways, and at a conference on July 30, the day after the secret central committee letter on the treachery of Zinoviev and Kamenev, he declared that on the railways ‘enemies are few’.44

Until the beginning of September, sabotage and counter-revolution continued to be treated as only a minor factor in economic difficulties.45

Provided with this information and these assessments, an objective observer of the Soviet economic scene in the spring and summer of 1936 would certainly not have concluded that there was an economic crisis. It is relevant here to note the conclusions of the émigré economic research institute in Prague (the ‘Kabinet prof. Prokopovicha’). According to its bulletin, during the first six months of the year there had been difficulties in the coal and oil industries, but ‘industry in general has coped successfully with the quantitative requirements of the plan’; industries other than coal and oil ‘almost universally approached the fulfilment of the planned tasks in quantitative expansion’.46

The view of the economic situation from the Politburo

Stalin and the Politburo were not of course objective observers. Is it possible that the Politburo, or Stalin personally, concluded that economic developments in the first six months of 1936 were such a disastrous failure that mass repressions had to be launched?

We have seen that this was certainly not the view of Kaganovich and Ordzhonikidze; their attitude to the economy was in harmony with Yagoda’s assessment of the social situation. What about Stalin, Molotov and the other members of the Politburo? In the autumn of 1935, inspired by the first successes of the Stakhanov movement, Molotov had authoritatively declared that industrial production could be doubled or trebled in the near future.47 This was fantasy, and by the spring of 1936 it was already clear that no such rapid development would take place.

However, there is no indication that the failure of this alluring prospect played any substantial part in the thinking of the leaders about the purges. In my opinion the evidence is overwhelming that the economic situation in 1936 was not an important factor in Stalin’s decision to launch the Zinoviev-Kamenev trial of August 1936, or in the launch of the widespread purge of economic officials in the autumn of 1936, which continued throughout 1937 and 1938.

Birmingham UK (1989), 42-9; L. H. Siegelbaum, Stakhanovism and the Politics of Productivity in the USSR, 1935-1941 (Cambridge, 1988), 127-35. 44 See E. A. Rees, Stalinism and Soviet Rail Transport, 1928-41 (London and Basingstoke, 1995),140- 1, 148. For the central committee letter, see below. 45 See Davies and Khlevnyuk (2002), 886-7. 46 Byulleten’ekonomicheskogo kabineta prof. S. Prokopovicha (Prague), cxxx, August – September 1936, 82-5. 47 See Davies and Khlevnyuk (2002), 880; Ordzhonikidze even spoke of quadrupling industrial production and the productivity of labour. 12

Consider for example the most important economic decision at this time, the approval of the capital investment plan for 1937 on July 19, 1936. Twelve months earlier Stalin had played a decisive part in overturning the Gosplan proposals for investment in 1936 in favour of a much more rapid expansion. But in 1936 Mezhlauk’s very modest proposals for investment in 1937 were approved by the Politburo without change, and at the same time the Politburo approved a growth-rate for industrial production which was lower than in the plan for 1936.48 Stalin seems to have lacked any active interest in these decisions. This was entirely compatible with the pattern revealed by his correspondence with Kaganovich during his 1936 vacation. Stalin was on leave from August 14 to October 25. During these ten weeks Stalin and Kaganovich exchanged over 140 letters and ciphered telegrams. Apart from agriculture, which is dealt with below, a mere half-a-dozen documents concerned the economy:

on August 17, Kaganovich, Chubar’ and Ordzhonikidze proposed changes in the plans for the Stalingrad and Khar’kov tractor factories following the delay in the transfer of production from wheeled to caterpillar tractors. Stalin agreed to the changes; on August 24, Kaganovich proposed to Stalin that 8-10,000 workers in the aircraft industry should be exempted from the call-up, owing to the depletion of its numbers by dismissals ‘by way of a purge (v poryadke chistki)’; Stalin agreed to a figure of 10,000; on August 28, Stalin ruled that 75 per cent of the remaining British loan should be used for naval shipbuilding; on September 2, Kaganovich submitted the economic plan for October- December 1936 for Stalin’s approval (it was approved by the Politburo on September 3); on September 3, Kaganovich reported the successful development of the gold industry in Dal’stroi; on October 12, Kaganovich reported to Stalin the discussion about production at the Gorky vehicle works which had taken place at the Politburo as a result of Stalin’s ‘instructions on the telephone’.49

The most important of these exchanges, on September 2 and 3, concerned the October-December economic plan. Kviring’s memorandum to the party central committee and Sovnarkom dated August 22, which was discussed above, included a draft Sovnarkom decree on the national-economic plan for October-December 1936. This proposed that industrial production by the People’s Commissariats for industry should increase by 17.3 per cent as compared with the plan for July-September, that the number of railway goods wagons per day should reach 92,000, carrying a freight amounting to 136 million tons, and that the number of passenger-kilometres should amount to18 thousand million. It also proposed that retail state and cooperative trade should amount to 28.5 thousand million rubles. Capital investment was to amount to 7,574.6 million rubles. The document also included a substantial number of other planned figures for the quarter.

48 See Davies and Khlevnyuk (2002), 873-5, 888. 49 Stalin i Kaganovich: perepiska, 1931-1936 (2001), 629-30, 646, 652, 658-9, 659-60, 701. 13

Kaganovich’s telegram to Stalin stated that ‘we discussed the question of the national-economic plan for the fourth quarter with the People’s Commissariats’, and listed the key planned figures. Most of these, including the plan for industrial production, were the same as in Kviring’s memorandum. The railway and retail trade plans were reduced slightly.50 The only important change was a substantial increase in the capital investment plan, from 7574.6 million rubles in Kviring’s document to 7,909 million rubles, presumably in order to make up for the shortfall in the previous nine months.51

Stalin evidently approved the plan without comment, including the figure for capital investment. All these figures, and the text accompanying them, were incorporated in a Politburo resolution on the following day, September 3.52 Kaganovich’s telegram contained a typing error: retail trade was given as 28 million rubles instead of the 28.5 milliard (thousand million) rubles in the Kviring document. The error was not noticed by Stalin and found its way into the Politburo resolution.

This coorespondence with Kaganovich is strong evidence that Stalin was not seriously concerned with failures in the industrial sector of the economy in these months.

What was Stalin’s view of the agricultural situation on the eve of and at the time of the Zinoviev-Kamenev trial? During his vacation, as in previous years, he was sent detailed reports of the progress of the grain collections, and Kaganovich and Chubar’ (Molotov after he returned from vacation) notified him of all changes which they proposed to make in the obligations of the various regions. In all, Stalin was sent 13 ciphered telegrams on the grain collections between August 18 and October 24, reporting reductions in the collections claimed by the regions and submitting their own proposals. On ten occasions Stalin simply approved their proposals. On two occasions (August 18 and September 12), he ruled that the cuts should even be larger than Kaganovich and Chubar’/Molotov proposed. It was not until October 9, when Kaganovich and Molotov submitted proposals to reduce the plan for state grain purchases (zakupki) in five regions, that Stalin ruled in the case of only one region that

In the Sverdlovsk region there is a good harvest. Kabakov’s demands have little foundation. A reduction of not more than 5 million puds may be given. 53

Stalin’s most remarkable statement about the grain collections was made on September 5. On August 17 Kleiner, in charge of the collections, submitted a memorandum to Kaganovich and Chubar’ expressing alarm about the loss of pace in the collections for August 6-15, and calling for a discussion of the problem.54 On September 4 Kaganovich and Molotov proposed to Stalin that because of the ‘unsatisfactory progress’ in the collections high officials should be sent to six lagging

50 The number of goods wagons per day was planned at 91,000; the freight at 131 million tons; the number of passenger kilometres at 18 thousand million, and the retail t rade at 28,000 million rubles. 51 SKP, 658-9. 52 RGASPI, 17/3/981, 8. 53 Sverdlovsk region claimed a reduction of 10.5 million; Kaganovich and Molotov proposed 7.8 million. 54 GARF, 5446/26/73, 177-174. 14 regions, and that ‘in addition we have instructed Pravda and Izvestiya to criticise these regions more strongly’. Stalin was acquainted with Kleiner’s alarm, and sent an immediate reply critical of Kleiner’s view and Kaganovich’s and Molotov’s decision:

[By cipher] CC of the VKP. Moscow. To Kaganovich, Molotov. I think the grain procurements are going pretty well. We cannot demand that the pace keep increasing if there is a drought on the Volga and the harvest in is a full 20 days behind last year due to climatic conditions. We will collect the grain in Siberia, but it will be late. I consider the directive to newspapers that they criticize the regions ‘more strongly’ to be tactically wrong, since such criticism will only benefit the fascists’ agitation about ‘famine’ in the USSR. We should not get nervous and give in to Kleiner’s screaming. We will collect the grain in any case. We may collect a tiny bit less than last year, but we don’t even need any more. We can just send people, but there is no reason to raise a clamour in the press. Stalin. No. 26 5 September 193655

During the summer, Kaganovich also sent Stalin the annual plans for the collection of flax and hemp and of cotton; he approved both these plans without change or query. 56

Agriculture, and particularly grain production, is the sector of the economy about which, with the advantage of hindsight, we might expect Stalin to have anticipated and worried about a crisis. But the available evidence indicated that he felt no such alarm.

If the leaders had believed that the main purpose of the purges was to overcome economic difficulties, we would expect the arrests to fall primarily on the weak sectors of the economy. But no such pattern can be distinguished. Take for example the main dramatis personae who were removed from their posts, and later arrested, in the second half of 1936. These were Mar’yasin (head of the State Bank), Pyatakov (first deputy People’s Commissar in Narkomtyazhprom), Rykov (People’s Commissar for Communications), Lobov (People’s Commissar for the Timber Industry), and Lifshits (deputy People’s Commissar in Narkomput’, the People’s Commissariat of Transport).57 Lobov was certainly in charge of an industry which had

55 SKP, 661; for the English translation of this and some of the other Stalin-Kaganovich documents discussed in this article, see the 1936 chapter of The Stalin-Kaganovich Correspondence, 1931-1936 (2003), ed. R. W. Davies, O. Khlevniuk, E. A. Rees, L. Kosheleva and L. Rogovaya. 56 SKP, 651-2 (August 28 – flax and hemp); 678-9 (September 16 – cotton). 57 Mar’yasin was transferred from his post to a post in the party central committee on July 14, arrested on December 21, 1936, and executed on September 10, 1937. Pyatakov was dismissed from his post and arrested in September 1936, and sentenced to death in the January 1937 public trial. Rykov was removed from his post in September 1936, arrested on February 27, 1937, and sentenced to death in the March 1938 public trial. Lobov was appointed People’s Commissar for the Food Industry in October 1936, arrested on June 21, 1937, and sentenced to death on October 29, 1937. Lifshits was dismissed and arrested in November 1936, and sentenced to death in the January 1937 trial. 15 worked badly in 1936, but the work of Narkomtyazhprom, Narkomput’ and the State Bank had been conspicuously successful.

Evidence about the repressions within heavy industry also indicates that there was no connection between economic difficulties and the intensity of the purge. The percentage of officials on the nomenklatura who were removed from their posts in different industries in 1936 (mainly in November and December) and January- February 1937 varied as follows: non-ferrous metals 9.3; chemicals 8.8; machine-building 8; iron and steel 7.5; fuel and power 5.8.58 The managers of the fuel industry, which was in great difficulties, suffered less than those in more successful industries.

In the compromising material about economic leaders assembled at the end of 1936 and the beginning of 1937, the main criterion for the purge was political, covering such accusations as participation in the oppositions and membership of other political parties in the past.59 The intensity of the purge depended not on the success of the People’s Commissariat or other government department but on a combination of mainly political factors, including the extent to which important members of former party oppositions worked in the commissariat, and the extent to which the NKVD or Stalin personally took an interest in a particular commissariat. Molotov, in his reply to the discussion at the February-March 1937 plenum of the central committee, provided the following data about the number of ‘members of anti-Soviet and Trotskyite organisations and groups’ who had been condemned in different commissariats between October 1, 1936 and March 1, 1937: PC (People’s Commissariat) of Heavy Industry and PC of the Defence Industry: 585 persons; PC of Education 228; Pc of Light Industry 141; PC of Transport 137; PC of Agriculture102; PC of Food Industry 100; PC of Water Transport 88; PC of Internal Trade 82; Academy of Sciences and higher education establishments 77; Editorial boards and publishing houses 68; PC of Local Industry 60; PC of Health 64; PC of Timber Industry 62; PC of Communications 54; PC of State Farms 35; PC of Finance 35; Courts and procuracy 17; Staff of soviets 85.60

58 RGASPI. 17/71/43, 1. These figures include such categories as heads of building projects, managers of trusts, and directors of factories and other enterprises. 59 RGASPI, 17/7134, 35, 37, 43, 45. This material was collected in the department of leading party agencies of the central committee, which was headed by Malenkov. 60 Voprosy istorii, 8, 1994, 18 (delivered on morning of March 2). These references are to a verbatim report of the plenum published from the archives. For Molotov’s main report, see below. 16

This list is revealing. The PC of Education is in second place. and the number arrested in the Academy of Sciences, higher education establishments, editorial boards and publishing houses exceeded the number in such traditionally difficult sectorts of the economy as timber and the state farms. Clearly economic motives did not predominate here.

The evidence that Stalin and the Politburo did not regard the economic situation as a major motive for launching the purges is strongly supported by the statements of the leaders about the purges. These all take the general line, both in public and in private, that the economy is flourishing, and the saboteurs and wreckers are able to cause only marginal economic difficulties.

The purges of leading figures in party and government were launched by the confidential letter of the central committee dates July 29, 1936, ‘On the Terrorist Activity of the Trotskyite- Zinovievite Counter-Revolutionary Bloc’ which preceded the Zinoviev-Kamenev trial. This stated:

Confronted with the completely irrefutable successes of socialist construction, they at first hoped that our party could not cope with the difficulties…But seeing that the party was successfully overcoming difficulties, they placed their wager on the defeat of Soviet power in the forthcoming war, as a result of which they dreamed of seizing power… Finally, not seeing any prospects, in despair they resorted to the last means of struggle – to terror.61

At the trial of Pyatakov and others, the first major public trial, held on January 23-30, 1937, the indictment, and the lengthy cross-examination of Pyatakov, did not accuse the defendants of damaging the economy in 1936. Neither the indictment nor the cross-examination made any mention of the economic situation in 1936. Zaleski’s statement to the contrary is a very rare slip. Rataichik, a prominent industrial official, in his concluding plea, even claimed that ‘in 1935 I virtually ceased all active work in this counter-revolutionary organisation’. Vyshinskii, in his summing-up for the prosecution, took the line that in spite of the wreckers ‘our industry is growing at a tremendous rate and is overfulfilling its production plans’, and ‘the position on the railways is similar’; ‘the damage caused by these individuals is quickly repaired by millions.’62 Similarly, at the Bukharin trial, on March 2-13, 1938, no specific charges or admissions were made about economic difficulties in 1936.63

At the February-March 1937 plenum of the central committee, the main reports by Molotov on heavy industry and Kaganovich on the railways did not suggest that there had been any special economic difficulties in 1936. Molotov emphasised that ‘in the past three years heavy industry has overfulfilled its plan…and fulfilled the second five-year plan in four years’. His line was that successes would be even greater as a result of the rooting-out of the wreckers.64 Kaganovich argued that

61 Published in Izvestiya TsK KPSS, no. 8, 1989. 62 Report of Court Proceedings in the Case of the Anti-Soviet Trotskyite Centre (1937), 4-19 (indictment), 21-81 (examination of Pyatakov), 571 (Rataichak), 506 (Vyshinskii). 63 Report of Court Proceedings in the Case of the Anti-Soviet “Bloc of Rights and Trotskyites” (1938). 64 Voprosy istorii, 8, 1993, 3-26 (report at the morning session of February 28). 17 improvements had begun at the beginning of 1935, and had continued in 1935 abd 1936 with the defeat of the so-called ‘counter-revolutionary limit theory’ which claimed that there were definite restrictions on growth which were imposed by the capacity of the railways.65

Stalin took the line in his report that the wreckers had been able to operate because of the complacency among party members induced by the great successes in the economy: ‘forgetfulness, blindness, carelessness and complacency’ were ‘the dark sides of the economic successes’; ‘wholly taken up with economic work, they were diverted by the economic successes in an extreme degree’:

The danger is that the environment of successes – success after success, achievement after achievement, overfulfilment of plans after overfulfilment of plans, will give rise to careless and self-satisfied attitudes among people who have little experience in politics and are not very observant.

‘Political blindness’ could infect ‘some of our inexperienced comrades as a result of dizzy distraction by the economic successes.’ ‘Dizzy’ (golovokruzhitel’nogo) was the word used by Stalin in condemning excessive collectivisation in his famous article in 1930 on ‘Dizziness from Success.’

Stalin presented this triumphant progress as the foundation for his famous insistence on the continued intensification of the class struggle:

The more we advance, the more successes we have, the more embittered will the remnants of the defeated exploiting classes become, the more rapidly will they go over to sharper forms of struggle, the more they will inflict damage on the Soviet state, the more they will seize on the most desperate means of struggle as the last resort of the doomed.

Stalin, like Molotov, claimed not that there had been an economic crisis but that even greater successes could be achieved without the influence of the wreckers. He rejected the ‘corrupt theory’ that the fulfilment of the economic plans meant that wrecking and its results were insignificant for several reasons. First, ‘all our economic plans are underestimated, because they do not take into account the huge reserves and possibilities concealed in the heart of our national economy.’ Secondly, fulfilment of the plans as a whole concealed the failure to achieve them in several very important branches of the economy. Thirdly, results would have been worse if the wreckers had not been exposed. But Stalin’s view of the greatest danger from the wreckers was presented in his fourth reason for rejecting the notion that the economic successes meant that wrecking could be ignored as trivial:

The wreckers normally undertake their main wrecking work not in the period of peace, but in the period of the eve of war or the war itself. Let us imagine that we began to comfort ourselves with the corrupt theory about ‘the consistent fulfilment of economic plans’ and did not touch the wreckers. Do the authors of this corrupt theory conceive what a colossal harm would be

65 Voprosy istorii, 9, 1993, 3-32 (report at the evening session of February 28). 18

inflicted on our state by the wreckers in the event of war, if they allowed them to remain in the heart of our national economy.66

While Stalin and the other speakers at the plenum did not base their case for the purges on the existence of an economic crisis, by the February-March 1937 plenum they had entirely abandoned the measured analysis of the weak sectors of industry which prevailed in the spring of 1936. In his major report Molotov spoke at length about the harmful effect of the wreckers on the Kuzbass and Donbass industries.67 Stalin commented on Molotov’s account that the wreckers in these industries ‘consistently led the Stakhanovites by the nose, put sticks in the wheels, artificially created a whole number of obstacles to their successful work and eventually succeeded in ruining their work’. Sarkisov, party secretary in the Donbass, insisted, contrary to the findings in the spring of 1936, that it was the Trotskyites who were responsible for the Donbass difficulties at the beginning of 1936. Gurevich, a senior Narkomtyazhprom official, claimed that the wreckers had concentrated their efforts on the coal, non-ferrous and chemical industries. Bagirov, Azerbaijan party secretary, blamed a serious explosion in the oil industry at the end of 1936 on to wrecking, and claimed that they had damaged over 100 deep oil wells in 1936.68

Thus Stalin and the other leaders did not argue in public or private on the eve of the purges in the summer of 1936 that economic difficulties were a justification for the purges; indeed, they did not at any time believe that there was any general economic crisis in 1936. But once the purges were under way most defects or imagined defects in the economy were attributed to the wreckers.

Conclusions

(1) There was no economic crisis or downturn in the first six months of 1936 before the Kamenev-Zinoviev trial in August. Both in the first six months of the year and in the year as a whole economic development was extremely rapid. The harvest of 1936 was extremely poor, but its impact was felt primarily after the end of 1936 in the second half of the agricultural year July 1936 to June 1937.

(2) The reports submitted to the political leaders included many references to weaknesses in the economy, but provided no grounds for concluding that there was an economic crisis either in the first six months of the year on in 1936 as a whole.

(3) In the spring of 1936 Kaganovich, Ordzhonikidze and the industrial department of the party central committee explicitly rejected the view that saboteurs or wreckers were responsible for poor economic performance, and denied that wreckers or saboteurs existed in large numbers in industry or on the railways. During Stalin’s vacation in August to October, his correspondence with Kaganovich gives no indication that he believed that the economy was in crisis or that there were serious economic difficulties, even in agriculture.

66 Stalin’s report will be found in Voprosy istorii, 3, 1999. It was delivered in the evening of March 3. It was published in Pravda, March 29, 1937.

68 Voprosy istorii, no. 1, 1994, 12, 19, 22-3. 19

(4) Even once the purges were launched following the Kamenev-Zinoviev trial, neither the proceedings of the public trials of 1937-8, nor the published and the secret record of the February-March 1937 plenum of the party central committee, display evidence of an economic crisis in 1936. The official line, both in public and in private, was that the wreckers had resorted to terror because of their failure to disrupt successful socialist construction. However, in contrast to the assessments made by the party authorities in the spring of 1936, once the purges were under way past and present economic difficulties, including those of 1936, tended to be blamed on the wreckers, and Stalin and his acolytes claimed that the economy would grow even more rapidly once the wreckers had been removed.

POSTSCRIPT

‘They destroyed the cadres – and in heavy ind[ustry] our rate of growth fell.’ M. G. Pervukhin ‘[In] 36-37 so many cadres were destroyed – the curve in 36-39 was at a minimum rate of growth.’ M. A. Suslov (Statements recorded in the working notes of the Presidium [Politburo] of the Communist Party during its discussion of the Stalin question on February 9, 1956, before the XX party congress.)69

While the anti-nomenklatura purges launched in 1936 cannot be attributed to economic crisis, there is no doubt that the economic difficulties which beset the Soviet Union from the end of 1936 were protracted and severe. In 1937 the rate of growth of industrial production was much lower than in the previous three years, and for the first time since 1933 investment actually declined absolutely. 70 In 1938 the rate of industrial production remained low, and an improvement in 1939 was followed a reversion to the lower rate of growth in 1940.71

There is strong circumstantial evidence that while economic difficulties did not lead to the purges, the purges themselves caused major difficulties for the economy. Evidently the removal of very large numbers of experienced economic officials and engineers was a major factor in the deterioration of economic performance. On the railways, by November 1938 as many as 2,245 out of 2,968 senior posts (75.6 per cent) were occupied by persons appointed since November 1, 1937.72 In the economy as a whole, on March 1, 1939, there were 32,899 posts on the central committee nomenklatura relating to soviet and economic government agencies; of these 47.0 per cent were appointed in 1937-8.73 Some of these new

69 Prezidium TsK KPSS 1954- 1964, vol. 1, Chernovye protokol’nye zapisi zasedanii: Stenogrammy (2003), 101. 70 According to the official figures, gross industrial production increased by only 11 per cent in 1937 (Promyshlennost’ SSSR (1957), 34), and capital investment declined from 35.3 thousand million rubles in 1936 to 32 or 33 thousand million rubles in 1937 (in current prices) (see Davies and Khlevnyuk (2002), 868). I hope to discuss the difficult problem of the changes in the measurement of capital investment in 1936-40 in a later article. 71 The growth rate was given as 12 per cent in 1938, 16 per cent in 1939 and 12 per cent in 1940 (Promyshlennost’ SSSR (1957), 34). 72 Zheleznodorozhnyi transport v gody industrializatsii SSSR (1926-1941) (1970), 309 (report dated November 17, 1938). 73 See Khlevnyuk (forthcoming). 20 appointments were made in the normal course of business, or were to new posts. But these figures provide a reasonable guide to the extensive nature of the purges.74 The occupants of some leading posts were replaced more than once in these two years. Two successive heads were arrested and replaced in the case of Gosplan, the central statistical agency (TsUNKhU), the People’s Commissariat of Finance and the People’s Commissariat of Agriculture, and three in the case of the State Bank.

Waves of arrests were closely accompanied and followed by a deterioration in economic performance. On the railways, a wave of arrests in the last months of 1936 was accompanied by a sharp decline in the daily number of goods wagons despatched.75 In the coal industry, arrests of senior personnel were so extensive in the first few months of 1937 that Kagan, deputy head of the Chief Coal Administration Glavugol’, wrote to Narkomtyazhprom in March complaining of the ‘complete collapse of work’ in the mine construction trust Shakhtostroi. Two months later he complained that no work had been done in the trust for five months because the whole board of the trust had been arrested.76 Arrests were widespread throughout the industry. Coal output per day steadily declined in the months January-May 1937, and did not recover to the level of December 1936 until November 1937.77

According to David Hoffmann, who has made an extensive study of Moscow in this period, in Moscow ‘labor discipline deteriorated rapidly with the onset of the purges (as shown by a marked increase in worker absenteeism and tardiness), and resulted in a substantial fall in factory production’.78

A study of the work of Lenenergo, the Leningrad electric power trust, in 1937- 8, made by A. P. Vorob’ev, deputy director of the trust from 1937 to 1968, reaches similar conclusions. According to Vorob’ev, Lenenergo overfulfilled its plan in 1936, and thus fulfilled the second five-year plan (1933-7) in four years. But at the end of May 1937 the chief engineer shot himself, and in mid-June the director of the trust was arrested, followed by the heads of power stations and trust departments. By the end of 1937 all directors and chief engineers in the power stations, and the heads of the Lenenergo departments, had been replaced. This resulted in ‘complete lack of preparedness for the autumn-winter load of 1937-8’. In October - December 1937 the production of electric power declined, and the number of accidents increased.79

In March 1939, a few months after the end of the Great Purge, a certain M. Pakhomov claimed in an outspoken letter to Stalin:

If last year and now the majority of industries have not fulfilled their plan, the cause of this is our weak cadres, who were promoted to leading work during the past year…The atmosphere of lack of confidence and oversuspiciousness

74 The figures for the railways may even be an underestimate, as many arrests were made before November 1, 1937. 75 For the arrests, see Rees (1995), 154-6. The average daily number of goods wagons declined from 92,000 in September 1936 to 86,500 in October, 84,000 in November and 80,400 in December (Osnovnye pokazateli, November and January-November 1937, p. viii). 76 Letter dated March 7, 1937, to Gurevich (RGAE, 7566/1/2753, 115); letter to Zavenyagin (ibid. 54,53) (there are two versions of this second letter, one undated, the other dated May 21, 1937). 77 Osnovnye pokazateli, November and January-November 1937, p. vi. 78 See Stalinist Terror (1993), 166. 79 Leningradskii martirolog, 1937-1938, v (2002), 549-55. 21

in the relations between people and at work is not at all justified…Such an atmosphere and the oversuspiciousness blunts the initiative and energy of the personnel, and has an extremely harmful effect on all the work.80

The purges of officials were not of course the only cause of the poor economic performance in 1937 and later years. In 1936 investment had been expanded too much, and throughout the second five-year plan investment had been inadequate in certain key industries, notably iron and steel. Both the overinvestment and the poor distribution of investment caused trouble for the economy.

Another important cause of economic difficulties was the drastic increase in defence preparations throughout the years 1936-40. The production of armaments, and investment in military preparations and in the armaments’ industries, all grew rapidly. The army was greatly enlarged, drawing on manpower which could have been availabel for the civilian economy. Expenditure on defence is estimated to have increased from 7.2 per cent of the in 1937 to 14.7 per cent in 1940. In 1940 five times as many weapons were procured as in 1935, and the number of servicemen doubled in this period.81

The relative importance of these factors in the economic difficulties of 1937- 40 remains to be assessed. But the purges are certainly a strong candidate for the role of prime mover in these difficulties.

80 RGASPI, 17/120/336, 9-16, cited in Khlevnyuk (forthcoming). 81 See Harrison and Davies in Europe-Asia Studies, (1997), 373, 374, 393. 22

Table 1 Quarterly increase in industrial production, 1936 (in 1926/27 prices as percentage of same period in 1935)

January-March April-June July-September October-December 1936: whole year Amount % Amount % Amount % Amount % Amount % increase increase increase increase increase I Union Narkoms Total 13167 31.6 13099 36.3 13323 31.9 16296 23.8 55884 30.3 Of which: Narkomtyazhprom 7692 38.8 8086 36.5 8054 30.6 9232 27.9 33064 33.0 Narkomlesprom 975 7.9 603 27.8 671 18.0 723 9.6 2980 14.1 Narkomlegprom 1961 27.8 1843 43.5 1823 45.0 2348 26.5 7974 34.5 Narkompishcheprom 2104 34.0 2164 38.2 2291 35.9 3306 15.5 9864 28.4 II Narkommestproms 2042 31.7 2191 32.2 2172 32.8 2439 24.6 9943 30.0 III Industrial cooperatives 1233 39.2 1313 43.9 1315 49.1 1516 36.5 5366 41.8 Total I – III 16442 32.1 16602 36.3 16810 33.2 20240 24.8 70094 31.1 Of which: Means of production 10134 32.5 10156 37.5 10147 31.2 11734 27.0 42171 32.5 Consumer goods 6308 26.8 6446 34.5 6662 36.3 8507 21.9 27923 29.1

Source: Izvestiya, January 22, 1937, p. 1 (and other Moscow newspapers). Note: This table also included subheadings for each Narkommestprom and type of industrial cooperative, and for Komzag (the Committee for Agricultural Collections) and the cinema and photography industry. It was entitled ‘The Gross Production of all-Union Industrial People’s Commissariats, Narkommestproms of Union Republics and Industrial Cooperation for December and Jnauary-December 1936’. Narkomtyazhprom=People’s Commissariat of Heavy Industry; Narkomlesprom=PC of Timber Industry; Narkomlegprom=PC of Light Industry; Narkompishcheprom=PC of Food Industry; Narkommestproms=republican PCs of Local Industry.

23

Table 2 Labour discipline

(a) January-March: 1935, 1936 and 1937

19351 19361 1936 as revised in 19372 19372 Large-scale industry 1. Absence without due cause (number of days): all large-scale 0.16 0.18 0.18 0.21 industry coal industry 0.34 0.46 0.45 0.42 2. Turnover (labour departures as percent of labour force): 20.4 20.1 20.4 19.5 all large-scale industry coal industry 23.6 26.2 26.9 27.3 3. Number of days worked per 67.57 66.80 66.80 65.62 worker Construction 1. Absence without due cause (number of days) 0.42 0.47 0.47 0.68 2. Turnover (labour departures as percent of labour force) 62.6 62.5 63.8 63.2 3. Number of days worked per 67.36 67.00 67.20 65.98 worker Sources: 1Osnovnye pokazateli, April 1936, 229-30, 232. 2Osnovnye pokazateli, April 1937, 161-3. Note: The source provides data for 18 industries or product groups for items 1 and 2 of large-scale industry.

24

(b) Number of days of absenteeism without due cause January-June: 1935 and 1936

1935 1936 Coal 0.74 0.95 Chemicals 0.18 0.24 Cement 0.35 0.50 Brick 0.90 0.95 Iron and steel 0.27 0.34 Metalworking and machine 0.24 0.34 building Cotton textiles 0.12 0.15 Linen 0.49 0.77 Leather and fur 0.14 0.15 Printing 0.14 0.15 All large-scale industry 0.34 0.39

Source: GARF, 5446/18/43, 2-4 (memorandum from Kraval’ to Chubar’, dated September 5, 1936).

Note: The memorandum also provides data for separate months in January-June 1936, showing an increase from 0.06 in January to 0.08 in June 1936 for large-scale industry as a whole, and corresponding increases for the individual industries. A handwritten note on the memorandum from Chubar’ reads ‘Ask the People’s Commissariats for explanations’.

25

Table 3. Average daily output in physical terms of industrial products by months, 1935-6

January February March April May June July August September October November December All year Power (mln kWh)1a 1935 49.3 49.7 48.5 47.6 45.5 45.7 44,7 44.4 48.0 53.4 53.9 61.7 49.5 1936 63.1 63.9 61.5 61.5 58.6 59.4 57.0 56.2 60.1 66.3 66.3 73.8 62.5 Coal (thousand tons)2 1935 208.2 277.8 278.1 283.6 278.9 281.1 281.3 280.4 285.8 312.9 333.7 359.4 298.5 1936 368.2 355.8 345.8 343.1 329.8 320.3 309.9 324.0 327.7 349.1 355.6 354.6 339.2 Oil and gas (thousand tons)3 1935 65.6 69.1 69.7 72.2 75.2 72.8 72.8 73.7 75.5 78.3 76.9 71.7 73.4 1936 78.4 79.8 79.6 78.0 81.1 81.2 79.9 78.3 76.3 80.0 82.4 80.8 79.7 Iron ore (thousand tons)4 1935 62.2 72.1 71.9 73.1 77.0 75.2 77.3 75.1 80.1 85.0 81.4 84.5 75.9 1936 79.3 76.0 82.2 82.7 87.3 85.6 79.6 75.5 79.3 83.8 84.5 84.5 81.5 Pig iron (thousand tons)5 1935 29.0 32.5 33.8 33.8 34.5 35.1 35.2 34.6 35.0 34.4 35.0 37.3 34.2 1936 38.1 37.9 40.2 40.3 40.1 38.7 38.3 39.0 39.8 39.3 39.2 41.0 39.3 Crude steel (thousand tons)6 1935 28.2 31.6 33.6 33.4 33.2 33.2 33.6 33.4 35.3 37.2 37.1 39.0 34.1 1936 42.2 42.3 44.3 45.3 42.8 41.9 40.9 42.8 44.7 48.5 48.0 48.1 44.3 Rolled steel (thousand tons)7 26

1935 20.5 23.2 24.8 25.0 24.1 25.2 24.8 24.1 27.4 29.0 30.1 32.4 26.0 1936 34.1 33.2 33.3 35.3 33.5 33.0 29.6 31.2 33.3 37.2 36.9 39.5 34.1 Copper from ore (tons)8 1935 139.7 155.2 175.7 186.2 179.5 189.7 184.1 156.5 176.8 177.3 177.3 180.8 173.3 1936 193.8 189.7 217.7 224.2 236.5 217.5 192.9 204.2 228.4 272.1 263.6 260.5 225.1 Aluminium (tons)9 1935 56.0 57.5 58.6 59.5 63.7 66,8 67.6 73.3 75.2 77.1 79.2 89.4 68.6 1936 89.9 89.6 83.6 79.3 90.2 90.2 89.6 94.3 86.2 90.9 85.5 97.3 88.9 Ball bearings (thousands)10 1935 1288 1138 1317 1646 1569 1477 1563 1595 1799 2213 1960 1901 1617 1936 2060 2458 2759 2861 2676 3258 3247 2995 2563 3560 2446 2998 2822 Sulphuric acid (tons)11 1935 2322 2642 2801 2775 2760 2592 2092 2255 2781 3001 3122 3207 2695 1936 3450 3504 3589 3651 3461 3264 2605 2406 2641 3556 3745 3852 3316

Superphos- phate tons)12 1935 2520 3358 3485 3583 3365 2976 2527 2516 3507 3420 3426 3625 3189 1936 4223 4359 4233 4580 3810 3571 2676 959 1459 3359 3996 4173 3434 Cement in powder form ( thousand tons)13b 1935 6.09 7.33 8.91 9,51 10.72 11.82 11.80 11.22 11.91 11.58 11.25 9.48 10.15 1936 12.18 10.72 13.49 14.01 13.44 13.42 13.24 14.01 14.83 14.15 14.16 12.64 13.36 Cellulose (thousand tons)14 1935 21.42 19.99 23.30 21.91 20.78 22.12 23.09 22.79 22.25 24.17 22.48 25.59 22.83 1936 28.25 25.18 31.99 32.72 25.89 30.29 30.99 33.13 29,13 34.66 30.75 35.68 30.62

27

Source: All figures except n. 14 from Operativnaya svodka o rabote promyshlennosti NKTP: A. Proizvodsvtvo: natural’nye pokazateli za 1936g. (Narkomtyazhprom otchetno-ekonomicheskii sektor, 1937). 1 p. 5. 2 p.8. 3 p. 18. 4 p.23. 5 p. 25. 6 p. 26. 7 p. 27. 8 p. 37. 9 p. 41. 10 p. 47. 11 p. 63. 12 p. 65. 13 p.70. 14 Osnovnye pokazateli raboty promyshlennosti Narkomlesa SSSR za 1936 god (Narkomles sektor statisticheskogo ucheta, 1937), p. 20.

Notes: a District power stations of Glavelelektro, plus Grozny industrial stations (except Ninagres), but excluding Vladivostok station. b In Soyuztsement trust.