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Torgsin” System in Ukraine in the Years of 1931–1935

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Torgsin” System in Ukraine in the Years of 1931–1935 Retrieved from https://czasopisma.uni.lodz.pl/pnh [27.09.2021] Przegląd Nauk HistoryczNycH 2020, r. XiX, Nr 2 https://doi.org/10.18778/1644-857X.19.02.06 VIKTORIIA TANASIUK PAVLO TYCHYNA UMAN STATE PEDAGOGICAL UNIVERSITY* https://orcid.org/0000-0002-2838-5972 The activities of the “Torgsin” system in Ukraine in the years of 1931–1935 Abstract. the paper studies the activities of the all-union association “torg- sin” in ukraine between 1931 and 1935. it proves that the soviet state needed to mobilize financial resources for implementing the industrialization programme and, therefore, sought additional sources of income. the soviet authorities elab- orated complex measures for this purpose. the grain procurement policy caused mass famine in ukraine. the establishment of the torgsin system demonstrated a pseudo-concern of soviet authorities about the starving population. the torgsin trade network, founded in the years of mass famine in the early 1930s, extended to the territory of ukraine and strengthened its organizational structure due to exporting food and industrial goods of high quality. it enabled the state to swin- dle gold, family values and antiques from the starving population in exchange for foodstuffs and trade currency with foreigners and soviet citizens through the torgsin network. PNH Keywords: ussr, ukrssr, “torgsin”, all-ukrainian agency, trade network.1 he socio-economic changes and modernization policies im- T plemented by the soviet authorities in the ussr in the 1920s to the early 1930s required the mobilization of finan- cial resources. the global economic crisis of 1929–33 had a major impact on the economy of the ussr. the great depression creat- ed a large financial hole in the soviet economy that threatened to disrupt the industrialization process. the collapse of prices in the world market, especially for food and raw materials, which were the basis of soviet export, prompted the kremlin to pursue a bar- baric policy regarding ukrainian peasants. the total collectivization * department of History of ukraine, e-mail: [email protected] Retrieved from https://czasopisma.uni.lodz.pl/pnh [27.09.2021] 164 VIKTORIIA TANASIUK and grain procurement policy that led to mass famine in ukrainian villages failed to save the ussr economy from currency shortages and to meet the needs of industrialization. significant failures in the implementation of currency policy were related to a relatively limited range of soviet export. However, the modernization of the country’s industrial potential required funding. the soviet authorities sought additional resources other than traditional sources, in particular by reducing purchase prices for agricultural products. to this end, they took the following, not very popular, measures: introducing an additional tax on indus- trialization and irregular working hours; increasing sales of vod- ka; disseminating domestic government bonds; and confiscating church assets, as well as currency, savings and jewellery owned by the population. the data of the Joint state Political director- ate indicate that there were valuables worth up to 400–450 mil- lion rubles in the hands of the masses1. subsequently, the soviet authorities needed to find ways for how to take possession of them. the soviet authorities believed that the seizure of valuables from the population and their sale by the People’s commissari- at for Foreign trade in the ussr in exchange for foreign curren- cy would bring significant economic benefits. thus, they started searching for all possible ways of a “legal” seizure of valuables from the population. as early as april 22, 1918, the soviet state adopted a decree of the council of People’s commissars of russian sFsr “on Nationalization of Foreign trade” and established its monopoly right to conductPNH foreign trade operations2. the People’s commissariat for Foreign and domestic trade in the ussr adopt- ed a decree as of July 18, 1930, thus establishing the all-union association “torgsin”, which operated until February 1, 19363. at first, it was a regular office of the general directorate of trade of the executive committee of Moscow that sold antiques to for- eigners and provided services to crews of foreign ships in soviet ports. the situation changed in January 1931, when this office 1 N. H o r i n, Industrial changes in the Soviet era: sources and forms of resource mobilization, “Bulletin of chernivtsi trade and economic university. economic sciences” 2010, No. 3, p. 323. 2 d.V. arkhiiereiskyi, Developing foreign trade in Soviet Russia and Ukraine during the days of “war communism”, “the History of trade, taxes and duties” 2016, No. 1–2 (13–14), p. 208. 3 Е.А. o s o k i n a, Behind Torgsin’s mirror door, “National History” 1995, No. 2, p. 86. Retrieved from https://czasopisma.uni.lodz.pl/pnh [27.09.2021] The activities of the “Torgsin” system in Ukraine… 165 was transformed into the all-union association “torgsin”, whose central office was located at 14 kuznetsk Bridge in Moscow. thus, the soviet state tried to concentrate currency trading with foreign- ers in one agency in the territory of the soviet union4. From the beginning, torgsin expanded its geography through ship chandlery, i.e. port trade, to such cities as arkhangelsk, Nov- orossiysk, Vladivostok, Poti, odesa, Mykolaiv, kherson, Feodo- sia and taganrog. the establishment of torgsin port offices was part of the overall process of mobilizing and centralizing curren- cy resources for industrialization. torgsin was called to turn port trade into a channel of stable currency income into the soviet state. at the end of 1930, the Port directorate was established under the rule of torgsin5. in december 1930, torgsin’s custom- er list expanded at the expense of foreign specialists who worked in the ussr. eventually, the all-union association “torgsin” had territorial, national and regional offices and was subordinate to the People’s commissariat for Foreign trade in the ussr. it was torgsin that was tasked with organizing retail trade with foreigners in the ter- ritory of the ussr, as well as supplying foreign ships and soviet ships making foreign voyages with various industrial goods and foodstuffs. this trade was carried out in foreign currency or the so-called effective currency, which was soviet gold coins (cher- vonets) obtained as a result of foreign currency exchange in the departments of the state Bank of the ussr. on July 28, 1931, the board of the People’s commissariatPNH for Foreign trade in the ussr decided to supply the trade network of torgsin with export goods, whose prices were determined exclusively by the People’s commis- sariat for Foreign trade in the ussr, to increase the possibilities of obtaining currency6. the acute shortage of industrial goods in the soviet union, caused by the inability of socialist light and food industries to meet the demand of the population for goods and the establishment of a centralized distributive system of foodstuffs in 1929, prompt- ed the soviet market to trade in a black market or torgsin shops. 4 Е.А. o s o k i n a, The gold for industrialization: «Torgsin», Moscow 2009, p. 19. 5 Ibidem, p. 166. 6 correspondence with the all-union union and all-ukrainian office “torgsin” and other organizations on the movement of export and import cargoes, state ar- chive of odesa region [hereinafter: saor], repository 1241, specification 1, file 2, sheet 196. Retrieved from https://czasopisma.uni.lodz.pl/pnh [27.09.2021] 166 VIKTORIIA TANASIUK the latter lured an average shopper with the glitter of storefronts and a plethora of sophisticated storefronts. since the autumn of 1931, torgsin shops provided services not only to foreigners but also soviet citizens who were entitled to buy goods there in exchange for their currency and gold (rings, earrings, and crosses)7. the idea of such a usurious exchange belonged to the director of Moscow department store No1, ephrem kurland, who proposed it to the People’s commissariat for Foreign trade in the ussr in March 19328. on November 3, 1931, the Polit- buro of the central committee of the communist Party (Bolshe- vik) instructed the People’s commissariat for Foreign trade in the ussr to organize the purchase of gold in exchange for scarce goods through torgsin shops. it was Moscow department store No. 1 that first began the process of harvesting gold based on the permission given by the chairman of torgsin Moisei shklyar. on december 10, 1931, the government of the soviet union commissioned torgsin to buy precious metals, including gold9. in the face of a severe currency deficit, torgsin became a lifeline for the state in receiving additional, extra-budgetary revenues. the rate of foreign exchange earnings from bread export operations did not bring the expected results. therefore, soviet leadership started searching for currency among its domestic reserves. sovi- et people, who kept old gold coins, jewellery, antiques, valuables, and sacred objects since the royal times as well as currency com- ing from abroad, were expected to save the situation. despite the efforts of the authorities PNHand chekists’ terrors, the people were reluctant to give them away to the state voluntarily. therefore, the state undertook to create conditions under which the people were forced “to give away the shirt off their backs” to survive. it is quite obvious that the 1932–33 famine was a pre-planned and well-organized campaign. Having deprived peasants of bread and other livelihoods, the government of the soviet union forced them to buy the very bread confiscated from them in exchange for family jewels and currency through torgsin shops. With the estab- lishment of torgsin, the soviet state demonstrated its monopoly 7 F. semenova, The activities of Vyatka branch of the All-Union Association “Torgsin” (1932–1936), “Bulletin of Vyatka state Humanities university” 2010, No.
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