Where did Stalin get gold for industrialization? Official version

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

In the late 1920s, the Soviet Union was close to bankruptcy. Where did you find the funds for industrialization?

By the end of the 1920s - the time when Stalin's sole power was established - the country of the Soviets was on the brink of financial bankruptcy. The gold and foreign exchange reserves of the USSR did not exceed 200 million gold rubles, which was the equivalent of 150 tons of pure gold. It is negligible in comparison with the pre-war gold reserves of the Russian Empire, which in value reached almost 1.8 billion gold rubles (the equivalent of more than 1400 tons of pure gold). In addition, the USSR had an impressive external debt, and the country had to spend astronomical funds on an industrial breakthrough.

By the time of the dictator's death in March 1953, the USSR's gold reserves had grown at least 14 times. As a legacy to subsequent Soviet leaders, Stalin left, according to various estimates, from 2051 to 2804 tons of gold. Stalin's gold box turned out to be larger than the gold treasury of tsarist Russia. His main rival, Hitler, was also far from Stalin. At the beginning of World War II, Germany's gold resources were estimated at $ 192 million - the equivalent of 170 tons of pure gold, to which must be added about 500 tons of gold plundered by the Nazis in Europe.

What was the price paid for the creation of the Stalinist "stabilization fund"?

The Tsar's gold treasury was blown away in just a few years. Even before the Bolsheviks came to power, more than 640 million gold rubles were exported abroad by the tsarist and Provisional governments in payment of war loans. In the vicissitudes of the Civil War, with the participation of both white and red, they spent, stole and lost gold worth about 240 million gold rubles.

But the "tsarist" gold reserves were melting especially quickly in the first years of Soviet power. Gold was used to pay indemnities for the separate Brest-Litovsk peace with Germany, which allowed Soviet Russia to leave the First World War, for "gifts" under the peace treaties of the 1920s to its neighbors - the Baltic states, Poland, Turkey. Huge funds were spent in the 1920s to foment a world revolution and create a Soviet spy network in the West. In addition, tons of gold and jewelry expropriated from the "propertied classes" went to cover the deficit in Soviet foreign trade. With the complete collapse of the economy, the absence of exports and income from them, as well as difficulties in obtaining loans in the capitalist West of Soviet Russia, the national gold reserves had to pay for the import of vital goods.

In 1925, a US Senate commission investigated the issue of Soviet exports of precious metals to the West. According to her, in 1920-1922 the Bolsheviks sold over 500 tons of pure gold abroad! The realism of this assessment was confirmed by both the secret documents of the Soviet government and the meager cash in the vaults of the State Bank of the USSR. According to the "Report on the Gold Fund", compiled by the government commission, which, on the instructions of Lenin, examined the country's financial situation, as of February 1, 1922, the Soviet state had only 217.9 million gold rubles in gold, and 103 million of these funds had to be allocated. gold rubles to pay off public debt.

By the late 1920s, the situation had not improved. The gold reserve of Russia had to be created anew.

In 1927, forced industrialization began in the USSR. Stalin's calculation that foreign exchange earnings from the export of agricultural products, foodstuffs and raw materials would finance the country's industrial development was not justified: amid the global crisis that broke out in 1929 and the protracted depression in the West, prices for agricultural products fell hopelessly. In 1931-1933 - the decisive stage of Soviet industrialization - real export earnings annually were 600-700 million gold rubles less than the pre-crisis expected. The USSR sold grain at half or even a third of the pre-crisis world price, while millions of its own peasants who grew this grain were dying of hunger.

Stalin did not think about retreating. Having started industrialization with an empty wallet, the USSR took money from the West, Germany was the main creditor. The country's external debt since the fall of 1926 increased by the end of 1931 from 420.3 million to 1.4 billion gold rubles. To pay off this debt, it was necessary to sell to the West not only grain, timber and oil, but also tons of gold! The country's meager gold and foreign exchange reserves were melting before our eyes. According to the State Bank of the USSR, from October 1, 1927 to November 1, 1928, more than 120 tons of pure gold were exported abroad. In fact, this meant that all the country's free gold and foreign exchange reserves were used, plus all the gold industrially mined in that economic year. It was in 1928 that Stalin began to sell the country's museum collections. Artistic export turned into a loss for Russia of masterpieces from the Hermitage, palaces of the Russian aristocracy and private collections. But the costs of the industrial breakthrough were astronomical, and the export of works of art could provide only a very small part of them. The largest "deal of the century" with US Treasury Secretary Andrew Mellon, as a result of which the Hermitage lost 21 masterpieces of painting, brought the Stalinist leadership only about 13 million gold rubles (equivalent to less than 10 tons of gold).

Gold from the State Bank was delivered by steamers to Riga, and from there by land to Berlin, to the Reichsbank. In the early 1930s, gold shipments from the USSR arrived in Riga every two weeks. According to the American Embassy in Latvia, which closely monitored Soviet gold exports, from 1931 to the end of April 1934, more than 360 million gold rubles (more than 260 tons) of gold was exported from the USSR through Riga. However, it was impossible to solve the problem of external debt and financing of industrialization at the expense of the gold and foreign exchange reserves available in the State Bank.

What to do? At the turn of the 1920s – 1930s, the country's leadership was seized by a gold rush.

Stalin respected America's economic achievements. According to eyewitness accounts, he read Bret Garth and was inspired by the California gold rush in the mid-19th century. But the Soviet-style gold rush was strikingly different from the free Californian entrepreneurship.

There she was the business and the risk of free people who wanted to get rich. The discovery of gold in California breathed life into the region, spurring the development of agriculture and industry in the Western United States. California gold helped the industrial North win over the slave South.

In the Soviet Union, the gold rush at the turn of the 1920s and 1930s was a state enterprise whose purpose was to finance industrialization and create a national gold reserve. The methods by which it was carried out gave rise to mass famine, prisoners' gulag, plundering of the property of the church, national museums and libraries, as well as personal savings and family heirlooms of its own citizens.

Mining gold and currency, Stalin did not disdain anything. At the end of the 1920s, the criminal investigation department and the police transferred all the cases of "currency traders" and "value holders" to the Economic Department of the OGPU. Under the slogan of combating currency speculation, one after another followed "scrofulous campaigns" - the withdrawal of currency and valuables from the population, including household items. Persuasion, deception and terror were used. The dream of Nikanor Ivanovich from Bulgakov's The Master and Margarita about the dramatized forced surrender of currency is one of the echoes of the scrofula of those years. The torture concert for the currency dealers was not an idle fantasy of the writer. In the 1920s, the OGPU persuaded the Jewish Nepmen to surrender their valuables with the help of their own melodies, which were performed by a guest musician.

But jokes aside, the OGPU also had frankly bloody methods. For example, the "dollar steam room" or "golden cells": "currency traders" were kept in jail until they say where the valuables are hidden, or relatives from abroad send a ransom - "salvation money". Demonstration shootings of the "harboring currency and gold", sanctioned by the Politburo, were also in the arsenal of the OGPU's methods.

In 1930 alone, the OGPU handed over to the State Bank valuables worth more than 10 million gold rubles (the equivalent of almost 8 tons of pure gold). In May 1932, the deputy chairman of the OGPU, Yagoda, reported to Stalin that the OGPU had valuables worth 2.4 million gold rubles in the cash desk, and that together with the valuables that “were previously handed over to the State Bank,” the OGPU mined 15.1 million gold rubles (almost 12 tons purity in gold equivalent).

The methods of the OGPU, at the very least, made it possible to get large treasures and savings, but the country had values of a different kind. They were not hidden in hiding places or underground, ventilation pipes or mattresses. In front of everyone, they glittered with a wedding ring on a finger, an earring in an earlobe, a gold cross on the wearer, a silver spoon in a chest of drawers. Multiplied by the country's 160 million population, these simple little things, scattered across caskets and sideboards, could turn into enormous wealth. With the depletion of the State Bank's gold reserves and the growth of foreign exchange appetites for industrialization, the USSR leadership grew stronger desire to take away these savings from the population. There was also a way. The values of the population in the hungry years of the first five-year plans were bought up by the shops of Torgsin - “All-Union Association for Trade with Foreigners on the Territory of the USSR”.

Torgsin was opened in July 1930, but at first it served only foreign tourists and sailors in Soviet ports. The depletion of gold and foreign exchange reserves and the need for industrialization forced the Stalinist leadership in 1931 - the apogee of the madness of industrial imports - to open the doors of tradersin to Soviet citizens. In exchange for hard currency, the tsarist gold coinage, and then household gold, silver and precious stones, the Soviet people received Torgsin's money, which they paid in his shops. With the admission of a hungry Soviet consumer to Torgsin, the sleepy life of high-end stores ended. Torgsin shops in large cities and unsightly shops in godforsaken villages shining with mirrors - Torgsin's network has covered the whole country.

The terrible year 1933 became Torgsin's mournful triumph. Happy was the one who had something to hand over to Torgsin. In 1933, people brought 45 tons of pure gold and almost 2 tons of silver to Torgsin. With these funds, they purchased, according to incomplete data, 235,000 tons of flour, 65,000 tons of cereals and rice, 25,000 tons of sugar. In 1933, groceries accounted for 80% of all goods sold in Torgsin, with cheap rye flour accounting for almost half of all sales. Those dying of hunger exchanged their meager savings for bread. Mirrored delicatessen shops were lost among the Torgsin's flour stores and sackcloths of sacks of flour. Analysis of Torgsin's prices shows that during the famine, the Soviet state sold food to its citizens on average three times more expensive than abroad.

During its short existence (1931 - February 1936) Torgsin mined 287, 3 million gold rubles for the needs of industrialization - the equivalent of 222 tons of pure gold. This was enough to pay for the import of industrial equipment for ten giants of the Soviet industry - Magnitka, Kuznetsk, DneproGES, Stalingrad Tractor and other enterprises. The savings of Soviet citizens accounted for more than 70% of Torgsin's purchases. The name Torgsin - trade with foreigners - is false. It would be more honest to call this enterprise "Torgsovlyud", that is, trade with Soviet people.

The savings of Soviet citizens are finite. The OGPU with the help of violence, and Torgsin, by means of hunger, practically emptied the people's money-boxes. But gold was in the bowels of the earth.

On the eve of the First World War, in 1913, 60.8 tons of gold were mined in Russia. The industry was in the hands of foreigners, manual labor predominated in it. In the Civil War, the Bolsheviks defended all the known gold-bearing lands of the Russian Empire, but wars and revolutions destroyed the gold mining industry. Under the New Economic Policy, by the efforts of private miners and foreign concessionaires, gold mining began to revive. It is paradoxical that, with the state's acute need for gold, Soviet leaders treated the gold mining industry as a third-rate industry. They spent a lot of gold, but cared little about its production, living like a temporary worker, at the expense of confiscations and buying up valuables.

Stalin drew attention to gold mining only with the beginning of the industrial breakthrough. At the end of 1927, he summoned the old Bolshevik Alexander Pavlovich Serebrovsky, who by that time had already distinguished himself in the restoration of the oil industry, and appointed him chairman of the newly created Soyuzzolot. In Soviet Russia that year, only about 20 tons of pure gold was mined, but Stalin set the task in a Bolshevik bold manner: to catch up and overtake the Transvaal, the world leader, which produced more than 300 tons of pure gold a year!

As a professor at the Moscow Mining Academy, Serebrovsky traveled to the United States twice to learn from the American experience. He studied technology and equipment at the mines and mines of Alaska, Colorado, California, Nevada, South Dakota, Arizona, Utah, bank financing of gold mining in Boston and Washington, the operation of factories in Detroit, Baltimore, Philadelphia and St. Louis. He recruited American engineers to work in the USSR. Due to a health disorder, the second trip ended at the hospital. But the selfless work of Serebrovsky and his associates brought results. The flow of gold to the vaults of the State Bank began to grow. Since 1932, to the "civil" gold mining, which was under the jurisdiction of the People's Commissariat of Heavy Industry, Dalstroy was added - the gold mining of prisoners of Kolyma.

The astronomical figures of the plans were not fulfilled, but gold production in the USSR grew steadily from year to year. The fate of Serebrovsky was sad. He was appointed to the post of People's Commissar, and the next day he was arrested. They carried him out on a stretcher directly from the hospital, where Serebrovsky was treating his health undermined in the service of the Soviet state. In February 1938 he was shot. But the deed was done - a gold mining industry was created in the USSR.

In the second half of the 1930s, the USSR took second place in the world in gold mining, overtaking the United States and Canada and yielding, albeit by a huge margin, only to South Africa, whose annual production by the end of the decade approached the 400-ton mark. The West was frightened by the loud statements of the Soviet leaders and seriously feared that the USSR would flood the world market with cheap gold.

In the pre-war period (1932-1941) prisoners' Dalstroy brought the Stalinist leadership almost 400 tons of pure gold. NEGULAG's "civil" gold mining for the period 1927 / 28-1935 yielded another 300 tons. There is no data on the work of "civil" free gold mining in the second half of the 1930s, but if we assume that the development proceeded at least at the same pace as and in the mid-1930s (an average annual increase of 15 tons), then its pre-war contribution to the achievement of monetary independence of the USSR will increase by another 800 tons. Gold in the USSR continued to be mined both during the war years and after it. In the last years of Stalin's life, the annual gold production in the USSR exceeded the 100-ton mark.

Having created a gold mining industry, the country overcame the gold and foreign exchange crisis. As a result of the victory in World War II, the USSR's gold reserves were replenished through confiscations and reparations. After the war, Stalin stopped selling gold abroad. Khrushchev, who spent gold mainly on grain purchases, unsealed Stalin's money box. Brezhnev also actively spent "Stalin's gold", mainly to support third world countries. By the end of Brezhnev's reign, Stalin's gold reserves had melted by more than a thousand tons. Under Gorbachev, the process of liquidating the Stalinist treasury came to an end. In October 1991, Grigory Yavlinsky, who was in charge of negotiations for economic aid with the G7, announced that the country's gold reserves had dropped to about 240 tons. The USSR's main adversary in the Cold War, the United States, had accumulated more than 8,000 tons by that time.

Stockpiling gold in all possible, and often criminal and reckless ways, Stalin accumulated funds that ensured the influence of the USSR in the world for several decades to come. However, it was a disservice to Russia. Stalin's gold reserves extended the life of an ineffective planned economy. The Soviet era ended with Stalin's golden treasury. The leaders of the new post-Soviet Russia had to rebuild the national gold and foreign exchange reserve.