South Urals industry in 20—30s of the XX century. Scientific research

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Simultaneously with the quantitative growth of the working class, its activity and creative energy increased. By the end of the recovery period, labor productivity in the Orenburg Province reached 75% of the prewar level. On their own initiative, workers increased their production rates. In the railway workshops of E. S. Egorov, V. N. Kotov, F. I. Proshkin, I. E. Korzhemanov and others were performing a shift and a half or two standards. The ranks of inventors were growing. Railwayman FP Kazantsev invented a cast-iron body of air distributor to a new system of railway brakes.

New economis policy was aimed, first of all, at getting the region out of the deep social and economic crisis, restoring the economy and raising the national welfare. In order to achieve these goals during the new economic policy, the most important means were used, such as:

– to restore the equivalent exchange between town and village;

– introduction of commercial settlement in the sphere of industry and trade;

– creation of a hard currency and a developed credit and banking system;

– Wide use of various methods to stimulate workers and peasants.

More broadly, new economic policy was understood as the path to socialism through state capitalism while maintaining the firm and monopolistic political power of the Bolshevik Party. At the same time, the state apparatus was thought of as a tool to keep commodity-money relations within certain limits.

In 1926, 3.5 times more coal was extracted in the mines of the South Urals than in 1913. During the New economic policy period, a radical reform of industrial management was carried out. The scheme of management of the industry has acquired such kind: The Supreme Council of National Economy (VSNKh) – syndicate – trust.

Being relieved of the operational management of the enterprises, the All-Union Agricultural Exhibition began to develop only plans for the development of industry as a whole, to monitor their implementation, to conduct a single technical policy.

Syndicates (self-accounting trade unions of trusts created on shares) carried out functions of sales of production, by means of orders regulated work of trusts.

The main production unit of steel (until the end of 30-s) self-supporting associations – trusts. They were given the rights of planning, distribution of funds, personnel placement. The trusts were fully responsible for the break-even performance of their enterprises (the decree of April 10, 1923 established that the state treasury was not responsible for the debts of the trusts).

In the end it meant that from a passive object of management from above the state enterprise turned into an active subject of social and economic policy.

The logical consequence of the denaturalization of economic relations in the South Urals was the restoration of commodity and monetary and financial credit subsystems. As a result of the 1922—1924 monetary reform, the transition to hard currency was made. The work of banks was resumed. By placing production activities of the trusts under strict control, banks stimulated more efficient work.

Prombank introduced the procedure for granting long-term loans to trusts for new construction on a competitive basis.

The granting of significant economic independence to the trusts was organically connected, further, with the development of planned initiatives in the national economy. Thus, in 1921 the central planning body of the country (Gosplan) was created. In this case, the new economic policy did not change the single state economic plan and did not go out of its scope, and changed the approach to its implementation.

In other words, the problem of combining plan and commodity-money relations, plan and market, development of state, cooperative (industrial cooperation) and handicraft industry became important in the South Urals.

However, it should be stressed that the process described in the South Urals was far from being unequivocal. Democratic methods of economic management (when one of the most important regulators of economic development is the market) contributed to the economic progress of the country. But at the same time, the gradual assertion of the Stalinist regime (with its command and control system) steadily led to the growing alienation of workers from property and power, to a decrease in the motivation for productive labor, and to an increase in contradictions in economic and social relations.

With the assumption of local trade turnover, the permitting of private business activities, and the restoration of the market throughout the country, a link between town and village was ensured. A crucial role in this success was also played by the transfer of state enterprises to commercial settlements.

The wide introduction of economic calculation was hindered by a number of reasons: lack of fixed and circulating assets, economically trained personnel, lack of developed supply and sales staff, long unprofitability of enterprises in the revived heavy industry, etc.

Many of these transferred businesses in the South Urals were practically unable to operate on a self-financing and payback basis. As a result, state enterprises began to be united into trusts. More often than not, enterprises producing homogeneous products or dissimilar but technologically connected with each other were united. The trusts were fully responsible for the organization of production and sales, performance of annual tasks and quality of products.

It was the trust, especially in the mid-20s, that was a legal entity and a subject of independent property rights. Enterprises that were part of it, the rights of legal entity, industrial, commercial and financial independence did not have. As the main industrial self-accounting unit, the trust existed for about 9 years.

If at the beginning of the new economic policy trusts are autonomous and operatively independent units of “socialist” sector of production, then since 1927 they have been turning into economic agents of the state, performing planned tasks. Potential possibilities of trusts as participants of market relations were not used also due to a number of other objective reasons. In particular, due to their underdeveloped logistics and sales system, they could not become either a fullfledged seller or a buyer in the market.

Having realized the insoluble problem of material support and sale of finished products by their own efforts, the trusts on their own initiative began to create such economic organizations as syndicates. Syndicate forms of state industry organization in the South Urals emerged in March 1921 – January 1923.

Syndicates were associations of voluntary type, which built their relations with the trusts on contractual commercial grounds.

Syndicate capital was formed by bank loans, government loans, mutual funds from trusts and share issues. The main functions of syndicates were to assist their trust shareholders in selling finished products and providing them with materials, semi-finished products, raw materials and fuel. The activities of syndicates were built on a commercial basis (i.e., they were paid for). Their employees were interested in making a profit.

In the very first years of their existence in the South Urals neither trusts nor syndicates were able to cope with the task of organizing an increasingly large trade turnover (especially in terms of territory). There were no competent state bodies which would be engaged at due level in studying of the nascent market, an account of demand and supply, effective regulation of commodity streams within cities, counties, provinces (oblasts), republics, the country as a whole.

Occurrence, development and liquidation of the syndicate form of wholesale and exchange trade is explained by changes in the position and role of the state trade system in the country’s economy. They functioned until the state wholesale and wholesale and retail trade strengthened. The paradox is that they themselves contributed to it to the maximum extent possible.

Cooperation has played a bigger role in the implementation of the new economic policy in the South Urals aimed at establishing commodity and market links between town and village than state trade.

At the beginning of the new economic policy, all the main types of cooperation (consumer, agricultural, handicrafts) were merged into one consumer cooperative, because they were engaged in the same thing – preparation and distribution of products.

The consumer cooperative society became an integral part of the state overlapping distribution apparatus. Deprived of any initiative and independence within it, it slowly agonized. In an environment of increasing commodity hunger, many cooperatives were ceasing their activities. In order to revive the cooperation, various activities were developed and implemented.

The cooperation was given greater opportunities to participate in procurement and sales operations, it was given the opportunity to participate in procurement and sales operations on the basis of leases, nationalized enterprises were transferred to it on the basis of leases, credit operations of cooperative institutions were supported with the help of state loans, etc. However, the reality was that cooperative associations had to rely on their own resources, the shareholders’ funds.

In 1929, construction began in the South Urals, in the Chelyabinsk region of Magnitogorsk Metallurgical Plant, which was part of a new coal-metallurgical base in the east – the Urals-Kuzbass. Magnitogorsk combine – a complex enterprise with a complete metallurgical cycle. Construction of the plant is carried out at a rapid pace. On May 15, 1931 operation of mine began, and on January 31, 1932 the first blast furnace was blown out.

The newspaper “Smychka” for January 1930 writes: “From the conference on the study of productive forces of the Sredne Volga region, the Orenburg district was part of the Sredne Volga region at the time with the center in Samara,” … Run on the map of the Sredne Volga…Recently, just a few years ago, in the sleepy steppes and gloomy ledges of the Orenburg Okrug mountains, there appeared people with strange instruments, drilling machines, drilling the obese body of the earth, extracting its insides. And in them found the wealth of the region.