>4 ...--.....,§, UKMNIAN CAMTAL AND THE SOVIET ECONOMY flush far fire Dogma e5 P92. D. Mi-CHEGAN STATE UNIVERSETY' Zimwii Lew Maaflnyk $961 This is to certify that the thesis entitled UKRAINIAN CAPITAL AND THE SOVIET ECONOICY presented by Zinowij Lew Melnyk has been accepted towards fulfillment of the requirements for Ph. D. degree mBusiness Administration 0 ajor professes/ Dam May 12, 1961 0-169 LIBRARY Michigan State University ABSTRACT UKRAINIAN CAPITAL AND THE SOVIET ECONOMY by Zinowij Lew Melnyk 1. This study concerns capital formation in the USSR during the first five—year plan. Its prime objective is to examine capital accumulation in the Ukraine during this period. Such an area approach also reveals some of the unifying and centrifugal forces operating within the Soviet economy. In addition, by presenting the factual material on the Ukraine's position in the USSR, the study contributes to the history of economic relations between the Ukraine and Russia. The findingsindicate that capital accumulation in the Ukraine during this period amounted to 14.3 billion rubles and was equal to 27.2 per cent of capital investments in the socialized sector of the Soviet economy. This is not sur- prising in View of the Ukraine's paramount importance as an industrial center and exporter of agricultural products. 2. The second aim is to compute capital flow between the Ukraine and the rest of the USSR. Obviously, the development of new industrial centers required substantial capital movements 2 Zinowij Lew Melnyk within the USSR. The investigation shows that the Ukraine provided capital exports to the rest of the USSR of approximately 5 billion rubles. This was equal to 29.6 per cent of the revenues of the all—Union budget in the Ukraine, or 23.1 per cent of the combined revenues of the all-Union, republican, and local budgets. These Ukraine's capital exports financed 11.5 per cent of total capital investment in the USSR socialized economy exclusive of the Ukraine. The above figures confirm the extent to Which the Ukraine was obliged to subsidize economic development in other parts of the USSR. The subsidy, which constituted one third of all capital created in the Ukraine, must have inhibited growth of the Ukraine's own economy while holding down, if not lowering, local living standards. Moreover, the decisions to export capital were made unilaterally by the central government without any reference to the wishes of the Ukrainian people. Also, the Ukraine received no interest on her capital exports and lost all hope of ever being reimbursed at a future date. For these reasons, many writers contend that the Ukraine was exploited by a modern form of Russian imperialism far more crippling than anything experienced in the past. Zinowij Lew Melnyk 3. The third aim is to gain an understanding of the origins and relative importance of the various sources of capital. The evidence indicates that agriculture was an important source of new capital, along with personal and industrial savings, in spite of persistent silence on this matter from Soviet officials. Undoubtedly, the Soviet govern- ment was aware of the great fiscal opportunities afforded by a combination of pricing policies and commodity taxation of agriculture. Thus, the prospect of exacting resources from agriculture must have presented an important consideration in forced collectivization. As a major bread producing republic, the Ukraine felt the impact of this loss of resources to a much greater extent than other parts of the USSR. 4. Finally, the study shows how the financial reform of 1930 assisted the central government in its efforts to raise the rate of capital formation besides directing the flow of capital throughout the USSR. The rate of capital formation was raised by increasing the level of forced savings. This was accomplished with the aid of high indirect taxation of personal income, commodity taxation of agriculture, mandatory purchases of government bonds by individuals and 4 Zinowij Lew Melnyk enterprises, and pressures upon industrial management. The redistribution of capital was facilitated by the simplified tax structure, centralization of major revenues in the all-Union budget, control of industry by financial institutions, increased taxation of profits, and tying in of profit taxation with plant's investment plans. All of these measures were either included in the reform itself or taken up subsequently as modificationsof the original provisions. Copyright by ZINOWIJ LEW MELNYK 1961 UKRAINIAN CAPITAL AND THE SOVIET ECONOMY BY Zinowij Lew Melnyk A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Accounting and Financial Administration 1961 H r r I ,‘n r .1]- w...) 9 I” Kid-n a.) i I! I, ii ACKNOWLEDGEMENTS This study was written under a fellowship granted by the Ford Foundation. However, the conclusions, opinions, and other statements are those of the author and are not necessarily those of the Ford Foundation. It is with great pleasure that the author expresses his appreciation of the assistance and guidance provided by Dr. John L. O'Donnell. The encouragement and help of Drs. Thomas Mayer and Donald A. Taylor, who also served on the dissertation committee have been of great value to the writer. Special gratitude is reserved for Mr. V. Holubnychy for his very real assistance throughout the study. Also, I am deeply indebted to my wife, Oksana, for the inspiration and invaluable help in the preparation of the manuscript. iii TABLE OF CONTENTS Page ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . ii LIST OF TABLES . . . . . . . . . . . . . . . . . . . . v INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 1 Chapter I. THE OBJECTIVES OF THE STUDY . . . . . . . . . . 6 The Statement of the Problem 6 The Period of Investigation 9 Ukraine in the Context of the Soviet Economy 10 II. THE SCOPE AND THE METHOD OF ANALYSIS . . . . . 16 The Aggregative Approach 17 The Economic Cross Section Method 23 The Institutional Approach 24 Capital Formation in a Socialist Economy 28 Capital Accumulation in the USSR and in the Ukraine 33 III. CAPITAL-FLOW ANALYSIS: UKRAINE VS. THE-REST-OF- THE-UNION. A. BUDGETARY REVENUES . . . . . 47 The Budgetary System of the USSR 49 The Turnover Tax 60 Deductions from Profits 85 IV. CAPITAL-FLOW ANALYSIS: UKRAINE VS. THE-REST-OF- THE-UNION. A. BUDGETARY REVENUES, Cont. . 115 State Loans 115 Transportation 138 Communication 15l Customs Revenues 155 Chapter V. CAPITAL-FLOW ANALYSIS: UKRAINE VS. THE-REST-OF- THE-UNION. B. BUDGETARY EXPENDITURES . . . Expenditures on National Economy Expenditures on Agriculture, Social and Cultural Services, and Defense and Administration VI. SUMMARY OF BUDGETARY RELATION IN THE UKRAINE VII. CAPITAL FORMATION IN THE UKRAINE . . . . VIII. CONCLUSIONS . . . . . . . . . . . . . . . APPENDIX . . . . . . . . . . . . . . . . . . . . . . BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . iv Page 162 163 171 180 187 196 200 260 3-2. LIST OF TABLES Turnover tax collections from food industry and agricultural procurements . . . . . . . . . Selected excise tax collections from food industry . . . . . . . . . . . . . . . . . Turnover tax collections in Ukraine . . . . . . Reallocation of turnover tax receipts to Ukraine from the all-Union budget . . . . . Profit taxes paid by all-Union and republican enterprises in Ukrainian SSR . . . . . . . Determination of profits of all-Union and republican enterprises . . . . . . . . . . Allocation of profits to Ukrainian SSR . Revenues from sales of government bonds in Ukraine and in the USSR . . . . . . . . . . The reallocation of revenues from sales of government bonds in the Ukraine between the state budget of Ukrainian SSR and the all-Union budget . . . . . . . . . . . . . . Allocation of expenditures on state loans from all-Union budget . . . . . . . . . . . . . Railroad traffic . . . . . . . . . . . . . . . The development of factors for allocating transportation revenues and expenditures to Ukrainian SSR O O O C O O O C O O C O O O O Computation of receipts and expenditures of transportation in the Ukraine . . . . . . . Page 68 71 77 80 109 112 113 117 133 135 142 144 149 Table II. III. IV. Allocation to Ukrainian SSR of receipts and expenditures of communication services Allocation of customs revenues, cultural and housing levies, income taxes, and other revenues 1928/29-1932 Depreciation allowances in the USSR and in the Ukraine Computation of appropriations for capital investments from all-Union and republican budgets during the first five-year plan Financing of the Ukraine's economy from the all- Union budget . . . . . . . . . . . . . Computation of financing of the Ukraine's agriculture by the all-Union authorities 1928/29-1932 Allocation of defense and administration, social and cultural services, and other expenditures Summary of budgetary relations in the Ukraine during the first five-year plan period Sources of capital formation in the Ukraine . . The unified state budget and the state budget of Ukrainian SSR. Analysis of budgetary revenues . . . . . . . . . . . . . . The unified state budget and the state budget of Ukrainian SSR. Analysis of budgetary expenditures . Industrial output . . . . . . . . . . . . . . . Retail trade turnover of state, co-operative, and private trading enterprises . . . . . vi Page 153 159 167 169 172 175 177 181 189 201 215 229 232 Table IV-B. VI. VII. VIII. IX. XI. vii Page Retail trade turnover of state, co-operative, and private trading enterprises . . . . . . 236 Output of grains . . . . . . . . . . . . . . . 237 Grain procurements by state . . . . . . . . . . 241 Wage fund . . . . . . . . . . . . . . . . . . . 243 Employment statistics . . . . . . . . . . . . . 248 Average annual earnings of workers and employees . . . . . . . . . . . . . . . . . 250 Population . . . . . . . . . . . . . . . . . . 252 Capital investments . . . . . . . . . . . . . . 255 INTRODUCTION The transformation of the USSR from an agricultural into a modern industrial state was frought with difficulties. Economic progress took place under the rigid central control of the Communist Party beset by dissension. This internal political unrest reflected unfavorably upon economic develop— ment and wellebeing of Soviet citizens. In addition, the isolation from the international money markets left no choice but to rely entirely upon domestic capital accumulations. Thus, in View of the widespread poverty and low productivity, the central government selected to undertake a number of measures designed to increase and direct the volume of capital formation as a means of ensuring the fulfillment of its plan to industrialize the country. The purpose of this study is to partially examine capital formation problems in the USSR by computing and evaluating capital accumulation in the Ukraine. Such an investigation brings to light both the unifying and centrifugal forces, the knowledge of which is essential to the understanding of the operation of the Soviet system. The study shows that such an analysis on a regional basis is possible in spite of inadequacies inherent in Soviet statistics. The Ukraine is a_natural focal point for such an analysis. She is the largest non-Russian nation behind the Iron Curtain, accounting for some 20 per cent of the total population of the USSR. Abundant and well diversified natural resources make her one of the richest countries in Europe. The Ukraine is known as an important producer of both industrial and agricultural products and is frequently referred to as the bread basket of Eastern Europe. Her export surpluses to the USSR and the rest of the world made an important contribution to balance of payments of the Soviet Union. The study covers the first five-year plan period extending from October, 1928, to December, 1932. This period marked the beginnings of an era of large capital accumulations and is characterized by the persistent efforts of the government to direct and increase the rate of capital creation in the country. Since most segments of the economy were socialized by the end of this era, some idea is thus obtained of the problems attending this transformation. In these respects the first five-year plan may be viewed as the richest period in the development and perfection of the methods and techniques of economic planning, administration, and control. The method of analysis is described in Chapter II. It involves an institutional approach to the study of capital formation. It includes an investigation of the budgetary system along with such other indicators of economic activity as capital investment, industrial output, retail trade turnover, and the like. All statistical information is gathered in the Appendix in Tables I — XI. The development of new industrial areas obviously required substantial capital movements within the USSR. Some regions were called upon by the central government to supply capital for economic development of selected backward areas without any hope of receiving repayment of principal or interest. It should be also noted that decisions regarding inter-regional transfers of capital were made unilaterally by the central government without representation of the wishes of the capital exporting republics. To this extent, it may be argued, these republics were subsidizing other areas at the expense of their own economic growth and welfare of local population. Chapters III-VI are devoted to an analysis of the extent to which Ukrainian capital was diverted to other parts of the USSR. This is accomplished by an extensive investigation of the budgetary system in the Ukraine. Whereas Chapters III and IV concentrate primarily on the revenue side of the budgets, budgetary expenditures are reviewed in Chapter V. Net capital exports from the Ukraine are obtained by way of summarising budgetary relations in' the Ukraine in Chapter VI. 4 Some important conclusions are drawn from the budgetary analysis. The evidence clearly indicates that agriculture was an important source of new capital along with industrial and personal savings. This in part explains the constant preoccu- pation of the Soviet government with agriculture in spite of the reluctance shown by Soviet officials in admitting the importance of agriculture in capital formation. As a major bread producing republic, the Ukraine obviously felt the impact of this loss of resources to a much greater extent than many other parts of the Soviet Union. The role of the financial reform of 1930 in both formation and geographic reallocation of capital becomes apparent. The great powers it vested in the all-Union budget permitted the central government to attend to its plans without interference from either republican or local authorities. Through the simplified tax structure and the concentration of the more important revenues in the all-Union budget, it (1) enabled the central government to direct the flow of capital and (2) provided the basis for raising the rate of capital formation through ever higher indirect taxation of the population, commodity taxation of agriculture, and pressures upon industrial management. The remaining elements of capital formation, such 5 as profits, depreciation reserves, and resources accumulated and invested in several segments of the economy, are discussed in Chapter VII. Chapter VIII contains major concluding observations based upon the entire analysis. There is no doubt that the Ukraine's capital accumulations played an important part in the Soviet economic development. Through expropriation of one third of the total capital formed in the Ukraine during this period, the central government financed 11.5 per cent of all capital investment in the socialized economy in the USSR exclusive of the Ukraine. Such a sizeable loss of capital undoubtedly hindered the development of the Ukraine's own economy. Put differently, the Ukraine's capital exports equalled 53 per cent of all capital investments in the Ukraine, or over nine-tenths of total investments in her industry. CHAPTER I. THE OBJECTIVES OF THE STUDY The Statement 9: the Problem It is a matter of record that the Soviet Union has attained the status of a leading political and economic power. The transformation of the USSR from an agricultural society into a modern, industrial state was accompanied by a number of events which helped to mold and solidify the country. Economic progress took place under the rigid central control of the Communist Party beset by dissensions. At the same time,there was widespread poverty, low productivity, a chronic lack of capital, plus political unrest caused by the central government's attempts to suppress the national aspirations of non-Russian peoples. In addition, rehabilitation and development of the already feeble. backward economy had to depend primarily on domestic capital accumulations as the lending nations were not willing to assist the new Communist regime. All foreign investments were discontinued after the October Revolution, and the USSR lost access to the international money markets. Because of internal struggles and political pressures from abroad, Soviet participation in foreign trade was also sharply reduced from its pre-World War I levels. It is surprising, therefore, that Soviet finances 7 attracted so little attention among Western scholars. Problems of capital formation in particular have been left virtually untouched. The purpose of this study is to partially fill this gap by shedding some light on capital creation in the USSR. However, this study differs from most other studies of Soviet economic problems in that it concentrates exclusively on the Ukraine:1 as a case study. Thus, the main objective of the present analysis is computation and appraisal of capital formation in the Ukraine. An investigation shows that such an analysis on a regional basis is possible in spite of in- adequacies of Soviet economic statistics. The second aim is to gain an understanding of the origins and the relative importance of the various sources of capital. Although Soviet authorities usually refer only to savings of industry and population as Sources of capital creation, it is expected that agriculture was also one of the more important suppliers of new capital. As a matter of fact, it is suggested that the prospect of extracting capital resources from 1It should be borne in mind that the study covers only Ukrainian Soviet Socialist Republic in the 1921-1938 borders. .As such, it does not include parts of Ukraine occupied at the‘ time by Poland, Czechoslovakia, and Rumania, or even those parts which were incorporated into Russian SFSR. At the time Ukrainian SSR comprised 60.8 per cent of total Ukrainian territory. (Entsyklopediya Ukrayinoznovstva (Encylcopedia of Ukraine) (Munich + New YOrk: Shevchenko Scientific Society, 1949), I, p. 25. 8 agriculture was a major consideration in the Kremlin's decision to embark upon forced collectivization. The third objective is to determine whether the Ukraine was a capital importing or exporting nation. This can be accomplished by striking a balance between the central govern- ment's revenues and expenditures in the Ukraine. The findings will reflect in part upon Ukraine's contribution to the economic development of the USSR. Also, they will assist in identifying both the dimensions and directions of the capital flow accompanying industrialization of the Soviet Union. The fourth objective is to show the manner in which the financial reform of 1930 assisted the central government (1) in directing the flow of capital throughout the USSR and (2) in raising the rate of capital formation by increasing the level of forced savings. It appears that this reform greatly facilitated the revival of an old Russian practice of expropri- ating the wealth of non-Russian nations and employing it to . 3 RuSSia's own advantage. 2It is hoped that later similar studies on other national republics and important industrial areas will facilitate a closer analysis of the effectiveness of Soviet capital investment. 3In this connection the reader is referred to an ex- tensive analysis of this subject by N. L. Fr.-Chirovsky (The Economic Factors-in the Growth 2; Russia (New Yerk: Philoso- phical Library, Inc., 1957). Lastly, the study will illustrate as far as possible the inequities and disparities that exist among the national economies comprising the complex Soviet economy. The knowledge of both the unifying and centrifigual forces is essential for a thorough understanding of the operation of the Soviet system. For the USSR, a multi-national state, has come to serve basically the interests of Russian minority mainly owing to the successful marriage of Communist ideology and Russian nationalism.4 Of course, many conflicts arose in the past out of the Kremlin's pursuit of the centralist policies framed in defiance of the federal principles upon which the USSR was organized. By presenting the factual material on Ukraine's position in the USSR during this period, the study will add to the history of economic relations between Ukraine and Russia. The Period 2; Investigation The study covers only the first five-year plan period. This period marked the beginnings of an era of large capital 4 N. L. Fr.-Chirovsky, ibid., pp. 140—141; Louis Fischer in Richard Crossman (ed.), The God That Failed (New York: Bantam Bodks, 1959), pp. 193-194; H. Kostiuk, Stalinist Rule in the Ukraine (New York: Frederick A. Preager, 1960), especially pp. 2-3, 38, and 71-73; Ya. Shumelda, gig Marksa ggIflglgnkgyg (From Marx to Malenkov) (Paris: Persha Ukrayins'ka Drukarnya u Frantsiyi, 1955), pp. 124, 136, 143-145, 169-170: Roman Smal- Stocki, The Nationality Problem 2f the Soviet Union and Russian Communist Imperialism (Milwaukee: Bruce Publishing Corp., 1952). 10 accumulations and rapid industrialization. It is characterized by the persistent efforts of the government to direct and increase the rate of capital creation in the country. Indeed, capital expenditures did not exceed capital consumption in the industry in any important amount until 1925/26.5 Also, by the end of this era most segments of the economy were socialized. In slightly more than four years the New Economic Policy economy was transformed into a rigidly controlled, planned, socialized economy. It is expected, therefore, that information pertaining to those years will contain both problems attending such transformation as well as adaptations to them. In this respect, the first five-year plan era may be viewed as the richeSt period in the development and perfection of methods and techniques of economic planning, administration, and control. Ukraine in the Context Qfi the Soviet Economy The Ukraine is a natural focal point for such a study. She is the largest non-Russian nation not only in the USSR but also behind the Iron Curtain. In the inter—war period 5R. S. Livshits, Ocherki pg_razmyeshcheniyu promyshlen- nosti SSSR (Essays in distribution of industry in the USSR)(Gosu- darstvyennoye Izdatel 'stvo Politicheskoy Literatury, 1954), p. 117. 11 Ukrainian SSR occupied.4431 million square kilometers6 and her population accounted for 20 per cent of the total USSR population.7 Abundant and well diversified natural resources make her one of the richest countries of Europe. In industrial output she ranked highly among the leading industrial centers of both Imperial Russia and the USSR. In 1913, she produced 68.4 per cent of Russia's pig iron,8 70.3 per cent of coal,9 and 64.1 per cent of iron and steel.10 Comparable ratios for1933 are as follows: 60.5 per cent of pig iron, 67.0 per cent of coal,12 and 49.2 per cent of steel.13 0n the other hand, even though the Ukraine contributed in 1912 only 18.2 per cent of Russia's output of machine tool industry, she produced in that year 52.5 per cent of Russia's agricultural machinery and equipment, 31 per cent of steam locomotives, 16 per cent of industrial machinery and equipment, and 13.2 per 6Entsyklopediya Ukrayinoznavstva, I, pp. 25, 164. 7Table X. 8Sotsialisticheskoye Stroitel'stvo SSSR, 1935, p. 176. 9Entsyklopediya Ukrayinoznavstva, I, p. 1086. 10 . . . R. S. LIVShltSIIQE. c1t.. p. 101. llSotsialistiCheskoye Stroitel'stvo SSSR, 1935, p. 176 12Entsyklopediya Ukrayinoznavstva, I, p. 1086. l . . . . 3SOtSlallSthheSkae StrOitel'stvo SSSR, 1936, p. 137. 12 . . . 14 . _ per cent of shipbuilding. More importantly, whereas the Northwestern region operated in many instances on imported materials and fuels and the Central region on metals from the . . 15 . . Ukraine and the Ural region, Ukrainian output was based on Ukraine's own resources. The Central region which was the more important of the other two areas contributed in 1912 only 37 per cent of output of all manufacturing industries in . 1 . . . RuSSia. 6 Its importance was, indeed, even smaller when it is noted that 60 per cent of this contribution originated in the textile mills.l7 The Ukraine also stood out in production of food stuffs and was frequently referred to as the bread basket of Eastern Europe. For example, her share in Russia's sugar output in 1913 was quite impressive--81.5 per cent.18 The significance of the Ukraine in the Empire's economy 14R. S. Livshits, pp. cit., pp. 104-105. lsIbid., pp. 64, 77. 8Computed from information contained in Tsentral'noye Statisticheskoye Upravleniye pri Sovyete Ministrov SSSR, Narod- noye Khozyaystvo SSSR y 1956 godu (National economy of the USSR in 1956) (Moscow: Gosudarstvyennoye Statisticheskoye Izdate1'- stvo, 1957), p. 99. 13 is also illustrated by the fact that she has continuously shown an active foreign trade balance both with Russia and with the rest of the world. For example, estimates show that the Ukraine's net exports ran in 1909-1911 at the rate of 319 million rubles per year, of which only 57 million rubles applied to the rest of the Empire. In 1912, Ukrainian exports exceeded imports by 260 million rubles, while a comparable figure for 1913 was 375 million rubles.19 It was estimated that without this substantial Ukrainian contribution to Russia's foreign trade, Russian Empire would have run in 1913 a foreign trade deficit of 268 million rubles.20 Communism had little ground for success in the Ukraine . . . . 21 . . Without RuSSian intervention. The role of RuSSians in the victory of Communist forces in the Ukraine is evident from 19K. Kononenko, Ukraine and Russia (Milwaukee: The Marquette University Press, 1958), p. 224. 201. Mirchuk (ed.), Ukraine and Its People (Munich: Ukrainian Free University Press, 1949), p. 200. 1The reader is referred for example, to the following sources in English: J. Borys, The Russian Communist Party and the Sovietization 9: Ukraine (Stockholm: Kungl. Boktryckeriet P. A. Norstedt and Sdner, 1960): C A. Manning, Ukraine Under the Soviets (New Ybrk: Bookman Associates, 1953); V. Hryshko, Experience with Russia (New YOrk: Ukrainian Congress Committee of America, Inc., 1956): J. S. Reshetar Jr., The Ukrainian Revolution, 1917-1920 (Princeton: Princeton University Press, 1952). 14 the following examples. In the elections to the All-Russian Constituent Assembly in November-December, 1917, Bolsheviks received in the Ukraine only 10 per cent of votes while their successes in Russia were much more impressive: 40-44 per cent in the Northern and Central regions.22 In June of 1918 the Communist Party of the Ukraine numbered only 4,364 men.2 By April 1, 1922, i.e., after the final conquest of the country, its membership rose to 54,818.24 In 1922, only 23.3 per cent of the Party members in the Ukraine were Ukrainians; Russians, on the other hand, accounted for 53.6 per cent of Party member- ship.25 At the time, Ukrainians constituted 80 per cent and Russians 9.2 per cent of the total population of Ukrainian SSR.26 Indeed, Ukrainians took to arms on numerous occasions in defense of their lost freedom long after the country was brought under Russian domination in 1919—1920. Thus, from 22J. Borys, 22° cit., p. 159. 23D. F. Solovey, Ukrayina y systemi sovyets'koho koloni- yalizmu (Ukraine in the system of Soviet colonialism) (Munich: Instytut dlya vyvchennya SSSR, 1959), p. 29. 4J. Borys, 92, cit., p. 155. 25Ibid. 26Entsyklopediya Ukrayinoznavstva, I, p. 164. 15 April 1, to June 19, 1919, alone,Soviet authorities reported 328 uprisings in the Ukraine.27 In 1923 Communists admitted that in 1921 there were 6,000 rebel organizations in the Ukraine.28 Similarly, numerous rebellions broke out in the Ukraine in early 1930 in opposition to forced collectivization of agriculture.29 In fact collectivization in the Ukraine could have been accomplished only with the assistance of non- Ukrainian agents brought into the area by the Soviet government mainly from Russia.30 27D. F. Solovey, QB. cit., pp. 45-46. 28Ibid., p. 47. 29 . . K. Kostiuk, pp. Cit., pp. 10-12. 30 J. A. Armstrong, The Soviet Bureaucratic Elite (New York: Frederick A. Preager, 1959), p. 61; H. Kostiuk, gp. cit., pp. 27-30. 16 CHAPTER II THE SCOPE AND THE METHOD OF ANALYSIS The value of newly formed capital in an economy may be estimated with the assistance of one or more distinct methodo- logical approaches. For example: 1. A common method of attack involves an analysis of the aggregate statistics concerning the economy that is analyzed. In such a case, certain values are consulted in an effort to arrive at that portion of the gross national product or the national income that is being devoted to further accumulation of capital and is not being currently consumed. 2. Another method of approach represents an analysis of the process of capital accumulation by the individual industries. Such an analysis reveals contributions of each segment of the economy to the total value of the newly formed capital during a particular period. 3. A third method can be defined as an "institutional" analysis of the process of capital formation. This method helps to identify the individual sources of capital accumulation according to the socio-economic nature of each source; e.g., profits of agriculture and industqz, sources gathered and l7 allocated through some politically controlled economic insti- tutions (the budgetary system, the methods of taxation), capital-flow relationship with other economic systems, and the like. If properly designed, all such methods of analysis should yield equally valid, comparable,and reasonably close sets of estimates. Variations among results should be readily explainable; and the differences, if any, could then be traced to underlying assumptions. Consequently, other things being equal, reasons for selecting one or another method of analysis need not rest upon considerations of validity of the results to be obtained. Instead, selection may rest upon specific conditions and circumstances surrounding the investigation, the nature of the economy under consideration, the availability of required data, and, possibly, intentions as to continued utilization of findings in some further research and analysis. The Aggregative Approach It should be recognized that the selection of an appropriate method for compiling the values of capital formed in the Ukraine is difficult not only because of the peculiarities of the Ukraine's economy but also due to the nature of the Soviet economy. 18 Even a cursory investigation of the writings on the rate of growth of the Soviet economy as well as on the national income statistics of the Soviet Union reveals an unusual lack of agreement among the various Western students of the USSR. This is in addition to the frequent and considerable differences between the Western estimates and the official Soviet pro- nouncements. Such variations in opinions are predicated first of all on the differences in the assumption as to the validity For greater understanding of the problem of measuring national income and production of the USSR see, for example: Abram Bergson, Soviet National Income and Product in 1937 (New York: Columbia University Press, 1953); Abram Bergson and Hans Heinmann, Soviet National Income and Product 1940- 1948 (New York: Columbia University Press, 1954): A. D. Bi- limovich, Era pyatiletnikh planov y_khozyaystvy§ SSSR (The era of the five-year plans in the economy of the USSR), Part I, Ch. 3 (Munich: Institute for the Study of the USSR, 1959); Collin Clark, A Critique 9: Russian Statistics (London: Mac- Millan and Co., Ltd., 1939); Gregory Grossman, "National In— come" in Abram Bergson (ed.), Soviet Economic Growth (Row, Peterson and Company, 1953), pp. 1-237 Donald R. Hodgeman, "Industrial Production" in Abram Bergson (ed.), Soviet Economic Growth (Row, Peterson and Company, 1953), pp. 225—244; Naum Jasny, The Soviet Economy During the Plan Era (Stanford: Stanford University Press, 1951): Naum Jasny, The Soviet 1956 Statistical Handbook, A Commentary (East Lansing: Michigan State University Press, 1957); Warren G. Nutter, "Some Observations on Soviet Industrial Growth," American Economic Review, 2 (May), 1957, reprinted by the National Bureau of Economic Research, Inc., as Occasional Paper 55: Warren G. Nutter, "Measuring Production in the USSR; Industrial Growth in the Soviet Union," American Economic Review, 2 (May), 1958. 19 and accuracy of Soviet statistics. The degree of confidence with which a Western economist approaches Soviet statistical information is largely determined by the degree of his mistrust of the basic Soviet statistics. It is also assessed by his critical evaluation of the methods employed by Soviet economists in constructing various aggregative values and indices. Consequently, differences of opinion among Western writers may also arise out of variations in factors used to deflate and/or to correct Soviet official statistics in an effort to eliminate inflationary bias. Under these circumstances an aggregative approach to the analysis of capital formation may yield rather arbitrary and far-from-conclusive results. In addition, differences between the methods of computa- tion of national income in the Soviet Union and in the West2 may produce variations in statistics large enough to render international comparisons rather burdensome. Moreover, a reader not adequately informed or else unaware of such differ- ences in statistical methods may easily become misled by a set of values estimated with reference to the national income. 2Wsewolod Holubnychy, "Das Volkseinkommen der Ukraine in den Jahren 1940 und 1954," Sowiet Studien, 2 (March), 1957, pp. 115-138. 20 For example, national income of the Ukraine for 1940 and 1954 computed in accordance with the methods established by the United Nations is valued at 70.6 billion rubles and 141.9 billion rubles respectively. If recomputed according to the Soviet methodology, the Ukraine's national income for the same years is estimated at 96.7 billion rubles and 197.2 billion rubles.3 Thus, our estimates of capital accumulations in the Ukraine, when expressed relative to her national income, may, indeed, become so confusing and hypothetical as to impose some serious limitations with respect to their practical applica— bility. However, unavailability of the necessary statistics poses the most formidable obstacle to the assumption of the aggregative approach in our analysis of the Ukraine's capital formation. Throughout the years official Soviet statistical agencies4 have failed to exhibit any substantial interest in computation and evaluation of national incomes for individual 31bid., pp. 119—120. For a concise review of the history and statute of Soviet statistical agencies see Vsevolod Holubnychy, "Govern- ment Statistical Observation in the USSR: 1917-1957," American Slavic and East European Review, 1 (February), 1960, pp. 28- 41. 21 constituent republics of the Soviet Union. As a result, Soviet statistics traditionally contain national income information only on the all-Union level. This is not to say that the state of available statistical data is such that national income for the Ukraine may not be computed at all. Various statements, source material, and incomplete references, are found widely scattered in a number of official publications, books, and individual research papers. However, too few attempts have been made in the past to present a reasonably complete and consistent picture of Ukraine's national income.5 Such estimates refer primarily to the pre-planning era. Interpretations of Ukraine's national income statistics by M. Volobuyev were the last ones that were found by this writer;6 they were met with hostility by the top-ranking members of the Communist party. Having stirred up significant controversy, they were eventually 5The only known to this writer include: V. S. Myshkis, "Balans narodnogo khozyaystva Ukrainy" (Balance of Ukraine's national economy), Khozyaystvo Ukrainy, 1, 1928, pp. 46-80; 2, 1928, pp. 47-82; B. V. Sihal, "Zarobitna plata, yak element narodn'oho prybutku" (Wage as a component of national income). Hospodarstvo Ukrayiny, 8-9, 1930, pp. 149-167. 6My‘kh. Volobuyev, "Do problemy ukrayins'koyi ekonomiky" (On the problem of Ukraine's economic status), Bil'shovyk Ukrayiny, 2, 1928, pp. 46-72: 3, 1928, pp. 42-63. It is probable that Ukrainian economists and statisti- cians in the USSR continued to work on the estimates of nation— al income of the Ukraine at least until 1931. However, this writer has been unable to verify this claim. 22 condemned by the Party.7 Evidently, the only estimates of Ukraine's national income in the free world are those computed by W. Holubnychy for the two years, 1940 and 1954.8 As a matter of fact, the apparent lack of consistent and authoritative statistics on the Ukraine's national income prompted W. Holubnychy to proceed in his own analysis on the assumption that national income for the Ukraine had not been computed during the era of SoViet economic planning. Inasmuch as the computation of the Ukraine's national income is certainly beyond the scope of this paper, the aggregative method can hardly be considered as suitable for the present analysis. 7Following heated discussion and attacks from his fellow-party-members, led by M. Skrypnyk and And. Richyts"kyi, M. Volobuyev "confessed" in his article, FProty ekonomichnoyi plyatformy nationalizmu" (Against an economic platform of 3"' nationalism), Bil'shovyk Ukrayiny, 5-6, 1930, pp. 54—69; 7, 1930, pp. 28-40. 8Wsewolod Holubnychy, "Das Vblkseinkommen der Ukraine in den Jahren 1940 und T954," Sowjet Studien, 2 (March), 1957, 9Ibid., p. 115. 23 The Economic Cross Section Method It is doubtful that, under the circumstances, the economic cross section method could be applied with any reasonable degree of success to the case of the Ukraine specifi- cally, or the Soviet Union in general. Objections to this method may be raised not only with respect to adequacy in measuring production, but also, and to an even greater extent, concerning the degree of the researcher's confidence in the validity of the basic statistical data: the accuracy, propriety, and consistency of statistical reporting by in- dustrial enterprises and other primary reporting units. Moreover, outside of a breakdown of information along some very general lines of classification of industries (such as heavy industry and light industry) Soviet statistics are not very generous to the researcher. In addition to the problems of reconstructing Soviet data in accordance with his own classification of industries, the researcher would be re- quired to cross the nationality borders within the Soviet Union. The necessity of such redistribution of statistical information by the individual republics will add to the difficulties in analysis. Since a great deal of arbitrary allocations would be required, there may also be some doubt cast upon the validity of findings. 24 The Institutional Approach The analytical framework developed for this study follows closely the institutional approach described at the beginning of this chapter. This decision is based in part on the problems of statistical measurements and statistical observations in the USSR. More important, the institutional approach reflects the nature of the Soviet economy and the manner in Which specific decisions concerning economic and social policies are reached in the Soviet Union. The Soviet economy is required to operate in accordance with the planning concept. This concept may in part be responsible for the difficulties in compiling the individual components of the process of capital formation by branches of the economy. For example, the picture of capital creation by industries, if viewed from the position of our Western standards, will be distorted at least to the extent of the Soviet state's influence on the economy through the medium of price-setting policies and practices. In a socialist economy the price is established in the order of planning . . . . Price represents one of the most significant economic categories which the socialist state has mastered and consciously utilized in the interest of the communist construction, treating it as subservient to the is requirements of the economic laws of socialism.10 According to Suchkov, Socialist state exerts its influence on the development of the branches of the national economy as well as of the economies of the individual republics and regions through the establishment of planned deviations between prices and costs . . . .11 Although planning bodies often take into account the general conditions on the market,12 they seldom allow prices to be determined by the free interplay of supply and demand. Consequently, prices may not necessarily reflect costs and relative advantages in production. . . . In our country the sphere of operation of the law of value is limited by the social ownership of means of production, and by the law of balanced development of the national economy, and is consequently also limited by our yearly and five-year plans, which are an approx- imate reflection of the requirements of this law. 10A. V. Bachurin, Pribyl"i nalog g Oborota y SSSR (Profit and turnover tax in the USSR) (Moscow: Gosfinizdat, 1955). p. 31. 11 A. Suchkov, Dokhody gpsudarstvyennogo byudzheta SSSR (Revenues of state budget of the USSR) (Moscow: Gos- finizdat, 1955), p. 161. 2In an extensive analysis of the Soviet budgetary system R. W. Davies conclueds: "Examination of Soviet prac- tice discloses that turnover tax was often used to bring about major adjustments of supply and demand when these were out of equilibrium . . . .” R. W. Davies, The Development 9: the Soviet Budgetary System (Cambridge: Cambridge University Press, 1958), p. 285. 26 Indeed, the role that price is allowed to play in formu— lating and carrying out economic policies is rather significant. It is described by A. Suchkov as follows: In a socialist economy price serves as the most important instrument of planned distribution of the nation- al income as well as of ascertainment of the value re- lationships between consumption and accumulation. Through the use of price, consumption of goods and services is regulated; the necessary proportions in the structure of consumption are determined by the aid of purposeful establishment of relationships among the prices for goods The picture is further complicated by a deliberate maintenance of the relatively low prices for producers' goods and the concurrent imposition of a turnover tax mainly on . 16 . consumers goods. The profit and the turnover tax closely resemble each other since they both (a) constitute the residual over and above costs, and (b) originate in the "net income . . . l . of the SOCialist soc1ety." 7 However, whereas profit 3Joseph Stalin, Economic Problems p: Socialism ip the USSR (New York: International Publishers, 1952), p. 22. 14 . Suchkov, pp, cit., p. 161. 15Bachurin, pp,<:it., p. 51. 16Ibid., p. 61. 17 Bachurin defines net income of a socialist society as "that part of a country's gross, or national income which is produced for the society by labor and is utilized for the pur- poses of accumulation and formation of the consumption fund." Ibid., p. 18. 27 reflects results of operations of an enterprise regardless of the nature of its product, the turnover tax is collected mainly at the point of sale of consumers' goods. Further- more, all proceeds from turnover tax are directed towards national needs and requirements.18 Hence, the difficulty of allocating turnover tax revenues to specific industries constitutes a serious problem. Finally, the institutional approach is preferred be- cause the Ukraine's economy shares with the economies of other national republics the doubtful honor of being a semi-closed system. The Ukraine's economy retains characteristics of a closed, self-contained economic system at least to the extent that the Ukraine possesses minimum control over her economy and is allowed to determine partially her own economic policies. On the other hand, the Ukraine's economic system is open at least in cases where the all-Union government (a) directly controls and influences a significant part of the Ukraine's economy, and (b) is permitted to condition and to overrule decisions of Ukrainian government regarding its economic policies on account of some real or avowed all-Union requirements. 18Bachurin,pp. cit., p. 61. 19It is evident from the above that the definition of a closed (or an open) system as used in this paper is based 28 Thus, the Ukraine may be called on to subsidize other parts of the Soviet Union without any compensation. In turn, she may be subsidized by them; all at a decision of the all-Union authorities with or without an explicit consent of Ukrainian government and due consideration of the interests of Ukrainian nation. Such a peculiar position of the Republic within the framework of the Soviet Union calls for some careful analysis of economic relations on the inter-republics level (or, Specifi- cally, the Ukraine vs. the-rest-of—the-Union). Economic develop- ments and phenomena of international character (external to the Ukraine's economy in their nature) can be analyzed most con- veniently with the assistance of the existing economic institutions. Capital Formation i p_Socia1ist Economy In a socialist-type economy, where a single government replaces a multitude of private decision-makers in the course of day-to-day operations of enterprises (in addition to the precise formulation of all the questions regarding economic on the degree to which the nation in question (or its govern- ment) is capable of formulating economic policies as well as exercising necessary administrative controls over economic institutions on its own territory. Whereas it is not influenced to any degree by such nation's participation in the international economic relations, this term is neither pynonymous nor mutually exclusive with the concept of economic autarchy. 29 policy), the rate of capital formation is also set by a planning agency of the government. On the one hand, the rate of capital formation may be set directly. In such a case, all other factors like wages and price levels, profitableness of the enterprises, level and methods of direct and indirect taxation will be adjusted by a government decree, or otherwise, at the point at which they are jointly capable of sustaining the pre-determined rate of capital formation. On the other hand, the rate of capital accumulation may be allowed to adjust freely to the level determined by the inter-relationship of all the above enumerated factors, fixed individually or severally on their own merits. In the absence of external means of financing, as was largely the case with the USSR, national income constitutes the ultimate source of new capital. Indeed, "the dimensions of socialist accumulation depend on the general magnitude of the national income produced by the Soviet society and the relative weight of the part [of national income] which is accumulated."20 As long as the government retains sufficient control 20 . . . . . N. Ryabov, SotSialisticheskoye nakopleniye p yego istochniki y pyervoy i vtorgy pyatiletkakh (Socialist ac- cumulation and its sources in the first and second five-year plans) (Gosudarstvyennoye Izdatel'stvo Politicheskoy Litera- tury, 1951), p. 79. 30 over the economy, the two possibilities may be equally ac- ceptable, provided economic conditions remain ideal or nearly ideal. In practice, however, the choice becomes mainly a matter of emphasis and is likely to depend on purely practical considerations. Thus, once a definite decision has been made by the Soviet government to proceed on the basis of accelerated, forCeful industrialization, the question of securing the necessary capital for industrial expansion has become of primary importance. Consequently, it became highly impractical to let the rate of capital formation be "determined" by the interplay of these other factors. To be sure, because of limited flexibility of these other factors, the rate of capital formation may not have always been a "determinant" of these factors to the extent that economic planners would have liked it to be. Nevertheless, maximum control over the factors influencing the rate of capital ac— cumulation seems to have been an expected consequence of the rapid industrialization. Under conditions of total planning of economic activities in the country, it becomes immaterial from the point of View of pure theory whether such accumulations are realized at the point of production or at the point of sale of goods.21 v. to» A. o- i ‘ Ni u; p ‘ 1 i ) 31 Under the first possibility, expansion of industries will take place on account of profits accumulated in the industry. Planning authorities will be required in such a case to exercise extreme care in setting prices for various goods and services exactly at the level which will permit accumulation of profits in each industry in the amount precisely corresponding to its planned investment. Under the second possibility each industry will be required to release its output at cost and the differences between costs and sales prices will enter the state treasury in the form of special tax as an integral part of the price to the consumer. Hence,all investments will be financed centrally in the form of subsidies from the state budget. It is obvious that the selection of an appropriate method for collecting the new accumulations in a socialist society is influenced primarily by the following factors: 1. The degree of control which the government possesses or desires to possess in the sphere of economic decisions; 2. The availability of the necessary channels for collecting and allocating investment funds; 2 . . . . . 1For a brief discuSSion of this see: R. W. DaVies, QB. cit., pp. 147-152. 32 3. The reliability of the general economic and financial 4. The ease (or difficulty) with which other factors can be adjusted to bring about the conditions of equilibrium on the market; 5. The relative rates of expansion of various industries; 6. The nature and stage of industrial development, and the general conditions of the economy. With the particular emphasis on rapid development of heavy industry as the base for further industrialization22 and the prevailing state of financial institutions in the USSR at that time, neither of the above indicated "pure" models could have been acceptable to the Soviet government. Ac- cordingly, the system that developed embodied elements of both models; it modified in response to changes in economic conditions and institutions. Historical evidence clearly indicates that this systenlshifted consistently towards the 22"The main link in the five-year plan," said Stalin, "was heavy industry, with machine building at its core. For only heavy industry is capable of reconstructing both indus- try as a whole, transport and agriculture, and of putting them on their feet. . . ." Joseph Stalin, m (Moscow: F'ereign Languages Publishing House, 1955), XIII, p. 177. 33 second model. Capital Accumulation pp the USSR and pp the Ukraine The Communist Party of the Soviet Union (C.P.S.U.) attempted to deal with the question of new capital accumu— lations, which were required for industrialization, as early as December, 1925, when it convened for its XIV Congress. Thks Congress indicated in its resolutions several means for resolving this foremost problem. At that time, according to Suchkov,23 there were essentially three sources of "socialist accumulations.” These included: (a) internal accumulations in the socialized industry, (b) mobilization of the resources of other branches of the economy by means of the state budget, and lastly (c) utilization of the resources of the population by inducing their accumulations in the savings banks, in co- operatives, in other financial institutions (the credit system), or through the sale of government bonds. In the succeeding years the turnover tax was added as another source of new capital. In part, this came about as a 3 2 Suchkov,-pp, cit., pp. 78-79. 34 further categorization of accumulations of the socialized sector of the economy. However, the need for separation of the turnover tax from profits was indicated much more em- phatically by the very nature of the turnover tax. As time went on, the turnover tax assumed the role of successor to its counterpart in the previous taxation of industry24 and to the various excise taxes with all the implications of their fisca1,regulatory, and discriminatory objectives. Thus, revenue raised from the turnover tax on any particular type of product was a function of its quantity sold, its selling price, and the applicable rate of the turnover tax. More importantly, the turnover tax came to assume the role of an economic lever which was used to bring about . . . . 2 an equilibrium in the market. 5 Such a role of the turnover 24E.g., the "equalizing" element of the Promtax which was imposed on an enterprise in a ratio to its turnover, as opposed to the other part of Promtax called "licence fee." 25mm explanation as to the role that this tax played in the financial relations of the Soviet economy, and the reason why the gap between costs and retail price is as large as it is," writes M. Dobbs, ”provides an important key to under- standing that crucial 'balance of income and expenditure of the population' and its relation to the current supply of consumption goods, which . . . lies at the heart of the financial problem." Maurice Dobb, Soviet Economic Develop- ment Since 1917 (New York: International Publishers, 1948), p. 361. 35 tax was facilitated by its eventual flexibility both in theory and in practice. Because the turnover tax was an integral part of the price to the consumer, it also acted as a means of confiscating the rapidly widening gap between the total wage fund and the supply of consumers' goods. In this respect, i.e., the confiscation of the purchasing power of the population, the turnover tax was probably a,more ef- fective tool of economic policy than some other means of withdrawing from circulation the excess of wages and other payments to the population. As a matter of fact, it was this very feature of the turnover tax in its improved version that was in part responsible for the abolition of rationing of consumers' goods in 1935. Needless to say, the importance of the turnover tax was complementary to the decisive role of controlled prices as a means of redistributing the national income. Moreover, it was largely through the turnover tax that prices performed their valuable services in the "forma- tion and redistribution of the monetary incomes of enterprises, organizations, and population."26 Hence, its importance as a source in the process of capital formation is self-evident. 26Suchkov, pp, cit., p. 12. 36 Finally, as a component of the state budget, the turnover tax was an important revenue producing agent for the treasury. . . . To any given wage-bill and plan for production, investment, and services for the country as a whole, there corresponds an appropriate level of retail prices and average rate of turnover tax at which total supply and demand on the retail market will balance and the required budget revenue will be received . . . . With a given output of consumer goods, the pattern of tax rates had to be so coordinated that the tax on all goods taken together reached the required level. The above enumeration of the sources of newly formed capital may be considered as reasonably complete for the entire USSR, or, for that matter, for any similar economy, provided it represents a closed economic system. Hewever, a study of capital formation in the Ukraine will not be complete until the movement of resources between the Ukraine and the rest of the Union is explained. As pointed out earlier, an expla- nation of capital movements among the republics is needed not only because of the semi-closed nature of the national economies of the individual republics, but also due to the generally non-compensatory feature of these transactions. 27Davies, pp,<:it., pp. 216-217. 37 To summarize, the analysis will necessarily include the following considerations: (1) Net capital-flow relationship between the Ukraine and the rest of the USSR; (2) Internal accumulations of industry and agriculture, not entering the all-Union system of collections; (3) Mobilization of the resources of population not ac- counted for under (1) above; and (4) Other sources of capital formation (government insurance agencies). 1. The net capital-flow relationship will be determined through the analysis of the budgetary system. This will in- clude an extensive investigation of the revenues and expenditures sides primarily of the all-Union budget and the state budget of the Republic. The local budget will be consulted only to the extent of the inter-budgetary transfers from the all- Union budget (usually by means of the state budget of the Republic). A serious lack of direct and accurate information con- cerning territorial contributions to the all—Union budget should be noted immediately. Outside of a few, sporadic, and widely scattered notes on individual items in the budget, very 38 little has been published containing systematic analysis of all budgetary revenues by the individual republics.28 But even that which is available in limited quantity cannot be used indiscriminately, as it probably does not accurately represent the territorial origins of the proceeds. The reason for such unreliability of available statistics in this respect is the method of reporting budgetary revenues by the statistical agencies. At that time all revenues were reported in accordance with the cash method, whereby proceeds were allocated to the republic in which the paying office was located.29 With many 28See: Vestnik Finansov, 3, 1928, pp. 156-159: 2, 1928, pp. 157-158; 6, 1929, Pp. 194-197; 9, 1929, pp. 118-121. The last period covered in this source refers to the first nine months of l928/29 fiscal year (October 1, l928-June 30, 1929). Some indications are also provided in: Ob'yasnitel'naya zapiska k proyektu yedinogo gosudarstvyennogo byudzheta SSSR pp_l928(29 .pyudzhetnyi god (Explanatory note to the project of unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Izdatel'stvo Soyuza SSR, 1928); Yedinyi Gosu- darstvyennyi byudzhet Soyuza Sovyetskikh Sotsialisticheskikh Respublik pp 1928/29 byudzhetnyi god (Unified state budget of the USSR for l928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Isdatel'stvo Soyuza SSR, 1928): Yedinyi gosudarstvyen- nyi byudzhet Soyuza Sovyetskikh Sotsialisticheskikh Respublik .pp_l929/30 god (Unified state budget of the USSR for 1929/30) (Moscow: Gosudarstvyennoye Finansovoye Isdatel'stvo SSSR, 1930). 29A. Abulyak, "Rekonstruktsiya finansovoy sistemy v rayonnom razreze" (Reconstruction of financial system in regional cross section), Planovpye Khozyaystvo, 6, 1930, p. 97. 39 industries centralized under direct superVision of Moscow, Russian SFSR probably was automatically credited with an unusually high proportion of the total contributions to the all-Union budget as far as indirect taxes and levies were concerned. This was true because indirect taxes and levies were considered to be all-Union sources of revenue. As an example, during the first nine months of l928/29 fiscal year, the Ukraine was reported to have contributed 135.1 million rubles of excise taxes out of 1,245.6 million rubles collected in the USSR, or about 10.9 per cent.30 Obviously, this is highly improbable, if we take note of the fact that population of the Ukraine, as of April 1, 1928, was estimated as 19.73 per cent of the total population of the USSR. The shares of the Ukrainian SSR in the gross output of Soviet industry and agriculture in 1927/28 were 19.1 per cent and 19.56 per cent respectively;31 while in l928/29 the Ukraine contributed 20.65 30Vestnik Finansov, 9, 1929, pp. 118, 121. 31Gross output of industry is valued here in 1926/27 prices while that of agriculture in 1927/28 prices. Gosplan SSSR, Pyatiletniy plan narodno-khozyaystvyennogo stroite1'- stva SSSR (Five-year plan of development of national economy of the USSR) (third edition: Moscow: Izdatel'stvo "Planovoe Khozyaystvo," 1930), III, pp. 562, 563, 567. 40 per cent of the output of large-scale industry and 23.62 per cent of the total industrial output.32 Finally, the value of retail trade turnover (including public catering system) in the Ukraine constituted in 1928/29 some 19 per cent of its all- Union counterpart. Such a state of budgetary reporting led A. Abulyak to conclude that the budgetary relationships between the all-Union center, the republics, and the local governments were determined by bureaucratic methods and on the basis of mere formal legality, without due considerations of the socio-economic and political factors. Thus, the situation arose in which the reported territorial receipts by republics correspondend neither to their actual payments and their financial strengths, nor to the needs of the republican or local budgets.34 Due to these difficulties, an attempt will be made to compute various items on the basis of known or estimated relationships between the Ukraine and the rest of the Union 2For reference see Table III. 3 . . . Details of computation and sources are presented in Table IV. 34Abulyak, pp, cit., p. 107. 41 and to verify them whenever possible. For example, the Ukraine's contribution to the turnover tax can be estimated on the basis of the weighted average of her participation in the Union's retail trade and her share in the marketable surplus of Soviet agriculture. In order to arrive at deductions from profits into the all-Union budget from Ukrainian economy, the following information will be utilized: known rates of such deductions and their inter-budgetary allocations, proportions of producers' goods and consumers' goods industries in Ukrainian and in the Soviet economies, profitability of industry, and the like. Resources of the population which enter the budgetary system are mainly direct taxes. Since most of them are re— tained by either the local or the republican budget, they do not pose any serious problem. However, it will be somewhat more difficult to determine the proceeds from the sale of government securities by the individual republics. They will be estimated with the use of such data as deductions from such proceeds to local budgets and their relationship to wages. And finally, the inter-budgetary transfers will be allocated to their original sources so as to avoid their double counting. From the total receipts of the all-Union budget in the Ukraine, payments to the Ukraine as well as expenditures 42 on her behalf from the all-Union budget will be deducted to determine the pp; capital inflow into or outflow from the Ukraine. Under the category of payments to the Ukraine such items will be considered as expenditures on national economy and expenditures for social and cultural services. In the group of expendi- tures from the all—Union budget on behalf of the Ukraine there will be included primarily such items as defense, state ad- ministration, and state loans. The extent of these expendi- tures will be determined by deducting from the total known (or computed) amounts spent on such items in the Ukraine that portion of them Which was contributed by the republican and local budgets. 2. Internal accumulations in the industry and agriculture will be ascertained by the aid of the same information as was used to determine deductions from profits (above). In addition, depreciation allowances whenever unavailable, will be computed in proportion to the Ukraine's share in the value of fixed capital in the USSR. 3. Resources of population not accounted for previously constitute primarily savings reflected in the savings deposits balances. 43 4. Other sources will be computed on the basis of ap- propriate indicators and indices. However, on the basis of known facts, it should be noted that these latter two items are expected to represent a relatively minor share of the grand total of all the sources. As far as possible all computations will be made in current prices. There are several reasons for this decision. First of all, considerable difficulties in adjusting Soviet statistics for price changes cause substantial divergencies in the various computations made by the Western economists. Obviously, the results of such estimates depend mainly on the selection of a particular factor of deflation. Secondly, it is somewhat doubtful that the acceptance of the Soviet statistics in 1926/27 prices would offer proper solution to the problem of elimination of the purely in— flationary elements. The reliability of the official statistics in "constant" 1926/27 prices with regard to elimination<>f inflationary bias in subsequent years, may be difficult to defend due to the following considerations:35 (a) New products were valued in the Soviet statistics 35See for example, Bilimovich, pp, cit., pp. 43-46. 44 either at prices computed on the basis of some theoretical assumptions as to their probable costs in 1926/27, or at actual prices of the first year of their full scale production. With a substantially large number of new products introduced during this era of rapid industrialization, it is not difficult to visualize the extent to which the distortion of statistical data in "constant" prices may have been caused by such a method of valuation of output; especially under conditions of strong inflationary pressures which plagued Soviet economy during the period under consideration.36 (b) It is true that those prices which were used for the purposes of evaluation of output in "constant" prices ex- cluded the turnover tax. Nevertheless, at least a part of the turnover tax crept into the costs of such enterprises via prices paid for raw .materials, supplies, and so on. Undoubtedly, the above noted difficulties are magnified H not only by the maintenance of different and somewhat unrelated 3 . . . 6S. N. ProkopOVich estimates the purchaSing power of one ruble as follows: 1928 -- .848; 1929 -- .788; 1930 -- .662; 1931 -- .572; 1932 -- .516; 1933 -- .457; etc., 8. N. Prdkopovich, Narodnoye Khozyaystvo SSSR (National economy of the USSR) (New Ybrk: Izdatel'stvo Imyeni Chekhova, 1952), II, p 179. 45 levels of prices for producers' and consumers' goods, but also by the different rates of changes in these price levels. Consequently, computations in current prices eliminate the danger of running unjustified and arbitrary adjustments on account of price movements over time. However, there remains the possibility of unreliability of the basic statistical data.37 Finally, it is desirable to compute the values of the newly formed capital in current prices not only for the pur- pose of simplification of computations, but also for methodo- logical reasons. We are interested in the values of newly formed capital in the Ukraine and its relative position to other indicators of economic development not only over a period of time but also at each point of time. As stated above, this computation can be done more easily in current than in constant prices. Second, it is not necessary to account for 7For example, at the December, 1958 plenary meeting of Central Committee of the Communist Party, N. S. Khrushchev accused G. M. Malenkov of improper misrepresentation of the gross output of grains in 1952. Whereas Malenkov, using the biological method of estimation, reported the grain crops as being equal to eight million poods, Khrushchev claimed it to have been no more than 5.6 billion poods. A. Z. Arkhimovich, ?Zyemledel'cheskoye khozyaystvo SSSR v 1958 9." (Agricultural economy of the USSR in 1958), vyestnik Instituta pp Izucheniyu SSSR, 3 (31), (July--September), 1959, p. 15, citing N. S. Khrushchev from Pravda, December 16, 1958. 46 price differences in the various areas of the USSR when ap- praising capital flow between the Ukraine and the rest of the Soviet Union. The real value of capital to the importing or its real burden to the exporting nation does not depend upon prices and their relationships elsewhere. Consequently, the value of the Ukraine's capital imports, or the burden of her capital exports should be appraised in connection with economic, social, and political circumstances existing in the Ukraine at the time. 47 CHAPTER III CAPITAL-FLOW ANALYSIS; UKRAINE VS. THE REST-OF-THE-UNION A. BUDGETARY REVENUES In the Soviet Union the individual enterprises are subordinated to the all-Union, republican, or local authorities. Most of the times, it is not the location of an enterprise that determines under which authority a plant or a group of plants is to operate. These decisions are usually based on the extent of control which the central government desires to retain over the operations of that segment of the economy, or the importance that Moscow assigns to an industry in the fulfillment of the general economic plan. Tendencies towards centralism have penetrated the thought and the work of the central government in the USSR. They were reflected in the activities of its economic agencies from the very beginning of economic planning. Assisted by a desire for swift and complete integration of the economies of the individual republics into one Soviet economy, political centralism, from the point of view of JRussians, tends to create the atmosphere necessary for justification of partial or complete disregard of economic jtherests of other national republics in favor of goals 4s established by Moscow. Thus, at least in Soviet literature, unilateral non-compensatory transfers of wealth among the republics upon instructions from Moscow are relieved of the somewhat unpleasant connotation of economic colonialism and exploitation which may otherwise be attached to them. On the contrary, they are defended by Russian economists as acts aimed at bringing about more rational distribution of industries in the country, development of backward economies, and the like. Yet, even now, after four decades of Russian communist rule ianastern Europe, problems faced by economic.p1anners; in Moscow suggest that such explanations failed to eliminate the centuries old economic and political conflicts between the center and the nonsRussian national republics. As recently as 1957 N. S. Khrushchev found it appropriate to dwell on the “dangers of the trends toward autarchy in the economies of the national republics" and the problem of "distribution of accumulated capital in accordanCe with all- Union interests, though it is necessary to take into account the fact that in several cases capital formation may take place in one republic and the need for this capital may arise in another republic."l' AS a result, a peculiar leevolod Holubnychy, The Industrial Output pf_the 49 economic structure has come into being. It comprises irrevocable unilateral rule of the central government over— imposed upon a complex of semi-closed economies of the constituent republics. As pointed out in the previous chapter, a careful review of Ukraine's economic relations with the rest of the Soviet Union becomes imperative precisely due to this unusual position she occupies with respect to the power structure and the political organization of the USSR. These relations are channeled through and reflected in several areas of economic activity, like movement of goods, credit, and income. It is suggested that direction and size of these movements can be discovered more easily by studying insti- tutions and agencies which are given the power to direct and Control them. ,_The Budgetary Syspem pf the USSR It is generally agreed that the budgetary system represents the most powerful single tool of governmental Ukraine, 1913-1956 (Munich: Institute for the Study of the USSR, 1957), p. 1, citing N. S. Khrushchev from Pravda, March 30, 1957. ‘ ' 50 control over the economy in the USSR. It concentrates and places at the disposal of the government resources probably equal to some two-thirds of the USSR's national income. As such, it enables various levels of government not only to influence but also to direct the development of the economy with varying degrees of precision. The Soviet budgetary system encompasses three major types of budgets, each of them corresponding to a certain level of political organization: the local budget, the republican budget, and the all—Union budget. The "local budget" (myestnyi byudzhet) refers primarily to finances of local authorities. However, this term is also used in Soviet economic literature to designate both a summary of local budgets on the territory of a specific republic and their consolidation for the entire USSR. The "state budgets of the Union republics" (gosudar- stvyennye byudzhety soyuznykh respublik), which are prepared, requested from.Moscow, and carried out by their respective governments are also consolidated for the entire USSR. The “all-Union budget“ (obshchesoyuznyi byudzhet) reflects not only activities of the central government and its agencies. It also includes some elements of financial accounts (e.g., 51 subsidies) of economic institutions and enterprises on the territories of the constituent republics which, for purposes stated above, are placed under direct jurisdiction of Moscow.2 It is probably desirable at this point to further clarify Soviet terminology on budgets. This is especially important with respect to the pre-Wbrld War Two period. First of all, the practice was to consolidate the all-Union budget and the state budgets of all republics into the "unified state budget" of the USSR (yedinyi gosudarstvyeppyi 3 byudzhet SSSR). The "combined budget"(§yodnyi byudzhet), on the other hand, included all three budgets--a11-Union, republican, and local, i.e.,the unified state budget plus 2For a brief review of distribution of revenues and expenditures among these types of budgets see, for example, N. N. Rovinskiy_§Q§gdarapgyennyi byudzhet SSSR (State budget of the USSR) (Gosfinizdat, 1944), Chapters 1 and 2; K. N. _Plotnikov, Finansy p_kredit y_SSSR (Finances and credit in the USSR) (Moscow: vysshaya Partiynaya Shkola pri TsK KPSS, 1956), pp. 21 ff.; Alexander Baykov, The Development p§_ppp_ Soviet Economic System (Cambridge: Cambridge University press, 1950), pp. 391-397. 3 R. W. Davies, Ehp_Development p£_the Soviet Budgetagy System (Cambridge: Cambridge University Press, 1958), p. 84; TsUNKhU Gosplana SSSR,Sotsialisticheskoye Stroitel'stvo SSSR (Socialist Construction in the USSR) (Moscow: TsUNKhU Gosplana SSSR, 1934), p. 49l-—hereafter referred to as Sotsialistiches- koye Stroitel'stvo. It is interesting to note that Sotsialis- ticheskoye Stroitel'stvo, 1934, is probably the only source which has used the term yedinyi to designate also the all- Union budget (p. 491). 52 the local budgets.4 Until 1938 "state budget" (gpsudarstvyennyi byudzhet) denoted a summary of the all—Union and republican budgets. Inasmuch as it specifically exgludpg the local budgets, it was equivalent with the unified state budget. However, since local budgets were included in the state budget from 1938 onwards, the state budget replaced the previous concept of the combined budget, which was subsequently discontinued. In addition, from 1939 the social insurance budget was also included in the state budget.6 Inasmuch as many present Soviet economists use the term state budget in its present . 7 . . broad meaning, it becomes necessary for a student of SOViet 4SotSialisticheskoye Stroitel'stvo, 1934, p. 494. 5R. W. Davies, pp, p13,, p. 84, note 1. On the other hand, A. Baykov and F. D. Holzman (citing Baykov) list 1939 as the first year in which Soviets began to include local budgets in the state budget. See: A. Baykov, pp, pip,, p.389; F. D. Holzman, Soviet Taxation (Cambridge: Harvard University Press, 1955), p. 215. 6A. Baykov, pp, cit., p. 389; F. D. Holzman, pp, cit., p. 215. 7For example, K. N. Plotnikov consistently uses the concept of state budget to designate the consolidation of all three budgets. At least he is careful to explain it in notes to his tables: "State budget of the USSR includes the Union budget and the budgets of the union republics. ‘Revenues and expenditures of republican budgets are combined with revenues and expenditures of local budgets, with the exception of the 53 economy to proceed with caution in comparing more recent economic literature with the earlier publications. Whereas local and republican budgets are often made available in various publications, it appears that the all- Union budget has never been published by itself. This statement is justified at least to the extent that this writer has been unable to locate any publication presenting a satisfactorily detailed enumeration of revenues and expend— itures” of the all-Union budget. The only notable exception to this is the disclosure of the all-Union along with republican planned budgets for several consecutive years in the late 1920's in some selected publications of the State Financial Publishing House.8 It looks like the 1929/30 amounts transferred from republican to local budgets in the form of deductions from state revenues." See his: Byudzhet sotsialisticheskogo gosudarstva (Budget of socialist state) Gosfinizdat, 1948), p. 17; Ocherki istorii byudzheta sovyets- kogo gpsudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinizdat, 1954), p. 106. This is also evident from his analysis of the state budget in his Byudzhet sovyetskogo gosudarstva (Budget of the Soviet state) (OGIZ--Gosudarstvyennoye Izdatel'stvo Politicheskoy Literatury, 1945), p. 63 ff. 8Such as: Ob'yasnitel'naya zgpiska k_proyektu yedinogo gosudarstvyennogo byudzheta SSSR pp 1928/29 byudphetnyi god (Explanatory note to the project of unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928); Yedipyi gosudar- stvyennyi byudzhet Soyuza Sovyetskikh Sotsialisticheskikh 54 budgets were the last ones to be published in this form. Yet, as far as the fulfillment of the all-Union budgets is concerned, even as an authoritative source as the Bulletin of Financial and Economic Legislation dispenses the subject, inter alia, just with very brief reports of total receipts and disbursements.9 Thus, the values for the fulfillment of the all-Union budget must be obtained indirectly from the unified state budget. Such an analysis is presented in Tables I and II. THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. In these tables both revenues and expenditures are gathered by fiscal periods and expressed in current rubles. A few words of explanation are in order. The Soviet financial system has undergone major changes during the first five-year-plan period. These changes not only involved important revisions in the methods of financing business enterprises and other economic institutions (like abolition Respublik pp 1928129 byudzhetnyi gpd (Unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928);Yedinyi gosudarst- yyennyi byudzhet Soyuza Sovyetskikh SotSialisticheskikh Res- publik pp 1929/30 god (Unified state budget of the USSR for 1929/30) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo SSSR, 1930). 9See various issues of Byulleten' Finansovogo i_Kho- pyaystvyennogo Zakonodatel'stva, published regularly in Moscow since 1925. 55 of trade credit), but also resulted in far reaching reforms of Soviet taxation system. As a result, a new budgetary system has emerged in the early 1930's. One would be greatly underestimating the nature of the Soviet budgetary system, if one were to conclude that, over a period of time, all it reflected was its readjustment to the changing economic conditions and the search for simplification of tax revenue structure. For, in the system of extensive economic planning and domination of industries by the government, "the state budget of the USSR is an in- separable part of the economic plan and it is constructed on the basis of the plan of economic develoPment of national economy . . . ."10 Moreover, it is so closely linked at every point with the economic plan that they are usually approved together.ll Indeed, the direct relationship be- tween the fulfillment of the budget and of the economic plan is invariably conditioned by this close connection of the 0 . . . . . 1 K. N. Plotnikov, Finansy p_kredit y_SSSR (Finances and credit in the USSR) (Moscow: vysshaya Partiynaya Shkola pri TsK KPSS, 1956), p. 27. 11A. Baykov, pp, cit., p. 395. 'V 'r'1 56 USSR budget with all the branches of the economy.12 "The close connexion. of the U.S.S.R. budget system with the country's economic plan and its social and cultural programme naturally result in the U.S.S.R. budget system playing a major part in the redistribution of the country's national income . . . ."13 we are assured by the Soviet economists that "a substantial part of the national income . . . . 4 . is being distributed through the budget . . . ."1 This very aspect of the size of the budget relative to the national income made it possible for Moscow to utilize the state budget as an effective tool of economic and political controls. Of course, the necessary justification for centralized control over the distribution of funds is neatly dressed in statements bordering on both practicality of measures and ideology. To put it in the words of a prominent Soviet economist, measures established by the national economic plan and, consequently, 12 . K. N. Plotnikov, Byudzhet sovyetskogo gosudarstva (Budget of the Soviet state) (OGIZ--Gosudarstvyennoye Izdatel'- stvo Politicheskoy Literatury, 1945), pp. 9—10. 3 l A. Baykov, pp, cit., p. 399. 14 K. N. Plotnikov, Finansy ;_kredit y_SSSR (Finances and credit in the USSR) (Moscow: vysshaya Partiynaya Shkola pri TsK KPSS, 1956), p. 27. 57 the corresponding budgetary expenditures are dis- tributed . . . among separate budgets not in relation to revenues assigned to them, but rather in accordance with the general tasks of socialist construction, defense requirements, and needs resulting from the Leninist—Stalinist policy towards nationalities."15 Budgetary deficits in the regions where plans deliberately call for expenditures higher than those which can be supported by revenues produced in the area, are covered by ". . . redistribution of resources within the budgetary system . . . ."16 This whole process of the uni- lateral transfers of wealth is called by Soviet economists the "budgetary regulation? (pyudzhetnoye regulirovaniyg). Budgetary regulation is achieved primarily by aid of such a definition and classification of receipts which permit legal retention of the major revenue producing taxes and.non—tax items in the all-Union budget, i.e.,in the hands of the central government. Only part of these"state revenues" re-enters republican and local budgets. And reéallocation of state revenues to their original source is quite flexible. 5 l N. N. Rovinskiy, pp, cit., p. 46. 16Ibid. 58 It depends almost entirely on the size of the budgetary deficit resulting from specifics of economic development in a given area, as provided in the centrally approved economic plan. Consequently, inasmuch as the all-Union budget is not subject to scrutiny by the republican governments and local authorities, it provides central government with the mechanism which handsomely conceals the inequities resulting from such an arbitrary redistribution of income and wealth among the various republics of the Soviet Union. Let us re-emphasize that the purpose of our analysis is to uncover the actual flow of funds between Soviet Ukraine and the remainder of the USSR: Lest our computations are misdirected, the distinction among various methods of formal presentation of Soviet budgets as well as the effects of fiscal.and financial reforms of 1930 on the entire budget system should be borne in mind. First of all, inasmuch as activities of local authorities seldom transcend the bounda- ries of their territories, local budgets should not enter this analysis, except for their relationship with other links in the budgetary system represented by inter—budgetary transfers. To the extent that Plotnikov specifically includes local budgets in his presentations,17 in Spite of the fact 7 See note 7, above. 59 that his estimates are often quoted by other Soviet economists we prefer to base the computations on official statistical returns collected in SotSialisticheskoye Stroitel'stvo, which are more complete and more relevant to our work. Second, fiscal and financial reform of 1930 had a dual effect on Soviet budgetary system. By consolidating many taxes and non-tax levies in a few entries, it rendered pre-1930 budgets largely incomparable, for some purposes, with those of 1931 and subsequent years. It is for this reason that a number of both Soviet and western economists prefer statistical series which adjust 1928/29 and 1929/30 budgets to the post—reform budget classification.19 This analysis, on the other hand, does not call for such theo~ retica1,adjustments. 18F. D. Holzman points out that Plotnikov's total figures are at variance with a summary of individual items listed by him. In addition, they are not readily reconcila- ble- with estimates of some earlier writers and statistical collections. However, it appears that Holzman accepted Plotnikov's estimates primarily because (a) Plotnikov's is the "only one Soviet book . . . available in this country which includes fairly complete series of budget data . . ." for the entire inter-war period and, probably more importantly, (b) “. . . it has the additional merit of adjusting the data for comparability as far back as 1928/29 . . ." (pp, pi£,, ,pp. 216r‘320). For example, see note 18, above. 60 In addition to changes in the structure of revenues, 1930 reform contained provisions which greatly revised revenue distribution among the all-Union, republican, and local budgets.20 Since the new rules on reallocation of the various revenue items among these budgets did not become retroactive at all, such theoretically adjusted 1928/29 and 1929/30 budgets are not acceptable for our purposes. This is another and a more important reason for our retaining of the original versions of 1928/29 and 1929/30 budgets in Tables I and II. The Turnover Tax Difficulties arising out of shortcomings of Soviet statistics in general have been presented elsewhere in this paper. Also, we need not elaborate any further on the fact that many vitally important series are simply not available 20Many of these changes are discussed in some already referred to western studies of Soviet economy. They also appear in most Soviet writings on budgets and fiscal problems. A more complete picture of differences in inter-budgetary distribution of revenues can be obtained by comparing in- structions of the People's Commissariat of Finances which elaborate on classification of revenues. See, for example, instructions number 182, dated December 28, 1929 (Izveyestiya Narkomfina SSSR, 13, 1930, p. 267) and number 210, dated May 31, 1931 (Byulleten' Finansovogo i Khozyaystvyennogo Zakonodatel'stva, 16, 1931, pp. 8-15). 61 to the western student of Soviet economy. Soviet economists are equally hindered by the secrecy with which the USSR government views statistics. Although the situation has improved in the more recent years, even now, Soviet economists are limited to handbooks published by the Central Statistical Administration and, as a general rule, cannot gain access to its rich files.21 Of necessity, therefore, in many instances our estimates cannot claim absolute accuracy and should be accepted as such. Their improvements will have to wait until additional information is released and published by the Soviet government. The strategic importance of the turnover tax in capital accumulation and in fulfillment of economic plans is continuously emphasized by Soviet economists. For example, Ryabov appreciates the role of the turnover tax in the following manner: During the first and second five-year plans, the turnover tax and deductions from profits represented those concrete forms of national income which were directed by the Soviet government entirely to 21Vsevolod Holubnychy, "Government Statistical Observation in the USSR: 1917-1957," American Slavic and East European Review, 1 (February), 1960, p. 41. 62 accumulation and other needs of socialist society . . . .22 Yet, primarily due to the indicated secrecy which surrounds Soviet statistics and finances of the central government, analysis of the origins and the sources of this tax has been left virtually untouched to the detriment of much needed economic research. The seriousness of the situation is so great that Soviet economists gathered at a conference of the State Planning Board in March, 1959 were led to conclude that it is impossible to determine the actual collections of the turnover tax on the territory of a republic.23 The same convention threw some light on the importance of such computations by criticizing the suggestion to omit the turnover tax from compilations of national in- comes of the republics on the grounds that, if accepted, such a procedure would produce results which would not reflect the true level of the national income of a republic, but rather a much lower one. 22N. Ryabov, SotSialisticheskoye nakopleniyg7;_yego istochniki y pyervoy ;_vtoroy pyatiletkakh (Socialist accu- mulation and its sources in the first and second five-year plans) (Gosudarstvyennoye Izdatel'stvo Politicheskoy Litera- tury, 1951), pp. 140-141. 23Digest pf_the Soviet Ukrainian Press, 12 (December), 1959, p. 5, citing M. Yarmolynsky, "Elaboration of the balance of national income of the Ukrainian SSR," Ekonomika Ragyan- §;koyi Ukrayiny, 3 (May-June), 1959, pp. 66-72. 24Ibid. 63 . . 25 . . . . The finanCial reform of 1930 prOVided for unification . 26 . . . . of fifty-four different taxes leVied upon the soc1alized . . 27 sector of the economy in a Single turnover tax. Throughout the years, in spite of a number of modifications, the turnover tax has remained very similar in its nature to the excise tax. It is levied on a single product or a group of commodities, rather than on output or trade in general. Unlike the craft tax, it is a single-stage tax. And finally, it is often used with discriminative purposes in mind. 25For more detailed discussion of this reform, the reader is referred, for example, to relevant sections in the following works: R. W. Davies, pp, pip,; F. D. Holzman, pp, .pip., V. V. Obolensky-Ossinsky and others, Social Economic Planning pp the Union p: Soviet Socialist Republics (The Hague: The International Industrial Relations Association, 1931); A. Suchkov, Dokhody gosudarstvyennogo byudzheta SSSR (Revenues of state budget of the USSR) (Moscow: Gosfinizdat, 1955); already referred to publications by K. N. Plotnikov; N. N. Rovinskiy, pp, pip.; I. Kabachkiv, "Rekonstruktsiya podatkovoyi systemy v SSSR" (Reconstruction of taxation system in the USSR), Suchasni problemy ekonomiky Ukrayiny (Contemporary problems of Ukraine's economy) (Warsaw: UkrayinS'kyi Naukovyi Instytut, 1936), Vol. XXXII, Book 8. It is noted that Kabachkiv's work represents probably one of the best reviews of the background and chronology of the reform. 26 . . . .. K. N. Plotnikov, Ocherki istorii byudzheta soyyet- skogo gosudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinizdat, 1954), p. 111. 27 . . . A list of these taxes appeared in Circular number 623 of the People's Commissariat of Finances dated September 7, 1930. lgvyestiyg Narkomfina SSSR, 38 (457) (December 12), 1930. 64 For analytical purposes the turnover tax collections should be segregated into those coming from the consumer in general and from the additional taxation of peasantry. This results from the different positions the turnover tax assumes with respect to industrial and agricultural consumer goods. In the case of industrial goods ". . . the 'share' of village and town in payment of tax is proportionate to their share in the purchase of goods . . . ."28 With regard to agricultural commodities purchased from collective farms by the govern- ment this is far more complicated. Difficulties arise from the fact that the obligatory delivery prices paid by the government for farm products serve, inter alia, as a means of collecting a part of the income. of collective farms and placing it directly to the disposal of the government.29 Accordingly, prices paid by the state procurement agencies to collective farms are but a fraction of retail prices at which the government resells goods to the consumers. In addition, these prices very frequently do not cover the cost of production of agricultural commodities. The difference 28R. W. Davies, pp, cit., p. 293. 9 . . . 2 A. V. Bachurin, Pribyl' p_nalog §_oborota y_SSSR (Profits and turnover tax in the USSR) (Moscow: Gosfinizdat, 1955), pp. 24, 43. 65 between the procurement prices (plus handling, processing, and distribution costs) and retail prices is collected by the state in the form of turnover tax.3O At least that part of such collections which accrues to the state as a result of underpayment to the farmer constitutes ". . . a tax on agricultural producer rather than on the general consumer and is the monetary equivalent of the tax in kind. Part of it represents land rent . . ."31 The remaining part of this tax in kind on agriculture invariably constitutes forced savings exacted from the agricultural sector over and above the savings of the population in general. It follows from the above, that the inclusion of the land rent and the disproportionate forced savings of rural population into the turnover tax presents a special problem 30F. D. Holzman, pp, cit., p. 82. According to A. Suchkov (pp, pip,, p. 101) the difference between the costs to the state and wholesale prices of agricultural (bread) products is paid by the procurement agencies in the form of turnover tax. It appears from this that any additional turnover tax on bread, if any (i.e.,over and above the wholesale price) should apply both to village and to town in proportion to their purchases of the product, prdvided, of course, that the wholesale prices established by the state are consistent with relative scarcities of these products. 31Holzman, pp, cit., p. 82. 32Ibid. 66 in the allocation of the turnover tax receipts to a specific republic. For whenever/a republic becomes a net exporter of its farm products with respect to the rest of the USSR, it assumes more than its share of the turnover tax burden. Neither of these two elements of the turnover tax collections has ever been quantified. Nevertheless, it is possible to discover the order of the magnitude of this tax in kind on agricultural producer in total by comparing whatever little information is available. It is very interesting to note that in spite of increasing food shortages and concomitant price increases of food products during the first five-year plan period (accompanied by minor changes in procurement prices), 33 . . For example, procurement price for rye grain per 100 kg. rose from an average of 5.72 rubles in 1928/29 (Ekonomicheskoye obozreniye, 2, 1930, p. 178) to 6.80 rubles in 1934 (James Coogan, "Bread and the Soviet Fiscal System," The Review pp Economics and Statistics, 2 (May), 1953, p. 164). As a matter of fact, Coogan's 1934 price is that of 1931/32 as he assumes that it remained constant until Janu- ary, 1935. On the other hand, Jasny cites the following price changes for one kg. of rye bread: 1928 - .08 ruble; April, 1933: .125-.25 ruble for rations and 2.50 rubles in "Commercial“ stores. Naum Jasny, The Soviet Price System (Stanford: Stanford University Press, 1951), p. 32. Thus, while procurement price of rye grain increased only 17.5 per cent, prices for rye bread rose in the same period by 56.3-212.5 per cent for rations and by more than 3,000 per cent in commercial stores. 67 proportion of turnover tax receipts from food industry has remained remarkably stable throughout these years. Ac— cording to the information gathered in Table 3-1, agriculture together with food industry provided between 52-56 per cent of turnover tax revenue (or its equivalent in 1929/30). Several qualifications are in order. we have stated above that the Soviet government has learned quickly to rely on turnover tax as a means of balancing population's money incomes and consumption expenditures. As shown in the Table I-E, actual collections of turnover tax plus special com— modity fund in 1932 amounted to l9,595.l million rubles instead of planned 15,198 million rubles. The fact that turnover tax rates on grains and other food products were being constantly raised in the years following the tax re- form tends to confirm the suggestion that proceeds from agricultural procurements rose in 1932 at a faster rate than the overall income from turnover tax. If this was the case, the 1932 ratio should be at least equal.xo or larger than its 1931 counterpart. Since the 1930 financial reform was responsible for many important changes in the SovietWtaxation system, we thought it desirable to investigate whether the above indicated relationship between contributions made to 68 TABLE 3-1. Turnover tax collections from food industry and agricultural procurements ,Total Food Agricultural FOOd Industry Years Turnover & Agriculturd. 1 Industry Procurements Tax Procurements (l) (2) (3) (4) ---------------------- Millions of Rubles -------—------——-—-——- 1929/30 5,653.3 2,979.91 152.3a'2 2,979.91 1931 ll,672.l 6,397.04 113.13 6,510.1 1932 15,198 C’7 7,903 C'8 1934 37,596 13,545 4,575 18,120 4,300b 1935 52,167 14,7775 20,729 35,506 1936 65,800 16,8006 22,600 39,400 21,900b ------------------------- Percentages ---------------—------——— 1929/30 100.00 52.71 52.71 1931 100.00 54.81 .97 55.78 1932 100.00 52.00 52.00 1934 100.00 36.03 12.17 48.20 11.44 1935 100.00 28.33 39.74 68.06 1936 100.00- 25.53 34.35 59.88 33.28 69 SOURCES: R. W. Davies“ The Development pg the Soviet Budgetary System, p. 292, unless otherwise indicated. aSotSialisticheskoye Stroitel'stvo, 1934, p. 493. bJames Coogan, "Bread and the Soviet Fiscal System," The Review pp Economics and Statistics, May, 1953, p. 167. cA. M. Lyando, Gosbyudzhet SSSR zavyershayushchego goda pyatiletki, p. 24. NOTES: 1Figures for all years include special commodity fund. 1929/3O figures represent equivalent of taxes unified into turnover tax by the 1930 tax reform. 2152.3 million rubles refers only to collections of turnover tax which were affected by the new provisions of 1930 reform concerning interbudgetary allocation of revenues (SotSialisticheskoye Stroitel'stvo, 1934, p. 493). Evidently other sources have included this amount in receipts from food industry. 3Small magnitude of this amount, even compared with 1929/30, strongly suggests that it represents a minor, though unspecified, portion of total turnover tax receipts from agricultural procurements. 4 . NKSnabzheniya plus VSNKh fats and perfumes. 5 NKPP only. 6Davies is not certain whether this includes or excludes the income from alcoholic drinks (pp, cit., p. 292). 7Plan. 8NKSnabzheniya. Plan. 70 the turnover tax by agriculture and food industry and its total receipts bore out under the conditions prevailing in 1928/29 and 1929/30. The results are presented in Table 3-2. It is gratifying to observe that appropriate collections of craft tax from food industry and procurement agencies were quite capable of closing the gap of 10.45 percentage points between 52.71 per cent (from Table 3-1) and 42.26 per cent (from Table 3-2) in 1929/30. After all, craft tax yielded in 1929/30 about 31.8 per cent of the equivalent of turnover tax. In 1928/29 craft tax provided 28.2 per cent of that year's turnover tax equivalent.34 As 1928/29 excises on selected items of food industry were equal to 47.5 per cent of the computed turnover tax receipts for that year com- pared with 42.3 per cent in 1929/30 (Table 3-2), the 1928/29 ratio of collections from food industry and agricultural procurements to the year's total of levies unified in turn- over tax probably reached the proportion of 1931. Certainly, it was not below its 1929/30 counterpart. 34Computed from values supplied by K. N. Plotnikov, Ocherki istorii byudzheta sovyetskogp gosudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfini- zdat, 1954), p. 111. 71 TABLE 3-2. Selected excise tax collections from food industry (in millions of rubles) 1928/29 1929/30 1. Excise taxes on beer and other alcoholic drinks 980.9 1,854.3 2. Excise tax on sugar 301.6 242.5 3. Excise tax on tobacco1 210.2 292.1 4. Total of lines 1 - 3 1,492.7 2,388.9 5. Estimated turnover tax including special com- modity fund 3,146.1 5,653.3 6. Line 4 divided by line 5: 47.45% 42.26% SOURCES: Lines 1 - 4: A. Suchkov, Dokhody gpsudarstvyennogo byudzheta SSSR, p. 91. Line 5: K. N. Plotnikov, Ocherki istorii byudzheta sovyetskogp gpsudarstva, p. 111. NOTES: 1Excises and turnover tax on this item were customarily included with the food industry. 72 In view of the above,it is suggested that the rate of 54-55 per cent be accepted as fairly representative of contributions made to the turnover tax by agricultural procurements and food industry during the first five-year- plan period. Not all of this, however, explicitly represents taxation of agriculture alone. To the extent that food industry itself is subject to turnover taxation (whether for discriminative, supply-and-demand-balancing, or purely fiscal reasons), part of this contribution to turnover tax income is paid by the general consumer. Appropriate ratios for the years following the first five-year plan era provide the clue to a possible solution. It is apparent from a comparison of columns 2, 3, and 4 in Table 3—1 that the relative increase in income from turnover tax from agricultural procurements was accompanied by an almost equal reduction of such income from the food industry. It follows that this increase in the reported turnover tax collections from agricultural procurements was made possible, in the later years, by a certain reclassification of tax revenues. And conversely, the extra burden of taxation in kind of peasantry was there all the time, even though it was not recorded as such. 73 In the 1920's some Soviet economists and politicians called this extra taxation of agriculture a "tribute." Others . . . 35 preferred to call it in milder terms such as "SCissors," "diversion" of resources from agriculture into industry. Let us see what Stalin had to say on this occasion in his speech delivered at the Plenum of the Central Committee and Central Control Commission of the C.P.S.U.(b) in April, 1929. . . . In addition to the usual taxes, direct and indirect, which the peasantry pays to the state, the peasantry also pays a certain supertax in the form of overpayment for manufactured goods, and in the form of underpayment re- ceived for agricultural produce. Is it true that the supertax paid by the peasantry actually exists? Yes, it is . . . .36 Of course, he justifies the existence of this, as he calls it supertax on peasantry by both economic and political arguments, but only as a temporary measure. Can we abolish this supertax at the present time? Unfortunately, we cannot. we must abolish it at the first opportunity, in the next few years. But we can- not abolish it at the present moment.37 35The term "scissors" came up for the first time in 1922. It referred to the adverse terms of trade experienced by farmers between their own commodities and the manufactured goods. For an informative description and theoretical analy— sis of this phenomenon the reader is referred to Maurice Dobb, Soviet Economic Development Since 1917 (New York: International Publishers, 1948). pp. 149-176. 36 J. Stalin, works (Moscow: Foreign Languages Pub- lishing House, 1955), XII, pp. 52~53. 37Ibid., p. 53. 74 Yet, there is enough evidence to show that the rate and the burden of this tax has been actually increasing with each year. While 39.74 per cent ratio reported for 1935 seems to be out of proportion when compared with other years, it appears that the ratio of receipts from agricultural procure- ments relative to total collections of turnover tax tended to settle at 32-34 per cent.38 Yet, it still excluded turnover tax on grain milled by Food Ministry (probably to the extent of 14 per cent of grain milled by cooperative and state industry), as well as on grain sold in the form of flour directly to consumers by state and cooperative retail trade network. This was true because taxes on such procurements were not being paid until a later stage in the distribution channel?9 Thus, the ratio of 32—34 per cent should be increased ac- cordingly. The adjusted ratio becomes at least 37-39 per cent. For simplicity we shall use an average of 38 per cent. 38Plan figures for 1938 yield a ratio of 31.65 per cent (R. W. Davies, op, gi§,, p. 292). Actual turnover tax receipts from agricultural procurements brought in 1940 some 35.0 billion rubles. A. Yugov, Russia's Economic Front for war and Peace (New York: Harper & Brothers Publishing 1942), p. 132. This was equal to 34 per cent of total turnover tax collections for that year (105.9 billion rubles, F.D. Holzman. 92, 333,, p. 217). 39J. Coogan, pp, cit., p. 167. 75 It is likely that a similar ratio for 1928/29-1932 was somewhat lower than 38 per cent. There are several reasons for this assumption. In the first place, as suggested above, contributions of food industry and agricultural pro- curements to the turnover tax averaged during the first five- year-plan period somewhat below the level of later years (about 55 per cent as compared with 60-68 per cent). Second, as the years went by,the ever widening gap between the agri- cultural procurement prices and retail prices for foods40 probably reflected tendencies towards greater extraction by the state of both the land rent and the disproportionate forced savings of the rural population. On the other hand, general economic conditions (e.g.,increasing shortage of consumer goods, inflationary pressures, and the tendency to clear the markets by directly influencing prices for indi- vidual commodities and/or by altering the price structure) provided a good case for increasing the burden of turnover tax on the general consumer. Thus, on balance, the relation- ship between contributions by food industry and by agri- cultural procurements may have remained largely unaffected. To conclude, it is suggested that about 35-37 per cent of the turnover tax income came during the first five-year~p1an 40See note 33,above. 76 from taxation of agricultural produce at the point of its procurement. These are the rates used in Table 3-3 (on a sliding scale so as to recognize the rising trend in taxation in kind of agriculture). For the period beginning October 1, 1930 they are applied to collections of turnover tax and the special commodity tax. For the two previous years we have used the three largest items united later in the turnover tax: the craft tax, excise taxes, and the special commodity fund. Together they accounted for 85.45 per cent of the computed equivalent of turnover tax in 1928/29 and 83.83 per cent in 1929/30. As far as Ukraine is concerned, it is suggested that her weight in collections of this tax in kind from agriculture be based on her share in state procurements of grains. Although ". . . there is some evidence to indicate that the rate of tax on producers of other agricultural commodities is at least as great as that on the producers of bread . . . ,"41 Coogan feels that, if adjustments were made for turnover tax contri- butions by ". . . all other raw material inputs to the food and other allied industries, meat, dairy products, etc. . ." the figures for collections of turnover tax on agricultural 41F. D. Holzman, op, cit., p. 154. m.hHH.m m.mhm.m ©.mm© N.omm.H N.mom OCHMHxD Ga mGOHpUOHHOO W . v v xmu H0>ocusu Hmuoa .o N.Hmm_m m.mo¢.a H.¢om Vm.amn wv.mmm momnp Hflmumm .Q H.mmn.m N.NH¢.H m.HNm m.mmo m.mam mucmamnnooum Hmnsuasownm< .m v w Amwanbu wo.HflEv xMD Hw>ocusu ou coflusnfluucoo m.m:HMHxD .o mm.mm ow.am mEmumhm.nowumxmu Enommhlmnm ou omumonpm Houomm GoaumooHHm Hmuoa .n ma.©m «m.¢m mm.mm N¢.¢m ¢N.mH Houomm coaumooHHm Hmuoa .m HN.NH ¢m.~a om.ma mn.ma mm.ma HouUMMIQDm momuutaflmumm .m hm.ma om.ma mmm.ma Nmo.ma @o.ma nopmuu meumn ca mnmnm m.ocflmnxb .m o.mm o.mo o.¢o o.mo o.mm 05cm>mu xmu Hwboquzu Hmnuo .p Hm.ma oa.~a mm.ma oo.aa om.o An x we HouomMIQdm mucmEmHsooum .u 6.5m n.mm m.om m.mm o.ma Hmucmsousuoum . .mm :a mnmzm m.mGHMHxD .Q 0.5m o.am 0.6m o.mm o.mm mucwEmusooum amusuasouumm >9 wUmE coauoflwhucou .m Axe muouomm cofiumooaac .m H.mmm.ma o.~no.aa m.om¢.~ v.omm.v ~.omm.m . uuuuuuuuuuuuuuuuuuuuuuu H.H¢H m.HmH mmH>mH 0cm moan .m IIIIIIIIIIIIIIIIIIIIIII H.hmh.a m.mmm xmu HMMHO .0 1w IIIIIIIIIIIIIIIIIIIII o.m¢m.m o.mom.a mmmfioxm .o w.aom.H m.ono.a m.m¢m ~.mmm IIIIIII boom huflooeaoo Hafiommm .Q m.mmm.na m.aoo.oa o.NnH.m llllllllllllll xmu Hm>ocusa .m unmanon mo macaaaflev coflumo IOHHm ou womnnsm mumfioomm .¢ mama Hmma omma om\mmma mm\mmma swuH Hmunmso suv GEHManD Gfl MGOHUUmHHOU ”Mu. H0>OCH59 .mlm magma. SOURCES: 78 aTable I. THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. bTable IV-B. RETAIL TRADE TURNOVER. Inasmuch as statis- tics on retail trade in the Ukraine, published in 1930's, are not always consistent, it is felt that information provided in the official statistical handbook published by the Central Statistical Administration of Ukrainian SSR in 1957 is more representative of the true state of affairs. Therefore, it was decided to rely on Table IV-B. NOTES: 1To each year's ratio (from Table VI. GRAIN PROCUREMENTS BY STATE) two percentage points have been added to give recognition to Ukraine's substantial deliveries of sugar beets (see note 43 to this chapter). 2Refers to 1930. 3Existing evidence leads us to believe that most of the land rent and the extra savings of peasantry realized from agricultural procurements were cashed by the government in excise taxes and craft tax. Therefore, the allocation factors need to be adjusted to reflect this condition. The allocation .factors for 1928/29 and 1929/30 were adjusted in the following manner: the absolute values of contributions made by agri- cultural procurements to the equivalent of the turnover tax were obtained for these years by applying factors developed in section B of this table to the estimated turnover tax collections (from line 5, Table 3-2). Values thUS' obtained were related to the totals of receipts subject to allocation (from secion A of this table). 1928/29 1929/30 (millions of rubles) 1. Estimated turnover tax 3,146.1 5,653.3 2. Ukraine's contribution via procure- ments (line 1 x procurement sub-fainr) 215.8 658.9 3. Ukraine's contribution via retail trade (line 1 x retail trade sub.factor) 389.4 721.3 4. Ukraine's total contributions 605.2 1,380.2 5. Receipts subject to allocation 2,820.2 4,880.4 6. Adjusted allocation factor 21.46%. 28.28% See note 3,above. 79 procurements ". . . would not be reduced significantly . . ."4ZA Nevertheless, lest we are too conservative, it is advisable to add somewhat to Ukraine's weight in grain procurements in order to recognize her dominant contribution to marketed surplus of sugar beets,43 another major turnover tax revenue producing commodity. Thus, for each year, ratios from Table VI. GRAIN PROCUREMENTS BY STATE have been raised by two percentage points, an undoubtedly conservative increment. A summary of the inter-budgetary allocations of the turnOver tax revenue in Ukraine, consistent with its terri- torial origins, is presented in Table 3-4. Although craft tax collections from the private sector were not united in the turnover tax, we have included them in this table. we feel justified in doing so by the fact that in these early years the craft tax was equally applicable to both private and socialized sectors. In addition, the amounts involved 42J. Coogan, op, cit., p. 167. 3For example, Ukraine's share in sugar beet pro- curements ranged between 83.52 per cent in 1928/29 (Ekono- micheskoye Obozreniye, 1, 1930, p. 203) and 67.11 per cent in 1932.(Sobraniyg_zakonov i_raspory§zheniy rabochekrest'- yanskogo pravitel;§tva SSSR (Collected laws and enactments of the workers' and peasants' government of the USSR), p. 688. 80 .mmm ZéHZHflmMD m0 BWUQDm HBocusa .mIm magma ”a mafia ”mmumoom o.mmm.m m.mmm.¢ ¢.Hmh.m o.¢ow, m.mma.a v.>om Dmmpsn :oflcD IHHm Eonm mcflmuxb 050 .m m.m¢h o.mmH H.¢NH ©.HN N.mmm m.moa H.0Hv I I I N.mmm m.mma xmu ummuu .Q b.5Nm o.mma H.¢NH ©.HN I I xMD Hm>ocuse .m "mmm amacflmnxb mo ummpsn mwmum oucfl pmuosomn .w m.aon.oa m.naa.m m.mnm.m o.mmo H.mHv.H m.0h© mcwmnxb CH mcowuomaaoo Hmuoa .m o.mm I I I m.mm H.m® Houumm mum>HHm Eonm xmu H ummuu mo macauowaaoo CH mumzm m.mchHxD .m m.moo.oa m.haa.m m.mnm.m ©.mmo m.omm.H N.moo mumflmomuuzfiwnw>ocusu ou . COHUDQHHDGOU m.maflmuxb .H . . omma Hop 3 . Nmm u . Em H mm\mmma mmma Hmma Iumso nuv om\mmmH mm\mmmH .uH Ammansu mo mcoflaaae use ummcsn coacDIHHm mgu Eoum mchHXD ou mpmflmomu xmu Hw>ocusu mo cOHumooHHmmm .wlm mqmHm> m CH muHCmmH om on on mHCHHmm H50 umnu Comm on hHHpmmH Cmo DH .mEHu mHnu um pmquusm3 DOC mH CoHumoHMHEmu m £05m umnu uHmm mH uH .mwumEHumm umwn mHCo qummHmmH Emnu mo HHm mUCHm .Hm>m3om .GOHHmm Sumo mo UCm map mo pCm mCHCCHme mnu mo mOHumH on» mo mmmum>m Cm >Hmmm ou mpmnsuom mHOE Coon m>m£ uanE pH AHU ummeoz .pos .m .m umpmmso any .H mHnms Ame "mmompom m.oap mm.mHv m.mmo.H mm.nwm.v mmmaumm\m~mH m.omH H.m¢H ¢.m~m m.mm p.mo¢.H mmmH p.4HH ma.vo~ H.mHm m.mm mm.mmm.H HmmH m.mm m.mm m.mm m.¢m m.mmm ommH .o q m.mHH m.on H.p¢m m.¢m m.¢oo.H om\mmma H.pm N.pa m.moa m.¢m H.HH¢ mm\mmma Apvuxmvnxmv Ape Amvxxavuxmv Ame AHV AquU Hmmv uwmpsn \mwmm .uxp mo \chHmuxp CH \MWpcsm pmme \mwmmo COHCDIHHm ummpsn mumum mmxmu “Hmonm CH mnmzm on“ CH mflu ouCH pHmm map ouCH pHmm m.mCHmnxD mwxmu uHmoum mummw .xmmansu mo maoHHHHs :Hv mmm CMHCHmuxD CH mmeHmequ CmoHHQCmmH pCm COHCDIHHm an UHmm mmxmu uHmonm .mIm mHQmE 110 importance in the Ukraine than in the rest of the USSR. Even though the relative importance of the Union- industry in the various republics is not known, it does not appear likely that there was any noticeable difference in this respect, at least between the Ukraine and the Soviet Union in total.104 This is true in spite of the fact that muniCipal economy might have been more important in Russia than in the Ukraine on account of such large cities as, for example, Moscow and Leningrad. The previous discussion of profitability, uniformity of taxation of industrial profits (at least until 1931 or 1932), Soviet pricing policies, and the emphasis on Group A in the Ukraine, suggest that the alternative (b) may also be largely discounted. Yet, in the absence of more convincing evidence, preference is given to the original estimates of fixed funds in Ukraine, assuming that inaccuracy which may thus result would tend to add to the conservativeness of the estimates. 104 . . . For example, compare information gathered in such sources as: Sotsialistychna Ukrayina, 5-6, 1934, pp. 107-108; SotSialisticheskoye Stroitel'stvo SSR, 1935, pp. 30-31; Staty- stychne Upravlinnya Ukrsyins'koyi RSR, Narodne Hospodarstvo Ukrayins'koyi RSR (National economy of Ukr. SSR) (Kiev: Derzhavne Statystychne Vydavnytstvo, 1957), p. 21; Upravlinnya Narodno- Hospodarsflkoho Obliku USRR, Radyans'ka torhivlya USRR (Soviet trade in Ukr. SSR) (Kiev: Derzhavne Vydavnytsvo "Narodne Hospodarstvo ta Oblik," 1936), p. 14. 111 Determination of Ukraine's share in profits of the USSR economy is based on the annual profit values, as shown in Table 347. Total profits, which appear in column 1 of this table, include profits of local enterprises which should be eliminated for purposes of this section. Since industrial profits were taxed uniformly during most of the first five- year plan era, it is assumed that local enterprises shared in total profits in proportion to their contributions to profit taxes. Pari passu, proportions of profits originating in enterprises subordinated to the all—Union and republican authori- ties are obtained from a comparison of Plotnikov's statistics on profit taxes (which include collections from local industries) with the appropriate values in Table I. Computations are pre- sented in Table 3-6. In Table 3+7, which summarizes the estimates of profit accumulations in Ukraine and in the USSR, no specific reference is being made to the fourth quarter of 1930. Nevertheless, no attempts have been made to compensate for this apparent omission inasmuch as the totals for the period already exceed profit accumulations quoted by Ryabov105 by one half of one 105N Ryabov, pp. cit., p. 137. 112 Table 396. Determination of profits of all-Union and republican enterprises. Deductions from profits Profit taxes origi— (millions of rubles) nating in enter- a prises of all—Union Total All-Union and republican sub- and ordination republican b (per cent of total enterprises profits) 1928/29 557.4 417.7 74.93 1929/30 1,263.2 1,004.5 79.52 40. 1930 562.3 382.8 68.26 1929/30 incl. 40. 1930 1,825.5 1,387.3 76.00 1931 2,157.5 1,333.31 61.80 1932 2,023.4 1,409.6 69.66 1928/29-1932 6,563.8 4.547.9l 69.29 SOURCES: (a) K. N. Plotnikov, Ocherki istorii pyudzheta sovyet- pkogo gosudarstva, p. 116. (b) Table I. NOTES: (1) Adjusted for transfers from local budgets, shown in Table I, under "Other income.” 113 .HODHO mHnmmOHDOC mCm CH DHCmOD DOC mmOp Om Op OD ODCHHmm CCO DmnD Cmmm On mHHpmmH Cmo DH .OEHD mHCD Dm waCmHnt DOC mH COHDMOHMHEmH Conn DmsD DHmm mH DH .mmDmEHDmm Dmmn H50 >HCO DCmmmHmwu mOHDmH mmeD mm SOCEmmCH .MO>OBOm .poHumm Comm mo pCm ODD mo UCm mCHCCHme ODD mo mOHDmH OCD mo mmmuw>m Cm >Hmmm OD mDmusuom OHOE Coon m>m£ DCmHE DH Amy .OmmH mo HmDHmCU ADHCOM mmpCHUCH AHV "mmaoz .DcmsHHHuHsu mo msstm >CMCHEHHOHC .mm .m .HXDOHHDM>Q.moom,omO£o£mC>O£mHmN>mu Mmmm Dwnmpshnmow .och>A .2 .m Amy .m>onmn.pos 45mm Cpl .mmmHCQHODCO COOHHQCQOH pCm.COHCDIHHm mo mDHMOHm mo COHDmCHEHmDOQ .oIm OHQmB ADV .mmHQCH COHHHHQ mm.¢ mo hDHCHUH> maD CH >Hnmnosm mumz mDHmODm Om\mNmH .mCCB .DCOO Hmm ¢.mm >9 mDHmoum pmNHHmmH m.Hmm> mCOH>mDm pmmoxm OD OHOB HmmH Dom waomhoum mDHmoum mo mmHQCH COHHHHQ m.m .Am .m .HmmH .mIN .O>Dm%MNNO£M mmomeQOHDmHHMHmDOm.fl thMCHm :.HwaHHDm>m Mpom omlm MCmHmCHm HSUMDON: .OHUHDDm man OpCm%A .d OD mCHpuoood any .mH .m .omma .p .mEmHQOHm m>>omCmCHm :..m Nm\HmmH mC CCMHQ CEO>OmCMCHm CEOCHpmm M: .>OHO>E£m .x Amy umMOMDOm mm~.m NH0.H mmn mmm mop xqvxxmo mmansu mo mCOHHHHE I COHDmCHpHOQCm CmOHHQCmmC pCm COHCDIHHm mo mmmHHQDmDCO mo mDHmOHm .o mm©.v mmm.H mHm.H hmH.H mom vaxAHv AmOHQCH mo mCOHHHHEV OCHmeD CH UmDmnmam mDHmODQ HmDOB .m m.mm m.mm m.¢m m.¢m m.prcmo Hume mpCCm pmme CH Danm3 O>HDMHOH m.mCHmeD .¢ Mmm CMHCHmuxD Nh.MH oo.v mH.m om.m n¢.m mmHQCH mo .HHQ I COHDmCHpHOQCm CmOHHQCmmu pCm COHCDIHHm mo mmmHumanCm mo mDHwoum .m H.mp m.Hp Ho.ps m.¢s oxucwu Hmmv mmmHHmHmDCm CmOHHQCmmH pCm COHCD IHHm OCD CH mCHDmCHmHHO mDHmonm mo OHDmm .m p.mH 8.8 H.m p.p m.m mmansu mo mcoDHHDn I mDHmoum Capos .H O O Q m MmmD NmmHImm\mmmH NmmH HmmH om\mmmH mm\mmmH .Mmm CmHCHmeD OD mDHmoCm mo COHDmooHH¢ .mlm magma 114 billion rubles. Although this does not look like a minor discrepancy, it is not expected to result in consequences of grave importance. For there were essentially three sources of investible funds: retained profits, depreciation, and the budget. With capital investments, profit taxes, and depreciation known, the effect of the choice between our own and Ryabov's values of profits is largely reduced to offsetting variations in the extent to which capital investments were financed from retained profits rather than by subsidies from the government (budgetary appropriations). A comparison of Table 3-7 with Tables 3—5 and I, reveals that the state budget of Ukrainian SSR received in the form of profit taxes during the entire period some 14.5 per cent of profits of all-Union and republican enterprises in Ukraine. At the same time, all republican state budgets combined, including Ukraine, collected 13.2 per cent of such profits. This concludes the discussion of the two most important components in the budgetary relations in the Ukraine. The remaining items on the revenue side of the budget are analyzed in the next chapter. 115 CHAPTER IV CAPITAL-FLOW ANALYSIS: UKRAINE VS. THE-REST-OF-THE-UNION A. BUDGETARY REVENUES, Continued State Loans Sales of government obligations in the USSR played an important part in raising funds that were needed to finance the industrialization and eaanomic growth.1 The names of the loans themselves attest to this: "loan of economic restoration," several "industrialization loans,' the loan to "strengthen peasant economy," and the like. It can be seen from Table I, that the revenues from sales of government bonds were rising rapidly both in absolute amounts and as a percentage of total receipts of the budget. This is not surprising. The government of the USSR considered state loans as "planned form" of attracting the savings of the population with the expressed purpose of utilizing them for covering productive expenditures, e.g., capital investments. l . . . .. K. N. Plotnikov, Ocherki istorii pyudzheta sovyetskogo gpsudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinizdat, 1954), p. 127. 2Ibid. 116 This continuous rise in the revenues from sales of government bonds can be attributed largely to the ambitious programs of the distribution of government obligations among the population as well as among economic enterprises and organizations which the government has been undertaking year after year. The population's savings were invested in state securities both directly, i.e., through the individual or collective subscriptions of the loans, and indirectly,\Nhen the savings banks invested their "stable deposit balances"3 (i.e., funds over and above operating requirements) in the public debt. Thus, in addition to its fiscal significance, the distribution of obligations has also served as an instrument for withdrawing the purchasing power of the population and diverting it into the state budget. Estimates of sales of government bonds in the Ukraine are presented in Table 4—1. In this table, the computation of receipts from the distribution of bonds among the population in the Ukraine is based on the Ukraine's share in deductions 3Ibid., p. 129. 117 N.HN m.mH m.mm N.om m.mH m.mH mmmD OQD mo OOMDCOOHOQ mm OCHmuxD .NH m.omo.m m.mh> o.b¢h v.50H b.mmm h.©MH mmm COHCHmeD .HH 0.0mm.m n.HNm.m o.mmm.m H.0mm w.mhm.H m.¢mb mmmD .OH "HMDOB .Q m.Hmn m.mwm ¢.H¢m 0.0m m.mm» H.mo OCHmeD .m m.mm m.mm m.¢m m.¢m m.¢m “Demo Dmmv_mmmp 03D CH mDHMOHQ OD mCoHDCQHHDCOU m.mCHmeD .m m.mnm.m ¢.mmH.H m.mN¢.H m.mOH H.0mm m.hnm mmmD .h “mmmHHmHmDCm .0 o.mmH m.m¢ m.mm h.¢ v.Hm h.mm OCHmeD .m v.mH ©©.HH mm.¢H m¢.mH mm.0H om.NH ADCOO Hmmv mmOCmHmQ DHmommp mmCH>mm CH mmmCmno CH OOCODHOQEH m.mCHmuxD .m o.mno.H e.gom m.mHN H.mm m.©mm m.ONH ammb .¢ "memm mmCH>mm .m o.ooH.H H.0hv m.mnm H.0h o.ovH m.m¢ OCHmeD .m mm.HN mm.mH MH.mN mm.mm gm.HN oo.hH ADCOO Hmmv HHODomm COHDmOOHHd .N m.¢mH.m m.mm¢.m ¢.©H@.H «.mHN 0.0mm m.onm mmmD .H "COHDMHSQOm .4 mmmHImm\mNmH mmmH HmmH ommH .Og om\mmmH mm\mmmH Ammansu «0 mcoHHHDs :HV .mmmD OCD CH pCm OCHmeD CH prOQ DCOECHO>OmmfiummHmm ODD Eonw meCm>mm .HIg OHQmB 118 Table 4.1 (Continued) SOURCES: Lines 1, 4, 7, 10: Table I. Line 5: Computed from data presented in Sotsialisti- cheskpye Stroitel'stvo, 1935, pp. 680-682. Line 8: See Table 3+5 as well as the discussion on the method of allocation of profits and profit taxes. NOTES: (1) Revenues from the sale of government bonds to the population are allocated to the Ukraine according to her share in deductions from such revenues into the state budget of Ukrainian SSR as compared with the total deductions into state budgets of all republics. The ratios are computed from data presented in Table I. 119 from proceeds taken from sales of government bonds into the state budgets of all republics. The ratios were obtained from Table I. Apparently, percentage rates, according to which revenues from sales of government bonds were deducted into the republican budgets (and through them into the local budgets), varied with the social groups to which the bond purchasers belonged (e.g., peasantry, workers, or unorganized population), rather than in relation to any political or administrative division of the USSR. The largest deductions were allowed on sales to peasants. Provisions were also made for penalties in cases of underfulfillment of the plan quota.5 Penalties usually stipulated some specific reductions in the prescribed rates of deductions into the state budgets of the republics and into the local budgets. Like rates of deductions, penalties also varied according to the social groups of the bond purchasers. To obtain more accurate results, revenues from the 4See relevant instructions of the NKF. For example, instruction No. 243, dated July 5, 1931 (Byulleten' Finansovogo i_Khozyaystvyennogo Zakonodatel'stva, 21, 1931, pp. 7-8). 51515. 120 sale of government securities in a specific republic should be determined by summarizing actual subscriptions to the bond issues in that republic by each social group of population. In practice this cannot be accomplished. Very little is known about the ways in which the quotas were established. Neither does the official statistics normally disclose actual purchases of bonds by the various social groups. Nevertheless, on balance, it appears that our method is not liable to result in any significant errors. First of all, according to various sources, workers and salaried employees, who had come to occupy a commanding position in the ownership of government securities sold to the population,6 were required to purchase government bonds in some specific relation to their . 7 . . . earnings. Second, available statistics reveal that sales 6They owned the following shares of the total debt purchased by the population: October 1, 1928 -- 37.0 per cent; October 1, 1929 -- 55.0 per cent; January 1, 1930 -- 65.3 per cent; January 1, 1931 -- 66.1 per cent; January 1, 1932 -- 66.0 per cent; January 1, 1933 -- 69.2 per cent; January 1, 1934 -- 69.7 per cent; January 1, 1935 -- 71.7 per cent. Computed from data published in SotSialisticheskoye Stroitel'- stvo SSSR, 1936, p. 672. 7Obyasnitel'naya zapiska k_proyektu yedinpgo gosu- darstvyennogo byudzheta SSSR pp 1928/29 byudzhetnyi god (Explanatory note to the project of unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928), p. 75; R. w. Davies, The Development pf the Soviet Budgetapy System (Cambridge: Cambridge University Press, 1958), pp. 127, 226. 121 of government bonds to peasants constituted a lesser part of the total sales to the population. Participation of villages in the subscriptions of the various state loans in the USSR was estimated by Ioffe as follows:8 First Industrialization Loan -- 5 per cent; Second Industrialization Loan -- 8.9 per cent; Third Industrialization Loan -- 21.9 per cent; Five- Year-Plan-In-Four-Years Loan -- 24.6 per cent (as of May 31, 1931). In 1932, rural population subscribed to 21.47 per cent of the mass-subscription loans.9 As a result, peasants claimed only a minor part of the outstanding public debt purchased by the population (in millions of rubles):10 All Peasants population October 1, 1928 411.0 108.4 October 1, 1929 529.1 70.7 October 1, 1930 1,287.3 241.3 January 1, 1931 1,499.8 302.3 January 1, 1932 3,117.5 780.0 January 1, 1933 5,442.8 1,270.8 8Ioffe, "1,700,000,000-moshchnyi vklad trudyashchykh- sya v sotsialisticheskuyu stranu" (l,700,000,000--mighty in- vestments of working people in socialist country), Finansy .i SotSialisticheskoye Khozyaystvo, 16, 1931, p. 17. 9K. N. Plotnikov, pp, cit., p. 129. loSotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 672. , - I l - - «O . . . ~ , - . -\ ‘ . . . . .. . ' I 'J - v v- . H ‘. , .I . .. . . . L _ , . - - - , , W . \ .' L. , LI ‘ , i . ’ i ‘ r I ” , . I 4‘ I 1 . - f < .. ‘-_, . v . ~ , Y _ . , . 5} . : I 7 } 1 . r‘ ' . ~ _ . v - . . , - ., . . r '1- , i' A ‘ . ‘- .1 ‘ \ ‘ "' A u - ' ' . I , I . . — Q >1 ’ p * ‘ . . - — I 7 . - ‘ . 1 1 1 " ' n.’ ' - 7 ., .. A I ‘I ‘ 7v r ' r ' ' bf ' ‘ r "J ' . L , I . 1 j' l 1 x . . . r, l., - .J .' - I __ 'r ,-« '4'" '_1 ‘ _ , ' ,.-J ,... ‘ ' F . . I I ' ‘ I‘ ( i . ' I ’ t- J, _, p . ' 1. r ‘ .7 1, ‘ I" ' l ' ) . 1 . , - y .’ . ‘, ‘. - ._' \. ’. I I 5 l a I - '." ‘ .. L . . K. v . . I ' ‘ ( T I l x ‘i A I ‘1 ‘ ‘ “On ”sum 4< . .- .. .J’H" vm' _r CS -'—' v.'\r-"- .'-‘ - ‘ . :1: a“ -' L l l“.‘--L 1'): 18 I. \J D L' -'. J '.’.L.' .i Pi ‘\' g ' ' ‘ . I I. \ ..' .. .1 _. L ~ . _ '. .1 ‘ :- , ,r- " .c ‘ , ‘ . . , . . . _ ‘ . , ' ‘ .. ' -, 1 .— --.11 \72f11.?.LIfI-"C\)l.' .w,’ . .. ~. ._ x J. - ,, (I 7: _~ . 5.- Hmur.’ wit—3 V b\(( warrfing’q ._ (v 1J6 .1 ' . 10 83:11.39} IS: I“ f '~ . .‘ .,-' _ i H 9 .5 J Jr} g': - : ' ‘I’ J . .4" . ”'4" I" I ." ”I Q r L OJ , . I v‘. I": .4 K H} '1 L1 -“ L 122 Third, population other than workers, salaried em- ployees, and peasants owned even smaller amounts of the out- standing debt. As of the same dates these amounts were as follows (in millions of rubles):ll 150.4, 167.5, 205.5, 206.5, 281.1, and 405.8. Fourth, it appears that there were some differences among the republics in the fulfillment of the plans of the distribution of state obligations within the various social groups.12 However, it is believed that the over-all pattern of these variations in each area or republic was consistent enough to justify the selection of the present basis of allocation. For we ought not lose sight of the fact that subscriptions to the state loans were not really voluntary. Subscription campaigns were accompanied by considerable social, . . . . . l administrative, and even thSlCal pressures upon the population. To this extent, the sales of government bonds were more akin llIbid. 12See, for example, I. Landa, "Zayem pyatiletka v che- tyre goda" (Five-year-plan-in-four-years loan), Finansovye Problemy, 10-11, 1930, p. 6. 13F. D. Holzman, Soviet Taxation (Cambridge: Harvard University Press, 1955), p. 200; R. W. Davies, pp. cit., pp. 127-128; P. Malevsky-Malevich (ed.), Russia/p2§.§.§. (New York: William Farquhar Payson, 1933), p. 533. 123 to taxes than to the bonds sold by most Western nations.14 Therefore, actual purchases throughout the country probably corresponded reasonably well withijmemonetary incomes of the population and were consistent with the objectives of fiscal policies, directives concerning regional economic development. and the resulting campaign pressures. It is not surprising that the government chose to rely heavier on the loan campaigns than on the work of the savings banks to enlist the resources of the population. Savings of the population could not have been expected to reach any important proportions under conditions of low real incomes and continuous discouragement of private ownership and entrepreneurship through taxation and social policies. Also, administrative and social pressures could not have been used here with the same ease and effectiveness as it was in the case of the loan subscription campaigns. For, whereas payments on subscriptions to the loans were deducted from earnings in installments at the source, the act of depositing one's savings in the bank continued to imply much more freedom on 4 . . 1 F. D. Holzman. 22. c1t., p. 200; also R. W. DaVies, pp. cit., p. 125. 124 the part of an individual and to largely depend upon his personal value judgments. Consequently, purchases of government securities by the savings banks were of secondary importance. In 1932, they were only slightly twice their 1928/29 level, while direct purchases by the populatbn increased in the same period nine times (Table 4e1). Savings deposit balances of natural persons rose from 213,236.8 thousands of rubles on October 1, 1928, to 960,748.3 thousands of rubles on January 1, 1933, or four and one half times.15 Equally, holdings of government bonds by the savings banks increased in the same period from 184.3 to 891.3 million rubles, or plus 484 per cent; while those of individuals rose from 411.0 to 5,442.8 million rubles, i.e., plus 1,324 per cent.16 In view of the fact that savings banks invested most of their funds in government obligations,l7 purchases of government bonds by the savings banks in the Ukraine were assumed to be directly proportional to her importance in 15SotSialisticheskoye Stroitel'stvo SSSR, 1935, pp. 682-683; also. 1936. p. 665. l6SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 672. 17F. D. Holzman, pp. cit., p. 23. 125 population's savings deposits. They were computed by applying to the total of such purchases in the USSR the relative weight of the Ukraine in the changes of savings bank deposit balances of natural persons. The appropriate ratios for each year were computed from data gathered in Sotsialisticheskoyp,Stroitel'- stvo SSSR.18 The main purpose of the distribution of government bonds among economic enterprises was the withdrawal of their temporarily free resources and the placement of these funds under direct supervision of the government. As in the case of the population, purchases of bonds were mandatory. If an enterprise failed to buy up its entire quota of bonds within the specified time limits, the state was authorized to 18SotSialisticheskoye Stroitel'stovo SSSR, 1935. pp. 681-682. It should be noted that savings deposits of natural persons had actually declined between October 1, 1930, and January 1, l931,both in the Ukraine and in the USSR. Yet, it was decided to disregard the negative sign before these values primarily because the ratio of the Ukraine to the USSR seemed to bear out in comparison with other years. It might have been desirable to base our computations on statistics concerning all savings deposits (i.e., natural and juridicial persons).‘ However, since changes in savings deposits of juridical persons tended to follow a much more irregular pattern, it was decided to leave them out altogether. In addition, data quoted by Sotialisticheskpye Stroitel'stove SSSR (1936, p. 672) refer to holdings of government bonds by the savings banks on account of population only. 126 seize its bank account and to extract the payment for the balance of unpurchased bonds. Such compulsory deductions into the state treasury were subject to the same regulations which governed recovery of delinquent taxes, although they did not necessarily carry additional penalties. Of course, the enterprise was then delivered bonds to the full amount of its quota. Unfortunately, the Soviet government does not disclose the information on purchases of government bonds by economic enterprises in each republic. Nevertheless, the existing evidence seems to bear out the hypothesis that such purchases were closely related to profits.20 It is assumed that the close dependence of purchases of state obligations by enterprises upon their profits was not altered even by some apparent 19See,for example: Circular of the NKF No. 767, dated November 22, 1930 (Izvyestiya Narkomfina, 46, 1930, p. 900); Decision of TsIK and SNK of the USSR, dated November 17, 1929 (Izvyestiya Narkomfina, 8, 1929, p. 183). 0According to control figures of the first five-year plan, 9 per cent of industrial profits were to be applied in this way, vysshiy Sovyet Narodnogo Khozyaystva SSSR, Kontrol'nye tsifry pyatiletnogo plana razvitiya promyshlennosti SSSR (Control figures of the five-year plan of the development of industry in the USSR) (Moscow: Gosudarstvyennoye Tekhnicheskoye Izdatel'— stvo, 1927), p. 163. R. W. Davies (pp. plp., p. 126) points out that 60 per cent of reserve capital had to be invested in state loans. Also, see note 21, below. 127 . . 21 differences among the various sectors of the economy. The fact that purchases of bonds by enterprises in some sectors of the economy were later modified to recognize investment . 22 . requirements does not cast much doubt upon the propriety of their allocation to Ukrainian SSR in accordance with her contributions to profits. For, with the total of funds un- changed, all that such "adjustments" would do is to modify the composition of their sources: profits, depreciation, and budgetary allocations. Under the circumstances, it may not be improper to warn against undue confidence in the accuracy of these 21In 1928/29 and 1929/30 industrial enterprises and joint stock companies were required to purchase government bonds to the extent of 9 per cent of their profits; syndicates and ”economic-accounting" enterprises (like Tsentrospirt)were responsible for allocating in this manner 18 per cent of their profits; while the appropriate ratio for trade organizations of local and republican authorities was 15 per cent. Obyasni- tel'naya zapiska k_prpyektu yedinogo gosudarstvyennogo byu- dzheta SSSR pp 1928/29 byudzhetnyi god (Explanatory note to the project of unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928), p. 74. 22Circular of the NKF No. 767, dated November 22, 1930, instructs agricultural industrial enterprises (largely food industry)\to invest in the state loans all of their resources not required for capital investments, profit taxes, and other mandatory deductions. This circular, while offering a detailed account of the method of determining the amounts to be thus invested by an enterprise, also dwells on the compulsory nature of such purchases. Izvyestiya Narkomfina, 46, 1390, p. 900. 128 estimates. Nevertheless, statements obtained from various sources do indicate that the computations are, indeed, a fair representation of actual developments. Although, on balance, it appears that our figures probably fall short of actual purchases of government bonds in the Ukraine, i.e., at least by the population. For example, the above estimates of total receipts from sales of government bonds in Ukrainian SSR in 1928/29 (136.7 million rubles) are slightly below the 140.0 million rubles claimed by Hutsulyak.23 The Ukraine's share in total proceeds (18.9 per cent based on estimated 136.7 million rubles) compares favorably with 18.3 per cent computed from the plan of deductions into the state budgets of union republics of the receipts from the distribution of the Second Industrialization Loan.24 This loan was sold 2 . 38. Hutsulyak, "Ukrayins'ke narodnye hOSpodarstvo na shlakhu sotsiyalistychnoyi rekonstruktsiyi v 1928/29 rotsi" (Ukrainian national economy on the road of socialist recon- struction in 1928/29), Bil'shovyk Ukrayiny, 15-16, 1928, p. 13. Another source (Akademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyaystva Ukrainskoy SSR) (Moscow: Izdatel'stvo Akademii Nauk SSSR, 1954, p. 255) mentions briefly 100 million rubles as proceeds from sales of government bonds in the Ukraine in 1928/29. This, however, yields a ratio of only 13.8 per cent of the USSR, an undoubtedly unrealistically low one, especially when compared with other years. 24Yedinyigosudarstvyennyi byudzhet Soyuza Sovyetskikh Sotsialisticheskikh Respublik pp 1928/29 pyudzhetnyi god (Unified state budget of the USSR for 1928/29 fiscal year) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928). 129 primarily to workers and salaried employees whose purchases were substantially proportional to their earnings; it was not to be sold to economic enterprises. In 1929/30, according to planned deductions into the state budget of Ukrainian SSR, the Ukraine was expected to contribute to the various loans in the following proportions: (a) 18.8 per cent of the Second Industrialization Loan (which was planned to yield only five million rubles in the entire Soviet Union), (b) about 21.24 per cent of the Third Industriali- zation Loan (total sales in the USSR were planned at 575 million rubles), and (c) 20.57 per cent of the "new loans" (their total distribution was expected to reach 310 million rubles).25 Actual purchases of bonds of Five-Year-Plan-In-Four-Years Loan reached in the Ukraine 104.7 per cent of the plan in the case of workers and salaried employees, and 50.7 per cent in the case of peasants. Comparable ratios for the entire USSR were: workers and salaried employees -- 101.3 per cent, peasants —- 44.3 per cent. This was at the time when the ful- fillment of the planned distribution of this loan to the 25Yedinyigosudarstvyennyi pyudzhet Soyuza Sovyetskikh Sotsialisticheskikh Respublic pg 1929/30 g; (Unifiédcstate budget of the USSR for 1929/30) (Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo SSSR, 1930). 130 population in the USSR was listed at 81.6 per cent.26 Thus, it appears that the computed ratio of 21.34 per cent for the population is reasonable, especially in view of the fact that, as of July 1, 1930, Ukrainians were responsible for only 20.46 per cent of delinquent payments on subscriptions to the Third Industrialization Loan. The conversion of the then outstanding four mass- subscription loans (loan to strengthen peasant economy and the three industrialization loans) into Five-Year-Plan—In- Four-Year Loan, which was ordered by the Decision of TsIK and SNK of February 21, 1930, was to be completed by January 1, 1931.28 It is likely that the differences in the tempo of conversions in the various republics and regions might have influenced the officially reported sales of government bonds, especially towards the end of 1930. Therefore, it is probably much more sensible to consider the last quarter of 1930 in conjunction with the entire year of 1929/30. 2 . 6I. Landa, pp, c1t., pp. 5-6. 27Circular No. 593 of the NKF, dated August 13, 1930, Izvyestiya Narkomfina, 36, 1930, p. 754. 28K. N. Plotnikov, pp, cit., p. 128. Decision of TsIK and SNK of Febraury 21, 1930, Izvyestiya Narkomfina, 18, 1930. p. 404. 131 Although participation of the Ukraine in the purchases of government bonds in the fourth quarter of 1930 (30.2 per cent) may seem rather high at first inspection, when combined with 1929/30 it results in a ratio of 22.1 per cent. This combined ratio does not compare badly with other ratios, particularly 22.9 per cent in 1931. In 1931, according to Berins'kyi, 343.5 million rubles worth of the Third Decisive Year Loan (1931 edition of the Five—Year-Plan-In-Four-Years Loan), or 21.47 per cent of the issue were to be sold in the Ukraine.29 Actual sales to the population reached in the Ukraine 116.7 per cent of the plan,30 i.e., with regard to the first lottery drawing. Assuming that this rate of realization of the plan was representative of the whole issue, sales of government bonds in the Ukraine 9Berins'kyi, "Pozyka tret'yoho vyrishal'noho" (Loan of the third decisive year), Radyans'ka Ukrayina, 6, 1931, p. 41. This is at variance with 335.8 million rubles, Ukraine's quota, derived from figures cited by N. K-iy (his article, "Rabotat' metodami luchshikh" (Let us work as the better ones do), Finansy i SotSialisticheskoye Khozyaystvo, 22, 1931, p. 19). According to the latter source, as of July 25, the plan was fulfilled in Ukraine as follows: total -- 91.9 per cent; workers and salaried employees -- 114.2 per cent; peasants -- 51.5 per cent; other population —- 84 per cent. 30 L—ov, "Ukraina organizovano vstretila tyrazh," Finansy i Sotsialisticheskpye Khozyaystvo, 4, 1932, p. 19. 132 should have approached in 1931 a 400 million rubles level, rather than 373.9 million rubles shown in Table 4+1. Official statistics released by the Board of Economic Accounting of Ukrainian SSR revealed that the population of the Ukraine invested in government securities from the intro- duction of the mass-subscription loans (i.e., August 24, 1927)31 until the end of 1932 approximately 1,258.8 million rubles.32 Purchases of government bonds by the population of the entire Soviet Union during the first five-year plan amounted to 5,184.3 million rubles. Thus, if 273.9 million rubles (net change in the holdings of state loans by the population between October 1, 1927, and October 1, 1928)33 are added to the above total, a comparable figure for the USSR might have reached 5,458.1 million rubles. The Ukraine's participation thus becomes 23 per cent. This is somewhat above the 21.33 per cent ratio obtained by using estimates presented in Table 4—1. Table 4-2 summarizes the inter-budgetary relationships on account of revenues from sales of government bonds in the Ukraine. 31K- N. Plotnikov, pp; cit., p. 127. 32Upravlinnya Narodno-Hospodars'koho Obliku URSR, Sotsialistychna Ukrayina (Socialist Ukraine) (Kiev: vydav- nytstvo “Narodne Hospodarstvo ta Oblik," 1937), p. 94. 33SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 672. 133 Table 4-2 The reallocation of revenues from salescfifgovernment bonds in the Ukraine between the state budget of Ukrainian SSR and the all-Union budget. (in millions of rubles) Years Sales of Deductions Retained Government into the by_the Bonds in state budget all-Union Ukrainep/ of UKr, SSRp/ budget 1928/29 136.7 9.3 127.4 1929/30 253.7 14.6 239.1 40. 1930 107.4 5.7 101.7 1931 747.6 56.6 691.0 1932 775.5 133.2 642.3 1928/29-1932 2,020.9 219.4 1,801.5 SOURCES : (a) Table 4-1. (b) Table I. 134 Table 4-3 presents an attempt to estimate budgetary expenditures in the Ukraine connected with the government debt. Unfortunately, due to lack of information, it was not possible to analyze these expenditures beyond a recognition of retire— ment of the loan of economic restoration. Such statistics are virtually non-existent to the researcher.34 The computations of retirements of public debt produce the following results (in millions of rubles):35 1928/29 -— 181.3; 1929/30 -- 685.3; fourth quarter of 1930 -- 22.8; 1931 -- 94.3; 1932 -- 172; 1928/29-1932 -— 1,155.7. It is gratifying to note that the estimated retirements of 172 millions of rubles in 1932 compare favorably with the planned retirements for that year (180.2 million rubles).36 Of course, it is hoped that the 34Only two references were found by this writer: a) Upravlinnya Narodno-Hospodars'koho Obliku URSR, Sotsiyalistychna Ukrayina (Socialist Ukraine) (Kiev: Vydavnytstvo "Narodne Hospodarstvo ta Oblik," 1937), p. 94; b) A. M. Lyando, Gosbyudzhet SSSR zavyershayushchego gpda pyatiletki (State budget of the USSR in the concluding year of the five-year plan) (Moscow: Gosfinizdat, 1932), p. 32. 35Obtained by the following formula: beginning balance of outstanding public debt plus revenues during the period minus the ending balance. The beginning and the ending balances were taken from SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 672, while revenues came from Table I. 36A. M. Lyando, Gosbypdzhet SSSR zavyershayushchegp‘gp- pp pyatiletki (State budget of the USSR in the concluding year of the five-year plan) (Moscow: Gosfinizdat, 1932), p. 32. 135 .Hld OHQmB any .H OHQMB Amy "mmumDOm m.¢s¢ .m.smm.m «.mpa.m H.mmH mmmaumm\mmmfi ¢.omH m.mH m.H©m m.H©m I NmmH m.mm m.mm m.mov m.wov I HmmH n.Hm N.Om o.mOH m.vn H.om ommH .Ow N.mm m.mH m.oHv H.mov H.mp cm\m~mD v.mp m.mH o.p4m m.HHm m.mm mm\mmmH OCHODMD CH Dmmpsfl COHCD ADCmU Hmmv mmHCDHprmxm \MfipwHMHommmCDv \MCOHDOHODmmm IHHm OCD Eoum \MCODomm mmHCDHpCmmxm OHEOCoom mo Cmoq meCDHpCmmxm COHDmOOHHd HmDOB HOSDO OAD mo DCOEOHHDmm mumww AmmHQCH m0 mCOHHHHE CHV .DwmpCQ COHCDIHHm wnD Eoum mCmoH mDmDm Co meCDHpCmmxw mo COHDMOOHH< .mlv mHnt 136 above estimates fairly well represent actual retirements of government bonds during the first five—year plan period. An exception should be taken with respect to 1929/30. 'An unusually large value of retirements in that year suggests that some conversions of the old loans into the Five—Year-Plan— In-Four-Years Loan were possibly double counted on the revenue side without proper adjustment of the expenditures side of the budget (compare 685.3 million rubles estimated retirements with 470.8 million rubles of total expenditures from the budget on account of public debt management). Expenditures connected with public debt were allocated to the Ukraine on the basis of her participation in the total purchases of government bonds. The underlying assumption here is, of course, that, over an extended period of time, such expenditures should be proportionate to sales of bonds. (This may not be entirely correct in the case of bonds involving lottery prizes rather than conventional method of interest payments).37 It is known that in 1932 retirements and interest payments to the population in the Ukraine amounted to 58.2 37See F. D. Holzman, pp. cit., pp. 202-203. 137 million rubles.38 On the strength of this information alone. one would be tempted to conclude that estimates of expenditures in the Ukraine presented in this paper are excessive. How— ever, since it can hardly be considered an adequate evidence for passing such a conclusive judgment, it has been decided to retain the original estimates. A comparison of budgetary revenues and expenditures associated with public debt administration in the Ukraine and in the USSR fail to reveal any divergent patterns. Thus, while all union republics received during the entire first five- year plan approximately 11.2 per cent of revenues from sales of government bonds on their territories, the Ukraine was returned about 10.9 per cent of such proceeds. Taking into account budgetary expenditures incurred in connection with the maintenance of public debt, the central government retained for its own purposes 64.8 per cent of gross collections in all union republics taken together, as opposed to 65.7 per cent in the Ukraine. 38Upravlinnya Narodno-Hospodars'koho Obliku URSR, Sotsialistychna Ukrayina (Socialist Ukraine) (Kiev: Vydav- nytstvo "Narodne Hospodarstvo ta Oblik," 1937), p. 94. 138 Transportation Means of transportation were largely owned, operated. and controlled in the Russian Empire by public authorities. The Soviet government revived and extended these pre-revolutionary practices of centralized control over the transportation industries. Thus, with minor exceptions, they are all under direct super- vision of the all-Union authorities. Until 1932, virtually all of their revenues and expenditures were included in the all-Union budget on the gross basis.40 As in many other respects, the central government failed to exhibit enough interest in regional analysis of transportation's revenues and expenditures. At any rate, it appears that the government has consistently avoided publicizing them. 'A. Revenues. Of necessity, the distribution of revenues and expenditures between the Ukraine and the rest of 9According to Kononenko,in 1913 no less than 80.5 per cent of capital invested in the railroads came from the state. K. Kononenko, Ukraine and Russia (Milwaukee: Marquette University Press, 1958), pp. 205-207. 40 . . . .. See: K. N. Plotnikov, Ocherki istorii byudzheta sovyetskogo gosudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinizdat, 1954), p. 107; F. D. Holzman, pp, p33,, pp. 215-216; R. W. Davies, pp, plp., pp. 239- 240. 139 the USSR will have to be made with the assistance of a number of pertinent indicators more readily available. Since most of the transportation revenues originated in the railroads,41 the structure of railroad revenues was projected into the analysis of total revenues of public carriers. Freight traffic alone produced in 1927/28 approximately 76.87 per cent of the railroad revenues, while passenger traffic was responsible for additional 17.43 per cent of such receipts. By 1932 their shares had changed as follows: 55.91 per cent for freight and 37.33 per cent for passenger traffic.42 Since these two sources together accounted for 94.3 per cent of the revenues of the railway system in 1927/28 and 93.2 per cent in 1932, their ratios were adjusted to a 100 per cent basis. The adjusted ratios become: a) freight traffic 81.5 per cent in 1927/28 and 60.0 per cent in 1932; b) passenger traffic 18.5 per cent in 1927/28 and 40 per cent in 1932. The above changes in the structure of the revenues 41See Table I. 42 . . . . All ratios computed from statistics presented in The U.S.S.R. 1p Figures (Moscow: Soyouzorgoutchot, 1935), 140 were brought about by two factors. First. changes in the passenger rates were much greater than those of the freight rates. Thus, while passenger rates per passenger—kilometer have risen from 1.35 rubles in 1927/28 to 2.45 rubles in 1932, or plus 81.5 per cent, freight rates, on the other hand, have increased in the same period by only 5.9 per cent: from 1.52 to 1.61 rubles per ton/km.43 Second, passenger traffic itself had experienced in that period a tremendous upsurge. Sotsialisticheskoyp,Stroitel'- stvo SSSR44 makes possible the following comparisons of trends in physical turnover (in relation to 1928 in both cases): 1) freight (billions of ton-kilometers): 1929 - 120.9 per cent; 1930 - 143.4 per cent; 1931 - 162.9 per cent; 1932 - 181.3 per cent; 2) passenger traffic (billions of passenger- kilometers): 1929 - 130.6 per cent; 1930 - 211.4 per cent; 1931 — 252.2 per cent; 1932 - 341.6 per cent. Whereas the dates and the patterns of changes in the rates are not known, a comparison of trends in physical turnover suggests a continuous. rather than an abrupt, gain 43Ibid. 44SotSialisticheskoye Stnaitel'stvo SSSR, 1936, pp. 416-417. 141 in the structure of railroad receipts. It is for this reason that the weights for the two sources of revenues in the inter- vening years were obtained by interpolating from 1927/28 and 1932 adjusted figures according to simple arithmetic regression. The ratios are presented in Table 4-5. It is assumed that the railways in the Ukraine were likewise responsible for the overwhelming proportion of transportation revenues. Thus, receipts originating in the Ukraine were estimated by direct reference to statistics on freight and passenger traffic in the Ukraine and their comparison with similar data for the USSR. The Ukraine's share in railroad traffic in the Soviet Union for the years for which the information was available is shown in Table 4-4. For other years the ratios were developed in Table 4-5 by simple arithmetic interpolation from values presented in Table 4—4 .p. Expenditures. It has been already stated that the classification of budgetary revenues and expenditures was changed in 1932 so as to exclude from the budget all operating receipts and expenditures of the transportation. Table II shows that operating expenditures of the railways Table 4-4. Railroad traffic. 142 1 1928/29 1932 1933 1934 1935 Ukraine Freight, billion tons/km Passengers: 1. millions of persons 2. billions of passengers/ km USSRC Freight, billions tons/km Passengers: 1. millions of persons 2. billions of passengers/ km Ukraine pp percentage p£_£pp_USSR Freight, billion tons/kml - Passengers: 1. millions of persons 2. billions of passengers/ km 21. 74. 93 291. 24. 23. 25. 20. .42 169.3 169.5 342 19.97 19.94 63 00 42.6 197.2 12.1 205.7 942.5 71.4 20.71 20.92 16.95 51.4 20.0 11.0 258.1 919.1 67.9 19.91 21.76 16.20 143 SOURCES: (a) Akademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyaystva Ukrainskpy SSR, p. 354. (b) Ibid.. p. 294. (c) SotSialisticheskoye Stroitel'stvo SSSR, 1936, pp. 416-417. (d) Naukove Tovarystvo im. Shevchenka, Entsyklopediya Ukrayinoznavstva, I,p. 1099. NOTES: (1) The following ratios were computed for the Ukraine's share in total inbound and outbound freight traffic of the railways in the USSR, originally expressed in thousands of tons (per cent of the USSR): a Inbound traffic Outbound traffic 1929a 27.0 32.7 1932b 27.9 34.0 1933 28.6 33.7 (a) SotSialisticheskoye Stroitel'stvo SSSR, 1934, pp. 263—264. (b) SotSialisticheskoye Stroitel'svto SSSR, 1935, pp. 400-401. (2) 1928. 144 m.mH 0N.HN m.mH m,mH mm.¢m m.ON m.mH mm.0m ¢.HN b.mH m®.hm m.NN mmODCDHpCOme DOHMDOHD HOmCOmmmm mCHDmHOmO UCO DDmHOHm CH CH OOCODDOCEH OHmDm m.OCHmeD ODODOmm mOCCDHpCOmxm mCHDmHOmO HODDO COHDOOOHHC m.0H 0.00 N.mH m.0m 0.mm m.mH v.Hm m.mm 0.0H m.mm 0.0m 0.0m DOCCO>OH OAED\HOmCOmme HODOD CH mo .HHD OOHCOO ODD mo CH0 DDmHO3 OOCODHOQEH m.OCHmHDD mHODomm HOmCOmmmm COHDOOOHHC 05.05 n.0H NmmH NH.m0 N.mH HmmH mH.mp H.HH om\mmmH Hm.ma ~.HH mm\m~ma OmOHCDHpCOme pOHmDm mCHDmHOmO CH OOCODCOQEH m.OCHODD pCCm Ommz OOHCDHUCOQMm mCHDmHOQO .m 0.00 0.0m mmmH 0.m0 H.Hm HmmH m.on m.mm om\mmmH o.pH m.mm mm\wmmH DOCCO>OH ODED \COD HmDOD CH mo .HHD OOHCOO ODD mo OOCODHOQEH CHV DDmHO3 m.OCHmHDD DanmDm mmflcmxwwm . 4 .ADCOO HOQV Mmm COHCHODDD OD mODCDHpCOme 0C0 mOCCO>OD COHDODDOCOCODD mCHDOOOHHm Dom mHODomm mo DCOEQOHO>O© ODE .mIq OHDmB 145 Table 495 Continued SOURCES: (a) 1928/29 and 1932 from Table 4-4 1929/30 and 1931 interpolated from 1928/29 and 1932 figures. (b) 1932, computed from statistics on freight and 1935, p. 195, and adjusted to 100 per cent base. Ratios for other years were obtained by interpolation from 1927/28 and 1932 figures (ibid.). (c) 1928/29 from Table 4-4. Ratios for other years were obtained by interpolations from 1928/29 and 1934 figures (ibid.). (d) 1928/29 and 1932 from Table VII. 1929/30 and 1931 interpolated from 1928/29 and 1932. (e) See note 47,to this chapter. (f) Allocation Factor for Revenues. (g) Residual. 146 amounted in 1932 to 2,899.3 million rubles. Similar figures for all transportation for the entire period were obtained by comparing transportation expenditures in Table II with such expenditures listed in the budget arranged according to the 1933 classification, i.e., net of operating expentidures. This analysis reveals that operating expenditures of transport- ation during the first five-year plan period were equal to 46 8,377.8 million rubles. It is important to note that the wage fund in the 45 Expenditures prior Expenditures Operating to exclusion of net of operating operating expenditures expenditures expenditures 1928/29 2,475.4 1,282.7 1,192.7 1929/30 3,148.6 1,694.6 1,454.0 4Q. 1930 1,066.5 620.5 446.0 1931 4,986.7 2.637.0 2,349.7 1932 6,589.6C 3,654.2 2.935.4 1928/29-1932 18,266.8 9,889.0 8,377.8 (a) Table II; SotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 646. (b) SotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 651; 1936, p. 645. (c) Adjusted for 2,899.3 million rubles of operating expenditures of the railways system, which were excluded in Table II. 46See note 45, above. All figures adjusted for 2,899.3 million rubles operating expenditures of the railroad system, not included in 1932 budgets. 147 railways system accounted for 65.1 - 78.7 per cent of its operating expenditures.47 Again, as in the case of the revenues, it was assumed that these ratios were representative of the entire system of transportation. The allocation factors that were employed in estimating expenditures on transportation in the Ukraine are weighted averages of the Ukraine's share in the wage fund of transportation and of her importance in the freight and passenger traffic. The latter part was based on the assumption that operating expenditures other than labor were proportional to the traffic turnover. And it was assumed that the Ukraine's share in the freight and passenger traffic was the same as her importance in the transportation revenues. The allocation factors are Operating expenditures of the railways were obtained by employing the same method used in note 45, above, to estimate operating expenditures of the entire transportation system. They were as follows (in millions of rubles); 1928/29 - 1,191.8; 1929/30 - 1,451.0: 4Q. 1930 - 445.3; 1931 - 2,349.7; 1932 - 2,899.3 (for sources see note 45). Wage fund in transportation is taken from Table VII. Since Table VII indicates values for 1928, 1929, and 1930, the following averages were assumed: 1928 and 1929 for 1928/29; and 1929 and 1930 for 1929/30. The ratios Of wage fund to operating expenditures for individual years are as follows (per cent): 1928/29 - 72.37; 1929/3O - 69.18; 1931 — 65.12; 1932 - 78.74. 148 presented in Table 4-5. The reamining 9,889 million rubles of expenditures in transportation (of the total of 18,266.8 million rubles) very closely approximate the capital investments in transport- ation during this period, i.e., 9.8 billion rubles.48 Indeed, ". . . from 1927/28 onwards . . . the gross income of the raibways considerably exceeded current expenditures on running costs and maintenance and was sufficient to cover investment on the railways and the various social and cultural services they maintained, in addition to their operating costs."49 The role of the budget in financing capital investment in transportation was rather insignificant: 139.8 million rubles in 1928/29;50 its financing of investments in transportation and posts amounted to 131.1 million rubles in 1928/29 and 21.7 million rubles in 1929/30.51 The following note also indicates that capital invest- ments in transportation were financed mainly from internal 48 . . . . State Planning CommiSSion of the C.P.C. of the Union of SSR, Summary pp the Fulfillment pf the First Five-Year Plan for the Development pp the National Economy pg the USSR (Moscow: State Planning Commission of the USSR, 1933), p. 270. 49R. W. Davies, pp,cit., p. 239. 50Ibid., p. 135. 51Ibid., p. 83. El 14.1. at! IQ (a .F P.\7.\CI»# L.A.» nhnIb W: I.” ~.W 1 w r I (III q IH . Furs m. IOINI‘)I1‘II 4.20 CH ,0 :ONZAAVIIV I MUCH 0h v-Hd \ AU 1' ,H\ RU HAN “~va 149 N.moo OCHOHDD Eoum mHO3mHUDDH3 DOz .U m.NmH.H mOHDHHODDCm COHCD IHHO >D pOOCmCHm mDCOEDmO>CH N.NON NmOHDHHODDCm COUHHDCmOm ha pOECmmm mDCOEDmO>CH "mqu On.0m0.H m.Hmm m.mnm H.0Nm 0.mmH OCHOHDD ) CH COHDODHOQOCODD 2 CH mDCOEDmO>CH HODOB .m H.mmH.D o.HDm o.ap¢ m.mDD m.mmm m.mom mmusDDpammxm mcflpmummo HO>O mOCCO>OH mo mmOOxm m.0nm.H 0.Hmm H.000 m.mm 0.mhm 0.mmm meHCDHpCOmxO mCHDmHOmO .H mOHCDHpCOme .m 0.m0m.m 0.000.H H.m00 N.00H m.m00 m.mmm OCCO>Om HODOB 0.0m 0.0m COHDODHOQOCOHD 0 CO >>OH HOHOOQm .m 0.nmm.m m.000.H H.m00 N.00H m.m00 m.mmm ODOHCmOm .H mOCCO>Om .< OCHOHDD w.hnm.m 0.mmm.m n.00m.m 0.000 0.0m0.H h.mmH.H OmODCDHpCOmxm mCHDmHOQO .m H.HNH H.HNH coHDmDDommcmDD D Co >>OH HOHOOQm .N m.mmm.0H 0.0H0.m 0.0m0.0 0.Hmm m.mmo.m 0.mmm.m mHmHCmOm .H mOCCO>Om .d MmmD mmmHIm~\m~mH mmmH HmmH 0mmH .00 0m\mNOH mm\mmmH .OCHODDD ODD Ammansp mo mcoDHHDs cHV CH COHDmDDOCmcmCD mo mmusDDpcmme 0cm mDmHOOOD DO COHDmDsCeOu .0I0 OHDMB 150 Table 4-6 (Continued). SOURCES: (a) Table I. (b) Ibid., note 3. (c) See note 45 to this chapter. (d) USSR values multiplied by appropriate allocation factors from Table 445. (e) Table XI. NOTES: (1) Adjusted for 2,899 of operating revenues not included in the budget. (2) V. P. Akulenko, "Kapital'ne budivnytstvo Ukrayiny na 1931 rik," Hospodarstvo Ukrayiny, 11-12, 1930, p. 31; M. Vasylenko, "Pidsumky druhoyi sesiyi VUTsVK-u ta TsVK-u Soyuza, " Bil'shovyk Ukrayiny, 24, 1929, p. 21. These sources indicate the amounts which were presumably financed by other than all—Union authorities in 1928/29 through 1931. The above figures yield the following rates: 17.0 per cent in 1930 and 16.6 per cent in 1931. Their figures suggest slightly higher ratios in 1928/29 and 1929/30. We have assumed here a ratio of 17 per cent. 151 sources. In 1933 the Industrial Bank financed the People's Commissariats of Railway Transport and Water Transport in the second half-year only.52 In view of the above, other than operating expendi- tures were assumed to represent primarily capital investments. The Ukraine's share in them was obtained from Table XI. IQ. Summary. Table 4-6 summarizes the results of operation of means of transportation in the Ukraine. Both receipts and expenditures were computed by applying to the USSR values the appropriate allocation factors from Table 4-5. Capital investments, from Table XI, were adjusted for the portion financed by other than the all-Union authorities. According to Table 4-6, about 18 per cent of the transportation's gross revenues that originated in Ukrainian SSR were diverted from the Ukraine into other areas of the Soviet Union. Communication According to Soviet terminology, this includes post, 52 . . The U.S.S.R. pp Figpres (Moscow: Soyouzorgoutchot. 1935), p. 323. Whereas in 1933 such financing did not exceed 1,058 million rubles, in 1934 it rose, according to this source. to 2,989 million rubles. ‘1' l‘ I! Ill-'0‘! lll.‘ ‘lll llllv,|1 l [.1 ll . 152 telegraph, telephone, and radio.53 No doubt, all of these services had to be increased along with the general expansion of the economy and the growing demand for them by the population. Therefore, in the absence of more detailed information, it is probably fair to allocate revenues and expenditures of communi- cation services (with the exception of capital investments) to the individual republics in relation to their weight in industrial output and the population. Thus, in Table 4—7, receipts and expenditures of communication services in the Ukraine were determined on the basis of an average of her contributions to the output of the large-scale industry and her share in the USSR population. Table 4—7 reveals that communication revenues in the USSR exceeded all expenditures on account of these services in every year during the first five-year plan era. It follows that collections of fees for such services amply covered not only operating expenditures and all capital investments in communications system but actually produced a budgetary surplus 53 . . . . State Planning CommiSSion of CounCil of People's Commissars of the USSR, Summary pp the Fulfillment p: ppp First Five-Year Plan for the Development pp the National Economy pf_ppp USSR (Moscow: State Planning Commission of the USSR, 1933). p. 178. 153 H.m0 p.Hm m.oa H.m m.n CHHImV .ND Dmmpsn cOHcpIHHm ODD Mm.pmcDmDOm .o o.amm o.¢~H m.mm m.mp m.mm mmuppflpcmmxm DmDoD .HH p.mm 0.0m 0.0m mo.om Hp.m omuamstO>cH HmDDmmo .oa «.mmm 0.0m m.mp m.m0 m.0m mmDsD .IHpCOmxm mCHDmHOQO .0 "OCHODDD .HH 0.0mm.a m.0om H.00m H.m0m m.m~HmmD:DDpcmmxm mcHDmDOmO .m «.mpm m.mmH m.0mH mo.m~D Hm.os nmucmstm>cH HODHQOU "mqu .w m.HmH.D m.omp o.Dmm H.mam m.mmH mDmDoD .p .mmmp .H OODCDHOCOQXM .O H.0Hm p.m0D m.moa m.HH m.00 xmxwv mcDmep .m D.omm.H H.Hmn o.mpm m.mo¢ m.mom mammp .0 wOCCO>Om .m mp.mD mm.mH mm.mD mH.om Nuxm + H0 mHODUmm COHDOUOHHC .m mm.ma m0.mH mm.mH Hp.mH ADCOO COOL mmmp p m 0 m \OCHOHDD "COHDOHCQOC .N Do.ma pa.ma mom.mH mp.om ADcmo 0000 Suumsch OHOUmIOmHmH mo DCQ IDSO CH Ohmflm m.OGHm.Hv-D .H mHODUmm COHDOUOHHC .C NmmHlmN\mNmH NmmH HmmH Hom\mNmH mm\mNmH .AmOHDCD DO mCOHHHHE CH0 mOUH>DOm COHDmOHCCEEOO DO mODCDHpCOCxO 0C0 mDQHOUOD DO mmw CmHCHmCxD OD mCoDDmooHH< .mi0 ODDOB 154 Table 4-7 (Continued) SOURCES: (a) Table I. (b) SotSialisticheskoye Stroitel'stvo SSSR, 1934, pp. 300-301. (c) 1928/29-1931: V. P Akulenko, "Kapital'ne budivnytstvo Ukrayiny na 1931 rik," Hoppodarstvo Ukrayipy, 11-12, 1930) p. 31; 1932 assumed to be the same as in 1931 so as to reflect the trend evident in the USSR. NOTES: (1) Including 40. of 1930. (2) 1930. (3) January 1, 1929. (4) January 1. 1931. (5) January 1, 1932. (6) January 1, 1933. (7) 1929. (8) 1930. 155 of 8.3 per cent of gross revenues during the five—year plan. In the Ukraine on the other hand, the unified state budget retained 13.3 per cent of communications gross receipts. The difference in this budgetary surplus between the USSR and the Ukraine can be explained chiefly by disproportionately low capital investments in communication enterprises in the Ukraine -- 15.7 per cent of such investments in the USSR. It should be added that, while the analysis of this as well as of the remaining items on the revenue side of the budget (presented below) may not be entirely accurate, the seriousness of the error is deemed to be minimal in view of the relatively small amounts involved. Customs Revenues An analysis of customs revenues in the USSR is hindered by several factors. First of all, there is the problem of statistics. Actual receipts of these revenues by the various ports of entry are of limited value to the researcher. In all probability, they do not properly reflect the origins of the customs receipts, i.e., according to the republics which have ultimately paid the duties. An adjustment of the official statistics would require the knowledge of the 156 following data: (1) destination of the imported goods (so as to determine the location of the payer of the duty, which may not necessarily coincide with the location of the port of entry), (2) exact composition of the imports passing through each custom office, and (3) schedule of tariffs. The situation is further complicated by the government's monopoly of foreign trade. This monopoly has enabled the state to plan and manipulate its commercial relations with other countries not only for purposes of assisting in the fulfillment of its general economic plan, but also towards the ends of attaining political influences and economic domination over the weaker foreign countries.54 With a direct control over the foreign trade, the government did not need to resort to tariffs in order to protect domestic industries. Thus, the role of tariffs was reduced to equali- 55 zation of costs of imported and domestically made goods. Neither is it possible to recreate a complete picture 4Harry Schwartz, Russia's Soviet Economy (second edition; New York: Prentice-Hall, Inc., 1954), pp. 574-578; A. BaYkov, The Develppment pg the Soviet Economic System (Cambridge: Cambridge University Press, 1950), pp. 71-77, 265-266. 55H. Schwartz, pp, cit., p. 585. 157 of contributions to receipts from foreign trade of each republic by looking at the imports alone. Owing to a thorough control of foreign trade, the government could view imports and exports as one transaction without paying much attention to the profitability from trade of individual products. Further, there was nothing to prevent the state from continuing to export a product even at the risk of displeasing some segments of Soviet society and disregarding their legitimate interests. Thus, "Some goods were even exported at the expense of home consumption and without profit, indeed sometimes with a loss, as they provided foreign currency for the payment of the required imports."56 For example, While rationing consumer goods on the domestic markets, the government continued to export grains in the early 1930's under conditions of unfavorable terms of trade despite the widespread famine in the Ukraine. 56A. Baykov., pp, cit., p. 77. 57H.Schwartz, pp, cit., pp. 589-590. Schwarts apparently refers to the so-called "artificial famine" of 1932-33 which was responsible for deaths of several million people in the Ukraine; according to the official information, the Ukraine failed to account in 1933 for at least 3 million persons. (See Vsevolod Holub, "Prychyny holodu 1932-33 roku," (Causes of the 1932-33 famine), Vpered, 10 (94), 1958, pp. 6-7). On this subject also see: 0. Martovich, Ukrainian Liberation 158 Baykov estimated that raw materials, semi—manufactured, and manufactured goods accounted for 89.0 - 93.4 per cent of all imports in 1929-1932.58 Manufactured goods alone were responsible for one half to three quarters of the total imports; they were mostly capital goods purchased for the industry. Thus, customs revenues were allocated to the Ukraine (Table 4—8) on the basis of an average of her importance in capital investments in the industry and in the retail trade turnover. The Ukraine's contribution to Cultural and Housing levies, as well as to income taxes were obtained by applying Movement 1p Modern Times (Edinburgh), pp. 65-66; M. Mishchenko, "Hunger as a Method of Terror and Rule in the Soviet Union," Ukrainian Qparterly, 3, 1949, pp. 219-255; M. Mischenko, "My Testimony on the Genocide in Ukraine," Ukrainian Quarterly, 3, 1950. pp. 256-264. 58 . . A. Baykov, pp, ppp., p. 275. In each year their share was as follows (in per cent of total imports): Raw materials Manufactured Raw materials, and semi— semi-manufactured. manufactured and manufactured goods goods goods 1929 43.6 46.6 90.2 1930 25.3 63.7 89.0 1931 19.2 74.2 93.4 1932 16.5 73.4 89.9 159 .Hx magma \0 .mI>H wasps \p .H OHDme \m m.mmm m.mmD HH.DN m.mHm.H mmmaumm\mmma m.hm hm.mH m.Hmm mmmH m.hm Hm.mH m.Hmm HmmH p.mm Dmo.om m.mmm mom\m~mH H.pm mm.om «.mmm mm\mmmH ADCOO COmvoqumspCH CH ADCOU HOmv AOOHDCH mo pOCHmCxD ODD CH mDCOEDmO>CH HmDHmmU DDO>OCCCD OmeD HHODOm mmmmb OCCO>OD mEODmCU CH OCmDm m.OCHmCxD CH OCmDm m.OCHmCxD OCCO>Om mEODmCO A00 Amy AHV "COCCOE mCHBOHHOD ODD CH pOCHmDDO AHV "mmeoz .H OHDOB A00 "mmUMDOm 0.0NH n0.mm 00.00m m0.0m0.H mOCCO>Om CODDO .m m.0m 0m.0m H.00H OECOD 0OC3O wHHmeH>HpCH CO me mmmH .0 N.mm 0.50N m0.0mm H.H0m.H mOxmB OEOUCH .m N.HHN 0.0HN mm.>m0 0.H0m.H mOH>OH mCHmCOm 0C0 HOCCDHCU .m N.mmm Hm.mmm m.mHm.H OCCO>OC mEODmCO .H DCOECDO>00 mmm OCHODDD mmmmD HOCDCOU COHCHOHDD IDOmpCm IDOmpCm ODD SC Do Dmmpsm ODmDm ODmDm pOCHmDOm ODmDm "mmOH pOHmHCD pOHDHCD AOOHDCH DO mCOHHHHE CH0 NmmHImN\mN0H mOCCO>OH HODDo pCm.mOme OEOUCH .mOH>OH mCHmCOD 0Cm HODCDHCU.OOCCO>OC mEODmCU DO COHDmUoHHC .wr0 OHDOB 160 H.mm DOmpCD COHCDIHHm EOCD mCODmCmCe 0.0N mEODH HOCpH>HUCH mo >HOEECO pCm mmm COHCHOCDD mo DOmpCD ODmDm ODD CH mOCCO>OC me DO HODOD COOBDOD moCmmOCUmHQ Any 0.0m0.H H.mmH OEOUCH >HODOCO£ m.mm0 OCCO>OH XODICOC CODDO 0.N >DHOQOHQ ODODO EOHD OEOUCH N.mmm OCCO>OH me DODDO 0.0 me HOHCDHCUHHmD “AOOHDCH mo .HHEV DOmpCD COHCDIHHO ODD >D pOCHmDOD OEODH UmDmUOHHmCC mCHBOHHOm ODD DO DCOU DOC >DCOBB Dov .mUHHDCmOH COHCD mo ODOmpdD ODmDm ODD ODCH mCOHDUCpOp mo DOZ Amy .DCOU DOC mm.mH I me HOCCDHCUHHmm OD COHDCDHHDCOU m.OCHmHDD ODD OD COHDHOQOCQ CH A0v .mUHHDCQOH HHO mo mDOmUCD ODmDm ODD ODCH mCOHDUCpOp OD Mmm COHCHOHDD Do DOmpCD ODmDm ODD ODCH mCOHDUCpOp mmmHI0N\mmmH DO OHDmH I DCOU DOC m>.0H >D pOHHCHDHHE mmmb ODD CH mCOHDUOHHOU HODOB Amy m.nm0 0.0mm 0.m0 DOOHDCC DO .HHEV OCHOHDD ODD CH mCOHDUOHHOO mm.00 0m.0H ADCOU HOQV ODOmOCD CmOHHDCmOH ODD ODCH mCOHDUCpOp CH DDmHO3 m.OCHmHDD 0.HON.H 0.H00 0.00m DOOHDCH Do .HHEV mmmD CH mCOHDUOHHOU HODOB HODOB mmmH HmmH "OCHOCDD ODD mo DOmpCD ODmDm ODD ODCH mCoHDUCpOp OD HOCOHDHOQOHQ OD OD UOECOOD Amy .ommH \m .ommH mo HODHOCO DDHCOD mCHpCHUCH \O N N Cmuxfiam ppm Cmvxflau “OBOHHOD mm UODCQEOO \p ApmscDDcooo mrw msnms 161 to such collections in the entire Soviet Union the percentages of their deductions into the state budget of Ukrainian SSR as compared with deductions into the state budgets of all union republics. Similarly, the Ukraine's share in receipts from the 1932 tax on individually owned farms (included in Table I under "other tax revenue") was assumed to be proportional to the proceeds from the agricultural tax in the Ukraine. As indicated in notes 6 and 7 to Table 448, other revenues consisted of the previously unallocated miscellaneous minor items, and the discrepancy between the total revenues and the summary of the individual items listed in the state budget of Ukrainian SSR. Twenty per cent of these receipts, -- with the exception of the discrepancy and the subsidies from the all-Union budget, which are known -- are assumed to have originated in the Ukraine. 162 CHAPTER V CAPITAL FLOW ANALYSIS: UKRAINE vs. THE-REST-OF-THE-UNION: B. BUDGETARY EXPENDITURES A distinct practical advantage of using a centralized budgetary system as practiced in the USSR is that it gives the government a leading role in both establishing economic goals and supervising the performance of economic institutions. The financial reform of 1930 went beyond Simple sanctioning of the centralist aspirations of the Kremlin rulers. By strengthening the already dominant position of the all-Union budget, it furnished the central government with immense economic powers, thus, singling it out as the only level in the political organization of the USSR capable of imposing its undisputed influence upon the economic life of the constituent national republics.l This centralist rule was asserted cheifly by 1The political meaning of this reform cannot be ignored. For it was in those years that Stalin renewed the fierce struggle of the Russian chauvinism against the non-Russians, waging it in every field of life. Eventually Stalin won it along with the centralist Russian forces: the battle against non-Russian nationalities, and in particular against the Ukraine (the largest of them) culminated in the reversal by the XVIIth Congress of CPSU(b) -- January, 1934 -- of the Soviet nationalities policy adopted in 1923. The new policy towards nationalities declared openly that it was not the imperialist Russian chauvinism, but rather the "national deviations" Of non-Russians which posed the chief threat to the Party and the Soviet State. For an illuminating discussion of the struggle of these forces 163 means of redistribution of financial resources according to the centrally prepared plan of economic development. 1 Expenditures pp National Economy The analysis presented in this section is limited to expenditures on industry, trade, supply and procurement organ- izations, and electrification. Expenditures on transportation and communication (as well as on state loans, which are shown separately in Table II and are not a'part of expenditures on the economy within the meaning of Soviet budgetary classification) were discussed in Chapter IV in conjunction with revenues from these segments of the economy. Expenditures on agriculture are set forth in the next section. Budgetary expenditures on the economy contain: (a) ap- prOpriations for capital investments (and working capital) in excess of own resources of an enterprise or an industry and (b) other expenditures, such as operating expenditures not included in product cost accounting, subsidies to unprofitable enterprises (the situation resulting mainly from the pricing within the Party in those years see Hryhory Kostiuk, Stalinist Rule pp the Ukraine (New York: Frederick Preager, 1960). 164 policies of the government), creation of necessary material reserves for the state, and the like.2 Amounts spent by the government on the economy are therefore subdivided into these two broad categories. ‘5. Capital Investments. Capital investments were usually financed from depreciation reserves, profits, and the budget.3 Technically speaking, though, the banking system usually entered the picture as an intermediary. All investment resources, including budgetary allocations and depreciation reserves,4 were concentrated in the appropriate banks for long term financing.5 These banks were solely responsible for the administration and expenditure of such funds persuant to the plan of capital construction. However, since participation of 2 . . . N. N. ROVinskiy, Gosudarstvyennyi byudzhet SSSR (State budget of the USSR)(Gosfinizdat, 1944), p. 135; K. N. Plotnikov, Finansy ; kredit y SSSR (Finances and credit in the USSR) (Moscow: Vysshaya Partiynaya Shkola pri TSK KPSS, 1956), pp. 78- 79; R. W. Davies, The Develppment pp the Soviet Budgetary System (Cambridge: Cambridge University Press, 1958), pp. 159-160. 3K. N. Plotnikov, pp, cit., pp. 80-81; R. W. Davies, .pp. cit., p. 209; N. N. Rovinskiy, pp. cit., p. 75. 4R. W. Davies, pp. cit., pp. 162, 234; K. N. Plotnikov, pp, cit., p. 81; N N. Rovinskiy, pp. cit., p. 123; N. Kaplan, Capital Investments pp the Soviet Union, 1924-51 (Rand Publication, 1951), p. 26. 5R. W. Davies, pp, cit., p. 209. 165 the banking system in capital investments was limited to providing technical services and did not result in any measurable addition to financial resources, the role of the banks is thus excluded from the discussion. Regretfully, Soviet statistics on depreciation reserves is all too scanty to portray a satisfactory picture of the size and importance of depreciation in each year. Even Ryabov fails to fill this gap in his extensive study of capital formation in the Soviet Union; he dispenses the subject with a brief reference to the total depreciation fund over the entire period -- 6.3 billion rubles. Yet, notes on depreciation charges contained in a number of references suggest that depreciation rates were reasonably stable during most of the first five-year plan 7 . . . . era. Under the Circumstances, it may not be inappropriate 6N. Ryabov, SotSialisticheskoye nakppleniye l yego isto- chniki y pyervoy ; vtoroy pyatiletkakh (Socialist accumulation and its sources in the first and second five-year plans) (Gosudarstvyennoye Isdatel'stvo Politicheskoy Literatury, 1951). p. 123. 7According to G. Ya. Burshtein ("Osnovnye kapitaly Ukra— inskoy promyshlennosti v 1925/26, 1926/27 1 1927/28 godakh" (Fixed capital of Ukrainian industry in 1925 /26, 1926/27 and 1927/28), Hogpodarstvo Ukrayiny, 7-8, 1929, p. 109), depreciation was actually charged at the rate of 4.5 per cent of fixed capital in 1926/27 and 4.4 per cent in 1927/28. SotSialisticheskoye Stroitel'stvo SSSR, 1935, pp. 20, 22, claims the following rates: 1931 and 1932 - 5.5 per cent, 1933 and 1934 - 5.4 per cent. 166 to assume that each year's depreciation charges were pro- portional to its stock of fixed funds. Thus, annual values for depreciation allowances in Table Svl were computed by apportioning 6.3 billion rubles, the total depreciation fund, to each fiscal period in proportion of the ratio of its average stock of fixed funds to the summary of average values of fixed funds for 1928/29-1932. However crude this method may be, it is encouraging to note that at least the 1932 computed value checks out with the figure actually reported for that year.8 Profits constituted the second part of internal resources of economic enterprises. They were adjusted for profit taxes to show only retained profits. In addition,, since economic enterprises were obliged to participate in the purchases of government bonds, not all retained earnings were available for investments. Accordingly, retained profits were further reduced to reflect this condition. Finally, capital investments themselves had to be adjusted in order to avoid double counting (investments in agriculture, transportation, and communication) and to recognize 8K. N. Plotnikov, Ocherki istorii byudzheta sovyetskogo gosudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinidzdat, 1954), p. 171. I l E I l II' III} I! in! 7 .mma .m .flxmnumaflum>a,>ouou> 1 CH mmmflumumucm cmoHHQsmmu paw coflcDIHHm mo ufimflmB m>aumamn .Aw mafia .hlm manmav mossy pmxflm m0 mumsm m.mGHmeD mmmflumumucw amoflaflsmmu paw COHCDIHHM Mo uzuflm3 m>HumamH ,6 w.No>uwNm N.Hxflcsooumfl ommw,m.wwacmamoxmc mmoxmmnoflumflamwmuom .>onm>m .z Amv .Ahlm GHQMBV muflwoum HmuOu mmEHu Amy cEDHOU Amy mmsflu Ame cesaoo Any .Ah-m magma gouge muflmoum Hmuon ca mmEHu Amv GEDHOU ADV .Amv cesaoo mmsflu mmansu coHHHHn m.o Ago .Naco NuumSUCH wamumlmmuma mnm>oo .m .m .omma .mmmm o>um.amuflouum o>oxmm£oflumflamflmuom CH pmnmfiansm coflumfinomcfl Eonm pmusmEoo Amy ummUmDOm Hoo.a oam.H ¢N¢.¢ moom.o o.ooa moo.mw omm mow How.a oao.m m.am www.ma Nmma mmm 0mm mmm omm.a m.mm www.ma Hmma ow on mvm omm H.m mma.m omma .Onuw cam mam 0mm omm.a m.om www.ma om\mmma oom mom ham omo.a m.sH mmm.oa mm\mmma “my Amy Ave Amy Amy AHV mmmmauaumucm ommmflnmumucm covaansmmm pamuoe cmoflaflsmmm paw coflcDIHH< cam COHCDIHH< namuoe Hmuou mxooum mzHfimMD mmmD mo ucwo Hmsccm me mmmnm>< coaumflomnmma mmmDImpcsm pwxflm .Ammannu mo mCOHHHHE CHV mafimuxb mnu CH cam mmmD mgu Ca mmUCMBOHHm COHHMHumHQmQ .Hlm mHQMB 168 those investments which were financed from other than unified state budget (municipal economy and a part of housing con- struction). The computations for both the Ukraine and the USSR appear in Table 5-2. g, Other Expenditures. For the USSR as a whole.these expenditures were obtained by deducting appropriations for capital investments from the total expenditures of the unified state budget on the economy. To the Ukraine they were allocated on the basis of her contributions to industrial output of the USSR for the following reasons. First of all, in part, these expenditures included increases in working capital which, all things being equal, can probably be expected to move in the same direction as output. Second, it is assumed that expenditures on such items as employee training, geological surveys, and research should in the long run benefit the republic; although it is recognized that under conditions of tight central controls over the economy, prevailing in the Soviet Union, the Ukraine was probably prevented from reaping full benefits of such projects. Third, in spite of the fact that an undetermined portion of these expenditures (especially those for labor and 169 Table 5—2. Computation of appropriations for capital investments. from all-Union and republican budgets during the first five-year plan (excluding agriculture, transportation, and communication) (in millions of rubles). Ukraine USSR A. 1. Total investments in socialized sector 9,389.0a 52,500.0b . Less: investments in: 2. Agriculture 1,402.3a 10,800.0b 3. Transportation 1,424.7a 9,800.0b 4. Communication 88.68 563.0C 5. Municipal economy 313.0 1,929.0e 6. Housing 293.8f 853.09 3,522.4 23.945.0 7. Applicable investments 5,866.6 28,555.0 B. Internal Financing by Egg Industry 8. Profits of all-Union and republican enterprisesh3,288.0 13,720.0 9. Less: profit taxesi 1,089.3 4,547.9 10. ' Purchases of government bonds by all-Union and republican enterprisesj 528.7 2,218.4 1,618.0 6,766.3 ll. Retained profits avail- able for investment 1,670.0 6,953.7 12. Depreciation reservesk 1,061.0 4,424.0 13. Total Internal Sources 2,731.0 11,377.7 C. Budget Financing 2: Capital Investments (7-13) 3,135.6 l7,l77.3 170 Table 5?2 (Continued). SOURCES: (a) Table XI. (b) Gosudarstvyennaya Planovaya Komissiya pri Sovyete Narodnykh Komissarov Soyuza SSR, Itogi vypolnyeniya pyervogg gpyatiletnyego plana razvitiya narodnogo khozyaystva Soyuza SSR, p. 253. (c) Table 4e7. (d) Kanars'kyi, "Zhytlo-komunal'ne hospodarstvo do XV rokovyn zhovtnya," Hospodarstvo Ukrayiny, 12, 1932, p. 111; S. Kanars'kyi, "Zhytlove ta komunal'ne hospodarstvo v 1933 r.," Hospodarstvo Ukrayiny, 3-4, 1933, p. 112. (e) SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 596. (f) A11 housing construction in Ukrainian SSR from 1929- 1932 amounted to 734.5 million rubles (S. Kanars'kyi, "Zhytlo- komunal'ne hospodarstvo do XV rokovyn zhovtnya," Hospodarstvo Ukrayiny, 12, 1932, p. 120). According to V. P. Akulenko, (his article, "Kapital'ne budivnytstvo Ukrayiny na 1931 rik,"l§9§- podarstvo Ukrayiny, 11-12, 1930, p. 31) 46.6 per cent of these investments in 1929 and 39.5 per cent in 1930 were actually financed by housing cooperatives. The 1931 plan of housing construction in the Ukraine considered that 29 per cent of them would be financed by housing cooperatives; total financing by institutions subject to republican authorities in 1932 were planned at 66.2 per cent (Akulenko, ibid.). The latter ratio seems somewhat high. It is assumed, therefore, that. the ratio of housing construction by cooperatives in 1930 is a more reasonable representation of the minimum share financed by other than all-Union authorities. Consequently, the amount shown in this Table is equal to 40 per cent of total housing construction in the Ukraine during the first five-year plan. (g) N. Kaplan, Capital Investments ig the Soviet Union, 1924-51, p. 182. This amount represents investments by Executive Committees of local soviets and housing cooperatives only. (h) Table 3—7. (i) Table 3-5. (j) Purchases of enterprises (from Table 441) times relative weight of all-Union and republican enterprises in total profits (from Table 3+6). (k) Table 541. 171 its supervision) may be more properly related to the wage fund, the difference between these two indexes is too small to justify such a ramification: the Ukraine's contribution to the USSR industrial output was 18.66 per cent, her weight in the wage fund -- 18.54 per cent. Total expenditures on the Ukraine's economy from the all-Union budget are shown in Table 593. A comparison of this table with Table XI, indicates that economic policies of the central government in the Ukraine were guided entirely by the all-Union requirements and, as such, frequently ran against the interests of the Ukrainian nation. For example, While investments in Ukrainian industry were equal to 21.8 per cent of the total industrial investments in the USSR, the central government financed only 3,136 million rubles of the indicated investments. This was equal to 18.3 per cent of comparable capital investments financed by the central government in the USSR. (Although this comparison is not entirely accurate, it is meaningful, inasmuch as "applicable investments" in Table 5-2 represent mostly investments in the industry.) Expenditures 23 Agriculture, Social and Cultural Services, and Defense and Administration Soviet agriculture has undoubtedly played an important part in capital accumulations, especially after its 172 Table 5e3. Financing of the Ukraine's economy from the all—Union budget. Total. Financing Other of capital Expenditures investments Expenditures USSR Unified State Budget 31,102.41 17,177.32 13,925.13 Ukraine 2 4 Unified State Budget 5,734.0 3,135.6 2,598.4 Less: Appropriations from the state budget of U- 5 krainian SSR 191.5 Expenditures by the all-Union budget 5,542.5 NOTES: (1) Includes the following items listed in Table II: (millions of rubles) Industry, excluding food industry 23,018.7 Food industry, trade, and procurement organizations 6,059.9 Electrification 1,759.3 Municipal economy and housing 264.5 (2) From Table 542. (3) Residual. (4) Allocated to the Ukraine at 18.66 per cent - her constributions to industrial output of the USSR (large-scale industry) as presented in Table III. (5) Table II. 173 collectivization. This is fairly obvious from the analysis of the turnover tax collections in Chapter III. Nevertheless, Soviet economists are quite reluctant to admit it openly and to discuss objectively the problems of agriculture. Budgetary expenditures on agriculture from the unified state budget included primarily financing of state farms and Machine Tractor Stations (MTS). They are divided, again, into appropriations for capital investments and other expenditures. From 1929 to 1932 capital investments in state farms in the USSR totaled 5,204.6 million rubles.lo In the Ukraine, from 1930-1932 they were equal to 491.3 million rubles,ll or 9.94 per cent of the USSR total for a comparable period. From 1929—1932 investments in MTS in the USSR amounted to 1,117 million rubles. It is not known how much of this was invested in the Ukraine. However, since the idea of the MTS spread into other parts of the USSR from the Ukraine, 9Bachurin is about'the only one who hinted it indi- rectly by' having stated that agriculture participated, inter alia, in "expenditures on the development of national economy" and defense facilities through the procurement price system, and specifically its contributions to the turnover tax collections. (Pribyl' i nalog s oborota y SSSR (Profit and turnover tax in the USSR) (Moscow: Gosfinizdat, 1955), pp. 24, 43). loSotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 244. 11Table XI. 174 where they were first organized on an experimental basis, it is assumed that the Ukraine's share in investments in MTS was higher than in investments in state farms. Consequently, the Ukraine's participation in investments in the state sector of agriculture is computed in Table 5-4 as follows: 10 per cent of the USSR investments in state farms, and 15 per cent of investments in MTS. The remaining expenditures on agriculture in the Ukraine were assumed to be proportional to her contributions to the output of grains. The extent to which Ukrainian agriculture was financed by the central government was determined by deducting expenditures on agriculture met by the republican budget from total expenditures on socialized agriculture in the Ukraine. Expenditures for defense and administration incurred by the all-Union budget are attributed to the Ukraine in proportion to her share in the population and in fixed funds of the USSR (Table 5‘5). This is based on the assumption that the chief purpose of these activities is the protection of life, 12V. Obolensky-Ossinsky at al., Social Economic Planning _in the Union nythe Socialist Republics (The Hague: The International Industrial Relations Association, 1931), p. 119: IN. Olezhko,Ahrarna pglityka bol'shevykiv (Agricultural policy (Df bolsheviks) (Nasha Knyhozbirnya, 1947), p. 61. 175 Table 5-4. Computation of financing of Ukraine's agriculture by the all-Union authorities 1928/29—1932 (in millions of rubles). Total Capital Other Expenditures Investments Expenditures USSR a b C Unified State Budget 8,646.0 6,321.6 2,324.4 Ukraine d e Unified State Budget 1,215.8 688.0 527.8 State Budget of Ukrainian SSR 305.2a All-Union Budget 910.6 SOURCES: (a) Table II. (b) Includes 1929—1932 investments in state farms-- 5,204.6 million rubles (SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 244) and in MTS — 1,117 million rubles (Sotsi- alisticheskoye Stroitel'stvo SSSR, 1936, pp. 464-465); Sotsi— alisticheskoye Stroitel'stvo SSSR, 1934, pp. 300-301), Also see note e, below. (c) Residual. (d) Per Table XI investments in state farms in the Ukraine from 1930-1932 were equal to 491.3 million rubles. Comparable investments in the USSR were 4,944.4 million rubles (Sotsi- alisticheskoye Stroitel'stvo SSSR, 1936, p. 244). Therefore, the Ukraine shared in them to the extent of 9.94 per cent. Accordingly, capital investments in state farms in the Ukraine are assumed to be 10 per cent of such investments in the USSR. Since MTS were first organized in the Ukraine on an experi- mental basis, it is assumed that the Ukraine's share in invest- ments in MTS was higher than in the investments in state farms-- 15 per cent. 176 Table 574 (Continued). (e) Allocated to the Ukraine in proportion to her contribution to output of grains in the USSR (in millions of rubles): USSR 1”. 11.; Ukraine Total Capital Other Ukraine's Other Expendi- Invest~ Expendi— Contribu- Expendi— turesl ments in tures tion to tures in MTS and grain Ukraine4 State output3 Farms2 (per cent) 1928/29 547.8 270.2 277.6 18.94 52.5 1929/30 incl. 4th quarter 1,681.1 1,282.1 399.0 26.8 106.9 1931 2,693.6 2,252.8 440.8 26.34 116.1 1932 3,723.5 2,526.5 1,207.0 20.90 252.3 Total 8,646.0 6,321.6 2,324.4 527.8 1. Table I. 2. For sources see note b, to this table. 3. Table V. 4. Other expentidures (USSR) multiplied by the Ukraine's contribution to grain output. 177 Table 5-5. Allocation of defense and administration, social and cultural services, and other expenditures 1928/29-1932 (in millions of rubles). Unified Unified Less State Expendi- State State Budget of tures from Budget in Budget in Ukrainian the all- the USSR the Ukraine SSR Union Budget in the Ukraine 1. Defense and a c a b Administration 6,839.0 1,463.9 137.3 1,326.6 2. Social and d a Cultural Services 4,568.9 888.0 614.4 273.6 3. Other Expenditures 2,102.0 403.1e 222.6f 180.5 SOURCES: (a) Table II. (b) Computed by applying to expenditures from the all-Union budget each year's average of the Ukraine's share in population (Table X:notes 3-6 to Table 4—7) and in fixed funds (Table 3-7, line 4). (c) The sum of expenditures from the all-Union and republican budgets. (d) Assumed to be proportional to the Ukraine's population in the USSR. (e) Obtained in the following manner (in millions of rubles): USSR Other expenditures on national economy 273.6 Transfers to social insurance, state insurance, and State Bank 383.0 Special state reserve fund 50.0 Other expenditures 1,395.4 2,102.0 Less: Expenditures from the state budgets 358.6 Expenditures from the all-Union budget 1,743.4 178 Table 5r5. (Continued). Ukraine Expenditures from the all-Union budget (20 per cent of 1,743.4) 348.7 Expenditures from the state budget of the Ukraine: special state reserve fund - 13.2, other expenditures - 41.2 million rubles 54.4 Unified State Budget in the Ukraine 403.1 (f) Includes the following itesm (in millions of rubles): Discrepancy between total and itemized list of expenditures on national economy from the state budget of Ukrainian SSR 103.4 Social insurance of workers and salaried employees 29.0 Transfers to all-Union budget 35.8 Special state reserve fund, and other expenditures (see note e, above) 54.4 222.6 l79 property, and productive capacity of the country. In view of the relatively small amounts involved, and, the apparent lack of more accurate evidence, the Ukraine's participation in expenditures on social and cultural services were computed in proportion to her share in the population. Finally as in the case of revenues, it is assumed that 20 per cent of all other items were spent in the Ukraine, i.e., except for such known items as discrepancy between the summary of expenditures on national economy and their total listed in the republican budget, social insurance, and transfers to the all-Union budget. 180 CHAPTER VI SUMMARY OF BUDGETARY RELATIONS IN UKRAINE In Chapters III-V the attention was focused on the individual components of revenues and expenditures of the all- Union and republican budgets. Now, with statistical evidence presented and inter-budgetary relations concerning each of these items computed, it becomes possible to strike a balance between revenues and expenditures of the central government in Ukraine. The outcome, of course, should indicate whether Ukraine, at least in the period under consideration, was capital importing or exporting nation. Such a summary of budgetary receipts and expenditures in the Ukraine is presented in Table 6-1. This table also illustrates relations between the all-Union and the republican budgets. It reveals that from 1928/29-1932 almost 5 billion rubles were withdrawn from the Ukraine by Kremlin without compensation and invested outside of her borders. The impact of this sizeable diversion of capital from the Ukraine upon her economy can be illustrated without much effort. It is equal to 29.6 per cent of the receipts of the all-Union budget in the Ukraine. If compared with the Table 6-1. millions of rubles). 181 Summary of budgetary relations in Ukraine during the first five-year period.l928/29-1932 (in Unified State All-Union State Budget of budget Budget in Ukrainian in Ukraine SSR Ukraine Revenues: l. Turnover tax 10,701.8 743.8 9,958.0 2. Profit taxes 1,089.3 478.5 610.8 3. State loans 2,020.9 219.4 1,801.5 4. Transport 3,362.0 -- 3,362.0 5. Communication 370.1 -- 370.1 6. Customs revenues 253.2 -- 253.2 7. Cultural and housing levies 427.8 216.6 211.2 8. Income taxes 230.0 207.8 22.2 9. 1932 tax on individually owned farms 30.5 -- 30.5 10. Other revenues 206.0 82.0 124.0 11. Agricultural tax 441.5 441.5 —- 12. Income from state property 105.1 105.1 -- 13. Total Revenues 19,238.2 2,494.7 16,743.5 Expenditures: 14. National economy, ex- cluding agriculture. transport and communication 5,734.0 191.5 5,542.5 15. Agriculture 1,215.8 305.2 910.6 16. Transport 3,001.0 242.2 2,758.8 17. Communication 321.0 -- 321.0 18. State loans 474.2 —- 474.2 19. Defense and Administration 1,463.9 137.3 1,326.6 20. Social and Cultural services 888.0 614.4 273.6 21. Other expenditures 403.1 222.6 180.5 22. Total Expenditures 13,501.0 1,713.2 11,787.8 23. Excess of Revenues over Expenditures 5,737.2 781.5 4,955.7 182 territorial budget,1 this net capital outflow from the Ukraine reached 23.1 per cent of all budgetary receipts in the Ukraine. Volobuyev, working on a similar problem for 1925/26 and 1926/27, concluded that withholding by the central government of 20 per cent of all the budgetary receipts in the Ukraine, which he claimed was the case in those years, was far too excessive a price for the Ukraine to pay for her membership in the Soviet Union.3 Ritchyts'kyi, on the other hand, asserted that Volobuyev apparently did not account for the Ukraine's share The term "territorial budget" was often referred to in the 1920's. It included local, republican, and the all-Union budgets on the territory of a republic. 2 . . . . . In order to obtain the territorial budget in the Ukraine, it is necessary to add local budgets (net of transfers from the state budget) to the unified state budget: Unified state budget 19,238.2 million rublesa Local budget - net 2,225.9 million rubles Territorial budget in Ukraine 21,464.1 a). Table 6-1. b). SotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 669. The rate of net capital outflow from the Ukraine is 23.1 per cent of her territorial budget (4,955.7 : 21,464.1). 3Mykh. Volobuyev, "Do problemy ukrayins'koyi ekonomiky" (On the problem of Ukraine's economic status), Bil'shovyk Ukra- yiny, 3, 1928, pp. 59-60. His analysis was based on statistical evidence developed and presented by V. Dobrogayev in an article "Problema finansovogo balansa Ukrainy" (The problem of Ukraine's financial balance), Khozyaystvo Ukrainy, 2, 1927. 183 in defense and administration expenditures of the central government. Therefore, he contended that net withdrawals from the Ukraine in 1925/26 and 1926/27 were in the vicinity of 8-14 per cent of her territorial budget.4 The essence of his attack on Volobuyev lay in the criticism of Volobuyev's comparison of "colonial exploitation" of the Ukraine by Tsarist Russia and the Soviet Union. In his opinion, Volobuyev underStated the extent of colonial position of the Ukraine under the Tsars and exaggerated it in the USSR. Yet, it is most revealing that Ritchyts'kyi did not deny the very fact of "colonial exploitation" of the Ukraine by Russia5 which, incidentally, was the crucial issue and the leading theme in Volobuyev's article. It is suggested that the above computed 23.1 per cent ratio of capital outflow from the Ukraine in 1928/29-1932 2 4And. Richyts'kyi, "Do problemy likvidatsiyi perezhytkiv koloniyal'nosty ta natsionalizmu" (On the problem of liquidation of vestiges of colonialism and nationalism), Bil'shoyyk Ukrayiny, 3. 1928, p. 80. fi' 5Bohdan Vynar, Ekonomichnyi koloniyalism y Ukrayini (Economic colonialism in Ukraine) (Paris: Natsionalistychne vydavnytstvo v Europi, 1958), p. 90. t (On the problem of Ukraine's economic statu ), Bil'shovyk Ukra— 6Mykhaylo Volobuyev, "Do problemy ukrEyins'koyi ekonomiky" in I 2: 1928: pp. 46-72; 3: 1928’ pp. 42"& a ¥——X ( 184 is not unrealistic. Indeed, the rate of capital withdrawals from the Ukraine by the central government through the budgetary system must have increased towards the end of the first five- year plan period, as compared with the middle 1920's. The following findings are offered in support of this statement: 1. The financial reform of 1930 provided for concentration in the all-Union budget of all the important revenue producing taxes and levies, thereby strengthening the central government's position in relation to republican and local authorities. Thus, for example, while during the first two years of the plan (1928/29 and 1929/30) the Ukraine received 416.1 million rubles or _20 per cent of the receipts from taxes equivalent to turnover tax (2,083.4 million rubles) on her territory, in the period following the financial reform (October 1, 1929 - December 31, 1932) the Ukraine was returned only 327.7 out of 8,618.6 million rubles, or 3.8 per cent of her contributions to the turnover tax collections. 2. Undoubtedly the impact of the pressure on the peasantry from forced delivery of farm produce to the state was relatively stronger in the Ukraine than in the rest of the USSR. The Ukraine, with less than 20 per cent of the Soviet Union's population, and 24 per cent of the grain output of the USSR, 185 delivered during the first five-year plan period 31 per cent of all grain procurements by the state. As pointed out earlier, profits on obligatory grain deliveries to the state were the major source of turnover tax receipts in the village. 3. Taxation of profits at the rates which diverted the bulk of profits into the budget--coupled with tight financial controls over business enterprises by the banking system-- made capital investments from retained profits and depreciation almost entirely dependent upon the central government's plan of economic development. With strong emphasis on con- struction of new industrial centers in the Asiatic part of the USSR (from 1930 on), the Ukraine was called upon to supply as much of the required financial resources as possible. The trend and the pattern of capital investments in the Ukraine confirm this without reservations. There is no doubt that Ukrainian capital expropriated by Russia played a prominent part in the Soviet economic development. It constituted 9.4 per cent of all capital invest- ments in the socialized sector of the USSR (52.5 billion rubles), and 11.5 per cent of such investments in the USSR exclusive of the Ukraine (43.1 billion rubles). Comparably, in this manner the Ukraine provided funds for 25.5 per cent 186 of all capital investments in the industry in the USSR ex- cluding the Ukraine (19.4 billion rubles). The loss of one third of all capital formed in the Ukraine undoubtedly hindered the development of the Ukraine's own economy. This loss was equal to 52.8 per cent of all capital investments in the Ukraine, or 91.7 per cent of capital investments in her industry. It exceeded all capital investments in Ukrainian agriculture as well as those in transportation by three and one-half times. 187 CHAPTER VII CAPITAL FORMATION IN THE UKRAINE That part of capital accumulation in the Ukraine which was diverted into other parts of the USSR by the budgetary system was analyzed in Chapters III-V and summarized in Chapter VI. To obtain a complete picture of the Ukraine's total capital formation during the first five—year plan it is necessary to add all the capital investments made in the Ukraine. Thus, total capital accumulation in the Ukraine during the period examined amounted to 14,345 million rubles (4,955.7 + 9,389.0 million rubles).l However, this is only a rough measure of capital creation in the Ukraine. The inaccuracy in this approach results, of course, from the fact that 4,955.7 million rubles represent capital that was withdrawn from the Ukraine only through the budgetary system. A number of other "leakages" is left unaccounted for: movement of surpluses of social and state insurance agencies; geographic redistribution of surplus resources by the banking system (in the sense of excess of 1Tables 6-1 and XI. 188 resources over their expenditures persuant to plans of regional economic development); and, finally, transfers of funds through professional and trade organizations. Needless to say, difficulties in securing necessary information prevent their full investigation and inclusion in the computations. Never- theless, on the strength of the existing evidence, it is believed that Egg capital movements through these other channels were not significant in comparison with the total capital formation and, therefore, their omission is unlikely to seriously affect the computation. To the extent that some capital might have left the Ukraine through these other channels, both capital exports and capital formation presented above may be under- stated. The more important sources of capital formation in the Ukraine are listed in Table 7~l. It is recognized that the first item, net capital outflow, is more properly thought of as an application, rather than source, of capital. Never- theless, its current use is dictated by the complex nature of the budgetary relations between the Ukraine and the rest of the USSR. Thus, net capital outflow is used here as a composite source comprising several ultimate sources that may be grouped into (a) forced savings of population and (b) transfers 189 Table 7-1. Sources of capital formation in the Ukraine. 1928/29-1932 (in millions of rubles). 1. Net capital outflow b 4,955.7a 2. Profits 4,693.0 less: profit taXes'paid into the all- c Union budget 610.8d purchases of government bonds 226.9 3,855.3e 3. Depreciation fund 1,510.0f 4. Transportation (capital investments) 1,424.7 5. Communication (capital investments) 88.6f 6 Agriculture(capita1 investments) - 1,402.3 13,236.6 SOURCES: (a) Table 6-1. (b) Table 3-7. (c) Table 3-5- (d) Since government bonds were purchased by enter- prises in proportion to their profits, participation of enterprises of all-Union subordination in these purchases is assumed to be in proportion to their contributions ot profit tax collections from the all-Union and Republican enterprises: 56.1 per cent (computed from data presented in Table 3‘5) of 528.7 million rubles (Table 5-2). or 296.6 million rubles. It is further assumed that expenditures connected with the above purchases relate to such total expenditures as these purchases relate to total sales of government bonds in the Ukraine, or 14.7 per cent of such expenditures in the Ukraine (296.6: 2,020.9; Table 4-1). Consequently, 69.7 million rubles were deducted from 296.6 million rubles (above). (e) Table 5-1. (f) Table XI. (9) Table 4-7. 190 of internal accumulations of economic enterprises on behalf of the central government. Even a cursory investigation of Table 6-1 reveals that the first category, the turnover tax. is the more significant one. It includes indirect taxation of consumers and commodity taxation of agricultural producers. The importance of the second group is reduced largely by simultaneous parallel expenditures from the budget on various segments of the economy (transport, communications, industry, agriculture). The remaining items constitute mainly internal accumula- tions of economic organizations over and above those included in the budgetary analysis. Thus, inasmuch as capital invest- ments in transportation and communications system have been financed mainly from their own revenues, they are included in Table 7?1 without modifications. Profits, on the other hand, had to be adjusted for profit taxes and net purchases of government bonds by the all-Union enterprises (included in the evaluation of net capital exports). Agriculture presents an especially interesting case. It was pointed out earlier that a large part of the turnover tax collections was derived from agriculture in the course of state procurements of agricultural commodities. This, of 191 course, was facilitated by the pricing policies of agricultural products. It will be recalled that this technique helped to divert from agriculture both profits and incomes; and it resulted in a serious underpayment for productive efforts of the rural population. It is apparent from a comparison of Tables 3-3 and XI that funds provided by agriculture through the commodity taxation greatly exceeded all investments in agriculture in that period. This was particularly true of the Ukraine.owing to the fact that Ukrainian SSR provided the Soviet Union with almost one third of Soviet agriculture's marketable output of grains. To obtain a complete picture of agriculture's role in capital formation, it is necessary to add capital investments in agriculture. A quick review of Table 5-4 and its comparison with Table XI reveals that substantial amounts were invested in other than state farms and MTS, presumably collective farms. Investments in collective farms were financed almost exclusively from the collective farms' own resources plus loans from the . 3 . Agricultural Bank. And, Since these loans were repayable, 2Table VI. 3 . . . . N. Kaplan, Capital Investments ig_the Sov1et Union, 1924-51 (Rand Publications, 1951), pp. 22-23. 192 one is justified to assume that collective farms financed all of their capital investments from their own sources. A summary of items enumerated in Table 7-1 falls short of estimated total capital formation in the Ukraine by approxi- mately 1.1 billion rubles. This difference was provided by a number of quantatively less important sources, such as savings by the population, co-operatives, and social and state insurance agencies. It appears that most of the savings of the individuals (i.e., excluding investment in home ownership), were reflected in purchases of government bonds by the savings bank. Similarly, a good portion of the accumulations by co-operatives were already included in resources of industry and agriculture. While savings deposit balances of the population (natural persons) increased in the USSR from 213.2 to 960.7 or by 747.5 million rubles from October 1, 1928, to December 31, 1932, (SotSialisticheskoye Stroitel'stvo SSSR, 1935 pp. 680—683), holdings of government bonds by savings banks changed in the same period by 707.0 million rubles--from 184.3 to 891.3 million rubles (SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 672). 5According to SotSialisticheskoye Stroitel'stvo SSSR, (1936, p. 384) capital investments of co-operative system amounted to some 12 per cent of all capital investments in the socialized sector from 1929-1932. This is, however, seriously exaggerated since capital investments of collective farms are included in this source with investments of co-operative sector. Therefore, a better measure of the relative importance of co-operatives in capital investments may be obtained from the 193 Although it is a fact that, beginning with October, 1929, insurance of all property of the socialized sector was compulsory,6 there are numerous indications that net accumu- lations of state insurance organization played a minor role in capital formation. For example, accumulations of state insurance in the USSR were expected to reach in 1930/31 only 56.1 million rubles.7 Actual profits of state insurance in 1931, according to Suchkov, were only 35.8 million rubles (Climbing to 219.6 million rubles in 1934).8 Its total revenues were also minor (all planned figures): 287.8 million rubles in 1928/29 and 426.3 in 1929/30,9 and 491 million fact that co—operative enterprises, outside of agriculture, contributed in that period 6.1 per cent of all comparable investments in the USSR (ibid.). Capital investments of agricultural co-operatives, on the other hand, amounted to 577 million rubles (SotSialisticheskoye Stroitel'stvo SSSR, 1936, p. 244), or 5.3 per cent of all investments in agriculture (10.8 billion rubles -— Table XI.). 6A. V. Bachurin, Pribyl' i nalog g oborotav SSSR (Profit and turnover tax in the USSR) (Moscow: GosfiniZdat, 1955), p. 132. 7P. Serebryakov, "Perspektivy raboty gosstrakha na syele na 1930/31 god"(Outlook for the work of state insurance in the village in 1930/31), Finansovye Problemy, 4, 1930, p. 36. 8A. Suchkov, Dokhody gpsudarstvyennogo byudzheta SSSR (Revenues of state budget of the USSR) (Moscow: Gosfinizdat, 1955). p. 109. 9Narodnyi Komissariat Finansov, Yedinyi Finansovyi Plan ‘Qa 1929—30 god (Unified financial plan for 1929-30) (Moscow: Gosu- darstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1930), p. 135. 194 . 10 . . . . rubles in 1931. In addition, an undetermined portion of resources of state insurance were evidently included in several items in the budget. For example, Bachurin maintains that all [premium] payments for insurance of state property, with minor . . . . . 11 exceptions. were unified in 1930 in the turnover tax. In part, revenues of state insurance were aIso included in . . 12 deductions into local budgets, government loans, as well as. possibly, deductions from profits. It is regretful that the state of available statistics does not permit closer investigation of social insurance. For resources of state insurance agencies must have been responsible for a substantial portion of the 1.1 billion rubles of capital investments unaccounted for in Table 7—1. Whereas some accumulations of social insurance fund were evidently included in the all-Union budget via purchases of ONarodnoye khozyaystvo SSSR BE poroge tretflyego goda pyatiletki kaontrol'nye tsifry 22 1931 god (National economy of the USSR on the threshold of the third year of the five- year plan and control figures for 1931) (Moscow -Leningrad: Gosudarstvyennoye Sotsial'no-Ekonomicheskoye Izdatel'stvo. 1931), p. 283; Planovoye Khozyaystvo, 12, 1930, p. 379. llBachurin, 22, cit., p. 132. 12A. M. Lyando, Gosbyudzhet SSSR zavyershayushchego goda pyatiletki (State budget of the USSR in the concluding year of the five-year plan) (Moscow: Gosfinizdat, 1932), p. 34. 195 13 . government bonds, most of its resources were probably spent on financing various communal projects. For example, the budget of state social insurance fund provided during the first five-year plan 1,370 million rubles for housing construction and 7,376 million rubles for various social and cultural under- takings: its total expenditures in that period amounted to . . 14 . 8,866 million rubles. To the extent that some expenditures on social and cultural projects undoubtedly included capital investments in those areas, social insurance contributed to . . . 15 . . capital formation in the country. Unfortunately, it is not possible to determine at this time the extent to which the Ukraine participated in either revenues or expenditures of the social insurance budget. 13 . . . .. K. N. Plotnikov, Ocherki istorii byudzheta sovyetskogo gosudarstva (Essays in history of the budget of the Soviet state) (Moscow: Gosfinizdat, 1954), p. 107. This evidently contained excess of revenues over all expenditures of the fund. 14ibid., p. 132. 15N. Kaplan, (2p..git., p. 167) quoting Sotisalisticheskoye Stroitel'stvo SSSR (1936. PP. 384, 349) shows that capital investments in social and cultural administration during 1929- 1932 amounted to 4,926 million rubles, of which housing was 1,303 million rubles, and municipal services 1,416 million rubles. CHAPTER VIII CONCLUSIONS 196 l. The study reveals that capital accumulations in the Ukraine during the first five-year plan amounted to 14.3 billion rubles and were equal to 27.2 per cent of all capital in the socialized sector of the Soviet economy. This investments is not surprising in view of the Ukraine's paramount importance as an industrial center and exporter of agricultural products. 2. The investigation shows that rapid industrial develop- ment of new areas was accomplished by extensive capital move- ments within the Soviet Union. During the period under review, the Ukraine provided capital exports to the rest of the USSR of approximately 5 billion rubles. This was 29.6 per cent of the revenues of the all—Union budget Ukraine, or 23.1 per cent of the combined revenues of Union, republican, and local budgets. The above figures confirm the extent to which Ukraine was obliged to subsidize economic development parts of the USSR. The subsidy constituted about one of all capital created in the Ukraine. Moreover, the capital exports equalled 11.5 per cent of all capital equal to in the the all- the in other third Ukraine's investments 197 in the USSR socialized economy exclusive of the Ukraine. Such a high capital export must have inhibited growth of the Ukraine's own economy, while holding down, if not lowering, local living standards. At the same time, the Ukraine received no interest on her capital exports and lost all hope of ever being reimbursed at a future date. It should also be remembered that the decisions to export capital were made unilaterally by the central government without any reference to the wishes of the Ukrainian people. For these reasons, many writers consider that the Ukraine has been exploited by a modern form of Russian imperialism far more crippling than anything experienced in the past. 3. The investigation clearly indicates that agriculture has played a prominent part in capital accumulations in spite of persistent silence on this matter from Soviet officials. There is no doubt that the Soviet government was aware of the great fiscal opportunities afforded by a combination of pricing policies and commodity taxation of agricultural producers. The results of this study seem to bear out the hypothesis that the prospect of diversion of resources from agriculture pre- sented an important consideration in forced collectivization. As a major bread producing republic, the Ukraine obviously 198 felt the impact of this diversion of funds to a much greater extent than many other parts of the Soviet Union. 4. There is no single way of measuring the impact of financial reform of 1930 on capital formation. Yet, the facts indicate that it influenced both the rate of capital ac- cumulation and pattern of capital distribution in the country. The reform helped to raise the rate of capital formation in several ways. First, the newly established turnover tax provided the basis for extending indirect taxation of consumers which. in conjunction with government controlled output, costs, and prices, permitted the state to tax away ever higher proportions of personal income. In addition, by combining the turnover tax, state procurements, and the pricing of agricultural commodities, the reform facilitated large—scale diversions of capital resources away from agriculture. Finally, taxation of industrial profits by way of the turnover tax siphoned off a large portion of industrial profits, thus reducing the level of profits reported by an enterprise. This technique ("regulation of profitability") placed industrial managers under constant pressure to implement cost saving measures because any relatively small changes in absolute profits left in their hands represented a significant percentage 199 deviation from the planned profit level. The redistribution of capital was greatly facilitated by the simplified tax structure, control of industry by financial institutions ("control by the rubleP), centralization of the more important taxes and other levies in the all-Union budget, increased taxation of profits (almost at confiscating levels), and, finally, tying in of profit taxation with plant's investment plans. All of these measures were either included in the reform itself or taken up subsequently as modifications of the original provisions. 200 APPENDIX TABLE I-A 201 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) 1928/29 Total of State Unified State Budget A11- Item State Budgets of Uk- Union Budget of Union rain ian Budget Republics SSR TAX REVENUE 4,004.1 1,741.2 340.4 2,262.9 l. Turnover tax - - - . - 2. Craft tax (Promtax) 1,055.9 950.6 162.9 105.3 Inc.: Socialized sector 885-3 Private sector 170.1 3. Income tax: 285.5 282.6 52.7 2.9 Incl.: Socialized sector 120.0 118.7 20.9 1.3 populationl 165.511 163.9 31.8 1.6 4. Agricultural tax 449.4d 444.9 112.7 4.5 Incl.: from collective a farms 9.9 from farmers '439 5a 5. Cultural and housing levies — - - - 6. Excises 1,802.6 1,802.6 7. Customs revenue 258.2 258.2 8. Dues and levies 131.8 131.8 Incl.: Stamp tax 71.6 71.6 9. Other tax revenue 20.7 20.7 10. Discrepancy 63.1 12.1 (63.1) NON-TAX REVENUE 3,461.2 492.2 63.0 2,969.0 1. Transportation 2,335.6 2,335.6 Incl.: Railways 2,305.3 2,305.3 2. Communication 202.5 202.5 3. Deductionafrom profits 417.7 54.9 16.2 362.8 Incl.: Credit ' ' institutions 108.5 Trade 16.7 Industry 286.9 44.8 12.6 242.1 4. State pr0perty 406.8 405.3 43.0 1.5 Incl.: Timber 307.6 307.4 31.1 .2 .Ores 65.6 65.6 10.9 - (Table 5. Special commodity fund 6. Other non-tax revenue STATE LOANS 1. From population 2. From enterprises 3. From savings banks OTHER INCOME a. Monetary income b. Income from the local budget TOTAL REVENUES OF UNION REPUBLICS TRANSFERS (from all—Union budget) ' TOTAL REVENUE Remainder from fulfill- ment of the budget for prior years (Balancing) TOTAL I-A Continued) 2,288.1 8,222.3 2,387.0 8,427.7 2,387.0 202 9.3 670.1 412.7 .1 (98.9) 412.8 5,835.3 - 205.4 412.8 6,040.7 203 TABLE I-B THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) 1929/30 Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR TAX REVENUE 6,083.7 2,044.6 439.6 4,039.1 1. Turnover tax - - - - 2. Craft tax (Promtax) 1,941.4 1,080.6 253.2 860.8 Incl.: Socialized sector 1,797.1 Private sector 144.3 3. Income tax: 614.6 483.1 70.1 131.5 Incl.: Socialized sector 421.3 291.8 36.0 129.5 populationl 193.3“- 191.3 34.1 2.0 4. Agricultural tax 405.6d 401.6 100.0 4.0 Incl.: from collective a farms 21.1 from farmers 384.5a 5. Cultural and housing levies - - — - 6. Excises 2,643.0 2,643.0 7. Customs revenue 304.3 304.3 8. Dues and levies 141.1 141.1 Incl.: Stamp tax 77.5 77.5 9. Other tax revenue 33.7 33.7 10. Discrepancy 79.3 16.3 (79.3) NON-TAX REVENUE 5,402.0 1,085.9 142.2 4,316.1 1. Transportation 3,099.3 3,099.3 Incl.: Railways 3,049.4 3,049.4 2. Communication 300.5 300.5 3. Deductionsfrom profits 1,004.5 429.2 70.2 575.3 Incl.: Credit institutions 116.1 Trade 36.6 Industry 846.7 418.3 68.3 428.4 (Table 4. State property Incl.: Timber Ores 5. Special commodity fund 6. Other non-tax revenue STATE LOANS 1. From population 2. From enterprises 3. From savings banks OTHER INCOME a. Monetary income b. Income from the local budget TOTAL REVENUES OF UNION REPUBLICS TRANSFERS (from all-Union budget) TOTAL REVENUE Remainder from fulfill- ment of the budget for prior years (Balancing) TOTAL 593.9 477.0 83.0 299.2 104.6 1,278.4 656.0 336.1 286.3 12,799.7 186.8 12,986.5 W010! I-B Continued) 593.0 61.8 477.0 47.8 83.0 13.7 63.7 10.2 68.4 14.6 15.8 - 15.8 - 3,214.7 596.4 178.6 . 8.9 3,393.3 605.3 .8 5 3,394.1 605.8 204 (178.6) 9,406.4 186.0 9,592.4 TABLE I-C 205 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) Fourth Quarter, 1930 Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR TAX REVENUE 2,563.3 468.7 71.5 2,094.6 l. Turnover tax 2,172.0 168.7 21.6 2,003.3 2. Craft tax (Promtax) 57.6 57.5 6.1 .1 Incl.: Socialized sector - - Private sector 57.6 57.5 6.1 .1 3. Income tax: 70.6 69.4 12.7 1.2 Incl.: Socialized sector 2.1 .9 .2 1.2 Populationl 68.5n- 68.5 12.5 - 4. Agricultural tax 170.2 170.3 30.9 (.1) Incl.: from colleCtive farms 15.4a'b from farmers 154.85"C 5. Cultural and housing levies - — - - 6. Excises — - - - 7. Customs revenue 89.6 89.6 8. Dues and levies .3 .3 Incl.: Stamp tax — — 9. Other tax revenue 3.0 3.0 10. Discrepancy 2.8 .2 (2.8) NON-TAX REVENUE 1,742.4 192.5 46.2 1,549.9 1. Transportation 931.0 931.0 Incl.: Railways 925.9 925.9 2. Communication 103.4 103.4 3. Deductionsfrom profits 382.8 159.1 39.9 223.7 Incl.: Credit institutions 36.5 Trade 6.4 Industry 331.1 135.5 25.8 195.6 4. State property Incl.: Timber Ores 5. Special commodity fund 6. Other non-tax revenue STATE LOANS 1. From population 2. From enterprises 3. From savings banks OTHER INCOME a. Monetary income b. Income from the local budget TOTAL REVENUES OF UNION REPUBLICS TRANSFERS (from all-Union budget) ' TOTAL REVENUE Remainder from fulfill- ment of the budget for prior years (Balancing) TOTAL 2 6 2.6 248.3 74.3 30 8 356.1a 15.9 212.4a'e 108.5a 35.1 8.9 - 8.9 677.1 36.3 4,670.7 713.4 651.5 22.0 5,322.2 735.4 248.3 6.2 43.5 5.7 340.2 - 8.9 8.9 123.4 4.1 (36.3) 127.5 3,957.3 7.7 629.5 135.2 4,586.8 TABLE I-D 207 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) 1931 Totals of State Unified State Budget A11- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR TAX REVENUE 12,115.5 1,993.7 342.8 10,121.8 1. Turnover tax 10,601.8 902.7 124.1 9,699.1 2. Craft tax (Promtax) 128.4 128.4 15.9 - Incl.: Socialized sector - Private sector 128.4 128.4 15.9 — 3. Income tax: 345.2 339.8 62.3 5.4 Incl.: Socialized sector 16.3 10.9 3.5 5.4 P0pulation1 328.9 328.9 58.8 - 4. Agricultural tax 457.9 457.9 113.8 - Incl.: from colleCtive a b farms 77.0 ' from farmers 380.9C 5. Cultural and housing levies 260.0g 154.8 25.6 105.2 6. Excises - 7. Customs revenue 281.3 281.3 8. Dues and levies 1.1 1.1 Incl.: Stamp tax - - 9. Other tax revenue 39.8 39.8 10. Discrepancy 10.1 1.1 (10.1) NON-TAX REVENUE 7,381.8 603.6 197.9 6,778.2 1. Transportation 4,458.4 4,458.4 Incl.: Railways 4,445.9 4,445.9 2. Communication 10 562.0 562.0 3. Deductionsfrom profits 970.0 479.2 179.6 490.8 Incl.: Credit institutions 176.4 2 Trade 42.9 Industry 684.7 419.5 175.0 265.2 (Table 4. State property Incl.: Timber Ores 5. Special commodity fund 6. Other non-tax revenue STATE LOANS 1. From population 2. From enterprises 3. From savings banks OTHER INCOME a. Monetary income b. Income from the local budgeth TOTAL REVENUES OF UNION REPUBLICS TRANSFERS (from all-Union budget) TOTAL REVENUE Remainder from fulfill- ment of the budget from prior years (Balancing) TOTAL I-D Continued) 32.4 32.4 1,070.2 288.82 92.0 3,269.0 244.7 1,616.4:’e 1,428.5a 215.8 388.6 273.7 25.3 363.3 273.7 3,115.7 153.4 23,154.9 3,269.1 706.2 9.1 23,861.1 3,278.2 208 .2 - 1,070.2 18.1 196.8 56.6 3,024.3 24.5 114.9 25.3 24.5 89.6 621.8 22.1 (153.4) 643.9 19.885.8 4.6 697.1 648.5 20,582.9 TABLE I-E 209 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) 1932 Totals of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR TAX REVENUE 20,050.9 2,550.4 467.3 17,500.5 1. Turnover tax 17,693.3 1,387.8 182.07 16,305.5 2. Craft tax (Promtax) — - - - Incl.: Socialized sector - - Private sector - - 3. Income tax 245.2 235.5 10.0 9.7 Incl.: Socialized sector 130.8 121.1 10.0 9.4 populationl 114.4 114.4 - - 4. Agricultural tax 459.0 459.0 84.1 - Incl.: from collective a b farms 121.5 ’ 121.5 24.1 - from farmers 337.5a'C 337.5 60.0 - 5. Cultural and housing levies 941.6 467.3 191.0 474.3 6. Excises — 7. Customs revenue 281.8 281.8 8. Dues and levies 1.2 1.2 Incl.: Stamp tax - 3 - 3 9. Other tax revenue 428.8 428.8 10. Discrepancy .8 .2 (.8) NON-TAX REVENUE 7,011.44 509.9 163.4 6,501.54 1. Transportation 2,511.94 2,511.94 Incl.: Railways 2,479.24 2,479.24 2. Communication 781.7 781.7 3. Deductionsfrom profits 1,409.6 409.6 148.1 1,000.0 Incl.: Credit institutions 358.6 358.6 Trade 55.4 55.4 Industry 901.4 306.3 141.8 595.1 210 (Table I-E Continued) 4. State property — - - - Incl.: Timber - - Ores - - 5. Special commodity fund 1,901.8 - - 1,901.8 6. Other non-tax revenue 406.42 100.3 15.3 306.12 STATE LOANS 3,921.7 688.3 133.2 3,233.4 1. From population 2,429.3e 2. From enterprises 1,128.4 3. From savings banks 364.0 OTHER INCOME - 46.9 46.9 a. Monetary income 46.9 46.9 TOTAL REVENUES OF UNION REPUBLICS 3,748.6 763.9 TRANSFERS (Subsidies from all- 8 Union budget)6 363.6 16.9 (363.6) TOTAL REVENUE 31,030.94 4,112.2 780.8 26,918.7 Remainder from fulfill— ment of the budget for 5 prior years 598.6 1.1 - 597.5 4 (Balancing) TOTAL 31,629.5 4,113.3 780.8 27,516.2 TABLE I-F 211 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY REVENUES (in millions of rubles) 1928/29 — 1932 Total Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR TAX REVENUE 44,817.5 8,798.6 1,661.6. 36,018.9 l. Turnover tax 30,467.1 2,459.2 327.7 28,007.9 2. Craft tax (Promtax) 3,183.3 2,217.1 438.1 966.2 Incl.: Socialized sector 2,682.9 Private sector 500.4 3. Income tax: 1,561.1 1,410.4 207.8 150.7 Incl.: Socialized sector 690.5 543.4 70.6 146.8 Populationl 870.6 867.0 137.2 3.9 4. Agricultural tax 1,942.1 1,933.7 441.5 8.4 Incl.: from collective farms 244.9 from farmers 1,697.2 5. Cultural and housing levies 1,201.6 622.1 216.6 579.5 6. Excises 4,445.6 4,445.6 7. Customs revenue 1,215.2 1,215.2 8. Dues and levies 275.7 275.7 Incl.: Stamp tax 149.1 149.1 9. Other tax revenue 526.0 526.0 10. Discrepancy 156.1 29.9 (156.1) NON-TAX REVENUE 24,998.8 2,884.1 612.7 22,114.7 1. Transportation 13.336.2 13,336.2 Incl.: Railways 13,205.7 13,205.7 2. Communication 1,950.1 1,950.1 3. Deductionsfrom profits 4,184.6 1,532.0 454.0 2,652.6 Incl.: Credit institutions 796.1 Trade 158.0 Industry 3,050.8 1,324.4 423.5 1,708.4 212 (Table I-F Continued) 4. State property 1,035.7 1,033.3 105.1 2.4 Incl.: Timber 784.69 784.49 78.99 Ores 148.69 148.69 24.69 5. Special commodity fund 3,519.5 3,519.5 6. Other non-tax revenue 972.7 318.8 53.6 653.9 STATE LOANS 9,550.0 1,072.0 219.4 8,478.0 1. From population 5,184.3 2. From enterprises ' 3,279.3 3. From savings banks 1,078.0 OTHER INCOME 512.2 289.5 24.5 222.7 a. Monetary income 133.1 133.1 b. Income from the local budget 379.1 289.5 24.5 89.6 TOTAL REVENUES OF UNION REPUBLICS l3,044.2 2,518.2 TRANSFERS ' (from all-Union budget) 830.8 52.1 (830.8) TOTAL REVENUE 79,878.5 13,875.0 2,570.3 66,003.5 Remainder from fulfill- ment of the budget for prior years 2,348.5 33.0 12.8 2,315.5 (Balancing) TOTAL 82,227.0 13,908.0 2,583.1 68,319.0 S OURCES : UNIFIED STATE BUDGET: SotSialisticheskoye stroitel'stvo SSSR, 1934, pp. 440-441; Ibid., 1935, PP. 644-645, unless otherwise stated. TOTAL OF STATE BUDGETS OF UNION REPUBLICS and STATE BUDGET OF UKRAINIAN SSR: SotSialisticheskoye Stroitel'stvo SSSR, 1934, pp. 446-447, 453; Ibid., 1935. pp. 654, 655-661. aSotSialisticheskoye Stroitel'stvo SSSR, 1934, p. 456; Ibid., 1935, p. 650; Ibid., 1936, p. 644. 213 bK. N. Plotnikov, Ocherki istorii byudzheta sovyetskogo gosudarstva (Moscow: Gosfinizdat, 1954), p. 118. CPlotnikov, 9p, cit., p. 126. dPlotnikov, (9p, cit., p. 126) lists only total collections of agricultural tax for the USSR. eibid., p. 128. fN. Ryabov, SotSialisticheskoye,nakopleniye i_yego istochniki y_pervoy i_vtorgy_pyatiletkakh, p. 149. 9According to Plotnikov, this refers to collections in towns. Collections in villages amounted to 244.7 million rubles (Plotnikov, 92, 913,, p. 126). Indeed, state budget in standardized classification lists total collections (towns and villages) of 518.1 million rubles; SotSialisticheskoye Stroitel'stvo SSSR, 1934, p. 456; Ibid., 1935, p. 650; Ibid.. 1936, p. 644; R. W. Davies, The Develgpment Qf_the Soviet Budgetary System, p. 295. hSotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 664; Ibid., 1936, p. 648. NOTES: 1In the cases of total of state budgets of union republics and the state budget of Ukrainian SSR this item includes in- come tax from private sector of the economy. 2Including the following receipts from reduction of admin- istrative expenses of economic organizations: 101.8 million rubles in 1931, 117.1 million rubles in 1932. 3Includes: 166.1 million rubles from tax on individually (privately) owned farms; and special levy on transportation equal to 127.7 million rubles. ' For comparison with prior years, the amount of 2,899 million rubles should be added to account for operating revenues of railways and deductions to FUBR. They were ex- cluded from the state budget for 1932. 5 . Without surpluses (ostatkov) of NKPS. The amount of subsidies from all-Union budgets includes in 1932 special deduction from turnover tax on cotton, oil, and tobacco in the amount of 62.0 million rubles for all union republics. 214 7SotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 664 and 1936, p. 648 indicate 183.1 million rubles. 8SotSialisticheskoye Stroitel'stvo SSSR, 1935, p. 664 and 1936, p. 648 indicate 15.8 million rubles. 91928/29 and 1929/30 only; remainder unallocated. 0 Apparently, this is included in deductions from profits in the budgets arranged according to standard classificaation (SotSialisticheskoye Stroitel'stvo, 1935, p. 650). 11A. Suchkov (Dokhody ggsudarstvyennogg_byudzheta SSSR, 1955, pp. 81, 88) lists as 223.8 million rubles in 1928/29, and 257.2 million rubles in 1929/30, and 67.7 million rubles in the fourth quarter of 1930. TABLE II-A 215 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) 1928/29 Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR NATIONAL ECONOMY 4,784.3 560.4 94.7 4,223.9 1. Industry, excluding food industry 972.5 226.5 27.9 746.0 a. Heavy industry,excl. 7 electrification 785.7a b. Light industry 28.9 c. Timber industries 157.9a 2. a. Food industry, domestic trade, supply and procure- 257.6 257.6 ment organizations b. Foreign trade 3. Electrification 179.3 179.3 4. Agriculture 547.8 241.1 48.1 306.7 5. Transport 2,475.4 2,475.4 a. Railways 2,217.3 2,217.3 b. Water transport 181.6 181.6 c. Land transport 74.3 74.3 d. Air transport 2.2 2.2 6. Communication (posts) 193.8 193.8 7. Municipal economy and housing 67.5 67.5 8. Loan of economic restoration2 28.5 28.5 9. Other expenditures 61.9 61.9 10. Discrepancy 92.8 18.7 (92.8) (Table SOCIAL AND CULTURAL SERVICES 1. Education 2. Health and physical education 3. Discrepancy SOCIAL INSURANCE OF WORKERS AND EMPLOYEES DEFENSE, ADMINISTRATION, REGULATION OF NATIONAL ECONOMY, ADMINISTRATION OF SOCIAL AND CULTURAL SERVICES EXPENDITURE ON STATE LOANS TRANSFERS TO OTHER FINANCIAL INSTITUTIONS a. Local budget b. Social insurance c. State insurance d. State bank SPECIAL STATE RESERVE FUND OTHER EXPENDITURES TOTAL EXPENDITURE OF UNION REPUBLICS TRANSFER TO ALL-UNION BUDGET TOTAL EXPENDITURES EXCESS OF REVENUE OVER EXPENDITURE (Balancing) TOTAL 481. 7 398.2 44.7 38.8 1,206.9 317.5 1,299.3 1,264.1 35.2 50.0 101.2 8,240.9 186.8 8,427.7 II—A Continued) 328.0 251.0 42.2 34.8 25.6 153.7 1,264.1 1,264.1 37.7 15.5 2,385.0 1.2 2,386.2 26.2 203.7 203.7 13.2 412.3 216 153.7 147.2 bk) OU1 (25.6) 1,053.2 317.5 35.2 35.2 12.3 85.7 (1.2) 5,854.7 186.8 6,041.5 TABLE II-B 217 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) 1929/3O Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR NATIONAL ECONOMY 7,680.7 919.3 128.9 6,761.4 1. Industry, excluding food industry 2,045.3 438.7 47.8 1,606.6 a. Heavy industry,excl. 7 electrification 1,631.8a b. Light industry 140.3a c. Timber industries 273.2 2. a. Food industry, A 8 domestic trade, supply and procure- 689.5 ) 689.5 ment organizations b. Foreign trade J 3. Electrification J 229.4 229.4 4. Agriculture 1,099.0 391.9 68.0 707.1 5. Transport 3,148.6 3,148.6 a. Railways 2,717.7 2,717.7 b. Water transport 294.2 294.2 c. Land transport 118.5 118.5 d. Air transport 18.2 18.2 6. Communication (posts) 272.9 272.9 7. Municipal economy and housingl 76.1 76.1 8. Loan of economic restoration2 65.1 65.1 9. Other expenditures 54.8 54.8 10. Discrepancy 88.7 13.1 (88.7) SOCIAL AND CULTURAL SERVICES 1. Education (Table 2. Health and physical education 3. Discrepancy SOCIAL INSURANCE OF WORKERS AND EMPLOYEES DEFENSE, ADMINISTRATION, REGULATION OF NATIONAL ECONOMY, ADMINISTRATION OF SOCIAL AND CULTURAL SERVICES 1,396.9 EXPENDITURE ON STATE LOANS TRANSFERS TO OTHER FINANCIAL INSTITUTIONS a. Local budget b. Social insurance c. State insurance d. State bank SPECIAL STATE RESERVE FUND OTHER EXPENDITURES TOTAL EXPENDITURE OF UNION REPUBLICS TRANSFER TO ALL-UNION BUDGET TOTAL EXPENDITURES EXCESS OF REVENUE OVER EXPENDITURE (Balancing) TOTAL 794.9 704.6 405.7 1,743.6 1,701.4 42.2 313.2 12,335.0 651.5 12,986.5 II-B Continued) 484.9 113.2 400.9 95.3 154.5 30.7 1,701.4 302.5 1,701.4 302.5 43.7 7.5 3,334.3 588.7 40.2 9.4 3,374.5 598.1 218 310.0 303.7 U'll-' PM (30.5) 1,242.4 405.7 42.2 42.2 269.5 (40.2) 8,960.5 651.5 9,612.0 TABLE II-C 219 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) Fourth Quarter, 1930 Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR NATIONAL ECONOMY 3,124.7 176.6 29.8 2,948.1 1. Industry, excluding food industry 898.6 68.4 11.5 830.2 a. Heavy industry,exc1. 7 electrification 677.2 b. Light industry 41.5a c. Timber industries 179.8a _ . W N 2. a. Food industry, domestic trade, supply and procure- ) 342.6 > 342.6 ment organizations b. Foreign trade 3. Electrification 95.7 95.7 4. Agriculture 582.1 93.9 17.0 488.2 5. Transport 1,066.5 1,066.5 a. Railways 903.4 903.4 b. Water transport 93.1 93.1 c. Land transport 59.1 59.1 d. Air transport 10.9 10.9 6. Communication (posts) 99.8 99.8 7. Municipal economy and housing .5 .5 8. Loan of economic restoration2 30.1 30.1 9. Other expenditures 8.8 8.8 10. Discrepancy 14.3 1.3 (14.3) (Table II-C Continued) SOCIAL AND CULTURAL SERVICES 1. Education 2. Health and physical education 3. Discrepancy SOCIAL INSURANCE OF WORKERS AND EMPLOYEES DEFENSE, ADMINISTRATION, REGULATION OF NATIONAL ECONOMY, ADMINISTRATION OF SOCIAL AND CULTURAL SERVICES EXPENDITURE ON STATE LOANS TRANSFERS TO OTHER FINANCIAL INSTITUTIONS a. Local budget b. Social insurance c. State insurance d. State bank SPECIAL STATE RESERVE FUND OTHER EXPENDITURES TOTAL EXPENDITURE OF UNION REPUBLICS TRANSFER TO ALL-UNION BUDGET TOTAL EXPENDITURES EXCESS OF REVENUE OVER EXPENDITURE (Balancing) TOTAL 295.8 275.8 533.4 74.9 418.3 337.2 6.6 31.0 43.5 168.9 4,616.0 706.2 5,322.2 147.7 129.9 25.3 337.2 337.2 17.0 709.0 21.4 730.4 2'20 36.5 148.1 33.7 145.9 2.1 1.1 7 1.1 1.4 (5.2) 5.4 508.1 74.9 56.6 81.1 56.6 — - 6.6 - 31.0 - 43.5 .9 151.9 130.6 ‘ (21.4) 3,885.6 706.2 130.6 4,591.8 221 TABLE II-D THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) 1931 Total of State Unified State Budget A11- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR NATIONAL ECONOMY 18,047.7 850.1 151.8 17,197.6 1. Industry, excluding food industry 7,200.5 240.5 50.3 6,960.0 a. Heavy industry,exc1. 7 electrification 6,438.9a b. Light industry 224.0 c. Timber industries 537.6a 2. a. Food industry, domestic trade, a supply and procure- 1,749.0 1,749.0 ment organizations 3 a b. Foreign trade 240.9 240.9 3. Electrification 579.8 579.8 4. Agriculture 2,693.6 504.0 81.0 2,189.6 5. Transport 4,986.7 4,986.7 a. Railways 4,274.9 4,274.9 b. Water transport 289.2 289.2 c. Land transport 288.1 288.1 d. Air transport 134.5 ‘ 134.5 6. Communication (posts) 531.0 531.0 7. Municipal economy and housing1 24.7 24.7 8. Loan of economic restoration2 - - 9. Other expenditures 41.5 41.5 10. Discrepancy 105.6 20.5 (105.6) 222 (Table II-D Continued) SOCIAL AND CULTURAL SERVICES 1,290.7 689.8 172.2 600.9 1. Education 1,171.6 581.2 153.6 590.4 2. Health and physical education 74.1 68.0 13.6 6.1 3. Discrepancy 45.0 40.6 5.0 4.4 SOCIAL INSURANCE OF WORKERS AND EMPLOYEES 25.6 7.1 (25.6) DEFENSE, ADMINISTRATION, REGULATION OF NATIONAL ECONOMY, ADMINISTRATION OF SOCIAL AND CULTURAL SERVICES 1,714.5 133.5 23.3 1,581.0 EXPENDITURE ON STATE LOANS 408.3 408.3 TRANSFERS TO OTHER FINANCIAL INSTITUTIONS 1,400.6 1,345.0 268.4 55.6 a. Local budget 1,345.0 1,345.0 268.4 - b. Social insurance 35.6 - - 35.6 c. State insurance 20.0 - - 20.0 d. State bank - — - - SPECIAL STATE RESERVE FUND - - — _ OTHER EXPENDITURES 284.0 106.2 13.0 177.8 TOTAL EXPENDITURE OF UNION REPUBLICS 3.150.2 635.8 TRANSFER TO ALL-UNION BUDGET 139.7 12.7 (139.7) TOTAL EXPENDITURES 23,145.8 19,855.9 EXCESS OF REVENUE OVER EXPENDITURE 715.3 715.3 (Balancing) TOTAL 23,861.1 3,289.9 648.5 20,571.2 TABLE II-E 223 THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) 1932 Total of State Unified State Budget A11- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR 3 5 6 NATIONAL ECONOMY 23,663.6 960.0 194.9 22,703.6 1. Industry, excluding 8 food industry 11,901.8 260.3 54.0 ll,64l.5 a. Heavy industry,excl. 7 b c electrification 10,474.6 194.5b 40.9C 10,280.1 b. Light industry 393.4: 65.8 13.1 327.6 C- Timber industries 1,033.8 2. a. Food industry, \ A N 1 domestic trade, supply and procure- 2 2,646.4a i b F c ment organizations 1 a 54. 31.6 2,725.4 b. Foreign trade “ 133.9 J J J 3. Electrification 675.1 675.1 4. Agriculture 3,723.5 559.5 91.1 3,164.0 5. Transport 3,690.33 3,690.3 a. Railways 2,691.23 2,691.2 b. Water transport 469.3 469.3. c. Land transport 364.6 364.6 d. Air transport 165.2 165.2 6. Communication (posts) 690.3 690.3 7. Municipal economy and housing 95.7 95.7 8. Loan of economic restoration - - 9. Other expenditures 106.6 106.6 10. Discrepancy 159.8 49.8 (159.8) (Table SOCIAL AND CULTURAL II—E Continued) 224 SERVICES 1,705.8 899.2 224.4 806.6 1. Education 1,523.4 740.3 187.4 783.1 2. Health and physical education 103.9 91.7 23.8 12.2 3. Discrepancy 78.5 67.2 13.2 11.3 SOCIAL INSURANCE ON WORKERS AND EMPLOYEES 34.3 10.3 (34.3) DEFENSE, ADMINISTRATION. REGULATION OF NATIONAL ECONOMY, ADMINISTRATION OF SOCIAL AND CULTURAL SERVICES 1,987.3 271.1 51.7 1,716.2 EXPENDITURE ON STATE LOANS 961.8 961.8 TRANSFERS TO OTHER FINANCIAL INSTITUTIONS 1,893.8 1,724.9 247.4 168.9 a. Local budget 1,724.9 1,724.9 247.4 - b. Social insurance 60.0 — - 60.0 c. State insurance 28.9 - - 28.9 d. State bank 80.0 - - 80.0 SPECIAL STATE RESERVE FUND - - OTHER EXPENDITURES 528.1 138.5 17.7 389.6 TOTAL EXPENDITURE OF UNION REPUBLICS 4,028.0 746.4 TRANSFERS TO ALL-UNION BUDGET 15.2 13.7 (15.2) TOTAL EXPENDITURES 30,740.43 26.697.2 EXCESS OF REVENUES OVER 4 EXPENDITURE 889.1 889.1 (Balancing) TOTAL 31,629.53 4,043.2 760.1 27,586.3 TABLE II-F 44:) THE UNIFIED STATE BUDGET AND THE STATE BUDGET OF UKRAINIAN SSR. ANALYSIS OF BUDGETARY EXPENDITURES (in millions of rubles) 1928/29 - 1932 Total Total of State Unified State Budget All- Item State Budgets of Uk- Union Budget of Union rainian Budget Republics SSR NATIONAL ECONOMY 57,301.0 3,466.4 600.1 53,834.6 1. Industry, excluding food industry 23,018.7 1,234.4 191.5 21,784.3 a. Heavy industry,excl. 7 electrification 20,008.2 b. Light industry 828.1 c. Timber industries 2,182.3 , N 2. a. Food industry, 3 domestic trade, supply and procure- F 6,059.9 >6,059.9 ment organizations b. Foreign trade J 3. Electrification J 1,759.3 1,759.3 4. Agriculture 8,646.0 l.790.4 305.2 6,855.6 5. Transport 15,367.5 15,367.5 a. Railways 12,804.5 12,804.5 b. Water transport 1,327.4 1,327.4 c. Land transport 904.6 904.6 d. Air transport 331.0 331.0 6. Communication (posts) 1,787.8 1,787.8 7. Municipal economy and housing1 264.5 264.5 8. Loan of economic restoration2 123.7 123.7 9. Other expenditures 273.6 273.6 10. Discrepancy 461.2 103.4 (461.2) (Table II-F Continued) SOCIAL AND CULTURAL SERVICES 1. Education 2. Health and physical education 3. Discrepancy SOCIAL INSURANCE ON WORKERS AND EMPLOYEES DEFENSE, ADMINISTRATION, REGULATION OF NATIONAL ECONOMY, ADMINISTRATION~ OF SOCIAL AND CULTURAL SERVICES EXPENDITURE ON STATE LOANS TRANSFERS TO OTHER FINANCIAL INSTITUTIONS a. Local budget b. Social insurance c. State insurance d. State bank SPECIAL STATE RESERVE FUND OTHER EXPENDITURES’ TOTAL EXPENDITURE OF UNION REPUBLICS TRANSFERS TO ALL-UNION BUDGET TOTAL EXPENDITURES EXCESSXOF RESERVE OVER EXPENDITURE (Balancing) TOTAL 4,568.9 4,073.6 283.9 211.4 6,839.0 2,168.2 6,755.6 6,372.6 179.6 79.9 123.5 50.0 1,395.4 79,078.1 3,148.9 82,227.0 2,549.6 2,103.3 260.8 185.5 121.2 738.1 6,372.6 1,078.6 226 6,372.6 1,078.6 37.7 320.9 13,606.5 2,513.8 217.7 l3,824.2 2,549.6 614.4 2,019.3 525.7 1,970.3 57.6 23.1 31.1 25.9 29.0 (121.2) 137.3 6,100.9 - 2,168.2 383.0 179.6 79.9 123.5 13.2 12.3 41.2 1,074.5 35.8 (217.7) 65,253.9 3,148.9 68,402.8 227 S OURCES : Unless otherwise stated, SotSialisticheskoye stroitel'stvo SSSR, 1934, pp. 442-443, 446-447, 453; Ibid., 1935, pp. 646- 647, 654, 655, 661. aSotSialisticheskoye stroitel'stvo SSSR, 1936, p. 645. bSotSialisticheskoye,stroitel‘stvo SSSR, 1935, p. 665, Ibid., 1936, p. 649. CSotSialisticheskoye stroitel'stvo SSSR, 1935, p. 664, Ibid., 1936, p. 648. NOTES: 1Beginning with the Fourth Quarter of 1930, financing of housing construction undertaken by the individual branches of the economy is included in financing of those branches. 2 . . . . In SotSialisticheskoye strOitel'stvo SSSR, 1936, p. 645, included in item 9, other expenditures. 3For comparative purposes, this amount should be increased by 2,899.3 million rubles to account for operating expenses and deductionstnx;FUBR by railways, which are excluded from the 1932 budget. 4Excluding surpluses of NKPS. 5 - SotSialisticheskoye stroitel'stvo SSSR, 1936, p. 649 shows 964.2 million rubles. 6SotSialisticheskoye stroitel'stvo SSSR, 1936, p. 648 shows 195.8 million rubles. 7It should be noted that 1935 and 1936 editions of SotSialisticheskoye stroitel'stvo SSSR do not agree with respect to expenditures on heavy industry, including electri— fication (millions of rubles): SotSialisticheskoye SotSialisticheskoye stroitel'stvo SSSR stroitel'stvo SSSR Difference 1936, p. 645 1935, p. 651 1928/29 965.0 888.6 76.4 1929/30 1,861.2 1,731.6 129.6 4th 0.,1930 772.9 700.8 72.1 1931 7,018.7 6,431.2 587.5 1932 11,149.7 10,435.3 714.4 21,767.5 20,187.5 1,580.0 228 However, both editions show the same values for total expen— ditures on industry and trade, as well as all other items in this category. Expenditures on heavy industry exclude ex- penditures on electrification. Expenditures on heavy industry were computed in the following manner (in millions of rubles): Expenditures on Heavy Industry, Electri- Heavy IndUStrY Including fication** Eleg:gigiéggion Electrification* , . 1928/29 965.0 179.3 785.7 1929/30 1,861.2 229.4 1,631.8 4th quarter,l930 772.9 95.7 677.2 1931 7,018.7 579.8 6,438.9 1932 11,149.7 675.1 10,474.6 21,767.5 1,759.3 20,008.2 *Sotsialisticheskoye stroitel'stvo SSSR, 1936, p. 645. **Sotsia1isticheskoye stroitel'stvo SSSR, 1935, p. 646. These expenditures are listed in the table under a separate heading. 8Total of a and b_(l94.5 + 65.8); however, Sotsialisti- cheskoye stroitel'stvo SSSR, 1934, p. 453 and 1935, p. 661 show 240.7 million rubles. 229 TABLE III INDUSTRIAL OUTPUT (in millions of rubles; in prices of 1926/27) 1928/29 1930 1931 1932 Ukrainian SSR: Large-scale industry 3,450.1a 5,217.1a 6,156.2l 6,927b Group A 1,955.7a 2,834.9a 3,943. 2 4,198C Group B 1,494.4a 2,382.2a 2,213.23 2,729C Small—scale industry 801.8d 1,602. 9 Total 4,251.94 7,758. 9 Union of SSRe Large-scale industrylo 16,704. 5 27,477. 33,903. 38,464 Group A10 7,757. 5 14,455. 18,776. 21,942 Group B10 8,947. 5 13,022. 15,127 16,522 Smale-scale industry 1,300. 5 4,700. 4,800 Total 18,000. 5 38,600. 43,300 Ukrainian SSR as Percentage of the USSR Large-scale industry 20.656 18.998 18.16 18.01 Group A 25.217 19.61 21.00 19.53 Group B 16,70 18.29 14.63 16.52 Small-scale industry 61.66 34.04 Total 23.62 20.10f SOURCES: aUpravlinnya Narodno-Hospodars'koho Obliku, USRR y_tsyfrakh, p. 52; Akademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narod— nogo khozyaystva Ukrainskoy SSR, p. 327. 230 bAkademiya Nauk Ukrainskoy SSR, 9p, cit., p. 392; Great Soviet Encyclopedia, LV, p. 800. CAkademiya Nauk URSR, Narysy rozvytku narodnoho hospodarstva Ukrayins'koyi RSR, p. 321. dAkademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyaystva Ukrainskoy SSR, p. 269. eCentral Administration of Economic and Social Statistics of the State Planning Commission of the USSR, The U.S.S.R. ip Figures (1934), pp. 32, 36. fN. Livshyts', "Vazhka promyslovist' Ukrayiny na XV Yuviley Zhovtnya," Hospodarstvo Ukrayiny, 12, 1932, p. 19. NOTES: lComputed as 118 per cent of 1930 industrial output. This ratio of 1931 to 1930 output of Ukraine's "census" industry is given by N. Livshits in his article "Promyslovist' Ukrayiny za 15 rokiv dyktatury proletariyatu," Bil'shovyk_Ukrayiny, 19-20, 1932, p. 57. 2Estimated as 21.0 per cent of output of Group A in the USSR. The ratio taken from N. Livshits, 9p, cit., p. 50. 3Residual. 4It should be noted that B. Sihal reports output of all industry in Ukrainian SSR in this year as 4,429.0 million (chervontsi) rubles (his article "Pryvatnyi kapital na shlakhu likvidatsiyi," Bil'shovyk Ukrayipy, 7, 1930, pp. 63-64. 5Cited in the source as 1928. 6K. Sukhomlin's values yield 19.21 per cent of the USSR, in 1926/27 prices (his article "Dva roky borot'by za pyaty- richku ta cherhovi zavdannya yiyi vykonannya," Bil'shovyk Ukrayiny, 9-10, 1930, p. 19. On the other hand H. Oleksyn uses 21.0 per cent which closely approximates our own estimates (H. Oleksyn, "Dvanadtsyat' rokiv sotsiyalistychnoyi promy- slovosty," Bil'shovyk Ukrayiny, 20, 1929, p. 10. 7N. Livshits (9p, cit., p. 50) reports 24.6 per cent. 8Values used by K. Sukhomlin (pp, cit., p. 19) are in 1926/27 prices. They yield a ratio of 19.52 per cent in 1929/ 30. 231 9N. Livshyts' points out that Ukraine contributed in 1931 20.1 per cent of the output of all industry of the USSR. Thus, output of Ukraine's small-scale industry is computed as follows: 20.1 per cent of 38.6 billion rubles yields 7,758 million rubles; by deducting from this the output of large-scale in- dustry (6,156.2 million rubles) we obtain 1.6 billion rubles as output of small-scale industry. 10Including fisheries and lumber industry. RETAIL TRADE TURNOVER OF STATE, CO-OPERATIVE TABLE IV AND PRIVATE TRADING ENTERPRISES (millions of rubles, 232 in prices of corresponding years) 1928/29 1930 1931 1932 Ukrainian SSRa Cities: 1,883.8 1,899.1c 2,941.7 4,374.9 State & cooperative 1,493.5 1,797.1C 2,921.1 4,347.9 Private 390.3 102.0C 20.6 - Villages: 941.3 1,288.9C 1,721.7 2,365.6 State & cooperative 826.2 1,270.2C 1,719.7 2,365.6 Private 115.1 18.7c 2.0 - A11 Retail Trade (Excluding Public b 2 Catering): 2,825.1 3,188.0 4,663.4 6,713.5 State 226.7b 442.72 959.9 2,319.6 Cooperative 2,093.0b 2,624.62 3,680.9 4,393.9 Private 505.4b 120.72 22.6 - Public Catering 127.9l 220.3d 457.66 791.9 Total 2,953.0i 3,408.35 5,121.0 7,505.4 11.9913. Cities: 10,494.55 11,996.3 16,447.0 23,387.8 State & cooperativeg 7,793.0 11,140.0f 16,447.0 23,387.8 Private 2,701.5e 856.3f - Villages: 4,662.15 6,629.2 8,278.2 12,116.5 State a. Cooperativeg 3,957.0 6,442.5f 8,278.2 12,116.5 Private 705.1e 186.7f - - All Retail Trade (Excluding Public Catering): 15,156.6g'5 18,626.0 24,725.2f 35,504.3f 233 (Table IV Continued) Stateh 2,409.02 4,283.0 6,547.0 12,715.0 Cooperativeh 9,341.02 13,300.0 18,178.0 22,789.03 Private 3,406.6e 1,043.0f - Public Cateringg 350.0 1,290.0 2,740.0 4,852.0 Total 15,506.64’7 19,916.07 27,465.27 40,356.37 Ukrainian SSR a; Percentage of the 1% Cities: 17.95 15.83 17.89 18.71 State & cooperative 19.16 16.13 17.76 18.71 Private 14.45 11.91 - - Villages: 20.19 19.44 20.80 19.52 State & cooperative 20.88 19.71 20.77 19.52 Private 16.32 10.02 - - All Retail Trade (Excluding Public Catering): 18.64 17.12 18.86 18.91 State 9.41 10.34 14.66 18.24 Cooperative 22.41 19.73 4 20.25 19.28 Private 14.84 11.57 - - Public Catering 36.54 17.08 16.706 16.32 Total 19.044 17.11 18.656 18.60 SOURCES: aUpravlinnya Narodno-Hospodars'koho Obliku USRR, Radyans'ka tgxhiylyg USRR, 1936, pp. 203-205, 207, unless otherwise indicated; years 1928/29, 1930 and 1932 also from Upravlinnya Narodno-Hospodars'koho Obliku, USRR y_tsyfrakh, 1936, pp. 370- 371. b . . . . . Also, Akademiya Nauk Ukrainskoy SSR, OCherki razv1t1ya narodnogo khozyaystva Ukrainskoy SSR, 1954, p. 295. 234 CAlso, ibid., p. 357 dUpravlinnya Narodno—Hospodars'koho Obliku, USRR 1 tsyfrakh, 1936, p. 370. eTsUNKhU Gosplana SSSR, SotSialisticheskoye Stroitel'stvo SSSR, 1934, p. 362. fAiso, ibid., 1936, p. 607. 9Central Administration of Economic and Social Statistics, The U.S.S.R. ip_Figures, 1935, pp. 294-295. thid., pp. 296—297. lTsUNKhU Gosplana SSSR, SotSialisticheskoye Stroitel'stvo Soyuza SSR, 1939, p. 163. NOTES: lSotSialisticheskoye Stroitel'stvo SSSR, 1939, p. 163, indicates all retail Trade, including public catering as 2,953 million rubles. Thus, if we deduct our retail trade, we obtain 127.9 million rubles for public catering. 2Indicated in the source as 1928; however, since it is compared (in Upravlinnya Narodno—Hospodars'koho Obliku USRR, Radvans'ka torhivlva USRR, 1936, p. 203) with 2,319.7 million rubles (combined retail trade of state and cooperative enter- prises in Ukraine in 1928/29), I believe it represents 1928/29. This belief is also confirmed by similar treatment in TsSU: Sovvetskaya Torqovlya, 1956, p. 31. 3Includes 280 million rubles by Workers' Supply Departments. 4SotSialisticheskoye Stroitel'stvo SSSR, 1939, p. 149 indicates 15,414 million rubles, in which case Ukraine's share is 19. 16%. 5Arrived at by adding components. 61 was unable to secure the value for public catering sales in Ukrainian SSR in 1931. I believe it to be reasonable to assume that Ukraine's share in 1931 was somewhere between that of 1930 (17.08 per cent) and 1932 (16.32 per cent). Since these ratios are rather close for reasons of convenience I shall use their average, 16.7 per cent. Thus, we obtain the following values for 1931: 235 Millions of Rubles Percentage of USSR Public catering 457.6 16.70 Total 5,121.0 18.65 The above assumption may be substantiated by the fact that Ukraine's share in public catering sales reveals a tendency to decline at least until 1932. It levels off in 1933. In 1934 it indicates possibility of reversing the trend: Public catering: 1933 1934 Ukrainian SSR (millions of rubles)* 939.1 1,222.2 Union of SSR (millions of rubles)** 5,701.0 6,341.0 Ukrainian SSR as a percentage of the USSR 16.47 19.27 *Upravlinnya Narodno-Hospodars'koho Obliku USRR, Radvans'ka torhivlva USRR,(1936), p. 203. **Central Administration of Economic and Social Statistics, The U.S.S.R. ip Figures (1935), p. 295. 7S. N. Prokopovich (Narodnoye Khozyaystvo SSSR, II, p. 179) shows the following values for retail trade turnover in the USSR (in millions of rubles): Including Turnover Tax Net of Turnover Tax 1928 15,507 13,156 1930 19,920 13,185 1931 27,465 15,822 1932 40,357 20,843 r0 3 2 .mmma .uouomam.mw .m.m.m.o one poo poo .m .omoa mmma flaw mNmH .mn¢m8 QHH mHQMB EOHM NmmH .com .m .o>um.amoaouum uaoxuocUHuuaaoauuom .omoa .o~\mmoa .HmmH "Scum "Mom mm coHco .mmm .m .Mmm fl>ox.msfl>muxb o>umumooamom mucoumz .Mmm Hmox.mcflhmuxb mmcsfia>mumb wcnohummumum Scum Nmmalmmma mom mcflhmumu UHHQDQ Ucm mpmnu m>aumnwmoou cam mumum .mncme AHH canoe Eoum cmxmu mummm Ham Mom mommy mUm>HHQ cam m~\mmma "mmm CMHGHMHMD "mmUMDom hm.ma om.ma mo.mH ¢O.ma II II hm.HH cm.¢a mpm>flnm hm.mH Hm.ma mo.om ha.am oo.o~ mm.om mn.®a m®.ma mo.ma mm.mm hm.¢m cm.©m msflumpmo Deansm mo.oa oa.om mm.om NH.HN em.om eo.oa o>aumummooo cum woman .mmm.wm coaco 0C0.Mm momucmuuma.mm_mmm cmwcflmnxb m.®mm.o¢ m.m©¢.nm o.oam.ma a.>a¢.ha o.mom.ma 0.00m.ma Hmuoe u: nu o.mco.a e.mam.m1 o.ooc.m o.ooc.m mcmaauo m.@mm.ov N.mm¢.hm o.m>m.ma n.mva.ma o.ooa.ma o.ooa.ma o.Nmm.¢ o.ovh_m o.omm.a 0.0mm 0.0mm 0.0mm mcflumumo UHHQsm m.vom.mm N.mmh.vm o.mmm.ha h.mmm.¢a o.omh.aa o.omh.aa m>flgmuwmoou Ucm mumum .mmw.wm.mmwmm H.nam.h m.v®¢.m m.mom.m o.mmm.m Hmuoe II ©.Nm b.0ma «.mom mum>flum H.ham.h N.mvv.m N.mm>.m o.mom.m o.oom.~ o.hv¢.m o.¢am 0.0mv m.om¢ o.mmm m.@m m.hma mcflumumo UflHQsm H.moo.h o.mmm.¢ ~.©mm.m m.mmo.m o.vH¢.m h.mam.m 0>Humummoou 0cm mumum . . . . mmm smacflwnxb mmma Hmma Omma mmma mmma mm\mmma “mummw msflpcommmuuou mo mmuaum CH “mmHQSH mo mGOAHHHE cflv mmemmmmezm Uande MB4>HMQ QZ¢_d5HB¢mmmOLOO .MB¢Bm m0 mm>CZMDB WQ¢MB AHdBmm .mI>H mqmdfi 237 TABLE V OUTPUT OF GRAINS (in millions of quintals) Ukrainian SSR Years Ukrainian SSR Union of SSR as percentage of the USSR 1927l 170.22'a 743.22'a 22.9j 1928l 138.92’b 733.22'C'd 18.94 19291 187.0k’5 717.4c'd'f 26.035 19301 230.8 e 835.4C'd'f 27.63 1931 183.09'1- 147.74 694.8d’f 26.34 - 21.26 1932 146.03’h- 132.0g 698.7d’f 20.90 - 18.8 1928-1932 885.7 - 836.4 3679.5 24.07 - 22.73 SOURCES: aGosplan SSSR, Pyatiletniy plan narodno—khozvaystvvennoqo stroitel'stva, Third edition, 1930, III, p,'590. bUpravlinnya Narodno-Hospodars'koho Obliku, USRR 1 Tsyfrakh, p. 215. CKulikov, P., "Itogi i perspektivy proizvodstva zyernovykh kul'tur," Planovoye Khozyaystvo, 5, 1932, p. 46. d TsUNKhU Gosplana SSSR, SotSialisticheskoye stroitel'stvo SSSR, 1936, pp. 342-344; S. N. Prokopovich, Narodnoye khozyaystvo SSSR, I, p. 210. eBerezikov, V. S., "Plyan dal'shoho sotsialistychnoho nastupu v sil's'komu hospodarstvi," Hogpodarstvo Ukrayiny, 11-12, 1930, pp. 24-25. fStalin, J., Report E2_the Seventeenth Congress 9; the C.P.S.U.(B)..gp the work 2; the Central Committee, p. 54; J. V. Stalin, Works, XIII,p. 326. gEntsvklopediya Ukrayinoznavstva, II, p. 710. thevolod, Holub, "Prychyny holodu 1932-33 roku," Vpered, 10 (94), February, 1958. 238 lAkademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narod— noqo khozyaystva Ukrainskoy SSR, p. 352. JGosplan SSSR, pp, cit., p. 594. kAdademiya Nauk URSR, Narysy:rozvytku narodnoho hospodar- stva.Ukravins'koyi RSR, p. 282. NOTES: lThese years are sometimes referred to as 1927/28, 1928/ 29, 1929/30, 1930/31. 2Gosplan SSSR, Kontrol'nye tsifrv narodnogo khozyaystva SSSR pp 1928/29 god, p. 550, quotes as follows (in millions of quintals): 1927/28 1928/29 Ukrainian SSR 184.05 131.02 Union of SSR 731.29 742.89 Ukrainian SSR/Union SSR 25.1% 17.6% 3Akademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyaystva Ukrainskoy SSR, p. 352, shows 147.0 million quintals. See general note below. 5Berezikov “Plyan dal'shoho sotsialistychnoho nastupu v sil's'komu hospodarstvi,” Hospodarstvo Ukrayiny, 11-12, 1930, pp. 24-25) lists 176.96 million quintals. On the basis of this figure, Ukraine produced in 1929 some 24.67 per cent of grains in the USSR. Five-year averages become as follows: high 23.8 per cent, low 22.46%. GENERAL NOTE: Information on total area under grain cultures and on the yield per hectare suggests the possibility of verifying the values set forth above. This is attempted below: 239 Area under Yield Estimated Differences Grain per Output of from Values Cultures Hectare Grains in the Table (000's of (in Quin- (000's of Above Hectares) tals) Quintals) + or - ( ) Ukrainian SSR (a) (b) (mi1.of Ql.'s) l928*** ‘19658.3 7.1 139574 .7 l929*** 20186.7 9.3 187736 .7 1930*** 22311.9 10.6 * 236506 5.7 1931 21097.6 8.7C'* 183549 .5 1932 18124.2 8.1C' 146806 .8 1928-1932 - - 894171 8.4 Union of SSR (a) (d) (000's of Ql.‘s) 1928 92,172.3 7.9 728,161 (5,037) 1929 96,011.8 7.5 720,089 2,674 1930 101,761.2 8.5 864,970 29,521 1931 104,405.8 6.7 699,519 4,679 1932 99,699.? 7.0** 697,898 (834) 1928-1932 3,710,637 31,003 SOURCES: aTsUNKhU Gosplana SSSR, SotSialisticheskoye Stroitel‘stvo SSSR, 1934, pp. 4-5. bUpravlinnya Narodno-Hospodars'koho Obliku, USRR_y_tsyfrakh, pp. 209—210, also Sots. Str., 1934, p. 204. S. V. Syol'ts points out that these yields per hectare represent biological yields and not actually harvested yields (S. V. Shol'ts, Kurs sel'skokhoz— yaystvyenngy statistiki,1945, p. 56). Although his reference is ‘with respect to yields in the USSR, it is believed that this is also true of the figures reported for Ukrainian Soviet Republic. CAkademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyaystva Ukrainskoy SSR, p. 352. deUNKhU Gosplana SSSR, SotSialisticheskoye stroitel'stvo SSSR, 1936, pp. 336-337. 240 NOTES: *S. Kosior ("Pidsumky zahotivel' i zavdannya KP(b)U v borot'bi za pidnesennya sil's'koho hospidarstva Ukrayiny," ggl'shovyk Ukrayiny, 3, 1933, p. 23) reports 7.0 for 1931 and 7.3 for 1932. In this case total output of'grains is esti- mated as 147,683,000 and 132,307,000 quintals respectively. The difference in 1931 is then equal to 35.3 million quintals; the 1932 estimate approximates the lower reported figure of 132 million quintals. Kosior also stated in the same article that some 30-40 per cent of grain was lost during harvesting in 1931 and 1932. On another occasion (his article, "Pro pidsumky vesnyanoyi zasivnoyi kampaniyi . . . ," Bil'shovyk Ukrayiny, 11-12, 1932, p. 14) he estimated that in 1931 alone some 20-25 million quintals of grains were lost in the harvest. In view of this, it appears that the yields per hectare in Ukraine in 1931 and 1932 which he quotes are actual yields. This probably explains in part substantial differences between our higher and lower values for output of grains in these years. **P. Kulikov ("Itogi i perspektivy proizvodstva zyernovykh kul'tur," Planovoye Khozyaystvo, 5, 1932, p. 45) shows 7.7, in which case estimated output is 767,688,000 quintals and the difference becomes 68,956,000 quintals. ***May also be referred to by some writers as 1928/29, 1929/30, 1930/31. It is interesting to note that the differences are minor, accumulating over the entire period to .84 per cent for the USSR and .94 per cent for the Ukraine. 241 TABLE VI GRAIN PROCUREMENTS BY STATE (in millions of quintals) Ukrainian SSR Ukrainian Union of Years SSR SSR as Percentage of the USSR 1 4 1927/28 43.5 110.0 39.55 1928/29 17.92 108.0 16.572 1929/30 50.0 160.0 31.25 1930/31 77.33 221.3 34.93 1931 70.0 228.4 30.65 1932 66.06 185.2 35.64 1928—1932 281.2 902.9 31.14 SOURCES: aUKRAINIAN SSR: 1927/28, 1929/30 and 1930/31 from "Za bil'shovyts'ku orhanizatsiyu ta udarni tempy khlibozahotivel'," Bil'shovyk,Ukravinv, 15, 1932, p. 3; 1928/29 from Ekonomi- cheskove Obozrenive, 1, 1930, p. 202; 1931 and 1932 from Entsvklopediva Ukrayinoznavstva, II, p. 710. bUNION OF SSR: 1927/28 - 1930/31 from A. Sarkis "K khlebozagotovitel'noy kampanii," Planovoye Khozyaystvo, 4, 1932, p. 77; 1931 and 1932 from S. N. Prokopovich, Narodnoye Khozyaystvo SSSR, I, p. 213. ' NOTES: General note: years 1927/28, 1928/29, 1929/30, and 1930/31 are also designated by various authors as: 1927, 1928, 1929, 1930. 1Akademia Nauk Ukrainskoy SSR, Ocherki razvitiya narod- noqo khozyaystva Ukrainskoy SSR, p. 332 indicates only 245 million poods (about 40.8 millions of quintals). 2This yields a ratio of 16.57 per cent. It is close to ratios provided by other sources: 16.4 per cent in 1928/29, 242 30 per cent in 1929/30, and 34.5 per cent in 1930/31 (I-Sapov, "Pidsumky mynuloyi i zavdannya novoyi khlibozahotivel'noyi kampaniyi,” Radvans'ka Ukrayina, 6, 1931, p. 26); 16.6 per cent (A. Bryukhanov, "Itogi khlebnoy kampanii 1928/29 goda," Ekonomicheskoye Obozrenive, 1, 1929, p. 133). 3V. Holub, in his article "Prychyny holodu 1932/33 roku," (Vpered, 10 (94), 1958), mentions 7.7 million tons. On the other hand, S. V. Kosior values actual fulfillment at 395 million poods (65.8 million quintals) in the "farmers" (selvans'kyi) sector (see his article "Pro pidsumky vesnya- noyi zasivnoyi kampaniyi . . . ," Bil'shovyk Ukrayiny, 11-12, 1932, p. 13). This agrees with the ratio of 40 per cent given by Bryukhanov, pp. cit., p. 133. 5Ekonomicheskoye Obozrenive, 1, 1930, p. 202 reports 97.35 million quintals for the USSR. In this case Ukrainian SSR's share is equal to 18.36 per cent instead of 16.57 per cent as shown in the table. 6V. Holub (pp, cit.) states that this represents 91 per cent of the plan. ‘ 243 m.mmm.m H.omm.a o.oaa.a o.aom o.emm coaooouommcoup omouaaom .e m.man.v h.moa.m H.0mh.a o.ovm o.omn Goauosupmcou .m m.ooo.m m.mmm.a H.mmv m.ooa o.maa wEHmm wumum paw mBE "many CH m.amh.m o.mam.m n.moa.a m.mhn o.vao m>upmsocw Hwnfiflp paw whopasofiumm .m m.h¢m.m m.vm¢.o o.maw.v ¢.mmm.m o.mmo.m mnumspcfl wamomlwmumq .H "msHUDHUcH n.5mn.mm m.¢mm.am N.wmm.ma mm.mm>.m m.mma.m mSEocoom HMCOHum: HH4 oMmm mm_coaco . . a . QH 0mm om mm co.pm05pm o mm.hvm muons .m oc.omv ma.mca coaumuuommcmuu omonafimm .v ov.NHm mo.mmH soaposuumsoo .m mo.0nm mo.mv mEHmm OUMpm paw we: "wasp CH . m.mHv . m.mm muumdpsfl HwQEHp H o m w paw musuasoflhmd .m .0m.oma.m oo.cmo muonuoca maoouummuoq .a a umcflpsHocH . m.N .o . om. . . . . . .Nm . meocoom MCOHumc ¢ a o «0 mm c m we 0mm N v DH mam a mo m H m H AH mmm emanamuxo NmmH Hmma Omma mNmH mmma Ammanou mo ucoaaaae cal ozom macs HH> mqmfifi 244 .oe .m .emoH .e .ccawmuxo mccomumaaoamuom :.anuou mmma > H Hmunofluhummm mflnmuom > sunflom O£OSUMGUHQOH mu ampmnm whacmumme ..S .>ommmaflmo .mma .m .omma .mmmD mNH>H£Hou m¥.mcm>pmm .SXHHQO osox.mumpommomloapoumz whcsfla>mumb Q .amm .m .omma .meumamu.w_mmmo .sxaano onox.mumoomuomuocooumz mannaa>mumom "mmUMDOm mh.ha mm.mH Nh.wa mm.ha om.ma. ¢N.HH mN.NN 0v.ma 0.00N.N m.mom.a mm.mH N.mv¢.a N.¢ma.a H©.ma 0.00m N.hmh m©.ma v.m¢© m.mm¢ hm.ma ma.hH mm.ha mm.mm m©.m ma.mm m®.ma o.mmm m.®a¢ Aconcaucoo HH> manmev soaumuspm . MQ'LOKO mpmufi Umouaflmm GOHDUSHumGOO . mEHmm wumum can we: "masu CH muumspcfi HwQEHD paw musuasownmd .N hupmspsfl mamomlwmumq .H "mGHUSHUQH mEosoom HMCOHumc HH< ammo 0C0.Mm mmmucwu www.mm Mmm GMHsHmeD ceaumosom .o OUMHB .m 245 deUNKhU Gosplana SSSR, SotSialisticheskoye Stroitel'stvo, 1934, pp. 318-319; Ibid., 1935, pp. 482-483; Central Admin- istration of Economic and Social Statistics, The U.StS.R.,ip_ Figures, 1934, pp. 167-168 (1929); Ibid., 1935, pp. 231-232 (1928,,1930). eK. N. Plotnikov, Byudzhet sovyetskogo gosudarstva, 1945, p. 61. NOTES: 1According to Upravlinnya Narodno—Hospodars'koho Obliku, USRR y_tsvfrakh, 1936, p. 397, wage fund for the entire economy was 5,999.1 million rubles; agriculture and timber -—4l9.8 million rubles; large-scale industry——2,126.5 million rubles; and construction--849.4 million rubles. 2Our source shows 2,800 million rubles. However, for reasons of comparability, I have deducted 600 million rubles paid to persons "engaged in 'education' in other branches." Such payments were not accounted for in prior years (Sotsialisticheskoyp stroitel'stvo SSSR, 1935, pp. 482-483). 3Values for 1928—1930 exclude wage payments to employees with own horses in the timber industry. Such payments are included in subsequent years. 4Ukrainian Academy of Sciences (Akademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyayptva UkrainskpnySR, 1954, p. 359) reports 1.8 billion rubles. 5Information on average wages in Ukraine and in the USSR reveals that the average wage was growing in Ukraine at a slower rate than in the USSR. Since the average wage for the whole economy of Ukraine in 1932 was below the corres- ponding amount for the Soviet Union, whereas in 1929 it was still reported about 2 per cent above that of the USSR, the average wage in Ukraine must have decreased relative to the average wage in the USSR for the first time during 1930 or 1931. Inasmuch as there were no significant changes reported in total employment in Ukraine relative to the USSR in this period, it may be reasonable to assume that Ukraine's share in the total wage fund of the USSR in 1930 and 1931, in accordance with the established downward trend, was somewhere between the 1929 (18.69 per cent) and 1932 (18.46 per cent). Inasmuch as these ratios are quite close, for reasons of convenience the wage fund in Ukraine for 1930 and 1931 is 246 determined by interpolation from 1929 and 1932 figures. Thus, according to arithmetic regression, the following ratios are applicable: 1929 - 18.69 per cent; 1930 - 18.61 per cent; 1931 - 18.53 per cent; and 1932 — 18.46 per cent. 6Computed by applying appropriate ratios (see note, (5) above) to the Wage Fund of the USSR, e.g., 13,597.2 million rubles in 1930 and 21,394.8 million rubles in 1931. It is interesting to note that the State Planning Commission places total wage fund in Ukraine in one of its diagrams, at 2.5 billion rubles in 1930 and 3.75 billion rubles in 1931 (Derzhavna Plyanova Komisiya, Sotsivalistvchne budivnytstvo pp_Ukrayini, 1932, diagram 73). 713.93 per cent, based on total of 2.8 billion rubles. 81t may be desirable to verify the wage fund for the entire economy on the basis of other information available: Workers and Average Total Difference Employees Wage Wage from Figures Fund in Table (000's of Above persons)* (millions (millions (rubles)* of rubles) of rubles) Ukrainian SSR 1928 2,020.3 753 1,521.3 (.7) 1929 a) 2,228.1 815 1,815.9 (3.2) b) 2,424.0 815 1,975.6 156.5 1932 a) 4,361.1 1,384 6,035.8 (6.7) b) 4,435.5 1,384 6,138.7 96.2 Union pf_§§3 1928 11,599.0 703 8,154.1 (4.7) 1929 12,167.9 800 9,743.3 8.1 1930 14,530.9 936 13,600.9 3.7 1931 18,989.5 1,127 21,401.2 6.4 1932 22,942.8 1,427 32,739.4 1.7 Table VIII. EMPLOYMENT STATISTICS. Table IX. AVERAGE EARNINGS OF WORKERS AND EMPLOYEES. *Sources: 247 9Does not include earnings of laborers employed on privately owned farms (M. Filyapov, "Pytannya pratsi ta robitnychoho pobutu v pershiy pyatyrichtsi i v 1933 rotsi," Sotsialistychna Ukrayina, 4, 1934, p. 40). 248 mm.am Ho.mm mm.mm om.- Hm.- muumooca camouummuog In vo.mm mo.- me.mm mm.ac mo.me maumm uumuu can we: “.Hoca ma.am mo.a~ am.om mm.m~ ao.m ououaooauoc Ac "mace cH emm.ma mm.ma Hm.ma mmm.ma me.oa msocoum Hocoauoc mo monocoun Ham MmmD.Hm momusmouma.mm mmm smacflmnxb N.acm.a m.mma.a m.omm o.mam o.omo coauoooom Am m.cmm ~.ama «.mma m.mHH o.mo ceaumoacseeoo Am m.oae.a o.ooo.a p.4Hm m.omo o.mmm moons Am m.o~m.a m.omm.a o.cmo.H o.cmm o.aom coauouuomucouu ooouaaom Io m.mma.m m.mcm.m e.m~o.a m.eam o.m~e acauusuuucoo A0 m.amc.o m.mme.m m.mom.c o.mom.m o.omo.m auumsoca mamouummumu In o.oam.~ H.Hoo.a o.mmo e.oae e.mcm neumm montwoco was ".Huca m.amm.m a.mmo.m e.mmm.a o.mom.a o.oao.a ouooaouaumm Ac “mane cH m.~eo.mm m.omm.ma o.omm.ea o.aoa.ma o.mom.aa aSocooo Hmcoaumc mo mmzucmun Ha< mmm.wm.mmwmm o.amm m.aom m.~aa m.ama m.mea coaomooom Am o.mm c.mm m.m~ m.ma coaomoacoeeoo Am a.mom m.ma~ o.moa o.mmH cm.m~H mooue Am m.oom H.mem m.oam o.moa o.ooa ceaooouooucouu ooouaacm Ac o.mao m.mce o.eom m.ooa m.~ma coauosuumcoo Au e.mmm.a o.oem.a a.oom m.omo m.amo auouooca camouummumq In m.omm m.mom m.mo~ m.maa v.5ea. usurp menu can we: ".Hoca m.moo m.mmc H.6Hm e.aom aa.aoa muouaooauoc Am "warp cH mm.mme.e H.moo.m o.mmm.m mo.c~e.m m.omo.m aeocooo Hocoaumc mo mucocmua flee mum coacaouxo mmma amoa omma mama mmma Amcomnmm mo mpcmmDOSu CH muwcumw mmmBV WUHBmHfififim BZHSMOAQZM HHH> mqmfifi .m>onm .N opos mom .mcflmuxb CH mommoamaw paw meMMOB ooa.amm.¢ so Ummmn ucmo mom Ho.mav .Nmma ca o.mmc.c coo mama ca o.emc.~ “monomam mCHBOHHom may mEHHchU Amga .m .wmmav.mmnsmflm.mfl .m.m.m.D was .Hm>m3om namuou GOACDIHHM may mo usmo mom Hm.ma msflmuxb Mom ms mm>flm maze .H.mmm.m m0 Hmuou m mwuosw mum .m .gmma .Mmm >OchfimuxD m>um>m>N03x ooocponmc m>mum>umn flxuwsuo .Mmm moxmsHMHXD xsmz mmflawpmxdm .o.amm lime: 0cm mEHmm oumum u©.noollquEHu Cam musuasoflumm um.mhmIIQ0HuusHuwsou “H.Hom.¢llmaosoow stoflumc Ham um>OQm opposq mmonu Eoum mmma How mGOADMHHm> mcfl3oHHom mnu m30£w Nam .m .omma .meum>mu > mmmo .Sxaano onox.mumoommomuocoouoz mascaa>mumo pony omumoaocH on oasosm uHm .muumSUGH HmQEHu mmUSHUCHH umMBOZ .HHH .m .hmma .msHSMHMD MGSUSUmHHmwmuom .mmMD SxHHQO O£0M.mumpommomlocponmz mmssfla>mnmbm 249 .mmmuomm .mm .mmma .mmuomam.mw .m.m.m.o one fl>002 .m .omma .o>ou.amuaouum m>ox :mmnoaumaamamuom “momuoom .mm .cmma .o>um.amuaouum m>oxmwsuaouaamamuom "mmm.wm cOHco .ooa .mma .Hma .mea .mm .emma .mmuomam.mm .m.m.m.o one .moaumauoum Hoaoom ocm oaeocoum mo coauouumacaeom Houucmo “maco mmma ocm mmma umam .mam .Ham .mm .emma .o>um.amuaouum maoxmocuaumaamamoom "Nmmaummma .ammm .m .omma .SXmum>mu.N mmmb .DXHHQO 030x.mumpommomlos©onmz mmccma>mumb "mmma “mmm ammcflmmxb "mmomDOm oo.mH mo.ma ma.ma mm.ma om.ma COHumosom Am Ho.oa em.oa an.ma om.ma coaumuacoesoo Am oc.am mm.o~ om.mH mm.mH moons Am oo.o~ cm.o~ oc.ma mm.mH mo.mH ceauouuommcmuu ooouaamm Ac om.mH oo.mH om.oa ea.ma em.oa . coauosuumcoo A0 mm.am Ho.mm mm.mm om.mm H~.- mnemSoCa mamomummumq In Aconcaucoo HHH> wanmev 250 emo.a mam ame mme mmm auomouom «cm owe moo mmm mmm we: can maumm mumum ".Hoca mom can mmm mom omm muouasoaumc mmo.H mmm.a mmm mmm moo coauousom Hmm.a Hmo.a mmm mma mm» moons mom.H mom.a moa.a Hmo.a mmm coaumuuommcmuu Hours ome.H mmH.H omo.a pom mmm acapmuuomncmuu omouaamm mom.a mcm.a mmo.a mmo.a omm coauusuumcoo omae.a cmH.H mmo.H mmm cam muonsoca mamouummumq “.HocH mme.H ama.a omm com moo aSocoow Hmcoaumc mo monocmun HH< mmwm.wm.mmwmm . «mm 1 we: W.wmdo mmom_A Uoom mEHmm mumpm ".HUCH memo mmam whammnom pom musuasomum< coco.a mmoo coauoosom 0mma.a u momue omom.a Udmm deflumuuommcmuu Hmumz 0mmm.a oomm coaumuuommcmup omouaaom m.omme.a momo.a momo.a coauosuumcoo oomm.a m.nmmm omom auuusoca mamumnmmuoq u.H0cH m.oemm.a Hm.mmo.a Ho.mmm m.nmam mmma aSoco00 Hoseaumc mo monocmun HH< mmm smacflmuxb mmma Hmma cmma mmma mama Amoaoau cat mmmwoqum QZ< mMMMMOS m0 mOZHZm¢ XH mqm<9 251 SOURCES: aM. Filyapov, "Pytannya pratsi ta robitnychoho pobutu v pershiy pyatyrichtsi i v 1933 rotsi," Sotsialistycvna Ukrayina, 4, 1934, p. 40. bAkademiya Nauk Ukrainskoy SSR, Ocherki razvitiya narodnogo khozyayptva Ukrainskoy SSR, 1954, p. 279. CUpravlinnya Narodno—Hospodars'koho Obliku, USRR y_tsyfrakh, 1936, p. 398. dSotSialisticheskoye Stroitel'stvo, 1936, pp. 512, 513; years 1928 and 1930 only: Central Administration of Economic and Social Statistics, The U.S.S.R. ip_Figures, 1935, pp. 233, 234; 1929 only: The U.S.S.R. ip_Figures, 1934, pp. 169-170, 171, 173, 175, 177. ‘ eThe U.S.S.R. ip_Figures, 1934, p. 174. fIbid., p. 176. NOTES: lEstimated in the following manner: 1930 1931 Wage Fund (in millions of rubles), 2,530.4* 3,964.5* Employees (in thousands of persons) 2,835.0** 3.663.1** * See Table VII, WAGE FUND. ** See Table VIII, EMPLOYMENT STATISTICS 2The U.S.S.R. ;p_Figures, 1934, p. 172 cites 769 rubles for 'Ukrainian SSR in 1929 and 1420 rubles in 1932. The wages in 1929, according to this source, were computed for the entire national economy "exclusive of lumber workers using own horses, and exclu- sive of remuneration in kind to domestic help." U The U.S.S.R. ip Figures, 1934, p. 174 shows 1,484 rubles. .h. Average earnings on MTS and state farms was 661 rubles (The U.S.S.R. _i_n_Figures, 1934, p. 174). U1 The U.S.S.R. ip_Figures, 1934, p. 178 shows 988 rubles in 1929 and 1,535 rubles in 1932. 61,466 rubles according to The U.S.S.R. ip_Figures, 1934, p. 177. TABLE X POPULATION (in thousands of persons) 252 Years Urban Rural Total Ukrainian SSR Jan. 1, 1914 5,607.2a 21,140.8a 26,748.0 Dec. 17, 1926 4,931.0a'l 24,112.4a- 29,043.3 April 1, 1928 5,714b 24,142b 29,856b Jan. 1, 1928 n.a. n.a. n.a. Jan. 1, 1929 5,349.7a'd 24,905.03'd 30,254.?d Jan. 1, 1930 n.a. n.a. n.a. Jan. 1, 1931 6,4909'l 24,910e 31,4008'f Jan. 1, 1932 n.a. n.a. 31,800f Jan. 1. 1933 7,158.761’d'3 24,472.7d’4 31,9ood'f'l'4 99913. Jan. 1, 1914 24,686.6a 114,626a 139,312.6 Jan. ,1. 1926 25,321.58“l 121,706.4a 147,027.4 April 1, 1928 27,871b 123,456b 151,327b Jan. 1, 1929 27,630.23'2 126,657.5a'2 154,287.72 Jan. 1, 1930 29,420.6C 128,023.3c 157,444c Jan. 1, 1931 31,855.8C'l 128,574.5C 160,430c Jan. 1, 1932 35,623.1C 127,543c 163,166c Jan. 1, 1933 39,739.2a'2'3 126,009.2a'2 165,748.41'5 Ukrainian SSR.pp_percentage p: the USSR Jan. 1, Dec. 17, April 1, Jan. 1, Jan. 1, Jan. 1, 1914 1926 1928 1928 1929 1930 22.71 19.47 20.50 n.a. 19.36 n.a. 18.44 19.81 19.56 n.a. 19.66 n.a. 19.20 19.75 19.73 n.a. 19.61 n.a. 253 (Table X Continued) Jan. 1, 1931 20.37 19.37 19.58 Jan. 1, 1932 n.a. n.a. 19.49 Jan. 1, 1933 18.01 19.63 19.25 n.a. = not available SOURCES : aSotSialisticheskoye Stroitel'stvo SSSR, 1934, p. 354. b . . Gosplan SSSR, Pyatiletniy plan narodno-khozvaystvven- nogo stroitel'stva SSSR, III, pp. 552-553. CS. N. Prokopovich, Narodnoye Khozyaystvo SSSR, I, p. 68. dUpravlinnya Narodno-Hospodars'koho Obliku, USRR g tsyfrakh, p. 388; for 1929 also Naukove Tovarystvo im.Shev- chenka, Entsyklopediya Ukrayinoznavstva, I, p. 152. eNaukove Tovarystvo im. Shevchenka, Entsvklopediva Ukrayinoznavstva, I, p. 152. fVsevolod Holub, "Prychyny holodu 1932-33 roku," Vpered, 10 (94), February, 1958, pp. 6-7. gSotSialisticheskoye Stroitel'stvo SSSR, 1935, pp. XLVIII-L NOTES : lM. Avdiyenko shows the following town population (in thousands of persons): Ukrainian SSR USSR Ukrainian SSR/USSR 1926 4,660.9 20,798.0 22.41% 1931 6,098.9 27,636.9 22.08% iHis article "deigi v strukture proletariata v pyervoy pyati- ,1etke," Planovoye Khozyaystvo, 6-7, 1932, p. 164. 2S. N. Prok0povich (.052. bit... p. 68) quotes for the USSR gas fOllows (in thousands of persons): 254 Urban Rural ' Total January 1, 1929 27,718.6 126,477.2 154.196.0 January 1, 1933 38,351.7 127,329.5 165,681.0~ 3Upravlinnya Narodno—Hospodars'koho Obliku, USRR y_ tsyfrakh, p. 169 indicates that this is equal to 17.8 per cent of the USSR. Accordingly, the USSR urban population would be 40,219.1 million persons. 4SotSialisticheskoye Stroitel'stvo SSSR, 1934, p. 354 shows for Ukraine: 24,527.6 for urban population and 31,683.3 for total population. These values yield 19.46 per cent and 19.11 per cent of the USSR respectively. 5SotSialisticheskoye Stroitel'stvo SSSR, 1935, pp. XLVIII-L, quotes for Ukraine 31,901.4 million persons. o.moom 0mmH mcoHumoHcsssoo .m 5 5 s s e s e e o .2 Hoom m Hmmo m seem m moom H NHmmo m mmom H COHumuuommcmue e Hoom.oH . muouHsoHume .m o.uooo.o uoom.m auumsocH omccmHm HoomJN HHme.oH Hooc.m muumsocH .m . . . . . . . . mEosoom m 0 . 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Gosudarstvyennaya Planovaya Kom1531ya pri Sovyete Narodnykh Komissarov Soyuza SSR, Itogi vvpolneniva pvervogo pyatiletnyego plana razvitiya narodnoqp khozyaystva Soyuza SSR, p. 253. -JSotsialisticheskoye Stroitel'stvo SSSR, 1936, p. 384. NOTES: lS. Hutsulyak ("Perspektyvy sotsiyalistychnoho budivnytstva na Ukrayini v 1929/30 r." Hospodarstvo Ukrayiny, 7-8, 1929, p. 11) reports 194 million rubles for agriculture and 904 for the rest of the economy. Investments in agriculture are composed of 71.3 million rubles in socialized sector and 112.7 million rubles in the private sector. 2Includes the 4th quarter of 1930, a total of 15 months. 3Actual capital investments in Ukraine's economy in 1929/30 are valued at 1,598 million rubles, or some 41.4 per cent increase over 1928/29 ("Tretiy vyrishal'nyi rik sotsiyalistychnoho nastupu," Bil'shovyk Ukrayiny, 1, 1931, p. 5). A. Rekis ("Kvartal bol'shevitskogo shturma," Hospo- darstvo Ukrayiny, 8-9, 1930, p. 33) confirms this by mentioning about 1.6 billion rubles. It is also very close to 1,564 million rubles, or 75 per cent fulfillment of the investment plan of 2,085 million rubles. (See S. Hutsulyak, "Pidsumky-druhoho roku pyatyrichky i plan na osinniy kvartal 1930 roku," Hospodarstvo Ukrayiny, 8-9, 1930, p. 12. 4Ya. M. Dudnyk ("Zavdannya plyanu narodnoho hospodarstva Ukrayiny na 1932 rik," Hospodarstvo Ukrayiny, 1-2, 1932, p. 15) reports 2,695 million rubles actual investments during the year. 5Semen Hutsulyak ("Narodn‘yo-hospodarchyi plan na tretiy vyrishal'nyi rik pyatyrichky," Bil'shovyk Ukrayiny, l, 1931, p. 27), points out that capital investments in Ukraine's industry during the first two years of the five-year plan (1928/29 - 1929/30) reached 1,556 million rubles (in 1928 prices). Thus, according to this source, actual investments during the last quarter of 1930 were probably in the vicinity of 170 million rubles. 6Plan figures. 258 7Computed from percentages supplied by A. Slipans'kyi in his article, "Sil's'ke hospodarstvo Ukrayiny XV rokovyn zhovtnya," Hoeppdarstvo Ukrayiny, 12, 1932, p. 101. 8V. P. Akulenko ("Kapital'ne budivnytstvo Ukrayiny na 1931 rik," Hospodarstvo Ukrayiny, 11-12, 1930, p. 31), lists 360 million rubles. However, per Hutsulyak ("Narodn'yo- hospodarchyi plan na tretiy vyrishal'nyi rik pyatyrichky," Eil;§hpyyk Ukpayiny, l, 1931, p. 28), the 360 million rubles include livestock breeding and building the necessary shelters; his figures yield the following ratios for Ukraine: 18.0 per cent in 1930 and 15.1 for 1931. 9It should be noted that A. Rekis ("Kvartal bol'she- vitskogo shturma," Hospodarstvo Ukrayiny, 8-9, 1930, p. 34), indicates a round figure of 700 million rubles. Both Hutsulyak and Rekis quote from the investment plan. 10Capital investments in state farms are computed from percentages given by A. Slipans'kyi (pp, cit., p. 101). They are as follows: ----—-e----l931 -------------------- 1932 ---------- Percentages of Millions Percentages of Millions Total Investment of Total Investment of in Agriculture Rubles in Agriculture Rubles State farms of republican importance 15.9 70.453 18.4 88.320 State farms of Union importance 21.4 94.823 35.7 171.360 165.276 259.680 It is evident that the discrepancy between these figures and the values quoted in the body of this table for 1931 is a Ininor one--3.8 million rubles. The date of publication of Slipans'kyi's article (1932) suggests that his 1932 figures ‘probably represented preliminary estimates and, therefore, should be viewed with caution. 259 lJ'This includes 30.6 million rubles of investment in transportation other than railroads in 1928/29. A compar- able figure in the plan for 1929/30 is 53.7 million rubles (M. Vasylenko, "Pidsumky druhoyi sesiyi VUTsVK-u ta TsVK-u Soyuza," Bil'shovyk Ukrayiny, 24, 1929, p. 21). On the other hand, S. Hutsulyak ("Osnovni problemy kontrol‘nykh tsyfr narodn'yoho hospodarstva USRR na 1929/3O r.," Bil'shovyk, Ukrayiny, 23, 1929, p. 17), lists investments in transpor- tation in 1928/29 as 165.2 million rubles; this includes investments in railroads to the extent of 127.8 millibn rubles. 12Obtained by deducting the 1928/29, 1931 and 1932 investments from their total for the entire first five—year plan period. 260 BIBLIOGRAPHY 261 BIBLIOGRAPHY I. BOOKS A. BY INDIVIDUAL AUTHORS OR GROUPS OF AUTHORS Akademiya Nauk SSSR, Institut Ekonomiki. Sovyetskaya sot- sialisticheskaya ekonomika, 1222-1252 (Soviet socialist economics). Moscow: Gosudarstvyennoye Izdatel'stvo Po- liticheskoy Literatury, 1957. Akademiya Nauk Ukrainskoy SSR, Insitut Ekonomiki. 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Clark, Colin. A_Critique pg Russian Statistics. London: Macmillan and Co., Limited, 1939. Condoide, Mikhail V. The Soviet Financial System: Its Development and Relations with the Western World. Columbus: The Ohio State University, 1951. Davies, R. W. The Development p£_the Soviet Budgetary System. Cambridge: Cambridge University Press, 1958. Davis, Jerome (ed.). The New Russia, Between the First and Second Five-Year Plan. New York: The John Day Company, 1933. Dobb, Maurice. _Qp Economic Theory and Socialism. New York: International Publishers, 1955. Dobb, Maurice. Russian Economic Development Since the Revolution. London: George Routledge & Sons, Ltd., 1929. 263 Dobb, Maurice. Some Aspects p§_Economic Development. Delhi: Ranjit Printers & Publishers, 1951. Dobb, Maurice. Soviet Economic Development Since 1917. New York: International Publishers, 1948. Farbman, Michael. Pyatiletka, Russia's 5-Year Plan. New York: New Republic, Inc., 1931. Glovins'kyi, Ye. 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Razmyeshcheniye promyshlennosti y_pyervoy pya- tiletke (Allocation of industries during the first five- year plan). Moscow-Leningrad: Gosudarstvyennoye Izdatel'stvo "Standartizatsiya i Ratsionalizatsiya," 1933. 265 Livshits, R. S. Ocherki pp_razmyeshcheniyu Promyshlennosti SSSR (Essays on distribution of industry in the USSR). Gosudarstvyennoye Izdatel'stvo Politicheskoy Literatury, 1954. Lyando, A. M. Gosbyudzhet SSSR zavyershayushchego goda pyatiletki (State budget of the USSR in the concluding year of the five-year plan). Moscow: Gosfinizdat, 1932. Maistrenko, Ivan. Kryzovi protsesy,y.sovyets'kiy,ekono- mitsi (Depressions and crises in Soviet economy). Munich: Instytut dlya vyvchennya istoriyi i kul'tury SSSR, 1955. Malevsky-Malevitch, P. (ed.). Russia/U.S.S.R. New York: William Farquhar Payson, 1933. Mar'yakhin, G. and D. Burmistrov. Nalogi p nasyeleniya y SSSR (Taxation of population in the USSR). Moscow: Gosfinizdat, 1957. Mirchuk, I. (ed.). Ukraine and Its People. Munich: Ukrainian Free University Press, 1949. Molotov, V. M. The Fulfilment p§_the First Five Year Plan. London: Modern Books, Ltd. Naukove Tovarystvo im. Shevchenka (Shevchenko Scientific Society, Inc.). Entsyklopediya Ukrayinoznavstva. Munich-New York: 1949. Paris-New York: 1955-1957. Obolensky-Ossinsky, V. V., and others. Social Economic Planning pp the Union p£_Soviet Socialist Republics. The Hague, Holland: The International Industrial Relations Association (I.R.I.), 1931. Obolensky-Ossinsky, V. V., and others. Socialist Planneg Economy ip_the USSR. London: Martin Lawrence, Limited, 1932. Olezhko, Nestor. Ahrarna polityka bol'shevykiv (Agricultural policy of bolsheviks). "Nasha Knyhozbirnya," No. 5, 1947. Pipes, Richard. The Formation p§_the Soviet Union. Cambridge: Harvard University Press, 1954. 266 Plotnikov, K. N. Byudzhet sotsialisticheskggo gosudarstva (Budget of socialist state). Gosfinizdat, 1948. Plotnikov, K. N. Byudzhet sovyetskogo gosudarstva (Budget of the Soviet state). OGIZ - Gosudarstvyennoye Izdatel'stvo Politicheskoy Literatury, 1945. Plotnikov, K. N. Finansy ;_kredit y_SSSR (Finances and credit in the USSR). Moscow: Vysshaya Partiynaya Shkola pri TSK KPSS, 1956. Plotnikov, K. N. Ocherki istorii byudzheta sovyetskoqp gosudarstva (Essays in history of the budget of the Soviet state). Moscow: Gosfinizdat, 1954. Plotnikov, K. N. (ed.). Organizatsiya finansirovaniya ; kreditovaniya kapital'nykh vlozheniy (Organization for financing and crediting of capital investment). Moscow: Gosfinizdat, 1954. Prokopovich, S. N. Narodnoye khozyayptvo SSSR (National economy of the USSR). 2 vols. New York: Izdatel'stvo Imyeni Chekhova, 1952. Reddaway, William Brian. The Russian Financial System. London: Macmillan and Co., Limited, 1935. Rostov, Walt Whitman. The Dynamics p; Soviet Society. First edition. New York: W. W. Norton & Company, Inc., 1953. Rovinskiy, N. N. Gosudarstvyenpyi byudzhet SSSR (State budget of the USSR). Gosfinizdat, 1944. Ryabov, N. Sotsialisticheskoyp nakopleniye i yego istoch- niki y_pyervoy i_vtoroy pyatiletkakh (Socialist accumu- lation and its sources in the first and second five- year plans). Gosudarstvyennoye Izdatel'stvo Politiches- koy Literatury, 1951. Sadovs'kyi, V. "Pyatylitka i narodnio-hospodarsIki interesy Ukrayiny" (The five-year plan and the national-economic interests of Ukraine). Suchasni problemy ekonomikv Ukrayiny (Contemporary problems of Ukraine's economy). 267 Vol. III of Proceedings of Ukrainian Scientific Institute, Economic series, book 1. Warsaw: Ukrayins'kyi Naukovyi Instytut, 1931, pp. 88-141. Sadovs'kyi, V. "Z pidsumkiv kol'ionizatsiynoyi polityky v SSSR" (On results of colonial policy in the USSR). Suchasni ppoblemy ekonomiky Ukrayiny, II (Contemporary problems of Ukraine's economy). Vol. XXXII of Proceedings of Ukrainian Scientific Institute, Economic series, book 8. Warsaw: Ukrayins'kyi Naukovyi Instytut, 1936, pp.5-24. Schwartz, Harry. Russia's Soviet Economy. Second edition. New York: Prentice-Hall, Inc., 1954. Shumelda, Ya. Vid Marksa pp_Ma1enkova (From Marx to Malenkov). Paris: Persha Ukrayins'ka Drukarnya u Frantsiyi, 1955. Sokolnikov, Gregory Y., and associates. Soviet Policy ip_ Public Finance, 1917-1928. Stanford: Stanford University Press, 1931. Solovey, D. F. Ukrayina y_systemi sovyets'koho koloniyalizmu (Ukraine in the system of Soviet colonialism). Munich: Instytut dlya vyvchennya SSSR, 1959. Stalin, Joseph. Economic Problems pg Socialism ;p_the U.S.S.R. New York: International Publishers, 1952. Stalin, J., and others. From the First pp the Second Five- Year Plan. New York: International Publishers. Stalin, J. Political Report p§_the Central Committee pp the Sixteenth Congress p£_the C.P.S.U.(p). Moscow: Foreign Languages Publishing House, 1951. Stalin, J. Report pp_the Seventeenth Congress p£_the C.P.S.U.(p) pp_the Work p£_the Central Committee. Moscow: Foreign Languages Publishing House, 1951. Stalin, J. V. Works. 13 vols. Moscow: Foreign Languages Publishing House, 1952-55. Suchkov, A. Dokhody gosudarstvyennoqp byudzheta SSSR (Reve- nues of state budget of the USSR). Moscow: Gosfinizdat, 1955. 268 Uranov, Petr. Rol' gosudarstvyennogo banka y_rabotye myestnoy promyshlennosti (The role of the state bank in the work of local industry). Munich: Institut po Izucheniyu Istorii i Kultury SSSR, 1954. Vynar, Bohdan. Ekonomichnyi koloniyalizm y_Ukrayini(Economic colonialism in Ukraine). Paris: Natsionalistychne Vydavnytstvo v Evropi, 1958. Yugov, A. Russia's Economic Front for War and Peace. New York-London: Harper & Brothers Publishing, 1942. B. AUTHORS UNKNOWN Finansy i_kredit SSSR (Finances and credit in the USSR). Moscow: Gosfinizdat, 1956. History p§_the Communist Party p§_the Soviet Union (Bolshe- viks). Moscow: Foreign Languages Publishing House, 1950. Narodnoye Khozaystvo SSSR pp_porogprtret'yego goda pyatiletki i_kontrol'nye tsifry pp_1931 god (National economy of the USSR on the threshold of the third year of the five—year plan and control figures for 1931). Moscow-Leningrad: Gosudarstvyennoye Sotsial'no-Ekonomicheskoye Izdatel'stvo, 1931. II. GOVERNMENT AND OTHER OFFICIAL PUBLICATIONS A. BY AGENCIES OF SOVIET GOVERNMENT Central Administration of Economic and Social Statistics of the State Planning Commission of the USSR. The U.S.S.R. ;p_Figures. Moscow: Soyouzorgouchot, 1934. Central Administration of Economic and Social Statistics of the State Planning Commission of the USSR. The U.S.S.R. ;p_Figures. Moscow: Soyouzorgouchot, 1935. (Sentral Statistical Board of the USSR Council of Ministers. National Economy pf the USSR. Moscow: Foreign Languages Publishing House, 1957. 269 ‘Derzhavna Planova Komisiya. Sotsiyalistychne budivnytstvo pp_Ukrayini (Socialist Construction in Ukraine). Kharkiv: Vydavnytstvo "Hospodarstvo Ukrayiny," 1932. Gosplan SSSR. Kontrol'nye tsifry narodnogo khozyaystva SSSR pp 1928-1929 god (Control figures of the national economy of the USSR for 1928-1929). Moscow: Izdatel'stvo "Planovoye Khozyaystvo," 1929. Gosplan SSSR. Kontrol'nye tsifpy narodnogo khozyaystva SSSR pp 1929-1930 gpd (Control figures of the national economy of the USSR for 1929-1930). Moscow: Izdatel'stvo "Planovoye Khozyaystvo," 1930. Gosplan SSSR. Pyatiletniy plan narodno-khozyaystvyennoqp stroitel'stva SSSR (Five-year plan of development of national economy of the USSR). 3 vols. Third edition. Moscow: Izdatel'stvo "Planovoye Khozyaystvo," 1930. Gosudarstvyennaya Planovaya Komissiya pri Sovyete Narodnykh Komissarov Soyuza SSR. Itogi vypolnyeniya pyervogo pya- tiletnyego plana razvitiya narodnogo khozyaystva Soyuza §§3 (Summary of the fulfillment of the first five-year plan of development of national economy of the USSR). Moscow: Izdaniye Gosplana Soyuza SSR, 1933. Narodnyi Komissariat Finansov. Yedinyi Finansovyi plan pg 1929-1930.god (Unified financial plan for 1929-1930). Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1930. Narodnyi Komissariat Finansov. Yedinyi sel'sko—khozyaystvyennyi nalog (Single agricultural tax). Moscow: Finansovoye Izdatel'stvo NKF SSSR, 1928. Narodnyi Komissariat Finansov Soyuza SSR i RSFSR. Yedinyi sel'sko-khozyayprvyennyi,naloq,pp_1931 gpg (Single agri- cultural tax for 1931). Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1931. State Planning Commission of the Council of People's Commis- sars of the USSR. Summary p§_the Fulfilment p£_ppp_First Five-Year Plan for the Development p§_the National Econopy pg the U.S.S.R. Moscow: State Planning Commission of the U.S.S.R., 1933. 270 Statystychne Upravlinnya Ukrayins'koyi RSR. Narodne Hospodar- stvo Ukrayins'koyi RSR (National economy of Ukrainian SSR). Kiev: Derzhavne Statystychne Vydavnytstvo, 1957. TsSU. Sovyetskaya Torgovlya (Soviet trade). Moscow: Gosstat— izdat, 1956. TsUNKhU Gosplana SSSR. Sotsialisticheskoye stroitel'stvo SSS§_(Socia1ist Construction in the USSR). Moscow: 0n...- TsUNKhU Gosplana SSSR, Soyuzorguchet, 1934. TsUNKhU Gosplana SSSR. Sotsialisticheskoye stroitel'stvo SSSR (Socialist Construction in the USSR). Moscow: TsUNKhU Gosplana SSSR, Soyuzorguchet, 1935. TsUNKhU Gosplana SSSR. Sotsialisticheskoye stroitel'stvo SSSR (Socialist construction in the USSR). Moscow: TsUNKhU Gosplana SSSR, Soyuzorguchet, 1936. TsUNKhU. Sotsialisticheskoye stroitel'stvo Soyuza SSR, 1933- 1938 (Socialist construction in the USSR), Moscow- Leningrad: Gosplanizdat, 1939. Upravlinnya Narodno-Hospodars'koho Obliku USRR. Radyans'ka torhivlya USRR, 1933-1936 3,;, (Soviet trade in Ukrainian SSR, 1933-1936). Kiev: Derzhavne Vydavnytstvo "Narodne Hospodarstvo ta Oblik," 1936. Upravlinnya Narodno-Hospodars'koho Obliku USRR. Sotsiali- stychna Ukrayina (Socialist Ukraine). Kiev: Vydavnytstvo "Narodne Hospodarstvo ta Oblik," 1937. Upravlinnya Narodno-Hospodars'koho Obliku. USRR y.tsyfrakh (Ukrainian SSR in figures). Derzhvydav "Narodne Hospodar- stvo ta Oblik," 1936. USSR Chamber of Commerce. Economic Conditions ip_the USSR. Moscow: Vneshtorgizdat, 1931. Vysshiy Sovyet Narodnogo Khozyaystva SSSR. Kontrol'nye tsifry pyatiletnogo plana razvitiya promyshlennosti SSSR (1927-1928 -- 1931-1932 g,g,) (Control figures of the five-year plan of the development of industry in the USSR, 1927-1928 —- 1931-1932). Moscow: Gosudarstvyennoye Technicheskoye Izdatel'stvo, 1927. 271 B. AUTHORS UNKNOWN Direktivy KPSS ;_Sovyetskogo Pravitel'stva pp_khozyaystvyennym voprosam, 1917-1957, sbornik dokumentov (Directives of C.P.S.U. and Soviet Government on economic questions, 1917-1957, collection of documents), 4 vols. Moscow: Gosudarstvyennoye Izdatel'stvo Politicheskoy Literatury, 1957. Indices p; Socialist Construction ip_the Union p§_Soviet Socialist Republics. Moscow: U.S.S.R. Council, Institute of Pacific Relations, 1936. Komunistychna Partiya Ukrayiny y rezolyutsiyakh i rishennyakh z'yizdiv i_konferentsiy(1918-1956). (Communist Party of Ukraine in resolutions and decisions of congresses and conferences; 1918-1956). Kiev: Derzhpolitvydav, 1958. Obyasnitel'naya zapiska k_proyektu yedinogo gosudarstvyennogo byudzheta SSSR pp 1928-1929 byudzhetnyi god (Explanatory note to the project of unified state budget of the USSR for 1928—29 fiscal year). Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928. Puti,narodno-khozyaystvyennogo razvitiya USSR, materialy k ppstroyeniyu pyatiletnyego plana (Paths of development of national economy of Ukrainian SSR; materials for the construction of the five-year plan). Kharkov: Izdaniye Ukrgosplana, 1928. Sobraniye zakonov i rasporyazheniy raboche-krest'yanskogo pravitel'stva SSSR (Collected laws and enactments of the workers' and peasants' government of the USSR). Yedinyi gosudarstvyennyi byudzhet Soyuza Sovyetskikp_Sotsia- listicheskikh Respublik pp_1928-1929 byudzhetnyi god (Unified state budget of the USSR for 1928—1929 fiscal year). Moscow: Gosudarstvyennoye Finansovoye Izdatel'stvo Soyuza SSR, 1928. Yedinyi gosudarstvyennyi bypdzhet Soyuza Sovyetskikh Sotpig— listicheskikh Respublik pp 1929-1930 g, (Unified state budget of the USSR for 1929-1930). Moscow: Gosudarstvyen- noye Finansovoye Izdatel'stvo SSSR, 1930. 272 Zbirnyk zakoniv 1:3 rozporyadzhen' robitnycho-selyans'koho uryadu Ukrayiny (Collection of laws and enactments of the workers' and peasants' government of Ukraine). III. PERIODICALS A. BY INDIVIDUAL AUTHORS OR GROUPS OF AUTHORS Abulyak, A. A. "Perspektivy razvitiya myestnykh finansov SSSR v pyatiletiye 1928/29 - 1932/33 g.g." (Prospects for development of local finances in the USSR during the quinquennium 1928/29 - 1932/33), Planovoye Khozyaystvo, 4, 1929, pp. 230-241. Abulyak, A. "Rekonstruktsiya finansovoy sistemy v rayonnom razrezye" (Reconstruction of financial system in regional cross-section), Planovoye Khozyaystvo, 6, 1930, pp. 91-118. Adrianov, V. "Kapital'ne budivnytstvo v ukrayins'kiy pro- myslovosti" (Capital construction in Ukrainian industry), Bil'shovyk Ukrayiny, 6, 1928, pp. 71-78. Adrianov, V. "Pyatyrichka vuhillya i metalu" (The five—year plan for coal and metals), Bil'shovyk Ukrayiny, 14, 1929, pp. 42-53. Adrianov, V. "Vazhka i 1ahka promyslovist' u plani industri- yalizatsiyi" (Heavy and light industries in the industri- alization plan), Bil'shovyk Ukrayiny, 2, 1929, pp. 57—64. Adrianov, V. "Vuz'ki mistsya promyslovosty i pyatyrichnyi plan" (Problem areas in the industry and the five-year plan), Bil'shovyk Ukrayiny, 6, 1929, pp. 24-35. Adrianov, V. "Znyzhennya sobivartosty v promyslovosti Ukrayiny" (Cost reduction in the industry of Ukraine), Bil'shovyk Ukrayiny, 11-12, 1929, pp. 41-49. Akulenko, V. P. ”Kapital'ne budivnytstvo Ukrayiny na 1931 rik" (Capital construction in Ukraine for 1931), Hospo- darstvo Ukrayiny, 11-12, 1930, pp. 28-39. 273 Arkhimovich, A. Z. "Zyemledyel'cheskoye khozyaystvo SSSR v 1958 g." (Agricultural economy of the USSR in 1958), Vyestnik Institutafigzlzucheniyu SSSR, 3 (31), 1959, pp. 5-17. Avdiyenko, M. "deigi v strukture proletariata v pyervoy pyatiletke" (Upheavals in the structure of the proletariat in the first five-year plan), Planovoye Khozyaystvo, 6-7, 1932, pp. 145-170. Averbakh, I. L. "Kreditnye plany v usloviyakh bankovskoy reformy" (Credit plans under conditions of banking reform), Hospodarstvo Ukrayiny, 7, 1930, pp. 88-91. Avilov, B. "Razryv myezhdu zagotovitelnymi i realizatsionnymi khlebnymi tsenami" (Gap between state procurement prices and free market prices for grains), Planovoye Khopygystvo, 7, 1928, pp. 158-170. Baturov, D. "Energetyka v plyani sotsiyalistychnoyi rekons- truktsiyi narodn'yoho hospodarstva" (Power industry in the plan of socialist reconstruction of national economy), Bil'shovyk Ukrayiny, 1-2, 1932, pp. 29-44. Baturov, D. "Industrializatsiya krayiny i resursy" (The country's industrialization and resources), Bil'shovyk Ukrayiny, 9-10, 1928, pp. 19-29. Berezikov, V. S. "Plyan dal'shoho sotsiyalistychnoho nastupu v sil's'komu hospodarstvi" (Plan for continued socialist offensive in agriculture), Hospodarstvo Ukrayiny, 11-12, 1930, pp. 16-27. Berezikov, V. "Zavdannya sil's'koho hospodarstva Ukrayiny v 1933 r." (The task of Ukraine's agriculture in 1933), Hogpodarstvo Ukrayiny, 1-2, 1933, pp. 58-72. Berins'kyi. "Pozyka tret'oho vyrishal'noho" (Loan of the third decisive year), Radyans'ka Ukrayina, 6, 1931, pp. 38-42. Birbrayer, M. "Vrednaya putanitsa" (Pernicious confusion), Problemnykonomiki, 2-3, 1932, p. 134. 274 Bogolepov, M. I. "Finansovyi plan vtorogo goda pyatiletki" (Financial plan of the second year of the five-year plan), Ekonomicheskoye Obozreniye, 11, 1929, pp. 1-11. Bogolepov, M. I. "Finansy planovogo khozyaystva" (Finances in a planned economy), Planovoye Khozyaystvo, 3, 1929, pp. 264-285. Bogolepov, M. I. "Finansovyi plan 1929/30 goda" (The 1929/30 financial plan), Planovoye Khozyaystvo, 9, 1929, pp. 94-110. Bogolepov, M. I. "Osnovnye cherty byudzhetnogo plana" (Main features of the budgetary plan), Planovoye Khozyaystvo, 11, 1928, pp. 54-66. Bogorod, D. and B. Tolstoy. "Territorialnye sdvigi pro- myshennosti v pyervuyu pyatiletku" (Territorial upheavals in the industry during the first five-year plan), Egg: blemy Ekonomiki, 6, 1932, pp. 186-222. Bor, M. "Planovyi balans natsional'nogo dokhoda v soyuznykh respublikakh" (Planned balance of national income in Union Republics), Voprosy Ekonomiki, March, 1960, pp.3-14. Bryukhanov, A. "Itogi khlebnoy kampanii 1928/29 goda" (Results of the grain procurement campaign of 1928/29), Ekonomicheskoye Obozreniye, 11, 1929, pp. 129-146. Burshtein, E. "Do pytannya pro kharakter kapital'nykh vkladiv i metody vyznachaty efektyvnist' yikh" (On the question of nature of capital investments and methods of determining their efficiency), Bil'shovyk Ukrayiny, 3, 1929, pp. 36-45. Burshtein, G. Ya. "Osnovnye kapitaly Ukrainskoy promyshlen- nosti.v 1925/26, 1926/27 i 1927/28 godakh" (Fixed capital of Ukrainian industry in 1925/26, 1926/27 and 1927/28), Hospodarstvo Ukrayiny, 7-8, 1929, pp. 95-111. Cfluernov, I. "Pro novyi sil's'ko-hospodars'kyi podatok” (On a: new agricultural tax), Bil'shovyk Ukrayiny, 12, 1928, pp. 39-49. 275 Chernov, M. "Organizatsiya khlebozagotovok v 1930/31 g." (Organization of grain procurements in 1930/31), Planovoye Khozyaystvo, 6, 1930, pp. 12-21. Coogan, James. 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"Zavdannya plyanu narodnoho hospodarstva Ukrayiny na 1932 rik" (Tasks of the Ukraine's.nationa1 economic plan for 1932), , Hospodarstvo Ukrayiny, 1-2, 1932, pp. 12-25. Filyapov, M. "Pytannya pratsi ta robitnychoho pobutu v pershiy pyatyrichtsi i v 1933 rotsi" (Labor problem and the question of working men's living conditions during the first five-year plan and in 1933), Sotsialiptychna Ukrayina, 4, 1934, pp. 25-44. Genkin, Ye. "Platezhi derevni vo 2-om polugodii 1931 goda" (Payments by villages in 2nd half year of 1931), Finansovye Problemy, 3-4, 1931, pp. 18-29. 276 Gerchuk, Ya. P. 'K voprosu o metodologii izmyereniya narod- no-khozyaystvyennogo nakopleniya" (On the question of methodology of measuring national-economic accumulations), Vyestnik Finansov, 10, 1929, pp. 39-57. Gerchuk, Ya. "Osnovnye problemy kontrol'nykh tsifr prom- finplana na 1929/30 god" (Chief problems of control figures and industrial and financial plan for 1929/30), .yyestnik,Finansov, 9, 1929, pp. 3-11. 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