1. At the time of my arrival in Sverdlovsk (1 January) the following quantity of grain had been procured in the Urals since the beginning of the campaign by all procurement agents covered by the Urals plan (in thousands of poods):

As this little table shows, grain procurements this year have declined substantially—by 5,024,000 poods. But with respect to individual crops we see an increase in procurements of wheat and sharp decreases in the amounts of oats and rye coming in.

2. With regard to the agricultural tax, as of 1 January, 11,778,000 rubles had been received out of an annual assignment of 19,244,700 rubles adopted by the Urals Oblast executive committee, which is 61.3 percent of the annual assignment. The control figure issued by the RSFSR Finance Commissariat is lower than the figure adopted by the Urals Oblast executive committee, specifically 17,900,000 rubles. The above-mentioned revenue on the agricultural tax as of 1 January is 65.8 percent of the figure issued by the RSFSR Finance Commissariat. The control figure of the RSFSR Finance Commissariat is closer to reality because the Urals Oblast executive committee fails to take account of the decrease in the control figure on the agricultural tax resulting from the privileges granted under the manifesto.

See chap. 1, n54.

Now that I have familiarized myself with this question in the provinces, we can establish that no more than 18 million rubles will come in from the agricultural tax in the Urals as a whole. Fulfillment of the agricultural tax is uneven. It is higher in the grain-growing raions than in the mountainous raions and the Cis-Urals Region [the area just west of the Urals]; as of 1 January, 68.7 percent of the RSFSR Finance Commissariat's control figure had been fulfilled in the grain-growing area [sic].

3. Insurance premiums. The yearly assignment for the Urals is 7,610,000 rubles. As of 1 January, 2,047,000 rubles had come in, or 27 percent of the yearly assignment. In this case, too, we see the same phenomenon: the fulfillment percentage is greater in the grain-growing raions than in the non-grain-growing raions. The fulfillment percentage for the grain-growing raions is 31.6.

4. The VKP oblast committee and the Urals Oblast executive committee have adopted the following measures to increase grain procurements: a. With regard to the agricultural tax: the final deadline for payment of

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the agricultural tax in the grain-growing raions has been pushed forward and set for 1 February, with instructions that repressive steps be taken against payers who missed their payments for the second deadline (1 January). An order has been issued that the payment for the final deadline be collected ahead of schedule. b. Specific calendar deadlines have been set for insurance premiums to be received so as to ensure that 60 percent of the yearly assignment is received by 15 January and all premiums are received by 1 February. c. Work on attracting purchases of shares in consumer and agricultural cooperatives has been intensified. d. The second-quarter plan for providing credit to agriculture has been revised and tightened up, so that loans will be issued only in kind in January and February and in minimal amounts of cash credit in March. e. Advance payments to the countryside for raw-material and food procurements have been terminated, but in some cases [only] reduced. f. Grain supplies within the oblast have been tightened up by eliminating, or in some cases reducing, provisions for grain-producing raions in the Urals. g. The fight against bag-trading [meshochnichestvo] has been intensified by prohibiting peasants from carrying high-quality ground grain out of the region by rail and prohibiting them from grinding it at all mills, in order to counteract the sale with flour [sic] that is most profitable to the peasantry. h. An order has been given to bring in all grain that is being kept at remote cooperative centers to railroad stations. i. The second-quarter plan for supplying the oblast with industrial goods has been revised with a view to providing as much as possible to grain-procurement raions by reducing deliveries to other raions. The supply of grain-growing raions has been set at 76 percent of the overall Urals plan for scarce goods, and at 63.6 percent when combined with goods that are available in ample quantities. An order has been issued to lower meat prices first by 10 percent, and later by another 8 percent. j. A levy in kind for ground grain has been imposed at the mills of raion executive committees and Meltrest [Mill Trust]. k. An order has been issued to cooperatives that they release industrial goods not only to shareholders but to nonshareholders as well. l. A directive has been issued to enlist all the party and soviet apparatuses of the okrugs in the work to increase grain procurements. m. Responsible officials (though not from the leadership itself) have been dispatched to all of the grain-producing raions.

Together with the oblast party committee, we adopted a decision to prohibit the barter of goods for grain. I issued an order to delay fulfillment of Comrade Mikoian's directive to exchange goods for grain on an equal footing.

On the night of 2–3 January I left for the area together with the second secretary of the oblast party committee, Comrade Ryndin, and the head of the Urals Oblast Trade Administration, Comrade Markov. We stopped at the following okrug towns and locations: Cheliabinsk, Chumlak station, the village of Shumikha, Kurgan, Makushino station, Petukhovo station, Ishim, Obutinskaia station, Tiumen, and Shadrinsk. In addition, I stopped in Petropavlovsk and Omsk for a few hours.

This tour revealed the following:

In December the vast majority of private factories were shut down by order of the okrug executive committees.

On the basis of the tour, we have been able to conclude that the oblast executive committee and the oblast party committee were not familiar enough with the situation in the okrugs, sketching an overly rosy picture for themselves. The okrugs were in the same position with regard to the raions. The representatives of okrug executive committees and okrug party committees who traveled with us to grain-collecting centers saw for themselves that the situation they had sketched at our joint meetings does not correspond to reality. It proved to be much worse everywhere. All of the okrug and raion officials took measures to increase the collection of payments, but they did not link this matter adequately with grain procurements and have not yet realized that grain procurements must be the core of their work. In some places we still encountered the attitude that grain procurements are merely one of the campaigns along with campaigns, no less important to them, for elections and reports to the voters, as well as for studying the decisions of the congress.

An allusion to the fifteenth congress of the VKP(b).

On the basis of a tour of the region and an acquaintance with the situation in Sverdlovsk, one could not help but conclude that the chief reasons for the unsatisfactory progress of grain procurements are prices and industrial goods.

Having ascertained the above situation, we had to conclude that deliveries of scarce industrial goods that are not directly related to the delivery of grain will not yield desirable results, that an increase in grain procurements is possible only if two factors work together: administrative pressure and rewarding grain deliverers with industrial goods. In this regard it has been clear to me that the latter, i.e., rewards, will be of preponderant importance for the following reasons:

By 15 January the well-to-do elements of the countryside will cover almost the full amount of agricultural taxes and the vast majority of insurance premiums. The remaining payments (on seed loans, land reorganization, etc.) are minor and, to a significant extent, disputed. Consequently, before the campaign for floating the loan and for self-taxation, the main grain holders, at any rate, will easily make their payments without making grain deliveries. I proceeded on the assumption that the campaign for self-taxation and for the loans would not be launched more or less widely until 15 February. It is in our interests to make maximum use of one of the best months for procurements: 15 January to 15 February. I also felt that increased pressure for self-taxation and the loan could fall flat. With these two campaigns we are affecting not only kulaks but also the entire mass of middle peasants. In the Urals as a whole, 12 million rubles has been paid on the loan and 7.5 million on self-taxation, for a total of 19.5 million rubles, i.e., a larger sum than the annual agricultural tax assessment. By conducting these two campaigns, we may run into a common front of kulaks and middle peasants and increased influence from the former.

In dwelling on the idea that a reward of industrial goods for deliverers must be introduced, we had to consider the impact of this measure, of course, on the status of cash. But during our tour we ascertained that the peasants are doing everything they can not to hold on to money, converting it to objects that are even superfluous in the peasant economy. For example, peasants have widely purchased iron beds, old cabinets, all kinds of furniture, gramophones, galoshes without regard for sizes, etc. Given this attitude by the peasantry toward accumulation in nonmonetary form, I felt that issuing rewards of industrial goods could not substantially worsen the situation of the chervonets [unit of currency] in the countryside, I felt that issuing rewards of industrial goods as a temporary measure for roughly the next two months is inevitable and necessary. The oblast party committee agreed with this view when we returned.

We recommended that the rewarding of grain deliverers with scarce industrial goods be introduced in the form of granting grain deliverers the right to make purchases on a priority or preferential basis in the amount of 50 percent of the value of the grain delivered, of which 30–35 percent is to go for textile goods, and the entire transaction must, without fail, be in cash rather than in-kind. Cooperatives are required to issue industrial goods to grain deliverers in the above-mentioned quantities, regardless of whom the grain was delivered to: a state organization, an agricultural cooperative, or a consumer cooperative. Our proposal fully coincides with the latest CC directive.

See document 39 in the original Russian-language edition, vol. 1.

A total count of commodity resources has shown that this measure is feasible. According to the plan for supplying goods to the Urals, 12.5 million rubles' worth of scarce goods (textiles, tea, leather, metal) will be sent to the grain-producing raions. In addition, we established during our tour that the principal grain-procurement raions in the steppe have an enormous need for lumber, which can be provided by the Urals region itself, in the amount of 1 million rubles, so that the entire stock of scarce goods should be reckoned at 13.5 million rubles. We determined together with the oblast party committee that a stock of 20 percent of all scarce goods should be allocated for general sale primarily to poor peasants who have previously delivered grain. After deducting this 20 percent, we get a stock worth 10.8 million rubles with which to issue rewards for grain procurements. Yet the rewards stock, based on 50 percent, needs to be in the following amounts: we set the procurement plan for January to March for the Urals at 18 million poods, worth 16 million rubles rounded off, in other words, the rewards require 8 million rubles' worth of goods. As a result, the oblast trade administration retains a reserve of goods worth 2.8 million rubles, which insures against possible interruptions in the arrival of goods and makes it possible to form a certain reserve of goods in Sverdlovsk to maneuver with, to send to raions that for various reasons will not receive goods on schedule.

I mentioned in my telegrams that the Urals can procure 39 million poods and from the very outset tried to reach agreement on this with the Urals organizations. I proceeded from the following premises: this year's harvest is no higher than last year's. We let procurements slip in the first quarter and, second, which is no less important, last year about 19 million poods of oats were procured, while this year at best 5–6 million poods will be procured, or 12–13 million poods less than last year. In 1926–27 [economic year] procurements by all Urals organizations totaled 44.5 million poods, so by subtracting these 12 million poods we get 32 million poods. The shortfall of 7 million poods can be covered by increasing wheat deliveries. I settled on this figure for tactical reasons as well. The whole plan for supplying the Urals, as coordinated [with] the Trade Commissariat, totals 34.6 million poods. This plan must now be reduced by the following amounts: (a) a change to 80 percent milled grain yields a savings of 1 million poods; (b) elimination of the vast majority of grain-producing raions from the supply plan, 1.5 million poods; and (c) under-fulfillment of the supply plan in the first quarter, 1.2 million poods, for a total of 3.7 million rubles. As a result, we will get a supply plan for the Urals in round numbers of 35 million poods (34.6–34.7). I considered it correct to set this figure and to firmly establish that the Urals must provide 8 million poods to be shipped out of the oblast, while granting it the right to increase its reserves as it increases procurements. Comrade Molotov disagreed with me and insisted on a procurement figure of 44 million poods, which even the Commissariat of Trade regarded as tentative, whereas the plan drawn up by officials in the Urals has been for 41 million poods from the very beginning. I consider the possibility of fulfilling a procurement plan of 44 million poods to be unrealistic because in the first six months 16 million poods, rounded off, were procured, which leaves 28 million poods, or 64 percent of the yearly plan, for the second half of the year. The unfeasibility of this plan gives the Urals organizations an opportunity, by citing it, not to carry out orders to dispatch shipments out of the region. It also seemed more beneficial to me from the standpoint of pressure to use my proposal—to guarantee the shipment of 8 million poods out of the region with a minimum procurement plan of 39 million poods.