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p By early 1924, Soviet industry had scored its first successes. Its average annual increase in 1921-23 was 41.1 per cent, and Lenin’s GOELRO  [189•1  plan was being efficiently implemented. By 1922, the Kashira and Krasny Oktyabr Power Stations were operating.

p However, the country’s industry still faced grave difficulties. In 1923, its output had reached only 35 per cent of the level in 1913. Factories, blast and open-hearth furnaces stood idle, and labour productivity was still low: at a large number of factories, it was only 30-40 per cent of the 1913 level. The people were still deprived of main basic necessities. The goals were to reconstruct the basic industries, at the same time updating the factories by introducing modern Soviet and foreign technologies, equipment and machinery, enhance the involvement of the working class and all working people, tighten labour discipline, and raise labour productivity. These ambitious plans would require a great deal of effort on the part of the Communist Party and the working class, as well as considerable funds.

p It was vitally important to have a man in charge of the reviving public industry who was both a talented and experienced organiser and a dedicated champion of Lenin’s plan for building socialism in the USSR.

p Industrial development could be capably directed only by a person who supported Lenin’s principles of work, was innovative, perceptive, and firm and consistent in pursuing the Party line. The choice of the RCP(B) Central Committee was, appropriately, Dzerzhinsky.

p On February 2, 1924, at the suggestion of the Party 190 Central Committee, the first session of the USSR Central Executive Committee approved Dzerzhinsky’s nomination for the post of Chairman of the Supreme Economic Council of the USSR. On February 5, he relinquished his duties at the People’s Commissariat for Transport, and on February 11 began his new job. Thus he was placed at the helm of the entire socialist industry. Another stage had begun in the career of this gifted and loyal associate and pupil of Lenin.

p “I propose to pursue the same line at the Supreme Economic Council that I followed on transport,” wrote Dzerzhinsky about his plans, “a clear state line, common to and obligatory for all economic executives, the unity in this sense, too, of Soviet public industry with the maximum of independence and initiative of the localities and departments and their public^ not syndicate-like, amalgamations. It is a huge and difficult task.”

p Dzerzhinsky gave priority to raising labour productivity. In this he proceeded from Lenin’s idea that “in the last analysis, productivity of labour is the most important, the principal thing for the victory of the new social system”.  [190•1 

p This issue was closely linked with the policy’of wages and salaries. It is therefore only natural that in the summer of 1923, when the gap between the prices for industrial and agricultural produce began to widen, the Central Committee considered the question of the factory and office workers’ salaries and wages. A commission was set up, with Dzerzhinsky as one of its members. Its conclusions were incorporated in the decisions of the RCP(B) Central Committee Plenary Meeting held on September 25. They stated that the growth of wages could take place only in connection with higher labour productivity.

p In February 1924, the CC Politbureau set up a standing CC commission for dealing with this question and Dzerzhinsky was elected a member. He did much to popularise and implement Lenin’s ideas on the significance or labour productivity. In a note written on February 5, 1924, he stated that one of the main questions facing Soviet power was learning to balance wage increases against the growth 191 of labour productivity and producing cheaper goods. A document drafted by Dzerzhinsky in March 1924 stated that the growth of real wages was possible only through increasing the output per worker, while production quotas had, in general, to be raised and calculated on the basis of a full eight-hour workday. A special body was set up at the USSR Supreme Economic Council Presidium, a Standing Conference on Labour Productivity. It was headed by Dzerzhinsky and functioned up to July 1925.

p During this period, Soviet industry had no precise, scientifically substantiated criteria for establishing labour productivity. Various methods were employed, which not infrequently catered to narrow local interests. Statistical bodies were not very efficient either. The press carried contradictory information as to the labour productivity that had been attained. This hampered the search for ways to solve the problem.

p The Communist Party naturally considered it a matter of top priority to introduce order into the calculation of manpower expenditure and to expose the anti-scientific basis of opposing forces’ concept of a correlation between labour productivity and the size of wages and salaries. Dzerzhinsky greatly helped to solve these problems. He arranged for statistical studies to be initiated at the Supreme Economic Council (SEC), examined the wage and salary situation and the state of labour productivity at various enterprises, and consistently emphasised the significance of Lenin’s idea of the role of labour productivity in the building of a socialist society. On June 4, 1924, speaking at a SEC session, Dzerzhinsky again stressed the need to raise labour productivity and increase wages and salaries by improving organisation of production and workers’ control over this matter.

p On June 12, 1924, the Central Committee Plenary Meeting formed a commission on wages and salaries, and approved its composition proposed by Dzerzhinsky, who was himself a commission member. Already at its first meeting on June 14, the commission instructed Dzerzhinsky to draft measures towards raising labour productivity. To focus public attention on this problem, Dzerzhinsky proposed to involve the press in the campaign. He believed it important for the press to report on steps taken which had secured an increase in labour productivity. He wrote a series 192 of articles published by the central newspapers. On November 25, 1924, at a meeting chaired by Dzerzhinsky, the Standing Conference on Labour Productivity at the USSR Supreme Economic Council decided to establish a fund for the publication of literature concerning labour productivity. At Dzerzhinsky’s initiative and under his general guidance, a collection entitled “On the Problem of Labour Productivity" was launched with the aim of analysing and summing up the experience accumulated in tackling the problem and promoting the results throughout the country.

p An important part of the overall effort was to raise the efficiency of the work day. Dzerzhinsky believed that Supreme Economic Council employees should set the example here. With this end in view, he proposed conducting a survey of the structure and distribution of their working hours, and asked for suggestions and conclusions. “It is necessary,” he wrote, “to take into account all general and individual breaks and idle moments. Going to breakfast, lunch, etc., should also be included.”

p On July 1, 1924, Dzerzhinsky chaired a conference on labour productivity. He requested each participant to make a profound and thorough analysis of the cause of low labour productivity, and to suggest ways of raising it by taking into account the specific conditions prevailing at each particular organisation or factory. It was decided to appoint commissions to study the actual state of labour productivity and wage and salary situation at factories.

p On July 18, Dzerzhinsky held another conference on labour productivity, which was attended by representatives of economic management bodies and trade unions. On August 24, the thesis ’On Labour Productivity and the Steps to Increase It”, which was approved by the USSR Supreme Economic Council Chairman, was published. It outlined ways and methods to raise labour productivity, measures to update factory equipment, mechanise production, introduce specialisation and standardisation, and bring the work of the factories up to full capacity. Of principal concern were, among other thingsy she scientific setting of output rates, intensification of labotrtr, raising the efficiency of the work day, wider application of remuneration by output, and training of more skilled workers. The Commission on Wages and Salaries stepped up its activities. After 193 making a detailed study of the statistics and results of inspections in the major industries, it submitted proposals to the Central Committee Politbureau.

p On behalf of the USSR Supreme Economic Council, Dzerzhinsky spoke “On the Policy of Wages and Salaries" at a Central Committee plenary meeting held on August 16-20, 1924. Drawing on Lenin’s ideas on labour productivity, he convincingly explained why productivity must grow at a faster rate than wages and salaries under the socialist system, and that labour remuneration should be increased on this basis.

p Dzerzhinsky’s stand was shared by the overwhelming majority of the plenary meeting’s participants, who approved his proposed resolution that “the growth of labour productivity must exceed wage growth”.

p Dzerzhinsky also discussed this question at a January 1925 plenary meeting. He stated that, having assumed power, the working class of the USSR thus shouldered responsibility for everything that was taking place in the country, especially for the condition of industrial production, and criticised the notion that the rates of production had reached their maximum. “If we fail to raise labour productivity,” he said, “we shall be unable to exist as a Soviet workers’ state.” Dzerzhinsky was convinced that this task “calls for the indispensable support of the broad masses and full utilisation of their collective creative endeavour and initiative”.

p Speaking at an extended conference of the Supreme Economic Council Presidium and representatives of local economic councils held on December 2, 1924, Dzerzhinsky discussed the great international significance of the campaign for higher labour productivity. Higher figures have to be attained, he said, in order “to compete through our indices and labour organisation in a workers’ state under a workers’ dictatorship against the results of labour organisation under the capitalist system”.

p Dzerzhinsky spoke about the role of standardisation of industrial output as a major reserve for raising the efficiency of public production, and urged the participants in the conference to broadly introduce it “in order to rebuild our industry and the entire national economy”. He considered it very important to introduce rational methods of production. “At present,” he wrote, “the central and 194 principal question of our industry is the question of rationalisation of our technology and organisation of production. The task must become a categorical imperative for the ‘morals’ and ‘will’ of all our economic management personnel, no matter which field they are engaged in.” Dzerzhinsky believed in the need to study rationalisation set by industrially developed capitalist countries, and mapped out concrete steps to this end.

p The Party Central Committee appreciated Dzerzhinsky’s efforts and the work done by the Supreme Economic Council he headed to increase labour productivity. Dzerzhinsky spoke on the subject again at the October (1925) Plenary Meeting of the Central Committee. He also gave an account of the talk that a German workers’ delegation had with Soviet workers at one of the factories. The latter were asked a number of questions but the one asked first was: “How do you work?”, which was followed by: “What are you paid for your work, and how do you live?" Dzerzhinsky noted in tins connection: “A sound approach.”

p The Chairman of the Supreme Economic Council was concerned with fostering among the workers a conscientious attitude to their duties. Above all, this pertained to the younger generation of workers. In his opinion, many young workers still did not really understand that “the factory is in the hands of the state of workers and peasants, where the happiness of the working class is collectively shaped”.

p To raise labour productivity and improve the overall development of the economy it was becoming increasingly important to engage in sensible and efficient planning, which would take into account both the society’s needs and its material potential. Dzerzhinsky was fully aware of this, and opposed both the planning dissociated from actually existing opportunities and the efforts to set the lowest possible targets in the economic growth and, specifically, labour productivity increase: “In the long run,” he stated, “the basis of socialist economy is to draw up a sound plan.”

p Dzerzhinsky was convinced that a scientifically based and verified state plan should become law for each factory and each economic manager. His work was worthy of emulation in this respect. At one of the CC plenary meetings he remarked: ’My entire work is geared towards implementing the plan.” But he also believed that the state 195 plan must not artificially restrict the work of a factory or economic amalgamation.

p Dzerzhinsky repeatedly stressed Lenin’s idea that improvement of the working people’s material well-being and the growth of wages and salaries were attainable only through continuous technological progress, with due account for the state’s financial potential. In February 1926, with a view to further raising the wages and salaries, the Party Central Committee formed another commission, of which Dzerzhinsky was a member. This commission provided information used in working out the resolution passed by the Council of Labour and Defence on May 18 , 1926 , “On Raising Labour Productivity in Industry and Transport”. The document emphasised the need to eliminate hold-ups and delays, to secure the timely supply of raw materials and fuel to factories, remove organisational inefficiency, improve the use of equipment, more carefully select top management personnel, and enhance the prestige and expand the rights of medium and lower-level operating personnel. Measures were mapped out towards consolidating labour discipline, making more sensible use of work time and manpower, and raising the skills of workers.

As a result of the joint efforts of the Party, the working class and the Supreme Economic Council apparatus headed by Dzerzhinsky, labour productivity in industry and wages almost approached the prewar figures. Higher labour productivity made it possible to improve the working people’s material welfare, strengthen the alliance of the working class and peasantry, and form a major source of means for the country’s socialist industrialisation.

p Dzerzhinsky made an invaluable contribution to the implementation of Lenin’s plan of building socialism in the USSR, especially to the creation of heavy industry. Lenin observed that “the only possible economic foundation of socialism is large-scale machine industry.  [195•1 

p The principal branches of heavy industry, i.e., metallurgy and engineering, were both considered parts of the metal 196 industry at that time. The Central Committee and the Soviet Government were doing their utmost to reconstruct it. In November 1923, Dzerzhinsky said: “We must become a metal Russia. Metallurgy is our whole future.”

p In March 1924, the CC Politbureau formed a commission on the metal industry headed by Dzerzhinsky. During its more than six months of work, the commission made a detailed study of the state of metallurgy and engineering, submitted a number of valuable proposals to the Central Committee and the government, and helped outline the basic trends in the further development of these major industries.

p In his numerous speeches and memos to the Central Committee, the Council of People’s Commissars, and the Council of Labour and Defence, Dzerzhinsky showed himself to be a staunch champion of Lenin’s ideas on the role of heavy industry in the development of the socialist economy. He underscored the significance of metallurgy and engineering in enhancing the country’s economic and defence potential, raising the standard of living, making cultural advances, and strengthening the alliance of workers and peasants. A great deal was being done to develop the larger heavy industry enterprises and the principal industrial centres.

p The major topic discussed at the Supreme Economic Council conference held in May 1924 and chaired by Dzerzhinsky was the advancement of heavy industry in Leningrad. The conference also passed a resolution “On Tractor-building”. The Central Committee formed a commission accountable to the Politbureau which was to deal with the industrial development of Leningrad. Dzerzhinsky was appointed its chairman. Leningrad’s industrial development was closely linked with the economic renewal of the entire country and had considerable significance for consolidating the USSR’s defence capability and enhancing the prestige of the world’s first socialist state.

p Fully aware of the importance of Leningrad’s defence industry, the commission nevertheless pointed out that city factories must turn out an adequate amount of consumer goods. In this connection, it focused on the development of metal processing, electric machine engineering, aircraft and ship-building.

p In July 1924, the Politbureau heard the commission’s report on Leningrad industry and, drawing on its 197 conclusions, made a statement on the significance of the city’s industry in general, and defence industry in particular.

p On September 12, 1924, the Politbureau considered Dzerzhinslcy’s report which contained a review of the metal industry. “If it is a must—and this is unquestionable—to advance the metal industry and place it on a sound foundation,” the report read, “it is necessary to seriously warn each department that it is fully and unconditionally responsible for meeting its commitments which were either assumed by the department itself or were set by the Party and the government, with respect to the metal industry first and foremost.” The Politbureau referred to this report when drafting measures towards developing this branch of the economy.

p Dzerzhinsky stressed the importance of having a good idea of what was going on at each major enterprise. “The country and the Party,” he wrote, “must know how each individual major factory is working. Each factory must have its own distinctive aspect.”

p On October 23, 1924, before the Congress of Transport and Industrial Workers was held, Dzerzhinsky wrote a letter to Abram Ginsburg, Deputy Chairman of the Chief Economic Department Collegium of the Supreme Economic Council. He spoke of the need to “analyse the opportunities for finding ... resources within our economy, the process of our organisation of production, labour and distribution”. He maintained that the industry could make a big step forward if mismanagement in the production sphere was overcome, the raw materials and fuel were used more thriftily and their quality was raised, the work day was more efficient, and the number of employees correlated with the volume of production. He also believed it extremely important to stop mismanagement and overspending in distribution, and especially in retail and wholesale trade.

p It was thought that the production of cheaper goods would help raise funds. Dzerzhinsky believed that cutting prices would lead to the accumulation of money in the country and provide an impetus for improving the organisation and technology of production. The lowering of prices for industrial goods and manufacture of more and lower-price means of production for agriculture would lead to the lowering of prices for agricultural commodities. “These means (tractors, fertilizers, etc.),” wrote 198 Dzerzhinsky, “should in a few years give such a boost to agriculture that we will have enormous reserves for both exports and luxury domestic consumption.” He recommended to draft a long-term plan for the development of production of the means of production for agriculture.

p Dzerzhmsky also named such important sources of the accumulation of funds as utilisation of unused current capital, stepping up its turnover, granting lower-interest credit, accounting for and purposeful use of depreciation funds, an accurate estimate of fixed assets, and attracting personal savings to industry through state loans.

p To more efficiently use financial and material means, Dzerzhinsky recommended more stress on planning and providing more favourable opportunities for developing the working people’s initiative when searching and using domestic reserves.

p Concentrating primarily on the sources of accumulation inherent in the socialist system, Dzerzhinsky did not reject the idea of foreign loans. He only opposed becoming dependent on them.

p Dealing with this issue once again in his report at the Fifth, All-Union Conference of the Metalworkers’ Trade Union (November 1924), Dzerzhinsky stated that the more stable the country’s economic and political position, the sooner capitalists would be ready to render it assistance. “We shall obtain this loan only when we start to pursue a policy of independent development, make independent efforts, and only given such a policy will a foreign loan not ensnare us.” Dzerzhinsky correlated the chances for getting foreign loans with the development of socialist economy, and the consolidation of its independence from foreign capital.

p Heavy industry was beginning to grow at faster rates. A number of Leningrad factories which worked for the war switched over to the production of other goods.

p When the Higher Government Commission on the Metal Industry finished its work, Dzerzhinsky requested the Politbureau to appoint him Chairman of the management board of the Chief Metal Industry Administration. This was done on November 13, 1924. He was in charge of 52 economic amalgamations and individual enterprises, as well as three syndicates responsible for the sales of the metal industry output. Dzerzhinsky held this post to the end of his life, 199 remaining at the same time head of the USSR Supreme Economic Council and the OGPU (Unified State Political Department). Moreover, between November 23, 1925 and February 5, 1926, he was also Chairman of the RSFSR Supreme Economic Council.

p The Central Committee decided to discuss at its January 1925 Plenary Meeting the state and prospects of the metal industry. Dzerzhinsky prepared a detailed report which outlined the prospects for the development of metallurgy and all branches of engineering, and contained clear ideas on the role and significance of heavy industry and the laying of socialism’s material and technical foundation. This document was forwarded to all participants in the Plenary Meeting. In a speech delivered at the meeting in the evening of January 19, Dzerzhinsky discussed the need to speed up the development of the metal industry. “The problem of the restoration, updating and reconstruction of fixed capital, the means of production, is facing us in a large number of industries. If we ignore it now ... in the near future our position will be desperate—we shall have no technical foundation for further development. And this means that the growth of the metal industry, which is the technical foundation of the entire industry, transport, and agriculture, cannot be artificially obstructed.”

p The growth rates in heavy industry, as elsewhere, were closely associated with reducing the cost of industrial goods, which directly affected the outcome of the economic competition between the USSR and the capitalist countries on the world market. “If we do not secure prompt and adequate development of our own production,” Dzerzhinsky’s report stated, “we shall be doomed to being beaten by the lower-price foreign goods.”

Dzerzhinsky showed that it was possible and necessary to develop heavy industry at faster rates, but nevertheless warned against groundless hare-brained schemes, and considered it necessary to approach the issue with due account for the country’s actual potential. His report contained suggestions for speeding up the development of non- ferrous metallurgy, engine-building, ship-building and agricultural engineering, and, above all, the tractor industry. Dzerzhinsky recommended trying to persuade noted specialists, including foreign experts, to lend assistance in developing the tractor industry. In a report to the January (1925)

200 Emacs-File-stamp: "/home/ysverdlov/leninist.biz/en/1988/FDAB259/20070706/242.tx" Plenary Meeting, Dzerzhinsky wrote: “This entirely new venture has, from the point of view of the country’s needs, quite unlimited prospects.” He pointed out that a new, completely modern tractor factory was badly needed. The meeting also discussed the question of diesel- locomotive building. The first effort in this field was a Gakkel diesel locomotive built at the Krasny Putilovets factory in Leningrad.

p Dzerzninsky’s main proposals were supported by the participants in the meeting, who also approved his report, recognised the need to secure the further development of the metal industry, and instructed the CC Politbureau to secure increased budget allocations and credit to the industry. A plan was to be drafted for the reconstruction of the fixed assets and re-equipment of old and construction of new factories with due consideration for the needs of the entire economy. The Politbureau was instructed to discuss what could be done to improve metal supplies in the countryside. The General Committee Plenary Meeting unconditionally supported the proposal on the development of non-ferrous metallurgy using the country’s own effort and resources. The Council of Labour and Defence was to examine urgently the question of building caterpillar tractors, automobiles and ships.

p The decisions of the Plenary Meeting on accelerated development of metallurgy ana engineering, the core of socialist heavy industry, were unanimously approved by the Party and workers.

p In view of the growing importance of metal industry for the development of the national economy, the Party Central Committee decided to discuss the prospects for its advancement at the 14th Ail-Union Party Conference. Dzerzhinsky was chosen as the speaker on the subject, and the newspapers published the major points of his report.

p The delegates enthusiastically supported Dzerzhinsky’s proposals on the accelerated development of metallurgy and engineering, the mechanisation of production and updating of factory equipment. Dzerzhinsky’s concluding remarks met with a particularly warm response: “The Russia of workers and peasants—it can be none other than a metal Russia, precisely the base that can ensure the protection of our state and keep a firm hold on the achievements 201 of the October Revolution. Only with metal, as with its own base, can it accomplish this, and raise the productive forces that are concealed in the depth of our land.”

p The conference unanimously approved Dzerzhinsky’s suggestions and adopted them without alteration as a resolution, thus demonstrating its complete confidence in the Central Committee approach to heavy industry.

p It was deemed necessary to increase the plans for metal industry for 1924/25 by 26 per cent as compared with the original programme, and to draft a plan for the building of new factories. The conference decisions laid the foundation for the practical efforts of the Party and the Soviet people directed towards promoting big industry.

p Issues of industrial development were dealt with in detail at the Third Ail-Union Congress of Soviets held in May 1925, both in Dzerzhinsky’s report and the delegates’ speeches. “The question of the renewal of fixed capital,” Dzerzhinsky said, “is already being replaced and supplemented by another issue, the question of expanding fixed capital. It is necessary to find the means to build new machine tools, new machinery, new equipment, new factories.”

p The delegates concentrated also on aircraft building. Even before the congress, Dzerzhinsky wrote: “Aircraft building must be put on a firm foundation.” The country was beginning to shake off its dependence on foreign partners in this field; in 1925, all the planes required by the Red Army were built at Soviet factories.

p Some of the results of the work in the metal industry were summed up at the Seventh All-Union Congress of the Metalworkers’ Trade Union, which was held in November 1925. In 1924/25, the output of the metal industry more than doubled, while the growth of industry at large was 62 per cent. Dzerzhinsky’s report and the speeches made by other Union members outlined measures to be introduced to further increase the growth rate of metallurgy and engineering.

p Dzerzhinsky was a vigorous champion of Lenin’sGOELRO plan, believing that the electrification of the country would pave the way for the technical re-equipment of the entire national economy. He urged “speeding up electrification" in order to deal with the principal problem—reducing the cost of industrial commodities.

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p In a report to the Third All-Union Congress of Soviets, Dzerzhinsky described the first successes in the work to implement the GOELRO plan and remarked, “Now, when the economy of our Union is firmly standing on its feet, the electrification of the country ... must become a top priority.”

p Dzerzhinsky’s important memo of March 9, 1926, addressed to the Council of Labour and Defence, read, in part: “Energy will determine the success in solving the problem of industrialisation of the economy of the USSR and the further economic development of the Union.” Dzerzhinsky pointed out the urgent necessity of state regulation of energy supplies and balanced planning of industry and transport with due consideration for the country’s actual energy potential. Dzerzhinsky also stressed the importance of closely correlating the development of the fuel industry and electrification. He considered: the latter “a powerful means of distributing energy and making rational use of fuel”. Dzerzhinsky worked towards organising electric power transmissions over long distances, and proposed the establishment of a Chief Energy Administration under the USSR Supreme Economic Council.

p Dzerzhinsky took steps to improve the operation of Glavelektro, a special department, and Elektrostroi, an important sector of the department which was in charge of electric power station construction. He personally followed the progress of this work. Dzerzhinsky was particularly interested in the Volkhov Hydroelectric Power Station, which he visited on June 15, 1925, to inspect the progress of its construction. He conducted long talks with tne project’s chief engineer and other top personnel and workers.

p Dzerzhinsky also supervised preparations for the building of the Dnieper Hydroelectric Power Station. In July 1925, he issued a decree concerning the station’s project evolution procedures and correlating the building of the station with the national economy reconstruction plan. Dzerzhinsky instructed his subordinates to collect all materials pertaining to the project.

p Late in 1925, the country marked GOELRO’s fifth anniversary. By that time, the Shatura Power Station (whose construction was initiated by Lenin) was completed. On December 3, Dzerzhinsky attended a Politbureau 203 meeting when it was decided to name the station after Lenin. Four other stations were commissioned, and in 1926, two more. Lenin’s plan for the electrification of Russia was leading to tangible results.^

p Dzerzhinsky was responsible for many of the successes in the reconstruction and development of the country’s fuel industry, especially, the Donets Coal Basin. In the spring of 1923, the Basin was facing grave difficulties. On May 7, the Party CC Politbureau formed a commission to investigate ways to improve the Donets Basin’s financial position and define a fuel policy. Dzerzhinsky was one of the commission’s members. The situation was all the more serious since in 1923/24 this region was providing three quarters of the country’s coal.

p Dzerzhinsky’s notes compiled during his work on the Politbureau commission contained suggestions concerning Party and political and cultural work. Dzerzhinsky proposed sending a group of experienced propaganda workers to the Donets Basin, expressed his attitude towards skilled specialists, mechanisation and electrification, raising the miners’ labour productivity and wages, the activities of cooperative bodies, and the building of housing and public batns. Dzerzhinsky criticised a number of executives in the fuel industry. Unlike some top-ranking officials in the coal industry who pessimistically viewed prospects for development, Dzerzhinsky showed that it was possible to raise the production of coal.

p Dzerzhinsky carefully thought out each of his suggestions and recommendations. He made notes on newspaper articles and books dealing with the fuel problem, and drew charts illustrating monthly coal production in the Donets Basin from 1920 to 1923. According to his calculations, it would be more economically expedient to use coal instead of firewood. Judging by his notes, Dzerzhinsky was interested in how fuel supplies were organised abroad, the links between the fuel industry and metallurgy, and their relation with railway transport;

p Stored in the Central Party Archives are Dzerzhinsky’s note pads devoted to “Fuel” which date back to his work on the commission. One important entry reflects the nature of the fuel problem and the ways of dealing with it: “ Making fuel cheaper for the consumers and increasing its production must be an independent goal, unrelated to the 204 other task, reconstruction of large coal mines, which will take years to accomplish and will require heavy state expenditure.”

p Dzerzhinsky subjected the materials received by the commission to a thorough analysis and gave a critical assessment of some of them. His participation in the commission’s work was active indeed. He submitted a number of proposals, many of which were later accepted by the Politbureau. He recommended to put an end to the isolation of the fuel industry from the rest of the national economy.

p On June 30, 1923, he submitted to the Central Committee a report which referred to a drop in the production of coal and the increase in its prime costs. Among the measures he proposed to increase the production of coal were: encouraging the development of small- and medium-scale coal .production (which before the war accounted for 43 per cent of the total coal output in the Donets Basin); reducing prices for coal to increase sales; granting more economic freedom to managing bodies; setting the issue of the miners’ wages and taking steps to raise labour productivity.

p On July 4, 1923, the Central Committee Plenary Meeting discussed the commission’s report and approved the majority of its proposals.

p Despite the measures undertaken to improve the work of the Donets Basin and to organise the sales of its coal, prices remained high. In a memo to the Politbureau of September 28, 1923, Dzerzhinsky outlined a concrete plan of action to reduce the prime costs of Donets Basin coal, and to improve the management of the fuel industry at large. His proposals were also discussed in the article “The Immediate Tasks of the Party in the Donets Basin" published in Pravda on January 22, 1924.

p After being appointed Chairman of the Supreme Economic Council, Dzerzhinsky began to pay even more attention to the Donets Basin, the work of which was on the agenda of the Party Central Committee Politbureau meeting on February 9, 1924. The meeting recognised it as imperative to substitute mineral fuel for firewood. On March 2, Pravda carried the Address of the Central Committee, which stated that the great importance of the Donets Basin had prompted the Party to form a Central Donets Basin Assistance Committee. By decision of the Central Executive Committee and the Council of People’s Commissars, 205 the committee was to be headed by Dzerzhinsky, who wrote: “The Committee has set immensely important tasks. We must get things moving and greatly extend their scope.” On March 28, the Central Donets Basin Assistance Committee considered the entire set of proposals pertaining to overcoming the crisis that was disrupting the sale of Donets Basin coal. The resolutions on its increased use were passed by the USSR Supreme Economic Council’s Presidium at the meetings on March 22 and April 2, 1924, which were chaired by Dzerzhinsky.

p The work under way in the field soon began to yield results. Already in August 1924, the USSR Supreme Economic Council Presidium noted that a great deal had been done to increase coal production, to mine higher-grade coal, raise labour productivity and improve the technical equipment of mines. When the targets set before the Central and local Donets Basin assistance committees had been reached, these bodies were abolished. However, Dzerzhinsky continued to keep an eye on that region.

p Another solution to the fuel problem was the development of new coal-producing regions. On March 26, 1925, the Party Central Committee Politbureau granted the request of the USSR Supreme Economic Council to send a geological research party to examine coal and oil fields in the northern region of Sakhalin island.

p On January 4, 1926, Dzerzhinsky chaired a meeting of the RSFSR Supreme Economic Council Presidium which discussed the industrial development of the Far East, and decided to launch large-scale preparations for coal mining there.

p Another priority at the time was the reconstruction and development of oil production. In one of his notes Dzerzhinsky stressed that measures should be outlined to save fuel, introduce lower-grade types and evolve more rational methods of its production and burning. Thus, he advocated a more sensible use of oil as fuel and voiced doubts as to the expediency of its use on locomotives. “Oil is hard currency for us,” he remarked.

p The rapid advance of the national economy made it urgent to explore and develop new oil deposits. On February 24, 1926, the USSR Supreme Economic Council Presidium passed a resolution on the organisation of oil prospecting, calling it a matter of top priority.

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p The chemical industry was gaining increasing importance among the branches of heavy industry. Here, the principal goal was to increase production of mineral fertilizers. In a report to the Third All-Union Congress of Soviets held on May 15, 1925, Dzerzhinsky pointed to the high prime cost of such fertilizers as the principal obstacle for their production. The main difficulty was the expense of phosphoric acid which was used for the production of fertilizers. Dzerzhinsky reported that the Mineral Fertilizers’ Institute had developed a cheaper technology for the production of phosphoric acid and that it was being introduced into industry. But it was soon apparent that this was an extremely slow process, and Dzerzninsky requested that the reasons for the delay be investigated and reported to him.

p Dzerzhinsky investigated many of the details of the functioning of the chemical industry. Learning that the prime costs and the retail and wholesale prices of chemical antiseptics were rather high, he immediately instructed the appropriate department to work out measures to reduce them.

p Dzerzhinsky believed that the problems of the chemical industry should be made known to the public. “Only in this way,” he wrote on October 30, 1925, “shall we be able to shake off our backwardness in the highly important field of the chemical industry... Our plans require the greatest concerted effort and common thought.”

p For the purpose of improving management in the chemical industry, on August 4, 1925, Dzerzhinsky signed a decree establishing a Chemical Committee affiliated with the USSR Supreme Economic Council Chief Economic Department. The steps introduced in this field promoted the development of the chemical industry.

p Not long before the 14th Party Congress, in a report to the 14th Moscow Conference of the RCP(B) delivered on December 11, 1925, Dzerzhinsky spoke positively about the need to reconstruct Soviet industry on the basis of new technology: “We must at all costs find means allowing us to accelerate production and expand it.”

p The Soviet people were developing the country’s large-scale industry despite great difficulties: Lenin was no longer alive to give guidance, petty-bourgeois elements were burgeoning, and opportunists inside the Party stepped up their activities. Moreover, money and materials were scarce, 207 there was not nearly enough skilled workers and specialists, and the experience required to develop industry along socialist lines was still very meagre.

p The need to launch socialist industrialisation was the principal idea of the overall work of the 14th Party Congress held in December 1925, which became known in the history of the Soviet Union as the industrialisation congress. It summed up the results of economic development and the experience of the work of Party bodies, and formulated the chief goal in the resolution “On the Report of the Central Committee"—“to secure the economic independence of the USSR that would prevent the USSR from becoming an appendage of world capitalist economy, for which purpose to pursue the line towards the country’s industrialisation, the development of production of the means of production, and forming reserves for economic manoeuvring”. These decisions were significant in principle. They raised the socialist industrialisation line to the status of Party policy.

p Dzerzninsky did not speak at the congress, but his previous work made a significant contribution to substantiating this policy, and later to its realisation. He was sometimes referred to as “the knight of industrialisation”.

p Dzerzhinsky demanded unswerving adherence to the decisions of the 14th Congress when drafting the plans for industrial development, above all, for heavy industry. He suggested that the Chief Department on Metal Industry at the USSR Supreme Economic Council redraft the plan for the development of metallurgy and metal-working industry, on the basis of the Party instruction “to turn the USSR into a country producing machinery and equipment”.

p On February 11, 1926, speaking in Leningrad, Dzerzhinsky said: ’We must find the resources and means inside the country to conduct socialist accumulation, the reconstruction and re-equipment of old and construction of new factories.” In his speech delivered at the meeting of the USSR Supreme Economic Council Presidium on March 19, he noted: “We have arrived at a one-hundred-per cent use of our fixed capital, and we really must map out the complete reconstruction of our national economy.”

p Dzerzhinsky frequently spoke about the importance of finding practical application for science and technology in the course of socialist industrialisation. He wrote: “The 208 country’s industrialisation, which is becoming the foundation of our efforts to build socialism, can be accomplished only if we both make use of all scientific and technological advances, on the one hand, and develop scientific research, on the other.”

p The April (1926) Central Committee Plenary Meeting considered the issue “On the Economic Situation and the Economic Policy”. It worked out measures to be introduced to promote the country’s industrialisation in accordance with the situation and the decisions of the 14th Congress. Its resolutions stated that “the advance of the industries and industrialisation of the country in general are that vital target whose attainment will determine the further growth of the entire economy in the direction of the victory of socialism.”

p On May 8, 1926, while on a visit to Kharkov, Dzerzhinsky spoke at the Ukrainian Miners’ Congress. A summary of his speech appeared in the papers under the heading “We Shall Accomplish Industrialisation Relying on Our Own Resources”. That was the main idea of Dzerzhinsky’s speech. “We can and must find means inside the country,” he stated, and then proceeded to analyse the sources that could yield the means required for the industrialisation. One of the purposes of his trip to the Ukraine was “to form an idea or the progress of production processes in heavy industry”. He then returned to Moscow for a short while, and on May 19 went back to the Ukraine. This time, he concentrated on the work of the Kerch Metal Works and tractor production at the Kharkov Engine-Building Factory, which he visited on May 28. That same day he left for Moscow. His last visit to the Ukraine gave a boost to the production in metallurgy and engineering.

p In the course of his visit, Dzerzhinsky had a chance to form a more complete picture of the metal industry in the country’s South. Its development was discussed on June 11, 1926, at a Labour and Defence Council meeting, which Dzerzhinsky attended, and on June 14 at the meeting of the Central Committee Politbureau. These two bodies defined the measures towards further advancing metallurgy and engineering. Dzerzhinsky initiated many of them himself.

p Dzerzhinsky’s last speech at the July (1926) Central Committee Plenary Meeting, made three hours before his 209 sudden death, also dealt with the future of socialist industrialisation and the search for the most efficient ways of accomplishing it.

p The development of heavy industry opened up fresh opportunities for advancing light, especially textile industries. Dzerzhinsky stressed the need to boost the production of cotton and gain independence from exports in this field.

p Dzerzhinsky outlined the principal targets before the textile industry at the Sixth Ail-Union Congress of the Textile Workers’ Trade Union held in November 1924. He considered this industry an important field where the alliance of the working class and trie peasantry could be consolidated: “Textile is one of the key sectors serving to strengthen the link between town and country.” Dzerzhinsky stressed the need to reduce the prices of textile goods and to considerably expand production. In the course of his work, he made a thorough study of the operation of textile factories. With Dzerzhinsky as its head, the USSR Supreme Economic Council managed to significantly develop the textile industry, including textile engineering. Specifically, it was planned to build a large cotton mill in Leningrad.

p The Party and the Government gave science an important role to play in the economy, and sought to provide adequate opportunities for scientific research. Dzerzhinsky was a vigorous supporter of this line, as is revealed in his letter of January 22, 1925 to the USSR Supreme Economic Council Scientific and Technological Department. Having earlier that day visited a department-sponsored exhibition, Dzerzhinsky wrote about the great achievements of Soviet scientists. At the same time, he noted that research institutes should and could do more to help rebuild industry and agriculture and consolidate the country’s defences. He also said that they needed support from the Supreme Economic Council and other bodies. He suggested that the department prepare a report on the work of scientific research establishments to be discussed at the USSR Supreme Economic Council Presidium and address local economic bodies on behalf of the council concerning the activities of research establishments and the need to establish direct links with the former to ensure the more efficient introduction of scientific discoveries and achievements.

210

p On February 4, 1925, the Supreme Economic Council Presidium discussed the work of its Scientific and Technological Department. Dzerzhinsky once more emphasised the importance of practical application of the results of scientific research in production. Stressing the significance of science in the country’s economic development and technological progress, he stated at the Third All-Union Congress of Soviets: “When we, who are strong thanks to the alliance of the workers and the peasants and of the nations inhabiting our Union, will look for support to science, then and only then shall we be able to easily attain the goals which we have set ourselves.”

p This did not mean, however, that science automatically received the impetus it needed for development. Dzerzhinsky noted that a great deal of effort of the Party and government bodies would be needed: “Encouragement of and assistance to scientific thought must be a top priority with us.” These ideas were incorporated in the congress documents. On June 11, the USSR Supreme Economic Council Presidium discussed the ways to carry through the congress’s decisions and instructed the Scientific and Technological Department to submit a report on improving the work 01 scientific-technical research establishments. Each of them was to be attached to a pilot-production plant, specialists were to be sent abroad, and a plan for the construction of scientific technical research centres was to be drafted.

p Dzerzhinsky did his best to attract distinguished scientists to work in the industrial sphere. With this end in view, in December 1924, scientific and technological councils were formed under the Scientific and Technological Department of the Supreme Economic Council; new research establishments were opened, including the Institute of Mineral Raw Materials named after Lenin, the Laboratory of Hydraulic Installations, the Research Institute for the Study of the North, the Central Oil-Research Institute, and the Experimental Silicate Institute.

p One aspect of the country’s industrialisation was the drive for economising. In his time, Lenin repeatedly stressed the importance of economising under the socialist system: “If we see to it that the working class retains its leadership over the peasantry, we shall be able, by exercising the greatest possible thrift in the economic life of our 211 state, to use every saving we make to develop our largescale machine industry, to develop electrification, the hydraulic extraction of peat, to complete the Volkhov Power Project, etc."  [211•1 

p The drive for economising became particularly extensive after the 14th Party Congress, which signified the beginning of the work to practically implement socialist industrialisation. The initiator of the campaign was Dzerzhinsky. The decree signed by him on February 23, 1926, which came to be known as the “drive for economising" contained an order to reduce overhead expenses in the national economy. Since that time, this issue received extensive coverage in Dzerzhinsky’s speeches, reports, memos and decrees.

p In early March, the Moscow newspapers printed a press interview with Dzerzhinsky on his views on economising. “Under the conditions of Soviet reality,” he observed, “economising is one of the principal Party trends in the field of the country’s economic development... The emphasis on economising is thus ... the struggle for authentic socialist construction." In one of his speeches, Dzerzhinsky referred to the slogan “economise” as the focus of the entire problem of the country’s economic advance.

p Addressing a conference of the audit commissions on March 8, 1926, Dzerzhinsky firmly stated that “each intentional or unintentional unnecessary expenditure must be regarded as an offence against the Soviet state”. In order to foster deeper awareness of the need for economising, he proposed a meeting of Communists engaged in the economic field “for an open talk”, and intended to make a report at the meeting.

p The Party Central Committee, which greatly supported the campaign to economise, decided to send a letter to Party branches. Dzerzhinsky drafted a detailed memo which contained the major points to be included: “We need means... We are insanely wasteful. A rouble saved per person would give us 140 million a year. A small saving in each economic cubbyhole—thrift in everything that is absolutely necessary. The strict reduction of all extras and unproductive expenditure would save our economy hundreds of 212 millions each year... Without economising, without doing our best in this field, we shall not be able to cope with the grandiose tasks facing us in the sphere of economic development, defence and satisfaction of the needs of the broad working masses. Dzerzhinsky’s memo listed concrete examples of possible and necessary ways to reduce expenditures and save state funds. His proposals underlied the draft Address on the Thrift Economy Drive approved by the RCP(B) Central Committee and the Central Control Committee and to which Dzerzhinsky introduced some amendments. On April 25, it was made public under the heading: “The Address of the Central Committee and the Central Control Committee of the RCP(B) on the Thrift Economy Drive”.

One of the objectives of Dzerzhinsky’s trip to the Ukraine in May 1926 was to verify what was being done there to promote thriftiness. He arrived in Kharkov on May 6 and the next day was already chairing and speaking at the Ukrainian Supreme Economic Council Presidium meeting. The first question under discussion was the drive to economise. Dzerzhinsky spoke about the need to cut down overheads, filing and accounting, promote production rationalisation, raise labour productivity and enhance the role of production conferences in this matter. A few days before his death, on July 11, Dzerzhinsky wrote: “It is necessary to urge the trusts to promote the drive to economise by all available means and with great persistence.” In the last months of his life Dzerzhinsky was primarily concerned with developing the economy by promoting thriftiness, and it was largely due to his efforts that progress was made in this area.

p In dealing with the problems of economic development, the Party stressed improving the work of the state and economic apparatus and management bodies in industry and other branches of the national economy. At the basis of this work were Lenin’s principles of economic management and of the work of the Party, state and economic apparatus: “We must reduce our state apparatus to the utmost degree of economy. We must banish from it all 213 traces of extravagance."  [213•1  Dzerzhinsky made an important theoretical and practical contribution to this effort.

p On March 16, 1923, soon after the publication of Lenin’s article “Better Fewer, but Better”, Dzerzhinsky drafted a document which he himself called “a preliminary draft for a review”, and sent it to the heads of a number of people’s commissariats and departments requesting them to give their opinion. He wrote that a greater part of the administrative apparatus was composed of employees who used to belong to exploiter classes and bourgeois intellectuals, and voiced the opinion that they needed to be won over to the side of Soviet power after re-educating them. Suggesting that this question should be discussed at a Party congress, Dzerzhinsky mapped out a plan of concrete action comprising 15 items. Among other things, he recommended promoting to key positions workers and Communists who had long been Party members, had acquired some experience in organisational work, and still kept in touch with the rank and file. The Central Committee instructed Dzerzhinsky to make a report at the 12th Party Congress in the section dealing with organisational questions.

p In his speech at a meeting of the organising section of the 12th Party Congress, Dzerzhinsky resolutely opposed bureaucratic methods of leadership and administration and the “monstrous centralisation”, he dealt exhaustively with the goals set before the leading bodies. With respect to the reorganisation of the administrative apparatus, he observed: “We must follow Lenin’s advice, ’better fewer, but better’.” He was tireless in his efforts to improve industrial management and reduce the amount of red tape and unnecessary meetings.

p His letter of June 3, 1925, addressed to the key Supreme Economic Council personnel, was typical: “Our greatest misfortune is at present an endless abundance of all sorts of meetings and conferences that eat up time without anything to show for the lost hours, that produce no tangible results.” Dzerzhinsky considered it necessary “to hold people more personally responsible for their duties”, and to “introduce the custom to always make the first item on the agenda the questions: is this meeting necessary?, who of those present could and should be 214 excused from it, and can the issue be dealt with outside of a meeting?”

p Dzerzhinsky’s letter was followed by a decree to the Supreme Economic Council which obliged the key personnel to draw up a list of commissions that could be abolished. A new procedure of holding conferences and meetings was introduced. They could now be convened only by the members of the USSR Supreme Economic Council Presidium, heads of departments and sectors, and chairmen of commissions. The meetings could start not earlier than 2.30 p.m., and were to be attended only by a limited number of persons who were directly involved with the matter under discussion. The agenda and materials for the conference with previously prepared suggestions were to be handed in to the participants no later than 24 hours before the opening. This procedure was discussed at the meeting of the Presidium held on July 1.3,1925 and chaired by Dzerzhinsky.

p “The basic evil that disorganises factories, trusts and economic management bodies,” wrote Dzerzhinsky, “is the filing, reference, statistical and inspection deluge. Reports, reports, reports. Accounts, accounts. Figures, tables, endless rows of figures. Complete absence of competent people. Under this system, there is no time to examine the issue. The experts in the business are not people but references and reports. Mountains of papers, with nobody to read them and no physical opportunity for reading them.”

p Dzerzhinsky attempted to cut down all this paper work. On June 17, 1926, in a decree entitled “To Make the Management System Healthier”, he demanded that each key official display precision and flexibility, and take more responsibility for his sector. This idea was formulated in the following way: “Decide, do and assume responsibility without wasting a minute, without unnecessarily appealing to authorities.”

p On June 23, Pravda carried Dzerzhinsky’s article “On Improving the Work of the State Apparatus”, which stressed that the campaign for a more flexible and thrifty state and economic management apparatus with a simpler structure and free from any bureaucratic outgrowths was an indispensable part of the drive to utilise more rational economic methods.

p Dzerzhinsky again discussed this subject in his speech at the conference of the key Supreme Economic Council 215 personnel held on July 9, 1926. High rates of economic development, he stated, depended to a not inconsiderable degree on the efficient functioning of the economic management apparatus. “The centre of gravity,” said Dzerzhinsky, “should lie in the responsibility assumed by each working person; the counterposing of organisational fetishism to living people, conscientious people.” Elaborating on this idea, he said: “We must introduce personal responsibility, know what each individual is doing, examine what he is studying, what he is responsible for, and to what extent.” He proposed “introducing the regime of personal contacts with those who we are guiding and directing, and whom we entrust with a particular job”.

p On July 10, Dzerzhinsky issued a decree “On the Improvement of the USSR Supreme Economic Council Apparatus and Fighting Red Tape”, which defined the organisation and content of business correspondence conducted by the various council divisions, and demanded that each document and suggestion be concrete and concise.

p Dzerzhinsky believed that the best results could be attained when work was based on confidence in the employees. Two weeks after his appointment as the Supreme Economic Council Chairman, he observed that, “One cannot head such a huge body as the SEC other than through complete confidence in the employees.” Further on, he stressed: “Those who have been entrusted with a department, the organisation of one local body or another, must have all possible confidence, all responsibility, and the opportunities for displaying initiative.”

p Having accumulated a great deal of experience while heading the Supreme Economic Council, Dzerzhinsky considered it expedient to reorganise the council. On March 3, 1926, he entrusted the council’s personnel to draw up suggestions on the reorganisation of its structure and, in particular, on setting up the chemical, the power and the mining industry administration and the fuel department. In a memo of March 8, Dzerzhinsky advanced a well-grounded plan for the reorganisation of the Supreme Economic Council.

p In the speech given on March 19 at a meeting of the Council Presidium, Dzerzhinsky spoke about the expediency of such reorganisation and outlined its principal trends. Criticising red tape and procrastination, he 216 remarked: “I believe we shall have no procrastination if we reinforce our reorganisation with really efficient work, precision in the activities of apparatuses that will have no unnecessary links, no unnecessary intermediary bodies”.

p Following up on this, Dzerzhinsky issued a circular “On the Organisation of Industrial Management”, which stated that clearly defining the range of functions of each employee and establishing the boundaries of his competence was a necessary condition of rational labour organisation. He pointed to the need to raise the prestige of administrative and technical personnel and not to burden it with unnecessary clerical work. This, in his opinion, would consolidate labour discipline.

p Work on proposals aimed at improving the structure and functioning of the Supreme Economic Council continued. At a conference of public industry employees held in April 1926, Dzerzhinsky spoke about the need to reorganise the council apparatus but suggested that it continue as the central administrative body. When the draft statute on the USSR Supreme Economic Council was being written in its final form, Dzerzhinsky submitted a number of principled suggestions aimed at enhancing its role as a body or state authority. All of the documents he had written or helped prepare provided a detailed substantiation of his ideas concerning ways of improving the functioning of the economic management apparatus.

Untimely death prevented Dzerzhinsky from carrying through to the end the reform he had planned. This was accomplished some time later. On August 24, 1926, the USSR Council of People’s Commissars heard a report delivered by Valerian Kuibyshev, who replaced Dzerzhinsky as Chairman of the USSR Supreme Economic Council, on the changes that should be made in its structure. Kuibyshev stated that Dzerzhinsky had planned to reorganise the council along three main lines in order to consolidate its role in the planning of industrial development, exercise more effective management over its individual branches, and expand the functions of the regulating body. “I completely support this idea of Comrade Dzerzhinsky,” said Kuibyshev, “just as the plan for the reorganisation he had drafted.” The Council of People’s Commissars approved Kuibyshev’s proposals and permitted work to begin on the reorganisation of the Supreme Economic Council apparatus.