we

Tie

—MOSCOW

INCE the Socialist Revolution of 1917 money has
acquired new meaning and significance in the Soviet

Under capitalism money is a means of accum-

ulating capital, a weapon wherewith to exploit the working

Union.
people,
Under socialism, the Soviet

economic policy has been directed
towards the utilisation of money,
trade and credit for organisation
of accounting, control and plan-
ning of production and distribu-
tion of products, for organisation
of the economy on socialist lines.

“We must not forget” wrote
Lenin in 1918, “that every radical
reform we undertake will be
doomed to failure unless we
achieve success in our financial
policy. Success in this field will
determine the success of the
enormous work we have Planned
to transform society on socialist
lines.”

Lenin’s policies could only be
put into practice after the Civil
War and collapse of foreign mili-
tary intervention, under the new
economic ‘policy, by strengthening
the: currency system and intro-
ducing currency reform.

The Soviet government carried
out the reform of 1922-24 earlier
than other European countries
and without any foreign financial
aid, despite the financial block-
ade declired by the capitalist
powers. ;

As-a result, it was able to ma-
neuver with the commodities at
its disposal and thus ensure the
efficacy of the policy of lowering’
and stabilising the prices of com-
modities.

The foreign trade monopoly en-
sured success of all measures
having rapid and uniform effect
throughout the country in com-
batting speculators — those who
gambled to lower the values of
the new Soviet ruble,

In addition, the government
conducted a persistent struggld
to supplant wholesale and semi-
wholesale capitalist traders on
the commodity market by stata
and cooperative organisations.

The currency reform of 1922-24
showed that Soviet economy could
develop successfully without for-
eign loans. It strengthened the
economic alliance of the working
class and the peasantry, created
a firm and real foundation for
true planned management of
economy for increased productiv-
ity of labor, stimulated by differ-
entiation in wages according to
the amount and quality of work
performed.

In carrying out the great plans
to industrialise the country and
collectivise agriculture, stability
of the currency system had to
be preserved, regardless of the
great financial expenditures in-

curred and despite the grim re--

sistance of capitalist elements
and the open subversive actions
of their agents designed to un-
dermine the currency system.

FTER the first world war,
followed by the Civil War and

foreign intervention, there was
serious disruption of the national
economy and the financial system
so that “money lost all its value
and: the currency system was un-
dermined at its very foundation.”

But during the second world
war: there was a totally different
situation, The Soviet economy
and currency system withstood a
strain that a capitalist economy
could not have borne.

Direct war expenditures alone
amounted to 108,400 million
rubles in 1942 and \125,000 million.
rubles in 1943 as against 56,800
million rubles in 1940, There
were further huge expenditures
in evacuating enterprises, institu-
tions and the population, and in
payments of pensions and grants
to war disabled and their fami-
lies,. which ran into a sum of 50,-
000 million rubles in the course
of the four and one-half years of

warfare. At the same time, there .

was an inevitable reduction in
certain important items of the

FRIDAY, JANUARY 16, 1948.

state income in the first period of
the -war.

As was pointed out in the deci-
sion of the Council of Ministers
of the USSR, the enormous war
expenditures “demanded the
emission of a large amount of
currency.”

The danger which threatened
the currency system was, how-
ever, successfully overcome by;
the efforts of the entire Soviet
people. Thousands of millions of
rubles, earned by the working
people, poured into the state
budget in an endless stream. On
‘the other hand, by their tremen-
dous efforts, workers, engineers,
scientists facilitated expansion
of production and lowering of
production costs, particularly in
branches of the war industry.

The financial strength of the
Soviet. Union, unlike that of
Tsarist Rusisa during the im-
perialist war, was not weakened.
By 1944, the income items of the
state! budget exceeded expendi-
tures by 5,000 million rubles.

E advantages of the socialist

economy and currency system
were demonstrated in the fact
that under the immensely diffi-
cult war conditions the Soviet
government was able to maintain
absolute order in management of
the currency system and to uSe
the money effectively as a means
of organising a well-ordered war
economy. During the war, fixed,
pre-war prices were maintained
for the rationed means of consump-
tion, while the prices of the
means of production and military
equipment were either maintained
at the previous level or lowered.

Reduction inthe commodity re- -

sources in the hands of the state
for supply to the population
through organised market chan-
nels freed from circulation a con-
siderable amount of currency
having no commodity coverage.

However, a part of this cur-
rency which found no commodity.
coverage in the organised market
found its way into the unorgan-
ised, collective farm market where
it caused a considerable inflation
of prices. At certain periods the
market prices rose considerably,
not a hundred or a thousand fold
as in 1920-21, but nevertheless 10-
15 times, as compared with ‘the
pre-war level. The gap between
market prices and fixed state-
controlled prices was also not
much less,

Thus, as a result of the war,

different price levels arose, which .

is an abnormal phenomena under

conditions of peacetime develop-
ment. .

At the present level of develop- ‘

ment of the socialist society, all
survivals of capitalism have not
yet been eliminated from the

minds of people, and existence |

of different price levels is an ob-

stacle in the way of combatting’ -

these survivals.

The speculating elements took
advantage of the wide gap be-
tween state and market prices
and also by the large sums of
counterfeit money in circulation,
in order to accumulate large
sums of money, thus reaping
profit at the expense of the popu-
lation. And this created a certain
danger for the currency system
as well as for the organised dis-
tribution of the social product
in the USSR, ‘

@
tie the USSR money cannot and
should not normally constitute
a means of accumulating any
income other than wages or sal-
aries. On the contrary, the chief
destination of Soviet money is to

serve as a means for distribution
of the social product through the

By PROFESSOR Z. ATLAS

mechanism of extensive retail
trade, in accordance with the

amount and quality of work per-—
formed.

It is true that a comparatively

: small part of the social product’

is set aside by the Soviet govern-
ment to promote workers’ sav-
ings, in the form of interest paid
on money deposited in Savings

‘ banks or invested in state loans

and utilised by the state to ex-
pand socialist reproduction, This

‘manner of rewarding the thrift
is both

of the working people
just and socially usefuk. ©

At the same time, it would be

dangerous and impermissible to ~

give speculating elements any op-
portunity of reaping profits from
the reduction in prices by buying:
up goods at greatly reduced
prices after abolition of ration
cards. Y ~~"

In the fulfillment of the new

‘five-year plan immense import-

ance attaches to the utilisation of
such economic levers as price,
money, credit, profit, premium.

“State planning of the national
economy in the USSR,” said P. A.
Voznesensky in a report on ‘the
five-year plan, “utilises the law

of value in the interests of
strengthening and developing so-
cialist production, with the dis-
tinguishing feature that the So-
viet economy excludes the conver-
sion of value into capital exploit-
ing labor.”

The important role of the eco-..

nomic levers of the Soviet state,

first and foremost, money, in

carrying out the five-year plan,.
is inseparably connected with the
law of value.

An essential condition for suc-_

cessful fulfillment of the five-
year plan is a stable currency of
full value, both as a measure of

~value—a means of socialist ac-

counting and control—and as an
important material stimulus for
increased. labor _ productivity
through the wage system, How-
ever, in order to have a stable
ruble of full value, decisive, bold
measures were necessary to elim-
inate the inevitable traces left by’
the war on the currency circula-
tion of the USSR.

e
E exchange of accumulated
money at the rate of one ruble

in the new currency for ten
rubles in the old, with preserva-

tion of existing wage rates and
lowered prices, constitutes an in-
disputable gain’ for the over-
whelming majority of the work-
ing people, particularly since sav-
ings bank accounts of the great
majority of depositors are pre-
served in their full sums,

The decision of the Council of
Ministers of the USSR states that
“certain sacrifices have to be
made-in connection with the cur-
rency reform. ‘The state .under-
takes to bear the greater burden

‘of the sacrifice, but the popula-

tion too must bear part of the
sacrifice, moreover as this will be
the last sacrifice.” '

Losses sustained by-a certain
part of the working people will
be insignificant and of short
duration. The people will be fully
compensated by the material
benefits accruing to all the work-
ing people from currency reform
and abolition of ration-cards. The
reform will, however, deal a blow
at speculating elements which
had accumulated large sums of
money and kept them tucked .
away. These are aspects the ma-
jority of the press in the capital-

ist countries prefers to overlook.

PACIFIC TRIBUNE—PAGE 11