# D. Financing of Economic Construction

Source: LS/v24, vol. XXIV

D. FINANCIAL MANAGEMENT AND CONTROL OF ECONOMIC ACTIVITIES

MARCH – DECEMBER

ON PRELIMINARY FINANCIAL SUPERVISION

20 MARCH 1919.

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121*0
3 l 11 ISKAK. I. L l 1C dkGU 1.
Landers.
So, according to the law, can we really detain anyone simply because of a single discrepancy? You have not answered this “query.”
P.
12419
II PROPOSED MEASURES FOR THE IMPROVEMENT OF FINANCIAL CONTROL AND ACCOUNTING PROCEDURES.

We instruct the [Commission] to… within the shortest possible time, formulate practical regulations:
1)
on strengthening accountability for unlawful delays in the submission of financial reports due to errors in individual sections;
2) on accelerating the disbursement of wage allocations;
3) on establishing a specially expedited procedure for the allocation of funds earmarked for specific categories of economic and industrial–productive expenditures;
4) on mandating the presence of competent officials from state oversight bodies in all institutions where oversight is directly linked to economic operations.

1 The note addressed to Landers, a member of the State Control Collegium, was penned by Lenin during the March 25, 1919, session of the Sovnarkom, while the Council was deliberating the issue of preliminary auditing of governmental financial activities by State Control. One of the key reasons for this discussion was State Control’s refusal to approve the payroll report for employees of the Shatura Construction Project—State Control had withheld the entire payroll due to an error discovered in just one of its components.

After exchanging views on this matter, the Sovnarkom adopted the draft of practical rules on preliminary oversight proposed by Lenin and appointed a two‑member commission tasked with, based on Lenin’s draft and the materials submitted by the VSNKh, drafting a resolution on preliminary financial supervision. On March 28, 1919, the Presidium of the VSNKh, having thoroughly discussed the issue, decided to submit a petition to the VSNKh requesting the immediate issuance of the resolutions already adopted by the VSNKh on this very topic.

* In the manuscript, a blank space remains to be filled in with the names of the commission members. Ed.

FINANCING OF ECONOMIC CONSTRUCTION

The VSNKh’s draft resolution on preliminary oversight was approved by the Sovnarkom on March 31, 1919, and published as a decree in Izvestia of the VTsIK, No. 74, dated April 5, 1919, under the title: “On Amendments to the Rules Governing Preliminary and Actual Audits.”

The Sovnarkom’s decree “On Conducting Audits by State Control” was published in Izvestia of the VTsIK, No. 263, dated December 1, 1918.

NOTES ON A TELEGRAM FROM L. N. KRITSMAN¹.
[April 4, 1919]
The release of 50 million in banknotes to Kharkiv and 25 million to Kyiv is utterly insignificant—and cannot save not only the upcoming sugar campaign but even the factories themselves from ruin.
The situation is extraordinarily perilous…
We earnestly implore you to safeguard this vital sector of the economy, which could provide both sugar and bread, by urgently transferring at least 150 million [to] Kharkiv and 100 million [to] Kyiv.
★
To Rykov: What has been done?
1 As the VSNKh’s authorized representative, L. N. Kritsman had been dispatched to Ukraine to oversee the sugar campaign.

INSTRUCTIONS TO THE SECRETARY¹.
[April 14, 1919]
Check with Krestinsky: Has the forestry department in Tver actually received 10 million? If so, draft a telegram to the forestry department in Tver.
1 In response to Tenin’s inquiry, Krestinsky telegraphed: “Nogin requested that 24 million be sent to Tver; we sent 22. Syromolotov asked for 10 million for the forestry department; we sent 8. Both sums have been reserved. A representative from Tver visited us today and was satisfied. There is no need to send any further telegrams through me.”
Upon receiving Krestinsky’s telegram, Lenin made a note on it: “a v arav’iv.”

NOTE TO II. N. KRESTINSKY.
April 17, 1919
Comrade Krestinsky! Evnevich informed me of this. Please return it to me along with your comments.
Lenin.
1 Lenin refers to a letter dated April 17, 1919, from Evnevich, an official of the Main Committee for the Administration of the Rubber Industry.

In his letter, Evnevich reminded the Sovnarkom of the need to issue supplementary instructions to the Sovnarkom’s decree “On the Liquidation of Debts Owed by State Enterprises.” This decree had been published in Izvestia of the VTsIK, No. 52, dated March 7, 1919. The Sovnarkom had instructed the Supreme Council of National Economy, State Control, and the People’s Commissariat for Finance to develop such supplementary instructions “within a reasonable timeframe,” as stipulated in paragraph 6 of the aforementioned decree.
24318
TELEGRAM TO THE UKRAINIAN SOVNARKOM.
Kyiv
Sovnarkom
Rakovskiy
May 28, 1919
In your telegram,
1815—once again, a complaint about a shortage of funds. Krestinsky assures us that a great deal has already been sent.
They have partially agreed with Litvinenko¹. It is imperative that we put an end to these misunderstandings once and for all. Immediately determine how much has been received, how much is still en route. Respond quickly and precisely, with a joint signature from you and Litvinenko, using a code to indicate exactly how much you require. We are not stingy—but you must guarantee orderly distribution.
Lenin.
1 I. Litvinenko was the People’s Commissar for Finance of Ukraine; in 1919, he served as a representative of the Central Committee of the Combatant Party within the Ukrainian Sovnarkom. From March 1920, after the merger of the Combatant Party with the RCP(b), he became a member of the RCP(b). In 1922, he headed the provincial land department in Podolsk Governorate. In the autumn of 1922, he was executed by remnants of Petliura’s bands while traveling through the grain‑procurement district near the city of Vinnytsia.
421G
NOTE TO N. II. KRESTINSKY!
Krestinsky
[June 11, 1919]
How much? When was it sent? What is the reason we still have nothing to give?
Lenin.

In a telegram from Smolensk, Chairman of the VTsIK, M. I. Kalinin, informed Lenin of the urgent need to transfer banknotes from the Minsk and Smolensk governorates to the districts, in order to avert disruptions to critical forest‑harvesting operations.
Lenin wrote his note to Krestinsky directly on Kalinin’s telegram. To the left of the document, Lenin added the notation: “For archival reference.”

FINANCING OF ECONOMIC CONSTRUCTION

NOTES TO Y. S. GANETSKY.
NO EARLIER THAN JULY 16, 1919.
I.
*312
To Ganetsky: Draft a reply.
231*8
To Ganetsky: That text won’t do. You must draft it like this:
“We promised you so many millions by such and such a date. We sent you so many at that time—and we will send you another so many at that time.”
Draft such a text immediately. 1 Y. S. Ganetsky, a member of the People’s Commissariat for Finance’s collegium, was tasked with composing a reply to the telegram X. G. Rakovsky had sent to Lenin on July 16, 1919, requesting the delivery of promised funds amid the acute monetary crisis gripping Ukraine. Ganetsky drafted the following response:
“Today, 300 million are being sent, of which 50 million are destined for Kaluga. Going forward, disbursements will be carried out in a planned, systematic manner.”
2 Lenin noted on the document: “(In reply to Rakovsky).” For more details on this, see Y. S. Ganetsky, “Lenin and the Nationalization of Private Banks,” Prorabetskaya Revolyutsiya, No. 6, 1926, p. 12.
t i
NOTE TO N. N. KRESTINSKY.
[End of August 1919]
It is unclear when we will be able to issue 600 million [rubles] per day.
Two shifts of 12 hours each—surely that’s not feasible.
Let us consider whether we might add a third shift—three shifts of 8 hours each.*
1 We are referring to the money issued by the expedition responsible for procuring state securities, which had been evacuated from Petrograd to Penza in the spring of 1918.
Lenin’s note to Krestinsky was apparently written during a Sovnarkom meeting. In response to Lenin’s question: “When will we be able to issue 600 million per day?”—Krestinsky replied: “Starting September 1st.” The date Krestinsky specified ultimately served as the basis for dating the document printed above.

2313*
NOTE TO N. N. KRESTINSKY 1.
[No earlier than September 1, 1919]
We cannot simply requisition funds—and besides, this is not yet a draft decree.
I propose: either assign this task to 5 people’s commissars, or negotiate appropriate measures, or submit a draft decree to the Sovnarkom.
1 Lenin responded to the note from N. N. Krestinsky, who had suggested that Lenin sign a draft resolution limiting the duration of loan repayments secured by collateral. Lenin’s cautious stance toward Krestinsky’s proposal stemmed from the fact that the draft Krestinsky had put forward might have infringed upon the interests of small bondholders (see Y. Ganetsky, “Lenin and the Nationalization of Private Banks,” Prorabetskaya Revolyutsiya, No. 6, 1925, pp. 5–15).
_____________
NOTE TO T. I. POPOV.
10236
T. I. Popov //1.
[No later than September 1919]
Have you verified:
1) Have 100 boxes been received?
2) Have they been stored in a secure location?
3) What is the status of security?

T. I. Popov was the commissioner of the Moscow branch of the State Bank.
* The boxes contained credit notes printed by the expedition responsible for procuring state securities.
2468 i
TELEGRAM TO THE PERM AND YEKATERINBURG GOVERNMENT COMMITTEES *.
Perm: three addresses—first, the Governorate Executive Committee; second, Commissioner Emshanov of the Perm Railway; third, Commissioner Minkin of the Perm State Printing Factory.
Ekaterinburg: Governorate Executive Committee; Member of the Revolutionary Military Council Lokhapkin; Member of the People’s Commissariat for Railways Kovylkin.
Commissioner Rudoy of the Perm Railway.
[October 20, 1919]
Given the urgent need to equip and launch the Perm State Printing Factory, we recommend that all civilian and military authorities…
* The text of the telegram was drafted by N. N. Krestinsky. The additions and signatures were written in Lenin’s own hand. Ed.