Zoloto dlia industrializatsii: TORGSIN (review)

Torgsin, the hard-currency retail chain of the first half of the 1930s, was the subject of an engaging article and fine chapters in Elena Osokina's previous two books.¹ When I received Osokina's lengthy new monograph, I wondered whether her subject would continue to yield new discoveries. It does. Osokina's analysis of a key Soviet business goes well beyond her pioneering earlier research on the subject, affording a fascinating angle on diverse aspects of Soviet life.

Torgsin (formally, the All-Union Association for Trade with Foreigners on the Territory of the USSR) was founded in July 1930 with the ostensible mission of supplying foreign sailors and short-term visitors to the USSR with foods and souvenirs. This mission reflected the logic of the distribution system of the First Five-Year Plan period, which isolated contingents of consumers and specified the primary retail outlet for each. More important, however, Torgsin was conceived in response to the urgent governmental need for hard currency in connection with the industrialization drive. Imperial Russia's gold reserves had already been depleted during the first decade of Soviet rule, as Osokina documents, so when Stalin opted for an economic strategy of accelerated industrialization on the basis of imported technology, he had little choice but to pay for imports with exports. This task was complicated by the worldwide depression. Oil, grain, and lumber, the chief Soviet export commodities, yielded diminishing returns as the terms of trade turned sharply against primary producers on the world market.

Soviet historians have traditionally focused on collectivization as the regime's solution to this dilemma. More effective than previous incentives and repressive campaigns at forcing peasants to deliver their grain to the state, collectivization enabled the government to expand grain exports in 1930 and 1931, even as domestic food supplies dwindled. Osokina draws our attention to Torgsin as a still more important source of convertible currency, second only to oil in the 1932–35 period. Its earnings covered more than one-fifth of the cost of all Soviet imports in those years, or, as Osokina tells us, the equivalent of all imported equipment for the Gor´kii and Stalin automobile factories; the Stalingrad, Cheliabinsk, and Khar´kov tractor factories; the Magnitogorsk and Kuznetsk iron and steel works; the Uralmash machine factory; and the Dneprostroi hydroelectric dam (227).

Like collectivization—and in direct contradiction of its name and original mission—Torgsin turned out to be primarily a vehicle for mobilizing domestic resources. Acquiring hard currency proved a higher priority than the planned allocation of goods to groups of consumers, and in 1931 the company opened its doors first to long-time foreign residents and then to Soviet citizens themselves. As of June 1931, Soviet citizens could make purchases at Torgsin for tsarist gold coins; as of September, they could use foreign currency transferred from abroad; and as of November they could make purchases on the basis of gold "scrap": crosses, decorative frames for icons, earrings, and so on. From this point on, Torgsin's principal customers were Soviet citizens, who sold roughly 100 tons of gold to Torgsin between 1932 and 1935 for the opportunity to shop at the company's stores.

Osokina emphasizes the extent to which famine was the engine of the company's growth. The decision to allow Soviet citizens to make purchases at Torgsin responded to pressures from below, as Soviet citizens petitioned for access and store administrators sought to expand their business. Famine was what pushed citizens to part with their valuables, as evidenced by the chain's record sales in 1933, and it was what permitted Torgsin to charge a premium on staple foods. Torgsin's prices, denominated in a "gold ruble" used only at the store, substantially exceeded the export price. The prospect of famine-generated demand led to the proliferation of small Torgsin outlets—some 1,500 of them at the peak in 1933—in nearly every mid-sized town of the Soviet Union, where peasants could purchase rye flour without...