Recognition of the Tsarist Debts

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…. 4. There can be no question of recognizing the debts of the tsarist monarchy in principle. The annulment of those debts was one of the most important conquests of the October Revolution. This annulment made it possible to reach the present level of economic development on the basis of our internal resources. Recognition of the debts would be a crushing blow to socialist construction and the proletarian dictatorship, since it would lead to an abrupt worsening of the material conditions of the industrial workers and of working people in general, an even greater delay in our already slow industrialization, and a menacing growth in the power of foreign capital within our economy. All of this would mean, given other difficulties, the strangulation of the socialist revolution in the near future and our country’s enslavement to foreign capital. Economic defeat of the workers’ state would become one of the most important factors in the stabilization of world capitalism.

5. Individual, practical agreements on the debts, based on the principle of mutual benefits, are permissible, however. Remaining completely on the basis of the decree of January 28,1918, certain strictly limited portions of the old debts can be recognized on the condition that appropriate economic or political benefits are granted us in return, in the form of new credits, agreement not to participate in any military bloc against us, and so on and so forth.

However, since such partial agreements imply such great responsibility and are of such tremendous importance, it is necessary to analyze the circumstances and terms of each such agreement with total clarity.

In the spring and summer of last year (1926) negotiations were held on partial recognition of the debts on our part in exchange for the granting of new credits by France. Our position in these negotiations was rather favorable. France had not yet managed to deal with the consequences of its inflation. England was paralyzed by the miners’ strike. In China the Northern March had begun. In expectation of a good harvest the Soviet Union had increased its pace of economic construction. Pressed by its contradictions with England and by the intensifying Serbo-Italian conflict over Albania, the French government wanted an agreement and urged us to make haste. If the Politburo had placed its bets on its French card, it could at that moment have gotten an agreement on terms highly favorable to us.

Not only was the occasion missed; everything possible was done to land us in the present exceptionally difficult situation. Our international policy during this period was a typically petty-bourgeois policy, that is, a series of vacillations between overconfidence — when the situation shaped up more favorably — and readiness to make impermissible concessions, when bourgeois pressure was intensified.

6. The first half of 1926 was an especially flourishing time for the petty-bourgeois theory of socialism in one country.

This theory, representing the distorted reflection in the minds of Stalin and Bukharin of the economic recovery period, played a fatal role not only in regard to economic plans and perspectives but also in our negotiations with France. Disregard for our world economic ties and our economy’s dependence on the world market, the Bukharin theory of the snail’s pace, the assurance that we were already nine-tenths of the way through building socialism, the baiting of the Opposition for its “pessimism” and “lack of faith” — all this blended into a typical melange of petty-bourgeois overconfidence, shot through with provincial narrowmindedness: the “world market,” they said, is irrelevant; we don’t need credits; we’ll get by on our own, etc., etc. In fact, if the main danger was that of “industry running too far ahead” and the “super-industrialism of the Opposition,” why even bother to seek agreements, credit, and an inflow of technology from the rest of the world? Proceeding from this fundamentally wrong position, at the heart of which lies petty-bourgeois national narrowmindedness, the Stalinist leadership in effect broke off negotiations with France at the moment most favorable for reaching an agreement. …

8. The defeat of the revolution in China, the weakening of the Comintern, the bankruptcy of the Anglo-Russian Committee, the break with Britain, and the immediate threat of war — that was the situation in 1927 when file Politburo undertook its super-hasty, exceptional measures to revive the negotiations with France. Under these conditions our hasty willingness to move toward concessions, in the eyes of the French bourgeoisie, appeared to be simply an expression of unsureness, shortsightedness, and weakness on the part of our leadership. The position of our delegation in the talks was bound to worsen abruptly. The heart of the matter is that France is now demanding our recognition of a very substantial portion of the tsarist debts in return for nothing more than maintaining diplomatic relations with us. The French government has separated the question of the debts from that of credits. The correlation between our debt obligations and possible credits now shapes up in immeasurably less favorable terms than were possible in 1926. Such a proposition is unacceptable to us. We must therefore say clearly, “We are against this particular agreement.” …

12. In the event that it is necessary to accept one or another agreement, which will impose new sacrifices on the land of the Soviets, a question of tremendous importance arises: Who will pay? — that is, the question of our wage policy, our tax policy, and our overall policy course toward the kulak and poor peasant. Maneuverist concessions to the world bourgeoisie require not only a correct world policy but also a revolutionary class policy at home.

The possibility for maneuvering effectively presupposes an active and cohesive party controlling its own institutions. We cannot “buy off” the bourgeoisie by paying millions and at the same time poison our own party with slander about the alleged ties of its left wing with a Wrangel officer and a military conspiracy. Such policies can only bring defeat. This is confirmed once again by the course of the negotiations with France. While rejecting untimely concessions, which can only lead to an intensification of pressure against us, we at the same time reject and condemn the policy that has led us to new international defeats.

G. Zinoviev, L. Trotsky, I. Smilga, G. Yevdokimov