In short, we arrive at the conclusion that no purely financial policy, in its pre-revolutionary sense of independence and priority, can or ought to exist in Soviet Russia. The financial policy plays a subsidiary part, for it depends directly upon the economic policy and upon the changes which occur in the various phases of Russia’s political and economic order.
During the transitional period from capitalism to Socialism the government concentrates all of its attention on the organization of industry and on the activities of the organs for exchange and distribution of commodities.
The financial apparatus is an apparatus subsidiary to the organs of production and distribution of merchandise. During the whole of this transitional period the financial administration is confronted with the following task: (1) supplying the productive and distributive organs with money, as a medium of exchange, not even abolished by economic evolution, and (2) the formation of an accounting system, with the aid of which the government materialize the exchange and distribution of products. Finally, since all the practical work in the domain of national and financial economy cannot and should not proceed otherwise than in accordance with a strictly defined plan, it is the function of the financial administration to create and compile the state budget in such a manner that it might approximate as closely as possible the budget of the entire national economic life.
In addition to this, one of the largest problems of the Commissariat of Finance was the radical reform of the entire administration of the Department of Finance, from top to bottom, in such a manner that the fundamental need of the moment would be realized most fully—the realization of the dictatorship of the proletariat and the poorest peasantry in the financial sphere.
III
The work of the financial institutions for the solution of the first problem of our financial policy, i.e., the monopolization of the entire banking business in the hands of the Soviet Government, may be considered as having been completed during the past year.
The private commercial banks were nationalized on December 14, 1917, but even after this act there still remained a number of private credit institutions. Among these foremost was the “Moscow People’s Bank” (Moscow Narodny Bank) a so-called cooperative institution. There were also societies for mutual credit, foreign banks (Lion Credit Warsaw Bank, Caucasian Bank, etc.); and private land banks, city and government (provisional) credit associations.
Finally, together with the Moscow People’s Bank there existed government institutions—savings banks, and treasuries. A number of measures were required to do away with that lack of uniformity involved and to prepare the ground for the formation of a uniform accounting system.
A number of decrees of the Soviet of People’s Commissaries and regulations issued by the People’s Commissariat of Finance, have completed all this work from September 1918 to May 1919.
By a decree of October 10th, 1918, the Societies for Mutual Credit were liquidated; three decrees of December 2nd, 1918, liquidated the foreign banks, regulated the nationalization of the Moscow People’s (Cooperative) Bank and the liquidation of the municipal banks; and, finally, on May 17th, 1919, the city and state Mutual Credit Associations were liquidated. As regards the question of consolidating the treasuries with the offices of the People’s Bank, this has been provided in a decree issued on October 31st, 1918; the amalgamation of the savings banks with the People’s Bank has been affected on April 10th, 1918.