At a soirée at Gorky’s mansion, Rolland supped with the inner circle. Here, Stalin came across as “a jester, a bit rude and peasant in his jokes, relentlessly showering this or that person with pleasantries, laughing heartily.” This was a coarser side to the decorous dictator encountered in the Little Corner, yet still self-disciplined. “Stalin eats and drinks thoroughly, but he knows well when to stop,” Rolland added. “After a reasonable number of full glasses”—toasts to all and sundry—“Stalin unexpectedly stops, refusing refills and further helpings. . . . He sucks his small wooden pipe with pleasure.”108
PROFLIGACY
Poland’s foreign minister Beck paid a visit to Berlin (July 3–4, 1935), where he was received one-on-one by Hitler, who complimented the genius of Piłsudski, averred that Poland should never be pushed from the Baltic, and enlarged upon the Soviet menace.109 On July 5, Stalin received Kandelaki, back from Berlin, where Schacht had proposed a whopping new ten-year, 1-billion-mark loan, reasoning that Soviet counter-deliveries of raw materials could solve Germany’s shortages without overly taxing precious hard currency reserves.110 Internal jostling had begun among the Soviets over their own economic plan for the next year, and the total amount of investment was the key state decision.111 For three years running, capital investment had been allowed only modest increases, and when the commissariats fought back, the hard-nosed Molotov—backed by the finance commissariat, the state bank, and Stalin—had held the line, warning against higher inflation and imbalances. On July 19, the chairman of the state planning commission, Valērijs Mežlauks, the son of a Latvian nobleman and a German mother, proposed that 1936 capital investment be slashed by 25 percent, to 17.7 billion rubles.112 He explained that the reduction would facilitate a budget surplus and the goals of “increasing real wages and gradually reducing [retail] prices.”
Stalin’s involvement in the nitty-gritty of economic policy had tapered as he allowed Molotov and others to carry the burden. Molotov happened to be on holiday, and two days after Mežlauks’s opening gambit, Stalin convened a meeting in his Old Square office. By now, Mežlauks’s investment plan had already been forced up to 19 billion. He was present for just an hour and twenty minutes, and fifty minutes of that overlapped with the military men (Voroshilov, Yegorov, Tukhachevsky).113 That evening, Stalin reported to Molotov that he had decided on 22 billion. “We shall see,” Stalin observed. “There are some things which we must not cut: the defense commissariat; repair of rail track and rolling stock, plus the payment for new wagons and locomotives (railroad commissariat); the building of schools (enlightenment commissariat); re-equipment (light industry); paper and cellulose factories (timber); and certain very necessary enterprises: coal, oil, open-hearth furnaces, rolling mills, viscose factories, power stations, chemistry (heavy industry commissariat). This makes it more difficult.”114
Molotov replied (July 25) by trying to hold the line at 22 billion rubles (“It’s possible and necessary”). Mežlauks wrote to Stalin and Chubar (Molotov’s deputy), acknowledging the difficulties that 22 billion would present for the industrial commissariats but insisting that this had to be the ceiling “for financial reasons.” On July 28, Stalin convened a politburo meeting, summoning some seventy-five people.115 The group voted a 1936 investment plan of 27.3 billion, while stipulating that the commissariats reduce their construction costs (somehow) so that the actual number would turn out to be 25.1 billion. Stalin wrote to Molotov that “22 billion was not enough and, as can be seen, could not be enough.” None of the economic officials had resisted Stalin, and Molotov, too, bit the bullet (“I would have preferred a smaller amount of capital construction”).116 The decree was published and, as usual, the tenacious lobbying persisted. Stalin continued to indulge it. The final 1936 investment plan would be 32.635 billion, not a 25 percent decrease from 1935 but a nearly 40 percent increase.117 It appears that Stalin had gained confidence in the economic system, which was having its second-straight good year, and, despite the risks of inflation, yearned to have more of both guns and butter.118
ANTIFASCIST FRONT