On June 30, Rolland, a guest on the Mausoleum at a physical culture parade involving 127,000 participants, was taken aback by the idolatry of the “emperor”—including the airplanes writing Stalin’s name in the sky—but also by the dynamism of the young people of the revolutionary epoch. His surprise reflected reading about Soviet failures before his arrival. “The economic situation, it seems, is good,” he wrote in a letter from Moscow to a literary critic friend in France. “During the last year, the conditions of life have improved significantly. This gargantuan city, which now numbers four million inhabitants, is a waterfall of life, healthy, warm, well-ordered. Among this crowd of strong, mobile, well-nourished people, you and I would look like strangers from a famine land.”107
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
Stalin, sensing his leverage, had sent Kandelaki back to Berlin, and on July 15, 1935, according to Schacht, Kandelaki told him he had just spoken with Stalin, Molotov, and foreign trade commissar Rosenholz, and that German obstruction and price gouging had prevented the USSR from fully utilizing the existing 200-million-mark credit, but Kandelaki “expressed the hope that it might also be possible to improve German-Russian political relations. I replied that we had indeed already previously agreed that a brisk exchange of goods would be a good starting point for the improvement of general relations, but that I was not able to enter into political negotiation.”119
The much-delayed 7th Comintern Congress, the first in seven years, opened on July 25 in the House of Trade Unions with 513 delegates (371 with the right to vote), representing sixty-five Communist parties. The last party member at liberty in Japan had just been arrested. German Communists had dwindled to a tiny group.120 Wilhelm Pieck, a German in Soviet exile, delivered the opening report, but Dimitrov made the key speech, formally announcing a policy shift to “a broad people’s antifascist front.” Dimitrov explained that an alliance with non-Communist leftists was a temporary expedient in response to a special threat. “Fascism in power, comrades, . . . is the openly terrorist dictatorship of the more reactionary, more chauvinist, more imperialist elements of finance capital,” he observed. “The most reactionary variant of fascism is fascism of the German type.” He called Nazism impudent for claiming to be socialist when “it has nothing in common with socialism. . . . It is a government system of political banditry, a system of provocations and torture of the working class and the revolutionary elements of the peasantry, petit bourgeoisie, and intelligentsia. It is medieval barbarism and atrocity. It is unbridled aggression against other nations and countries.”