The Ministry of Finance of the Union of Soviet Socialist Republics (USSR) (), formed on 15 March 1946, was one of the most important government offices in the

Soviet Union The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...

. Until 1946 it was known as the People's Commissariat for Finance ( – ''Narodnyi komissariat finansov'', or "Narkomfin"). Narkomfin, at the all-Union level, was established on 6 July 1923 after the signing of the

Treaty on the Creation of the USSR A treaty is a formal, legally binding written agreement between sovereign states and/or international organizations that is governed by international law. A treaty may also be known as an international agreement, protocol, covenant, conventio ...

, and was based upon the People's Commissariat for Finance of the

Russian Soviet Federative Socialist Republic The Russian Soviet Federative Socialist Republic (Russian SFSR or RSFSR), previously known as the Russian Socialist Federative Soviet Republic and the Russian Soviet Republic, and unofficially as Soviet Russia,Declaration of Rights of the labo ...

(RSFSR) formed in 1917. The Ministry was led by the

Minister of Finance A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfolio ...

, prior to 1946 a Commissar, who was nominated by the

Chairman The chair, also chairman, chairwoman, or chairperson, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the gro ...

of the

Council of Ministers Council of Ministers is a traditional name given to the supreme Executive (government), executive organ in some governments. It is usually equivalent to the term Cabinet (government), cabinet. The term Council of State is a similar name that also m ...

and then confirmed by the

Presidium A presidium or praesidium is a council of executive officers in some countries' political assemblies that collectively administers its business, either alongside an individual president or in place of one. The term is also sometimes used for the ...

of the

Supreme Soviet The Supreme Soviet () was the common name for the legislative bodies (parliaments) of the Soviet socialist republics (SSR) in the Union of Soviet Socialist Republics (USSR). These soviets were modeled after the Supreme Soviet of the USSR, establ ...

. The minister was a member of the Council of Ministers. During the

Russian Civil War The Russian Civil War () was a multi-party civil war in the former Russian Empire sparked by the 1917 overthrowing of the Russian Provisional Government in the October Revolution, as many factions vied to determine Russia's political future. I ...

, and immediately afterwards, the Commissariat usually confiscated property to support government operations. Following a short period of stability after the civil war the Commissariat introduced several governmental

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

es on the population. The commissariat's structure differed little from its

Tsarist Tsarist autocracy (), also called Tsarism, was an autocracy, a form of absolute monarchy in the Grand Duchy of Moscow and its successor states, the Tsardom of Russia and the Russian Empire. In it, the Tsar possessed in principle authority and ...

predecessor, the only notable difference was that the Soviet ministry was very centralised while the Tsarist's finance ministry was a very

decentralised Decentralization or decentralisation is the process by which the activities of an organization, particularly those related to planning and decision-making, are distributed or delegated away from a central, authoritative location or group and gi ...

one. The Commissariat, and later the Ministry, prepared the

state budget A government budget is a projection of the government's revenues and expenditure for a particular period, often referred to as a financial or fiscal year, which may or may not correspond with the calendar year. Government revenues mostly include ...

in a joint process with its republican and local branches. The Ministry's structure went through few changes due to the Soviet government's conservative approaches to change. Soviet leader

Mikhail Gorbachev Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet and Russian politician who served as the last leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...

introduced several reforms during his rule which had the unintended consequence of considerably hurting the ministry's prestige.

Founding and early history

The Ministry's predecessor, the People's Commissariat for Finance of the

(RSFSR), was established by a decree of the second convocation of the

All-Russian Congress of Soviets The All-Russian Congress of Soviets evolved from 1917 to become the supreme governing body of the Russian Soviet Federative Socialist Republic from 1918 until 1936, effectively. The 1918 Constitution of the Russian SFSR mandated that Congress s ...

on and was part of the

Sovnarkom The Council of People's Commissars (CPC) (), commonly known as the ''Sovnarkom'' (), were the highest executive authorities of the Russian Soviet Federative Socialist Republic (RSFSR), the Soviet Union (USSR), and the Soviet republics from 1917 ...

. The first Commissar was

Ivan Skvortsov-Stepanov Ivan Ivanovich Skvortsov-Stepanov (; 8 March O.S. 24 February">Old_Style_and_New_Style_dates.html" ;"title="nowiki/>Old Style and New Style dates">O.S. 24 February1870 – 8 October 1928) was a prominent Russian Bolshevik revolutionary and Sovie ...

appointed in 1917. However, following the introduction of the

New Economic Policy The New Economic Policy (NEP) () was an economic policy of the Soviet Union proposed by Vladimir Lenin in 1921 as a temporary expedient. Lenin characterized the NEP in 1922 as an economic system that would include "a free market and capitalism, ...

, Narkomfin was made responsible for

Gosbank The State Bank of the USSR (), known as the State Bank of the RSFSR from 1921 to 1923, and commonly referred to as Gosbank (), was the central bank and main component of the single-tier banking system of the Soviet Union. It replaced the State Ban ...

, the State Bank of the RSFSR and then the

State Bank of the Soviet Union The State Bank of the USSR (), known as the State Bank of the RSFSR from 1921 to 1923, and commonly referred to as Gosbank (), was the central bank and main component of the single-tier banking system of the Soviet Union. It replaced the State Ban ...

. On 26 November 1921

Lenin Vladimir Ilyich Ulyanov ( 187021 January 1924), better known as Vladimir Lenin, was a Russian revolutionary, politician and political theorist. He was the first head of government of Soviet Russia from 1917 until Death and state funeral of ...

issued a note calling for the appointment of

Grigory Sokolnikov Grigori Yakovlevich Sokolnikov (born Hirsch Yankelevich Brilliant; 15 August 1888 – 21 May 1939) was a Russian revolutionary, economist, and Soviet politician. Born to a Jewish family in Romny (now in Ukraine), Sokolnikov joined the Russian ...

to the newly established post of People's Commissar for Finance. Sokolnikov took control of the organisation in 1922, although his formal position was not ratified until November 1922. In 1946 the

Council of People's Commissars The Council of People's Commissars (CPC) (), commonly known as the ''Sovnarkom'' (), were the highest executive (government), executive authorities of the Russian Soviet Federative Socialist Republic (RSFSR), the Soviet Union (USSR), and the Sovi ...

was renamed the

and the People's Commissariat for Finance was renamed as the Ministry of Finance. In 1928 the

Soviet government The Government of the Union of Soviet Socialist Republics (USSR) was the executive and administrative organ of the highest body of state authority, the All-Union Supreme Soviet. It was formed on 30 December 1922 and abolished on 26 December 199 ...

launched a building program headed by the

OSA group The OSA Group (Organization of Contemporary Architects) was an architectural association in the Soviet Union, which was active from 1925 to 1930 and considered the first group of Constructivist architecture, constructivist architects. It published ...

. The OSA group oversaw the construction of a building which should have housed the employees of the People's Commissariat for Finance. Due to its close connections with the Commissariat for Finance the building was often referred to as "the

Narkomfin building The Narkomfin Building is a block of flats at 25, Novinsky Boulevard, in the Moscow Central constituency, Central district of Moscow, Russia. Conceived as a "transitional type of experimental house", it is a renowned example of Constructivist arc ...

". The building was designed by Moisei Ginzburg and Ignati Milinis and has a reputation for being one of the best examples of still-standing Soviet

constructivist architecture Constructivist architecture was a constructivism (art), constructivist style of modern architecture that flourished in the Soviet Union in the 1920s and early 1930s. Abstract and austere, the movement aimed to reflect modern industrial society a ...

. The architects tried to give the building a

collective A collective is a group of entities that share or are motivated by at least one common issue or interest or work together to achieve a common objective. Collectives can differ from cooperatives in that they are not necessarily focused upon an e ...

feel to it but, when the building was finished in 1932, it was denounced as a remnant of "leftist utopianism" by

Joseph Stalin Joseph Vissarionovich Stalin (born Dzhugashvili; 5 March 1953) was a Soviet politician and revolutionary who led the Soviet Union from 1924 until Death and state funeral of Joseph Stalin, his death in 1953. He held power as General Secret ...

's regime. Unlike many other Soviet constructivist buildings there is an ongoing campaign to save it. When

Alexei Kosygin Alexei Nikolayevich Kosygin (–18 December 1980) was a Soviet people, Soviet statesman during the Cold War. He served as the Premier of the Soviet Union from 1964 to 1980 and, alongside General Secretary Leonid Brezhnev, was one of its most ...

, the

of the

, initiated the 1965 economic reform the Ministry of Finance sabotaged the reform by not fully implementing it which, along with many other reasons, helped the reform to fail.

Duties and responsibilities

During the formation of the Soviet state, the People's Commissariat for Finance was created in the late 1910s and early 1920s to serve the needs of the

(RSFSR). The

commissariat A commissariat is a department or organization commanded by a commissary or by a corps of commissaries. In many countries, commissary is a police rank. In those countries, a commissariat is a police station commanded by a commissary. In some a ...

did not differ greatly from that of

Imperial Russia Imperial is that which relates to an empire, emperor/empress, or imperialism. Imperial or The Imperial may also refer to: Places United States * Imperial, California * Imperial, Missouri * Imperial, Nebraska * Imperial, Pennsylvania * ...

Ministry of Finance A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfoli ...

, however the Soviet finance ministry was a heavily centralised structure, while its predecessor was not. During its humble beginnings, the main task of the People's Commissariat of Finance were: confiscation of property, robbery and requisition; printing and creating money; and

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

. In the immediate aftermath of the

October Revolution The October Revolution, also known as the Great October Socialist Revolution (in Historiography in the Soviet Union, Soviet historiography), October coup, Bolshevik coup, or Bolshevik revolution, was the second of Russian Revolution, two r ...

, and during the

, the Soviet government forcibly confiscated property to support their government. After the

inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...

of the 1920s printing of money nearly ceased and confiscation of goods became harder; after years of confiscating there was simply not enough property left to fund government operations anymore. After the civil war the confiscation of property ceased and several government

es were introduced. The ministry's tasks were summed up in the 1971 charter: "The USSR Ministry of Finance prepares the draft of the USSR State Budget and bears responsibility for the fulfilment of the USSR State Budget, both for receipts and for expenditures ... Under the rule of

the Ministry lost much of its power. An example being that before 1990 all foreign trade investments had to be approved by the Ministry of Finance but in 1990 the ministries of finance of the

Union republic In the Soviet Union, a Union Republic () or unofficially a Republic of the USSR was a constituent federated political entity with a system of government called a Soviet republic, which was officially defined in the 1977 constitution as "a ...

s approved foreign investment. The ministry was of vital importance and in the 1971 charter the Soviet government gave the ministry broad

legislative A legislature (, ) is a deliberative assembly with the legal authority to make laws for a political entity such as a country, nation or city on behalf of the people therein. They are often contrasted with the executive and judicial powers ...

power. As nearly all organisations had some sort of financial aspects the Ministry of Finance set standards and rules for accounting and bookkeeping. It also had the power to issue regulations for the detailed application of the tax legislation. This is also a common feature in the

United States Department of Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States. It is one of 15 current U.S. government departments. The department oversees the Bureau of Engraving and ...

, although the Soviet's regulations differ in being of a highly centralised manner that the US one does not. The Ministry of Finance usually exercised its powers jointly with other government agencies. The 1971 charter states that the Ministry of Finance had the right to participate with the State Committee on Prices for price-setting in the USSR, but it also participated in the setting of salaries and the fulfillment of the five-year plans with the State Planning Committee and the

State Bank of the USSR The State Bank of the USSR (), known as the State Bank of the RSFSR from 1921 to 1923, and commonly referred to as Gosbank (), was the central bank and main component of the single-tier banking system of the Soviet Union. It replaced the State Ban ...

(Gosbank). The finance ministry started the budget preparation process by preparing instructions, forms and schedules for the upcoming

and prepared a preliminary balance of revenues and expenditures using data estimated by the

State Planning Committee The State Planning Committee, commonly known as Gosplan ( ), was the agency responsible for central economic planning in the Soviet Union. Established in 1921 and remaining in existence until the dissolution of the Soviet Union in 1991, Gosplan ...

(Gosplan). This preliminary budget was then sent, together with instructions, to the all-Union ministries and ministries of finance of the Union's republics. The Union branches of the Ministry of Finance then prepared a budget estimate with information received from the lower Union ministries and information given to them by the all-Union Ministry of Finance. The state budget was conceived after the Union Ministry negotiated a compromise with its republican and local branches and each

Soviet republic A soviet republic (from ), also called council republic, is a republic in which the government is formed of soviets (workers' councils) and politics are based on soviet democracy. During the Revolutions of 1917–1923, various revolutionary ...

was given its own state budget. The Economic Committees of the Supreme Soviet voted on the state budget which, if it received enough support, would become policy.

Organisation

;Positions The leading office of the ministry was the

(titled "Commissars" until 1946), the head of the ministry. The offices of First Deputy Minister of Finance were seen as the ministry's second-in-command. There were several Deputy Ministers of Finance, each of them focusing their responsibility in one specific area, for example the

financial regulation Financial regulation is a broad set of policies that apply to the financial sector in most jurisdictions, justified by two main features of finance: systemic risk, which implies that the failure of financial firms involves public interest consi ...

of the Soviet

automobile industry The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, selling, repairing, and modification of motor vehicles. It is one of the world's largest industries by ...

. ;Departments There were two departments in the Ministry of Finance, both of which were highly

centralised Centralisation or centralization (American English) is the process by which the activities of an organisation, particularly those regarding planning, decision-making, and framing strategies and policies, become concentrated within a particular ...

but were sometimes subjected to direct control by the local

CPSU Party Control Committee The Central Control Commission (, ''Tsentral'naya Kontrol'naya Komissiya'') was a supreme disciplinary body (since 1934 within the Central Committee) of the Communist Party of the Soviet Union, also known as the ''Party Control Commission'' (193 ...

s. The two departments had their own distinctive

budget A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...

. The Head of the Department of Revisory Control was recommended by the Minister of Finance and approved by the

, the Head of the Department of Revisory Control for the Union republics was recommended by the republic's Minister of Finance and the Council of Ministers. The Department of Revisory Control of the Ministry of Finance enforced financial discipline by the following means: observance of laws, supervising financial discipline, controlling the implementation of the state budget, controlling the activities of financial organs, controlling the national insurance of the workers, examining the activities of the

State Bank In Australia and the United States, a state bank in a federated state is usually a financial institution that is chartered by the government of that state, as opposed to one regulated at the federal or national level. In British English, the ter ...

, controlling the audit functions of the internal financial control and controlling the activities of the chief and his senior accountants. The Department of Revisory Control of the Ministries of Finance of the Union Republics: Controlled the implementation of the national budget of the republican Ministries of Finance and their local counterparts. The department also exercised control over enterprises and institutions directly

subordinate A hierarchy (from Greek: , from , 'president of sacred rites') is an arrangement of items (objects, names, values, categories, etc.) that are represented as being "above", "below", or "at the same level as" one another. Hierarchy is an importan ...

to the Soviet government. The Department of Budget was a department which took part in drafting the budget of the

Soviet Republics In the Soviet Union, a Union Republic () or unofficially a Republic of the USSR was a constituent federated political entity with a system of government called a Soviet republic, which was officially defined in the 1977 constitution as " ...

Disintegration

After the failed August Coup of 1991

Boris Yeltsin Boris Nikolayevich Yeltsin (1 February 1931 – 23 April 2007) was a Soviet and Russian politician and statesman who served as President of Russia from 1991 to 1999. He was a member of the Communist Party of the Soviet Union (CPSU) from 1961 to ...

and the Ministry of Finance of the RSFSR claimed authority over the Ministry of Finance of the USSR, the

and the Bank of Foreign Economic Activity. This meant that the institutions could not carry out any orders without the consent of the RSFSR government. The Ministry of Finance continued functioning until the RSFSR government issued a

decree A decree is a law, legal proclamation, usually issued by a head of state, judge, monarch, royal figure, or other relevant Authority, authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislativ ...

completing its takeover of the Soviet financial system. It was succeeded by the

of the Russian Federation (1992). The last Soviet Minister of Finance was Vladimir Yefimovich Orlov, and Vladimir Rayevsky was acting Minister during the period of transition.

Commissars and ministers

The following persons headed the Commissariat/Ministry as commissars (narkoms), ministers, and deputy ministers:

References

;Notes ;Bibliography * * {{authority control

Finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

Finance in the Soviet Union Finance, Ministry of

Finance, Ministry of

Founding and early history

Duties and responsibilities

Organisation

Disintegration

Commissars and ministers

See also

References