The Birth of Torgsin

Abstract

This chapter discusses how the Special Bureau for Trade with Foreigners on the Territory of the USSR, Torgsin for short, was created on July 18, 1930. The emergence of Torgsin was part of a sweeping process of centralization and monopolization conducted by the Soviet state at the end of the 1920s and the beginning of the 1930s. By opening Torgsin's stores for foreigners, the Soviet government aimed to concentrate the entire domestic hard-currency trade in the hands of a single organization. The service required from Torgsin was clear — to prevent foreign visitors from taking their currency back home. Although foreigners, unlike Soviet citizens, were allowed to have hard currency in their possession, the People's Commissariat of Finance (Narkomfin), a passionate advocate of the monopoly, tried to minimize the use of foreign currency as a means of purchase within the Soviet Union. This was true even for Torgsin. However, the acute needs of industrialization forced the leadership to loosen the state's currency monopoly.