During World War I, the regional industry lived off state subsidies. In the period of post-war reconstruction, in the conditions of new economic policy could not go on like this.
The society needed an industry providing expanded reproduction. It was necessary to remove the enterprises from the state dependence and to transfer them to the self-support account. By the Decree of 9.VIII.1921 the Council of People’s Commissars proclaimed the transfer of industry of the country to the self-account.
In the first years of the new economic policy, the entire industry of the South Urals could not be taken into account. The light industry, working on the market, switched to the self-account right after the introduction of the new economic policy, and the heavy industry was transferred to the new conditions of management gradually. The Soviet planning system was strengthened. At provincial and regional executive committees were created planning commissions, and in all economic addicts and departments – special planning bodies.
It was necessary to restore the industry on the basis of old equipment. It took the heroic efforts of the workers. Many human resources workers returned to production. The labor discipline had been strengthened. The working class showed a lot of persistence and ingenuity in the struggle for the restoration and profitability of plants and factories.
Production meetings of workers in the South Urals (Orenburg, Chelyabinsk, and Orsk), attended by representatives of trade unions and administration, played a major role in the recovery. The meetings addressed specific issues of improving production.
Workers in the South Urals have ensured a high rate of industrial growth. The specialization of production started during the New economic policy years were of great importance for the development of mechanical engineering. Many factories introduced serial production instead of the single production that was typical for the old Russian machine building industry. The most important economic problem was the rapid restoration of mineral fuel production. The civil war undermined the Krai’s economy, and the South Urals’ rap began with the almost complete collapse of industry. For example, out of 69 enterprises of the Orenburg Region in 1921 41, i.e. about 60%, were inactive. According to the data provided by the Promburo, the labor force availability was on the average 41%. The number of workers from 1917 to 1921 decreased at the plant “Orel” from 860 to 200 people, in railway workshops – from 3000 to 1.5 thousand 6.
The catastrophic shortage of workers, which arose in 1921 as a result of the disbandment of the labour force and the return of refugees to their homes, was compounded by very poor discipline at work. Labour productivity in industry in the South Urals was low.
Truancy was common, most often forced. People stood in bread queues during working hours or went to the village hoping to buy or exchange food.
In the first years of the Soviet power a number of valuable productions were launched in the South Urals: cold rolling of steel bands of hoop iron, steel ropes, solid drawn pipes, enameled tableware, the production of braids and steel tools was expanded. Since 1923 the production of dynamical iron has been resumed.
There was a reorganization of large and medium industry. The state controlled only vital and profitable enterprises with manpower, raw materials and fuel.
Small industry began to be denationalized. The situation of workers at enterprises remained difficult. Difficulties of this period were multiplied by the fact that hunger was rampant in the region.
“As a result of hunger and diseases, the population of the Orenburg Province decreased by 115142 people from 1921 to 1922. There was a decrease in the rural population, but the urban population increased due to the inflow of 7736 people from the village”.
The first unemployed appear, unemployment has spread to the printing, clothing and food industries.
“The desire to increase productivity pushed the economic authorities to switch to piece-work forms of wages. At the plant ‘Orley’ in the transition to pieceworking labor productivity exceeded the norm by 30%. When the liquidation commission from December 15, 1924 banned it, increasing the norm of production, productivity fell by 30%. Leatherworkers and printers were the first to switch to the division”.
The region’s industry is rapidly developing. The process of restoration and expansion of plants is underway. At the beginning of the 20s the process of restoration of the destroyed plants and factories in Orenburg province is going on: “By 1925, out of 180 enterprises 132 were operating. Proletarian personnel who left the city in the hungry year 1921 returned to industry. 94% of workers
worked at state enterprises. In all branches, except for flour milling, there was an increase in the number of workers. By the end of 1925, 35054 people were employed in the province together with temporary workers against 26130 in 1922”.
The restoration of the national economy in the South Urals was mainly completed in 1925—1926. By the volume of industrial output, the number of employed workers reached the level of 1913, although the full restoration lasted until the end of the 20s. The share of the public sector was 72.6%.
In 1925, 84% of workers were employed in the public sector of the Orenburg Region, 6% in cooperative organizations and 10% in private enterprises. But since 1926 the tendency to increase the share of the public sector at the expense of others has been clearly seen. As for the private industry, the requirements and sanctions have become more and more stringent.
The economic competition of these sectors is replaced by volitional decisions of state bodies. As a result of this policy, in 1927 94% of all workers worked at state enterprises. In the cooperative and private industry, the remaining 6% accounted for 15.5% of output, which allows us to conclude that this sector of the economy is more productive”.
During this period a number of new productions are emerging in the South Urals. If iron production did not reach the pre-war level, production of special grades of steel and products, wire, a significant amount of tin plate, and roofing were becoming increasingly important. The quantity and quality of market assortment – tin plates, axes, braids, nails, etc. – is increasing. But the rate of transfer of industry to the production of quality metal products was found to be insufficient.
In December 1926 the first Urals Congress of open-hearth production workers was held, the spiritual father of which was V. E. Grum-Grzhimailo. Prominent statesmen, scientists and engineers of plants of the South, the Centre, the Urals were present at the Congress as guests and delegates. The decisions of the Congress had a huge impact on the development of steelmaking throughout the country. The resolution on the reporting report noted the need to develop the Urals industry in terms of quality – production of high quality products.
This dictated the development of smelting not only pure pig iron, but also highquality iron and steel. Therefore the nearest tasks of the Southern Urals were:
development of production of dynamical and transformer iron, installation of production of solid drawn pipes for responsible purpose, acceleration of organization of special steel production in Zlatoust, expansion of open-hearth production, organization of production of steel rolled wire. It was noted that the development of the production of quality products in the South Urals is a natural and correct way to revive the Urals metallurgy and guarantee its further development.
January 14, 1927 was issued a resolution of the SNK (Council of People’s Commissars) of the RSFSR on the report of the regional executive committee.
The resolution instructed the All-Union National Economy Council (SNK) – the State Planning Commission of the RSFSR – to pay special attention to the expansion of wood-coal fuel production and the development of high-quality metal products in the Urals, as well as the production of tool steel and highquality metal products.
The interests of the revival and growth