Article 107 of the RSFSR Criminal Code

Text of the Provision

Article 107 of the RSFSR Criminal Code (adopted by VTsIK resolution of 22 November 1926, effective 1 January 1927):

Malicious raising of prices on goods through buying up, concealment, or withholding from the market shall be punishable by deprivation of freedom for a term of up to one year, with confiscation of all or part of property, or without such.

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The same actions, when a conspiracy of traders is established, shall be punishable by deprivation of freedom for a term of up to three years, with confiscation of all property.

The provision remained in force until 1 January 1961, when the 1960 RSFSR Criminal Code superseded it.

Origins and Introduction

Article 107 first appeared in the 1926 edition of the RSFSR Criminal Code, adopted at the close of the NEP era. Its original purpose was to curb speculative price manipulation by private traders (NEPmen) who operated under the mixed economy. When the grain procurement crisis of 1927–1928 struck, the article was repurposed for an entirely different function.

Weaponization in Grain Procurement

In January 1928, Stalin traveled secretly to Siberia and told party officials in Novosibirsk: "If the kulaks are engaging in unbridled speculation on grain prices, why do you not prosecute them for speculation? Don't you know that there is a law against speculation — Article 107 of the Criminal Code of the R.S.F.S.R.?" He ordered that kulaks be commanded to deliver all grain surpluses at state prices immediately and, if they refused, prosecuted under Article 107 with their grain confiscated and 25% redistributed to poor peasants. This directive became the starting point of what was soon labeled the Ural-Siberian method.

Subsequent History

Article 107 remained part of Soviet criminal law until the adoption of the 1960 RSFSR Criminal Code, after which the crime of speculation was recodified under Article 88 (1960) and later Article 154 (late 1980s). The article provided a template for economic coercion under the guise of socialist legality and stands as a representative case of the Soviet state's transformation of law into an instrument of rule.