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Although being formally adopted, the early models of the PPD were not produced in very significant numbers: in 1934 only 44 were produced, and only 23 in 1935. Production picked up in 1937 with 1,291 produced, followed by 1,115 produced in 1938 and 1,700 produced in 1939. The PPD was actually decommissioned entirely in 1939 and factory orders cancelled following a directive of the People's Commissariat of Defense Industry (the Soviet military leadership). The PCDI was looking to equip all soldiers in the Red Army with self-loading rifles like the SVT-40, and so were skeptical of the need to produce submachine guns. There was also a cost element to this decision, as one PPD submachine gun cost around 900 rubles while one SVT rifle cost around 700 rubles.
The decision to cancel production of the PPD was quickly reversed, though, after the personal intervention of Degtyaryov with Stalin, with whom he had a good personal relationship. This incident led to shortages of material when the Soviets went to war with Finland in 1939, with shortages of individual automatic weapons being so severe that the Red Army was forced to pull old Federov rifles out of stockpile. The Soviet military was also shown first-hand how effective the submachine gun could be on the battlefield, the Finnish forces made making effective use of their superb Suomi KP/-31 submachine guns. The Winter War convinced the Soviet military higher-ups that submachine guns had did indeed have their place in the infantry.
In 1938 and 1940, a number of modifications were made to the PPD design, mostly aimed at making the gun easier to produce. This resulted in the PPD-40 model, the most heavily-produced variant of the design. Mass production began in 1940, with 81,118 being manufactured that year alone. Nevertheless, the PPD-40 was considered too labor-intensive and resource-expensive to mass-produce economically, as most of its metal components were produced by milling. It was officially replaced by the superior and cheaper PPSh-41 by the end of 1941.
