ADDRESS BY ALLEN W. DULLES DIRECTOR OF CENTRAL INTELLIGENCE TO THE EDISON ELECTRIC INSTITUTE NEW ORLEANS, LA. 8 APRIL 1959 - 2:30 P.M., CST 'THE CHALLENGE OF SOVIET POWER'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70-00058R000200030010-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: November 16, 2016
• Document Release Date: April 4, 2000
• Sequence Number: 10
• Publication Date: April 8, 1959
• Content Type: SPEECH

P E eNES
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Is
ADDRESS
BY
ALLEN W. DULLES
DIRECTOR or CENTRAL INTELLIGENCE
TO THE
mum ELECTRIC INSTITUTE
New Orleans, La.
8 April 1959 - 2:30 p.m., CRT
a opportunity to speak to your nth Annual
Convention onthe subject of the "Challenge of Soviet Power".
This topicparticularly appropriate for the Edison Electri0
Institute. It was Lenin who defined Communism "as the Soviet system
plus electrification. The very first Soviet economic plan in the
early 1920a had as one of its principal Objectives the development of
a modern electric power system.
In effect, the Soviets propose to electrify Marxism. What
may in fact do is either to shock their backward political inatit*ion
into key with their more modernized technical and industrial Skills
or electrocute the whole archaic Marxist political system.
In any event, the Soviet Union has certainly sought to fo11oW up
Len emphasis on electric power and has become a leader in many
electronic fields. It has developed intensively the role of radie in its
massive effort to promote its subversive policy on a world-wide basis.
It uses electricity to jam the airways and to build an electronic iron
curtain around the minds of their own people.
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businessof Intelligence, the various
power are changing the whole system of inf matt=
nany vital fields. Electricity operates the radar which
net sneak attack. It helps to make possible the read
f yarning of impending danger and as the mass of
Ours in day by day, over electric channels, it is
becomes a valued partner in helping us in its co o
on.
* * *
The Challenge of Soviet power presents
military; second, economic; and third
This challenge is a global one.
As long an the principles of internati
regimes in Moscow arid Peiping, we must expe
will, be the liquidation of our form of free society and
izedl communized 'world order.
They change their tertn4ques as circtstancee dict
never given us the slightest reason to hope that they a
their over-afl objective.
We sometimes like to delude
ftyxbd with another nationalistic paver struggle of whic
SRI
ate the
pUrpose
rgence of
rid has
seen so many. The fact is that the aims of the Communist international
with its headquarters in Moscow are not nationalistic; their objectives
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and elont1y preach, that
vvelAy rule the
each move tber ealic is directed to this and. Communism,
leetricity, seeks to be an all-pervasive and revolutionary force.
To promote theirobjectives they have determined cost what
and
- to develop a military establishment and a strong national
econ Which will provide a secure home base from vhimh to deploy
their destructive foreign, activities.
To achieve this Objective, they are devoting abozt twice as
much of their gross national product to military ends as we do. The
USSR military effort as a proportion of GNP is greater than that or
any nation in the world. Their continuous diversion of economic
resources to military sport is without any parallel in peacetime
history.
We estimate that the total value of their current annual military
effort is roughly equivalent to our own. They amccaplish this with a
GNP /eh is nov less than half of our own.
Here are some of the major elements vhiCh go into their military
estsbliehir. The &mist Union maintains an army of 2i million Men
and the ition of universal military training is being continued.
The Soviet Ar today has been fully re-equipped with a post World War
II arsenal of guns, tanks and artillery. We heve reason to believe the
army has already been trained in the use of tactical nuclear weapons.
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They have the mast modern types of aircraft for defense: night
and day fighters, a very large mediam bomber force and some long-range
hoWbers. They have built lees of these long-range bakers than we had
expected several years ago, and have diverted a major effort to the
perfection of ballistic nineties.
Their sUbmarine strength today is many times that with which
Germany entered World War U. Mayhem* over 200 long-range modernized
submerir*es and a like nuMber of less modern craft. They had made no
boasts abt nuclear powered submarines, and on all the evidence, ve
concluding that ve are ahead of them in this field.
however, that they have the c bility to produce such
will probably unveil some in the near future.
a word on the ballistic missile situation.
Wer II ended, the Soviet acquired much of the Oermen
missile field, V-1 and V-2, and, with them many Ones=
on that base, over the past ten years, they have been
eloping their missile capability, starting with short.
d te-range missiles. These they have tested by the
in production of certain models for some time.
saw that in their particular geographical
position* the long-range balitetic missile would become their beet
instrument lathe power struggle with their great rival, the United
States. As the elms and veight of powerful nuclear weapons decreased,
-k
When Wc
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with the improvement of the art, they became more and more persuaded
of this. Renee, they have concentrated on these veapons, have tested
=me end assert that they now have ICBMs in serial production.
They hope in this Ifay eventually to be able to hold the U.S.
the threat of nuclear attack by ICs vile' they consolidate
their position in the fragile parts of the non-Cammintatte woad,
Before leaving the military phase of the Soviet threat, I liant
to pel any possible misinterpretations. First I do not believe
that the Soviet now have no1itary superiority over us; and second, I
do not believe that they desire deliberately to provoke hostilitiee
%du, the U.S. or the 'WeErtern vorld at this time. They are well avert
f our deterrent force. They probebiy believe that the rinks to them
even if they resorted to surprise attack woul4 be unacceptable.
Taking into account our over-all military strength and. our
atrntetc positiou vis-a-vis the Soviet Union, I consider that our
mtlit$17 posture is stronger and, our ability to inflict damage is
today greater, then that of the Soviet Union.
Furtb.ennore, we have alliee. The strength, the dependabilitio
and the dedication of our allies put them in a very different category
than the unvilling and. =dependable allies of Moacov, even in.cludieg
the Chinese Comunists.
But as the Soviet 1nilit?.rT ca,pabilities and their nuclear
they viii feel that their f'oreign policy can be somevhat more assertive.
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If
People
lire had the f
tie c cow diplomacy. Since then there
etr'atta and Berlin cx't.s, aml todey the
penetration of Iraq. Ezzee, we must *BOUM
to probe and to test ma, and they may eve
es in aggression by proxy. They put ma to
e ire two paints to keep in mind es ve view the military future
with h lower industrial base than vs, therm* producing a
.fft which is roughly equivalent to our own; and secondly,
their people to accept wry :ea sacrifices and
to peradt the massive militarytmildup to continue.
ide to alter their policy so as to give their own
break in the consumer field vith anything like the share in
their groes notional proluct vhith we, as a people enjoy, the wcapects
of reel ;ogee in our time vould be far greater.
vill turn now to some of the highlights of the ecommio aspect
of the Soviet challenge.
The new eonfidence of
the Soviet Communist perty,
olely on his oonvicti
He is convinced that the final victory of
by non-militarymmans. Here the Soviet
of
d?.? not
deterre
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eediuga o the recent 21st Party Congress laid out what
economic order of battle.
it in these words, to summarize the ten
hours of hio opening an1 losing remarks:
c might of the Soviet icn is base4 on
the priority growth of heavy industry; this
insure the Soviet victory in peaceful economic cpetition
with the capitalist countries; development of the Sovtet
economic might will give Communism the decisive edge in
the international balance of power.
In the elior't space of 30 years, the Soviet Union has gr
position into being the second largest industrialized
econo in the or44 While their headlong pace of industrialization
has n3.ove down moderate1r in the past few years, it still continues
to be more rapid than our own. During the past seven years, through
1958 Soviet industry has grown at the annual rate of 94 per cent. This
is not the officially announced rate which is somewhat larger. It is
our reconstruction and deflation of Soviet data.
Our own industrial growth has been at the annual rate of 3.6 per
cent for the seven years through 1957. If one included 1958, the comparison
with the rate of Soviet growth would be even less favorable.
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I do not conclude from this analysis that the secret of Soviet
success lies in greater efficiency. On the contrary. In comparison
with the leading free enterprise economies of the West, the Communist
state-controlled systea is relatively inefficient.
The secret of Soviet progress is simple. It lies in the fact
that the Kremlin leaders direct a far higher proportion of total
resources to national policy purposes than does the United States. I
define national policy purposes to include, among other things, defense
and investment in heavy industry.
With their lover living standards and much lover production of
coneumer goods, they are in effect, playing back into investment a
large section of their production, thirty per cent, -Wile ve in the
United States are content with 17 - 20 per cent.
Soviet investment in industry as planned for 1959 is about the
name as U.S. investment in industry during 1957 !which so far vas our
best year.
Although the Soviets in recent years have been continually upping
the production of consumer goods their consuming public fares badly
in comparison with ours. Last year, for example, Soviet citizens had
available for purchase barely one-third the total goods and services
available to Americans. Furthermore, most of the U.S. output of
durable consumer goods is for replacement, while that of the USSR is for
first-time users. In nunnery, the Soviet economy is geared largely to
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econcetic growth taut for rni].itaxy purposes; mire is
increasing consumer satisfactions and but1dth a, bigber standard of
living.
Here are sane examples: while the Soviets last 7ear were
producing only one automobile for every fifty ve produced, they mere
turning out tour machine tools to our one.
This contrast in emphasis carries through in many ether fle1d.
Our capital expenditure for transportation and ccmm1cationa is more
than double the comparable Soviet expenditure. /et this is largely
accounted for by our massive highway building program which has been
running 15 to 20 times the USSR spending, vhereas their annual investnent
in railroad rolling stock and fixed aseets sUbstantially exceeds ours.
At the moment, they do not feel much incentive in the road building
They have no interest in, having their people travel around on a
inasBivele. Also this would put pressure on the Kremlin to give
the tmoi,lemore automobiles.
5.ai investment which includes stores, ahoppdng centers
vies and office buildings, has been absorbing over 6 170140n
ar in the US, and only two billion in the 'USSR1
ng investment is ramphly twice that of the Soviet even
ihoug living space per capita in the U.S. is already four times that
of
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's words,
economically . To aurp?
ed States means to exceed the hlgjieat
indexes of capital
Khrushohev's i.ttous seven year plan establishes the formidable
task of increasing industrial production about 80 per cent by 19651.
Steel production, according to the plan, is to be pushed close
to 100 million net tons. Cement output is set at a level somewhat
higher than industry forecasts place United States production in 1965.
The energy base is to be revolutionized. Crude cdl and natural
gas will constitute more than one half of the total energy supply?, and
relatively high cost coal will be far less Important than now.
By 1965, the USSR plans to produce about 001billion knows t
houre of electricity. As a study comparing Ti. S. and USSR electric
power production prepared by a leading industrial research group pointed
out, this means that the absolute gap between the U. S. and USSR in the
quantities of electricity generated will increase scoeWhat in our 'favor
over the next seven years.
This interesting study received a considerable
b3ieity4 We agree with its conclusion. However,
electric r is not true across the board
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Obout
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For example, compare primary energy production trends in the
countries. Soviet production of coal, petroleum, natural gas
and ctrLc power, expressed in standard fuel units, tutioulated
to 45 per cent of the U.S. production in 1958. By 1965 it vill be close
to 60 per cent. The absolute gap in primary energy has been closing
since 1950. At the present pace, it will continue to narrow over; the
next seven years.
Similarly, the absc1ite gap in steel production has been hrLnk1rg
over the past five years. The maximum gap in steel capaci Y 4171Darent17
ws ched in 1958
Lze ocmforting illusion spread by the "disci')
gapidiould not serve as a false tranquilizer.
At the same time it is important not to exaggerate Soviet
cts in the economic race. In the propaganda surrounding the
launcbi.ng of the Seven Year Plan Ihrushohev made a number of statem.nts
about Soviet economic poser Which were nothing more than wishful
th king. Specifically he stated that, "after the completion of the
Seven Year Plan we vill probably need about five more years to atch
up 'vtth an tstrip the United States in industrial output.
he atded b7 that time (1970), or perhaps even sooner, the Soviet
to first place in the worJA both in absolute value
of production in per capita production."
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First of all, to reach such improbable conclusions, the Kremlin
leadere overstate the present comparative position. They claim USSR
industrial output to be 50 per cent of that of the US. Our own analyses
of Soviet industrial output last year concluded that it was not more
than 4o per cent of our own.
Secondly, Kbrushchev forecasts that our fixture industrial growth
viii be only two per cent a year. if this is true the United States
will be virtually committing economic suicide. This prediction I regard
as umrealistic.
A saner projection would place 1965 Soviet jnduatrl.al production
at about 55 per cent of our own. By 1970, assuming the same relative
rates of growth, USSR industrial output as a whole, would be about 60
per cent of that in the United States.
Further, when Khrushchev promises his people the world's highest
standard of living by 19T0, this is patently nonsense. It is as though
the Shrimp bad learned to whistle, to use one of his colorful comments.
These Soviet exaggerations are a standard tool of Communist propaganda.
Such Tawaganda, however, should not blind us to the sobering implications
of their expected economic progress.
First of all, rapid economln growth will provide the Kremlin leaderme
with additional resources with which to intensify the arms race. If
recent trends and present Soviet policies continue, Soviet military
spending could increase by over 50 per cent in the next seven years
without increasing the relative bnrden on their economy.
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Seamil34-, swot additional imptavenent can be nude in the standards
of vim of the Russian Imaplei 4riferi Afitb contUrced emxinutts an heavy
industry and. *moments. it is
death of Stella in 3153
that serious attautioi h&ibeeu given to inpraving living standard*
Mat moderate slov-dasta in the heedlong grovth of heavy industzy vhich
then ensued has been cesmed, in large part* by the diversion of more
reeources to housing, im svicultexet at to oonsamer
Living Standeatteit based on present Soviet pima, ere expected to
jflA aberat one-third over the next NNW years. This level
med, will still be tar belts/ that vhid our own attizene arenow
but it .21.3. lnok good to people lobo for long have been Oompel3ad
to accept very 34v standard".
Finally, the Soviet Semen Tear Pin,mien if not
provide the vherevithel to pug& the eroaneton of
vith
unaxeritted and underdeveloped nations of the Fa B i.965
et output of some basic rev Materiale stei smee induetrial products
approaching, end in a fey cases exceeding that of the Thrtted
Mot pmminently, these products will be the Isind that ate
far iniustrialization in the lass developed count/tee.
Tee outcome of this contest -- the Comurist challenge in underderve
is cruclea to the survival of the ?roe World.
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This is an u reeedeute eiioch of change. Within little more
than ten years, over three quarters of a billion people, in twenty-
ie nations, have become independent of colonial rule. In all of these
newly emergent countries, there is intense nationalism coupled with the
daterminatima to &thieve a better way of life which they believe
industrialisation vill bring them.
The leaders of world Ccesnunism are a3art to the opportunity vhich
this great transformation provides them. They ze the future Of
Communism cant* insured only be expansion, and that the best hope of
such expansion lies in Asia and Africa. Mhile they are attempting'to
focus all. our concern on Berlin, they are moving into Iraq with erns
economic aid, and sUbvirsion, and giving added attention to Africa.
The Communist bloc trade and aid programs in undeveloped countries
moved into high gear during 1956. The equivalent of over one billion
dollars in new credits is extended to underdeveloped countries by the
bloc in this year. In the four year period ending 1958 the total Of
grants and credits totalled 2., billions, of which 1.6 came from the
USSR and the balance from the satellites and China. Three-fifths of
the total delivered to date has been in the form of arms to the UP --
Egypt and Bola -- lessen, 'rag, Afghanistan and Indonesia. These Sane
Cuntries, pins India, Argentina, Ceylon, Burma and Cambodia, hove
received the bulk of the economic aid.
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Over 4,000 bloc tethzicians have been sent to assist the
deveioiinent of nations in the Free World. About 70 per cent of
thee technicians are engaged in economic aetivities. Others are
reorganizing local military esteblishments and teaching bloc military
doctrine to indigenous personnel.
The bloc also has a veil developed program for training
students froi underdeveloped countries. About 3,230 students
technicians, and military specialists have now received such training
behind the Iron Curtain.
While these figures ae still well below the total of our own
aid, loan and training programs this massive economic and military
aid program is concentrated in a few critical countries and of course
theme figures do not include Soviet aid and trade with the East
European satellites and Communist China.
India which has received over 325 mi')lton of bloc gints an
credits, is a primary recipient. The Soviet economic showplace here
is the Masi steel mill being built by the Russians. The 17.A.R.
over the past four years received over 900 million dollars in aid
and credits. Ibis investment today doee not seem quite as profitable
to the Soviet as it did last year.
/rag prawiles a prime example of the opportunistic nature or
the bloc's aid program.
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the coup dlatat on
nt with Communist nattona ba bei
the, the USSR has provtded over
development credits. The Iraq Development
two Western advisors. Western technicians are
end contracts with many Western firms canoelled
Moscow is pressuring the Iraq goverment to accept
epeince on st support and the number of fellow' trave13.ers
is graving.
The Soytet policy of *concede penetration fits Ulm a glove
tntotheir world-vide casrpaign of subversion' whicdt is the third
elsment of the triple Soviet choilumge: military? economic and
subversive.
International Cuni has not thanged its aerating procedure
since the dogrel of the Comintern and the Cominfbrrk. The Commedet
f the =Rs' of thich Ihnishcbev is the leader" is the spearhead
movement. It hese a world-wide rsission, formulated by tetYk4
pt t81n and. now promoted by ithrushebev but with more subtle
tecta than those of Stalin. This mission continues to be the
Ubrsio f the entire free world starting of course with Vim*
coitries eh art most vulnerable.
of attack is based" first of ell" on the Communils
r)artieB of Soviet MIMI and. Cargattnifft China. Tralse in turn
also being and
'
l6
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direct the hard core Cesereunist oreenizations -vitt& exist In
practically every try of the vorld. Every Commemist peaty
meintainsttssaciet connections with bbeeovs or in case of certain
of the Communist parties in the Far last with Peiping.
se parties ago have an entirely overt association
tnternat1?&. Outtst veiet. At the 21st /Olathe of the Sovi. t
of tame So
otamunt repreeenta
Comemmist
de triumph o
of the US Communi
Party. The single
leaders was their confidence in the even
the Communist movement.
From time to time Moscow
in 1933, not to interfere in the internal a
strength of this ve resumed relations vith the Soviet.
They
es.
&re eager to ludoLtke egzwesments of "friendship end non-aggression,*
of the vor3A. Meese are not vorth the paper they
are te on. During World liar 1:1, }bocce abolished the internetional
Comin rn to opiate the United States, its then rt 1 1.7* Ite
functions haves hoverer, been carried on continuously %wader other fbasee.
In addition to its Ilerld.vide penetration through Communist party
reanimation, the Communierts in MOSCONI and ledping have set up a whole
ries of front organizations to penetrate all segments of life in the
zee countries of the world. These include the World Federation of
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n.
81
51
first t
out the
of youth and students stage
is, This summer they are to
they have dared meet outside of
International Democratic Federation the
ra Unions, the International Association
1nwt5t journalists and medical organivations.
professional and sceial lines, and designed to
vale, the Communists have created the World PeaCe
ains so-celled peace committees in 47 countries,
tradixig on the magic word of *peace."
ive apparatus, the Soviet has the largest
for espionage and secret political action
asseMbled. In Moscow, Prague and pciping
centers, they aro training agents recruited trma
ntries to go out as missionaries at Communise
3.d. Much of the Middle Fast and
Black Africa, are high on their
this hemisphere as recent
in Mexico dhow us. Their basie
systemp of fres and democratic
organizetions on
purpose is to destroy
government and disrupt the cc
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which **se are based. Behind their Iron Curtain they ruthlessly
suopress ell attempts achieve more freedcm witness Humeri
and mow Tibet.
Ihe task of destruction is alleys easier than that of
construct/ The Comunist writ!, in demling with the forcer
colonial
arees and. the newly emerging I:WM.023S of the world has
appealing slogans to export and vulnerable ecommic conditions to
exploit. The fragile perlianentary sratems of new end emerging
countries are fertile ground for these agitators.
Also =der the Nbading of subversion we coast
fact that the Comunist leaders have sought to advance their causei
by local wareby prosy roma* Vietnam
"11401L ?sae tvi
In conclusion I wish to emphasize again the pressing need fbr a
r understanding of the real purpose of the Mno-Soviet program.
s 230 evidence that the present leaders of the Coammist world
slightest idea of abandoning their goal, or of changing the
cs of achieving them.
o feel we can buz, peace by omnprcattse with Ebrushchert
etLZech CO21023861.021 we give tdm merely strengthens
andedge and the ability of the Soviet regime to
of the Russian 1* whom, fri?ndelop we
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Our defense lies ziot in compromise but in understanding and
trmzss, in a strong and ready deterrent ailitary power, in the
our stecmomic assets with those of the other free countries
of the world to meet their methods of economic penetration, end finally
in the u king of their subversive techniques.
The -all power of the free world is still vastly superor to
that und.er the control of the Isadore of international Cuntsrn. If
they mseeed we fail, it will oaybe because of our complacency
have devoted a far greater share of their power, 0111
avd resources to our destruction than we have been willing to dedicate
our own preservation.
Thayer. not supermen. Recently they have made a series of blunders
vhich have done What words could not do to help us unmask their true
intentions. These very days Communist actions in /re and Tibet have
particularly aroused Moslems and Buddhists against international
Communism, The institution of the so-called Communes" system on the
China Mainland has shocked the free world and even the Soviet leaders
apologetically refuse to endorse it.
Despite the problems surrounding the Berlin issue, Western Burope
ic etronger than it over has been since World War II. kWh of Tree
Asia and the Middle Bast is becoming alerted to the true etniflcse
Communism.
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The outcome of the struggle against international Communism
epends in great measure on the steadfastness of the United States
nd its willingness to accept sacrifices in meeting its responsibility
?()help maintain freelmn in the world,
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