CONSTRUCTION OF SOVIET GROSS NATIONAL PRODUCT ACCOUNTS FOR 1950-55

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A000500050002-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 56
• Document Creation Date: December 23, 2016
• Document Release Date: April 10, 2013
• Sequence Number: 2
• Publication Date: January 19, 1955
• Content Type: REPORT

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I a 0C/:KC I
ECONOMIC INTELLIGENCE REPORT
CONSTRUCTION OF
SOVIET GROSS NATIONAL PRODUCT ACCOUNTS
FOR 1950-55
CIA/RR 55
19 January 1955
CENTRAL INTELLIGENCE AGENCY
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SECRET
 F
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans
mission or revelation of which in any manner
to an unauthorized person is prohibited by law
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?
ECONOMIC INTELLIGENCE REPORT
CONSTRUCTION OF SOVIET GROSS NATIONAL PRODUCT ACCOUNTS
FOR 1950-55
CIA/RR 55
(ORR Project 13.115)
Office of Research and Reports
S-E-C-R-E-T
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This report represents the first attempt in ORR to construct Soviet
gross national product (GNP) accounts in current rubles. Heretofore,
the chief product of the aggregative research effort has been an index
of GNP; no absolute measures have been made. In addition, this report
undertakes the conversion of the GNP from rubles into dollars, for pur-
poses of intercountry comparison. It attempts to clarify the elementary
technical questions raised in intercountry comparisons of GNP.
Requirements imposed by 'the intelligence community upon ORR have
made it essential to construct monetary estimates of Soviet GNP. They
are useful in several ways. (1) The intercountry comparisons requested
in contributions to National Intelligence Estimates require monetary
estimates as points of departure. (2) The aggregative magnitudes com-
puted in structural studies should be checked by independently derived
figures. The basic ruble GNP estimates serve this purpose. (3) The
end-use origin breakdowns of GNP reveal useful information on eco-
nomic policy intentions and changes. (4) Many of the componefits derived
in the process of constructing GNP accounts have intelligence application
within themselves. Among such useful magnitudes are the wage bill, agri-
cultural income, retail trade expenditures, and gross investment outlays.
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Page
Summary of Estimates . . . . . . . . . . . . . . . . . . . . . . . 1
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. Basic Gross National Product Accounts . . . . . . . . . . . . 2
A. Households . . . . . . . . . . . . . . . . . . . . . . . . 3
B. Organizations . . . . . . . . . . . . . . . . . . . . . . 15
C. Consolidation . . . . . . . . . . . . . . . . . . . . . 24
III. Division of Gross National Product by End Use . . ... . 24
A. Basic Classification . . . . . . . . . . . . . . . . . . 26
B. Adjustment for Implicit Defense Expenditures . . . . . 26
C. Need for Adjustment . . . . . . . . . . . . . . . . . . . 27
D. Method of Adjustment . . . . . . . . . . . . . . ... . . . 27
IV. Division of Gross National Product by Sector of Origin . . . . 33
A. Derivation of Components . . . . . . . . . . . . . . . . 33
B. Special Calculation of Agricultural Weight . . . . . . . . 34
V. Derivation of Gross National Product Estimates for 1950 and
1952 -5 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
A. Projection of Totals . . . . . . . . . . . . . . . . . . . 36
B. Projection of Division by Use . . . . . . . . . . . . . 37
C. Calculation of Defense Expenditures in Terms of'Unadjusted
Rubles . . . . . . . . . . . . . . . . . . . . . . . . 38
VI. Conversion of Ruble Estimates into Dollar Terms . . . . . . . 38
A. Methodology for Computing 1951 Ruble-Dollar Conversion
Ratios . . . . . . . . . . . . . . . . . . . . . . . . . 38
B. Conclusions . . . . . . . . . . . . . . . . . . . . . . . 43
VII. Dollar Estimates of GNP and Its Components . . . . . . . . . . 44
A. Limitations in Conversion Procedure . . . . . . . . . . . 44
B. Application-of Conversion Ratios . . . . . . . . . . . . . 44
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1. Income and Outlays of Households in the USSR, 1951 . . . . . 4
2. Valuation of Agricultural Commodities. in the USSR, 1951 . . . 8
3. Consolidated Net Income and Outlay Account of Government,
Social, and Economic Organizations in the USSR, 1951 . . . . 16
4. Gross National Product Account of the USSR, 1951 . . . . . 25
.5. Division of.Gross National Product of the USSR by Use before:
Adjustment, 1951 . . . . . . . . . . . . . . . . . . . . . . 25
6. Division of,Gross National Product of the USSR by Use after
Adjustment, 1951 . . . . . . . . . . . . . . . . . . . . 28
7. Deduction of Turnover in the USSR, 1951 . . . . . . . . . . . 32
8. Gross. National Product of the USSR by Sector of Origin, 1951? 35
9. Gross National Product of the USSR, 1950-55 . . . . ? . . . . 36
10. Disposition of Gross National Product of the USSR by Use,
1950-55 . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11. Defense Expenditures in the USSR at Established Prices,
1950-55 . . . . . . . . . . . . . . . . . . . . . . . . . 39
12. Ruble-Dollar Ratios for Soviet and US Product Mixes, 1951 . . 41
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13.
Effect of the Summation of Converted Sector Dollar Values
on Dollar Estimates of the 1951 Gross National Product of
the USSR by Sector of Origin . . . . . . . . . . . . . . . .
45
14.
Effect of the Summation of Converted Component Dollar Values
on Dollar Estimates of the 1951 Gross National Product of
the USSR by Use . . . .. . . . . . . . . . . . . . . . . . . .
46
15.
Dollar Estimates of Gross National Product of the USSR and
the US, 1950-55 . . . . . . . . . . . . . . . . . . . . . .
47
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CIA/RR 55
(ORR Project 13.115)
CONSTRUCTION OF SOVIET GROSS NATIONAL PRODUCT ACCOUNTS
FOR 1950-55*
In 1951 the gross national product (GNP) of the USSR approximated
1,076 billion rubles. Of this total, about 30 percent was originated
in each of the two sectors, agriculture and industry; about 20 percent
in service activities; and the remaining 20 percent in transportation,
communications, construction, and trade. The total thus generated was
spent so as to devote almost four-sevenths to consumption and almost
two-sevenths to investment. Of the remaining one-seventh, all but a
very small fraction was devoted to defense, and the rest to government
administration. By 1955 the total will rise to over 1,400 billion
rubles, an increase of nearly one-third. Soviet GNP in 1951 was less
than one-third as large as US GNP (measured in comparable terms). By
1955 it will be somewhat greater than one-third the size of US GNP.
There exists no single measure capable of defining the economic
potential of a nation, since the magnitude desired is dependent upon
the purpose for which the measure is intended, as, for example, to
estimate military strength, consumer welfare, or growth. The near-
est approach to a general appraisal of the over-all productive ability
of an economy is an estimate of the net value of total goods and serv-
ices produced in a particular time period. In economists' jargon,
this measure is termed GNP.
The first, basic part of the report is the detailed GNP accounts
themselves, constructed so as to include all net income and outlays
* The estimates and conclusions contained in this report represent
the best judgment of ORR as of 31 December 1954.
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 generated in the Soviet economy in 1951. The procedure used to con-
struct the accounts representsan adaptation of that employed by the
Department of Commerce in its presentation of US national accounts.
The adjustment in US national accounting procedure required by the
institutional peculiarities of the Soviet economy relies in large part
on the work of Professor Abram Bergson. J Many of the entries are
based on prewar relationships and are therefore of questionable validity
in the period under consideration. The margin of error of the major
components is much lower, however, since postwar data are available.
The allowance of a margin of error. of 5 to 10 percent seems warranted.
In the second and third parts the GNP accounts are reclassified in-
to significant origin and use categories. The chief dilemma at this
stage involves the treatment of the turnover tax as a factor cost ele-
ment. A tentative solution of this problem has been reached.
The fourth part of the report is the presentation of an attempt
to move the 1951 total in both constant and current ruble terms back
to 1950 and forward to 1955. The end-use breakdowns are similarly
estimated for these years. A special discussion of alternative esti-
mates of defense expenditures is also included.
The last part of this report deals with the conversion of the GNP
estimates from rubles into dollars. In addition to developing dollar-
ruble conversion ratios for GNP, it cautions against attempting to
construct dollar estimates by aggregating converted sector magnitudes
and restricts the usefulness of such conversion factors to direct
sector or use comparisons.
II. Basic Gross National Product Accounts.
The GNP of the USSR is presented in this part from the point of
view of both income and outlays, in terms of 1951 ruble market prices.
Retail market prices are used initially because most available Soviet
statistics are expressed in these terms.
The accounts presented in this part are intended as a balance sheet
of the Soviet economy for the year 1951. On the left side of each
account is entered all income, public and private, accruing to indi-
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viduals, organizations, and the state during the year. The entries are
selected so as to avoid double counting while simultaneously taking care
not to omit any sources of income. All income is initially included,
irrespective of relationship to the performance of productive services.
Transfer items, that income which does not represent payments for pro-
ductive services -- for example, pensions and allowances and interest
receipts -- have, however, been segregated and do not enter into the
final calculation of GNP.
On the right side of each account are entered all expenditures in
the economy for the year, again avoiding double counting and omissions.
Total outlays, including transfer items, are, of course, equal to total
income, since each transaction is entered on both sides of the accounts.
Transfer payments are separated on the outlay side, as on the income
side. They represent expenditures for which no goods or services are
received. The private and socialized sectors of the economy have been
entered separately.
Table 1* presents the income and outlays of individuals in the
form of (1) wage and salary payments, (2) private farm plot receipts
in money and in kind, (3) income in money and in kind from the distri-
bution of collective farm earnings, (4) earnings of private artisans,
(5) subsistence allowances for military personnel, and (6) the imputed
rental income of home owners. In addition, the table lists transfer
incomes accruing to individuals in the form of pensions and allowances,
stipends to students, and interest receipts on government bond holding.
The outlay side of Table 1 breaks down the spending pattern of indi-
viduals by major categories, including savings and direct taxes.
1. Income.
a. Agricultural Income.
(1) Wages of Farm Labor.
Wages of farm labor include wages paid to workers
on state farms (sovkhozy) and machine tractor stations (MTS's) and the
wages paid to hired workers on collective farms (kolkhozy).
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Income and Outlays of Households in the USSR
1951
a. Agricultural Income
(1) Wages of Farm Labor 18.1
(2) Money Payments to Col-
lective Farmers (on
Labor-Day Basis),
Salaries, Premia 20.5
(3) Net Income from Sale
of Farm Products 41.1
(4) Net Farm Income in Kind 143.2
Total 222.9
b. Nonagricultural Income
(1) Wage Fund
(2) Artisan and Other
Current Incomes 32.8
(3) Military Subsistence
Allowances 14.0
c. Imputed Rent of Owner-
Occupied Dwellings 11.1
d. Total Income Currently
Earned
e. Transfer Items
(1) Pensions and Allowances 36.9
(2) Student Stipends 4.8
(3) Interest Receipts 5.7
Total Transfers 47.4
a. Retail Sales
(1) State and Co-
operative Stores 337.8
(2) Collective Farm
Market 35.3
b. Housing (including
Imputed Rent) and
Services 53.6
c. Trade Union Dues 3.7
d. Consumption of Farm
Income in Kind and
Military Subsistence 157.2
e. Statistical Dis-
crepancy 12.9
f. Total Outlay on Goods
and Services 600.5
g. Transfer Items
(1) Net Savings
(a) Net Bond
Purchases 31.2
(b) Increment
of Savings
Deposits 4.0
(c) Other 3.0.
Total 38.2
(2) Direct Taxes 44.3
Total Trans-
fers 82.5
Total Outlays 683.0
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In 1941 the wages of farm labor comprised 4.86 per-
cent of the total wage bill. The proportion of total workers and em-
ployees in the national economy employed in state agriculture was almost
the same in 1951 as in 1941. Assuming no significant change in relative
wage rates, the above wage bill proportion holds. The farm wage bill*
equals 4.86 percent of 372.9 billion rubles, or 18.1 billion rubles.
(2) Money Payments to Collective Farmers.
Total money income of collective farms in 1951
amounted to 186 percent of the 1940 level of 20.9 billion rubles, or
a total of 38.9 billion rubles. In prewar years, labor-day payments
to members of the collectives amounted to about 50 percent of the total
money income of the collective farms. Postwar literature lends support
to the continued prevalence of this proportion. J On this basis labor-
day payments are estimated at about 19.4 billion rubles.
In addition to the payments for labor days worked,
collective farms pay out salaries to officials. and administrative per-
sonnel as well as premia to collective farm members. Again, on the
basis of prewar Soviet statistics these are estimated to amount to about
3.0 percent of collective farm money income, or 1.1 billion rubles.
Thus total money payments to collective farmers in
1951 are estimated at about 20.5 billion rubles.
The 41.1-billion ruble total of net income from the
sale of farm products includes both money income of farm households
(kolkhozniki) realized from sales on the open collective farm market'
(37.2 billion rubles) and sales to government procurement agencies
(8.5 billion rubles), less an allowance for money costs of production,
4.6 billion rubles. The calculation is summarized as follows:
Money income of collective farms from all
sources
Portion realized from sale of farm products
(85 percent of above)
See Table 1, Income, a, (1), p. 4, above.
-5-
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38.9
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Total sales by collective farms to all purchasers 33.1
Portion sold on collective farm market (30 per-
cent of total) 9.9
Sales to procurement agencies (the balance) 23.2
Total sales on collective farm market 47.1
Portion sold by collective farms (see above) 9.9
Sales by collective farm households (the
balance) 37.2
Household sales to procurement agencies (36.6
percent of procurement sales by collective farms) 8.5
(a) The total money income of collective farms
has been estimated at 38.9 billion rubles. It is necessary to resort
to prewar computations to determine the proportion derived from sales
of farm products. If Bergson's calculation for 1937 is assumed to
prevail, only 85 percent of collective farm income arises from the
sale of agricultural products. In 1951, application of this proportion
yields a total income estimate of 33.1 billion rubles (38.9 x 0.85 - 33.1).
(b) A 1949 official estimate indicates that 30 per-
cent of the total money income of collective farms derived from sales
of farm products arises from sales in the collective farm market. / If
this proportion still holds for 1951, receipts of collective farms from
farm market sales amounted to 9.9 billion rubles (33.1 x 0.3 = 9.9),
the remaining 23.2 billion rubles of farm income arising from sales to
procurement agencies.
(c) Total sales in collective farm markets have
been estimated elsewhere* at 47.1 billion rubles. Deducting the 9.9
billion rubles of collective farm sales leaves 37.2 billion rubles for
sales by households.
(d) In order to estimate sales by households to
procurement agencies, it will be assumed that they are in the same pro-
portion to procurement sales by collective farms as the total output of
farm households is to the total output of collective farms. The prewar
proportion was 36.6 percent. If this ratio is still applicable, sales
of farm households to procurement agencies are taken to be 8.5 billion
rubles (23.2 x 36.6 = 8.5).
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Total sales by households amount to 45.7 bil-
lion rubles (37.2 billion from farm market sales and 8.5 billion from
sales to procurement agencies). Prewar calculations indicate that the
monetary production expenditures of farm households amounted to 10 per-
cent of their total money income. Assuming this proportion prevails in
1953, the net money income of farm households is set at 41.1 billion
rubles (45.7 x 0.9 = 41.1).
The estimate of net farm income in kind was de-
rived by valuing at state store retail prices less the value added
created in distribution, transportation, and processing of the esti-
mated quantities of food crops consumed by farmer growers. The turn-
over tax has not been removed. State store prices less the excluded
elements have been used as the basis of valuation, for both pragmatic
and theoretical reasons. Retail prices approximate the opportunity
cost to the farmer of consuming his own product instead of having to
purchase its equivalent, if the higher and difficult-to-measure farm
market price is excluded. It has been deemed desirable to retain the
turnover tax, since the tax represents elements of both monopoly profit
and land rent. Eliminating the tax entirely would exclude the rent
component not institutionally included in farm compulsory delivery
prices. Also, the turnover tax has been included in the estimate for
retail sales,* so in the interest of commensurability the tax has been
retained for estimates of income in kind. In Table 2** the commodities
have been priced in the manner described above.
Net farm income in kind is thus estimated at
143.2 billion rubles. If the average rate of turnover tax prevailing
for retail trade (64.3 percent) is assumed to apply to income in kind,
a tax of 92.1 billion rubles would reduce the estimate to 51.1 billion.
b. Nonagricultural Income.
(1) Wage Fund.
According to a passage in an official Soviet
publication on statistical terminology, the wage fund includes pay-
ments made not only to workers and employees but also to cooperative
* See Table 1, Outlays, a, (1), p. 4, above.
** Table 2 follows on p. 8.
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 Valuation of Agricultural Commodities in the USSR
1951
Value of
Production
(Billion Rubles)
Percent Consumed
by Producers
Value of Portion
Consumed by Producers
(Billion Rubles)
Breadgrains
113.0
40
45.2
Coarse Grains
70.8
11
7.9
Meat
6o.6
35
21.2
Vegetable Oil
25.2
15
3.8
Butter
14.4
11
1.6
Milk
44.9
49
22.0
Cheese
11.2
9
1.0
Vegetables
32.7
66
21.6
Potatoes
55.6
30
16.7
Rice
3.3
68
2.2
craftsmen, military personnel, and involuntary labor. 7 Apparently
excluded from the general fund are earnings of noncooperative artisans
and subsistence allowances for military personnel.
A~ The postwar estimate rests on a statement by
Molotov J that the 1948 wage bill was almost double that of 1940, and
on a report that the 1948 wage bill increased over that of 1947 by
10 percent. 2/ If the 1947 Plan had been fulfilled, the wage bill for
1948 would have been 308 billion rubles, closely consistent with the
Molotov estimate.
The increase in the nonagricultural labor force
amounted to 15.3 percent between 1948 and 1951. 10 Applying this in-
crease and allowing for a 5-percent rise in the level of wages due to
a rise in the average, level of skill and shifts in total employment in
favor of the higher paying industries yields a 1951 wage fund estimate
of 372.9.billion rubles. From this total the 18.1-billion wage bill
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for farm labor is deducted, leaving a general wage fund of 354.8 bil-
lion rubles.
This is a most tenuous measure. It is assumed
that the proportion of noncooperative artisan incomes to the total wage
bill remained constant from 1940 to 1951. The total wage bill rose from
161 billion to 373 billion rubles, an increase of 132 percent. Applying
this multiple to the 1940 independent artisan income figure of 14.1 bil-
lion rubles yields an estimate of 32.8 billion for 1951.
The estimate of military subsistence allowances is
taken directly from Hans Heymann. ll The 14-billion ruble total in-
cludes 10 billion for rations, 3.6 billion for clothing and personal
equipment, and 0.4 billion for miscellaneous personnel costs.
The estimate of 11.1 billion rubles is calculated as the
product of (1) the total amount of floor space privately owned and occu-
pied in both urban 'and rural areas of the USSR in 1951, estimated at
491 million square meters, and (2) the average rental per square meter
of dwelling space paid by the urban population in 1951, amounting to
22.56 rubles per year.
(1) At the end of 1938, total privately owned urban
housing amounted to 85 million square meters. 12 The wartime de-
struction of all housing, public and private, amounted to 70 million
square meters, of which 12 million square meters had been rebuilt by
the end of 1945. L3/ If private urban housing was destroyed in pro-
portion to its relationship to total housing, total availability at
the end of 1945 approximated 63.5 million square meters. In the Fourth
Five Year Plan the public urban housing construction goal was set at
75 million square meters. Reports during the first 2 years of the Plan
period indicated fulfillment accomplishments of only 75 percent, 1/
yet the official claim of total construction for the entire period was
101 million square meters. L5/ In the absence of any claim of over-
fulfillment, it appears plausible to consider the entire overfulfillment
of 26 million square meters as the increment in private urban dwelling
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space. After allowing for a 2-percent depreciation rate, private urban
housing in 1950 is calculated at 83 million square meters. To this
figure is added a net of 9 million rubles of estimated construction in
1951 after deducting the depreciation estimate. Available private urban
housing, therefore, amounted to 92 million square meters in 1951.
According to Izvestiya, the total number of rural
houses stood at 26.2 million in 1950. 1 In 1951 an additional 0:4 mil-
lion were constructed. L7/ Assuming 15 square meters as the average
size of a rural dwelling, the total area of rural housing amounted to!
399 million square meters in 1951.
(2) report calculated the average rental per 50X1-H U M
square meter to be 2 ru les per year in 1948. 18 Rental charges
are believed to have been constant since 1948, so this average charge
is assumed to be applicable for 1951.
For the total private: dwelling space of 491 mil-
lion square meters, this would yield an imputed rent of 11.1 billion
rubles.
d. Total Income Currently Earned.
See Table 1, Income, d.*
e. Transfer Items.
(1), Pensions and Allowances.
The estimate of 36.9. billion rubles comprises
(a) disability pensions and allowances paid to war invalids and victims
of industrial accidents, 22.3 billion rubles; (b) pensions and sick
benefits paid out to workers and their families, 10.5 billion rubles;
and (c) aid to mothers of many children, 4.1 billion rubles.
(a) Outlays on social security (sotsial'noye
obespecheniya) amounted to 22.3 billion rubles in 1951. 19 111 of
this amount is presumed to represent pensions and allowances.
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(b) the total budgetary allocation for social
insurance was 13.5 billion rubles in 1951. LO/ Information for 1950
indicates that only 78 percent of actual social insurance, outlays
constitute pensions, the rest comprising maintenance of public con-
valescent and recreational activities. / Therefore, the budgetary
appropriation is reduced to 10.5 billion rubles.
(c) The 4.1-billion ruble appropriation for
material aid is clearly a transfer payment, since benefits are based
on need as indicated by number of children and incomes of parents with-
out any regard to productivity considerations.
The number of students in higher educational
institutions has more than doubled since 1940, but the number of
stipends has increased in smaller proportion, and the average size
of payment has not kept pace with the rise in living costs. In the
light of these qualifications the 2.4-billion ruble expenditure for
1940 has been doubled to obtain the 1951 estimate of 4.8 billion
rubles. This estimate represents a balance between the upward effect
of the rise in enrollment and downward effects of the decline in pro-
portion of students aided and the decline in the real value of stipends.
(3) Interest Receipts.
The figure of 5.7 billion rubles includes (a).0.7
.billion rubles of interest on savings deposits, and (b) 5.0 billion
rubles of lottery winnings on state loans.
(a) In 1951, total deposits in state savings
banks amounted to 22.5 billion rubles. 22 Applying to this total
the 3-percent interest rate paid on savings deposits results in
an interest receipts estimate of 0.7 billion.
(b) Total budgetary appropriations for loan
service amounted to 7.0 billion rubles in 1951. Not all of this
expenditure represented interest payments, 2 billion rubles being
repayment of principal. Therefore, interest receipts from state loans
amounted to 5.0 billion rubles. 23
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2. Outlays.
a. Retail Sales.
(1) State and Cooperative Stores.
Retail trade sales in 1953 are estimated at
436.1 billion rubles, derived as follows: The revised Plan goal for
1953 was set at 312 billion rubles 24 for the last 3 quarters. The
first quarter estimate is obtained by applying the proportion of
annual trade occurring in the first quarter for 1936-40 and 1948-49,
about 22.7 percent. On this basis the annual goal for 1953 was 403.6
billion rubles. The 1953 Plan fulfillment report indicated the trade
goal had been overfulfilled by 33 billion rubles, 25 resulting in a
total 1953 trade turnover of 436.1 billion rubles.
In volume terms, retail trade in 1951 stood at
75.1 percent* of the 1953 level, or at 327.6 billion rubles in 1953
prices. Between 1951 and 1953 the price level for consumer goods had
fallen by 16.4 percent, yielding an estimate in current prices of
381.3 billion rubles.
Not all sales by state and cooperative stores
are made to individuals. In prewar years, about 11.5 percent of
total sales-were made to institutions. Applying this corrective
factor reduces trade turnover to private persons to 337.8 billion
rubles.
The most recent statement concerning the value
of collective farm market trade is the official estimate that it
comprised 12 percent of total trade in 1949. 26 Since subsequent
price reductions have the effect of reducing the relative share of
collective farm market trade in subsequent years, it is assumed that
its proportion had fallen to 11 percent by 1951. If the figure for
state and cooperative retail trade, 381.3 billion rubles, is divided
by the percentage of total trade carried on in state and cooperative
stores, 89 percent, an over-all trade estimate of 428.4 billion rubles
is obtained. Subtracting the state and cooperative retail trade figure
* A Plan fulfillment report for 1953 indicated a 21-percent increase in
retail trade, and a report for 1952 indicated a 10-percent rise over the
previous year.
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from the total leaves collective farm market trade as the remainder --
47.1 billion rubles.
An increasingly large proportion of collective
farm market sales is being made to the cooperative network for further
processing and resale. By 1948, cooperatives were already buying 48
percent of the meat and 53 percent of the butter, though only 6 percent
of the potatoes. J Upon this basis it is assumed that only 75 percent
of total sales, 35.3 billion rubles, are made to individuals.
b.' Housing and Services.
In the absence of reliable postwar information it is
necessary to use prewar experiences in estimating explicit housing
expenditures. In 1940, housing and miscellaneous services amounted to
11.4 percent of household expenditures on goods. Assuming this ratio
prevails in 1951, explicit housing and service outlays are estimated at
42.5 billion rubles LE2.5 = 11.4 (337.8 + 35.5)7. To this is added the
11.1-billion ruble estimate for imputed rent of owner-occupied dwellings,
for a total outlay of 53.6 billion rubles.
c. Tirade Union Dues.
Prewar information discloses that membership dues paid
to trade union, party, and other organizations comprised about 1 per-
cent of the wage bill. Since the 1951 wage bill amounted to 373 billion
rubles, dues payments are estimated-at 3.7 billion rubles.
d. Consumption of Farm Income in Kind and Military
Subsistence.
See Table 1, Income, a, (4), and b, (3) *
e. Statistical Discrepancy.
This is the difference between the sum of all income
reported in Table 1,* and the sum of all other outlays reported in
Table 1.
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f. Total Outlay on Goods and Services.
See Table 1, Outlays, f.*
g. Transfer Items.
(1) Net Savings.
(a) Net bond purchases. The 1951 loan for sale to
individuals which was originally set at 30 billion rubles was actually
33 billion rubles, due to oversubscription. From this total is deducted
the proportion of the 2 billion rubles used for repayment of principal.**
This is assumed to be identical with the proportion that individual sub-
scriptions bear to the total, about 90 percent. Deducting 1.8 billion
rubles from total individual purchases provides an estimate of 31.2 bil-
lion rubles for net bond purchases.
(b) Increment in savings deposits. In 1951 the
increment in savings deposits is estimated to be 4 billion rubles. L8/
(c) Other increases in savings, including incre-
ments in each holding. No official statistics on the volume of currency
in circulation have appeared since 1937. However, a rough approximation
may be obtained for this magnitude.as of 1 January 1951 by assuming that
the 1937 figure can be moved in the same proportion as the wage fund.
The comprehensive wage fund was estimated at
102.7 billion rubles for 1937. 29 The total wage fund as of 1 January
1951 may be taken as the average between the 1950 and 1951 figures
(354.4 and 372.9 billion rubles, respectively), that is, 363.8 billion
rubles. An increase of 3.54 times in the wage fund is therefore in-
dicated from 1937 to 1 January 1951.
Total currency in circulation as of 1 January
1937 is given as 11.256 billion rubles. 30 Multiplying this by the
increase in the wage fund yields a figure of 39.85 billion rubles as
a rough estimate of total currency in circulation as of 1 January 1951.
Assuming a further increase in currency in circulation during 1951 by
5 percent (the same rate of increase as in the wage. fund), 2.0 billion
rubles is obtained as the increase in cash holdings in 1951.
* P. , above.
** See Table 1, Income, e, (3), p. 4, above.
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Voluntary insurance payments amounted to about
0.5 billion rubles in 1940. Assuming such purchases of insurance to
bear a constant relationship to wage payments, the approximate doubling
of the size of the wage fund would mean total voluntary insurance pur-
chases amounted to 1.0 billion rubles in 1951. The total for other net
savings is therefore 3.0 billion rubles for 1951.
(2) Direct Taxes.
Direct taxes on the population amounted to 44.3
billion rubles in 1951. 31
B. Organizations.
Table 3* represents income and outlays of the public sector of
the economy, defined to include economic organizations (subdivisions
of ministries, consumer and producer cooperatives, and collective farms),
social organizations (trade unions, the Communist Party, and so on),
and the administrative units of government (the ministries, the Supreme
Court, the Supreme Soviet and attached organs, the Council of Ministers
and attached organs, and comparable organs in the republican and local
governments). In this account only the proportion of collective farm
income and outlays retained and expended by the farm as an organization
is included; the portion of farm income distributed to members is
entered as personal income in Table 1.' The retained incomes of
economic organizations are net only in the sense that they remain after
the expenses necessary to create them are deducted. The only other
incomes of economic organizations entered are those which are trans-
ferred to the government in the form of taxes and special funds pay-
ments, or transferred to depreciation accounts. The inclusion of any
other type of income of these organizations would involve double
counting. The bulk of the income in Table 3 consists of state budget
revenues.
1. Income.
a. Net Income Retained by Economic Organizations.
(1) Collective Farms.
Official sources disclose that 23.7 percent of
collective farm investment was financed by long-term credit in 1951
* Table 3 follows on p. 16.
P. 4, above.
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S-E-C-R-E-T
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Consolidated Net Income and.Outlay Account
of Government, Social, and Economic Organizations in the USSR
1951
a. Net Income Retained by Eco-
nomic Organizations
(1) Collective Farms
(2) State and Cooperative
Organizations
b. Income of Economic Organi-
zations Allocated to
Special Funds
(1) Social Insurance
Budget
(2) Funds for Worker
Training and Educa-
tion
c. Indirect Taxes and Other
Payments by Enterprises
to State Budget
(1) Taxes on Income of
Enterprises and
Economic Organiza-
tions
(1) Health Care
28.0
6.1
(2) Education
63.1
26.9
Total
33.0
b.
Government Administra-
tion
14.1
c.
MVD-MGB
17.5
d.
Defense
93.4
e.
Gross Investment
236.0
f.
Other Outlays
23.0
21.4
g.
Consolidated Total
Value of Goods and
8.7
Services Disposed
of Exclusive of
Sales to Households
475.1
30.1
h.
Transfer Outlays
(1) Pensions and
Allowances
36.9
(2) Student Stipends
4.8
(3) Interest Pay-
ments to House-
holds
5.7
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Consolidated Net Income and Outlay Account
of Government, Social, and Economic Organizations in the USSR
1951
(Continued)
(2) Payments from Profits
of Enterprises.into
the State Budget 47.8
(3) Turnover Tax 247.8
(4) Miscellaneous 51.9
d. Allowance to Cover Account-
ing Losses of MTS"s -8.0
e. Consolidated Total Charges
against Current Product,
Net of Depreciation 410.2
g. Consolidated Charges against
Total Product 440.0
(1) Net Savings of House-
holds 38.2
.(2) Direct Taxes 44.3
Consolidated Total
Outlay Net of
Consolidated Total Sales to House-
Income 522.5 holds 522.5
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 and 1952. 32 Total loans amounted to 2.7 billion rubles in 1952. 33
For 1951, only a planned figure of 3.5 billion rubles was cited. 34
If the fulfillment experience of 1950 of 3.8 35 billion rubles of
planned investment from loans as compared with 2.0 billion rubles of
actual investment 36 is used as a guide, actual investment from long-
term credit in 1951 is assumed to be 1.9 billion rubles. On this
basis, total collective farm investment in 1951 and 1952 is calculated
at 19.4 billion rubles.* If total investment be distributed between
the 2 years in the same proportion as that portion financed from
loans, investment in 1951 is. calculated at 8 billion rubles. Deduct-
ing loan-financed investment from the total leaves 6.1 billion rubles
to be financed from the indivisible fund of the collective farms. If
it is further assumed that there was no net change in the size of the
indivisible fund in 1951, the retained earnings of the collective farms,
which are identical to deposits in the fund, are assumed to be 6.1
billion rubles.
The retained profits of state and cooperative
organizations were reported at 26.9 billion rubles in 1951 37 in
the budget presentation of Finance Minister Zverev..
b. Income of Economic Organizations Allocated to
Special Funds.
(1) Social Insurance Budget.
According to Soviet data, 38 the total state
social insurance budget amounted to 21.4 billion rubles in 1951.
In the absence of specific postwar information
on the subject, it is necessary to resort to prewar practices. The
1940 study made by Bergson and Heymann 39 estimated training and
education funds at 1.5 percent of the total wage bill. If this
proportion still prevailed in 1951, the funds for that year are
estimated at 8.7 billion rubles.
* 1.9 + 2.7 = 19.4.
23.7
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c. Indirect Taxes and Other Payments by Enterprises to
State Budget.
(1) Taxes on Income of Enterprises and Economic.
Organizations.
This revenue category includes a tax on the
money income and income in kind of collective farms, a tax on the
income of cooperative organizations, a levy on noncommodity activi-
ties, and sundry payments by enterprises into the budget. In 1951
such receipts were officially estimated at 7.6 billion rubles. LO/
(2) Payments from Profits of Enterprises into the
State Budget.
The 1952 budget message by Finance Minister Zverev
estimated payments from the profits of state enterprises in 1951 at
47.8 billion rubles. 41
The budget message indicated turnover tax col-
lections in 1951 amounted to 247.8 billion rubles.
The estimate of 51.9 billion rubles includes
(a) customs and reparations receipts, 24.9* billion rubles; (b) tim-
berrevenues, 1.3 billion rubles; (c) license and fee receipts, 13.5
billion rubles; (d) local taxe's1',1 /7.2 billion rubles; and (e) other
revenues, 5.0 billion rubles. J The other revenue item is the
difference between total revenues, 470.3 billion rubles, and the sum
of all budget revenues accounted for in the above calculations, 461.1
billion rubles; less an estimate of 4.2 billion rubles to account
for revenues from capital transactions.
d. Allowance to Cover Accounting Losses of Machine
Tractor Stations.
In 1951, revenues of the MTS were estimated at 5.2
billion rubles. 45 These consist mostly of payments in kind by
* This figure represents an interpolation between the 1950 figure of
25.8 billion rubles 4L2/ and the 1952 figure of 26 billion rubles. 43
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collective farms for tractor work performed by the MTS. Outlays for
the MTS for both capital and operational expenses are estimated at
17.2 billion rubles in 1951, of which 4.0 billion consisted of capital
investments. 46 The 8.0-billion ruble excess of operational expend-
itures over revenues is deducted from the revenue side of our table
as a budget subsidy.
e. Consolidated Total Charges against Current Product,
Net of Depreciation.
See Table 3, Income, e.*
f. Depreciation.
In the absence of comprehensive Soviet data on capital
consumptions allowance for the economy as awhole,* it becomes necessary
to use US experience in this regard. To make the analogy reasonably
valid, the period 1869-1919 has been chosen. L7/ Depreciation rates of
8 percent for producer durables and 2 percent for construction result
from US experience. Weighting these rates by the Soviet proportion of
construction to producer durables, roughly 2.1, yields an annual
depreciation rate of 4 percent.
consumption allowances by applying this U.percent rate to the cumulative
total of annual investments since 1923-24. A range is included to take
account of varying estimates as to capital losses during the war.
Utilizing 0 figures and moving his magnitudes to 1951 according 50X1
to his methodology results in a 1951 capital consumption total of 28.4
to 31.2 billion rubles. The midpoint of the range, 29.8 billion rubles,
is. used as the figure for depreciation in this report.
g. Consolidated Charges against Total Product.
See Table 3, Income, g.**
h. Transfer Receipts.
See Table 3, Income, h.**
P.
** P. 17, above.
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2,. Outlays.
a. Communal Services.
Public outlays are comprised mainly of expenditures from
the state budget and capital investment of economic organizations. Trans-
fer receipts and outlays are treated in the same manner as in the con-
solidated private account (Table 1*), except that receipts in the private
account become outlays in the public account and vice versa.
Budgetary outlays for health care were set at 21.7
billion rubles in 1951. 11n On the basis of prewar information the
budget appropriation represents only 69.8 percent of total outlays for
health purposes. Total outlays are therefore 21.7 + 0.698 = 31.1 billion
rubles. Prewar information also discloses that 10 percent of these
total expenditures are in the form of capital outlays, which are rep-
resented in Table 3, e.** Deducting this component leaves a net total
of 28.0 billion rubles.
Total budgetary outlays on education amounted to
57.2 billion rubles in 1951. 50 In prewar years only 80 percent of
total outlays came from the budget. Total expenditures are.therefore
71.5 billion rubles. From prewar data is deducted the 7 percent of
total outlays representing capital investment. Also deducted is the
4.8-billion ruble entry for stipends. The net outlay for education
becomes 63.1 billion rubles.
Budgetary outlays for government administration
amounted to 14.1 billion rubles in 1951. 51
Outlays for internal security are estimated at 17.5
billion rubles in 1951. This figure represents continuance of the
* P.~+, above.
** P. 16, above.
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1949 figure 52 with no change on the assumption of no increase in the
size of the internal security establishment.
The budgetary explicit realized expenditure for defense
amounted to 93.4 billion rubles in 1951. 53
e. Gross Investment.
The estimate of gross investment has been calculated
in two ways which yield slightly differing results. As an approxima-
tion, gross-investment has been derived as the residual between the
sum of all incomes and the total of all outlays other than gross in-
vestment. This method provides an estimate of 236.0 billion rubles.
It is also possible to obtain a result by aggregating
the components of gross investment. The breakdown is as follows:
Billion Rubles
(1)
Depreciation
29.8
(2)
Fixed capital investment
132.0
(3)
Working capital investment
11.3
(4)
Collective farm investment
8.0
(5)
Stockpiling
7.0
(6)
Gold production
9.4
(7)
Increase in loaned working capital
15.0
Total explicit breakdown
-212.5
Residual calculation
236.0
The estimates are obtained as follows:
(1) Depreciation.*
(2) Fixed capital investment. 54
(3) Working capital. investment. 55
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(4) .Collective farm investment.*
(5) Stockpiling. The ORR estimate of 7.0 billion
rubles as the value of accretions to the government stockpiles is based
on ORR calculations.
(6) Gold production. Total gold production in 1951
is estimated at 14.7 million troy ounces. Valued at 77 rubles per troy
ounce, gold production in 1951 approximated 11.4 billion rubles. Total
Soviet gold sales inthe West in 1951 are estimated at 2.6 billion
rubles. 56 Assuming no change in domestic gold requirements, accretions
to the gold reserve in 1951 are therefore 9.4 billion rubles.
(7) Increase in loaned working capital., It has been
the general belief of scholars in the Soviet field, confirmed by offi-
cial statements, 57 that the state budget surplus is a major source
of working capital loans by the banking system. It is assumed that
15.0 billion rubles of the entire 25.0-billion ruble surplus for 1951
was used to this end.
The 23.5-billion ruble gap between investment
calculated as residual and that obtained by cumulating known components
requires some attempt at explanation. It is possible that some of the
residual outlays represent governmental expenditures for goods and
services rather than for capital investment purposes. The explained
residual items in the national economy and "other" components in the
budget may well pertain to current expenditures. It is also possible
that certain investment items have been omitted or understated. How-
ever, it seems highly significant that only about 10 percent of in-
vestment derived by the residual method cannot be assigned to some
specific activity.
The figure of 23.0 billion rubles for other expenditures
is comprised of (1) 10.0 billion rubles to represent expenditures to
compensate for this portion of the budget surplus, and (2) 13.0 bil-
lion rubles unexplained expenditures in the national economy portion
of the budget.
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 (1) It was assumed in Table 3, Outlays, e,* that 15.0
billion rubles of the 25.0-billion ruble surplus had been used to in-
crease the loaned working capital of the long-term investment banks.
The remaining 10.0 billion rubles is assumed to be used for general
purposes.
(2) All but 13.0 billion rubles of the total national
economy expenditure of 179.4 billion rubles has been accounted for else-
where in the accounts.
g. Consolidated Total Value of Goods and Services
Disposed'of Exclusive of Sales to Households.
See Table 3, Outlays, g.*
h. Transfer Outlays.
See Table 3, Outlays, h.*
C. Consolidation.
In Table 4** the private and public sector accounts have been
consolidated into the GNP account. It will be noted that the trans-
fer payment entries 'have been dropped at this stage of aggregation.
A balance can be achieved without their inclusion, since they cancel
in the combination process. The GNP estimate satisfies the con-
ceptual requirement that it be net of transfer payments.
Division of Soviet GNP by use is presented in Table 5.**
Allocation of GNP by use requires that a closer approximation to
real cost be attempted. In technical jargon? factor price rather
than market price becomes the new standard of measurement. Essen-
tially, the transition to factor price measurement involves the
* P. 10, above.
xx Tables 4 and 5 follow on p. 25.
 Gross National Product Account of the USSR
1951
a. Total Income of Households Current-
ly Earned 635.6
b. Consolidated Charges of Government,
Social, and Economic Organizations
Against Current Product, Net of
Depreciation 410.2
c. Net National Product 1,045.8
d. Depreciation 29.8
e. Gross National Product 1,075.6
a. Total Outlays of Households on
Goods 'and Services
b. Consolidated Total Value of Goods
and Services Disposed of by
Government, Social, and Economic
Organizations, Exclusive of
Sales to Households
Division of Gross National Product of the USSR
by Use before Adjustment
1951
Consumption
Administration
Defense
Gross Investment
Allocated GNP
Unallocated
Total GNP
(Billion Rubles) Percent
691.6 .65.7
31.6 3.0
93.4 8.9
236.0 22.4
1,052.6 100.0
23.0
1,075.6
475.1
1,075.6
 removal of those elements of market price which are not compensated by
factor services -- that is, by labor, capital, and rental contribution
to production. The principal omission required for the adjustment is
the elimination of that portion of indirect or excise taxes (turnover
tax) which may not be imputed to payment for production services.
A. Basic Classification.
The accounts in Tables 1, 3, and 4* show GNP by factor origin
and by, expenditures on a rather detailed basis. It is now desired to
recast the outlay side of the accounts in terms of the large aggre-
gates -- consumption, administration, defense, and gross investment.
In the reclassification, consumption includes retail sales to
households, housing, trade union dues, income in kind, military sub-
sistence,** and the statistical discrepancy from Table 1, and communal
services from Table 3.*** Administration encompasses the government
administration and MVD-MGB entries in Table 3. Defense and gross in-
vestment are taken directly from the respective entries in Table 3.
The unallocated item is the "other" entry in Table 3.
The breakdown in Table 5 has been derived directly or through
the use of historic relationships from official statistics. In order
to achieve comparability with the procedure used by the US Department
of Commerce, it is necessary to transfer to the defense category out-
lays that have been entered under the uther headings. From consump-
tion are taken 3.0 billion rubles spent for military education. From
administration are removed 5.0 billion rubles, which approximates the
annual expenditures on maintenance and equipment of the 400,000 para-
military component of the MVD-MGB. The 6.0 billion rubles transferred
out of investment and the 3.C billion rubles transferred out of the un-
* and 25, respectively, above.
** In accordance with Department of Commerce procedure, military sub-
sistence has been included twice, both as consumption. and as defense
expenditure. In determining turnover tax incidence, only the portion
included under defense is assumed to be taxed, since the defense
ministry actually pays the tax when it is purchasing food and petroleum
products. To assume tax is levied on military subsistence under both
headings would overestimate the tax burden.
**x P. 16, above.
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allocated item represent the noninvestment portion of the 11.0 billion
rubles estimated outlay for special weapons research and development.
The breakdown in established prices in Table 6* reflects this transfer
process.
C. Need for Adjustment.
All entries in Tables 1, 3, and 4*-* are gross of turnover taxes.
If a breakdown of gross national product is to be accurately reflective
of resource allocation, the prices used to value the component aggregates
should closely approximate alternative costs (the relative economic
effort expended to channel resources in a particular direction). As has
been reiterated in previous reports, the inclusion of turnover tax adds
a noncost element to price. To this degree the tax vitiates the sensi-
tivity of the unadjusted aggregates as indicators of the real division
of GNP. Comparison of the two breakdowns of GNP by use in 1951 in Table 6
provides a graphic indication of the degree to which the turnover tax,
if not corrected, can distort the distribution of the national product.
Particularly apparent is the overemphasis given to consumption and the
understatement of defense and investment.
D. Method of Adjustment.
Two questions must be answered to adjust the components for
turnover tax: what are the taxable portions of each component, and
what rate of turnover tax should be deducted?
1. It is assumed that the turnover tax is applicable to the
following entries in Tables 1 and 3***:
a. Household retail purchases in their entirety at the
rate of taxation.
b. Income in kind in its entirety at the general rate
of taxation.
** Table Willows on p. 28.
Pp. It, 16, and 25, respectively, above.
** See Table 6, p. 28, below.
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Division of Gross National Product of the USSR
by Use after Adjustment
1951
Value Net of Deducted
Value at Established Prices Turnover Tax
Use (Billion Rubles) (Percent) (Billion Rubles) (Percent)
Consumption
Administration
Defense
Investment
Total GNP
688.6
65.2
462.6
56.9
26.6
2.5
21.3
2.6
110.4
10.5
104.7
12.9
230.0
21.8
225.0
27.6
1,075.6
d. Communal services to one-tenth of their value at the
general rate. It is assumed that the outlays for communal services are
evenly divided between commodities and services and that one-fifth of
commodities purchased are taxable .(consumer goods and petroleum products).
e. Government administration to one-half its value at the
general rate. This item is assumed to be evenly divided between services
and taxable commodities.
f. Civilian MVD-MGB expenditures, taxed in the same
way as government administration.
g. The food portion of military subsistence, taxed at
the general rate. References to official publications indicate that
the armed services and internal security agencies pay turnover taxes on
food products purchased by them. 58 They are tax-exempt on manufactured
consumer goods.
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 h. Petroleum product purchases by the armed forces,
taxed similarly to food procurement. 59
i. Of the total investment in stockpiles of 7.0 billion
rubles, approximately 2.0 billion rubles, a maximum figure for con-
sumer goods subject to the general rate of taxation.
J. Half of total working capital accretions amounting to
9.5 billion rubles, taxed in full at the general tax rate.
2. To compute the general rate of taxation) total turnover
tax collections for the year, 247.8 billion rubles, must first be
divided by the total turnover upon which the tax was assessed, 385.3
billion rubles. It is necessary to deduct income in kind and farm
market sales from taxed turnover for the purpose of making this com-
putation, as no explicit tax is levied on these consumption components.
Housing expenditures are also excluded, since a much lower rate of
taxation is assumed for this category. The result of the above com-
putation is a rate of 64.3 percent.
It is generally recognized that the turnover tax represents
an element in retail prices not entirely compensated by an identifiable
cost. Much less easy to decide is the proportion of the tax which is
cost element. The very low prices* at which the state takes a delivery
of agricultural crops lead one to suspect that no allowance is made
for land rent in the price paid. Official admissions by Soviet leaders
that for certain crops procurement prices have not even covered pro-
duction costs 60 lend further support to this hypothesis.
In a positive way, Soviet economists have confirmed the
relationship between'land rent and the turnover tax. In the words of
Allakhverdian: "In this way it follows that in agriculture a portion
of the surplus value product takes the form of rent. In the USSR, in
connection with the nationalization of land, absolute rent has been
abolished forever, but in the reformed situation there exists differ-
ential rent, which appears as the most important source of socialist
accumulation." 61
* Low in the sense of the dollar-ruble relationship as compared with
the ratio for processed food and textiles and producer goods.
 In addition to representing land rent payments, the turn-
over tax also serves as one of the sources for financing state services
to agriculture, particularly the operations of the MTS's. Expenditures
incurred by the MTS's are partially covered by payments in kind from'
kolkhozes, but their receipts have been inadequate and the MTS's have
chronically had deficits which must be paid by budget subsidies. Avail-
able official sources.do not draw a direct connection between turnover
tax payments and budget subsidies but do observe that "kolkhozy receive
large material-technical and financial aid from the state. The Soviet
state annually spends billions of rubles to supply agriculture with
machines, fertilizers, and other means of production." L2/
Known references in official literature do not help in
determining the actual breakdown of turnover tax between specific factor
compensated and economic rent elements. Principal. reliance is placed,
therefore, on the examination of analogies between the Soviet and US
economies. In each country the retail prices of rye bread, beef, and
cotton cloth have been distributed by factor shares (the proportion of
final product) according to the categories of farmer's incomes and
processor's and other middleman's receipts for both countries, to which
must be added, for the USSR, taxes and MTS income in kind. If inter-
country comparisons are made for each of the three representative prod-
ucts, it will be noted that the farmer's and middleman's shares are
universally smaller in the USSR. In the USSR the equivalent of the US
farmer's share is the explicit farmer's receipts plus the income in
kind of the MTS plus an unspecified proportion of the turnover tax
share. The equivalent of the US middleman's share is the explicit
Soviet. middleman's receipts plus the portion of the turnover tax which
is not allocated to the farmer.
By assuming that the US distribution of factor choices would
prevail in the USSR in the absence of turnover taxes and that agri-
cultural machinery were owned by the farmer, instead of by the state,
it becomes possible to reallocate turnover taxes between the two remain-
ing factors of production. The difference in the farmer's share in the
two countries plus the explicit MTS share divided by the turnover tax
share gives the proportion of the turnover tax compensated by factor
services symbolically, as follows:
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Fus Fr + Mr) = Tfc
r
Where Fus = US farmer's share in percent
Fr = Soviet farmer's share in percent
Mr = Explicit MTS share in percent
Tr = Turnover tax share in percent
Tfc Proportion of turnover tax compensated by
factor services.
The remaining share of turnover tax is a monopoly profit which is a
function of official resource allocation policy. It will be regarded
as economic rent because the same level of production would presumably
be forthcoming if the profit were eliminated.
On the basis of the foregoing calculations, 37 percent of
the tax assessed on agricultural products represents payments to pro-
ductive factors. In order to apply this result to the turnover tax as
a whole, it is necessary to make allowances for the portion of tax
levied on nonagricultural items. In the 1941 plan, approximately 89
percent of total turnover tax receipts were to originate in organiza-
tions marketing farm products. L3/ Applying this relationship yields
33 percent as the factor compensated proportion of turnover tax. The
tax deduction calculation in Table 7* utilizes this 33-percent proportion.
The ratio between the portion of indirect taxes that can-
not be allocated as compensation for specific factor services and GNP
is not conspicuously higher- in the USSR than in many other advanced
economies. If only explicit indirect taxes are taken into account --
since measurements are in this frame of reference in'Western economies --
17.2 percent of Soviet GNP in 1951 was comprised of indirect taxes.
In the same year the proportion was 15.3 percent in France, 15.1 per-
cent in West Germany, and 16 percent in the UK. 64
The turnover tax adjustment reduces the share of consump-
tion in GNP to 56.9 percent of GNP** and that of administration to 2.6
percent. The allocation to defense rises to 12.9 percent and that of
investment to 27.6 percent.
* Table 7 follows on p. 32.
** See Table 6, p. 28, above.
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 Deduction of Turnover in the USSR
1951
Household Retail
Purchases
373.1
239.9
160.7
Income in Kind
143.2
92.1
61.7
Housing
53.6
0.5
0.3
Communal Services
9.1
5.9
4.0
Government Administra-
tion
7.0
4.5
3.0
MGB-MVD
5.5
' 3.5
2.3
Total
12.5
8.0.
5.3
Defense
Military Subsistence
11.0
7.1
4.8
Purchase of Petroleum
Products
2.2
1.4
0.9
Total
13:2
8.5
5.7
Investment
Stockpiles
2.0
1.3
0.9
Inventories
9.5 ?
6.1
4.1
Total
11.5
7.4
5.0
 IV. Division of Gross National Product by Sector of Origin.
A. Derivation of Components.
The division of gross national product by end use in III, above,
attempted to recast the outlay side of the accounts in terms of the
large aggregates. Similarly, the present portion of the report seeks
to recast the income side of the accounts in terms of the major aggre-
gates of origin of GNP -- industry, agriculture, construction, trans-
portation, communication, trade, and services.
Except in the case of agriculture, the classification of the
income accounts does not facilitate the direct estimates of the income
by origin aggregates. Instead, a different approach must be adopted.
What is derived is an approximation to a value-added* measure of con-
tribution to GNP. Ideally, this can be approximated by combining wage
and salary payments, profits, and depreciation charges incurred in a
particular sector. In Tables land 3** this procedure has been followed
for the economy as a whole. The requirement becomes one of developing
the same compilation for the several origin sectors.
The principal ingredient in the value-added computation is
the payment to labor engaged in production. The pertinent magnitudes
for the Soviet economy are obtained by multiplying the 1951 labor force
estimates 65 for industrial branches and economic sectors by the
average annual wage for the respective branch or sector, as revealed
in the 1941 Plan. 6j'61 The profit component cannot be supplied from
Soviet profit data, since profits in the Soviet institutional framework
are principally a function of resource allocation policy rather than a
criterion of managerial activity. The depreciation comp~'on/ent of value
added can also be supplied from 1941 Plan information. The offi-
cial depreciation charges have been doubled to adjust for the under-
statement of capital consumption in Soviet practice. Except for agri-
culture, the weight for each sector has been determined by the ratio
of its combined payroll and depreciation deductions to that for the
economy as a whole.
* Defined as the additional value imparted to a good at a partic-
ular stage of production. It corresponds to the difference between
sales receipts and materials and fuel costs, or is equal to wages +
profits + depreciation charges.
** Pp. 4 and 16, respectively, above.
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The outlined procedure cannot be used for computing the.agri-
cultural weight, because of the peculiarities of available farm income
data. The seasonality of the rural work year and the hidden unemploy-
ment alleged to prevail in agriculture make it necessary to readjust
manpower figures to a full-time equivalent basis. Much more difficult
of solution is the derivation of an average annual wage. Even in the
USSR, agricultural incomes still contain a large proprietary element.
The bulk of the earnings of the rural population arises not from money
payments for labor on the collective, but from income both in kind and
in cash obtained from the consumption or sale of produce grown on the
farmers' household plots; Therefore, the agricultural contribution to
GNP has been computed from income statistics of this type.
The basic data for determining agricultural income are contained
in Table 1, Income, a,* and in Table 3, Income, c, (3).** All income
from farming can be found here except for a considerable portion of the
rental return from land. The question of equivalence between land rent
and the turnover tax discussed in III, above, again assumes prominence
with regard to the size of agricultural incomes. Depending on the as-
sumption as to the percentage of turnover tax which is representative of
factor cost equivalent percentage adjustments are made in Table 1, In-
come, a, (3), and a, (4),* and in Table 3, Income, c, (3).** In other
words, those incomes which contain rental elements have been adjusted to
suit the premises relating to land rent and MTS service payments. Using
the same alternatives as'in III, above, in regard to the turnover tax-
factor cost relationship, agriculture originates 29.4 percent of GNP.
Arithmetically the weights are obtained by summing. the combined
labor payments and depreciation charges of the nonagricultural sectors.
The computed total is then divided by 1 less the agricultural weight
to obtain total value added in the economy. The weights, for the other.
sectors are then obtained by dividing value added in the respective
sector by the value-added total.
* P ve.
** P. 16, above.
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 The breakdown in Table 8 includes as GNP for purposes of
division of product by origin only that portion of the total shown in
Table..4 that is assumed to reflect factor cost. If the entire figure
of 1,075.6 billion rubles be used, the difference between it and the
totals indicated in the right-hand. side of Table 6 should be propor-
tionately distributed among all seven sectors.
Gross National Product of the USSR by Sector of Origin
1951
Adjusted GNP
Unadjusted GNP
(Percent)
(Billion Rubles)
(Billion Rubles)
Industry
31.8
258.7
342.1
Agriculture
29.4
239.2
316.2
Construction
7.0
57.0
75-3.
Transportation
7.6
61.8
81.7
Communication
0.9
7.3
9.7
Trade
4.1
33.4
44.1
Services
19.2
156.2'
? 206.5*
V. Derivation of Gross National Product Estimates for 1950 and
1952-55.
In order to obtain .breakdowns of Soviet GNP for.1950 and 1952-55
on as detailed a basis as that constructed for 1951, it would be nec-
essary to proceed in the manner indicated in Tables 1, 3, 4, 5, and
6.* It is possible, however, to derive GNP totals and divisions by
use by moving 1951 totals and components by appropriate production
indexes.
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A. Projection of Totals.
The GNP totals in 1951 terms have been obtained by multiplying
the 1,076-billion ruble 1951 estimate by the GNP index for the pertinent
years. 68 In order to convert these to current rubles, a rough price
index has been introduced, as shown in Table 9. The price index combines
an index of producer goods prices and one of consumer goods prices
weighted in the proportion of 1.7:1. This ratio represents the relative
shares that the two groups of goods comprised of total production in 1951.
Gross National Product of the USSR
1950-55
1950
1951
1952
1953
1954
1955
1951 Ruble Value lue a
1,008
1,076
1,193
1,228
1,308
1,413
Price Index J
104.0
100.0
96.4
91.0
88.1
85.3
Current Ruble Value c/
1,048
1,076
1,150
1,117
1,152
1,205
a. The 1951 total in Table , p. 25, above, is moved by the following
GNP index: 1950, 92.9; 1951, 100; 1952, 110.8; 1953, 114.8; 1954)
122.5; and 1955, 132.2. 69/
b. The price index is a -weighted average of a consumer and a producer
price index.
Indexes
1950
1951'
1952
1953 1954 1955
Consumer Goods Price Index*
106.0
100.0
95.4
85.9 83;3 80.8
Producer Goods Price Index**
103.0
100.0
97.0
94.0 91.0,88.0
c. 1951 Ruble Value x Price Index = Current Ruble Value.
TO . Price reduction for 1955 assumed to be equal to that of 1954.
** 71/. Estimates for 1954 and 1955 assumed to be identical to 1953.
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 B. Projection of Division by Use.
Each of the use categories in Table 6* is moved by pertinent pro-
duction indexes in order to derive breakdowns for 1950 and 1952-55. The
ruble value estimate for consumption is moved by an index incorporating
consumption estimates of the principal components of the Soviet consumer's
market basket.** The administration ruble figures are moved by the serv-
ices index; and the investment figures, by a combined index comprised
63 percent of the producer goods, 25 percent of the construction, and
11 percent of the transportation indexes.**,* The defense figure is moved
by a deflated index of defense expenditures. The resulting ruble values
for any one year are added, and the sum is divided into the ruble value
of any component in order to express that component as a share of GNP.
This procedure is chiefly useful as a basis for making comparisons with
the US economy in terms of 1951 prices. The disposition of GNP by use
.in the USSR during 1950-55 is shown in Table 10.
Disposition of Gross National Product of the USSR by Use
1950-55
Use
1950
1951
1952.
1953
1954
1955
Consumption
59.4
56.9
55.0
55.0
55.1
55.3
Administration
2.8
2.6
2.5
2.5
2.4
2.4
Defense
11.8
12.9
13.6
13.0
12.2
11.5
Investment
26.0
27.6
28.9
29.5
30.3
30.8
The percentage-figures in Table 10 cannot be directly converted
to rubles by multiplying them by the respective GNP figures in the third
, above. The series mentioned 72 runs only through 1953. The 1953 value
estimates have been extrapolated to 1954 and 1955 by application of pro-
duction estimates. For derivation of the indicated production indexes
see 73/.
*** This division is based on the relative weights of those components
in the GNP index (see 74/). One-half of transportation is assumed to be
allocated to investment.
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row of Table 9,* because these current GNP figures were obtained by
using an over-all GNP price index. If current ruble estimates for
each end-use component were desired, each component would have to be
converted to current terms by a price index especially constructed
for that end use.**
C. Calculation of Defense Expenditures in Terms of Unadjusted
Rubles.
For the special problem of calculating ruble defense expendi-
tures-for other years than-1951, two procedures may be used, the choice
depending on the purpose to be served. If the aim is one of making inter-
national comparisons of defense efforts, the technique used to derive
Table 10*** is recommended.****- The resulting estimates in terms of 1951
rubles may be converted to a current basis by use of a price index re-
flecting changes in the cost of the defense bill of goods. If, however,,
a monetary expression of defense outlays is desired, the same technique
with a different base should be employed. In Table 6,***** instead of
the adjusted ruble figures, the defense magnitude expressed in established
prices serves as the base for movement of the series. Again, the con-
version of the magnitude from 1951 to current ruble terms necessitates
the use of a special price index. The process should yield approximately
the same result as a direct computation utilizing current explicit and
implicit budgetary data. Defense expenditures at established prices
in the USSR during 1950-55 are shown in Table 11.***F**
VI. Conversion of Ruble Estimates into Dollar Terms.
A. Methodology for Computing.1951 Ruble-Dollar Conversion Ratios.
1. General Procedure.
The procedure adopted for deriving the ruble-dollar con-
version ratios shown below in Table 12****X*X makes use of the scarcity
above.
The price indexes should be net of turnover tax.
** P. 37, above.
*XXX Implied in the use.of the index of deflated explicit budget-
ary expenditures is the assumption that these outlays are a constant
proportion of the total. Over the 5-year period under discussion the
actual proportion does not vary significantly.
XXXXX P. 28, above.
XXXXXX Table 11 follows on p. 39.
******* Table 12 follows on p. 41.
-38-
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Defense Expenditures in the USSR
at Established Prices
1950-55
Rubles
1950
1951
1952
1953
1954
1955
1951
90
110
131
131
131
131
Current
95
110
128
125
123
121
relationships prevailing in both the Soviet and the US economies.
Essentially the technique involves the valuing of a.weighted, repre-
sentative list of Soviet commodity outputs and service activities in
both dollars and rubles. The calculation is also performed for US
production.of the same commodities and services. Conversion ratios'
can be derived at any stage of aggregation by comparing value of
production or activity in the two currencies. By including the US as
well as the Soviet production mix, prices can reflect the scarcity
relationships prevailing in both economies.
2. Calculation of Sector Ratios.'
a. Industry, Agriculture; Transportation, and Communications.
The. calculations of industrial sector conversion ratios
involve two levels of aggregation. The procedure employed closely
resembles that used to obtain ORR production indeies.* The computation'
of the construction materials conversion ratio typifies the method used
at the lowest level of aggregation.**
* Actually the similarity is that of a price index, since the parameter
is the conversion (price) ratio and the variable is output.
** See conversion ratio, p. 40, below.
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Price per
Metric Ton
Production
Production Production
USSR US
USSR
Commodity (Rubles)
US
Dollars
USSR US
(Thousand
Metric Tons)
(Million (Million (Million (Million
Rubles) Dollars) Rubles) Dollars)
Cement 185
12
12,400 41,960
2,294 152 7,762 514
Bricks 305
27
12,300 6,471
3,752 327 1,974 172
Totals
6,046 479 9,736 686
Conversion Ratios 12.6:1 14.2:1
In the construction materials sample the conversion ratio
based on US production is higher than that based on Soviet production,
since the US produces relatively more of the commodity (cement) with
the higher ruble-dollar ratio. In effect, at this stage in the aggre-
gation process, the conversion ratios for each product are weighted by
output.
In moving to the next level of aggregation, the combining
of industrial branch ratios into an over-all industry ratio, the branch
ratios are multiplied by value-added weights. The arithmetic products
obtained are summed, and the total is divided by the sum of the weights.
The quotient is the industrial sector conversion ratio for each economy.
These weights represent the proportions of GNP generated by the respec-
tive industrial branches in 1951. A different set of weights has been
derived for each economy. Two useful results are obtained by using the
value-added weights. Since the product list is not exhaustive, a dis-
torted sector ratio would result if the total derived production values
for each branch were merely added together. By using value-added pro-
portions the relative importance of the branch is reflected in spite of
numerous omissions of component products. In addition, the direct use
of production values would contain the distortions of gross value
weights. Value-added weights eliminate this deficiency.
Neither output nor price statistics are available for the
defense industry, yet the large size of this branch, particularly in
the USSR, compels its inclusion. Scattered analysis indicates that a
7.5:1 ratio may be applicable for this branch.
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Ruble-Dollar Ratios for Soviet and US Product Mixes
1951
Soviet
Product
Mix
US
Product
Mix
Major Sectors
Industry
(Defense excluded)
13.0-1
13.8-1
(Defense included)
12.3-1
13.7-1
Agriculture
16
6-1
23
3-1
"/
Transportation a
.
4.9-1
.
3.9-1
Communications
5.8-1
5,.4-1
Construction
10.0-1
10.0-1
Trade
4.0-1
4.0-1
Services
5.5-1
5.4-1
Industry
Energy
12.3-1
12.3-1
Electric Power
13.6-1
13.6-1
Solid Fuels
11.9-1
12.4-1
POL
11.4-i
11.5-1
Metals
9.9-1
10.0-1
Nonferrous
15.9-1
16.6-1
Ferrous
9.4-1
9.5-1
Fabricated Metals
8.9-1
9.5-1
Shipbuilding
8.0-1
4.8-1
Automotive Equipment
9.7-1
9.9-1
Electrical Machinery
8.1-1
9.6-1
Electronic Equipment
7.5-1
9.0-1
Chemicals
14.1-1
16.0-1
Construction Materials
12.6-1
14.2-1
Forest Products
6.9-1
10.3-1
Food Products
23.4-1
19.6-1
Manufactured Consumer Goods
15.5-1
16.1-1
Defense Industry
7.5-1
7.5-1
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Ruble-Dollar Ratios for Soviet and US Product Mixes
1951
(Continued)
Soviet
Product
Mix
US
Product
Mix
Agriculture
16.6
23.3-1
Food Crops and Livestock
16.8-1
24.4-1
Industrial Crops
13.9-1
11.8-i
The agriculture, transportation, and communications ratios
are obtained in a manner similar to that employed for obtaining the in-
dustry ratio. Only one level of aggregation, however, is required. Since
coverage is more complete and gross values more nearly equal to value
added than in the industrial sector, there is little validity sacrificed
by summing ruble and dollar values of the components and deriving sector
ratios directly from the sums. The procedure is comparable to the first
level of aggregation used to calculate the conversion ratios for industry.
b. Construction, Trade, and Services.
The ambiguities involved in attempting to define and
price units of activity in the trade and services sectors dictate the
need for some substitute basis of comparison. Since these sectors furnish
services almost entirely personal in nature, it appears suitable to meas-
ure "output" in terms of the full-time labor force employed in each sector.
The price per unit of output -- the average annual wage -- is obtained by
dividing the total value added in each sector by the labor force. For
the services sector the two largest components, medical and educational
services, are specifically included.. For trade, an over-all sector meas-
ure is used. The construction conversion ratio represents the best esti-
mate of the responsible analysts. It is based on a weighted sample of
comparative construction costs in the two economies. Even less than in
the case of goods can qualitative differences be minimized in the inter-
country comparison of services. In fact, much of the difference in cost
may be explained by lack of similarity in the services rendered..
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3. Problems of Pricing.
The validity of Soviet prices as measures of real cost has
been discussed in previous reports and need not be reiterated here, ex-
cept for one aspect. Consumer goods prices are retail prices, so they
include US excise and Soviet turnover taxes. Soviet agricultural prices
have been synthesized from consumer goods prices by deducting added
values created in marketing, processing, and transportation. Turnover
taxes are included to the extent that they represent identifiable land
rent and MIS service factor payments. As derived above in III, C,
37 percent of turnover taxes are so included. In addition,.10 percent
of the monopoly profit element of the tax also has been included. This
proportion is about equal to the share of collective farm market trade
in total trade and represents the economic rent accruing directly to
farmers. The entire tax is left in the prices of food products, manu-
factured consumer goods, and petroleum products. This procedure is re-
quired for comparison purposes, since GNP calculations for Western
economies do not exclude indirect taxes.
The conversion ratio for GNP is arrived at by weighting the
individual sector ratios by their value-added weights. The result is
an over-all ratio of 9.8 to 11.1 rubles to the dollar (US and Soviet
production mixes, respectively). For conversion purposes the average
of the two ratios, 10.5 rubles to the dollar, is used. There is con-
siderable dispersion of individual sector ratios about this weighted
average. The highest ratios prevail for agriculture and food products,
reflecting both the effects of the turnover tax and "underallocation"
of capital resources to these activities relative to the shares they
would receive in a market economy. The high ratio for manufactured
consumer goods largely reflects the incidence of the turnover tax. The
considerably higher than average ratios for chemicals and nonferrous
metals can be explained in terms of comparative technological and
resource endowments. The lower than average ratio for most machinery
items reflects the priority the Russians have given to machinery in-
dustries in their investment programs. The significantly lower than
average ruble-dollar ratio for services reflects in part the lack of
those refinements which characterize personal service in the US. In-
deed, it must be admitted that a comparison of the prices of services
in the two economies without any allowance for qualitative differences
means that unlike activities are assumed to be comparable.
 VII. Dollar Estimates of GNP and Its Components.
A. Limitations in Conversion Procedure.
There are limitations which must be observed in applying the
computed conversion ratios to selected ruble magnitudes, or the re-
sults will be invalid. The purpose of the ratios is to facilitate
intercountry comparisons of particular economic activities. It is
legitimate to compare the Soviet with the US GNP or to compare any
GNP component individually. One cannot, however, construct a dollar
estimate of Soviet GNP by first converting each sector to dollars at
its own exchange rate and then summing the dollar magnitudes. This
procedure inextricably scrambles the Soviet and US scales of values
into a meaningless jumble. It involves adjusting ruble sector totals,
which are a function of.Soviet resource. allocation (pricing) policy by
the introduction of prices which reflect US resource allocation pref-
erence. Unless the Soviet scale of preferences is preserved in the
comparison, the application of conversion ratios is invalid. The dis-
tribution of GNP by sector of origin in Table 13* illustrates the
deficiencies of the foregoing technique. The absurdly small size of
the agricultural sector and the inflated proportion of GNP originated
in transportation, trade, and services are direct effects of inter-
posing US values on Soviet bases. Another error involved in this
procedure is the implied conversion ratio of 9.1 rubles to the dol-
lar -- which results in an overstatement of Soviet relative to US GNP.
A similar distortion appears if the ruble values and uses of GNP are
converted to dollars and then summed to obtain GNP, as in Table 14.**
Defense has been inflated to the point at which it commands more than
one-fifth of total resources, whereas consumption has been deflated
until it uses only slightly more than two-fifths percent of GNP. It
is unrealistic to think that a peacetime economy would devote well
over half of its resources to nonconsumption purposes.
B. Application of Conversion Ratios.
There is no interposing of one economy's scale of values upon
another in intercountry comparisons of GNP which utilize conversion
ratios representing weighted averages of each country's respective
* Table 13 follows on p. 45.
Table 14 follows on p. 46.
 Effect of the Summation of Converted Sector Dollar Values
on Dollar Estimates of the 1951 Gross National Product
of the USSR by Sector of Origin
Value ,
Converted Value
(Billion
Conversign
(Billion
(Percent
Sector
Rubles)
Ratio ?J
Dollars)
of Total)
Industry
342.1
13.0-1
26.3
22.2
Agriculture
316.2
19.9-1
15.8
13.4
Construction
75.3
10.0-1
7.5
6.3
Transportation
81.7
4.4-1
18.6
15.7
Communications
9.7
5.6-1
1.7
1.4
Trade
44.1
4.0-1
11.1
9.4
Services,
206.5
5.5-1
37.5
31.6
GNP
.1,075.6 c
9.1-1
118.5
100.1
b. See pp. 41 and 42, above. The figures are arithmetic averages of
sector ratios for the USSR and the US.
c. The unadjusted ruble total used here implies that the portion of
turnover tax not compensated by factor cost (monopoly profit) can be
proportionately distributed among the sectors. Such an assumption has
been introduced in order to assure comparability with similar measures
in Western economies.
sector ratios. This procedure has been followed in the derivation of
GNP ratios presented in VI, above, which result in an over-all
average of 10.5 rubles to the dollar. Applying the 10.5-rubles-to-
the-dollar relationships, 1951 dollar estimates of Soviet GNP emerge
which may be considered comparable with US figures. Comparative
figures for the years 1950-55 are presented in Table 15.*
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Table 14
Effect of the Summation of Converted Component Dollar Values
on Dollar Estimates of the 1951 Gross National Product
of the USSR by Use
Use
Value J
(Billion
Rubles)
Conversb1) n
Ratio
(Billion (Percent
Dollars) of Total)
Consumption
688.6
20.0-1
34.4
42.4
Administration
26.6
4.7-1
5.7
7.0
Defense
110.4
6.3-1
17.5
21.6
Investment
230.0
9.8-1
23.5 29.0
GNP
1,055.6
13.0-1
81.1 100.0
a. See left-hand column in Table 6, p. 28, above. The unadjusted di-
vision of GNP by use is employed in this derivation because the conver-
sion ratios for the end uses are based on Soviet prices inclusive of all
of the turnover tax. If the breakdown after adjustment were used in-
stead, it would be necessary to introduce conversion ratios which re-
flected the new prices.
b. The conversion ratios for end uses are based on the weighted aver-
ages of the ratios of the origin sectors which serve as indicators for
moving the end-use proportions (see V. B, above).
The conversion ratios may also be used to make intercountry
comparison of specific uses or origin of GNP. The process cannot,
however, be continued to the stage of aggregating the separately con-
verted sectors, if scales of preference are not to be inextricably
scrambled. Dollar estimates of Soviet GNP by sector of origin are
shown above in the third column of Table 13 and those by end use in
the third column of Table 14.
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Dollar Estimates of Gross National Product
of the.USSR and the US
1950-55
Year
USSR _a/
1950
96.0
307.2
1951
102.5
329.8
1952
113.6
339.9
1953
117.0
350.2
1954
124.6
360.4
1955
134.6
370.9
a. Derived by dividing figures in top row
of Table 9, p.36, above, by 10.5, the GNP
conversion ratio.
1955 extrapolated at historical growth
rate of 2.9 percent a year, which shows
that in the years 1950-53 the GNP of the
USSR has ranged from about 30 percent to
one-third of that Of the US. By 1955, the
ratio will rise to about 36 percent.
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 Declassified in Part - Sanitized Copy Approved for Release 2013/04/10
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Declassified in Part - Sanitized Copy Approved for Release 2013/04/10
CIA-R DP79RO1141A000500050002-8
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/10: CIA-RDP79RO1141A000500050002-8
SECRET
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