RUMANIAN PARTY LINE SHIFTS ECONOMIC EMPHASIS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700190141-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: August 24, 2011
• Sequence Number: 141
• Publication Date: June 29, 1954
• Content Type: REPORT

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LANGUAGE
Economic - Party line, theory, fiance, bu et,
aEriculture, domestic trade, ~
petroleum, planning
Monthly periodical
PUBLISHED Bucharest
DATE
PUBLISHED Dec 1953
SUBJECT
HOW
PUBLISHED
WHERE
CLASSIFICATION CONFt~,}?
CENTRAL INTELLIGENCE AGENCY
FOREI^.N DOCUMENTS OR RAD O BROADCASTS
COUNTRY Rumania
P,EPORT
CD N0.
DATE OF
INFORMATION 153
DATE DIST. 019 Jun 1954
SUPPLEMENT TO
REPORT N0.
THIS IS UNEVALUATED INFORMATION)
RUi+LWIAN PARTY LINE SHIFT'S ECONOMIC EMPHASIS
[Comment: The followtng article in Lupta de Clasa
organ of the Rumanian WorY.er's Party, written-'a ' theoretical
St. Arlene, gives reasons for the nex economic J P rty theoretician
and discusses certain shifts.] pc.. icY ir. Romanis;,
Under the present regime of the Rumanian People's Republic significant
Progress has been made in the development of the national econoB>,y on the road
to socialism. The volume of industrial production has surpassed the
level. Heavy industry, particularly the machine building industry, is coot
ally or. the increase. Followin t Prewar
Moldavia and the discove ~ E he development of the petroleum basin ininu-
of the count ~' f new oil strata in Oltenia and in other regiunes
ry, the production of crude oil (titeiu) reached 9.3 million tons,
compared to 8.6 million tons produced in 1936. At the end of 1953, the produc-
tion of coal had increased 2.4 times over 1938 production; that of steel, 4
times; and that of cement, 4,5 times. Production of eiects?ic enerEy and chemi-
cal industries have increased greatly. The production of cotton cloth in 1952
was 90 percent greater than i~ 1938; wool cloth, 110 percent; rayon, 40 percent;
shoes, 167 percent; and cotton underwear, 110 ner,;ent.
Successes have been obtained in agriculture as a result ^r aid received
from the people's democratic state. More than 200 MTS have bean set up. More
than 280,OOp i'amilies of peasants have united in about fa,000 collectives and
TOL, the majority obtaining significant results in productivity per hectare and
in raising their standard of livin3? State farms, with more than 4,100 tractors
and agricultural machines, ha~oe achieved large yields of ,-rain per hectare.
The amount of goods distributed by state and cooperative stores to
workers in 1953 is 50 percent greater than iu 19j0.
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CONFIDI:tamr qT,
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Private Enterprise
During the period of transition from capitalism to socialism there Ere in
the Rumanian People's Republic, in addition to socialist formations, sou
producers of goods. In agriculture they constitute the large majority and will
continue to be the principal producers of agricultural products for a long time.
In trade and production, they constitute tha private capitalist formation. In
these two sectors, the economic law governing capitalist production and the
small-scale production of goods prevails. $ere the law of value is the re
ing force. $owever, this role is limited by the existence of the socialist
sector and the laws 6ulat-
democrstic state. governing it, and by ttie political economy of the
pecple's
The socialist formation has the directing role in the over-all economy.
As a result, the effect of the economic laws governing the private sector is
limited by the action of the socialist economic laws. The people's democratic
state can check these laws and use them in the interest of building socialism.
Peasants with small and medium farms are interested in increased industrial and
agricultural production. They are interested in producing more agricultural
goods to satisfy the need for industrial rax materials and for food for tl,e
urban population, for they in turn benefit from the expansion of industry. The
people's democratic state, properly balancing the general interest of the state
xith the interests of the private sector, can attract indeuendent producers
along the road to socialism.
The private capitalist sector, formed for the most_Pgrt of kulaks o
the socialist sector. There is an acute struggle between them. The
democratic state is carrying out a , PPoses
the only correct policy durin +, policy of fencing in the kulaks. Thisliss
of the economic law of the pr~vate sectort s~ge and limits the damaging action
means limiting the abilit o: Policy of fencing in the kulaks
but permitting them to exy the kulaks to exploit and to enrich themselves,
goods as pand their production and increase their exchange of
provided by law and under the control of state agencies. It is in
the interest of the national economy that in the present stage kulaks increase
agricultural production, deliver assigned quotas to the state, and bring prod-
ucts to the market.
Because the state cannot directly plan production 1. the private capitalist
sector, it has set up a series of economic levers which permit it to exercise a
poxerful re3ulating influence on thi, [sector) as well as on the socialist sector.
Economic Balance
The development of the socialist formation is taki.,~; place in the Rumanian
People's Republic amidst a sharp class struggle, The op?ping of an ever large.
field of action for the fundamental economic laws of socialism and of propor-
tional planned develo went of the national econo
on the part of the capitalist elements and their~oolssandaasentso~uresistance
by the imperialists. These persons have recourse to mqn g ' PPorted
our forward march. y methods to impede
The continued sharpening of political vigilance, thorouga study of the
ection of economic laws, and their application in the building of socialism are
the chief tasks of party and state cadres.
The principal requirement of the laws of planned Proportional development
in the national econoaty is the establishment of a proper ratio between .economic
branches in conformity with the requirements of the fundamental economic law
of socialism. The ratio_axisting between the various branches of the socialist
econo~r are not fixed. They can and must change in accordance with the economic
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conditions and historical objectives in every period. Changes in this ratio
cannot be spontaneous, but must be planned by the people`s democratic state.
Thus the forward mr.rch of a socialist society leads to expansion of production
and to greater fulfillment of the material and cultural needs of the workers.
Taking objective necessities into account, the socialist state plans the
ratios between capital goods and consumer goods, between the mining industry
and the processing industry, between the accumulation, consumption, and re-
serve funds, the proportion of labor force to be assigned to various branches
of the economy, etc. Of special significance is the establishment of a proper
ratio between industry and agriculti?^e, and between mining and processing. A
sure supply of raw materials must be set up for heavy industry through the
expansion of present sources and the discovery of new ones.
To assure the proportional harmonious development of the national economy
it is necessary to liquidate the territorial division of productive forces, a
remnant of,capitalism. For this purpose the Five-Year Plan provides for the
allocation of industries, sources of raw materials, and of consumer centers,
and the development of the economies of regi.unes which suffer from the ararchic
localization of industry left by the previous regime.
Ttie task of building socialism requires the liquidation of the dispropor-
tions between economic branches of the national economy and the establishment
of new proportions to assure the wealth of Products necessary for the maximum
satisfaction of the material and cultural needs of the country.
The plenum of the Central Committee, held 19-20 August 1953, revealed that
forcing the rate of industrialization and establishing an improper ratio between
the accumulation fund and the consumption fund has resulted in an unsatisfactory
standard of living among workers in cities and villages, in comparison with the
level of the national econoulY. The rate of industrialization was forced by the
allocation of too great a fund for heavy industry while not enough was granted
to overcome the lag in agriculture, and the consumer goods industry did not
receive investments in line with other branches of the economy.
Financial ?lapping
The plenum fixed the accumulation fund for 1953-1955 as 27.8 percent of
the national income and the consumption fund at 72.2 percent. The accumulation
fluid will increase annually "in a special manner" during 1953-1955, and will
represent a smaller percentage of the national income, because the national
income will rise more rapidly than the increase in the accumulation fund. At
the same time, the consumption fund will increase each years both in absolute
figures and in percent. The rate of increase of the consumption fund will be
more rapid than the rate of increase of the national lncome.
The plenum established a proper distribution of the accumulation fund
between the branches of the national economy. This distributlon takes into
account the lag in agricv't.,:ra1 production, in the output of consumer goods,
and in the building o" dwellings. It ^=tr~blishes a h..^.mnnirn~s ratio, and pro-
vides for the m:forced development of heavy ,.ndustry, without which the develop-
ment of the economy and the building of socialism would not be possible. Thus
the volume of investments provided for heavy industry ::nd certain large con-
struction pro3ects for the period of 1953-1955 were reduced 15 to 17 billion
lei. Of this fund, 10 to 12 billion lei remain in the consumption fluid; and
about 5 billion lei are designated for the development of agriculture, for. the
production of consumer goods, for the construction of dwellings, and other
social-cultural work. The level of investments for heavy capital goods and
for large-scale constructions of transport [pro,jects] will decrease proportion-
ately, those for agriculture and consumer goods industry will double. At the
same time, investments for social-cultural work and especially for the building
of dwellings will increase.
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Under the peoples democratic regime wide action has been taken to
present xorkers and to mobilize new xorkers. Wages are being based on
and quality of work. train
of traini This system is a powerful stimulant to quantity
ng and to increasing labor productivit raising the level
more than 2ppe than 1~'~ workers; in 1951, more thany170,0001nand inhools
,~0 workers and masters. 1952
However, ccrta?u imbalances developed in the labor field.
to unequal wage scales in various bra
scales checked the increase in trainedcworkerstin some brancheso ese were due
cree of the Council of ?~'? These wage
particularly in those bManchesrs seeks to stimulate the traini A recent de-
force. The decree i of industry which are most in needoofwlabors~
and sets u a mproves~?the wage system, stimulates the trainin
and labor p graduated wage scale providing for higher B of workers,
prod tivity of each worker increases. pay as qualifications
Balance Between Indust and A riculture
The law of the planned proportional development o: thc~ national economy
places greatest emphasis on the establishment of a proper balance between indus-
try and agriculture. The plenum of 19-20 August showed that an
oped in the republic as a result of the great lag in a
This lag has been dete imbalance devel-
has been socialized rmined and fixed b Bricultural production.
y objective causes. In industry, which
ress. In a ' planned development assures proportional
griculture, however where the overwhelmin ma and sustained prog-
are owned by small and medium independent g ,jority of the farms
of production remained behind. Peasants, the development of the forces
The fact that the law of planned proportions. devel?
socialist part of the rational econo~., and has a
in agriculture Pment affects orly the
tionate rate of development of industive factor which limited field of action
pendent farm exists the Z'Y and agriculture~ndgsilor. the dispropor_
rational or Possibility of introducing hex techni ue, as the inde-
tion c ganization of production are very reduced, and a q and of the
annot keep pace with socialist industrial 8riculturel
techniques on an ever increasing scale. Produc-
Agricultureuwillnbehableutossatisfy
fully the requirements of industry and of the urban pop,ylatinn onl
full socialization and mechanization.
y after the
However, the socialist transformation of agriculture cannot be nchieved
without some effort. It requires the necessary equipment and the free consent
of peasants in ,joining collectives.
It would, however, be a great mistake to attribute the
culture behind industry exclusively *.o the existence of independent ownership,
for independent Brest lag of agri-
Production. peasants in Rumania today have a potential for
greatly increased
I.~denendent Peasantry and m a
- - uuian
In tie present stage of the development of agriculture, when independent
farms provide approximately 75 percent of the Brain supply, lar er
of raw materials for industry and food for the urban
tamed by stimulatin g fluantities
of goods between city andsvillage?ingorathihheir Population could be ob-
production and the exchange
granted stronger supports to the individuals lloandtmediumn~ of A
crease production in conformity with the needs of the national econ ugust 1953
combine more strop 1 peasant, to in-
g y the interests of the state wtth the interests ~deto
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farms. Thus, individual small and medium farms will receive granter credits
to procure more tools
buildin
,
g materials, selected seeds, and to breed and
fatten animals, At the same time, MTS will be directed to Ptve them technical
aid.
Instead of drawing up plans for individual farms, plans which would not
take into account objective economic laws governing independent small producers,
the plenum directed its attention toward creating a common interest between the
state and the peasantry in increasing production. Attempts in the past to fix
plans for individual farms were not successful, for they could not take into
account particular conditions on t`~e more than 3 million individual farms.
Plans actually caused production to decrease. Individual producers were required
to cultivate many crops which would not grow in their areas. The crop distri-.
button broughF about lower yields per hectare.
Although the state cannot plan agricultural production in the private sector,
it can orient and direct thi's production in the interest of building socialism
by using a series of economic levers such as the collection of mandatary quotas,
contracts, procurements; prices, credits, etc. It is necessary to point out that
the proper use of these economic levers, in strict conformity with economic ob~ec-
tive law, permits the people's democratic state to exercise n regulatory influ-
ence on the prodv^.tion and circulation of goods produced independently, to cause
producers of these goode to serve in the national economic interest and in the
building of socialism, and to "fence in" tide exploitation potential of the pri-
vate capitalist sector.
Free trade is necessary to raise considerably the volume of goods which
enters into the central state stockpiles. A recent decree of the Council of
Ministers organized this type of trade so that it will contribute more and more
to the intensification of the exchange between city and village. Up to the pres-
ent time [December 1953], the agriciiltura] producer has had to sell specified
quantities to cooperatives from a very restricted list of agricultural products,
in order to have the rip~t to :,~-y certain industrial products which figured in
another list, s?milarly restricted.
On the other hand, only the sale of grain and wool gave the producer the
right to buy arty kind of industrial product from the same list. For other agri-
cultural products such as milk, beans, potatoes, and poultry, he could buy only
certain industrial products. He could buy nc lursber at all. When a producer
needed lumber, but had no wool or grair. to sell, he was forced to sell milk and
vegetables on the free market to bqy grain or xool. Re sold these commodities
to a cooperative in order to be eligible to buy lumber. As a result money lost
its role as an equivalent general value in this type of trade. This situation
made the exchange between city and village difficult and diverted to the free
market a number of agricultural products such as potatoes, milk, vegetables,
etc., which are extremely important for socialist industry and for the urban
food supply. The new system remedies the situatien and strengthens the exchange
between city sad village.
In the present period, socialist trade cannot azure the variety and quan-
tities of food products needed, because the greatest amount of commodities are
produced by the private sector.
Prices
By withdrawing from socialist trade ever larger quLntities of food products
obtained from contracts, purchases, mandatory 3elivery quotas, the free market,
and from the socialist sector of sgricultui?e, the state can influence prices on
the free market, making them higher than those charged for goods sold by the
state. This position has not been understood by some agencies of the Ministry
I J
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of Domestic Trude and by some of the people's councils. In violation of the
directives of the Central Committee and of the d
ing for limiti
e
To establish 8~more proper ratio between industry and agriculture, the
plenum of the Central Coaunittee prepared a series of measures to stimulate
the development of agriculture, measures which were made concrete in various
state and party decrees. Important +ax reductions were granted to individual
peasants, collectives, and TOZ (agricult,,-41 cooperatives) on income
from young fruit trees, vines, bees, geese, ana .:+tk worms, In addition,
taxes were reduced oa income earned b - erived
farms, during the first 2 Y collectives establio:ing new stock
percent were Years of such farms, Income tax decreases of 20-30
delivered thegentire h~rvest fromwho drew up delivery contracts and then
the contract areas to the state.
A powerful stimulus to increase per hectare productivity is the decrease
in income tax for collectivists and TOZ members who sell products
excess of the avera6e per hectare norm for a Given area,
produced in
The plenum of the Central Committee revealed the existence of
between the various branches of agriculture, particu'ar v a
animals and animal Podder. It is an imbalance
by direct state plannin clear that this imbalance cag in raising
peasants. Si because the vast majority of annot be overcome
The plenum planned t?o encourage by eve Producers are individual
of animals ii, collectives, TOZ, state farms, and independent holdingse r0aising
special interest in this regaiYl is a decree, recently voted by the Grand
National Assembly, providing for increased animal raising In 19 4-
decree sets up a program which will stimulate and su
animals so that attar 2- 5 1956. This
in the food and raw materialasu a significant ppO~ the raising of
Pply improvement will be brought about
All these economic measures of the government and the party show that the
attraction of small and medium peasants to socialises is not done b
but by giving them state aid. The transition co socialism b s
peasants is done b Y ruining them,
tion Y improving their economic status Y mall and medium
and sale of products to the state, and b ~ by increasing their produc-
technical level. In such a case the Y raising their organizational and
of the advantages of workin peasant is convinced by his own e
a result he x111 turn voluntaris soil by machine and by advanced methodser~p9ce
sized that one of the most important dutiesiof agriculture. The _
constant or { Pa= t;; and State organs~se~ea
existing ones.
Ban_zation of new collectives and TOZ, and the consolidation .of
To overcome the lag in agriculture the plenum devoted special attention to
state farms and hLPS, where the state is able to plan 9irectly the
distribution of goods. The plenum discussed the existence of
the organization of state farms Produc,;ion ana:
errors xhich serious errors in
PlsI'ms?haThelpoor organization of malty. state faprevent them from becoming model
owered their T?m and their lack of long_rar;e
productivity in crops and animal husbAndry,
1"~~y of the mistakes cited are due to insufficient machine
force. To overcome these errors the plenum took a series of measures tc aseure
more agricultural machine and a 2'Y and labor
Properly trained technicians. p rmaueat cadres of workers, functionaries, and
Support for IL riculture
ng but not liquidatin
crees of the state, provid-
virtually eliminate private trade, inh bated thedexchange betweentcity and
village, and curtailed the supply of food to the xorking population.
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The plenum took a series of measures to assure that existing deficiencies
in DPfS be overcome. The present lack of spare parts and certain types of
machines will be overcome by the assignment of the tractor plant in Stalin to
produce other machines in addition to the KD-35 and Belarus, tractors. Speci-
fied enterprises will make enough spare parts and drawn machines to establish
a better ratio between tractors and tractor equipment.
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