REPORTS FOREIGN TRADE IN CRITICAL STAGE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600300612-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: September 7, 2011
• Sequence Number: 612
• Publication Date: May 1, 1950
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/09/08: CIA-RDP80-00809A000600300612-8
CLASSIFICATION CONFIDENTIAL CONFIDE!ITIAL
CENTRAL INTELLIGENCE AGENCY REPORT
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
CD NO.
COUNTRY
Czechoslovakia
DATE OF
INFORMATION 1949 - 1950
SUBJECT
Economic - Foreign trade
HOW
DATE DIST. / May 1950
PUBLISHED
Daily and biweekly newspapers
WHERE
PUBLISHED
Paris; Zurich; Stockholm
NO. OF PAGES 3
DATE
PUBLISHED
15 Dec 1949 - 25 Feb 1950
SUPPLEMENT TO
REPORT NO.
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THIS IS UNEVALUATED INFORMATION
Prague -- The Communist economy has reached an unhappy stage. The 1950
plan has been revised several times in accordance with the new demands of the
Soviet Union. Its extent is such that the domestic wealth and the labor force
are being exhausted.
The execution of the plan fails insofar as a favorable foreign trade has
been relied on. The average yearly value of foreign trade was to amount to
49,500,000,000 crowns during the Five-Year Plan. Imports of raw materials
from the West were to be covered by the normal returns of foreign exchange.
The planned annual import of investment goods valued at 17,250,000,000 crowns
remained uncovered, but it was considered certain that necessary credits would
be obtained from the West.
This optimism turned out to be unfounded. however. Not only are imports
of raw materials from the West still not covered from current returns of foreign
exchange, but the dollar and pound deficit of 1948, which amounted to about 4
billion crowns, has now increased to 12,500,000,000 crowns. The import of invest-
ment goods is out of the question because credit has been refused by the West.
Recently, when the situation had become extremely di,ficult, Evzen Loebl,
Deputy Minister of Foreign Trade, allegedly revealed at one of the conferences
of leading economic executives what he had been told by the US government dur-
ing his visit to Washington. He allegedly announced that in order to save the
Czechoslovak economy US credit conditions must be accepted.
On 25 November 1949, Loebl was arrested in Prague. Together with him
were arrested another deputy minister, branch chief Margolius, the deputy chief
of the foreign exchange section of the National Bank, Engineer HaJek, and sev-
eral other officials. The governor of the National Bank, Doctor Nebesar, and
the general manager of the bank, Engineer Chmels, were questioned. The offic-
ial report called the arrested persons "wreckers of the regime." -- A. B.
14
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CONFIDENTIAL `jO NFIDN TIA I
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CONFIDENTIAL
GIVES 1949 FOREIGN TRADE FIGtIRPe - ?--- Zuercher Zeitung, No 137, 21 Jan 50
According to an rfficial report from Prague, Czechoslovakia's imports in
December 1949 amounted to 3,569,000,000 crowns while imports for the entire
year 1949 amounted to 39,399,000,000 crowns. December exports totaled
4,479,000,000 crowns and exports for 1949 are given as 40,308,000,000 crowns.
By way of comprrison, import-export figures for 1948 are listed as 37,669,000,000
and 37,653,00i,000 crowns, respectively, so that 1949 shows an export surplus of
909 million crowns as against an import surplus in 1948 of 213 million crowns.
With regard to changes in currency valuation, it is significant that last
year's imports approximate those of 1937, the last prewar year, even exceeding
them to some extent; while exports, figured on the basis of 1937 I'ices, failed
to achieve prewar standards.
It is well known that 1948 was a year of great pressure with regard to
import requirements because of the disastrous crops of the preceding year,
whereas the latest crops resulted in very favorable conditions for domestic
consumers. Rationing of bread and flour could be discontinued. The food sup-
ply in general underwent considerable improvement. Sugar, however, is still
being rationed, and the cultivation of sugar beets is being greatly increased,
in the interest of exports.
Quantitatively, imports of raw materials, compared with total imports for
10 '?, rose to 54.6 percent as against 48.8 percent in 1948, an increase of 5.8
,.accent, constituting a 17-percent increase in value.
Total exports increased by 2,760,000,000 crowns compared with 1948.
Concerning participation of the Eastern countries in Czechoslovakia's
foreign trading in 1949, the report merely states that it amounted to 45 percent
instead of the anticipated 40 percent. Apparently Yugoslavia is not included in
these figures, whereas East Germany and Albania obviously have been taken into
consideration.
In 1948, the Soviet Union, with special shipments of grain, meat, and butter
supplied Czechoslovakia with 15.6 percent of her total imports; on the other
hand, 15.9 percent of the latter country's total exports went to the Soviet Union.
All other Eastern Bloc countries, not including the Soviet Union, supplied 35 per-
cent of the imports and received 37.8 percent of the exports, with Yugoslavia
participating at the rate of 6.3 percent of the imports and 6.9 percent of the
exports.
In conclusion, the report states that the elimination of Yugoslavia from
Czechoslovak foreign trading has been more than compensated for by foreign-
trade negotiations with the Soviet Union, Poland, Hungary, Rumania, Bulgaria,
and Albania; the decline of import-export relations with the West is also re-
flected in this circumstance.
CREATES LARGE FOREIGN TRADE MONOPOLIES -- Neue Zuercher Zeitung, No 61, 10 Jan 50
According to Inpres, a mouthpiece of the Czechoslovak Ministry of Informa-
tion in Prague, products of the Czechoslovak metallurgical industry will be
handled on the world market by Ferromet, the nationalized foreign trading cor-
poration. Ferromet will also act as purchasing agent for the import require-
ments of the metallurgical industry and will procure the foreign exchange neces-
sary in this connection. The company plays an important part in the realization
of the Five-Year Plan in that the export contracts secured by it are expected to
keep the well developed metallurgical industry of Czechoslovakia supplied with
work.
CONFIDENTIAL
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CONFIDENTIAL
The founding of Ferromet led to the total exclusion of private capital
from the metallurgical industry. By acting as a clearing house for both
exports and imports, Ferromet has become one of the largest foreign trading
organizations in its field. Seventy percent of the company's employees have
entered into socialistic contracts. With the aid of these contracts, and on
the basis of numerous suggestions for improvements, the organization's activities
have been rationalized and +, -- ,.,rhead expense noticeably reduced. During the
first year of its existence, Ferromet devoted a great deal of attention to the
training of cadres. The socialized system of industrial accounting is currently
being introduced.
Among the privileged foreign trading companies the Metalimex monopoly
occupies a special position inasmuch as its functions are chiefly concerned with
imports. The company is one of the largest of its kind. Its annual turnover
amounts to several billion crowns. The company was founded in December 1948.
In this first year of its existence it succeeded in setting up its administra-
tion; training -adres of specialists, and in satisfactoril" coping with the
foreign trade problems with which it was confronted. One of the main difficul-
ties it had to overcome was the fact that some of the raw materials required
by it, such as nonferrous metals, are considered strategic raw materials by
the West. Nevertheless, the company was able to supply the industry with,
adequate quantities of raw materials and even exceeded the planned require,
ments. The majority of raw materials wee imported from the Soviet Union. The
elimination of superfluous imports is one of the company's most important goals.
Papco, the one-year-old combine for the export of paper products, has
increased its volume of exports by 14.34 percent as compared with 1948, the. last
year prior to the monopolization. During the same period, Finland increased her
paper goods exports by 8-percent, Sweden by 2 percent, Norway by 4.6 percent, and
Canada by 12.04 percent. Papco's success was achieved under fairly difficult
circumstances, since the company was up against the powerful organizations of
the paper industry of the Nordic states, the so-called Scan-Organizations. In
1946, Czechoslovakia exported paper tc 37 countries, 19 of which are overseas.
In 1948, export of industry included 80 countries, of which 62 were overseas.
In 1949, export was expanded to cover 90 countries, of which 68 were overseas.
The paper industry's share in total exports has risen considerably in the post-
war period.
1950 TRADE WITH USSR -- Svenska Dagbladet, No 54, 25 Feb 50
Prague, 24 February -- The Soviet Union will deliver 3 million tor., of
goods to Czechoslovakia under the terms of an agreement signed in Moscow by
the two countries. The Soviet deliveries will include 1,300,000 tons of iron
ore, 460,ooo tons of wheat, 250,000 tons of corn and grain, nonferrous metals,
fertilizers, synthetic rubber, raw materials for textiles, machinery, and indus-
trial equipment. To transport all these commodities, 200,000 railroad cars will
be needed. In order to ease the direct railroad traffic, part of the goods will
be transported by way of Poland and the Danube.
CONFIDENTIAL
50X1-HUM
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