THE EUROPEAN SATELLITE POWER COMPLEX

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A000900050001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 133
• Document Creation Date: December 12, 2016
• Document Release Date: October 3, 2000
• Sequence Number: 1
• Publication Date: July 30, 1951
• Content Type: REPORT

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%SECREI
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Iffi)I4IDQ& S1TILL1S'N COMORMs
WI& S
STRUIMS AM
30 Jhlg 1951
State Dept. declassification & release instructions on file
This report bas been prepared at the "*met of the Oftiof of National
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report op Certain seatioss, hcrava f are of lore classi-
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C31fR
ProJeot 6-61
21M BUROPS48 S LI38 MW CO
(Contributiron in NXIP...3)
PART I
ISDIYID1XLL BATBI.LITS COUI ,
Boom= STtE l88 i IMUM 8
MNMW
......-MMAW"
1-.- r and ConOluslont.
The integration of the Ruagauriaa econaMr In the Soviet Me* is !sllwdl-
manned, and SoTI.t-typt controls. a uppli d to the industrial ssato r,
Iaalmaste-iat psoduatian in. Bmgaty eentributes apparosimutely half Of the national
ineaM and at the same tine supports tbo `oonomio potential thr Hear of the Bloc
with iWartant exports of bsusity heavy m.ehimyo and steel prodnctss, in,
eluding nepons and sarrunition, .l~east,:vtsolmnieal paodwts, end preoisian parts
and inst aa.ntse To nelntain and .spend this eonteibution to the Bleats .oo??
nomdo-od.lstary potsamtial, capit01 lu mstmset is to be aaopaaded by 1964 by ape
pat'aaeimately 60 pszro nt over 2950, with particular emphasis on basis industries,
nctmbly- .oat, iron And steel, and ohsaaic*1s,
Izustaria2 davelopaosa t in Thinp y is nee.ssitatimg a considerable mcpamsion
in urban aavlaymant in the tape of bury war losses of urban muss of norkI
age. Labor it shifting from agricultaura, and the .~loyment at mourn Is In-
oreaei;g. griaultusai emoploymsnt increased 230,000 under the . Three roar
Play (1941,5o), and an additional expansion of 650,000 to a total of apprdzi.?
vately 2.4 million above the pra+aaar level is anticipated by 1953. Altlmugh
there is a dsfiaiansy In skilled maposear and tea mioal persomzel, labor prom
dustivKty has rosanwr d to approadmaat.7y prsaaar levelse Increased iltduet sal .
prodnotion, despite gtiaatYtattvs and teatmioai s ortoomings of t labor fbraie
mar be attsibutab2. to in industrial oquipmsat by the ftr ms during
VIorld War II and ourremt drives tdr iner.ased i dividual output*
Idiasiares taeard oollestlvisation of agriculture were not taken until midm
1948 and have sines advenosd at a ale, pass. A substantial portable food
surplus will be available to the Soriet Bloc in 1961 and 19524
Production of iron and steel in excess of pre.mr- levels has been meads possi.
bis through inportaatio of .irsntial raw materials Arum the Blocs T20 oonsidsr.-
aabl0 eaapsntion plannid star 1966 will depend on increased imports of hI&4Wadr~
Ilan o e, bituminous coal,. and fa rroa11a ra, rice,. Smgiry lacks adequate do.
manic supplies.
Jtmong' the aaadbarrous metals metals paroduc ed,, only alu (ms and antimiRr are
sigaitYeAft. A11maiwmm pa"oduotta oapuitir is being rapidly expanded, but Imports
of , lead, and zinc met be allocated by the USSR from Bias availabilitt so
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Coal production is being wed at a rapid rate to meet rising industrial
requirmmntas but Bm3gpry crust depend -entirely an imports from the Bloc for
bituminous coal W d ma llurgioal. coke, AlthDUgIu Goal 'will eeontin in start
supply in 1951 and 1952, surplus production witbin the Bloc could meet to
rising requirements of Bhmgarian iadu~etrya Output of crude oil is' smealll, but
the prodaast ion of petroleum products in 1950 sxeeeded domestic requirements by
now -285,000 metric tons, most of ahieh were exported to the rest of the Blood
The output of electrie power will meet i tsteiaai. requiPeeaenta through 1952.
B.s.araMe ~.
Soiiert suiit IS a,ir mush of the Sxngarian oootaom ' appear tiraly ostablisbad
and are Maly to be f rthmr expanded in 1951 and 39620 The continued sub-
seraienoA to the USSR of top.?18vs1 8u36arian adttinis tra o rs, many of n'ho1a are
Soviet.,, reinforces the Soviet somonis held an 8aagaxy and pis in.
ersaead an the USSR
Tb. Present Co=aiaist - ragitae in y is sttactively iwzsasftzg its control
air industry and this s rvise branches, but to date its aoutsol over agriculture
is Use iftr- esabing. The rsoeu p auun=sed drastic revision at the FL,. Year
Plan (198o.54), oalling for greaWS increased produrttian and for continued sx
pension in Davy itsdustryr, is further svi4.nse of the regi7ms's Intention to
exercise tighter *oonmatds eantrols and to enforce mans e=ating program of
soaialisatl4n
The principal eaeaj=ss in eantrel a fists In the field of agricu tu", where
soofalisation is proaa.ding slowly. Cozaaist concern amr tug problem is
iadtisated by resent obarges against the "bscaatrdasss" of agriculture, Increased
Plug mogbaais on the asehxniaation and socialiutian of forming, and severe
crap surrender nesaures eimrd at the kulaks. Althtruugh here is evidens of
oansiderable unrest along the harm s, especially the lculat4, ' present trends
indioste, that Coamtemsat a ,ols are unlikely to be sueoesstltlty eh~.l .caged dur..
lag 2951, and 1952 o Commmist planning, w zile directed toward "ant-a4 soc4ahi..
, apparently is desigtaed to avid serious trouble with tarn groups as a
A lesser moatmsss sancta in controls aver industrial labor, Current trends
indicate an undsrourrsnt of diraatisfnction in labor union rates, when
moms
resentsant against recent control program has appeared. iTith the continued
rapid vision of the industrial labor tome, them is sa=- possibility Us:
labor umaat may increase and create a serious problem for the ltngarian govern.
m~att~
The USSR Meraises important controls over Tmgary's ecazomic sf'Paira and is
expected to eantinue sash controls during 1951 and 1932. In large part' thaese
am In stets from the Soviet occupation of Sangary during 1944.47. During this
oosupation the USSR wan' able to pisos Hungarian Coa>nznists, and seen Sowi.t
eitfsens, in iapartant economic posts in Hangary, thereby facilitating the
atrtabliobm1t of a Co mznist resins, Ttze resulting constant iutterrleaac of
axngaty's top economic adatinistratora to control by the USSR can be ampectei to
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aaatiaus as a "r int uaaoe in the 3 urian soon r.
t areovrsr, the USSR under the terms of the Parteedam sgre *nt was able to
talc over former Gorman assets in sAnpm7 and thereby obtained caatml at mare
than 200 flrjw. By acquisition or thaw prope rt3a a end by the tarmtion of,
joust Sa inn eon mist to amplott aviation, river namigation,, ps-
tralsumo and bausifie- Ii] and ra2m ree*mvms, the USSR acquired coutzo2 over the
i ortant asotora at the Balgarien. eeonar V, The Soviet Union slew: profited by
the tGnw of the Tangarian pace. traatyeveehieeh provided for the pat of
$200 mtllinn in separations to V* USSR or a period of 8 years ending in 19520
The USSR alma bas intlusnood B avian production by stipulating the kinds and
eznunts of pro b otrs that min be aeospted as reparatjons. in addition, Soviet
control is .zaroissd through the modiu n of trade age eomsrbs, an sarample
the agrsamsnt of 2 Ostaber 1948 praflding lbs the delivery of $15D millian~
'aaorth of Mohinatry to the USSR betvsrn 1950 and 1954, Thus it eehauld be any
tioipatrd that Soviet sooromia conb'ols of this mtiro may be intensified har
ing 1951 and 1962,
ap EOoamta Planning,
(1) Preparation of Pismo
+.:rswr+r~r
The basis inciples of the Three Year Plan (.1949?49) and of the
live Year Plan (1960..64) eliieh followed were first =sk sd out by the Cem mists
-in Party cir4eesb In facts in the Five Year Plan At, there appears a formal
selawaels~dgamwst or Co ist rasponaibili r for initiating and working out the
general outline at the PI=* In addition, ref raas is mmds to v ariova5 un-.
specified farms of Srerist assistance in the preparation of the Plan,
81i0 1947 the ply process has dev kkped and' expanded after
the Soviet tashioa. The tnrmulatian of a plus is followed by revisi a o
mast ehanging .onditioms as that' bewmtt evident. Thus the Three Ysar Plan was
fulfilled, at least otf'isislly, within 2 years and 5 anths, permitting sub?.-
sta vial chmzgss in the 2949 targets. The Five Year Plan was eatrnstvsly re..
vissd in L y 1951, In axpla3aing this revision, Zoltan Vas, Pea=: dent of the
National Planning Ottiao, ssphasixed the following eonsidsratiozus (a) the 1954
targets for ineneafaetu ring, based-on 1950 results, eauld be mat in 1953; (b) the
need appeared In various branches of industry, such as coal, steal,. iron, and
ohsndcaU, - to speed up production= (s) a leg In sgrioulb rs was hindering
ftrtbtar deftlopowl" of the awn=Vs and (d) the existence of labor abor6agrs
aaraatsd a need fdr the ftxtber expansion of the labor fore*. This revision,,
undialaksn d+a-spite admitted dirficultlosp indicates a trend tweed plug for
higher targets and stricter controls to aunt madman rearms tram the sooaaoctr4
Although basis doeisions regarding planning progress are aids In
"* organie there is a teandsn y to give govern ental planning units i
.reseed responsibilities as they attain: a csrtaia maturity or reliability and
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boomw are a xperienoedo Thus the Thrace Teri. Plan Let of July 1947 prodded
fbr the esta-b3islarat of the Natioail PUaz g OlPxee, shah is Charged with
the reap wlbilii r for prepauratam of detailed p'lanso In Jim 1949 there was
established the People's Eoammio Counoilt a small body of bi,gb.-ranking
nsubgrs ihtoh tuna the suprasreei *organ for plaraaings. subject only to decisions
of the Cabin CounoiLs Tbus the " r and the planning functions of the
ar*Ownde ministries bus been greatly augoentsd si=e 1947. Mw same d v slop.
noat applies to the a &d n1 atra#v. units extending dm m to the local enterprises O
mhioh p1a`y an I reasing role in the detailed preparation of plans,
Trends in plan preparation are reheated in the atatoment of
ob tliios and ,inns In the Five Year Plea Ast the Plea's basis ob joestives vatire
(a a zoar1eraiAoa of the industrialisation process, (b) abalitfon of the *bsak,.
ss* of a grioultura, and (a) tseaaf~axstioa of the eaaonm q into _ a predoamis
nemtly industrial one, In the 1951 revision these objectives are *gain
strarsaRard? : and spneifio targets f`orr prwdustion,, 1%Lv ast amts, labor productivity,
and other fields are raised aocordifgly. The total in+vastent flgur1 was
ebengsi from 50,9 to 85 billion forints,* and larger.-soal.ee industrial production
fgvm 188.4 to 510 poyreent of 1949 production. According to Vas, by 1954 In..
dustry is to account for 64 persont of the anti?nal inooms as compared with
51 pereesst in 1949, aM the capitalist sraier of the erconeej is to be reduced
to about l or 2 percent as compaxad with 20 psraaa,t in 1949. In accordance v th
the Co=,mist eosospt, the econ is tb*x*tors to be subordinated to the re.
gui re ants of ia+3nwtr~tati.nas'i~iora ,
(2) Plan Control,
TrewU in the control of plan feilfillwat roughly parallel tbove
dealing with the preparation of plus o With the 4evelopment of the plaz+miag
proood s leas Coss ware elaborate =xohinaryr to control plan fd1fillamtto
The Pewpla'ni Econ Mo Connc-l and the 'National Plaming Office
exo roisib raspactively, policy.- n aad supervisory pc-erers with regard to plan
fulftllmant, The P1sarntrrg Office has authority to deal directly with local
units, , wk. m apectionap re ui re reports, confer with the ministries and athsr
control seamless and praweut entoftsment problem to the Caabiu tt Councils The
People's Economic Council in obargsd with the coordinating functions ~ and thus
exercises control over the sooac mic mudotrles, the 'Central Statistical Otfioaa,.
tbo- Stater Control Case, and other bodies concerned with plan fatlf311meetLt,
? o t+ awbo ge rata of the farint is 7 to the u3 dollar? this
does wit in any MW represent the forint'? reeslsr.cbange valve, dioh is at least
ma:a~r tines the atlioial rat. It is difficult-to estimate this exo2*Uge valuwo
siaae the toeint's purobasiug 'power varisa with each category of cozmoatlities,P
who" pricer I. fired by the govuzment,
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In 1948,,. an the . e of the Inauguration of the Five Year Plan,
the State Contrrol Comber was reargaad s.a and assumed the ttu bona of the teen
foxweu '*&Oisies ooaeasrnsd with the fins ass of germ tad agencies. and of
aatf onal exl rpri.seso In additions the Cozibw deals with such gaweral problems
as eftiaieaay, natioarsUsation of pxnduotiamo and entbraement of gaiirument
deore em Aaaatsr bo4r sonostnsd with plan, tlsifillmsnt is the Central
Statistical Oftiess, whish recently` was granted authority to issue quarterly
reports on the It,, Year Plan. In, aeiditian6 on 18 February 1951 this office,
ims, given the autbori1 to initi to - rimdnal proceedings under the sev . law
for the "prots.tioni' of the sooaoW,. This authority also is beld. by the
PlOnniM Offiat, the State Conis+ol Center, and the min' tries*
ba AdminisiratiTe Control.
Recent heeds in +ede~talstrs-tive control reflect the devaloptesot of
mars elaborate and more ettaatIve emaahis y to direct the rapidly expanding state
industr&os a Now ageas ass also hwse been .re4ted to keep pace with the extension
at state atmsrahip of new branches at industry.
Illu#irativ* of the trend tmard more elaborate admin3ttaratirs
control, the Heavy Indwttrits Cent.c, ich tormrrr1y h bom the adminiatrstim
Organ tar the ziatianaiised. et.st+or of henry induct ry, was trsnstormed in Jaoatr
1949 into the Dirsatarate of lbavy Industry and incorporated an a separate
ssatian in the prws3ouniy existing L' alstry of Industry. In June 1949 this
?dinistry was dhidsd into *3 separate Ilinisiriee, one dealing .with heavy in.
dustee'y and the other with light industry. The Ihnistry of Hewer Indusiz7 alas
&=ad Jurisdiction owr the tallawlag Direaterat.ss coal ndning; b Lto and
alurdnum~ heavy lu&uiry; passer I zs&,xti"ial daselopaaat; electric and mass
appliens.s; and tbeeha oical and the lime? cement, and glass industries. Sine
than the, ? nistar r of wry Industry has been reorganized from times to tins. Par
,a%amgle, fr units in the ltniettary *a now Ltint,t f es ware treated in Dscaeober
1950, on. for mining and prier and the other for toun5riec and macbines.
Despite the trend tward tighter control, there in sonsid ble
errideace that labor prubieaae bAv, not been sat isfactarily resolved* In 1950
and 1951, mW n decrees were issued with regard to wage and ? oonsu~tion warns 0
bonus poWmats and other inoantive devises, defective production, labor disair
phase and a Mlsyment records. In an effort to attain greater stability, in.
dustey wage agrooments raea-ntly by been replaced by a system of facte y sager
bso In December 1950 the Ca=i,l of LSinisters adapted a fasr rersldbg
"solution on .eons and wueste, Yet in spite of theses- .offar#s, tb.r persists
continued criticiaa by administrators of the 1a+es3e: of discipline, indicating a
waskn ets in conUol over Dungsury's expanding indst rim. Altbaugh the !.Trod
toward stricter contralti is expeaste4 to centime in 1951 and 2962, it is unlikely
that the lobar problaes will be entirely aelveda
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iM!
(2) A fMdturaso
The trod tenwrd rigorous cants Is is less at in regard to
agrioultu rs tban in the other seotC 's ' of the eonaegq-. Little socialization
as aged bsfom 1948, and the tea o sines that tine has been slog, in.
dioating a continued slow exbwelan at direct controls in 1951 and 1952.
State ;Pare and producez e a cooperatives represent only a mdnex part of *at'
cultural pro&totion, However, by_ a variety of maasu res pressure is exerted
en the,various term groups outside of the soria33sed seectwoo
R.amitly thorn has aid was writiaism or stato farm oporationso
In Janiaaryr 1951 the subw of ork"alsssitleatio~s~e was greatly reduced, and an
investigation was ordered of the conduct of Various memsCgerso In h the
work brig e a atom was decreed for an state lames. It can be anticipated,
there ors, that continued ettorte will be mods toward tighter controls of the
state fatsee *-
Sim& 1947 the organisation of farmers into produesarae a peratjes
b" been reused upon as a aetns of gredutUy eolleetivising agriculture, There
are three typos of producerse oooperatim, in addition to the i~ndepeudemt
e ri aultsral saoper ati esa, as rovso led by a decree issued by the Uinistter of
AgrieultCCr* in January 1951 o Tm of thews tour categorise represent re?.a hely
mild phemea of oolleativisLtion and the other tea a rslativ ely *dsaneeed stags
reaembliag ,acne closely the Soviet pattern In recent mouths.. Comratnilet leaders
hue sdvaaatsedd the torrtion of the milder types of cooperatives in the ivmedi'
ate future, indicating a :mild prograc s ,&,r agriculiaerso samsrbSt similar to
their aouespt. of the Soviet Now Eoonvmdo Policy in the< 1920es.
i rhiI*, ganereel controls over agriculture have been iatsnaitisd,
and this trsrnd is s peotsed to aantinusr0 Thftug i rationing, taxes, a m ender
doorees, control of supplise, and other maasurss the farmers as pressured into
support of the Fine Year Phut. Recent criticism of the kulske and the 8e7bri
atop surrender dearis for 1951 applnoable to them indicate that those farmers
may- axparienos harsh treatment during 1951 and 1952. In. &W event, is Coimis t
Mader; app tly are planning to eorrseet as rapidly as possible the control
esakaaseers vrhich exist in agriculture,
(S) Econsmic Seretces ortation,, Cameamicattona etc.).
The trends tasard inorsasoed m1raal agar economic services are
ssiffilaw to theca in Industry. The trend tosard tighter top-.level oration
is illustrated by the oreation in Juar? 1940 or the 113nistrieas. of Internal and
External Tea" to replace the. tormsr T 4 nistry e f Commerce and CooperMive
Sooirtias,
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2 a Faatotw Role. to the Effbmtiw+sss of Car Vt roe e
an Pro rte on of the 13 under Direst Gowrlnt Co
The t2 ads toward netiaa lireatiooa< of the ?con r indicate virtually
Mete govwT=nU1 control over the main sectors of industry and roommio
sertiess - but only limited oantr of -owe r' a icu1 rs.
(1) Extent of atic-aaliaation or and Services.
PMW
B~mgarian fitly is almost oo iately nett naliteds Byy fl
of the ndtiasaalisation naasurres adopted in the first half of 1948, the proms
portion of 14ormers in mtiona7^issd industries inersued during this period
from. 42 to 78 pers... .dsoarding to semioffioIal souress, about 80 par amt of
all W usfiry me etate'a,-st at the end of 1948. Natioaoalisatton continued .
& wing 1949 and 19500 .featured by .the der.e of December 1949 'rhich applied to
firms' amglaaying 10 or aapre persona.. Zoltan Vas# President of the National
Pla=ing O fine, mantel anuouno & that at the out of 1950 the socialist sector
extended to 100 percent of the iotur end beai1ding industries bat was
limited to 10.6 pearcent of w All iaduattstiise, Chiefly, shops with fearer that 10
coplooreeso Vas also stated that 97 portent of all industry;, imluding small
industry, should be socialised by the end of 1951,,
Kat^ioz-lisation of the nomic serrai ces, with the 'axapt eon of
retail tacade,, is li ise- fir-added. In the previous. y reported statement,
yes declared that'at the end of 1950 'ea~mioatians and wholesale trade 'rare
3.00 percent in the socialist easter1 while only 67 portent of retail trade was
natiwn Heeds Some natiouali^*ei services, particularly with respect to. transpor-
tation, wars inherited from the tormer goverrnuant, Electric power plants were
nationalised in 1946, and -tai, nttionalised in 1947.48. Foreign trade
aloe same under state oarnsrrship by virtue of various msaaures adopted during
the period of the Three Year Plan. Although only 67 portent of retail trade was
reported as sbats-.o d at the and of 1950, this figure represents a. notable
ehenge from the 30 percent alaimid for the ens of 1949, The eacgansion of the
sta-ts9s role in retail trade will eontiatie during 1951 and 1952e.
(2) Extent of Colleotivisatim of A ioulture.
:..ri^wr^~~~rr^rr~.^^~^^..~~^r.^ ^ .rte. ....r~~.^.r
The soeiali:ation of - agrioultvrs, which bas procscde far less
torpidly than that of industry and of.the , serwic.s, now extends to -only a small
proportion of fsrv ins, operations. daoording to late 1950 figures& the socialised
eetar embraces 13.9 poreeat of the tillable land, of which 7.2 pereont re?
presents state farms and 8.7 percent prouaers? cooparativss, The Burgasiaa
Central Statistical Office published data indicating that in 1950 the percentage
of tillable land in the saoielist sector atipprezi tely doubled, being 847 percent
at the becludng of the years
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Tbwe Is s*, a evil to 4 x%di eaiyr that the rsaent rats of
c r a e i s l i a t a t i o n of agriculture =j r t be mAintsimd is 1951. On 10 Liatch 1951
the ibrms.t on of nw aoopsrati was belted, and the official objective was
defieeed as the ooalidatioa and devalopeaint of these producers' oooperatiws
alrsacbr in existanoso Nsverthsl sso bah in the Five Year Plan and sapeaiaaliy
in the May 1951 raviaime, great seeress in pissed upon the need' to deal with
"baaWmrd agrie &1barro5 Conooqu tt ro as etpan Eton of the socialist
aaetor probably will be attempted 4zring I951, eM 195x.
boo t1ons a# Ias6ere s of SMUOMIC co u
Recent rap is indisete siguitiouht trends deraloping in the trade
union field,.. During 1950 and 1951 there was such critician of +,bs alleged
Allure of the unions to parftrm their proper role in conneretLoa vstli labor
discipline and mnrale. During the summer of 19500, Cameamist leaders severely
berated the union leadership and tap officials of the Trade Union Cowncfl, who
publicly aakz w1odged their shertaags. Uesraerhilea nuaerous revemrpinga of
trans union aganoise haver been carried out, and mazy unions have been combined
in order to bring then more cffsctively under Cnist control, In June 1950
the Trade Union Courwil passed a resolution aimed at ravitalising the role of
union confidsoatial agents in factories, and in Deceanbar the Council adopted now
st t &tss ' apparently intended to stress workers' duties and to tiger Party
ooaftol over the unions, Recant replaaament of i zstrial wags agresmeats by
factory slags agreemeait~c is a further indfoatian of the trend taerarzd inereaset
control over the unto. Lsaaerhilc, certain goirsrn=ntsl f nvUo uy such ax.
the responsibility ter admin3ettsting the social inruranas programs imn. been
transferred to the trade unions. The trend toward increased party and state
control over the unions is expected-to contimz. *wing 1951 and 1952
*010
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n. LaMMW of t1 R souroos for gaonmulo Devo1Q nt0'
Hungary is planning ID increase its civilian labor force by 300,000 persons
from 3,9 to 4.2 mullion,, from January 1950 to January 1963. There is also
planed a shift of 200,000 persons from agricultural employment to nonag~ria
eultural. Since the civilian labor fbros increase of 300,000 is entirely non'
agricultural, this category of warkaerrs is therefore expected to in a total
of 800,0000 The 1963 goal for the labor force will be attainable because of
the natural increase in the population and the recruitment of woman, Hungarian
training programs, which enaountercd initial difficulties, are designed to
produce more skilled aarkera, but the aaabitioua expansion celled for in the
present Five Year Plan (1950.514) will plans a strain on the supply of skilled
labors Praduatiri.ty is -car alnat equal to pros* lereelso
to Sisa and Distribution of the Labor Fare.
At the beginning of the present Tmgarian Pied Year Plan (January 1950)
there neat a civilian labor fares of about 3Q9 million people. This was a d.'.
traas' of approrimatsly 400,000 below the level shom by the 1941 cansua,, The
following table gives the projeatad increases in the labor laves
Civilian Labor force
(Estimated as of 1 January)
Thousiads
1960 1961
Agricultural Workoere 2,000 7./
2bnsgricuytural Work ,rs
and p2ayses 34980
Industry, Construction 18085 6
Transport 185 t
Total
10900 1.850.4/ 1,800 a/
i1
1,270 1,420 ~7/ 1,550 (
218 To! 223 31 223 of
sso 660 wo el
imea ' 081 TM MM WithdrOMIS ME 170nagr o tur
a
sum of componeentso
With `eduction in total annual increment to labor foroc, no cbsngS in
port employment is a zpeatsd 9
s, Pro jeat+ed from 1941 census data,
e~ . No further increase expected, in the light of criticism of adni-nistrativre
and trams overstaffingo 13
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The yr ma ft little change in the total numabeer of the population of marking age
(ever 15 years) but sharply iedumd the proportion of urban males of aorlring
age. War losses mer? heavy among male" of s?mrk'ng Map leaving a predondawno.
of rural tool* workers o This is__ shmm in the folio sing tables
Sez Ratio or Diftaadat Urban and Rural Areas
1941 and 1948
Settle sac
2949
1941
Budapest
542,4
4770954
6220566
580,336
13 Towns
430,241
408,758
457,484
4490361
46 Towns
650,614
602il84
665,18
661,587
61 Rural Commities
Over IO,OOD
419,808
418,213
441,E
447,766
Villager under' 10,000
2,491,806
2,519,434
2
568,064
2,6455,705
raid Decrease
Fvrmale Decrease
or Inc. nrsas
or
ears
Budapest
`.64,455
11;9%
--42,220
5.8%
13 Towns
+41.483
9:2%
,? 8,123
1.8%
46 Towns
?8,432
?s4~
? 3,771
0.5g?
61 Rural Cov amitie*
over 10,OOO
30590
0.8%
+ 6,017
1,~4%
Villages under 10,000
+Z1,620
019%
+76,641
5.Q
To restore the bal6aa? of the icon, it sets necessary to shift large
mnobsrtis of rural people and to attract a_ considerable number of m=m Into nwom-
agricultural-employmrat. The first Three Yaat Plan (1947-60) inoreaeed the
numbers of nonagricultural melee" by ZSO,OOO, 15 leaving the total of as*
played persons still below the prewar 1 s l,@ IT-is plaaooasd to add 650,000
workers 16 in industry during the preeant Five Your Plan (1950.54). Assundng
vAmsss saouriag Us major part oP the imoremeut in the first S years, non.
agrisultural aploymant will roach about. 2.4 ' million by JJm,i 7 1953, a level
somat above prewar. Altheugh the addition of 800,000
in 3 years will be difficult, it is not impossible* because of the elasticity of
the nurlwjng population.
2. Iemu2 Of Teoha1001 Trsg hours to 15.6 percent, 20 Further asisw in
Sphere will be more difficult but will be attempted, Ovastir* laurel ware
also reduced from 6.6 percent at all working h *u" to S,4 Pa ai , 2 The
Pint low rats of overtiy indicates that a considerable inaraasr' total
roan boar could be obtained by increasing overtime work,
bo Seeress of Additions,,'.'. `
Of the 300.000 additional vorb.rs planned in industrial employment from
.1960 to 1953.? 160,000 will be available b oaujs. of the natural inrtwaso of 50,000
Per yew in the number of workers over 15 yews of age. 22 Some additional
shifty from ag ulture will be made, and the Proportion of women in l.n&strial
employment will be increased. Under sold war conditions it is not expiated
..1,3..
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that aabool enrollme s oriU be rcduoed6 b training is being awceleratsd,
and as inaroased proportion of grsdw-tss is bin dire tsd 1*to isdustry)\iU-game mobMsa-tion would require rs&wtion in pIszaned eVioymsut goa7lso
u
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nx. Ljos ad M ims,
am=
Food shortages developed in lhmgary J a 1930, and is 1931 ratioadug vas
reimposed . for the second tin. in the postwor pew. Hooding in Padspest
is below prewar levels,, but living conditions are not so critical as to
came widespread u a est such as would oonst'1 tuts a threat to the regime.
Working coaditiaie in Hgmgary.are closely regulated by the state and
follow the fuailiar Satellite pattern of the reduction of labor unions to
rubber-.temp eatoaoement agaciss of government policies, the imposition
of pieoenrork norms as a basis of wage payments, and the use of incentives
to increase productivity, The effect of limitations on food and the drive
for greater industrial productivity have resulted in widespread apathy on
the part of the worker, eaporassed in work norm frauds, absentesisms and
illegal migration. Causes of sabotage have occurred in response to upward
norm revisions but, do not canstitute a distinct Weakness in the eoo ,
althougb they do deter the pace of Industrialization.
1. Y. yt ~- C- {,r a 4 w ".
so p
The Commnmist regime in Hungary has produced a social upheaval., and,
the poorer peasants, industrial workers, Casmmnist intelligentsia, and party
members have risen to the top. Recently there have been reductions in the
welfare of all classes caused by the shortage of food and ooasesear goods.
The goverment, is of the discontent aver the relative shortages of the
p year, reinstituted food rationing early in 1951. As yet there is no
indication that the undeniable welfare gains of the last feu years have, bean
so completely reversed as to entail any threat to the regime.
According to official 8smgariaa statements, real ,noose. is Hungary
increased steadily in the immediate postwar period, surpassed the prewar level
in July 1945; and rose even further in 1949. 1/ Stich inforation as is avail..
able on wage Increases and official prices of foods on the controlled H arian
market would seem to confirm a rising average standard of living, at least
until mid-1950.* The following cost-of-living index, also based on scattered
* Information an wages and food prices is presented in tables at the w d
of this sectiai.
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official a_ ar ate. statistics, shows ?a steady rise thru& 194 but a 4rop in
1949 to a lovel below the 1947 average:
Cost of Living Iadax 3/
19469
1946
4W
1947
461
6b0
199
441
00
The 3 v prices of 3.949 indicated that the Hungarian standard of
liv*ng was among the hig at. in the Satellite ccnmtriee. Food was relatively
plentiful and cheap, and other consumer goods such as furniture, clothing,,
kitchen equipment, and radios, while . naive,, more readily available ev:su
to awe workers. J/ This degree of recovery is striking in a defeated
country paying heavy' reparaticoso
The supply of eonmmner goods decreased markedly after 19496 The
government attributed this to. the necessity to wort food, to the machlisa-
4ims (hoarding and scare-buying) of rich peasants, and to the indiecriminate
buying of those with rising incases. il The partial drought in 1950 also
was a factor in reducing the availability of consumer goods.
b. Z.
Information on the per espita consumption of selected foods in postwar
Hung=7 as ca Tared with prover co:p tion shows a early the progress sahisrsd
tbromgh 1949 in restoring cud in such ea ae Core ls!$ fate, eMd :sugar,
in surpassing prewar levels of consumption. This progress was otfi clay y
marked by the gradual evil tion in 1949 of virtually all of the ration
restrictions which had been In force since the beginning of the vane Food
shortages began to occur sporadically in the spring of 1950, however,
Increasing in frequency toward the end of that year. J/ Beginning on .
I January 1951, full rationing was periodically reintroduced on Individual
food items until the most important foods were again rationed. The basic
rations under the current system are surprisingly 1w. The basic bread ration,
for instance, is aisactly the sauce as the ration In affect during 1946, sbsm
Hungarian food supplies were at a postwar lard The basic meat ration for
Budapest residents is less than half of the claimed 1950 per capita consumption
-W 16--
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and only 47 percent of the prewar national level. Only the butter ration
is above prewar consumption, but butter is available only to a few.
9npplamentary rations, most generous for heavy laborers, particularly
miners and 'intellectual workers," provide the favored elmments of the popula-
tion with a ration well over the prewar average for bread, testa, and suganr
but still below recent averages for meat and milk. She same foods am be
purchased in.a free market, but prices are prohibitive, and goods are not
always available. Little Is known regarding the food eonaaanption of the
agricultural population, but it is pressaaably higher at present then the
rations for the urban population.
It is possible that rationing has been introduced, not only to assure
equitable distribution of consumption but also to provide incentives for
workers to enter more favored occupations, thereby reinforcing the government's
currently unsuccessful labor recruitment program. Rationing might also be
designed to Induce eaaployeee to work longer hours in order to supplement tbelr
meager food supplies with free-market purchases
00 ~o
Hungary suffered considerable damage to housing facilities during the
w m but as the result of a generally satisfactory building and repair program
has been successful in restoring most of the damage.* In spite of the
rehabilitation of damaged housing and the addition of new, housing, however,
population increases have more than offset these gains. It appears that the
average rmmber of people per room in Budapest in October 1949 may have been
as high as 3,13. This figure, however,, represents some progress since the
end of the war, when the nUMber of persons per roam in Sxidapeet was probable
greater than four.
The extent to which housing is now under goverment control in Hmgarj
is not kwwn, tort probably most, if not all, of the postwar construction is
public property. The noosesity for reconstruction in Budapest channeled nose
old housing into government control by means of a decree in May 1949 stipulating
that if the owner of a damaged house could not start its reconstruction by
3l. May 1948, the goverment would assume responsibility for the r acnstruction
and autcmatiealiy became owner of the property. Bemuse of low fixed rents,
the high cost of goverment-controlled building materials, and the deflationary
credit policy of the goverrmrent, most landlords were effectively prevented from
uedertaking reconstruction, so that an of the buildings Instructed after
May 1948, which included the bulk of reconstruction in Budapest, have probably
passed into govormnent ownership. V
* Statistics on postwar housing construction and rebuilding in Budapest are
contaided in a table at the end of this section.
"174-
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To. date there Is no evidence that the housing shortage is a mattm
of major oondprn to the goverment or that it has had a significant effect
on the morale of the population. .However, some strain may be planed on
the construction industry as it tries to keep pace with the rapid industrialisa-
tion of the country, which is occurring to a large emtsnt in localities
that do not have sufficient housing to aaco~odats a large influx of
workers.
i~eltar.
d. and
Information regarding health and sanitation in 8uogw is very
meager, but it would appear that good general progress has been made in
restoring vaar.damaged hospital facilities and in building new ones. Of the
50,000 hospital beds available before the war, only about 200,000 were reported
to be functioning at the and of 1945, 2/ but all 503000 were reportedly
available again at the end of 1949. Nevertheless, facilities for the
treatment of tuberculosis, Hungary's greatest public health menace, were
inadequate until recently. The goverment bas stated that the minim=
requirement far the treatment of tuberculosis is 98000 beds (apparently
in contagious, wards), that at the beg taming of 194? only 5#600 stsrh beds
were available, and that only 6,300 were planned. to be available by the,
and of 1947.,2/ Progress since 1047 is not known, but it Hungs=y bas
added as many as 700 beds each year for tuberculosis patients since 194?,
It-would be close to its stated minimm regnir+ eta for treatment of this
disease.
2. W CgA.t?
The Hungarian government eaoerCisea ccmiplete control over wages, haws
(a 49-hot. week is standard), social benefits, and other working conditions. IQ/
Trade unions have been rodus:ed to eubeervience and exist only to rubber-
stamp pre ranged 1oonective agreements,' to enforce state, regulations,
and to perform minor welfare functions. Many measures of governsent control
extend beyond the industrial labor force to embrace the trades, the professions,
and agricultural labor. f
The introduction of the piecework system in industry was designed to raise
productivity by setting output name which had to be met if the worker were
to maintain his income,. Thus far the system seems only to have aroused wide-
spread apathy among the workers and, to some extent, even smoa~g managers and
trade union officials. Heavier doess,of gent discipline and Incentives
have failed to overcame this apathy, and periodic manipulations of the norm
levels have inspired protests and occasional acts of sabotage, although such
resistance is sporadic and of little significance. In addition, the state must
contend with-norm frauds, which managers and union officials often sanction, 1t
and with excessive absenteeism, tardiness, loafing on the job, and Illegal
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migration; Labor t urnaver is highs partie ularly . g former agrioultatrel
workers. Thus, while there appears to be little tendency an the part of the
labor force toward open resistance to the regime, a caae1derable-degree of
protest against arbitrary government control feats itself in an ind#x~eot
it nner. ' These protests, while they do not seriously retard industrial outputs
do put a brake on Hungary's progr= of rapid industrialization. The present
situation will probably persist for inane time. There is no avidonee that
the govorment will atte?pt to handle the labor force with moro drastic
or repressive measures, which in any case would be of doubtful effectiveness.
Wages of Certain Hungari 941ndur
19 1.949
end Office Wafters. 3~,, /
A "rage Industrial Worker
45
676
mph Industry
H.Aa
190
Metallurgy and Metal Working
8. A.
730
Machinery Industry
8. A..
700
Construction Industry
N.A.
6"
l leotrieal Lqudpment Industry
A. A.
936
Skilled Meta ar Mechanise
NA.
1,500
2ff1 Wimtrkera
Ord1nmz7 Mark
433
7m Ut
aWhi Colle2R Worker
g5
99
)bltilingual Clark Typist
N. A.
1,5M U1
1.019 on
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Official Prises of Saleoted Hogarin Foodstuffs
bite Bread
potato"
Beans
Soap Meat (Beef)
Pork
Ham
Fish
Lard
-Batter
Cheese
Eggs (Doren)
Kale
Nat Meats
Coffee
1948-W
1948
Smuke 2/
N. A.
00.668
1,80-2.40
R.A.
N.A.
15.20
LA.
19.70.2+0.00
28.00.29.00
15.00
9.6040.90
IQ,A.
28.00.34.30
120,00
Farints ~ Ei3.eQrae
1950
man' ZAU&v g/
2.60
0,76-0.82
0070-0.90
8.40
19.30-20.00
16x90
10.75
19.00
24.00
14.20
8.40
1.70
34.50
NA.
1.60 1.60
0.58 0.50
L. 2.17
N.L- 7.80
N.A. 14.60
N.A. 12.70
N.A. 9.75
17.00 17.00
23.0044.25 N.A.
11.00 N.A.
9.00.9.80 7.80
N.A. 1.35
18.00.30.00 N.A.
119.00 R.A.
Wartime Damage and Postww Housing Constrliation and
Rebn.'~.1d3 ng in Budapest
Habitable, Prar
Conpl sta4 Destarocyed
Damaged bat Repairable
Habitable at End of War
Repaired up to October 1949
Newly Constructed tip to October 1949
Habitable, October 1949
Still to be Repaired, October 1949
iM frep Units
293,2. 22/
15,850
53,660
.
RILM
500850 AV/
2s
wo= U/
2,450 ?
4,020
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I. Fc ,3.'rade,,,asnd
MLUM
bMM
The value of Hungary a ?aeports to the mm in 1950 emoided that of
laaporta 17 over $3OO afilion, This coaxlitiea shat pail throto 2.9529
ifhen gross deliveries to the USM will probably reach between $200 million
m d $250 sl2lica, Considerably more than 60 percent of BmUolan exports
to the IISSR are In the form of finished goods, and the remainder is largely
foodstuffs, almninum, and large supplies of 'ba x te. The finished goods
fell Into the foUovfng four general categorriesa mamafactam-ed metal
,products, irsluding machinery and mamiticros; precision and optical eq i nt;
electrical and electronic equipment; and textiles. To mast Soviet dens 1s,
B arg must be pr vided with commodities chiefly c posed of ixdset .l
raw materleis, primarily cokes, iron ore, and lumber.
gar, is orienting its seonoq toward the Soviet Bloc and is everting
to the SaatelIites foodstuffs, textiles, bauxite and atu mm, same railroad
*Tdpmmt;* telephone and radio oTaip?ent, ph,ax nceuticals,, and Special
tear of machine BmWOy imports f a the Satellites cokes, iron tire,
fro vehicles, ohemiemis, rolled metal goods, nonf1wrous metals, ferro-
alloys, pr'ecioian instrmmenta, and other industrial equipmmtt. These
H arian imports fro the Satel [teas reduce the voi me of imports frs m
US t0
Bui gaaria efforts to the Western curies consist chiefly of agsria
cultural ca ties . Owing to Western Europe's inability to finance
imports from =a-Soviet Bloc countries, partie:anl.arly from dollar areas,
garrian foodstuffs find a ready market in the west, which takes a :.ergs
pert of such Htntga d art : exports o AYtlzoug 2 trade agreements with the West
sell for disable 5hipeentts of finished goods, such agreements are usually
not fulfilled.
Current Imparts from the West are not Indicative of S t s mirAmzsa-
requirements. Imports are principally cotton, nonferrous metals (especially
copper), machine tools, certain precision and industrial squijm t (Including
bearings, electrodes, and abrasives), wool, hides, tanning matearial.s2 paper
and ptalp, and certain food tuffs,
As Soviet Moo capacity both for volume and quayitl' production increases
and the economic integration program advames, Htmgaarian dependence upon
6le rn i -rta3 will be considerably decreased,
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I. -- -- - .
The vitbdraval of certain Western esporte word prober y affect, in
order of ice, Hw ga=yea ea m Lion pattern,_ rate of inftatrul
expansion, am-rent vntput of industrial aLliteay equipment, aid the Soviet
Bloc stnokpiling programs Now.ver, in view of part Hungarian abd].ltp to
obtain imports tram the Westj* future piroa~irement efforts vill probably
coutiuue to be snooeasful,
2. a
a.th?~~ 3eRi~t flee,
Soviet trade policy requires that Soviet Blois dspaacd.nae an imports from Western areas be reduced to a mind==o It is apparent that lmplemsnt*-
tion of this policy was an l portent factor in the formnlatian of the long-
term soviet Bloc trade pacts of 1950..
The f ollovitg table shown the - principal Hungarian imports and the
proportion of those imports obtained in 1947 frog the Hlocss
Principal Hungarian Imports
1936.0
Tait Tcos
Pereaatagr
frm- Orbit
cgmg=
Cotton
27
1937
28
1936
.26
35
Hades, Wit, et .
2
936
17
5
5
Timber and Products f
hoe
939
1,053
1
229
65
Coal
171
1936.
263
1934
in
100
Coke
244
1936,
564
1948
423
100
Petroleaaa a/
i8
1936
313
U
42
iron ore
318
(1936
745
1
579
95
Pig, Sarapr.
10
(
1
126
(1936)
T .A*
coo
Copper aad lu
1
0
19%
(
1?
1939
5
.
5e ? l
Other Nonferrous
YAWS
11
(1936)
23
(1939
6
78
C'he call
46
(1936)
222
(1948
2
11
32
Bscanse of war cc?diticeosg imports vere necaseari]y low frcea 19140 to '1946.
lwl*WW paper, cardboard, and pulpo
refined Prsmari:~y from Yvgoe av1a (85 'percent) and the MM (15 percent) b r value,
+- r- mete detailed table is given at the and of this section.
2k
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2he Post
the aloQ,. As the majnai of Thi rian requfsmmaents are obts4nahla foam
motion progra? for the MM c become mare
effective, this eaoditioa viii be eaen more pt Ulent b East Garmai and
Poland? for ememapl., should be able to f M a larger portion of Jarian
chemical rs7virosaats. Poland, the 'CSSR, and Csschoslwakia should be
able to fill the umber req irementa, and East GerzwW the sleet rode
requiram~snta4
b. MMft yi!i p
Igreements with Western luropeen -WkM
in 1950 Oa].tsd for
im
fillmeet van ports slightly In +nnsss of 1949 imparts from two oo mtriesr bat fella
n' ? neamglste. Trade agreements with Overseas aorars mire ramsined
BmqVean This look of ample ientatiaan or trade paste with Western
comes and o rsesa areas does not iadieate aotoal rsquir1 ents
or trade.**
s
and ande tine imports are primarily nooSirroua metals, ferreallcDra,
parts. Tzngs rian agents constantly attempt to make spot
purchases of Moll quantities of counodities which we delivered for
the British Zone of Austria after being consigned to Swltaerland4 Copper,
ton, mol7bdena, eadmitmm, nictai cobalt, chrome, and various firrsellafs
of these metals are the chief cae~po:ueata of this trade.
3. a.
a0 viii he SSR. ~
H~ aqw-te to ?~ fails UM expanded Imports fzmtbe U by m rs
than $300 millfan in. 1949. Total o to the Soviet Union in 1952 are
espectedtobe lrcm mill3aa to $250 m1234on, of whirl more than 60
percent be finished goods. Of these total deliveries to the WM, it,
is estimated that those an tide agreements will waouxt for ru iy $67
z4114 an and reparations $90 million. The ball enos vdll be divided vmtotig
profits trace Soviet-owned assets W 2d Soviet dmipenias and aapptrt of Soviet
troops In Htnsgartyi
Haomdte Its Hmgary+a most important a3ngle export to the Soviet
%ion. Trade easements for 1950 called for large deliveries mounding to
7009000 metric tons. Almost all prodnatio n of the aleatotsewioal indvatqs.
This is particularly illustrated in Hung. an-Argentias trade, v6deb is
scheduled to meant to $3744 mill4 ancmally for each ooMtry but v h probably
is less than $12 million in value for both Oommtrlw6
** The value of Hungarian trade with Western Plumps (1949-50) is, shown in a
table at the end of this s+?otica.
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inaltading motearss tubes, sables, `t 1eoaaos cation eguipowt, radar, etc.,
is exported to the UM and canst$.tutes probably as mach as 20 percent of
Soviet da uestio praductiono Preuisim and optic equipment, 1nelndi
artillery flues and rangy-Finding ; , constitutes a this~d meejar
A Tian export to he 1JM, The: fourth meje espet is heavy mesbaaice1
equipmet, ina1x, g loaanotive$ ailed other rolling stock, erti]i cry pieces,
tank and ,reacted car assemblies, as'iLtery, and shells and bombs. Hungary
also exports to the USA' small. vossc ls, textiles, and foodstuffs, as volt
as considerable amounts of by octet gasoline.
b d Trads vif$ Other Sete]1ites.
Total trade between Hungary and the other lopean Satellites is.
believed to have increased flraca about $65 =1111o n in 1949 to about $170
million in Vungw7 imported in 1949 and 1950 more pram the Satellites
than it exported to them. B mgsrian sbipmemnte to Cseohoelavakfa are- ceded
only l those to the i1S and are composed of foodstuffs (especially meats,
grain., and edible oils); eleetroteahzzical equipmz t; bwMdte and various
other minerals including petroleaam and e11 U1'? textiles; cvmnstructian
.materials; chemicals (primarily" ~tioels); and small amounts of
machinery. Deliveries to Poland follow a similar pattern but with -rasrter
emphasis ea machinery and certain rails r equipment and lessor emphasis
an foodstuffs. East German according to the 1950 trade agreement, seas
to .receive some $11 mlMon vairth of Hungarian goods, of ' Mh aba~at three-
fourths would be foodstuffs, meat being the most Important single hems.
Itaabinery, crre9e pet role r , and clhemnicala (largely ~ttael,e) would
constitute the greater part of the reaming a me-r earth. Raaem3,ee vas to
import Hungarian locomotives and other ro214' g stoec, petrol emu producing
equipment, electrical equipment, light bulbe, and heavy industrial gs*ro
ilban4 and Bulgarian trade is relatively to Hmmgary0
0. 2`811.? yith the West.
Homan exports to Western gape amounted to about $7,22 mf314ce
in 1949 and about $80 million in IM, BqxwW to ether nos -MM WOW
probably do not exceed 10 percent of those to Western grope,
Despite trade agrewtente which can for large quantities of textiles
and machine products, deliveries are in the great majority of cases oampoeed
of agricultural p ncts, a saes33 concert of textiles, glassware and cwmdas,
minerals, fueland metal produstsfl There are a few a ptionso The
Netherlands, for eocsmple, received from Hungw7 in 1949 railroad equipment
(to the value of about one-MM of Hungarian-Netherlands trade far that
m24m
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year) in retar?n for neaeasaz7 tin and rubber. Austria receives a slightly
metal preduoU than
IsrW
do mat portion OM ~~uropean Fco anic and
Cooperatioan
Ninety-clue percent of Leman imports fro Hungary' are agricu3.'lhral soot-
modities, as are about 80 pent of Austria's imports, oa-cr 90 pant of
Italian imports, and 85 percent of Swiss Imports. These four csentriss
imported about 70 percent of 1950 Hungarian deliveries to the OE.
4. 'xC2=&W of A NO Joao
According to an official scat nt, J / cgs a foreign trade is divided
br areas as follows:
Bungar~um Foreign Trade
1948-0
USM
Other Satellites
3mb4VAe Are"
Total
16 32 26 H/
18 U 33
66 54 Al
if The greater part of these wrporta is composed
of fiedahed goods.
The composition of Hungarian foreign trade is as follovas
CexPoaitian iV % Trade if
Bw I at .s
S~ifitris Goods
Pia .aped Goods
Total
99.6
9.8
30.6
L/ Agricul coaaodities were 61.8 percent of the
total in 1938 and on] 37.4 percent of the total in
1950.
.. 25 as
4001010
ML
36.2
10.5
53.3
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Aasnmirig that thew figmres are ow Toot and that OEEZ trade is 90 pee-
sent of non -Orbit trader the veins of Bungalow foreign tredo is dived
1' areas as foiiavsa
B aoCian kveru and esparto
1.949-50
xu" so Dal
AMR. IM
UM ]44.O 131.9
Other Satellites 6 4,9, 167.4
Nonn eo Areas 243.3 207.4
Total A= Z&A-7
50 ? Lateral Transfers,
Unilateral deliveries 1 Hungary to the USSR are as follows
a. Reparations at $30 mill.iM a year through 1952.
b. Receipts from jointly owned antes s
e Receipts from Scviet-o sd empanloo (foxasr Om m non assets).
d. Re ipts from stock in the Tuagarlan, General Credit Bank
(about 55 percent Soviet-oumed), rich controlled about 40
pads of --g industries, (The disposition of the
The valve and nature of the goods received as a result of this eaeploltatioa
have not been determined. Ro,ever, the output of the third largest precision
and optical industry in Cps and of an electrotechnieel industry vith a
production rate about vase- izteenth that of the US rate are devoted almost
lvsivaty to goods ccnaigmd to the W SR from Runga xT
The follaring list shows reparations deliveries as planned, at 1938
prices$
26
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FACHUM7
Railroad Bgcipamant
Ships
SmilYnishad Metal
Goods
Grain aM Seeds .
Animals
Mince2laneous
Total
Planned Hangariaa Reparatiasns 21
1948433
~~ 1 A7~i~Yd-ii~.rr~^.~ r .+a i 'S 194j i^r:ti^n.r)IilhiM BS Psrooot of I"M1111oa US Percent of
11.0.6 16,1 2.4 " /161.17
29.7 . 45.1 6.4 4~i.4
11.6 17.6 2.4 16.7
8.4 12.8 2.0
005 0.8 0.5
3.3 5:0 0.3
1.7 2e6 0,2
6. ?...v11c tl ^ l ,iuIM izat` ta 0
13.6
3.5
3.5
13
The signing of Soviet Bloc 5 -year trade agreements of considerable
magnitude bas been the most significant factor governing changes in
Hungarian trade since 1949. Western eontrole and world shortages: also arc
probably responsible for the decline in trade between HaagaYy- and the USSR.
Thus, trade and expansion within the Soviet Bloc of those items on which
anpbasis is to be placed should be expected to 1xi rsase through 1952.
The decline 'in O O 'trade is primarily the result of two. temporary
Impediments-the 1950 drought and British and Svedish dissatisfaction
with Hungarian treatment of both nationals and property. The drought
is apparently the most important factor. Dependence on the nest will
decrease as the industrialization progrm in the Bloc advances.
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Hungarian Trade with Western Narope
1949-50 /
Inereasa
or
kwan 12M
Austria
112,892
11,070
??1,822
16136
9,319 -6,83.7
o3,44
-5
751
Benelux
11,048
8,500
--2,548
7,609
4,3% -3
213
?3
439
,
-4
104
Denmark
1,161
19 204.
*43
29.500
,,
1,352 -1,148
,
x1,339
0
.
4346
France
59890
3,123
?2,767
6,860.
20134 -46726
0
4
-98
Greece
ROAD
4
8
2
7
9
Iceland
312
4251
55
3 02
-6
-309
Ireland
176
40
-136
72
36 -33
w105
-4
Italy
6,293
sr330
42;- k"
5,172
MU +4,442
.1
2Z
01
284
a
ine='herlt-nde
5,515
3r612
-11947
11,101
6,902 -4,199
,
.
+5
542
,
+3
290
Norway
1
s
367
703
1,072 srt
,
-412
,
0324
Portugal
N. A.
N A.
&A.
N. A.
A.A. N.A. '
A.A
N
A
Spain
-
12 612
N.A.
1 e1
.
&A.
.
.
-11
Sweden
Switzerland
3,935
11, 815
623 JV 3,312
11.
369 -446
5,514
n
493
961 93
U V 4 o~
12
43': ~
X336
Trieste
,
.
,
a
325
4726
4
80 +76
1,338
223 1,325
+1,334
4343
Turkey
3,399
3,769 4370
3,756
9,704 4-1,948
+357
+ 1
935
United K:bigdom
17,335
5,453,8/-11,882
26,320
1,048 At-94t972
48
989
,
04
405
West Germanic
15,820
31,395 +15,575
23,864
24,341 .277
,
a8,0ri4
,
-79254
Total
VMS, -19.4Q
A derived table.? Hance Hungarian isports are stated f.o.b. S-g ap S
t
i
ns
eaw
RXce
more usual e.l.f. bt
ungary. x+iike .s*, Hungarian exports sre stated o
i
f
S
t1
.
.
.
apar
ng eountr3P in
.
stead of the more usual f.o.b. Hungary. The resulting error 3s probably 10 percent nndearvaluatian
of imports and 10 percent overvaluation of exports.
The result of the Swedish pique at the Daeember 1949 N4ationalication Program.
Result of detention of Saunders and December 1949 Natioayalisatioa Programs
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91111116016
Pria i=l ~mga~riaa Imports
1939 and 1946,48
CaaeaaM=
Metric Tens
Paaroentage In 1947
!'rem Soyist ffiee
Cora
340
Ries
26,x.
22,036
Pr is and Nuts
31
4V
4,634
3,099
0
Cacao Bemis
5,027
645.
494
0
Tobacco
386
1,807'
27
Bides, Sides, and Fun
l? 415
984
5,29?
5,648
5
Cotton (Raw and Waste)
27
].2059
25,826
27,079
35
1kv and Waste
Jute
3,306
1,439
5,007
4
Wool Rev and 1?/aste
j
t
3
068
1
3
3
20
Cotton, Yarn, and Thread
s72Z
,
M
799
0
Wool Tarn
282
704
815
0
Rayon yarn
4*048
83
1,473
1,034
22
Cotton Fabrics
780
7
4?
Wool Fabrics
592
91
170
Textile Fabrics
1,334
737
10910
Timber and Its Products
525,269
43,270
28,446
1,917
69
Rags
4
,1
2x999
7
Paper
38
3
725
16
0
N"
36
Paper ~ Cardboard
,
2
,
,
44"
oft
61
Crude Rubber
,641
798
3,358
3,24?
2
Cftl
263,088
dim
1310130
175,811
100
Coke
42
203
000
427
576
563
637
100
Petroleum, Crude
I,
420
,
,
so
,
so
Petrolaam, Other
11,2W
1,936
42
Glass re
3,
w
372
Iron Ore
3'34$632
123,000
578,653
7950291
95
Iron and Steel
Pigs, Scrap, Lucy
315,920
3
63,943
Other Heavy Steel Ca nodi-
ties
6,110
388
12,971
Manufactures
3,x976
1,737
-
:.
a*
Copper Alloy
174448
1,135
4,599
10,586
58
Other Nonferrous Wr ,
34
Budapest 13
Tomeg rarto,
3oroknari-+ot 158,
711
2, 12, 25,
.34,39
37.,
Budapest
Pinoe6han4kS4 as
2, 21, 25,
31,
3aers air
(Danuvia)
i
42
Lajua on An p
nts,
Budapest XIV
Ds rzuvia,
Seekesfehervsr
2,
43
faVar Leoaser M r7ck
Vessprem
2,
43
ervari-iut 81/850
Budapest xi
2,
25,
273
410
Finomedhanikai (Marx)
Bulcau-uta 7,
Budapest VI
2,
25
M* a r Optikai MuTak
Caaras-+t 37/41,
? apest TII
2,
25,
45
Other 1'iras
2,
25,
33,
34
V
8,30 Appen& B, pQ 1V
Special Machine Too1r ,
Guts and 1 tar ?acts
'1 tita y Small As,
~itiou am des
machine (1 me,, Fire-
Control Iu suruaee.cts,
Clocks, Prociaian
Ours, Inst ats
Sma11 Arm Parts (to
Imials Maohim Guns)
3m Arms miticn
Optical, and Eleetzonis
fire-Coo o1Instru-
menta, Camoaraa, Pro-
afaion Optical Com-
ponents
Projectors, Aircraft
Inetramenta, Metear.
.taxy Optical Device.,
Pr ,lion YWIAW Peru,
Maters, Gaeta,
Yn te, switions
Total
proftGuoa
10
30
18;34
10
50
2p526
30
30
50
18000
10
360
15
30
1"OW
50
IM
240
290M
15
20
25
500
1(X)
120
14?
29000
90
135
260
49
w
"a
UR=
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 Approved For Release 200GOMW -RDP79R01012A000900050001-5
vu. x~iY cgs; ~,$_ arm.
a3rm ALEX
Hru.,iary's transport ttion system makes only a limited conixibuti.on to
the economic potential "or var of the USSR. Soviet Hungarian rail traffic,
which is dependent. . pon but apparently not limited by trans? oading at the
border, co,ipri_ses only a minor part of total Hun'arian rail traffic.
Bawc te., a major -tern of Sovie{Htttmgarion trade, is moved internally by
the rail network to Hu ngariaan Danube ports for transship'ent across
Yugoslavia to Rumania and thence to the USSR. Total Hungarian ship'nents
of this commodity account for about one-third of the annual consumption
of the i3 4SR. The railroads also are important to the USSR because they
carry transit traffic to and from Austria, Switzerland, and Czechoslavakia,
including the shipment of such items as -iarhiner7 and chemicals,^hich are
in short supply in the ^oviet Union. Moderate quantities of new railroad
equipment and small Hungarian vessels are being delivered to the Soviet
Union.. The Hungarian highway and air transport systems make no appreciable
contra. -.t:.tion to the Soviet economic potential.
The strategic significance _~f Hungarian transportation facilities and
equipment to Soviet war capabilities outweighs their economic significance,
primarily because of the country's geographic location. Current and planned
improve-i?nts of the rail network, such as the strengthening of main through
lines, the construction of a by-pass around Budapest, and the development
of a new transloading station, will so-ievih ,t increase the military importance
of the railroads in terns of possible large-scale westvard movements. The
through-traffic capacity of t,-s highways, now largely unused, the increases!
mechanization of the Hungarian, Army, and the relativ'ely extensive airfield
xnetwor?k also would be of considerable importance for Soviet-.Satsllite
military operations.
so
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 Approved For Release 200l CIA-RDP79RO1012A000900050001-5
NEW
~ QC
I.f antribe zr,n c;x` ilrer a to the reoDQ.MiicPouens
for or o the (S SS onnection, IM.AV handles about 100 metric tons a day of.
Austrian shipments in transit to the USSR.
2) Iw orta.nce of Tr E f'ic to the Soviet Fcon .
Soviet-Hungarian rail traffic is of only moderate
impttrtance to the economy of the USSR. Agricultural products, bauxitte,
and rail road equip.i ent are the main Hungarian commodities shipped to the
UJSSR. Deliveries of new rolling stock amount to less than 2 percent of
total Smiiet annual. availability. Bauxite shipments from Hungary are
carried tee the largely via the Danube, moving by rail only as far
as Hui, 9 Danube ports.
b. Rolcl.c?}' Railroads in Trade with the rest.
1) -?tent and ature of Traffic.
Hungary is a key link in the Soviet line of comininication?.
with Soviet-occupied Austria. Vienna is a principal gateway for Orbit
trade with the Test, particularly West Germany and Switzerland. This
trade - i not large in volume but includes many commodities in short supply
within the Orbit, such as machinery, parts, tools, and chemicals. The
total volume of this traffic is not known.
(2) Q Ades E~ine Traffic.
Much of the Hungarian rail traffic with Western countries
is clandestine. Moreover, as Western export controls are extended, an
increasIt c percentage of Hungarian Western traffic will turn to illicit
channels, although the total volume of traffic presumably will decline.
The present clume of clandestine traffic is not known.
lmy nonce of Traffic to the Orbit Econorm.
Goods of foreign origin which are routed through Hungary
gave an importance to the Soviet oconon r which is disproportionate to their
volute. The tonnages of metals, cheruiIcale, machinery, and parts which
reach the USSR through IHur ary, while small, are in m n cases much 'lore
important than equal volvToes of inte ~-ial Soviet traffic. Chemicals and
machines =, Which are in extremely short supp3 r in the USSR, cross Hungary
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 Approved For Release 2001469iiWIA-RDP79R01012A000900050001-5
at a rata of Ilere than 100 metric tons z. day. 1/ This is a anall volume
of trafttc in relation to total Hungarian rail shipments, hov,ever, and
thr bulk, of MAV.abor ne traffic is in commodities of secondary importance
to the econ_o of the USSR.
Inverse C ,ntributi ons.
a. ZLr n Gent.
Htmgary requires no railway equipment from the USSR and, on
the coi t nary, contributes several categories of equipment to that ccnotry.
b. Mate.rjall.
Hungary contribubes several categoric s of railway materials
to the JSSR but requires none in return.
Ewan 2.0-Or -
fhtin:"ary, has enough unskilled railroad laborers for present
needs bir" has insufficient numbers of trained engine drivers and workshop
mechanics. These shortages are not acute but might become so if MAV
were to woxpand its locomotive inventories rapidly.
d. Soviet. Contaol.
The 115SR ex-3rcises absolute control of MAV operations. This
is accomplished through politically reliable Hungarians placed in positions
of authority at all levels in the chain of operational command and through
Soviet transport experts assigned to key positions in the M.AV cevatral
directorate and in the regional directorates.
5. Pr able Developments.
It is expected that the entire length of Route 80 between
Budapest and Satoraljaulhely will be converted to a high-capacity, double-
track line by the middle of 1952, if not before. It is probable that-a
new transloading station will be constructed at Satoraljaujhely before 1953.
Lines between Debrecen, Budapest, Szekesfehervar, and the Yugoslav
frontier probably will be strengthened in 1951 and 1952. It is not
expected that inventories of locomotives and freight cars will be increases
appreciahly in 1952. wile these developments will contribute somewhat
to the strategic value of the Hungarian rail system to the USSR, they will
not appreciably increase Hungary's contribution to the Soviet economic
potential for war.
-93-
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 Approved For Release 2001/04&j*dWIA-RDP79R01012A000900050001-5
1. DiAect i:cntribiutione of High s to the Economic Potential
far VII;c, f the USSR.
The condition of the Hungarian road net is generally good. Ten
percent of the system can support heavy traffic over extended periods of
time, and almost, 90 percent can carry moderate traffic throughout most
of the year. Normal operations, however, are not believed to approximate
capacity.
The road network is well-distributed,, and the completion of roads
and bridges now under construction will tie virtually all Hungarian
Comm ities into the national transportation system. Plans for the
subsequent improvement and expansion of the highway network are modest.
The nee for further development, considered from either an economic or a
strategic point of view, is apparently not considered urgent by the USSR
and air^gary.
a. General Description of the Ffetwork.
T hes length of the Hungarian road system has not changed
materially since before World War II. Its total length is about 30,000
kilometers. slightly more than 3,000 kilometers are hard-surfaced, about
23$000 kilometers are surfaced with crushed stone or gravel, and the
remainder of the highways are unimproved: dirt roads. I/ The network
centers on Budapest, and the major surfaced highways radiate to t`e
Yugoslavs, Austrians Czechoslovak, and Soviet frongerso
Hi.gPhway construction since the war has been conceriu ?ated on
the restoration of the main arterial routes and the-itprovemont or
construction of so-called "junction -highways" which connect villages
with railroad stations or one of the major highways. The construction
program, although modest, has served both economic and military purposes
to sort, extent, but there is no evidence to indicate that military
corsideratione have been paramount in the planning of the construction
program.
he Hungarian Three Year Plan called for the hard-surfacing
of hot stretches (5 to 10 kilometers) of the various major highways,
totall' . f 5 kilometers, and the improvement or construction of l,I00
kilometers of connecting roads. / Despite the limited nature of these
goals, actual progress lagged behind plan. The Hungarians attributed
this to inadequate funds and the low output of the Hungarian quarries,
which n 1948 were producing crushed stone at a rate not exceeding 65
percent of the 19'J8 rate. The impending nationalization of the gnarries,
however, was expected to result in increased production sufficient to
permit the construction of from 500 to 600 kilometers of connecting roads
a y@1r in 1949 and 1950. 3/
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The l.ow level of highway construction plans and accomplishments
is further explained by the fact that the restoration of bridges has been
given a higher priority than road-building. The bridge reconstruction
effort has been descried as 'tan outstanding achievement even by ,Testers
standards.' By January 1950, over 2,000 rail and highway bridges had
been reconstruc`lcd, an(i only 106 remained to be rebuilt during the period
of the next 5.ye-ar plan, including 23 of major importance. 1J/
The hungar:; a.n road construction and improvement program is
not believed to be of gr. ear military significance. Despite reports stating
that the constriction of bridges and highways to carry weights of 20 metric
teas is being -and ertak'.n solely for military purposes, such construction
apparently is taking place only on a small scale and over short stretches
of rod of prince r ly local importance. Moreover, the increased weight of
po.3twa1 vehicles, employed in normal traffic requires more substantial
highways and bridges. Reports of concentrated construction work in the
.Yugoslav border area are unconfirmed. Although the main route from
Budapest to the Yugoslav border via Mohacs is to be strengthened under
the rive. Year (1950?54), only 18 kilometers of this 300.-kilometer
highway warp co^t doted by the end of 1949, and only 160 kilometers of this
type of highway were to be built throughout the country In 1950. 5] The
slight m1litary importance of the connecting roads is apparent from the
fact that the. 10 roads in that category which were under construction at
the end of 1949 averaged only about 2.5 kilometers in length. V rixrthermore,
only 200 kilometer of connecting roads were. planned for construction in
1950.
b. Traffic.
The Five Year Plan specifies that in 1954 trucks will haul
freight amounting to 170 million ton-ki1o3aeters, but this figure represents
only 2.5 percent of the total traffic planned for all forms of transport. 2
The ccxn?nercial movement of motor freight is the responsibility
of the Nat' lonal Trucking iterprise (TTi t!L'VAR) which operates under the
Road Transport Section of the Ministry of Communications. This agency is
handicapped by a lack of operable vehicles. In mid-1949, T WL'V R owned
about 400 truck: , most of them antiquated, which had been requisitioned
frc:m private concerns. / This situation continued to prevail in 19501
suggesting that new vehicles, both imported and domestically mane-factures,
were b :i ng allocated to the military or to high-priority constriactien
work. 2/
'ia -uini.ng that T' 'GRF MARR now operates a maximum fleet of 600
trucks, a rough estimate indicates that traffic currently carried by this
agency probably does not exceed 750,000 metric tons or 15 million torn-
kilometers a year, The vast difference between this figure and the planned
total of 170 mill. yon. tcn.kilometers in 1954 suggests that a large proportion
of total motor vehicle traffic in Hungax'y,, as In the other Satellites, is
carried by vehicles belonging to various Ministries and industrial
entevprises rather than to the state trucking organization. The planed
ca 95-0
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t:-af "ic oca1 n v'.-rth5A,ess c pne&aro unre~klistlc ' ' issu; contrary to
i fo si is n 'li.*.?,5` avaiiii le, t-h' : 1. n`ned 'gtu'e of 170 :"i? i cn t n? 3}ri~t':rs
ircc31r iEy ariim 1-dra a.:i well as motor transport. There is undoubtedly
a Ian ;a amou%%lt c:' ?__I? ` `''? ?a u traffic which cannot be dis garded in any.
,:'St, ~t.
c="r.+si e.Latia tf the traffic potential 01' the H rian ro:3.d 8-
:Uth.o,igh commodity statistics are not ?s ilable, Ii ngar5 ~
'high r.s:SJ raf ..c is believed, to consist chiefly of agricultural produce
mcved h virago to railroad stations or distributed by both motor are
ho~rse-d ?ao 7ohicles within urban -9.r s. Irz addition,, a substantiel
portion of total traffic consists of short-ha-111 motor trucking of
cd:-nstl-lactic: r;nterials, industrial raw materials, and finished products
in ;ih n areas, particalarly Budapest. Motor passenger traffic, both
urban_ and in'serur',mn, has developed rapidly in recent years Uthcuth
total hi gh ar traffic is important to the national economy, there is little
long-c~i. r:?ance freight traffic, and the country's requirements :4or
et's,su:?ial short-haul traffic, in the absence of adequate motor tra port,,
could be largely sal iIlad by animal-drawn vehic l_es.
The organization responsible for the upkeep of roads and
brIrlg-s thr?oii&x t Hun ary reportedly had at its disposal in 1949 four
tru:aks.z two cement mixers,, and one concrete pavingmachine. Ve_r`i.ous
atte: q;?hn have been made by Hung a.ry to import heavy equipment suitable for
; h c c o true{:; on of both airfields and highways, but the amount of each
eouipna m:it actual ly received is unknon. Initial domestic production of
rc uci'bniildin=; 'siachinery was scheduled to begin during the Five Year Plan
period. 10,/
A. Ca2.city.
It is estimated that the major routes across Hungary can
accommodate from 1,000 to 2,000 metric tons a day, a figure believed
to be well in excess of current operating le;rels. The factors Yihich
limit hs gh!.vay traffic are probably the need for such traffic and the nu m'h er
of serviceable motor vehicles rather than the capacity of the road system
itself:
a. Vu Leer ab? lit
Since motor transport) accounts for only about 2 percent of
total Hi nrllarian traffic, the economic vulnerability of the highway
network is judged to he slight Only a limited number of highways al -e
suitable for long-distance traffic, however, and the vulnerability of
the system is -thereby increased. The fact that the principal high is
are in most cases supplemented by rail lines would reduce the eeononic
effecthieness of attacks on highway targets unless rail connections were
disruo?ted at the same time.
Bridges are the most vulnerable points or the highway
network, p&rticuLarly? the large Danube and Tisza River bridges. There are
WO 96 m
OPNOW
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now seven brides spanning the Danube, five of them at Budapest, and all
are over 300 meters in length. Nine highway bridges of 200 meters or
more span the T 'qza. Destr.te' ion of these 16 bridges would cut the itigh'Nay
system into 3 isolated segment ,3.
2. Direct Contr3bi~tion c" H irra~r Tra soort Equipment- he
cnnomic. Potential fog, War of t1he USSR.
.
a, Inverts
The following figtwres have been reported by several different
sources, all of which state that the data are from the Hungarian Ministry
of Communications: il/
FungGrian Motor Vehicle Registration
1938.39, 19479
Wd" A& z&Z"W
a,
Passo tiger Cars
13,225
15,746
9,421
8,943.
Taxis
3,226
3,150
6s 506 b/
-
2,730
20047
Buses
596
668
183
472
633
Trucks
3,486
3P803
7
695
112231
9,340
Other
762
841
,9
826
735
21,2-22
?
' l
?A 26W
..
6.
..
a,/ 1949 figures are not to*.i1s, since all registrations were not collected
pcrioor to the dseZine,
b Includes passenger oars and taxis.
Includes trucks and other vehicles.
It is noteworthy that about 70 percent of all vehicles of
all types are r g1eteroil in and prestr ably oporuted p_r.;mnrily in the
immediate vlcini t , of Budapest. The number of trucks in Hun any is now
far above prevar levels, whereas the number of passenger cars is only about
60 'percent of th-s prewar level. The number of motorcycles has tripled
since before the war, increasing from 9,475 in 1938 to 26,239 in 1949. I?
Although data after 1949 are not available, reports of some
deliveries from onside sources and the fact that Hungary has a wel1-
establ.isiaed and axpandiug motor vehicle industry suggest that the
number of -rotor vehicles may exceed 30,000 in 1951. The percentage of
thi:;~ total -, hi.ch. is available for the use of the civilian econozayr is
unctartain. One report states that in August 1948 the Hungarian Army
had 104 trucks, `> 7 passenger cars, 6 reconnaissance care, and 4 ambulances. ,3/
A more recent report maintains that in 1950 the Army had 6,800 trucks,
19400 jeeps and passenger cars, 300 ar bu aces, and 60 radio cars. MV
These figures, a.f' correct, indicate a rapid expansion of the motor- vehicle
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strength of the !goys and it is possible that 50 percent of the total
H ngarian track inventory is nor assigned to the military. It appears
likely that a substantial part of this military expr,nL i on has been
achieved through imports of surplus US !Irmy vehicles from Western Furope:
The US Military Attache in Budapest estimated in July 1950 that from
4,000 to 5,000 vehicles of thin type had been received by that time,
with approximately two-thirds of the total being assigned to the Hungarian
armed forces and police.
The avers -e age and condition of the Hungarian motor vehicle
park have undoubtedly improved since 1946. The availability of spare parts
for postwar vehicles and the number and equipment of repair facilities
are believed to be adequate at the present time. The procurement of
spare parts for the older vehicles, which embrace a multitude of origins.,
makes, and models, still presents a problem, particularly in the A.
This difficulty is diminishing, however, as increasing new production
makes possible the retirement of much of the older equipment.
b. effect of Transfers to the USSR..
So far as is known, no transfers to the USSR have taken place
either from Hungary's motor vehicle inventory or from its current
production. Shipments of motor vehicles in limited quantity to Rumania
are recorded, and it 3s probable that Bulgaria, Albania, and possibly
Poland have received small quantities of Hungarian-built trucks.
The relatively undeveloped state of Hungarian motor transport
and the small percentage of total traffic which it carries suggest that
possible future transfers of motor vehicles to either the USSR or tho o1 .Sr
Satellites would not have a serious disruptive effect on the Hungarian
economy. If, honever, large-scale transfers including carts, ra.gons, and
draft animals should occur, the effect would be more pronounced.
3. Indirect Contributions*
a. Role of Hi,
Although some motor vehicle traffic presumably takes place
between Hungary and the USSR, no data permitting discussion are available.
b. Role of Iiiahwa Transport in Trade-with-the West.
There is no regular motor vehicle traffic between Hungary and
the West. Posai:rly some clandestine trade of this type does occur throug`3
Czechoslovakia and the Soviet Zone of Austria, but data sufficient to
permit worthwhile analysis are not available. The Hungarian civil economy
has received automotive equipment, particularly spare parts, from the West,
but generally it insignificant amounts. Delivery of Western vehicles to
the Hungarian Army, on the other hand, is believed to have been of some
mapnitude and of considerable importance).
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4. ,Trvesa gzntrahiptio~ns.
a. f'guai n nt A
The USSR could facilitate Hungarian highway construction and
improvement; Ly supplying road-building machines, but there is no evidence
that this has been done. On the other hand, unless the currant loin level
of planned road construction in Hungary is substantially revise?, the
importation, or us,-: of much mechanized equipment will not be required.
Hungarian motor vehicle production eliminates the need for exteria-)Xe
vehicle i reports unless expansion of the inventory is to be accelerated
markedly.
b. Materials and LILnpo
With the exception of bitumen. which is imported from Albania
and Riv ania, Hungary is heUevead to possess normally adequate supplies
of highway construction materials. There is some evidence, however, that
below?-plan prexuction of c.1?ushed stone has retarded construction.
Possibly some st w-l f o-- bridges and vehicle construction is imported from
the USS:R. A per,aistent shortage of gasoline is evidenced by continued
rationing and the forced conversion of many vehicles to the use of
substitute Nola. lb ;1lthough a shortage of truck drivers has been
rep-i:r ted in Hungary, this deficit could be easily eliminated without
outside assistance. nginring and technical personnel are in adequate
3up_)iy.
Although exact details are unknown, Soviet control of Hungarian
highway transport in probably extensive. There are indications, for
exa-jple, that road construction and improvement projects are ordered by
Soviet military officials. 17/ It is likely that the state trucking
transport company is subject to strict Soviet direction. 1S/ Soviet
personnel presu mably hold. positions of importance to highway transport in
the Hungarian Ministry of C ommuxnications .
5. Probable Beve .oREents.
There is little likelihood that Hungarian motor transport will
ryes sur. ably increase in economic importance during 1951 and 1952. Expansion
and improvement of the road system, already adequate for current needs and
in relatively good condition, will be slow and of little consequence.
The major effort of the motor vehicle industry probably will be directed
toward the modernization of the military vehicle park, while the development
of com sex cinl trucking will progress haphazardly and achieve only minor
results. Both actual and possible contributions of Hungarian highway
trar;sporrt to the Soviet economic potential for war will remain smmall?
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C. Water 7'ran port.
1. Direct Contributions
fos~!"ar of tee US i..
of Wt er Tr[,naoort to the E onomic Potent' j
The vra.terays of Hungary contribute appreciably to the Soviet
potential for war. The ;Host significant contribution is the availability
of Hungarian ports and inland water transport for the movement of bulk
cargoes, principally bauxite, to the USSR. The waterway system is also
of potential m litary value for support of Soviet-Satellite operations
against Yugoslavia.
:s. Cenral Descri ion of the tdet
Although Hungary has no maritime ports, a number of river ports
are of importance to water transport. These are located on the Danube
and the Tisza, the only Hungarian rivers of any economic consequence, which
run roughly north and south across the country. The Danube is the main.
"ater-may of Hungary. Along its course are several ports, including
Bszdc pest, .,&ir h not only is the major port of Hungary but also in one of
the principal ports of the entire Danube system. During the hi ?h or
season, Budapeet is accessible to ocean ships of shallow draft (under
12 font). In addition to Budapest, there are about 11 other Hungarian
ports on tie Danube,, but only a few of these are of economic Importance.
Navigation on all Hungarian rivers, including the Danube, is
hampered by dependence on rainfall and by ice, which limit somewhat
their economic and strategic significance. This is particularly true of
the Tisza, on. which navigation is frequently restricted by low water.
b. Traffic.
The waterways account for only a snail portion of the total
traffic carried by the Hungarian transport network. The tnn-k?lometer
perform ance of the rsaterways, for example, is probably less than 5 percent
of that of the rail system. The total tonnage (domestic and transit)
moved on the waterways is estimated to have been about 1 million motric
tons in 19/+7 and has probably increased since then. The Hungarian :rater ay
system carries coal, ores, petroleum products, building materials, grain,
and other bulk cargoes. Its carriage of other products is insignificant.
C ,;,al constitutes about one-third of the total traffic, while ores, notably
bauxite, constitute another third. The bulk of this traffic moves on
the Danube, while the Tisza and other rivers are used chiefly for the
movement of agricultural products and lumber, Traffic reaches its peak
during the late spring and su;mner, with the decline thereafter depending
pi iIIk3`?' .1y upon t too water level. The volume of traffic during the et.immer
nscnths is usually more than double that of the fail months, and the winter
is a season of relative inactivity because of unfavorable navigation conditions.
The transport of bauxite, an ore of considerable strategic valuze to
the USSR, is of rim. ry importance in 13un. arian waterway traffic. Bawd''ae
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for export to the 77-9 ,SR is loaded at the ports of. Csepel, Ado *, and Korarom.
Komarom is the pri;tcipal port for this traffic, loading as much as 3,000
ma ric tons a day rrhon navigation conditions permit. The port of Adony is
reported to be the second :Largest bauxite port in Hungary, with a capacity
of 1,000 ietric tons a day. The cargoes are discharged at the Hessarabian
port of Ismail in the US..
a, ._qui mcsni; .
'Tith the exception of a few larger ports such as Budapest and
Konxarom, t hie facilities of Hungarian ports are extremely pooh. Cargo
cranes are seal.,, cluayss are inadequ.aate, and storage facilities are often
insufficient. Rain ant road clearance -facilities are not limiting factors
on port traffic at present, but probably would prove inadequate for large-
scale traffic -ir.-vorients.
It i.e evident that Hun arian authorities are aware of the
deficiencies of the .t.ervay, system and are taking stops to remedy hem.
Ca: al project---,, c'ia~nnel clearance work, and port expansion and rehahiiita:Uon
are going ahead as fast as available resources permit. It is likely; that
conditions rill, inprove within the next few years but probably not .significantly
be:"ore the end sf? 3.952.
d. Ca,.c.
The capacity of the Hungarian water transport system fluctuates
widely according to the, season of the year and prevailing weather conditions.
An extremely tentative estimate of capacity would be on the order of 500
million ton-k- ilcrneters annually, which is well above present estimated
traffic levels.
Hungarian ports and waterways are considered to be quite
vulnerable to hostile action. Port installations are in many instances
still handicappod by the damage inflicted in World '"ar II. nines can be
la:;d in the charnels, and such installations as sluices and locks can be
pule out of c on mi s.i.on by air attack.
In the evert of attack upon the Crater-my= system, if the rik.i l
network remained mddamaged, the railroads could carry a substantial part
of the traffic that now moves down the Danube to Rumanian Black See, or
river ports for transshipment to the USSR. "'Hie rail lines , horee ver, probably
could not carry all of the more Important traffic, particularly bauxite
and petroleum, which would require additional specialized railway equipment.
The position of Yugoslavia athwart the Danube route between
i