SOVIET PLAN FULFILLMENT 1954

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00935A000300180001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: November 9, 2016
• Document Release Date: August 25, 1998
• Sequence Number: 1
• Publication Date: July 5, 1955
• Content Type: IM

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if
INTELLIGENCE MEMORANDUM
SOVIET PLAN FULFILLMENT
1954
CIA/RR IM-411
5 July 1955
WARNING
THIS MATERIAL CONTAINS INFORMATION AFFECTING THE
NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE
MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTS.
793 AND 794, THE TRANSMISSION OR REVELATION OF
WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS
PROHIBITED BY LAW.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
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CONTENTS,
EN e
Summary and Conclusions . . . . . . . . . . . . . . . . . 1
I. Introduction . . . . . . . . . . . . . . . . . . . . 4
II. Industry . . . . . . . . . . . . . . . . . . . . . . 5
A. General Trends in Production . . . . . . . . . . 5
B. Producer Goods Industries . . . . . . . . . . . . 7
1. Basic Material and Service Inputs . . . . . . 7
2. Engineering Industries . . . . . . . . . . . 11
C. Consumer Goods Industries . . . . . . . . . . . . 14
1. Production . . . . . . . . . . . . . . . . . 14
2. Distribution . . . . . . . . . . . . . . . . 16
D. Cost Reductions and Technological Progress . . . 20
IV. Agriculture . . . . . . . . . . . . . . . . . . . . . 23
A. General Trends . . . . . . . . . . . . . . . . . 23
B. Grains and Fibers . . . . . . . . . . . . . . . . 23
C. Livestock . . . . . . . . . . . . . . . . . . . . 24
V. Labor . . . . . . . . . . . . . . . . . . . . . . . . 25
A. Labor Force and Labor Productivity . . . . . . . 25
B. Industry . . . . . . . . . . . . . . . . . . . . 27
C. Agriculture . . . . . . . . . . . . . . . . . . . 29
VI. Capital Investment . . . . . . . . . . . . . . . . . 30
A. General Trends . . . . . . . . . . . . . . . . . 30
B. Industry . . . . . . . . . . . . . . . . . . . . 31
C. Housing . . . . . . . . . . . . . . . . . . 32
D. Construction Costs . . . . . . . . . . . . . . . 33
E. Agricultural Investment . . . . . . . . . . . . . 34
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VII. Transport . . . . . . . . . . . . . . . . . . . . .
A. General Trends . . . . . . . . . . . . . . .
B. Rail Transport . . . . . . . . . . . . . . . . .
C. River and Sea Transport . . . . . . . . . . . .
D. Motor Transport . . . . . . . . . . .. . . . . . .
Appendixe3
Pie
35
35
38
39
Appendix A. Totes on Capital Investment in the USSR . . 41
Appendix B. 1c,ource References . . . . . .
45
1. Increases in Industrial. Output and National Income 6
in the USSR, 1951-55 . . . . . . . ,
2. Increases in the Production of SelectedFBasic Industrial
Materials in the USSR, 1951-55 . . . ? . . 8
3. Increases in the Production of Selected
End Item:; in the USSR, 1951-55 . .
Industrial
4. Indexes of State and Cooperative Retail"Trade Turnover
for Selected Commodities in the USSR, 7,951-55 . . . 17
5. Indexes of Production and Sales of Consim.er Goods
in the USSR, 1954 . . . . . . . . . . . . ? . . ? . 19
6. Reduction in Total Cost of Industrial oduction
in the Uf3SR, 1951-55 . . . . . . . . . . . . . . 21
7. Trends in the Improvement of Production
in Certan Key Industries in the USSR,
Efficiency
1951-54 . . . 22
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Page
8. Growth of Industrial Labor Force and of Industrial
Labor Productivity in the USSR, 1951-54 . . . . . . 26
9. Civilian Labor Force in the USSR, 1952-54 . . . . . 28
10. Official Soviet Index of Volume of Gross Investment,
1951-54 . . . . . . . . . . . . . . . . . . . . . . 30
11. Planned and Actual Distribution of Investment
Expenditures in the USSR, 1953-54 . . . . . . . . . 32
12. Annual Increases in the Productivity of Construction
Labor in the USSR, 1951-55 . . . . . . . . . . . . 33
13. Growth of Freight Turnover in the USSR, 1951-54 . . 35
14. Increases in Railroad Freight Turnover in the USSR,
1951-55 . . . . . . . . . . . . . . . . . . . . . . 36
15. Increases in Ton-Kilometers of River and Sea Freight
Traffic in the USSR, 1951-55 . . . . . . . . . . . 39
16. Increases in Ton-Kilometers of Motor Freight
in the USSR, 1951-55 . . . . . . . . . . . . . . . 40
17. Rates of Annual Increase in Capital Investment
in the USSR, 1947-49 and 1953 . . . . . . . . . . . 42
18. Increases in the Volume of Capital Investment
in the USSR, 1946-55 . . . . . . . . . . . . . . . 43
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I
CIA./RR IM-411
(ORR Project 14.436)
SOVIET PLAN FULFILLMENT*
Summary and Conclusions
The implications of Soviet plan fulfillment in 1954 should be
assessed from two points of view: that of the Soviet leaders and
that of the great mass of Soviet citizens. Soviet leaders are
concerned with furthering the development of a modern industrial
economy, with maintaining and improving the position of the Soviet
Bloc with respect to the West, and with creating the conditions
considered necessary for the eventual transition to Communism.
Soviet citizens in the mass are more interested in their own im-
mediate welfare, although the extent of their willingness to pro-
duce is a limiting factor on the decisions of the leadership.
For the Soviet leadership, the 1954 plan results are a mixture
of gratifying successes and persistent failures. The increase in
total industrial output was sufficient to permit a slight over-
fulfillment of the 'ambitious goals of the Fifth Five Year :Plan
(1951-55), if only a modest rate of growth is achieved in :L955.
By the end of this year the Soviet index of industrial production
will show an increase of 80 percent over 1950? Output of coal,
petroleum, steel, and electrical energy is rapidly approaching the
levels which Stalin designated in his 1946 election speech as the
material basis for Communism. Even in 1954, the first full year of
the "new course," output of producer goods rose more rapidly than
output of consumer goods.
A number of the top-priority industries, however, will barely
make the 5-year targets and then only by straining capacity to the ut-
most, without the slack that has usually been available at the end of
a plan :period. The investment plan for the 1951-55 period probably
was assured of success by the achievements of 1954, but because of
inefficient construction, the cost of the program appears to be con-
siderably higher than had been anticipated. High costs, low labor
* The estimates and conclusions contained in this memorandum repre-
sent the best Judgment of ORR as of 1 May 1955.
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productivity, and inefficient organization in the construction industry
are some of the most serious chronic problems n the Soviet economy.
Cost reductions ?Ln industry were slightly behid the plan on the whole,
and there may hale been cost increases in the xtractive industries,
where the immediate benefits of cost reduction are the greatest.
The volume of rail transport ;planned for 1.955 as exceeded in 1954,
but this overfulfillment resulted from longer-than-pland length
of, haul for fuel, timber, and other basic mate ials rather from the early completion of over-all proc_ucti n plans. The economy
as a whole reflected the stresses and strains of the superimposition
of the "great projects"; logistical support of the Korean War; the
general uncertainty, relaxation, and reassessm6nt which followed
Stalin's death; and, finally, the consumer goes program.
The principal problems facing the Soviet leadership at the end
of 1954 were lagging labor productivity and agricultural production.
By the middle of 1954 it was apparent that the Fifth Five Year Plan
goal for labor productivity could not possibly be fulfilled. Achieve-
ment of production and investment targets is being purchased at the
price of above-Man increments to the industrial labor force. The
effectiveness of this expedient has been sharply reduced as the Soviet
leadership returned large numbers of skilled to The lture,
thus reversing the trend of the past 25 y has
been overexpended, thereby exerting pressure on the limited supply
of consumer goods. Various forms of propaganda and prestige rewards
are losing their effectiveness and must be augmented by more material
incentives. The deficiencies in agriculturallproduction are primarily
deficiencies of those food products which wood improve the diet and
provide incentives to both the urban and rur aL workers -- livestock
products and fats and oils. Failure to achie4re the desired rates of growth in labor productivity and in agricultural production retards
the growth of total output, thus constricting1the investment surplus
and lowering the rate of growth of the econom as a whole.
The Soviet citizen also must view the 19514 achievement with mixed
feelings. It undoubtedly was the best year for the Soviet consumer
since 1937 or :-938 and possibly the best yeari since the onset of col-
lectivization and industrialization. Retail prices again were reduced
but by a much ;smaller percentage than in 19511 and the volume of trade
turnover increased 18 percent instead of 15 percent as planned. The
output of manufactured consumer goods exceeded the original Fifth
Five Year Plan goals, and some improvement ws made in the quality
and variety of consumer goods. In 1954, unlike 1953, most of the
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increase in trade turnover resulted from increases in production
rather than from inventory clearances, repricing, releases from
stockpiles, and the channeling of a greater portion of total goods
into the state trade network. Only 1 or 2 percent of Soviet house-
holds, however, could afford many of the luxury consumer goods pro-
duced, such as refrigerators, washing machines, automobiles, and
television sets, and only shock workers could afford the radios and
motorcycles produced. The increased production of textiles, pots
and pans, footwear, and furniture, to be sure, benefited the broad
masses of the population, but many of these items were relatively
expensive, and their quality remained, on the whole; poor. Much
excess purchasing power still remained at the end of the year,
however, as a result of the rapid growth in the labor force, the
reduced state loan, and the increased procurement and purchase
prices paid for farm commodities. Queues were still chronic, and
long. While few households could afford the luxury goods, many
were willing and able to purchase larger quantities of less expen-
sive goods which were in short supply. This was particularly true
of quality foodstuffs (meat and dairy products and vegetables) and
housing. Housing is quite cheap in the USSR) but it is of very
poor quality and is extremely crowded.
25X1A9a
Popular morale_,probably improved considerably in 1954;. but the
improvement resulted as much from the general relaxation of tension
as from the improvement in the material well-being of the Soviet
masses., The ordinary Soviet citizen at the end of the ye ay have
felt some pride in an d may- have derived some satisfaction from. the
continuation of industrial growth, but/his more immediate personal
desires were far from satisfied. Much of the effect of the consumer
goods prograprobably.was negated by the continued shortages of
housing and of quality foodstuffs. These are the products which
most Soviet consumers;xpp-1d like to purchase in increased volume,
and these are the products for which the gap between output and
plan was greatest.
In the final analysis, of course, the decisions are made by the
leadership; most citizens can do little more than hasten the program
or drag their feet. The Soviet leaders at the end of 1954 had con-
siderable cause for satisfaction in the rapid industrial growth of
the country, the improvement in its military posture, and the initial
success of the "new lands" program. The problems which they faced,.
however, were serious, persistent, and deeply rooted in the institu-
tional structure of the regime. Awareness of the problems was indicated'
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by the public attention devoted to housing construction, the long-
range growth )f animal husbandry, and the relatively low rates of
growth of indistrial production and investm nt planned for 1955.
The latter apparently reflected the increas d defense expenditures
and the desir-e of the Soviet leaders tc con olidate their economic
position and to provide a firm and flexible base as the point of
departure for the Sixth Five Year Plan.
I. Introduction.
The results of Soviet plan fulfillment in 1954 are particularly
interesting ftr several reasons. First, 19 4 was the first full
year of economic activity after the death o Stalin, who had dic-
tated the pattern of economic growth in the USSR as well as its
political development for so many years. Second, 1954 was the
first complete year of the "new course," since 1953 was occupied
largely with making the adjustments necessa y to implement the
new emphasis :)n the production of consumer goods. Events such as
these are to the Soviet economy what change in secular trends are
to a market economy. Third, as the fourth year of the Fifth Five
Year Plan (1951-55), following a year cf un;sually low rates of
growth, 1954 produced results which, in lame measure, were to
determine the successes and failures of the; Fifth Five Year Plan
as a whole.
The principal objectives of this memora.dum are to relate actual
achievements to planned goals, to indicate 'areas of activity where
difficulties are either being encountered of anticipated, and to
point out the general causes of the difficulties. Economic policies
are not the primary focus of this memorand but they will be
introduced throughout as the necessary framework for understanding
current activities. Brief comparisons withIdevelopments in the
Fourth Five Year Plan (1946-50) will be? introduced in order to pro-
vide necessary perspective.
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II. Industry.
A. General Trends in Production.
In 1954, having made the necessary adjustments to the shifts
in the order of priority which were announced after Stalin's death
in 1953, the Soviet economy resumed a rapid rate of growth which
virtually insured the fulfillment not only of the original Fifth
Five Year Plan goals for total industrial output but also of the
original and revised goals for the production of consumer and
producer goods. Total industrial output increased 13 percent in
1954, and the 9-percent increase planned in 1955 will raise the
cumulative index to 180 (1950 = 100) (see Table 1*). The output
of producer goods rose 13 percent in 1954, the first full year of the
"new course, compared with 12 percent in 1953, the year of transi-
tion. The estimated planned increase of 10 percent in 1955 will bring
the cumulative index for producer goods to 184, compared with the
originally planned 180. Production of consumer goods increased
12 percent in 1954, in accordance with the "new course," despite
the lag of agricultural production. The estimated 6-percent planned
increase in 1955 will raise the cumulative index to 171 rather than
to 160, as originally planned. It must be remembered, however, that
the base is much smaller for consumer goods than for producer goods,
the former accounting for no more than 30 percent of total industrial
production in any given year.
The Fifth Five Year Plan was somewhat more ambitious than
the Fourth Five Year Plan and did not have the benefit of quick
return from reconstruction and reconversion. It is still worthy
of note, however, that in the Fourth Five Year Plan the planned
growth of industrial production (1950 over 1940) was exceeded
substantially -- the actual increase of 73 percent reported
contrasts with the 48-percent increase planned. On the other .hand,
production of consumer goods fell far short of the Fourth Five
Year Plan goals, whereas in the current plan even the revised
goals (excepting quality foodstuffs) will be reached in most
instances.
* Table 1 follows on p. 6.
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I
Increases in Industrial Output and National Income in the USSR J
1951-55
Planned Increase
Increase over Previous Year 1955 over 1950
1951 1952 1953 195i 195 Original Revised
National income 12 11 8 11 10 60 64 _/
l
i
a
'Total 1.11dUs v
output; ,/ 16 11 12 13 9 71. 80
Producer goods J 17 (12) (12) (13) (11) J 80 81t
Consumer goods J 16 11 13 (12) (6) b 60 71
a Data for 1951-5 and the original cumulativ
ly plan fulfillment reports and from the Fifth
tives, respectively. The one figure given for
cumulative goals are from Bulganin's speech to
goals are from year-
ive Year Plan direc-
955 and the revised
he Supreme Soviet in
loyed is unknown,
Soviet statistics on gross industrial productioi and national income
provide a rough i.easure of the direction and m nitude of change.
Moreover, these eytatistics are useful because they represent one of
the principal yardsticks by which economic growth h is planned and
measured in the USSR.
b. Parentheses indicate interpolations. and the 1955 Plan.
c. / Computed from actual increases for 195]-5
d. A few words on some of the problems encountered in using the indus-
trial output statistics are in order:
First, yearly increases apparently have be
fulfillment reports, inasmuch as both Bulganin
report 3/ indicate that the cumulative index o
d
s
at 165 at the end of 1954. The producer goo
short if the interpolated rates for 1955 are k
percent increase in gross production, indicati
also have been rounded downward. Actually, an
cent in producer goods is required to reach th
on the basis of the announced annual increases
n rounded down in plan
and one Soviet; press
gross production stood
series also falls slightly
pt consistent with a 9-
g that the subtotals
increase of about 11 per-
cumulative goal of 184,
* For. serially numbered source references, se~ Appendix B.
-6-
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Increases in Industrial Output and National Income in the USSR
1951-55
(Continued)
footnote d continued
Second, there are some problems of consistency between the original
plan for total production and the planned rates of increase in the sub-
totals, as stated in the 1952 Plan directives. The original Fifth
Five Year Plan directives specified a 70-percent increase in total in-
dustrial output and an average annual rate of 12 percent. Producer
goods output was scheduled to grow at 13 percent a year, and consumer
goods output at 11 percent. The over-all 5-year goal was not consistent
with the average annual increase, which implies a 76-percent increase
for the period. If the official ratio of capital to consumer goods
production of 7:3 is applied, the 12-percent total rate is too low.
A partial exit from this dilemma is provided by Malenkov's allusion
to 60 percent as the original increase planned for consumer goods.
This is equivalent to an annual rate of 9.9 percent. Even if it is
assumed that the 70-percent 5-year increase for total output has some
validity, it must be recognized that it is less than a 12?-percent
annual. rate of increase because the consumer goods yearly increase
has been rounded upward by over 1 percent. Assuming a rounding upward
of the producer goods goal by half as much, 0.5 percent, the 5-year in-
crease in this category would amount to 80 percent. Applying the 7:3
ratio to the computed consumer and capital goods increases yields a
total industrial output increment of 74+ percent.
B. Producer Gocl.s Industries.
1. Basic Material and Service Inputs.
Judging from the results achieved in 1954, a number of
the top-priority industries, the so-called "leading links" -- coal,
petroleum, metallurgy, and electric power -- barely will reach, and
in some cases may even fall short of, the 1955 production goals
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(see Table 2). Throughout the postwar period thes6 industries have
received a proportio::iately larger share of availabje resources than
Increases in the Production of Selected Basic Industrial Materials
in the USSR
1951-55
Increase over Previous Year
Percent
Increase
Required
1
1
1952
1953
1954
1955 over 1950
in 1955
Industrial Material
95
Pig iron
14
14
9
9
76
14
8
Crude steel
15
10
10
8
62
6
Rolled steel
15
12
10
9
64
4
Zinc
15
24
2
7
150
170
5
34
Lead
25
17
22 2
:L3
Copper
14
15
N.A.
5
8
Coal
8
7
6
8
43
17
Crude petroleum
12
12
12
12
85
11
Electric power
14
13
13
11
80
Caustic soda
8
11
15
11
779
17
lcined soda
C
9
21
19
10
8
a
Mineral fertilizers
7
8
9
16
88
2
22
Synthetic rubber
20
9
13
1
82
17
Cement
19
15
15
19
120
27
Bricks
20
19
12
13
130
14
Slate
27
26
22
17
160
Paper
12
9
10
10
46
J
a. (?verfulfilled in1954.
in the prewar pericd. In 1948-49 there occurred a marked shift in
investment allocations in favor of these industries, and a further
shift was made in the Fifth Five Year Plan. As a result of this
emphasis, the production goals of the Fourth Five Year plan for these
industries were substantially exceeded, and the g I oals for the Fifth
Five Year Plan (announced in 1952) required :furt er growth at very
rapid rates, despite the already expanded base t~ which the increases
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would apply. For example, the Plan called for a 62-percent increase
in production of crude steel and an 85-percent increase in production
of crude petroleum, which contrast with the comparable increases of
about 35 and 10 percent planned, on a much smaller base, for the 1940-
50 period.
The original 1955 petroleum goals apparently have been
revised downward to a cumulative increase of about 75 percent above
the 1950 level by the end of 1955.* Yearly increments have been
exactly 12 percent per year (which represented, in 1954, an actual
overfulfiliment of the yearly plan), whereas an average rate of
growth of about 13 percent is required. There is no evidence of
planning for the 1.7-percent increase which would be necessary in
1955 to salvage the original plan. The condition which led to the
implied downward revision of the crude petroleum production plan
is not known definitely, but refining capacity** seems to pose a.
greater limitation than the availability either of extraction equip-
ment or of oil deposits.
The cutback in crude petroleum production plans apparently
has brought about an upward revision of the coal production plan such
as to maintain the planned level in the fuel balance. Output of coal
rose 8 percent in 1954, and a similar rise in 1955 would be sufficient
to provide the cumulative planned increase of 43 percent for the
1951-55 period. Investment allocations to the coal industry, however,
increased notably last year, and recent reports indicate that a 13-
percent increase in output is planned for 1955. J An additional
increment to coal output of this magnitude probably will more than
compensate, in terms of energy equivalents, for the anticipated short-
fall in the production of crude petroleum.
Projection of the 1954 rates of increase in ferrous metal-
lurgy indicates that the Fifth Five Year Plan goals for output of pig
iron probably will not be achieved but that the 1955 goal for output
of crude steel still may be reached. Output of pig iron increased
only 9 percent in 1954; consequently, output in 1955 must rise l4 per-
cent in order to reach the level planned for the end of the 5-year
* This statement assumes that there has been no change in the num-
ber of petroleum components included for the purpose of calculating;
percentage increases. These components are crude oil, natural. gas
liquids, and natural gas.
Production of oil equipment in general seems to be far behind
plan. See III, B, 2, and Table 3, below.
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period. In 1954, output of crude steel incre
than the rate cf growth in 1953 but still suf
cumulative planned goal, if maintained throug
is whether the USSR can achieve the requisite
crude steel if pig iron output continues to
of scrap could be substituted for a year or
scrap will not suffice to maintain current r
sed 8 percent -- less
icient to meet the
1955. The problem
rate of growth in
ag. Increased. inputs
wo, but the supply of
tes of growth in steel
output beyond L955 without a marked increasejin output of pig iron.
Although the generation of elect'ic power increased
less in 1954 than in 1953 -- 11 percent comp ed with 13 percent --
the 5-year goal will be reached if there is Like gain in 1955?
Such success, however, apparently will be atjthe price of using
existing equipment to the limit, with little reserve capacity, be-
cause of a se:7ious lag in the production of /steam turbines and
generators. Et is estimated that installed Jelectrical generating
capacity by tae end of 1955 may be as low a 75 percent above 1950
instead of 100 percent, as originally planned.
Aprojection of 195+ trends in the production of
chemicals ant. nonferrous metals leads to the conclusion that several
commodity production objectives of the Fift! Five Year Plan probably
are now out of reach. The 1955 production Iof caustic socLa, calcined
soda, and synthetic rubber probably will fall far short of the 1951-
55 targets. The production of mineral fer
(16 percent) in 1954, and if the 1955 goal
is achieved, J the cumulative growth for
more than 8C percent. Although this will
target of 8E percent (1955 over 1950), the
and important because of requirements for
in agriculture.
ilizers rose sharply
of a 24-percent increase
he 5-year period will be
e less than the original
result is still impressive
The production of aluminum at! the end of 19t4 exceeded the
1950 level 'Dy 140 percent, and the modest growth (9.8 percent) planned
for 1955 is slightly higher than needed t; meet the ambitious planned
:increase of 160 percent for the 1951-55 p riod. J The production
of other ncnferrous metals, however, is e nsiderably behind the
original plan. The production of copper s lagging far behind plan,
and copper is believed to be generally i short supply. Although
the production of lead doubled by the en of 1954 (over 1950), and
output of !,inc was more than 70 percent Bove the 1950 levels, the
original 1951-55 plan for these metals hs been abandoned. The in-
creases planned for 1955 are only 11.7 a.d 16.5 percent, respectively,
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whereas increases of 34 and 45 percent would have been required in
order to meet the original Fifth Five Year Plan goals.
2. Engineering Industries.
Plan fulfillment for the engineering industries in 1954
indicates both great achievement and substantial failure (see
Table 3*). The whole pattern of development of the engineering
industries is considerably different in the Fifth Five Year Plan
from what it was in the Fourth, in which almost every major en-
gineering industry had a 1950 goal of from two to four times the
1940 rate and in which much of the increase was to come from new plants
in the relatively less industrialized areas of the country. In
the Fifth Five Year Plan, many engineering industries had relatively
small projected rates of increase -- about 20 percent for the auto-
mobile and tractor industry, for example. Indeed, many industries --
the locomotive industry, for example -- were so disrupted by shifts
in output mix during the Korean War period that production declined
substantially. On the other hand, those engineering industries
which provided the capital equipment for the "leading links" and
for the "great projects" -- the oil and electrical equipment indus-
tries, for example -- were scheduled for great expansion.
The 1954 plan fulfillment indicates that the cumulative
680-percent increase in large hydroturbines already has been achieved
but that the goal for steam turbines may not be reached in 1955.
The metallurgical equipment industry will achieve only about one-
half of the planned 85-percent increase (1955 over 1950), and
production at worst may be only about 10 percent above the 1950 level
in 1955. The production of equipment for the petroleum industry
looks hopelessly behind the 250-percent cumulative increase planned,
with the almost certain result that the USSR will be without the 20-
percent reserve refinery capacity desired at the end of 1955. Indeed,
the cutback in the petroleum production plan may have been dictated
by the lack of sufficient refinery capacity.
Production of steam locomotives, which dropped to less
than one-third the 1949 level in 1951, when the plants were switched
over to capital equipment for the "leading links" and for the "great
projects," probably regained the 1949 level in 1954. The USSR has,
however, a substantial reserve inventory of older steam locomotives,
Table 3 follows on p. 12.
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Increases in the Production of Selected :CndusI rial End Items
in the USSR
1951-55
Increase over Previous Yea
Planned
Increase
Increase
Required
End Item
1 1
1952 1953 1 54
1955 over 1950 in 1955
Steam turbines
10
8 40 4
130
33
Large hydroturbine.,
145
24 35 82
680
a/
Electric: locomotives
11
34 7
N.A.
Steam locomotives
N.A.
N.A. 163 13
N.A.
Freight cars
Trucks
N.A.
N.A.
N.A. 3 N.A
11 11
N.A.
15
Passenger cars
N.A.
7 30 23
49
Antifriction bearings
30
17 15 13
N.A.
Petroleum equipment
N.A.
44 17 N.P. f
250
Metallurgical equ'_p-
ment
12 18 5(
85
80 b
Metal-cutting mac'iiine
tools
3 c 14 81
N.A.
Large heavy and uni-
versa:L tools
11
N.A.
Chemical equipmert
38
28 24 1411
230
32
Looms
N.A.
39 2 69
N.A.
Spinning machines
N.A.
18 N.A. 9
N.A.
Tractors
N.A.
7 13 2 /
68 cf
14
Grain combines
15
N.A. 2 N A.
N.A.
Sugar beet combi:es
N.A.
19 50 l4
N.A.
a. Overfulfillei in 195 , when the cumulative index for the 1951-5 period
reached 746.
b. It is estimated that output of metallurgical equipment dropped sharply
in 1951 and that the index at the end of :L954 (1950 = 100) was approxi-
mately 103.
c. Ministry of Machine Tool Industry only.
d. The origina:, goal of a 19-percent increas is believed to be in terms of
horsepower, whi,3h is estimated to be equivale t to about a 40-percent in-
crease in terms of physical units. Revised goals under the "new course"
provided for about a 68-percent increase (physical units), which probably
will be achieved. SI I
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and current production consists largely of new, larger, more efficient
models. The production of electric locomotives shows some increase,
but the production of diesel locomotives appears to be lagging so
badly as to go unreported. The production of these types probably
is still far short of the volume required for the extensive dieseliza-
tion and electrification program outlined by Kaganovich in mid-1954.
A program comparable to that outlined by Kaganovich apparently was
proposed in one of the original versions of the Fifth Five Year Plan
but was dropped because of the magnitude of requirements for the great
projects, the accelerated expansion of the "leading links," and pos-
sibly the requirements for logistical support of the Korean War. In
any event, the USSR has yet to expand current production rates of
diesel and electric locomotives in order to implement the program
outlined by Kaganovich. The production of freight cars was not re-
ported in 1954, and production probably was somewhat below the 1950
level. The production of freight cars, particularly gondola types,
probably will have to be substantially increased in the near future.
An 8-percent increase in output of metal-cutting machine
tools was reported in 1954, but the general trend in the production
of machine tools is difficult to ascertain. Unlike the emphasis in
the first four Five Year Plans, the main emphasis on the production
of machine tools in the 1951-55 period has been on heavier, more
complex tools rather than on rapid expansion of unit output. Soviet
reporting in the Fifth Five Year Plan has not been consistent either
in terms of categories or in terms of subordination of the producing
units. It is probably a safe assumption, however, that the 1951-55
goals will be reached.
The production of row-crop-type tractors almost tripled
in 1954 and was very close to the "new course" goals. Output of
heavy, general-purpose tractors has been stable for several years
and is ample to support the current expansion of the sown area.
The 1955 goals for output of tractors should be achieved, or very
nearly so, indicating that the defense industries are successfully
making a major contribution.
In summary, the results of 1954 indicate that the major
basic commodity production goals in the producer goods sector will
be approximately fulfilled. More of the items subject to specific
annual reporting will fall somewhat short of plan than will exceed
it, which is in sharp contrast to the results of the Fourth Five
Year Plan. Even with a slight shortfall in the present plan, how-
ever, the increase in production is impressive because of the larger
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base (1950 for the Fifth Five Year Plan, :L9)-0 or the Fourth) and the
virtual exhaustion of unusual sources of grown available during the
Fourth Five Year Plan, such as reconversion arkd reconstruction, looted
capital equipment, and the retention of skilled prisoners of war. On
the other hand, production capacity will be considerably tw:ed.
C. Consumer Goods Industries.
1. Production.
In assessing the growth of the pr duction of consumer
goods in the USER it is desirable to distingi4 sh between those items
which are proce:;sed agricultural raw material and those goods which
are produced from raw materials of industrial origin. This distinc-
tion roughly co:'responds to the standard categorization of nondurables
and durables. The USSR, by shifting distribu ion priorities and by
increasing investment allocations, can increase substantially the
output of industrial consumer goods in a relatively short time. The
situation is qu:Lte different, however, if an ncrease in the output
of agricultural raw materials is a prerequisite.
Historically (from 1928 to the pr sent), the rather
limited investment in agriculture has had. an lmost negligible effect
upon agricultural output; greater capital intensity has been largely
negated by migration of large segments of the youthful rural labor
force, forced collectivization, and other fors of political and
economic pressures. The peasant has been bled by state acquisition
of most of his collective output at artifici ly low procurement
prices and then bled again by the requirementt that what little cash
income accrues to the collective be used in large part to augment
state investment in agriculture. As a conse ence, the dynamic
factors affecting the growth. of Soviet agricultural production are
peasant income -- including availabilities of manufactured consumer
goods -- and peasant reaction to political pr?essures in the villages.
Increases in these pressures have produced additional peasant resis-
tance to the state's agricultural program. Itn addition, agricultural
production has certain innate characteristics, particularly dependence
upon adequate rainfall and the time required to build up livestock
herds, which make it very difficult to secure increments to output
merely by shifts in distribution priorities and in investment alloca-
tions.
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The production of consumer goods as a whole showed a sub-
stantial increase in 1954, in accordance with the "new course" goals,
but in many instances it fell short of the plan. The production of
automobiles apparently reached the planned 1955 level in 1954. The
production of radios is probably somewhat behind schedule, but the
reported 76-percent increase means that the rate of increase necessary
in 1955 is much less, about 50 percent. The production of bicycles,
which was fairly large in past years, increased 25 percent and may
reach the planned 1955 level. Television sets were reported as
below plan; nevertheless, output increased more than. 300 percent.
In this case, however, the base is fairly small. It is difficult to
judge the prospects for household refrigerators and washers (where
output also has been meager in the past), because the final goals
are not known, but output is rising rapidly. The same is more or
less true for vacuum cleaners, cameras, watches, and clocks -- there
may be some shortfalls, but substantial gains have been made.
Output of textiles and leather products probably will
meet the plan, with the exception of such things as linen and of
certain kinds of knitwear. In general, some raw materials are in
short supply throughout the textile industry, although raw cotton
may be plentiful. The silk industry has already exceeded the :Five
Year Plan, probably because of increased production of synthetic
fibers. The growth of the production of leather footwear is very
definitely affected by leather shortages, but rubber footwear does
not seem to lack raw materials. In 1954 there apparently was a con-
siderable improvement in the quality and style of textiles, but the
range of choice still leaves much to be desired.
The producer cooperatives, which are small enterprises
employing a few artisans and operating largely with scrap and local
raw materials, have already reached the 1955 goals for total production.
Lagging agricultural production shows up quite clearly
in the plan fulfillment reports for processed foodstuffs. Goals for
meat and dairy products, vegetable oil, and canned foods all will be
substantially underfulfilled at the end of the plan. Sugar and sugar
products are probably the only major categories in which success is
likely. The failures in meat and dairy products are not, of course,
very surprising, inasmuch as Western observers have generally con-
sidered the plans to be unrealistically high. Soviet concern with
the problem was evidenced at the beginning of 1955, when Khrush.chev
outlined a vast animal husbandry program for the next 5 years (1956-60).
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Like all Soviet plans, it is quite ambitious,jand it is heavily de-
pendent upon the success of the "new lands" program. Together with
increased procurement prices, Klirushchev's liestock plan is,
however, more likely to result in a substantial increase in pro-
duction of meat and dairy products than any other program of the
postwar period, particularly the abortive Thr e Year Livestock
Plan (19+9-51).
2. Distribution.
It is evident from the announcements of retail trade
turnover that, in general, 195+ was the best year the Soviet con-
sumer has had since the late 1920's. Si;nifiCant increases were
reported in sales of many consumer goods, alt ough there were
official admissions that the demand for a numter of important con-
sumer commodities was not fully met. As in 1953, substantial releases
of foodstuffs from state reserves occurred in 195+ in order to sup-
plement the slcw growth of agricultural produ tion. The shoddiness
of many items, especially clothing and footwear, continued to plague
the Soviet concumer. Retail prices for food and industrial com-
modities remain 14 and 27 percent, respectively, above 19+0, but
this has been more than compensated for by increased aggregate wage
payments and other forms of monetary income ich have given the
consumer surplus purchasing power despite the above-plan output
and sale of consumer goods.
In 195L+, state and cooperative rtail trade turnover
increased 18 percent (in comparable prices) over 1953. This increase
was sufficient not only to overfulfill the annual plan (an increase
of 15.5 percent; over 1953) 9J but also to overfulfill the original
4
Fifth Five Year Plan goal. (a 70-percent increase over 1950) in
years. The success of the "new course," ina
half of 1953 and designed to provide more an
to the populace, is impressive. Although an
was reported in the first half of 1954 over
the base of coisparison was relatively low.
1953, however, retail trade turnover was swe
in consumer goods production* and by imports
urated in the latter
better consumer goods
increase of 21 percent
he first half of 1953,
n the second half of
led by a sizable increase
mainly of food products,
alf of 195+ the increase
Output of consumer goods in the second h4 f of 1953 increased by
30 billion rub Les over the first half of 195.
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over the second half of 1953, although somewhat smaller than for
the first half, reflected a greater absolute increase because of
the expanded base of comparison.
The revised 1955 goal of a 100-percent increase over
1950 in retail trade turnover 10 probably will be attained easily,
since an increase of only 11 percent is necessary in 1955 to ful-
fill this plan. As indicated in Table 4, the sale of most individual
food and manufactured commodities appears to be progressing as
scheduled during the Fifth Five Year Plan. In 1954 the greatest
Table 4
Indexes of State and Cooperative Retail Trade Turnover
for Selected Commodities J in the USSR
1951-55 b
Indexes (1950
= 100)
Increase
Required
1955
in 1955
Commodity
1951
1952 1953
1954
Goal
(Percent)
Meat
132
145
198
229
230
1
Fish
114
129
139
164
210
28
Butter
110
129
175
187
190
2
Vegetable oils
and other fats
114
133
159
194
260
35
Sugar
129
162
200
220
230
5
Clothing
114
126
163
199
240
21
Furniture
150
180
250
313
400
28
Bicycles
186
231
268
329
550
67
Sewing machines
129
157
211
264
510
94
115
138
190
236
260
11
126
153
180
200
11
a. These commodities were selected because they are the only ones reported
during the past 4 years for which the plans are known.
b. Compounded on the basis of reported annual percentage increases.
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percentage increases were reported for consumer durable items --
washing machine:, 900 percent; vacuum cleaners!, 170 percent; refrigera-
tors, 80 percent; television sets, over 300 percent; and radio sets,
76 percent. These commodities, however, are gh-priced luxury items
which were not Bold in large quantities before 1954; consequently,
large percentage increases in. sales do not ref ect very large absolute
increases. i
Ostensibly, the 18-percent increas6 in retail trade
turnover reported for 1954 is a significant acaievement and one
which reflects the desires of the Soviet gover ent to provide the
people with more consumer goods. This increas , however, is the
result not only of increased supplies but also of several other
factors -- (a) the upgrading and repricing; of koods, (b) greater
weight of more expensive commodities, (c) emphasis on higher quality
production, and (d) funneling of a higher percentage of total trade
through state trade channels than in the past which would not re-
flect absolute commodity increases. Cumulativ ly, those factors which
result in the marketing of a proportionately g -eater percentage of
more expensive goods probably are responsible or a significant portion
of the reported increase in 1954. As shown in Table 5,* those factors
were probably especially significant in the first half of 1954, when
production of many commodities was noticeably below sales. Deficits
in many commodities, foodstuffs in particular, were made up through
imports and releases from state reserves. ll
Since mid-1953 the USSR has attempted to channel more
trade through the state trading network. Comm scion sales were
begun in an effort to induce farmers to sell m )re of their surplus
produce to cooperatives rather than through the collective farm
market at higher prices than obtained for contact and obligatory
deliveries. This move was intended to neutral
market by narrowing the spread between the pri
farmer from the state trading system and in th
plan has not been successful, and trade organi
severely criticized because of it. Further in(
to farmers to market their produce through sta
a decree raising-the prices of potatoes, fruit
the off-season. This decree was intended not
equal distribution but also to stabilize price
farm market during the interim harvest period.
* Table 5 follows on p 19.
_ze the collective farm
,es received by the
"free" market. This
rations have been
ucement was offered
;e trade channels by
s, and vegetables in
)nly to obtain more
on the collective
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Table 5
Indexes of Production and Sales of Consumer Goods in the USSR
1954
1953 = 100
Midyear 1954
End of Year 1954
Commodity
Production
Sales
Production
Sales
Meat and meat products
102
130
109
116
Fish
113
124
114
118
Dairy products
110
121
113
110
Vegetable oils
117
113
111
110
Confections
105
114
103
111
Tea
114
119
111
120
Cotton fabrics
103
119
106
118
Silk fabrics
157
145
129
128
Woolen fabrics
119
156
117
125
Hosiery
110
131
107
124
Leather footwear
110
115
107
116
Radio receivers
207
200
176
176
Television receivers
288
200
300
200+
Phonographs
132
133
131
126
Refrigerators
316
300
192
18o
Vacuum cleaners
449
400
290
270
Sewing machines
125
131
129
125
Watches and clocks
129
136
128
124
Cameras
142
153
154
157
Furniture
128
137
127
125
Bicycles
130
129
125
123
Motorcycles
166
165
144
136
Automobiles
127
170
123
138
Omission of references to sales on the collective farm
market in the 1954 report is unprecedented in the Fifth Five Year
Plan period. This may be indicative that (a) sales have stagnated
because of the effects of the measures taken to funnel more trade
through. state channels and because of the drought in major producing
areas, which has decreased food supplies, or that (b) prices have
risen considerably, perhaps as a result of the drought.
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In general, production increases lave been largest in those
items purchased by the upper economic strata of Soviet society -- the
managers, engineers, Party and state bureaucrats, and possibly the
Stakhanovites. Greater availabilities of textiles, clothing, foot-
wear, and furniture benefit the bulk of t:ae people in greater or less
degree, but the most important things for theaverage Soviet citizen
are food of better quality and more and betterr,, housing. It is in
precisely these areas that production lags most, and the obstacles to
future growth are most serious.
i
D. Cost Reductions and Technological Pro ess.
There a:e several measures of efficiency which are quite im-
portant in asse sing Soviet plan fulfillment .I All Soviet production
schedules are based upon anticipated cost reductions and increased
productivity of capital as well as on the planed allocations from
current account. The 90-percent increase in he volume of invest-
ment;, for example, was to be achieved by a 301percent reduction in
construction costs (1951-55 compared with 19L_50)_and a 60-percent
increase in allocations from current account.; Probably the most im-
portant efficiency measure is the reduction i4 sebestoimost' (total
cost*) of industrial production, which iricluds the value of raw
materials and semifinished goods, fuel and po$rer, wages, an amortiza-
tion allowance,** and certain administrative expenditures. This cost
reduction is made up of the difference betwee the actual total cost
of production (sebestoimost') in year II and the total cost of produc-
tion in year II calculated on the basis of cost per unit it. year I.
Such reductions in the cost of industrial production increase the
economic surpli..s available for investment and provide the basis for
price reductior..s in producer goods.*** Together with reductions in
Sebestoimust', the accounting category dhich is the basis for
most Soviet pricing and cost accounting, cannot be properly trans-
lated. The closest approximation is our condept of total cost with
the qualification that under the Soviet systdm there are no fixed
costs which are accounted for if the plant i~ not operating.
** The Soviet amortization allowance inclu4es repair and replace-
ment of capita:- equipment but does not conta:4n an obsolescence factor.
** Price reductions in consumer goods are derived primarily from
the reduction of the turnover tax, although 4jeduction of the sebestoi-
most' of processing may have been a factor. In general, the rate of
profit decreed by the state is higher in consumer goods than in heavy
industries.
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construction costs, price reductions for producer goods, raw mate-
rials, and semifinished goods make possible a greater increase in
real volume of investment than is indicated by the allocations from
current account. The yearly decline in the aggregate sebestoimost'
of industrial production is shown in Table 6. -
Table 6
Reduction in Total Cost of Industrial Production in the USSR
1951-55
Percent
Cumulative
Percentage Reduction from Preceding Year Four Year Five Year
(1952-55) Plan
1951 1952 1953 1954 1955 Reduction 51251-55
N.A. a 8.0 5.0 4.0 (4.5) (Plan) 20.0 25.0
a. The total reduction in 19951 was not reported in percentage terms.
The Soviet press, however, did report that savings from cost reduc-
tions, excluding the savings from the reduction in wholesale prices
of raw materials and semifinished goods, amounted to 26 billion rubles.
Apparently most of the savings from 1951 price reductions were passed
on to provide the unusually large reduction in 1952.
As indicated above, planned cost reductions for the 1951-55
period were to amount to 25 percent (aggregate production in actual
costs compared with aggregate production in 1950 costs). If 1951 is
excluded from consideration and if it is assumed that the 1955 yearly
plan will be met, the cumulative cost reductions for the 1.952-55
period alone will amount to about 20 percent. On the other hand, the
savings in 1951 probably were large enough to insure that the economies
planned for the 1951-55 period will be achieved but probably will not
be exceeded.* The wage component certainly will be larger than planned.
Soviet writers have shown considerable concern over the fact that most
cost reductions are occurring in the engineering industries, where
Comparison with reductions in sebestoimost' achieved in the Fourth
Five Year Plan is not possible, because of inclusion of
subsidies until 1949.
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economies are realized over the life of the niachiie, instead of in
the extractive industries, where the economies usually are realized
in the current, or immediately subsequent, time ppriod.*
Several measures of utilization of capital equipment are
considered sufficiently important to be reported in the annual plan
fulfillment announcements. Production plans for the capital equip-
ment inputs necessary to achieve output goals are
anticipated economies in the use of materials and
inventory of capital equipment in each time peri
important efficiency measures are the production
blast furnace voluiie and coal inputs per kilowat
Efficiency trends for the Fifth Five Year Plan a.
Table 7.
based upon the
of the existing
d. Among the most
per cubic meter of
-hour of electricity.
e indicated in
Trends in the Improvement of Productio Efficiency
in Certain Key Industries in the USSR
1951-54+ ]11]]]
Increase in Yield peg
Unit of Input
Cumulative
Target
Increase
Required
1951
1952
19
?
1951-55 _
in 1955
Production of pig iron
per cubic meter cf blast
furnace volume
5
2
Production of crude steel
per square meter of open-
hearth furnace area
3
5
3
Productivity of coal com-
bines
19
N.A.
N.A.
N.
A.
N.A.
N.A.
Speed of drilling in proven
fields
4
5
output of electric power
per unit of coal input
N.A.
2.4
1.9
2.1
6
N.A.
N.A.
* This assumes that the decline in sebestoimos ' is passed on in the
form of price reductions.
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With the exception of construction costs and the utilization
of capital equipment in the coal industry, most of the efficiency
indexes indicate reasonably satisfactory progress. There is, how-
ever, no indication of economies in excess of those previously planned.
The failure after 1951 to report improvement in the utilization of
coal combines probably indicates that in fact no improvement occurred.
In general, the coal industry seems to be operating in a rather un-
satisfactory manner, although gross output goals are being met.
IV. Agriculture.
A. General Trends.
It was perhaps indicative of the continued poor production
performance of agriculture in 1954 that, in the discussion of the
plan results, less than one-sixth of the space was used to describe
actual production results. An over-all increase in 1954 of 3 per-
cent in the production of 10 important agricultural commodities indi-
cates a continuation of the very slow secular growth characteristic
of the Fifth Five Year Plan period. The production index for :L954 is
only 2 percent above the average for the first 4 years of the plan
period. Fiber output (represented by cotton, hemp, and wool) con-
tinued the increase of the postwar period and has shown a remarkable
increase over prewar levels. On the other hand, the general agri-
cultural index has remained relatively static as a result of the
poor production performance for the more important food products,
output of which has failed to reach prewar levels. The failure of
this index (weighted by grains, potatoes, vegetables, meat, and
milk) to rise probably provides the basis for most of the official
concern about the lag in output.
B. Grains and Fibers.
The production of the most important food commodity, grain,
increased 5 percent, but as the plan announcement states, the
increase resulted from a 5-percent increase in acreage, the largest
annual increase in acreage during the current Five Year Plan.
Ironically enough, an excellent crop on the grain acreage of the
"new lands" area of Northern Kazakhstan, Western Siberia, and the
Urals offset a bad drought in the Ukraine, the traditional bread-
basket of Russia. This change in the regional production pattern
of grain probably resulted in government procurement of a :Larger
proportion of the grain harvest than in recent years, thus allowing
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the state more flexibility (1) to increase state reserves; (2) to
divert grain to local shortage areas or to areas that are scheduled
to convert acreage from grains to other crops;or, (3) which is less
likely, to increase exports.
Slight to moderate increases in the production of other
crops, such as potatoes and vegetables, were also the result of
acreage expansion rather than increased yield .
The production of the raw materials ofd two quality foods,
sugar, and vegetable oils, may have been slightly lower as a result
of drought in important growing areas.
The greatest success in crop output was in the production
of fibers. The USSR improved its fiber position by a 9-percent
increase in the production of raw cotton and ~y a 14-percent in-
crease in the production of flax, reversing a trend of the east
3 years of a sharp decrease in the production; of flax.
The announcement of an overfulfillme4 of the plowi:ag plan
on the "new lands" assures a large increase i grain acreage for
1955. Although the degree of success will depend mostly on the
weather, there also will be a great strain on? organization and on the
equipment resources available for this region. Much disruption was
noted last year, when the acreage sown was on'1y one-fifth that planned
tie 1955 program.
in t'
By 1956 the planned expanded acreage of 28 million to
30 million hectares, equal to the total sown acreage of Canada,
will have absorbed large investments and, which is more important,
apparently will. be an integrated portion of the Soviet agricultural
program upon which a balanced production pro~ram will rest. Bring-
ing such a marginal region into production seems to be a gamble
that, should it fail, might cause political and economic reper-
cussions that would prove a serious limitation to Soviet capabilities.
C. Livestock. I
In the livestock economy there were o significant changes in
the trend either of numbers or of productive y per animal. An incre-
ment of 7 percent in hog numbers reversed a ownward trend in the
rate of increase of the previous 3 years, bu increases in cattle and
sheep numbers continued at a low rate (2 to percent). Despite
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n n n n ~n ~*+
measures to encourage rapid increases in privately held livestock, the
gains in this sector were small and uneven during the first full year
of the "new course." The rates of increase in the first half of the
year for the privately held herds were greater than for the year as
a whole, indicating that above-normal slaughtering may have occurred
in the third quarter because of lack of fodder in the drought areas.
An indicator that the peasant has not changed his attitude
toward the socialized holdings of livestock is implied in the sheep
statistics for collective farms. The plan announcement gives the
reason for a 2-percent drop in sheep on collective farms as "un-
satisfact.ory maintenance of sheep on pasture during the 1953-54
winter." Although losses may have been inevitable because of the
severe winter, the long record of peasant indifference to communal
herds becomes especially evident when adverse natural conditions
create greater demands for personal care. This antipathetic attitude
on the part of the peasant is usually expressed in official press
jargon as lack of "maintenance" or "poor organization and manage-
ment",of socialized herds.
It appears that the already low output of meat, milk, wool,
and other products per animal not only did not increase during 1951
but even may have fallen in the important meat and milk category.
The continuation of low animal productivity certainly was aggravated
by low feed-grain and fodder ',supplies during the 1953-54 wintering
season, the severe winter ofiearly 1954, and poor pasture conditions
in many areas during the summer and fall of 1954. The effects of
the drought that reduced pasturage will continue to be felt through-
out this winter and spring as, a result of low feed-grain and fodder
supplies. It is not suggested, however, by these comments pertain-
ing to the peasant's attitude that the new incentive program has
failed. The year that has passed since the initiation of the "new
course" is not enough time to show the impact of the incentive
measures on peasant attitude or labor productivity.
V. Labor.
A. Labor Force and Labor Productivity.
The growth of the industrial labor force and of industrial
labor productivity indicates a rather marked contrast in trends,
although it is such as might reasonably have been expected. The
increase over 1953 was almost the same in both cases -- 6 percent
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for the labor force and 7 percent for labor product.vity -- but
whereas the planned g -owth of the labor force for t 4e 1951-55
period was achieved by the end of 1953, the index off` labor produc-
tivity in 1954 (1950 = 100) was only 133. If the labor produc-
tivity plan for this year is met, the index will st*nd at approxi.-
mate:Ly 142, as compared with the target of 150 set Out in the Fifth
Five Year Plan directives. Year-by-year increases n labor force
and :Labor :productivity are indicated in Table 8. ,
Table 8
Growth of Industrial Labor Force and of Industrial
in the USSR
1951-54
abor Productivity
Increase over Previ us Year
Planned
Increase
Increase
1955 over
Required
1951
1952
195.
1954
1950
in 1955
Industrial labor force a/
5
4
6
6
13 b
J
Industrial labor productivity
10
7
6
7
50
13
a. Derived from industrial output and industrial Productivity figures which
indicated that the Fifth Five Year Plan goal was achieved by the end of 1953.
b. Based. on original plan of a 70-percent increase; see Table 1, p. 6, above.
Since the output goals have been revised upward, he labor force goals would
also be increased somewhat.
c. Overfulfilled.
The goals for the growth of the labor force also ere reached in the
middle of the Fourth Five Year Plan, but the gove nment managed to ex-
ceed the plan for labor productivity with the aid of inflated measures
of industrial production and with the use of pr is ner-of-war la'cor.
To exceed the planned growth of the labor force, .oreover, means that
the wage bill has teen exceeded, placing addition l pressure on the
supply of consumer goods. The Fifth Five Year Pl directives for
labor productivity in effect have been abandoned., Because it is be-
lieved that lagginE; labor productivity was one ofthe most important
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considerations in the adoption of the "new course," any cutback in
the production of consumer goods should tend to keep the rate of
growth at the present low level. Continued growth of the industrial
labor force also will require more consumer goods in order to main-
tain incentives.
B. Industry.
The fulfillment of production and investment goals in the
current Five Year Plan has required above-plan increases in the
labor force to compensate for failure to meet labor productivity
targets. Soviet labor force figures for 1952-54 are shown in Table
which indicates that the 1955 goal of 45 million workers and em-
ployees in the national economy already has been surpassed. A
part of this increase was the result of a bookkeeping transfer of
collective farmers to the category of state agricultural workers,
but the 5-year target was exceeded in 1954 even after deduction
of this group. The Fifth Five Year Plan goals for the industrial
labor force already had been exceeded in 1953.**
The Fifth Five Year Plan called for 13-percent increases in
both the industrial labor force and the total labor force. Since
this rate of increase is less than the rate of increase in working-
age population during the same period, a declining rate of labor
participation by young and old persons and by women evidently was
intended. Expanded educational programs indicate declining partici-
pation by young persons. The overfulfillment of labor force goals
in 1953 and the first half of 1954, therefore, must have been
achieved by heavier employment than foreseen of women and older
persons. These unplanned "increases" are enabling the USSR to meet
industrial output targets, despite failure to increase output per
worker according to plan.
As has been noted, the over-all plans for labor productivity
will not be reached either in industry or in construction. More-
over, 1954 continued a general trend of the Fifth Five Year Plan in
that the worst failures in industrial labor productivity were in the
extractive industries, particularly the coal and timber industries.
In the latter, labor productivity was actually less than in 1940,
Table 9 follows on p. 28.
* Soviet annual plan fulfillment reports regularly give absolute
figures for the numbers of workers and employees in the national
economy but not for those in industry alone. Changes in the indus-
trial employment are computed from data on changes in total indus-
trial output and industrial labor productivity.
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9,*
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Table 9
Civilian Labor Force in the USSR
1952_54
1952 1953 1954 1955
January July January July January July January
Collective farm workers b:/2/ 48.1 49.0 49.5 49.5 48.6 48.4 48.7
Workers and employees 40.8 41.5 41.7 42.4 44.8 46.6 47.0
Nonagricultural J 37.9 38.6 38.7 39.4 44.3 41.3 41.6
State agricultural a/ 2.9 2.9 3.0 3.0 4.5 5.3 5.4
Total labor force 88.9 90.5 91.2 91.9 93.4 95.0 95.7
a. The 195 figures are estimated from a recent report 12 and from plan fulfillment data.
F or ie e ata; seed oducto B.
b. The July figures are obtained from sources listed in introductory remarks in Appendix B.
For the seasonal adjustments required, see source-123-
c. Obtained by subtracting the number of state agricultural workers from the number of workers
and employees.
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c i_fY_R_w.._T
despite greatly increased mechanization of cutting and hauling, which
probably is why the timber industry as a whole is, operating at a
loss. L4/ The planned increase in labor productivity in the coal
industry for the 1951-55 period was 40 percent, but by the end of 1953
the increases totalled only 17.2 percent. L5/ The engineering in-
dustries generally have shown much more favorable results.
From the point of view of the Soviet leaders, labor produc-
tivity is one of the most important measures of economic progress and
growth. They consider increments to labor productivity to be the
most important source of accumulation fo?' future growth. Lagging
labor productivity is, therefore, one of the most serious economic
problems, if not the most serious, facing the Soviet leadLership at
the end of 1954. To a Western observer it appears that the solution
to the problem lies in greater material incentives to replace in
part the medals and slogans of the past, and this solution means
primarily more and better food and more and better housing. Para-
doxically, agriculture and housing construction are the areas in
which it is most difficult to transform resource allocations into
the end products desired.
Agriculture.
The most important changes in the agricultural labor force
were the following: (1) a shift of over 2 million Machine Tractor
Station (MTS) workers from a temporary to a permanent basis, (2) a
quantitative and qualitative rise in the managerial and technical
personnel in agriculture that reversed the trend of recent years,
and (3) the beginning of a regional shift of agricultural employees
to the "new lands."
An important result of the change to a permanent status of
peasants working for the MTS's will be a more clear-cut stratification
of the rural labor force and rural social patterns. Heretofore,
several million collective farmers temporarily worked for the MTS's
as tractor drivers and other machine operators and assistants during
the crop season, returning to the kolkhozes even during the crop
season, when their services are needed in the MTS's. In order to
instill "discipline" during the crop season and to provide the MTS's
with an off-season labor force, the government changed the status of
this fluid labor force to one of permanency. This action. may have
a negative effect on the mass of collective farmers, as they see a
large corps above them on the agricultural labor ladder enjoying
what undoubtedly will be a higher standard of living.
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It is too early to detect the results of a movement of more
than 100,000 agronomists, zoologists, eng:ineerl,s, and other specialists
to the farms anal tractor stations. This :^ise lin the quality of the
upper managerial and technical strata may streigthen one of the
weakest links in the organization of agriculture.
VI. Capital Investment.
A. General Trends.
The volume of capital investment increased 15 percent in 1954,
and this increa:;e probably was sufficient to eet the planned 90-
percent increase in volume for the 1951-5') period, as compared with
the 1946-50 per-.od. In 1953 the volume of investment increased only
4 percent, probably as a result of (1) a general reassessment of the
construction program, when a number of the large Stalinist construc-
tion projects were suspended or abandoned, and (2) shifts in the
pattern of resource distribution in accordant with the upward re-
vision of consumer goods production schedules. The recently an-
nounced 1955 state budget provides for an outright decrease in
planned capital investment, although the planed 1955 outlays may
in fact exceed actual 1954 outlays for invest ent. The trends in
gross investment; for the Fifth Five Year .'Plan are presented in
Table 10. ,
Official Soviet Index of Volume of Grass Investment a/
1951-54 l
Percent
Increase over evious Year
1951 1952 195 1954
12 11 4 ~ 15
a. The volume of investment is measu ed in real terms:
that is, it is expressed in prices of a base year, :L945
in this instance.
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The increment required in 1955 is relatively small (about 7 or
8 percent), but the current cost of the program for the period will be
higher than anticipated because of failure to reduce construction costs
as much as planned. Information presently available indicates that the
planned increase in volume of capital investment in 1955, like the goal
for industrial production, is relatively modest -- barely sufficient to
reach the Five Year Plan goal.* The cost of the investment program in
the Fourth Five Year Plan was also greater than planned, but the volume
goal for the period was exceeded by 22 percent.
Aside from the 15-percent increase in the volume of gross in-
vestment, very little information on the distribution of investment was
released in the annual plan fulfillment report. Table ll** contains
the available estimates of actual investment in the various areas of
activity. The 1954 plans were very ambitious in all areas of activity,
in heavy industry as well as in light industry and agriculture, and the
actual achievements are impressive, even if short of the original goals.
On the basis of the information available, the distribution of invest-
ment in 1955 will not be substantially different from 1954. Although the
share of heavy industry in the total will increase somewhat, after de-
clining in 1954, investment allocations to light industry in 1955 will be
approximately 70 percent above the 1953 level.
B. Industry.
The distribution of investment among various branches of heavy industry
is difficult to determine because the annual plan fulfillment report did not
repeat the detailed breakdown provided in the midyear. If the data for the
first 6 months are assumed to apply to the entire year, several. interesting
trends appear. Investment in the coal industry,. which leveled off and may
even have declined in 1951-53, increased substantially and probably is the
basis for the above-plan increment to production scheduled in 1955. In-
vestment in the iron and steel industry, which had risen rapidly in previous
years, increased only slightly, probably less than would have been required
if all commodity production goals in this sector were to be achieved.***
The engineering industries probably showed a sizable increase in
investment for the expanded plant and additional equipment required to im-
plement the agricultural and consumer goods programs. Investment in the
See Appendix A.
Table 11 follows on p. 32.
The capital requirements estimates were derived as follows:
1. Changes in iron and steel production were computed from produc-
tion estimates. (The production estimates through 1953 are based
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Planned and ACl:ual Distribution of Investment
in the USSR
1953-54
Expenditures
Expenditures
Increase in Expenditures
(Billion Rubles)
__ Percent
1953 1954
1954 over 1953
Actual Planned Actin
Planned Actual
Heavy industry 80 90 28
12.5 10
Light and food industry 7.5 14 11.5
84 51
Agriculture 12 21 18
75 50
Trade and cooperatives 2 4 3
100 50
Transport and communica-
tions 17.7 18.6 1.8
5 2
Housing 19.4 25.5 23
31 18
electric ;power industry increased by about 18 percent, despite the prob-
able downward revision of the 1955 goal for installed generating capacity
from 100 :percent over 1950 to 75 percent.
C. Housing. J
As expected, the planned 31-percent increase in investment expendi-
ture for state urban. housing was not achieved. Itjis estimated that
on official Soviet Ennouncements. The 1954 ?odu on estimate was derived
by interpolation between the 1953 estimate and thoI
duction, which is slightly below the Fifth Five' Y
2. The estimate of increases in iron and st
creased productivityr was subsequently confirmed i
fil.lment report. They were then deducted from th
duction. The remainder was taken to be productio
was required..
3. The estima-;es of output from new capital
forecast for 1955 pro-
ar Plan goal.)
el production due to
the half-year plan
total increases in
.for which new
in-
ful-
pro-
capital
were multiplied by capital-
figures are estimates of
metallurgy industry,
output ratios derived from US data. The resulting
requirements for new capital in the Soviet ferrou
expressed in 1952 Ui dollars.
4. Estimated :-eplacement capital requiremen
quirements for new capital to obtain total capita
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s were added to the re-
requirements.
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r
approximately 23 billion rubles actually were spent, as compared with
the 25.5 billion rubles planned for 1954 and as against actual. outlays
of 19.4 billion in 1953. The amount of living space built was expected
to increase from 28 million square meters in 1953 to 37.8 million square
meters in 1954, but this goal probably was not met. Many industrial
ministries, the communal bank (which is responsible for loans for pri-
vate building), and local municipalities were criticized frequently
for failure to fulfill the housing plan.
Construction Costs.
Construction costs were not reduced according to plan in 1954 --
a failure characteristic of all the previous years of the Fifth Five
Year Plan. Indeed, official reports indicate that, in the Ministry of
Construction, costs actually increased in 1952 and again in 1953. In
fact, the 5-year goal for labor productivity in construction, calling
for an output per construction worker in 1955 of 55 percent more than
in 1950, has been abandoned. Table 12 indicates that in order to re-
cover the lags of 1951-53, labor productivity would have to increase
by about 13 percent both in 1954 and in 1955 in order to meet this
target. Instead, however, Finance Minister Zverev in his April 1954
budget address announced a planned increase of 8.6 percent for the
Annual Increases in the Productivity of Construction Labor
in the USSR
1951-55 aJ
Increase Required
1951 1952 1953 1954 in 1955
10 7 4 8
a. For sources, see introductory remarks in Appendix B. -
year, 16 indicating that no hopes were entertained of recovering the
ground already lost. The actual 1954 increase was even less than the
revised goal. As a consequence of the failure to meet planned cost
reductions, the cost of the 1951-55 Soviet investment program probably
will exceed the 1946-50 plan by at least 80 percent rather than the
planned 60 percent. At the end of 1954 there was considerable evidence
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that a general reappraisal of construction projects was under way in
order to insure the most effective use of availab e funds.
Planned state expenditures on urban housing for 1955 amount to
24.5 billion rublee:, less than the 195+ plan although above the esti-
mated actual outlay for 1954. In view of Klu-ushcnev's emphasis on
housing in his construction speech published in December 1954, !1 it
is somewhat surpri.ing that allocations did not increase this year.
On-the other hand, the experience of 195+ indicat1ed that the construc-
tion units were incapable of absorbing larger allocations; the 1955
appropriation probably is much more realistic an more likely to be
used fully. Judging from the criticisms leveled y Khrushchev against
frilly, nonutilitarian design and small, atomistic, and inefficient
construction units Soviet builders may be faced with severe insti-
tutional. constraints upon the scale of housing construction which may
be undertaken. I
E. Agricultural Investment .
Although investment in the agricultural Oector did not reach
the 1954 planned levels, there were large increa es both in state-
financed investmen'; for MTS's and sovkhozes and in kolkhoz investment
from internal funds. A total estimated investment of 39 billion
rubles,* which includes increments to socialized herds, amounted to
an increase of near^ly 4+0 percent over the previous year. Although
this is an impress'_ve increase for 1 year, the absolute amount remains
small in view of t:ie large disinvestment in the agricultural sector
resulting from collectivization, the destruction of World War II, and
the continual "under-investment" common to the 5 year plans.
State investments in the MrS's and state farms are estimated to
be 50 percent above the previous year, the greatest increases coming
in long--needed MIS construction and in increased allocations of machin-
ery to the MI'S's. Most of this increase in machnery allocation reflects
large increases in series other than the usual to major machine items,
large track-laying tractors and combines. This hange in the 2attern
of machine allocations is in line with the anno ced plan for a more
balanced mechanization of agriculture. The "new lands" program ab-
sorbed the major share of new machinery, especi ly large tractors and
combines.
* State investments, amounting to nearly or.Le-ha f of the total, are
made at wholesale prices, whereas those of kolkh zes probably are
valued at retail prices. Thus some degree of distortion is involved
in aggregating the two types.
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Investment by kolkhozes rose sharply as a result of increased
money income and added pressure from the state to assign a greater pro-
portion of this income to investment and to accept long-term government
credits. Since the kolkhoz organization does not purchase mechanized
field machinery, most of the increase in machinery, as is indicated in
the plan report, probably was in the form of trucks and machinery for
the mechanization of animal husbandry.
VII. Transport.
A. General Trends.
As shown in Table 13, the volume of freight traffic in the USSR
has risen consistently during the Fifth Five Year Plan period, and the
1955 goal for rail transport, the chief means of transport, has been
overfulfilled. In general, the Soviet transport system has kept pace
with the growth of the economy.
Growth of Freight Turnover in the USSR
1951-54
1950
= 100
1951
1952
1953
1954
Total transport
111
122
131
143
B. Rail Transport.
Overfulf illment of the 1955 goal for rail transport was
achieved in 1954, but this is in fact illusory, for the high level
of traffic resulted in some considerable degree from failure to
decrease the average length of haul, as planned, and only in part
from an actual increase in the volume of freight hauled. The
physical volume of freight has grown consistently, however, during
the Fifth Five Year Plan period, and most rail transport plans are
being met. Economic growth does not appear to be hampered seriously
by limitations on rail transport, although rail-loading plans for a
number of important commodities, including timber, scrap iron, and.
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building materials, have not been met for sevieral years. Operating
efficiencies and economies have not been effected as planned in rail
transport, and curtailment of capital investment in the early years
of the Fifth Ftve Year Plan has resulted in tome pressure upon the
freight-car park necessary to transport bulk commodities. Motor
transport may be taking some of the load. offithe railroads in the
highly industrialized areas, but not in the long-haul, intercity
traffic. The capabilities of the Soviet rai~ system are being ex-
panded by increased outlays for equipment and new and improved lines.
Extensive investment in heavy locomotives, specially diesel and
electric equipment, is scheduled in the nea future but probably will
not; be felt t?3 any great extent before the nd of 1955. The pro-
duction of freight cars continues to be an ?mncertain quantity,
although it is certainly behind both the anfiual and the long-range
plans. Substantial additions of new line (largely narrow-gauge) are
to be laid to facilitate the "new lands" program.
It it estimated that about 85 perc~nt of all freight is moved
by railroads in the USSR. The Fifth Five Tear Plan for railroad
freight traffic, which called for a modest' increase of 35 to 40 per-
cent, has been overfulfilled in 4 years. shown in Table 14, rail-
road freight traffic at the end of 19,14 , increased 42 percent
over 1950.
Table ;L4
In2reases in Railroad Freight Tunover J in the USSR
1951-55
Year
Annual Increaso
Percent
Index
(1950 = 100
1951
12.0
11'2.0
1952
9.0
122.0
1.953
7.0
130.5
1954
9.0 i2/
142.0
-955 Plan
135.0 to 14o.o
3.. Gruzooborot (freight turno er is believed to re-
fer to traffic, measured in tofl-kilometers. The in-
crease reported for 1953, howerer, may have reflected
tons originated.
b. Calculated from the totaljreported at the end of
1954.
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Ostensibly, preterm fulfillment of the Fifth Five Year Plan
goal appears to be a major achievement and most certainly reflects the
capabilities of the Soviet railroad system to supply the needs of the
country. Increases in ton-kilometers can be achieved, however, by two
methods -- by loading more tons of freight per car, holding the average
length of haul constant, or by loading the same amount of freight per
car and transporting it over greater distances. The tonnage of freight
moved has increased in the USSR during the period 1951-54; average
daily car loadings (in 2-axle car units) increased about 10 percent
during this time. Some increase also took place in average loads per
car, but cars now are loaded nearly to capacity, and future significant
increases could not be expected from increasing carloads. What the
overfulfillment of the Soviet rail transport plan probably indicates
is that the USSR planned great reductions in the average length of
haul for specific bulk commodities. Such reductions would have mod-
erated demands for increases in motive power and in the freight-car
park. Failure to achieve planned reductions in the average length of
haul has resulted in premature fulfillment of planned traffic increases
and in additional pressure upon transport equipment.
The increase in rail traffic in the Fifth Five Year Plan
period was to be made possible not only by an increase in capital in-
vestment but also by increasing operating efficiency and economies --
an increase in the freight-carrying capacity of trains, a reduction
in freight-car turnaround time, and a decrease in the average length
of haul. Although rail traffic increased approximately 9 percent in
1954, loading plans were underfulfilled for a number of important com-
modities, including timber, scrap iron, building materials, chemical
and mineral fertilizers, and certain industrial consumer goods. These
deficiencies are believed to be attributable to a shortage of freight
cars, especially cars suitable for carrying bulk commodities. This
shortage is believed to stem from cutbacks in output of freight cars
several years ago, which reduced new car deliveries in 1952 and 1953.
The freight-car production plan was not fulfilled in 1954, but it is
believed that the 1954 plan reference is to a revised plan with higher
goals, adopted during 1953.
At present, over half of the freight-car pool in the USSR
is composed of large 4-axle cars. It is believed that a large re-
serve of laid-up cars exists in the USSR, but these are mainly old
2-axle boxcars which are ill-suited for transporting bulk commodities.
Pressing old 2-axle cars into service would help alleviate the
shortage, but the average load per car would be reduced because of
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the small size of the cars. Furthermore, maintenance costs, already
high, and stoppages due to breakdowns would increase with the use
of the old 2-ax',_e cars.
I
The appirent shortage of freight cars is aggravated by the
fact that the desired. economies and increased efficiencies in freight-
car operation have not been effected. In 1954, plans for reducing
freight-car turnaround time and for increasing economic speed of
trains were not fulfilled. The average length of haul for 'basic
commodities -- ores, fuels, grains, and timbe -- has not decreased
significantly, as planned, but instead has it Ireased slightly.
Increased movement of quantities of consumer ;goods in 1954 further
complicated the rail transport picture becau e these goods require
more careful handling and weigh less per carload than do raw materials.
Soviet leaders seem well aware cf tho inadequacies of the
rail transport system and axe taking measure to insure that the
railroads will not become a bottleneck in th growth of the Soviet
economy. Extensive investment in heavy dies l locomotives and 4-
axle freight cars is scheduled for the near ~uture, together with
improvement in traffic-control equipment. Electrification. of many
lines is planned. Delivery of needed equipment in quantity, how-
ever, will not, take place before the end of j1955, and until then heavy
bulk commodities may not move in the desire amounts. Nevertheless,
a rate of gro-,rth of at least 5 percent in r ilroad freight traffic
may be expected in 1955. 1
C. River and Sea Transport. I
River and sea transport contribute bout 6 and 5 percent,
respectively. of the total ton-kilometers o traffic annually carried
in. the USSR. Despite almost a 2-week delay in the 1954 opening of
several prin(;ipal river arteries, including the Volga, as well as
some sea lanes, freight turnover plans for both river and sea trans-
port were ovsrfulfilled. River shipment plans, however, for several
important cornnodities -- metals, grains, cement, and fruits and
vegetables -- were not fulfilled. As indi~ated in Table 15,* the
1955 goal fcr sea freight traffic was virt ly fulfilled in 1954,
but it is dcubtful that the planned goal fir river freight movement
will be reached by the end of 1955. 1
* Table 15 follows. on p. 39.
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Table 15
Increases in Ton-Kilometers of River and Sea Freight Traffic in the USSR
1951-55
Percent
Increase over Previous Year Increase
Planned Increase Required
1951 1952 1953 1954 1955 over 1950 in 1955
River transport 13 12 aJ 6 75-80
Sea transport 8 9 10 18 55-60 1-4
a. Not reported.
D. Motor Transport.
Less than 5 percent of all Soviet freight is carried by motor
transport, but this type of transport is extremely important in its
own right. Motor transport is confined primarily to use in highly
industrialized areas and to the movement of agricultural products to
the nearest railhead. Trucks are being used in increasing numbers to
replace rail movement for short-haul transit, thereby releasing
railroads for long-haul transport. An increase of 80 to 85 percent
in motor transport was planned for the Fifth Five Year Plan, but
this goal has already been dwarfed by the reported increase in
motor carriage in 1954, as shown in Table 16.*
* Table 16 follows on p. 40.
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Table 16
Increases in Ton-Kilometers of Motor
1951-55
Freight in the USSR
Annual Increase
(Percent)
Index
(1950 = 100)
-
1951
20
1.20
1952
15
:L38
1953
13
156
1954
66
'?59
1955 Plan
18o to 185 J
a. The index postulated in the Fif
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NOTES ON CAPITAL INVESTMENT IN THE USSR
In Table 17* a comparison of annual and midyear rates of increase
in the volume of capital investment is shown in order to provide a
basis for judging the probability that half-year rates will approxi-
mate annual rates. In Table 17 the midyear increase is within 3 per-
centage points of the annual increase in about one-half of the cases
and within 5 percentage points of the annual increase in more than
three-quarters of the cases.
The Fifth Five Year Plan for capital investment is as follows:
... to increase the total volume of state capital
construction during 1951-55 approximately 90 percent,
but to increase state allocations for this construction
only approximately 60 percent, as compared with the
Fourth Five Year Plan, covering the difference of 30 per-
cent through lowering the cost of construction by way of
increased labor productivity, lowered overhead expend-
itures,. and lowered prices of building materials and
equipment. 18
Since increases in the volume of investment, as given in the peri-
odic plan fulfillment reports, are measured in constant terms (1945
prices), annual and cumulative investment volumes can be related.
The results are presented in Table 18,** which shows that if 1946 in-
vestment equals 100, total investment in the years of the Fourth Five
Year Plan was 707; that the goal for the Fifth Five Year Plan is
therefore 1,344; and that 78 percent of this goal had been accomplished
by the end of 1954. The increase required in 1955 to reach the,cumu-
lative goal is relatively small but cannot be measured precisely,
because of certain statistical problems.
Changes in Soviet investment accounting practices during the post-
war years make precise comparisons of investment levels between dif-
ferent years or periods difficult. During the Fourth Five Year Plan
Table 17 follows on p. 42
Table 18 follows on p. 43.
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Table 1-1'
Rates of Annual Increase in Capital In*estment in the USSR J
1947-49 and 195
Mi ear
End of Year
1947
I
Total investment
6
10
Coal
6
9
3
4
5
30
1948
Total investment
26
23
Coal
24
29
Electric power
13
20
Light and food
24
32
Metallurgy
28
31
Machine building
11
15
Transport
26
11
Housing
42
36
1949
Tc,tal investment
24
20
E=_ectric power
37
39
Metallurgy
1
21
18
Machine building
J
14
10
Construction materia
ls {
23
12
Transport
32
32
F:ousing
/
38
26
19')'3
Total investment
4
4
Light and food
8
8
a. For sources, see introducto remarks in Appendix B.
42
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Table 18
Increases in the Volume of Capital Investment in the USSR a/
1946-55
Indexes (1946; = 100
Year
Annual Increase
(Percent)
Annual
Cumulative
1946
17
100
100
1947
10
110
210
1948
23
135
345
1949
20
162
507
1950
23
200
707
1951
12
224
224
1952
11
248
472
1953
4
258
730
1954
15
297
1,027
1955 Plan
goal
1,344
For sources, see introductory remarks in Appendix B.
Through Five Year Plan period (1951-55).
period the fulfillment of the investment plan was measured in terms
of investments in the state plan of capital investments. "Extra-limit
investments," which were outside the investment plan, were not in-
cluded in computations of plan fulfillment. In 1950 the category of
"extra-limit investments" was eliminated, and investments which
formerly fell in this category were included in the investment plan
and the investment budget. Consequently, during the Fifth Five
Year Plan the state plan of capital investment covers a broader
category of investments than it did in the Fourth Five Year Plan.
During the Fourth Five Year Plan the volume of state investment
was 306 billion"rubles in 1945 prices, 19 which would amount to
366 billion rubles in 1 July 1950 prices. This total excludes "extra-
limit investments" made during the period. In the first 4 years of
the Fifth Five Year Plan, 550 billion rubles (presumably in I July 1950
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prices) were invested. This amount includes investments that would
have been in the category of "extra-limit investments" prior to 1950.
A comparison of 550 billion rubles with the Fourth Five Year Plan
figure of 366 ba.llion rubles indicates that o
of investment are required in 1955 to meet th
goal of a 90-percent increase over 19+6-50.
fulfillment of he 1955 investment plan, the
It should be no-;ed, however, that the figures
comparable, because the concept of state inve
broader than the concept of state investment
Plan. If a strict comparison could be made,
that the USSR will not achieve a 90-percent i
y 14+5 billion rubles
Fifth Five Year Plan
hort of a drastic under-
oal should be met.
are not strictly
tment since 1950 is
n the Fourth Five Year
t probably would show
crease in investment
during the Fifth Five Year Plan period, altho~gh the degree of under-
fulfillment would not be large.
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SOURCE REFERENCES
This memorandum is based on Soviet plan fulfillment reports,
issued quarterly through 1952 and semiannually thereafter, and
on CIA analyses of the mid-1954 report.
All data in this memorandum,unless otherwise indicated, are
taken from the annual and semiannual Soviet plan fulfillment reports.
These reports appeared in the Soviet press on the following dates:
21 January 1947, 18 January 1948, 20 January 1949, 18 January 1.950,
27 January 1951, 29 January 1952, 23 January 1953, 17 July 1953,
31 January 1954, 23 July 1954, and 21 January 1955. Translations
of these reports, beginning with the annual report for 1943, appear
in the following numbers of the Current Digest of the Soviet Press:
1948 annual: Vol. I, No. 4; 1949 annual: Vol. II, No. 4; 1950 annual:
Vol. III, No. 3; 1951 annual: Vol. IV, No. 3; 1952 annual: Vol. V,
No. 2; 1953 semiannual: Vol. V, No. 27; and 1953 annual: Vol. VI,
No. 5.
All Soviet newspapers, books, and journals are considered to
be highly reliable sources of economic information. The FBIS
publications are primarily translations, and slight errors in broad-
cast intercept as well as in subsequent translation make them
slightly less reliable sources than the originals.
Evaluations, following the classification entry and designated
"Eval.," have the following significance:
Source of Information
Information
Doc.
-.Documentary
1
- Confirmed by other
sources
A -
Completely reliable
2
Probably true
B -
Usually reliable
3
- Possibly true
C - Fairly reliable
4
- Doubtful
D - Not usually reliable
5
- Probably false
E - Not reliable
F - Cannot be judged
6
- Cannot be judged
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"Documentary" refers to original documents of foreign governments
and organizations; copies or translations of such documents by a staff
officer; or information extracted from such locum nts by a staff officer,
all of which may carry the field evaluation "Documentary."
Evaluations not otherwise designated are those appearing on the
cited document; those designated "RR" are by the author of this, memo-
randum. No "RR" evaluation is given when the author agrees with the
evaluation of the (sited document.
1. Zasedaniya verkhovnogo Soveta SSSR, chetertogo sozyva vtoraya
sessiya 3-9 Fevralya 1955 g. Stenogr ficheskly otchet)
Stenographic Report of the Meetings of the Supreme Soviet of
the USSR, Fourth Meeting, Second Sessio , 3-9 February 1955),
Moscow, :.955, p. 475-476, U. Eval. RR ;1.
2. Ibid.
3. Pravda, 21 Jan 55, U. Eval. RR 1.
4. Qah Aid , ORR Project 5,470, Petroleum
c) Ma. 1955, pp. 55-6, C.
5.
Ibid., no 16, 24 Jan 55, p. CC-4, U/OFFIUSE. Eval. RR 2
6. Izvestiya,, 8 Feb 55, p ? 3, U. E'val ? BR{ 2.
7. Ibid.
8. CIA. CTJ,/RR 37, The Role of the Tractor Industry in the USSR,
1900-54, 16 Aug 54, S.
25X1 A8I - Pravda, 2l Jan 54, U. Eval. RR 2.
11. State, Moscow. Dsp 252, 22 Jan 54, s-1 Eval. RR 2.
12. CIA. CIA/RR 39, Agricultural Labor injthe USSR, 31 Aug 54, S.
13. Ibid.
14. Finansy SSSR, no 10, 1954, U. Eval. J.
15. "Za po em proizvoditel'nosti truc,a v iigollnoy promyshlennosti"
(For ar.. Upsurge in the Productivity op Labor in the Coal Industry),
Ugol', no 5, 1954, U. Eval. RR 2.
16. Pravda, 22 Apr 54, U. Eval. RR 1.
17. Ibid., f?8 Dec 54, U. Eval. RR 1.
18. Gruliow, Leo, ed. Current Soviet Pol"cies, New York, 1953,
p. 27, U. Eval. RR 2.
19. Vopros ekonomiki, no 6, 1954, U. Ev41. RR 1.
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