POTENTIAL ECONOMIC GAINS TO THE USSR RESULTING FROM THE ACQUISITION OF CONTINENTAL WESTERN EUROPE IN MID-1952 (COMPLETED MARCH 1952

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000300020017-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 95
• Document Creation Date: December 15, 2016
• Document Release Date: December 19, 2003
• Sequence Number: 17
• Publication Date: May 1, 1953
• Content Type: IR

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SECRET
ECONOMIC INTELLIGENCE REPORT
EIC?R--4
POTENTIAL ECONOMIC GAINS TO THE USSR
RESULTING FROM
THE ACQUISITION OF CONTINENTAL WESTERN
EUROPE IN MID-1952
(COMPLETED MARCH 1952)
May 1953
Prepared Jointly by
U. S. Intelligence Agencies
Mkt ec:34. gok
D g_12
ECONOMIC INTELLIGENCE COMMITTEE
SECRET
DIA review(s) completed.
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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Economic Intelligence Repol't
ETC-R-4
POTENTaL ECONOMIC GAINs TO THE ussa
RESULTIM FROM
THE ACQUISI Tr, ON OF CONTINENTAL %ES-1.1ERN EURO:PE
IN MID4952
(COMPLETED MARCH 192)
Kay 195 3
Prepared Jointly by
U. S. Intelligence Agencies
Economic Intelligence Committee
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STA TESNT OF CONCURRENCE
On 10 April 1952, this project was concurred in by the
EIC representatives of the Departments of the Army, Navy-, Air
Force, State, and by CIA as a contribution to NIE.400
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/MO *ova 40,?? ???? doe* ilont
- Introduction.
Assumptims.
Sulimaary
SECURITY INFORMATION
iii
iv
T&BTE OF CONTENTS
and Conclusions.
I.
Importance of Continental Western Europe in the Balance
1
of Economic Power between East and West.
II.
Principal Factors Affecting the Exploitation of
9
Continental Western. Europe by the USSR.
A.
Political and Administrative and Fiscal Factors,
9
B.
Economic Factors.
14
III.
Critical Sectors.
17
A,
Pctroleum.
17
B.
Food.
25
C.
Copi-Jer and Tin.
30
IV.
Non-Critical Sectors.
33
At
East-Vest Transl)ortti_n.
33
B.
Coal.
37
C.
Electric power.
40
B.
Metals.
.40
E.
Chemicals.
F.
Rubber.
49
G.
Textiles.
50
Va
Princi:)al Soviet Gains.
52
A.
Introducti-n.
52
1. Increase in General Economic Potontinl,
52
2. Increase in Milit:ry Prpducti-m Potential.
52
3. Problems of Conversion to 4r Production.
53
Problems ,f Standardization of Arms and
54
B.
Industrial Equipment,
Sect )rs which would Make Major Contributiors to
Soviet Potential.
55
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MOO NNW wawa VAINI
SECURITY INFORMATION
Page
1. Machinery. 55
2. Electronic Equipment. 57
3.- Shipbuilding. 59
L. Aircraft* 61
5. Ordnance. 62
Annex 1: Petroleum Supply
Annex 2: Petroleum Transport'
Annex 34 Food Balances.
Annex 4: mtals.
Annex A Rubber Supply-.
Annex 61 Aircraft (TS)*
LIST OF TrOLES
Table 1. Indicators of the Economic Potential of 2.4
Continental Western European Courtriesy
19500
Table 2* Indicators of the Economic Potential of 5-7
Continental Western Europe and the Soviet
Bloc, Compared with the US and Other Free
World reas, 1950,
Table 3. Estimated Petrleum Suplies in Continental 18
? Western Europe, Fy 1952, 1253, and 1954.
3
Table 4. Cm.sulintion of Petroleum Products in Seven 22
Continental 'Astern European Countries, by
Maj)r Consumer Categories, FY 1951.
Table 5. EstiJmted Consumpti n of S,ocifid Petroleum 23
Products in Continental Western Eur pc,
FY 1552 and 1953.
Table 60 Estimated East-West Traffic Pcquirements, 34
FY 1953 and 1954.
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ONO 011011. ???10 ?????
INMODUCTION
In flay 1951, the Board of National Estimates recommended to the
IAC that the following estimate be prepared: N1E-40$ "Potential Miii
tar, Economic, and Scientific Accretions to the USSR Reuiting from
the Acquisition of Western Europe before 1953.n The original terms of
reference drawn up by the IAC working group included military, politi-
cal, economic, and scientific analyses* The economic contribution was
levied on the Economic Intelligence Committee in June 1951*
It was hoped that this estimate would provide an answer to a ques-
tion which arose frequently in estimates of Soviet capabilities and
vulnerabilities: To what extent could the USSR effectively mobilize
and possibly integrate the resources of Western Europe if the USSV over-
ran this area. The EIC contribution was completed in April 1952; the
ONE draft estimate was caripleted in October 1952*
During the months that elapsed since the jnitiation of the project,
the international situation changed considerably and the assumptions
underlying the proposed estimate no longer appeared directly applicable.
Consequently, the Board of National Estimates recommended that the esti-
mate be cancelled and that the economic contribution to the estimate be
Issued by the EIC 0 This report en the, "Potential Economic Gains to the
USSR Resulting from the Acquisition of Continental Western Europe in Md..
1952,? ia being issued in response to the recommendation by the Board
of National flstimates, Although the assumptions underlying the report
were too restrictive for a national estimate, the report does contain
data on Western Europe that are of significance for future studies on
Soviet capabilities and vulnerabilities*
This reportwas approved by the ETC on 10 April 1952, as a coordi..
nated contribution to NIE-40* The EIC representatives, however, did not
agree in detail on au the statistical estimates in the report on Bloc
production, capacity, inventory, and requirements presented., Some of
these figures differ from those made by several of the agencies; others
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represent the only available estimate, but arc not supported by convinc.
ing evidence. In the former case, the IAC representatives of the EIC
have agreed that such differences as exist would not materially affect
the conclusions of this report; in the latter case, they have agreed
that the available evidence at least does not controvert the cctimates
presented. No attempt has been made to bring those estimates up-to-date
and the status of the report has remained unchanged :ince it was approved
by the EIC in April 1952.
A number of individual sector papers were prepared as contributions
to this summary report. These sector papers are worIcing drafts and are
not
arc
BIC Secretariat upon request. (Phone:
1. Aircraft
2. Chemicals
Electronic Equipment
14,-, Food
5. Machinery
-6. Metals
71 Ordnance
- 8. Rubber
94 Shipbuilding
lO, Textiles
being issued with the report. However, a limited number of copies
available for the following sectors and will be disseminated by'the
ii
? moo aim was
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POTEPTLJI ECOITOMIC GAINS OF USSR RESULTING FRO-J:1 'ME
ACQUISITION OF OONTIINT,EITML UEIERN EUROPE IN MID-i952
:XS TUPTIONS
1, Continental Western Euroe is occupied by Soviet forces in nid,-1952,
2, tBSR has cmtr,-)1 of Middle East oil and overland access to all of
cntinertal Asia.
3. Effective Allied blockade prevents Soviet trade with other areas
and severely curtails coastal shipping.
i. F ,r the purnose of estimating Soviet military requircmorts,
nwartime conditions" as stipulated in the outline of =410
have been construed as f,11-ms: larcr,e-scale air and navia war;
no major ground'operations; USSR expects an Allied ground invasi ,n
in 19514t
5.
Except for blockade,
been ignored.
destructive effect of miliary action has
6. No systematic stripping of Western European ec-.)npmy; o,;?.)timum
allocation of scarce fuels, materials, equipment, manwer, and
scientific and technical pers:rnnel thrugh.)ut Soviet cDntrlled
area.
uI
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CONCLUSIONS
1. Under the assumdtions of this study, acquisiti ,n of Continental
Western Eur -)c (ME), with its industrial equipment substantially intact,
w mad approximately d ubi.e the economic potential of the present Soviet
Bloc by 19514. It w-uld more than double the crude steal, primary alminum,
lead, basic chemicals, and electric power pr Niue tin under Soviet c )ntr
It would increase its cora pr ducti m. by tw -thirds and Its primary c pl.er
production by one-third. It w' more than double its machine t ,D1 inventory
and production capacity. It w uld more than double its resorvir of skilled
industrial manpower, The national income of CWE, which may be taken as a
r ,ugh indicator of over-all economic strength was in 1950 generally ceuiv-
alent to that of the Soviet Bloc, By 1954, the basic ec.inmic superiority
of the Free World over the S-..?.vict 131 c would be reduced from roughly 4:1
at present t., ab?:-Llt, 3:2.
2. The additional economic res urces c',ntribut, d by ME c :uld,
course, not be converted immediately int additi no.1 military strength.
Soviet efforts t-, press the Western European cc nomy into the service of
its machine w_ulf.1 have to vorc:Ine c nsiderable initial difficulties.
Satellite, governments wuld have to be organized and trained Communists
would be placed in key administrative positions. Administrative procedures
would probably be slow and inefficient for the first year or tvro. Most of
the administrative and technical pers)nnol in government and industry
would at first be permitted to stay in their jobs under the supervision of
Soviet or native C-rmunist advisors or observers. Such limited
passive resistance as may exist mowg this and other gr-ups would be met by
arrests and deportations. Gradually, the remaining "bourgeoisti elements
Wad. be replaced as reliable individuals can be trained to occupy lower
administrative positions. By the end of the second year of occupati n,
Communist contr )1 would pr-.bably be established. The Communist
puppet regimes, while enc-untoring widespread hostility and evast..,n, could
be expected to be m re effective in enforcing cc nomic c ntr is than the
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Collaboratot governments of ItT.-.,rld War II, th:ugh less effective than the
Nazi regime within Germany proper.
3. The =led sea blockade would cut off a large proportion of
C:,ntinental Western Eur i.pets normal fm-c1 and raw material supplies--
abut '41e-sixth of its grains and sugar, wire than one-third of its fat
supplies, nine-tenths f its netr-)leum supplies, nearly all of its rubber
supplies, most of its non-ferrous metals supplies, two-thirds of its tex-
tile fiber supplies.
Lt. The resulting sh)rtagos c uld be made up in part by increased
imports frnm the present Soviet Bloc (petroleum, grains, coal, certain
metals, rubber), by increasing d ?.mestic pr-ductinn, by changing the pattern
of utilization, by m /..(1 intensive scrap utilization, thn,ugh the devel)pment
of substitutes, by drawing nn stocks, or a combinatton of these measures.
In most cases, moreover, c ns!.7.mptinn c uld be reduced to some extent with-
out adverse effects nn essential industrial pr-:ducti,n. But the necessary
adjustments w-uld be difficult and time consuming and s 'me could not be
completed within the first tw; years of nccupati a.
5. The major cc -n-mic weaknesses of Soviet Eurasia during the first
tw years wnul;', be in the petroleum and foci supplies. Copper and tin
and East-J.-Jost transport would als- present problems.
6. In the first year f occupation, about 11 million t ns of
petr bourn c uld be shipped fr_Ja Eastern Europe t V.Testorn Eur.pe without
reducing civilian c nsumptian in the .5,-,vict Bloc by more than 20 percent
beln)w the FY l952 level. In the sec 1-10, year, shipments could be step-pod
up to i1 rnillin t-ns, with the increase coming out of increased Soviet
Bloc production. The handling 0f this traffic would require careful
-1-lanning of petr-leum movements within the LUSH. to maximize the use of the
available tank cars. Even with imprts of this magnitude, petr ,1euri c n-
sumpti a in ME w-)uld decline to about one-third of normal?barely adequate
for minimum requirements.
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7* Once the initial supplies from stocks and the 1952 harvest are
exhausted, food consumption levels in CWE would decline sharply, both
qualitatively and quantitatively. This would be the case even though
CVE could produce more than enough food to support its population at
present calorie levels; but the achievement of self-sufficiency would
reiraire a radical shift of agricultural production from livestock to
crops for direct human consumption. During the first two years of
occupation, Soviet controls would not be sufficiently effective to en-
force such a drastic reallocation of agricultural resources. Although
livestock production would undoubtedly be reduced substantially, the
resulting savings of food energy would bc sufficient only to offset
the anticipated decline in total crop production, but not the loss of
food imports. Consequently, in the second year of occupation, food con-
sumption in Western Europe is likely to fall to average calorie levels
comparable to those experienced in the occupied Western European coun-
tries during World War II even if as much as million tons of grain,
over and above the grain equivalent of foodstuffs requisitioned by the
occupation forces, were shipped from Eastern Europe to Western Europe.
8. Among the metals, copper and tin would be the most critical.
Sitoplica from primary and secondary production would decline to about
one-half of normal in the combined area, but this would be enough to
moot all Qssential requirements.
9* The East-West transportation requirements would double, but
with the anticipated improvement in operating efficiency, the avail.-
able capacity would be adequate for this :Increased traffic.
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10, s a result ,f the initial disorganization an:. readjust
readjust..
ment, total industrial pr ,ucti.n in CWE w uld decline sharply in the first
year of occupation, but eff rts would be made fr-vri the start t
maintain essential pr-duction in those industries which would be
most useful t, the Soviet military effort, notably coal, electric
i,owor? petr bourn, metals, chemicals, machinery, elect onto equipment.
Armament production would remain on a small scale p r?uphly comparable
to that contemplated under I resent NATO plans. The availabiltiy of
large stocks of basic no-KU-ties in the USSR and some in Western
Europe would Irvido a cushion which would help abs rb the initial
impact of the blockade during this transitional 1.erild.
11, In the sec nd year of occupation, the C-mmunist e
regimes would be mare firmly established and the most essential
adjustments would have been made. Alth-iugh 1.,etr 3.eum, f.?)(1, and
certain other materials wol-ld be in oh rt supply, these shortages
would probably not prevent production in priority inJustries from
rem ining the levels prevailing prior to the occu:
sential -n--particularly ,roducti )n c-ndon t n imported
raw materials such as textiles, and production of durable c
g mid remain at low levels,
120 The main c ,ntribution of C`Jj'E to the Soviet military
effort would be in broadening its ec ,n-nic base by 611:v:dying steel
and other metals, machine tools and other machinery, optical and
,recisi on instruments, electronic equipment, and transi,-)rtpti n equip
meat to the USSR. The excess petroleum refining and metal smelter
and refining capacity that would exist in OWE under 6,-,viet occu:)a-
ti n would -,r;viLle a substantial cushion against war damage. In
the longer run, the unlimited auility of the Soviet Union t draw
)n. Western Europels technical skills, its patents, -la.' its industrial
know-how, would be even more in, ortant. CWE would be a substantial
drain on the USSR in petroleum, but even in this case Western
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Eur,-2ets essential requirements, amounting, to ab-ut )no-third of
norm-1$ could be met without significant adverse effects on the
economy :f the USSR. In foci, OWE would be a net gain to the USSR
in the first year, but - net liability in the following years,
though Soviet shipments of grain (and possibly some oil seeds) would,
be partly offset by Soviet requisitions of ltiest-ck :roducts in Western
Europe. There would also be some drain on Soviet sup,lios of certain
n-,n-ferr us metals and rubber.
13. In armament production, CWE p,ssesses a large potential
which in a few industry branches is greater than that of the present
Soviet Bloc. In view of the large capacity for armament pr.,ducti n in the
USSR, relatively little of this Western Eur,pean potential would be immed,-
iatcly mobilized in su ,,-)rt of the Soviet war effort. Western Eur-pe
most important short-run c'nt:21buli,n in this field would be in
sup; lying machine t-)1s, specialized skills, ard component parts.
A particularly significant c ntribution would be made by Continental
Western Eurrpels electronics industry, which would immediately increase
Soviet capacity in this field almost fourfold, and up to sevcnf ld
within a year if the Western European industry is -.rut ,n a two- shift
basis. The acquisition of this capacity would greatly improve the
quality of Soviet w.c. .ons.
Soviet acquisition of OWE would add greatly to Soviet
naval and merchant marine c nstructi n capabilities. The :resent
limited se-pc of nal construction in OWE would, however, make
the immediate gains to the Soviet small. A large ,Dr,portiun of the
Western European ship yard ca acity would pr bably be devoted to
c)nversi-n of merchant ships, and the cmstructi ,n of small
vessels. New constructi )n started after mie0.19521 including possible
submarine eanstructi n$ would not become a fact r until after mid-
1954. While few naval vessels would be captured, a considerable
portion of CWEts large merchant marine would probably fall under
s)viot c ntra. Western Europe's e,ntributi-n to the present Soviet
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produqtion capacity in underwater weapons--mines, torpedoes and
component parts--would also be substantial.
15? Although present capacity in C1JE would permit aircraft
production to be increased tenfold., from the presentannual level
of between 1,600 and 1,800 to about 17,500, actual output under
occupation conditions is expected to be far below that figure.
Because of the relatively small addition that the aircraft industry
of 21:,1 could make to the Soviet Bloc inventory and to the USSR.!s
annual production, the Soviets would probably not attempt to mass
produce aircraft in Western Europe. It is, however, likely that
some specialised equipment and personnel woad be transferred from
W estern Europe to the ILSR, and that the remainder would. be used
for the repair and maintenance of the Soviet Air Force operating
in. Western Europe.
16. In ordnance, the UL,SR would acquire an estimated mid-1952
production capacity of some 8,700 armored vehicles per annum, equiva-
lent to 14 percent of the capacity of the present Soviet Bloc, The
UL.SR would also acquire some of the 15,50e armored vehicles now inven-
toried. as in-being in OWE. In addition, the USSR. would gain an
estimated annual production capr!city of about 10,000 pieces of heavy
artillery, equivalent to about 9 percent of the capacity of the
present Soviet Bloc. Some of the 20,500 artillery pieces now inventor-
ied as in-being in OhE would also f.11 into Soviet hands, The estimated
mid-1952 annual production cap city of 334,000 metric tons of explosives
in OWE is equivalent to more than one-third of the capacity of Soviet
Bloc countries. The annual rate of production of explosives, military
and industrial, in OWE is estimated at about 200,000 metric tons by
mid-1952, as compared with 390,000 metric tons in the Soviet Bloc.
While the production capacity of armored vehicles and artillery. in ME
is considerable and could be further expanded, it is doubtful that the
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Soviets would use it during their initial period of occupation for
other than repair and maintenance purposes, as Soviet invc.ntories and
production capacities in these categories are believed to be adequate
for forwcuable requirements. It may be expected, however, that
:estern Europt--,n ordnance production cap-city would be utili;4ed more
fully by the Soviets if production facilities in the USSR suffered
severe damage by air attacks.
SEC -E -T
op,' 'moo ONO mon Mir MO
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POTENTIAL ECONOMIC GAINS OF USSR
aESULTING FROM TL ACOIToITION OF
COTINENTAL LELTERN KROPE
IN MID-1952
I. ImE2rtance of Continental 'v.:lest:ern Europe in the
-Balance of EconTSTE Power between East and .4-esT,
1. Under the assumptions of this study, acquisition of Contin,,.
ental Western Europe (CE), with its industrial equipment substant-
ially intact, would approximately double the economic potential-of
the present Soviet Bloc by 1954. It would more than double the
crude steel, primary aluminum, lead, basic chemicals and electric
power production. under Soviet control. It would increase its coal
production by two-thirds and its primary copper production by one-
third. It would more than double its machine tool inventory and
machinery production capacity. It would increase its electronic pro-
duction capacity four to sevenfold. It would more than double its
reservoir of skilled industrial manpower. The national income of CifiE,
which may be taken as a rough indicator of over-all economic strength,
was in 1950 generally equivalent to that of the Soviet Bloc. (See
Tables 1 and 2.)
2. By 1954 az: a reult of the acquisition of Continental_ ',;estern
Europe, the basic economic superiority of the Free tiorld over the
Soviot Bloc would be reduced from roughly 4:1 at present to about ,
3:2 (see Table 2). Not only would the Soviet Bloc gain direct control
of CVIOs economic resources, it would also gain access to strategic
materials in the Iliddle East and boutheast Asial though the quantities
that could be moved from these areas would be limited as long as an
effective sea blockade is maintained,
3. The extent to which this basic economic potential could be
translated into military strength will depend on a number of factors,
including (a) the initial degree of economic mobilization for war;
(b) the speed with which economic resources can be converted to
military purposes after the beginning of hostilities; (c) the problems
cnceuntord by the WSR in exploiting the economic potential of ClgE;.
(d) the ultimate compressibility of civilian consumption.
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INDICATORS OF TEE EcoNoLac POTENTIAL OF
CONTINENTAL WESTERN EaROPEAN COUNTRIES, 1950
Country
National
Population a,/ Income b/Per
Unit: (Millions) (anion dollars)
National
Income
Capita b,/
(Dollars) -
Austria
7.1
1,610
227
Belgium-Luxembourg
8.9
5,405
605
Denmark
4.3
3,049
714
Finland
4.0
1,458
365
France
41.6
22,617
544
Italy (including
Trieste
46.5
11,609
249
Netherlands
10,1
5,360
531
Normay
3.3
1,938
594_
Portugal
8.6
2,150 7
250y:
Zaar
.9
495
550d
Sweden
7.0
6,022 --
858
Switzerland
4,7
3,964
847
Spain
28,3
4,739
168
West Germany
47.4
16,968
358
West Berlin
2.1
.714 g/
337 g/
Yug os ?avid
16.3
2,442--
150-
Total.
241.1
90,540
376
D.chine
Tools
(Thousands)
n.a.
125
20
n.a.
600
300
n.a.
n.a.
20
n.a,
n.a.
n,a.
20
2,300
Coal
Production c,/
(Millions
of m.t.)
Crude Steel
Production
(1llions
of m.t.)
Electric Pmez
Production
(Billions
of KWH)
.1.6
0,9
4.9
27.4
6.2
9.0
0.2
neg.
1.7
O.
.1
4.2
51.3
8.7
30.7
1,3
2,3
24,9
12,3
0.5
? 505
0.4
0.1
17,3
0,5
O.
0.9
15.1
1.9
0.7
0.3
1.4
18.3
O.
neg.
9,1
11.5
1,0
6.3
135.1
1201
44.0
0,
0.
0.4
5.1
0,4
2.4
262.3.
35,6
180.3
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Country
Crude
Petroleum
Production
(i ii IOnS
of m.t.)
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Primary
Aluminum
Production
(Thousnds
of m,t,.
Number of
Locomotives
(Park)
(Thousands)
S-L-C-R-B-f
Table 1 Continued)
Ton/ is,
CE?7ried by
Railroads d
(Billionsf-
Number of Seagoing Merchant
Trucks Tonnage el'
(Park) (Lillions-jf
(Thousands) deadweight tons)
Austria
1.5
18
2.1
5,2 g/
11
:3eigium-Luxembourg
0.
2.9
3,9 -g-/
152
0,6
-Denmark
iiniand
0,
0.
0,8
0.8
1.1 --
3,4
59
32
1.7
0.7
France
0.1
61
13,3
33.9
800
3,7
Italy (including
Trieste)
0.,.
37
5.6
10.6
292
3.5
Netherlands
0
1.0
3.0 gi
78
3,8
Jorway
o.
46
0,6
1.3 --
49
7,8
Portugal
0
0.5 hi/
0.5 g/
22
0.5
Saar
0,
0,3
0.7
9g/
Sweden
o.
4
1.8 lk/
7.9 g/
89--
2.8
Switzerland
21
0.9 --
2.0
40
0.1
Spain
0.
2
2.8 h/
6.5 g/
79
1.5
i-est Germany
1.1
28
15.5 --
4,1
392
0,8
i'est Berlin
lugoslavia
0,
0.1
0
2
0.
2.5
17d
9,3
16
0,3
Total
3.5
219
51,4
144,4
2,100
27.6
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FOOTMTES TO TABLE 1
a/ Eid-/950
b/ UN estimates projected to 1950 and converted to 1950 dollars. For method see UN Statistical Office, National
and Per Capita. Incomes, Seventy Countries, 1949, Statistical Papers Series E, 4a, October 1950.-
c/ Hard coal and lignite in terms of hard coal equivalent.
d/ State railroads.
e/ Vessels over 1,000 gross tons, including freighters, refrigerated freighters, bulk carriers, tankers, and
combination passenger and cargo vessels.
4?,. 44,2?4?pgt,rian oil production is controlled by the USSR.
OIR. estimate.
h/ 1949,
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Table 2
INDICATORS OF TEE 7sc0mIzo 14TEI;TIAL OF CONTINENTAL WESTERN EUROPE
AND THE 0111ET BLOC, CUIZPARED WHH THE US 11ND OTHER FREE (JR-LD ARE1,S, 1950
Index
Unit
Continental
gestern.
Europe a?/
USSR
European
Satellites b/
SOVIET BLOC
Communist
China
Total
Eurasia
Population
liational income
l'ational income
per cap.
Machine tools
inventory
millions
billion dollars
dollars
thousands
241
91
376
2,300
201
62
303
100
,0
91
24
264
800
475
15
32
neg.
767
101
132
1,800
1,008
192
190
4,100
Production.
Coal
millions of m.t.
262
263
92
35
350
652
Crude steel
II Ii II
36
26
7
neg.
69
Electric power
millions of KH
180
86
/0
4
130.
310
Crude petroleum
millions of m.t.
3.5 e/
38
6.5 f/ g/
neg.
44.5
48
Primary aluminum
thousands of m.t.
219 ?
172
13 ?
0
185
404
Transportation
Locomotive park
thousands
51
31
n. a.
n.a.
n.a.
Ton-Km, carried
by railroads
billions
144
510
80
30
620
764
Truck park
thousands
2,100
2,000
133
46
2,179
4,279
Seagoing merchant
marine
deadweight tons
28
3 h/
neg.
neg.
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Table 2 ..Continuod)
FREE vvURLD OUTSIDE EURASIA
US Canada UK Other Free Total Grand
iorld (3/ Total
PERCENT. OF GRAND TTAL
CE Soviet Frc,o 4or1d
Bloc (excl, Gv4E)
Population
152
14
51
555
772
1,780
14
43
43
iLtienal income
ational income
per cap,
i chine tools
inventory
236
1,552
1,900
13
935
185
42
831
850
63
113
800
354
459
3,735
546
307
7,835
17
29
18
23
65
48
Produotion.
Coal
499
15
220
94
828
1,480
18
26
56
Crude Steel
88
3
16
7
114
183
20
18
62
Electric power
388
51
55
92
586
896
20
15
65
Crude petroleum
266
4
neg.
108
378
426
neg.
11
89
Primary aluminum
652
360
30
'5
1,067
1,471
15
13
72,
Transportation
Locomotive park
42
4
20
25
91
Ton-Km. carried
by railroads
.859
79
36
120
1,094
1,858
8
33
59
Truck park
8,271
545
879
2,032
11,727
16,006
13
14
73
Seagoing merchant
marine
37
1
22
12,,,,
/-
103
27
3
70
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FOC,TXTES TO TABLE 2
SDO Table 1
b/ Albania, Bulga 'a Czechoslovakia, Estern Germany, Hungary, Poland, RumLnia.
c/1 Includes Ireland, Iceland, Africa,. Latin America, Australia, Now Zealand and Oceania, Japan, Indonesia,
Philipeines, hxcludes non-8ovict Centinntal Asia.
dj, Rough estimete.
Includes Austrian oil production, now under Soviet control.
f/ 'Includes synthetic oil in terms of crude oil equivalent.
Excludes
Austrian oil production, now under Soviet control..
h/ 2,582,000 tons of which 785,000 tons were obtained through US lend-lease.
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aor ow. a...?
In economic preparedness, the ILSR has the edge over the root of the
world. Its economy has been continuously geared to war production since
before World ',ar II. Even now, after nearly two years of ?estorn rearma-
ment, tho USSR devotes a much larger proportion of its national product
to military purposes than the US or any other Western country. In 01iJE,
on the other hand, military expenditures currently absorb a smaller pro-
portion of the national product than in the US, and much less than in
the USSR.
The speed of economic mobilization after war starts would probably be
greater in the US and the UK than in either the USSR or CWE, particularly in
View of the momontum already achieved by the US defense effort. The speed of
mobilization in OWE would be slowed down because of the many basic adjust-
Taunts which the .oskrn European economy would have to undergo (see Part II
bolow). The result would be o reduction of the initial advantage of the
Soviet Bloc during the first two or three years of war.
In the long run, the obstacles to a full utilization of UilE in the
service of the 6ovict war economy could be gradually overcome, and the
combined economic-military potential of the. enlarged Soviet Bloc would
approach thu 2 to 3 ratio compared to the Free World which is suggested by
the indicators of basic economic st,rongth. The long run compressibility
of civilian consumption may be assumed to be about the same in these two
areas. During the last war, the major participants?the US, the UK, the
USSR and Germany?all devoted -lout 40 to 50 percont of their national
income to military purposes at the peak of the., war effort. More far-
reaching, reductions in the standard of living can probably not be
achievod?in the vies tern countries primarily because of the relatively
high level of consumption considered as a "minimum"; in the Eastern
countries because a further roduction would reduce consumption below the
physical minimum of subsistence.
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??????
II. Principal Factors Affecting the _Exploitation of
Conti7717777t.stern turope IFTLe USSR.
4
A, .i?olitical and Administrative and Fiscal Factors
The shock of defeat and a second occupation of most of Western
Europe within a period of only a few years would initially prevent any
mass will to resist the Soviet invaders. Only r: handful of people,
and those mostly the wealthy, :overnment offici-ls, and m,mber of
the Armed Forces, would h-Ne an opportunity to reach the safety of an
unoccupied area. For the groat majority the overriding problem would
be to make those adjusim,nts to the regime which would permit them to
survive, and to -void imprisonment or deportation. They would as a
consool,ence accept whatever changes in their employment the Soviets might
choose to direct, though unwillingly and as a matter of necessity. Except
for thc. Communists and their simp-thizers, the tempo of work would be
at the minimum consistent with personal safety. Productivity may be ex-
pected to decline.
&side from the struggle to stay -live, the: response of the
Western Europeans to the Soviet occupation obviously would he determined
to a considerable extent by what the Soviets do. In their over-all
eonomic and political policy the latter have not been greatly moved
so f-r by regard for th,, sensibilities of the people.. Judging from
their actions in Eastern Europe, it does not appear lik(ly that they
would follow, as the Germans did initially, a policy of ostensible
non-interference in local affairs and respect for local customs, laws
and regulations, Instead they are likely to proceed inmidir,tely and
arbitrarily to institute whatever social, political and administrative
chances they deem best suited to their objectives. For example, the
Soviets might be expected to proceed at once with the transfer of all
important industrial concerns, banks, etc., to Soviet, state, or "joint"
Soviet-statc ownership. However, curtain other stops toward sovietization
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of the economic structure which might encounter greater resistance,
such as farm collectivization or extensive expropriation of small
businesses, would probably be postponed.
Where the initial occupation is accompanied by serious fighting,
Soviet troops in their excesses in the first flush of victory would
probably display even loss regard for local sensibilities than would
official Soviet policy, though this situation would probably be
corrected rapidly as fear of contamination of the troops with Pestern
ideas and the need to prep-a-e for a counter-attack dictated the enforce-
ment of severe discipline on the individual soldier.
ExperiLnce in the Satellite countries would also indicate that
the Soviets might undertake large-scale and relatively unselective
deport-tions. Lhile Soviet authorities might be somewhat restrained
in their action by thuir concern for the prestige and popularity of
locr?a Communist parties, past actions suE2,.est that other considerations
would freouc-ntly be overriding.
Satellite governments would be organized in all occupied countries
and trained Communists would be placed in key administrative positions.
Only in France, Italy and ',est Germany is there a prospect that they
would be available in sufficient numbers however. For i-stern Germany
the Soviets could draw on cadres from East Germany. DUG to the cxisto.,
once of a full-fledged Communist administrative apparatus in East
Germany, the setting up of a German Communist regime would proceed
somewhat more smoothly than in the rest of Europe. Even in these
three major countries the Soviets would meet with widespread passive
resistance.
Administrative procedures would probably be slow and inefficient
for the first year or two at least, even though the Soviets would have
an advantage over the Nazis in that they would have a considerably
greater number of native supporters. Most of the administraive and
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technical personnel in government and industry would at first be
permitted to stay in their jobs under the supervision of Soviet or
native Communist advisers or observers. .Such limited passive
resistance as may exist among this group would be met by arrests and
deportations. Gradually, the remaining "bourgeois" elements would be
replaced as additional politically reliable- individuals are trained
to occupy lower administrative positions.
The methods of economic control would follow the pattern
established in the present Soviet orbit, The occupied countries
would be confronted with large Soviet demands for goods and services,
To fin-lace occupation costs and other public expenditures, the puppet
governments would have to rely heavily on the expansion of currency
and credit. Inflationary financing would also be used whenever it
was desirable to stimulate industrial production and food collections
by monetary incentives. At the same time the supply of food and other
consumer goods would shrink as imports from overseas are cut off.
Seizure of stocks and licnc;my property" by the occupation power, and
looting and black market operations by individuals in the Soviet
armed forces would further reduce supplies., The general lack of
confidence in the future of the Currency would stimulate the hoardi
of goods, and this would, intensify the inflation*
Some effort would undoubtedly be made by the puppet govrn-
medts to reduce demand by increasod taxation, with the: emphasis on
indirect taxes, but tax revenues would not be sufficient to offset
the inflationary effects of the factors mentioned above. The main
reliance of the new regimes world be in suppressing the consequences of
inflation by a comprehensive system of price, wage, allocation, and
rationing controls. Lvasion, of controls would be widespread, particularly
in countries like France and Italy, which lack a tradition of effective
enforcement of, and compliance with, economic regulations(
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.1??? 401?0 ?????
When the rapidly mounting inflationary prosoures roach the
proportions of a hypLr-inflation, the new regimes may be expected to
wipe out the accumulated excess purchasing power by means of monetary
reforms. In the course of the monetary reforms, the internal govern-
ment debt would be repudiated or reduced to a fraction. Together with
selective taxation and other discriminatory devices, monetary reform would
also be used to reduce the scope of private enterprise, and as a mons
of transferring funds to the occupation authorities and to the state.
Control of industrial production would be accomplished by
centralized planning and by direct Soviet or State Control over
all important industrial concerns. This would be supplemented by
strict Central Bank control of all cruditF, and investments.
In contrast with the "cooperator" governments of World War II,
i,ho Communist puppet regimes might be expected to make systematic
efforts from the start to enforce controls on farm production. Special
state or "cooperative" trading companies might be creat .d. which would
sot up food purchasing agencies in the rural areas with Lpecinl stores
selling consumers' goods and agricultural implements and supplies to
farmers in exchange for food deliveries in excess of a fixed basic quota.
If persuasion and incentives failed to achieve their purpose,
the Communist regimes might well resort to largescale removals of
livLstock and the detailed policing of farms to enforce compliance
with production and delivery schedules. On the other hand, greater
coercion would also breed more resistance than in World War II. While
during t:e Axis regime, farmorp w.re not in aLL areas hostile to the
dominant power or to their own subservient governments, under the assumed
conditions they would be without major exceptions. In spite of
strict controls, the farmers would undoubtedly contrive, as they did
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01.? ????? MOO ?????? ??????
in World bar II, to obtain ample supplies for themselves, as well as
a surplus for disposal in profitable black markets. During the first
two years, while administration, transport, and distribution are
disorganized, evasion and non-compliance would be very widespread.
In subsequent years, Communist control over food production and
deliveries would probably be tightened with the result that an
increased proportion of the declining agricultural output would be
available for controlled distribution. In the cities, preferential
rations would be granted to essential workers in industry and govern-
ment. Thc. rationing system would thus be used deliberately to induce
increased output and cooper-tion with the regime,
The not effect of these political, ?idmini.strative, and fiscal factors
on economic activity is difficult to predict. On
thu whole, it is likely
thr,A, after Lhe initial period of disorganization, the Communist puppet
regimes would be more effective in enforcing economic controls than the
collaborator governments of iiorld oar II, though less effective than the
Nazi regime within Germany proper. Organized resistance should not be
expected until the prospects of liberation appear favorable, This
would be particularly true if the Soviets initially pursued a "correct
occupation policy as did the Germans. Should the Soviets adopt a ruth-
less deportation policy, sporadic resistance could be expected. Short
of this, and until liberation was at hand, the principal obstacle to
Soviet exploitation of Continental 14tstern Europe would be largely of
7EZiVe nature-slowing tempo of work, administrative inefficiency,
viol-tion of economic controls, etc. During this period, the organization
for resistance would be underway; but not until the sta-re of organized
resistance is re-ohLd would the European peoples be in a position to
deny to the Soviets - significant part of their potenLial economic
gains from ,qust,rn Europe.
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B. Economic Factors
In addition to these political and administrative problems, the
USSR would ,ncounter a number of economic problems in the exploitation
of Continental Ivestern Europe* The most serious of these problems would
be presented by the petroleum and food supply. However) except for the
initial period of disorganization arid readjustment--of one or two years-
these factors would probably not prevent the full operation of those
industries in r1WE which can make significant direct or indirect contri-
butions to the Soviet military potential*
It may be assumed that the Allied sea block-,de would be suffi-
ciently effective, from the start to prevent all but a trickle of over.
seas shipments from reaching the Soviet controlled area. A large pro-
portion of v,stern Europe's normal food and raw material supplies would
thus be cut off---bout one-sixth of its grains and sugar, more than one-
third of its fat suirdiLs, nine-tenths of its petroleum supplies, nearly
all of tLs rubber sup:dies, most of its non-ferrous metals supplies,
two-thirds of its textile fiber supplies.
The resulting shortages could be made up in part by increased imports
from the present Soviet Bloc) by increasing domestic production, by
changing the pattern of utilization, by more intensive scrap utilization,
through the development of substitutes, by drawing on stocks, or a corn,-
binatdon of these measures. In most cases, moreover, consumption could
be reduced to some extent without adverse effects on essential industrial
-)roduction. But the n,ccb-,ry adjustments would be difficult and time-
consuming, and some could not be completed until after the second year
of occupation. Oil burnitv facilities would have to be converted (or
reconverted) to coal. A large portion of the trucks would be equipped
with wood or coal gas generators. Nuch traffic would have to be rerouted,
and existing channels of trade would have to be reorganized.
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Simil-r adjustments would be made in agriculture. Grain extraction
rates would be increased, and livestock production would be reduced in
favor of production of crops for diroct human consumption. In spite
of these adjustments, both the quantity and the quality of the diet would
deteriorate sharply, and in the second year of occupation, food
consumption would fail to levels roughly comparable to those in World
bar II, As a result of the food short-To, the -1-,ck of economic
incentives and other factors, productivity may be expected to decline.
Efforts would, however, be made to assure adequate rations to
eg,Intia1 workers in industry ane. gorernancrril. In :?ccord-nce with the
usual Soviet pattern, the ratiorjind system would discriminate strongly
in fivor of managers, technical personnel, and industrial workers. It
may be expected, however, that workers could not be completely isolated
from the food shortagc It is also likely that conditions of actual
starvation would occur in certain food deficit areas which the Soviets
might consider as of secondary importance.
Total industrial production would undoubtedly do dine sharply
in the first year of occupation, but the Soviets would try from the
start to maintain essential production in the basic industries (coal,
electric power, petroleum, chcmicals), and in those manufacturing
industries which would be most useful to their military effort (notably
machinery and electronic oquipmcnt). :,rm-mcnt production woulC, remain
on a small scale, roughly comparable to that, contemplated ,Indor present
Ni4T0 plans. The existing stocks of basic comx4IJ,ies in the U:'5S.13 as
well as in CVE would pr,..-?ride a ens kion which would help absorb the
Initial impact of the blockade during this transitional period.
During the sea and year of occupation, the Communist puppet regimes
would be more firmly establishod, the most essential adjustments would
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have been ma:le, ,and pxoduction in priority industris would prob-bly
regain the pro-occup-ti'm level. non-essential production?particularly
production dependent on iportEd raw materials such as textiles and
leak%hcr, -nd productisn of durablL consumer goods--would remain low,
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own
III. Critical Sectors
Petroleum
1. Estimated Supplies.
Of all the weaknesses in the economic armor of Soviet Eurasia,
the most serious would be the petroleum supply. This would be the case
even if the USSR had military control of the Middle Fast, provided
that oil transport from the wells is effectively interdicted, as is
assumed in this study.
While the present Soviet Bloc produces enough petroleum to cover
its requirements for peace and war, this is not true of Continental
Western Europe. Crude petroleum production in OWE currently does not
exceed about 3.5 million metric tons, plus 1.5 million tom under
Soviet control in :Lustria. Even if Austrian production is included,
Continental Western. Europa7n crude petroleum production would yield
only about 4.5 million metric tons of petroleum products, equivalent
to 11 percent of its current requirements for inland consuktion
(soc Table 3). Western European st,ocks, if captured intact would add
7.5 million tons, so that total supplies in. CI,Z would !mount to 12
million tons. It is assumed that 5.2 million tons would be reo..isitioned
by the (ycuption forces, leaving 6.8 million tons available for
civilian consumption. This is only 17 percent of the supplies
available for inland consumption in FY 1952.
Efforts would undoubtedly be made to supplement this supiay by
shipments from the USSR and the Satellite countries in order to assure
a minimum level of consumption necessary for the maintenance of the
basic economy in 01',E. It is estimated that about 7.8 million tons
would ixolYlly be shiploed from. the 1;asR. This amount could be spared
by the Soviet Union without sia:nificant adverse effects on industrial.
?"oducticrl and without withdrawals from stocks. , Shipments of this
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Table 3
ESTINATED PETROLEUh SUPPLIES IN CONTINENTAL WESTER7 EUROPE,
FY 1952, 1953, AND 1954
(In millions of metric tons,
in terms of petroleum products)
aj
Production from
indienous crude
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Requisitions by Soviets
-
FY 1952 FY 1953
4.5 4.5
35.312/ 10,8 2./
5.2 2/
FY 1954
5.o
13.8 2/
5.2 2/
Current supplies av, for
civilian consumption 10.1 13.6
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a/
12/
.2/ See Annex 1
d/
Total available for
civilian consumption
39.3 2/ 13.9 13.6
Including.. Austria,
Difference between inland consumption and indigenous production,
in terms of petrole.om products.
Estimated inland consumption, Excludes bunkers. Includes
military consumption,
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magnitude would leave the USER with civilian supplies approximately
equal to the 1950 level and 18 percent below the estimated civilian
consumption in FY 192, 1/ ;mother 3.4 million tons of petroleum
products could be made available to T4F, from the Satellite area
(primarily Uumani^). This would leave 2.6 million tons available for
civilian consumption in this area 2/.
With imports totalling 10,8 million tons, petroleum supplies in
CIJE would amount to 22.8 minim tons, assuming that -,11 stocks were
captured intact, and that all stocks would be consumed in the first
year. Zter deducting Soviet military requirements in ONE, 17.6
million tons, or 44 percent of current inland consumption, would be
available for civilian use.
It may be expected, howuver, that only a part of lostern Europels
stocks woulr' be made available for consumption in the first year of
occupation. If it is assumed that one-half or these stocks would be
released for consumption, civilian petroleum availabilitios during the
first year would be about 14 million tons, or 35 percent of inland
consump'Gion in FY 1952. 3/
No furthcr deterioration in the petroleum su,)1,1y would occur in
the second ycar of occupation under the as,Lmptions of this study.
In that year, o-stern European crude oil produnti n could be
incro-zed slightly, as a result of the anticipated further expansion
of ,,estern German and :.ustri-n output. More Llnuprtantly, increased
17- This estimate
into the UJSR
via rail,
2/ Set: annex 1
assumes no imports of crude oil or petroleum products
except 300,000 tons that might be obtained from Iran
for basis of these estimates.
3/ It should bt noted that FY 1952 inland cons limp-flan
military consumption.
includes some
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More importantly, increased production in the Soviet Bloc would permit
additional shipments of about 3 million tons to OWE, provided civilian
consumption in the Soviet Bloc were held at the same level as in
FY 1953, 1/ This, in turn, would make it possible to maintain civilian
consumption in CWE at approximately the some level as in FY 1953)
without any- further withdrawals from stocks. At the same time, further
progress would be made in converting oil-burning eq. ipment to other
fuais. In the third year of occupation, perhaps an additional 2
million Loris of liquid fuels would become available from reactivated
synthetic gasoline plants in Germany. In that year, it may also be
possible to further increase imports from Eastern Europe,
2, Impact on the Economy,
The initial impact of a two-thirds reduction in civilian petroleum
supplies, from 40 million tons in FY 1952 to 14 million tons in FY 1953,
on the economy of OWE would be severe; but with drastic rationing,
supplies would probably be adequate to maintain essential economic
activity at the level set by other limiting factors. As mentioned under
II-B, industrial production is expected to fall sharply in any event
during the first year of occupation as a result of the general dis-
organization and readjustment. In the second year, the most necessary
adjustments would have been made, and from there on the petroleum shortage
would probably not prevent essential industrial output in ME from
regaining the pre-occupation level.
The Soviets are undoubtedly fully aware that the petroleum supply
is a critical factor which might limit their ability to exploit the
economic potential of CrIE. It is reasonable to assume, therefore, that
no measure would be neglected that could servo to stretch the available
supply. Private passenger car trpffic and civil aviation would he
25X1 177?Sec717-IneTTT1.
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brought to a virtual standstills The resulting savings would, however,
be relatively small, as these categories accounted for only about 8
percent of total petroleum consumption in FY 1951 (see Table 4). But,
in addition, truck traffic could be curtailed much more sharply than,
for example, in the US, since practically all important industrial plants
in OWE are served by railroad sidings. Wherever practicable, moreover,
trucks would be equipped with wood or coal gas generating equipment.
Finally, most of the European fuel oil-burning facilities can be
converted to coal, and stops would undoubtedly be taken at once to
supply industrial consumers and households with the necessary equipment.
The estimated consumption pattern for FY l953, by products, is
shown in Table 5. It projects a reduction of motor gasoline and
residual oil consumption to about ono-fourth of the FY 1952 level.
Kerosene and distillates would be reduced to about two-thirds, and
lubricants to about 40 ,)orcent.
These cuts in Western European civilian petroleum consumption,
while severe, would be less drastic than these sustained by Germany in
World War II. Before the war, Greater Germany consumed about 7 million
tons of petroleum products. In 1940, civilian consumption was reduced
by more than half a BY 19)42 civilian supplies dropped to between one-
third and one-fourth of prewar. More significantly, the procentage
reductions in civilian supplies of motor gasoline and diesel oil were
much more drastic than those anticipated for CWE under the assumptions
of NIE-40. Civilian consumption of motor gasoline, which ran at a
monthly average of slightly morc than 200,000 metric tons just before
the outbreak of World War II, was reduced to one-third in 1940, and
dropped to about 12 percent of prewar in 1943. Civilian consumption
of diesel oil dropped from about 130,000 tons monthly before the war
to two..thirds of this amount in 1940, and slightly more than ono-third
21
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Tab le14.
CONSIMPTION OF PETROLEUM PRODUCTS
IN SEVEN CDNTINENTAL WESTERN EUROPEAN
COUNTRIES, a/ BY MAJOR CONSUMER CATEGORIES, FY 1951
(In millions of metric tons)
Consumer Category
Consumption
Percentage of Total
Highway transport
Commercial
6,6
Private
2,0
7
Railways
1,7
6
Inland water transport
2,0
7
Aviation
0,3
Total transport
??????????,......*
1206
WI,
Industry
1009
39
Agriculture
109
7
Light and heat
2,6
9
Unspecified
00
1
??????????????,..
Total
2803
100
n/ Belgium-Luxembourg Denmark, France, Italy, Netherlands, Norway,
Sweden,
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eye 001. ebe. Yee ye..
Table 5
ESTDIA.TED C..1017SUMPTION OF SPECIFIED PETROLEUM PRODT.IC
IN CONTINENTAL WESTERN EuRon:, FY 1952 :IND FY 1953
(In millions of metric tons)
Product .
Inland
Consumption,
FY 1952 2,./
Civilian
Consumption
FY 1953
FY 195,3 as
Percentage of
FY 1952
txVia -Lion gasoline
Motor gasoline
Jot fuel
Kerosene
o.5
10. 9
0,2
Distillates 8.6
Residuals 3J4,9
Lubricants 313
Total inland
consumption
14
, 0 3
23
0
0,9 64
5.3 62
3.8 25
1.4 42
eeeeee.Yeeeeeeeeeleeeyeeilyeeeey.
39,8 13,9
a/ Excludes bunkers, Includes military consumption,
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in 1943. 1/ These drastic cuts wore made without any serious effect
on Germany's ess cntial civilian and military productions To be sure,
Western Europe has since become more dependent on liql id fuels; but it
cannot be expected that a reduction from 40 million tons to 14 million
tons would have a more serious effect on industrial production than a
reduction from 7 million tons to about 2 million tons in Greater
Germany during World War 114
3, Petroleum Trans porto
No special problem would be raised by the need to transport large
quantities of petroleum products from Eastern Europe to Western Europe,
most of this by rail. Standard gauge tank cars for movements westward
from translonding points in Eastern Europe would be available in
sufficient numbers, as tank cars now engaged in traffic from the ports
would be released fa' EaL;t.West movements, and total petroleum con..
sumption in CWE (including military consumption) would be reduced to
less than half of normal. The serviceable inventory of tank cars in
the ISSR could transport to the Western border more than twice the
amount of petroleum products than the tonnage which is likely to be
available for export. 2/ The shipment of 7.4 and 9.9 million tons to
OE in FY 1952 and FY 1953, respectively, 3/ could be made entirely by
rail, but since at least 2 million tons could be shipped from Baku via
pipeline to Batumi, and from there via Black Sea tanker to Rumania
and thence to 'Western Europe, the remainder could be shippod by rail
without any strain on Soviet tank car facilities.
1/ Soo US Strategic Bombing Survey, The German Oil Industry. See also
LESBS, The effecta of strategic Bombing on the German War Economy,
1945, PP. 77-78.
2/ See Annex 2,
3/
See Annex 1.
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B. Food
Continental Western Europe is normally dependent on imports for
about 20 percent of its food requirements. In FY 1952, the equivalent
of 500 calories per capita per day, out of a total average consumption
of 2,750 calories, will be imported from other areas. I/ These imports
are equivalent in food energy to 15 million tons of grain. 2/ However,
some of these imports take the form of livestock feed, and this increases
the tonnages that are required. In recent years, OWE imported some 7,5
million tons of brcadgrains, 5.5 million tons of coarse grains, and
some 4 million tons of oil seeds and other fats and oil products equiva...
lent to about 1.5 million tons of pure fat. Practically all of those
imports came from overseas areas. Next to the petroleum supply, the
less of those food imports would raise the most serious problem in the
Soviet expldtation of OWE.
This is the case even though OWE could produce more than enough
food to support its population at the present average caloric level of
2,750 calories per capita per day. Continental Western Europe's produc-
tion of original food energy from the soil--including grass and other
fodder crops--is equivalent to between 7,000 and 8,000 calories per
person per day. But most of this output is fed to livestock, with a
consequent less of some 80 percent of the original food energy in
the conversion to livestock products. In addition, part of the original
output is needed for seed and industrial purposes. Only about 2,250
calories per capita per day remain available for human consumption
It would obviously be impossible to convert all pasture land and
other fodder crop acreage to the growing of food crops,: But, the 500
-
calorie deficit could be made up from domestic production by means of a
17 iPiTEports. See Annex 3,
7/ At the normal (80 percent) extraction rate.
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radical shift of agricultural resources from livestock feeding to
direct human consumption. To some extent, such a shift always occurs
in wartime, Flour extraction rates are increased in order to make a
larger proportion of the grain milled available for bread making; this
leaves, of course, o smaller quantity of milling offals available for
livestock feeding. Other measures can be takon, including the requisi.
tioning of grains and potatos originally intended for livestock feeding,
and the expansion of the acreage devoted to crops for human consumption
at the expense of the acreage devoted to feed crops and pasture. But
past experience has shown that the drastic reduction in livestock
numbers which such a policy implies will encounter extreme resistance
on the part of farmers and consumers alike. People dislike changing
to a simpler diet and will go to great lengths in evading government
regulations to obtain foodstuffs to which they have become accustomed.
People living in rural districts, and in food surplus areas in general,
will be more or less successful in this, A country like Denmark) for
instance, suecosenlly resisted Nazi pressures to reduce its dietary
standard to that of the rest of Europe. Consumer demand for livestock
products will bid up prices in the black market, thus providing a special
incentive for farmers to produce such products. Because of their high
value per pound, livestock products are in any event more suitable for
illegal trading than bulky foodstuffs such RS grain and potatoes.
Besides high black market profits, there are other reasons which load
the farmer to resist pressures to reduce his livestock. To him livestock
is an essential element in his farming operations. TO him it represents
real capital, which he will try to preserve as a hedge against infla.
tion. These factors, together with the dispersion of agricultural
production among millions of farms, make it extremely difficult to
enforce a drastic reduction of livestock numbers.
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The experience of Axis Europe in World War II may serVe to
illustrate this problem* During the war, food imports into Axis
Europe were sharply reduced. In addition) agricultural production
declined as a result of shortages of fertilizer, manpower, and draft
power, Livestock herds wore reduced and agricultural resources wore
diverted from livestock feeding to direct human consumption. But the
reduction in livestock numbers which actually occurred, and the concomitant
savings of food energy were far from adequate to prevent under-nourish.
ment and some starvation in large areas of Western Europe occupied by
the Nazis. In food deficit areas, consumption levels of non-nriority
consumers declined to less than 2,000 calories per head over prolonged
periods of time, and in some instances to less than 1,500 calories. At
the same time, large quantities of bread grain, potatoes, sugar beets,
etc., were fed to livestock.
There is, of course, a possibility that the Communist regimes
might be more successful than the Axis governments in enforcing the
necessary adjustments. For reasons explained under Il-A, however,
government controls over food production and distribution are unlikely
to be more effective than those prevailing in Axis Europe during World
War II, at least during the first two years. As a result, the food
situation in 0WE is expected to deteriorate sharply in the second yesr
of occupation, after the initial supplies from stocks and the 1952
harvest arc exhausted
ILLa_1122Laar of occuontion, it is estimated that total food
supplies available from indigenous production and stocks on hand would
supply an average of about 2,550 calories per capita per day, or 300
calories mcre than in the consumption year 1951-52, if none of these
supplies were requisitioned for shipment to Eastern Europe or for use
by the occupation forces* 1/ Higher flour extraction rates would be
See Annex
-27.
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the principal factor in increasing the caloric value of indigenous
food availabilities.
Soviet requisitions of foodstuffs must, of course, be anticipated.
The emergency slaughter of livestock, made necessary by reduced fodder
supplies, would make considerable qunntities of meat available
temporarily, and a large part of this windfall would undoubtedly be
seized by the occupying power. Exports of sugar, cheese and eggs from
surplus countries would be largely diverted from present markets to
the USSR or to the occupation forces. 1together, Soviet requisitions
during the first year of occupation are estimated at about 850,000
metric tons of sugar, 500,000 tons of meat, 180:000 tons of dheose, and
150,000 tons of eggs. Those requisitions might be slightly more than
offset in terms of calories..though not, of course, in quality of value.-
by the shipment of about 2..1/2 million tons of breadgrains from the USSR
to OWE. Average supplies available for consumption in OWE would thus
be of the order of 2,600 calories ner capita per day,
It may be assumed that the farm population (which constitutes about
one-third of the total population) would retain, legally or otherwise,
enough food to supply around 3,200 cal-pries daily for each mumber of the
frmily. It is doubtful that during the period involved, the Soviets
could establish an administrative organization which would be capable
of enfOrcing a more stringent delivery program if they desired to do so.
approximately 27 percent of the total population (40 percent of the
non-farm population) would be engaged in industrial or other work
regarded by the Soviets as essential and would receive d daily average
of 3,000 calories. 1/ This is a broad category including heavy
workers (i.e., minors) receiving 4,000 or more calories daily, down to
and including light workers consuming considerably less than 3,000 nnd
also including administrative and police officials on relatively good
J.1 A111 calorie figures include non-rationed and black market supplies.
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moo ow. ???,. ???? OW, ???
rations. This would leave average food supplies equivalent to only
1,800 calories daily available for consumers in the non-priority
categories.
In the second year of occunation, the food deficit in Western
Europe would be considerably greater than during the first year. Stocks
would be down to minimum levels. The total output of original food
energy from the soil would decline, but this decline would be partly
offset by a further increase in the proportion of the total output
which is nsed for direct human consumption. As during World War II,
the pattern of consumption would shift toward a diet with a larger
share of vegetable foods and a smaller share of livestock productse
Acreages of high yielding food crops would be expended: and consump-
ti)n of grains and potatoes fpr food would be increased at the expense
of food. These measures would result in a food output equivalent to
about 2,250 calories per person per day, about the same as in 1951-52. 1/
On the basis of the assumed average daily consumption of 3,200
calories by the farm population, and 3,000 calories by other priority
categories, it is estimated that the average daily food supply available
from indigenous production to the non..priority segment of the population
would be about 1,000 calories (prior to requisitioning of surpluses).
Imports amounting to 6.5 million tons of grain equivalent from Eastern
Europe would be necessary to raise the average daily consumption of non-
priority consumers to 1,650 calories. Most of the imports would
undoubtedly be in the form of bread grain. In addition, there might
be some imports of vegetable fats from Eastern Europe or M'anchuria, but
the calories they would contribute to the Western European diet would
probably be more than offset by Soviet requisitions estimated at 150,000
metric tons of sugar, 300,000 tons of meat, 1005,000 tons of cheese, and
50,000 tons of eggs.
17-7ETEJ7/Taex 3,
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Even with imports of 6.5 million tons f breadgrains, the food
situation in CWE would be serious* Y.11-priority consumers would be
at calorie levels comparable to those experienced in the occupied
Western European countries during World War II* The shortage of fats
would be particularly acute* While it is impossible to predict the
exact extent and incidence of the food shortage, it is likely that
non-priority consumers in those food deficit areas which the Soviets
might consider as of secondary importance would fare w)rste
Under normal growing conditions, sufficient grain would be available
from harvests and reserve stocks in the Soviet Bloc to supply CWE's
minimum requirements during the first two years. Transportation
facilities would be adequate to handle these quantities 1/0 However,
it is by no means certain that the Kremlin would decide on shipments of
this magnitude* in any case, shipments on this scale could probably
not be continued for more than two years, it is likely, therefore, that
the Soviets would permit consumption levels of non-priority consumers
in OWE to decline sharply as this would serve to increase the pressure
for a further tightening of controls and further drastic reductions
in livestock production in the following crop yearo
C. Cer and Tin
Shortages of critical metals are not expected to seriously affect
production for essential purposes in either the Soviet Bloc or in
Continental Western Europe, but certain non-ferrous metals, notably
comer and tin, would have to be rationed severely. Production of
cobalt and molybdenum would also fall considerably short of normal
requirements, but good substitutes for come uses?vanadium and tungsten,
respectively--would be available to meet essential requirements*
1# Copper*
In 1751, OWE was dependent on imports for about 85 percent of
its apparent consumption of new copper amounting to 663,000 metric tons*
1/ Sec Section D, below.
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1.10 ???? Oriat ?????? 11.101. .141.
Copper was also short in the Soviet Bloc, although imports amounted to
only about 10 percent of apparent consumption, totalling 300,000 tons.
Under wartime conditions, Western European mine production of
copper could probably be stepped up to a maximum of about 115,000
metric tons, If OWE were completely dependent on indigenous primary
production, consumption would therefore have to be cut to less than
one-fifth of the 1951 level. However, a substantial proportion of total
copper consumption is derived from scraps The exact proportion for
ONE is not known but if it is assumed that OWE derives a similar propor-
tiJn of its total consumption from old scrap as the US and the UK (about
one-third), total consumption of primary and secondary copper would have
to be cut by only one-half, Also, in an emergency, scrap collections
could probably be stepped up, at least temporarily. Moreover, aluminum
would be available for substitution in SCMC USCS0 US experience suggests
that essential civilian requirements for copper amount to about one-fourth
of peacetime demands; but the Soviets could be expected to reduce this
ratio further. Under these conditions a munitions program approaching
present NAM goals could be accomplished in OWED 1/
Soviet Bloc production of primary copper is expected to increase
from 272,000 metric tons in 1951 to about 325,000 tons in mid-1954e All
of: this would probably be required for essential military and civilian
purposes within the Bloc.
2, Tin,
In 1951, Western Europe was dependent on imports for more than 90
percent of its apparent consumption of primary tin, amounting tc 25,000
metric ton sl The Soviet Dloc was also short or tin, domestic mine
production covering only about 75 percent of its estimated consumption
of 20,000 tons, Although production of tin could be increased to about
It Is interesting to note that total copper consumption in Greater
Germany declined from 448,000 tons in 1938 to 221,000 tons in 1943
(ie., about half) without any serious effect on munitions output.
Primary copper contributed only 90,000 tons in 1943.
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240000 tons by mid-1954 for the combined area, this would still represent
only 57 percent of apparent consumption in 19516
Products containing tin are vitally important and widely used in
an industrial economy, and no country could support large-scale industrial
production without consuming substantial quantities, particularly for
solders and bearing materials. In a war economy, the amount of tin in
these essential uses can be decreased somewhat, but for most uses
substitutes have not been developed. In Western Europe, large quantities
of tin are ordinarily consumed in making tin plate, which is used
.:rimarily for food preservation. Although civilian use of tin plate
could be almost cimplctely cut off, limited qunntitios would be
necessary to provide containers for army rations6
Under wartime conditions, Western European tin supplies could be
increased by a vigorous scrap collection program. The Soviets could
also draw on stocks, estimated at 9,000 tons in the MLR, and 3,500
tons in CWE. Even so, the Soviets would still be nearly as hard
prcssed for tin 13 were the Germans during World War IT, 2./ unless
substantial quantities could be brought in from Malaya,
I/ in consumption in Greater Germany declined by more than half during
? World War II, .from 20,400 metric tons in 1938 to 9,500 tons in 1943.
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Iv. NON-CRITICAL acToncli
A. East-West Transportation
In the event of Soviet occupation of Continental Western Europe,
vest bound traffic demands on East-West transportation lines would ap-
proximately double, In view of the dismantling of the second track in
Eastern Germary, the weakest link in East-West transportation is now
in an area which forms a band extending from the Baltic west of Stettin
through East Germany, the Czech-German border area, and Western Austria
to the Adriatic Sea. This area is crossed in an East-West direction by
four double track and eight single track lines, The only inland waterwrv73 in this area are the low-capacity canal system east of Berlin and
the Danube. This inland transport capacity can be supplemented by water-
borne traffic through the Baltic Sea to Baltic ports between Stralsund
and Flensburg (and from there to the Elbe and the West German transport
system); but this traffic in limited by the relatively small capacity of
the West Baltic ports. Despite these problems, East-West transport would
probably not seriously affect Soviet exploitation of CS under the as-
sumptions of this study. Under the same assumptions, transloading fa-
cilities b(tween the broad gauge network of the USSR and the standard
gauge network are not expected to impose any obstacles to the flow of
essential East-West traffic.
I. Traffic '?ecuirements,
East-to-West freight traffic requirements would increase from an
estimated 35 million rletric tons per annum at present to about 68 million
tons in the first year, and 75 million tons in the second year (see Table
6). These traffic requirements are calculated in such a way as to mini-
mize the traffic burden on East-West routes. It is assumed, for instance,
that the estimated Polish coal surplus of 20 million tons g./ available
1/ The sectors listed in this chapter are considered non-critical oither
because capacity or supplies are likely to be adequate, or because
the anticipated shortages would not significantly affect essential
industrial production.
2/ See 117.,13 below,
, 33. --,
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Table 6
ES TINA TED LAS T-110 -WES T FREI GH T TRAFFIC REQUIREMENTS, FY 1953 AND 1954
(In millions of metric tons)
?????????????.'"...d.".T...P......???????d?ri?owmegm.????
41?10.?????? 0010,010
Petroleum products 1,/
Grains 2/
Swedish iron ore 3/
...
Manganese and chrome
Timber
Coal LI
Miscellaneous
Military traffic other than POL
FY 1953
FY 1954
1008
13.8
2.5
6.5
6
6
1-
1
1
1
2
2
2
2
8
8
Total
through traffic
Local traffic
33.3?
lip 3
35 35
Ibtal traffic
68.3
75.3
1/ See III -
2/ See
2/ See Iv ?-? D.
See IV - B.
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entirely over North-South rduteS to the three Scandinavian countries
and Finland (12 million tons)s and Austria and Yugoslavia (6 million
tons). This would leave only 2 million tons to be shipped over East-
West routes, Those would probably be shipped to Italy, and would
compete with East-West traffic in the Austro-Italian border area. Other
owl requirements of Western European coal-deficit countries would
be met by shipments from the Puhr or the Saar. About 9 million tons of
Swedish iron ore--the maximum it is believed could be shipped by way
of the Baltic -would require transshipmentAn German Baltic ports;
but only 6 million tons of this, destined for MIEs would compote with
other East-West traffic; the remainder would go to Poland and
Cnechoslovakia over North-South routes.
V Because of limited transport and loading facilities in Sweden,
7/ In 1251, about 7.5 million metric tons of Swedish iron ore went
to CE ; about 2.5 million tons went to Poland and Czechoslovakia,,
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mom aft. NO. 1?1.1.
2. Traffic Capacity.
The total (one-way) freight traffic capacity of East-West trans-
portation lines is estimated as follows:
11...0?????????*1.1.1.
Railroads
Inland waterways
Traffic through West Baltic ports
4.10.1,???
70 to 90 million mote
por annum?"'
6 to 9 million m. t.
per annum
4 to 6 million Ms 17,0
per annum
Total 80 to 105 million m. t,
1,4?11.....,?????????????.,
114.11.1.001.0.1.
per annum
If the Kiel Canal were kept open, another 20 million tons
annum could be moved via Hamburg.
3. Conclusions.
per
In round figures, aniLcipated Enst-to-lIcst freight traffic
requirements of 68 million metric tons in the first year, and 75
million tons in the second year compare with a capacity of at leasi
80 million tons, and possibly as high as 105 million tons (excluding
the Kid l Cann1). The availabl,, capacity thus seems adequate to handle
the estimated load; but at first sight, thorn appears to be little
lc- way.
It should be noted, however, that the capacity estimate is on the
low idu, Pith carsfla planning much of the present "local" traffic
could hr .moved over secondary lines, or by truck, or a combination of
these two modes of transport. Road tomsNrt capacity, in particular,
V- The lower estimate assumes 4 double lines at i!.0 trains per day,
plus 8 single lines at 15 trains par day, equal to 230 trains each
way per day, of which 210 (7!) are freight trains, averaging 900
tons capacity. The higher estimate assumes 50 trains per day in
each direction on. double lines, and 20 on single lines, Full
potential reached in six months. The assumptions on which these
estimates are 1.rlsod indicate that the margin of error may be
wide.
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could be incroasEd considerably by moving trucks to the critical areas
and by spc( ding truck turn-around. In an emergency, a larger proportion
of the (xis tin! capacity could thus be made available for long distance
E.%st-,WoElt traffic. Lin: cap-city could, moreover, be increased quickly
and cheaply by putting in additional sidings, by installing, better block
syotoms, or by converting single track lines to one-way trafCic. A
combination of these measures might add at least 7 million tons to lino
capacity in the first year and about 15 million tons by the end of the
second year. Finally, the second track could probably be restored on
East-German main linos in about 12 to 18 months. No East-West transport
bottleneck should, therefore, be anticipated except in case of severe
destruction.
In the absence of war damage, no serious transport problem is
expected to arise in any other area, Italian coal requirements, amount*.
ng to about 9 to 10 million tons, could be supplied en ti rely. by rail.
Italian shipments of pyrites (L00,000 tons) and sulphur (200,000 tons)
northward by rail would ratio no problem. Shipments of pyrites from
Spain (1.5 million tons) and Portugal (700,000 tons) to other 1,estcrn
European countries would n.itially be a problem because of the poor
condition of the Spanish railroads and the necessity of transshipment
at the border. However, this problem is not of such magnitude that it
could not be solved within a relatively short time. Moreover, it is
reasonable to expect that some coastwiso traffi c in the Mediterranean
would continue in spite of the blockade.
B. Coal
Continental Western Europe is normally self-sufficient in coal.
Western - European coal production declined sharply during the war, how*.
ever, and its postwar recovery has not kept pace with that of other
industries. Coal output in the Ruhr has not quite IN,.:gained the prewar
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(1938) 1.-c(01, dicspito a considerablo increase in the mine labor force.
The some is true of the Netherlands. In France, the Saar, and. Belgium,
coal production is equal to or higher than prewar;Obut in theso countries,
too, output, per manshift is still below the prewar norm. Coal production
in all of these countries is limited primarily by the lack of develop.
mont and modurnigction, which can be componsatod only in part by
increased omployment of labor. As a result, the sharp increase in the
demand for coal which occurred. after Karon could not be satisfied
from indigenous production, and during 1951 CE had to import about
42 million metric tons of coal, or 13 percent of its apparent consumption.
Of this amount, about 9 million tons came from. Poland, 1 million tons
from Czechoslovakia, 6 million tons from the DK, and. 26 million tons
from the TS. In 1952, OWE is coTected to import about, the some
quantity of coal as in 1951, After 1952, the Western European coal
deficit is expocted to decline as current and planned mv os tmorits in the
European coal mines come to fruition.
Of no 42 million metric tons imported in. 1951, about 8 million
tons wore added to stocks. Continental Western Europofs net dopendence
on coal imports was, therefore, only 34 million tons out, of a total
consumption of 312 million tons, 1/ or 11 percent of actual consumption.
Imports from the Soviet, Bloc amounted to 3 percent, and imports from
overseas (US and TR) to 8 percent of actual consumption.
If Continenta2. Western Europe were over-run in mid-1952, coal
production would undoubtodly fall; but output could probably bc brought
back to the pre-occupation levol by. FY 19A. Imports from Poland could
be increased to around 20 million tons. (in order to minimize the
burden on the East-host transportation system, Polish coal would probably
be shipped to Scandinavia, Finland, Austria, and Yugoslavia, over North-
South routes. Sue Coal consumption in FY 1954 would thus be
only slightly lower than in 1951.
IT Hard, coal and lignite, in terms of hard cool equivalent..
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VW* am. =Mb mr?M,
To be sure, requirements would incTean. Petroleum products arc
now contributing about 14 percent of Continental Western Europe's total
energy r.Qquirements, equivalent to about 450 million metric tors of
bituminous coal. With the civilian petroleum supply reduced to one-third,
at least 40 million tons of coal would, therefore, be required to make
up for the reduction in the petroleum supply. /
Increased military production, with the accompanying rise in the
propOrtion of heavy industrial and synthetic products in the industrial
product mix, would also tend to increase coal requirements, On the other
hand, certain other requirements wuld be reduced, including bunker coal,
and cool requirements of consumer goods industries, Coal alloc-tions
for space heating could undoubtedly be reduced, Electric utilities
which have made incrensin demands on the coal supply in recent rears,
could probably get by with alloctions approximately equal to thoe
received in 1951, as increased power requirements by industry would be
offset, and. perhaps more than offset by automatic power savings due
to blackouts and. brownouts (see IV-C, below). It is probabla that on
balance-, Western European coal supplies would be adequate to moot all
ass en id al renin rements
ThE, Sovi,t Bloc, which produced about 450 million metric tons 2/
in 1251, is s(if-suUicient in coql. Production is expected to increase
to 471 million tons in FY 1952 and 5)16 million tons by FY 1954. These
supplies would be ample to satisfy essential wartime requirements in the
Soviet Pine, with a margin of about 20 million tons cqhich would be avail-
able for export to CIJE.
2/1-11lis does not take account of the lower efficiency of coal compared
. with petroleum products in certain uses.
L/ Hard coal and. lignite, in terms of hard coal equivalent.
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?...? ammo 0010.1 ????? WOW* OF.
C. Electric Power
Without exception in either the Soviet Bloc or the Western European
nations, the trend in electric power production has been continuously
upward, and it is expected that this trend will continue.
Electric power production in GUE is expected to reach an annual
rate of 215 billion KWH as of mid-1952, of which more than Mf is
hydro-power. There would. probably be some expansion of generating
capacity under Soviet occupation., though the rate of expansion would
be less than. in the past few -roars. However, if necessary, output from
the existing generating capacity could be considerably increased through
additiona hours of utili7,ation.
Electric power production in. the .U5311 will amount to about 120
billion KWH in 1252, of which only 15 percent is hyd:ro-,power. -by
1954, electric power production in the USCJE should. reach about 150
billion KWH. Production for the total 3oviet Bloc, estimated at 173
billion ra: in 1952, is likely to increase to 213 billion KWH in 195114
Under wartime condit industrial demands for electric power
would undoubtedly increase faster than normally, but other demnds for
electric pow,,T would increase los L, than normally, or perhaps even
de.clino? as a result of brownouts and blackouts. It is likoly, therefore,
that electric power output would be adequate to meet the total demand.
D. Hotels 1/
1, Steel.
Crude steel production. in Contdnental boo torn Europe by mid-1952
will probably run at an annual rate. of 113.5 million metric tons. This
-
will not only be enough for internal consumption requirements, but will
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leave about 10 million tons available for export. 1/ Crude steel output
in the Soviet Bloc is expected to reach an annual rate of 41.5 million
tons by mid-1952. In the event of Soviet occupation of CUE, the Soviets
would command a combined crude steel production of 85 million tons as
of mid-1952. The level of civilian, and military production which this.
quantity of steel could support may be judgad by comparing this figure
vith the average annual U5 steel output during 1942 to 19U, of 80 million
metric tons. Access to Western European production would eliminate the
steel shortage now experienced in the Soviet Bloc?particularly in the
Satellite countriesas OWE could mdce substantial surpluses available
to the USSR (at least 10 million tons), and still retain sufficient
supplies for civilian and military production.
While crude steel production in the Soviet Bloc would continue
to increase to about 119 million metric tons by mid-195)41 further
Irv,Imain. Western European crude steel output would. probably be
impeded by shortages of iron ore and scrap. Although Sweden would be
capable of producing for exbort some 16 to 17 million tons of high-grade
ore? only about 9 million tons coald probably be ship ad in the fire
year Of occupation because this apears to be the maximum ament
which can at present be moved through. Swedish Baltic ports. About 3
million tons of this would be shipped to Poland and. Czechsolovakia;
6 million tons would go to CUE, Total. Continental Western. European
domestic ore prodlticAl would. be about 75 million tons, but its average
iron content is only 33 percent, as comared with (0 percent for the
Swedish. or.. The total quantity of iron ore expected to be available
for consumption in CUE plus circulating scrap would yield only about
34 million tons of metal. It is unlikely that CUE could collect more
than. 6 million tons of old scrap annually. Total crude steel production
1/ 'Crude steel oeuivalent of net steal exports (mostly in form of
finished steel).
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wouldlthcmforc, probably not exceed 40 million tons per year. Now.
ever, if necessary, transportation and loading facilities for moving .
iron ore through the Baltic could be expanded, and Continental Wstern
European crude stool output could then be increased. to about 45 million
tons, as coke and manalese supplies aro expected to be ample. Full
utilization of the existing capacity of 49 million tons appears to be
precluded by the age and condition of the equipment. Furthermore,
there would be problems arising from the limited capacity for rolling
the specialized types of products needed .for military end products*
2. Aluminum.
'Acquisition. of the Continental Nbstern European aluminum produc-
tion capacity of. )450,000 metric tons would increase the 5o'viet Bloc
potential from 288,000 metric bons in mid-1952 to 738,000 tons. By
mid.19541 the combined capacity would. reach about 800,000 tons.
Continental Western Europets capacity- at present is not fully utilized,
primarily because of power shortages; but under wartime condftions,
sufficient electric power would undoubtedly be made available. Full
utiliation of 'the available aluminum production capacity would require
about )4 percent of the total available electricity in the combined area,
If consumption in C'ffE were to continue at levels comparable'to
1951, demands would. be a:omit 300,000 tons, leving 150,000 tons avail-
able for export tb the Soviet Bloc. If necessary, civilian consumption
in. OWE could be further reduced and well over half of the total output
could be diverted to military production in OWE or the Soviet, Yloc.
3ubst/11.1 quantities would undoubtedly be used to substitute for
other materials, particularly copper,
3. 14:Agnoilmi.
Production of magnesium is gbxod to current market demands which,
in turn, are closely- associated vitae the maaufacture of armaments*
Plant capacity in OWE and the Soviet Bloc, including potential capacity
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in Western Germany which is partially dismantled, is estimated at
30,500 metric tons per year. Raw materials are available within the
area.
4. Lead.
Nine prodrution of lead in. 1951 in the combined aroa is estimated.
at about 410,000 tons, or nearly (0 perc,nt of apparent consumption of
primary load. By mid-1954, prodution. could be increased to about
470,000 tons. Together with lead obtained from secondary recovery,
those supplies would be adequate for essential industrial requirements*
. Zinc.
)
The soviet Bloc is a net importer of zinc. In. 1951, the Bloc
is believed to have produced. aboUt 225,000 metric tons of primary zinc,
as compared with an apparent consumption of some 300,000 tons* By
mid-954, Soviet Bloc production of primary zinc could probably be
increased to approximately 260,000 tons.
OWE is also a net importer of zinc, In. 1951, the arca- prOducdd
some 300,000 tons of zinc from domestic mines, and consumed about
1480,000 tons. By mid-1954, mine production could probably be increased
to about 3),10,000 tons.
Essential civilian requirements in OWE amount to some 100,000
tons per year. Armament -preAuction on the scale of the present NATo
program would require approximately. 80,000 to 100,000 tons of zinc
annually. About 100,000-160,000 tons would, therefore, be available
for export to the Soviet Bloc which, together with Soviet Floc produc.,.
tion, Would be enour:h to meet the military and, essenti,lcivilian
requirements of the &viet Bloc.
6. cobalt,
_ ?
Cobalt is important in the production of certain alloy stools
used in military equipment. Production of cobalt in OWE was negl'Fible
in. 3,951, but it could be increnod subLitantinlly, -particularly in Finland.
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By mid-1954, production-in OWE could be stepped up to about 600 to
900 metric tons or one-half to two-thirds of apparent consumption in
1951? Apparent consumption in OWE was about 1,300 tons, with signs of
a critical shortage developing by mid-1252.
Cobalt production in. the Soviet Bloc, amounting to about 950 tons,
is believed to cover present requirements. By mid-1254, production
could. ,:)robably.be increased to 1,500 tons.
It may be as;:umed that the bulk of cobalt available after mid-1952
mould be assigned to military production since essential civilian require-.
m.unts are negligible. Where positle, other metals, such as vanadium
would be substituted for cobalt.
7. '1,'1-rt-'nu'r
-Consumption of molybdenum in OWE totalled about 2,000 to 2,500
tons in. 1951. Productioni was insignificant. Production of molybdenum
in the USSR.? estimatod at 15)150 tons in. 1951, plus receipts from China,
do not moot US-J,R recuiroments? and. thorn is also a shortage in the
Satellite countries. Tbos deficits can, however) he Not by substituting
tungsten, which for many uses is superior to molybdenum. The available
molybdenum should be sufficiont to meet the small non-substitutable
requirements? for instance in electronic tubes :In. both Wstern Europe
and. the Soviet Bloc.
8.
In. 1951, apparent consumi7tion of nickel in OWE was about 18,000
tons. Productdon was insignificant. The Soviet Bloc, on the other
hand, produbed a slight surplus over its requirements of ar)und 25,000
tons. r: mid-195/1, Soviet Bloc production could be increased sufficiently
to cover about 7 ercent of the 1951 apparent consumption of the
combined area. Stocks already accumulated in the 6oviot Bloc could.
provide additional supplies.
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9.
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TIr
Ad-192 t L, pr diction C'1', and. the ;.ovi.2.t Ploc
Lolbind is expected to be at the rate of about 15,000 metric tons per
year. Inventories in the USSR are estimated at 10 to 15,000 tons. By
mid-1954, the production of the combined area is likely to increase to
more than 18,000 tons. Tht,se supplies are sufficient to meet all
requirements indefinitely and are large enowh to offset the molybdenum
deficit by substitution.
10. Vanadium.
There is P- current production of vanadium in CAE. During World
War II, the estimated annual capacity in Axis Juropa for processing
vanadium from iron ore sings was about 1,000 metric tons. Production
was discontinued after the war. Estimated vanadium production in the
Soviet Bloc during 1951 is 1,0.5 tons and is expected to increase to
1,825 tons by mid-194, Current vanadium production in the Soviet 'Bloc
apparently meets consumption and stockpile requirements. It is estimated
that vanadium requirements for the combined area could be
met during the period under consideration by exports from the present
Soviet 'Bloc to CIPTE and the reactivation of slap recovery in Germany.
11. Manganese and Chro-itc.
The USSR Produces sucl; large quantities of the so metals that the
smell Weston. European supplies could easily be augmented to meet all
no niiirements.
E, Chemicals
. . _ _
Acquisition of Continental Woster, Wrope would more than double
the Soviet production capacity in basic chemicals. The production
capacity of the combined area would be more than adequate to sustain
a major war effort indefinitely.
1. Sulphurous laterials.
In 1950, C1RIE consimed 2.9 million metric tons of sulphur in all
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its forms. In 1951, apparent consumption rose to about 3.3 million
tons, but this probably included, some additions to stocks. CPE imports
some sulphur from other areas, including the US; but these imports are
approximately offset by exports, primarily from Italy, Spain, and
Portugal to other areas (includinF the PK). CWE as a whole could be
self-sufficient in sulphur if the entire surpluses of Italy, Spatn
and. Portugal. wore retained within the area. Total production of Mi;
in 1951 was 2.9 million tons; by mid-1952, it is expected to rise to
3.2 million. tons. Most Of the Igestorn European production is based
on pyritos; but Italy produces about 200,000 tons of native sulphur,
and another 200,000 tons is producod in the form. of recuperated suipnur.
The USSR, which produced about 1.2 million tons of sulphur in
1951, is self-sufficient in sulphuroas materials, The European
Satellite's, on the other hand, are short of sulphurous materials and
depend partly on imborts from Southern Europe. With the acquisition
of the Southern European deposits by the Soviets, total sulphur
? supplid s could undoubtedly be redistributed in such a manner as to
satisfy .all essential requirements in the combined area. To be sure,
demands for military production would increase, but this would be
offset by reduced demands for fertilizer production, which would be
limited by other factors. Also, total nrbduction of sulphur ih all
its forms would probably increase, particularly in the Soviet Bloc.
The transportation of more than 2 mil/ion tons of pyrites from
Spain and Portugal would raise somd problems; bat these could probably.
be surmounted (see Section. TV -
Processing facilities for making sulphuric acid are more than
adequate. Production in. the Soviet Bloc, amountin. to 4.4 minion
tons in 1.951, is expected to rise to 5.7 million tons by mid-1954.
Production in DE, amounting to 7.1 million tons in. 1951, will. increase
to 7.5 million tons by mid-1952. The total production of the combined
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area in 1951--11.5 million tons--was almost equal to that of the US.
Between one-third and one-half of the Western European output was used
in the Manufacture of fertilizer.
mmonia..
Ammonia is derived from two major sources: (a) As a by-product
of coke ovens and manufactured gas plants; (b) Through the fixation
of atmospheric nitrogen. The principal uses are in the production of
fertilizer and. of explosives. Durine wartime, increased production of
explosives is made possible in part by increased ammonia production,
and in part by reducing the production of nitrogenous fertilizer.
In 1951, CUE produced. about 1.7 million_ tons Of synthetic ammonia
(in terms of pure N). The estimated. production capacity was 2.1
million tons. Production in the Soviet Bloc amounted to 1 million.
tons in 1951, and further expansion of production facilities should
raise this to about 1.2 million tons by mid-19514. The total output
of the combined area would be sufficient to meat all essential
requirements.
3. Chlorine.
. .
Chlorine is a chemical of groat importance for the manufacture
of a large variety of products, includinp rayon, pulp and paper,
synthetic elastic materials, and chemical warfare agents. The produc-
tion of chlorine in the Soviet Bloc is small--about 500,000 tons--and
constitutes a potential bottleneck. However, acquisition of CWE--with
a production of about 600,000 tons--would more than double the chlorine
production capacity of the Soviet bloc. But even with the inclusion
of CWEI the total Soviet Bloc production, amounting to about 1,1 million
tons, would be only about half of that of the US. Careful alloca-
tion of chlorine to the most essential needs would be necessay.
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Liquid chlorine is difficult to store as it must be kept in
C ontainers capable of withstanding very high. pressures. Tho quantity
that can be stored is, therefore, limited to less than one month's
production. The availability of tank cars for the transportation of
chlorine, which must be of special do sin and able to -withstand high
pressures, may also raise a problem. Chlorine production requires
large quantities of electric power.
4. Carbide.
Approximately one-third of .the production of carbide in most
countries is used for the production of acetylene for metal cutting
and welding,. The balance is used for the production of a long line
of chemicals and s7nthetic rubbers. Carbide is also used for the
production of eynamido fertilizers; but this requirement can be easily
curtailed, to release carbide for other uses.
Production of carbide in t113 Soviet Bloc in. 1951 amounted to
1,2 million, metric tons, substantially more than present US produc-
tion. Production in (TWE was even p;reater?more than 1, 4 million
metric tons. A large proportion of the Soviet Bloc production is
used in the production of synthetic rubber. Carbide, like chlorine,
requires largo qunntities of electricity for its production. The
total production capacity for the combined area is ample to meet all
essential requirements.
5 Load.
Tetraethyl load is important in the production of aviation
gasoline. It is believed. that the USSR, with a production of between
5? 000 and. 7,000 tons, covers its requirements and probably has eXCOSS
capacity over its requirements. CW, on the other hand, produces
only about LI.,300 tons--most of this in France?and depends on imports
from the UK and the US, However Continental Western European production
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is scheduled to increase to 6,000 tons by mid-1952, and could be
expanded further in a fairly short time. Production in the Soviet
Bloc is also likely to increase substantially.
F. Rubber
In 1950, Continental Western Europe consumed almost 400,000
metric tons of rubber* Almost 85 percent of this was imported?nearly
all natural rubber; the balance was from reclaimed rubber.
Consumption in the Soviet Bloc also amounted to about 400,000
tons; but nearly two-thirds of this was produced within the area
(somewhat less than half in the form of synthetic rubber, and more
than 15 percent in the form of reclaimed rubber). Imported natural
rubber contributed only a little more than one-third. Synthetic
rubber production in the Soviet Bloc is being expanded rapidly and
is expected to reach 257,000 tons by FY1952. In addition, the
'Soviet Bloc is believed to have accumulated stocks amounting to nearly
300,000 tons. Continental Western European stocks are about 50,000
tons.
-Assuming the outbreak of hostilities and the overrunning of
CWF by the Soviets in mid-1952, normal imports of natural rubber
would be stopped? It is estimated that only about 50,000 tons per
year could. be obtained by blockade running and other means during
wartime. Under present and contemplated plans for reactivating Western
German; Italian. and Swedi sh. synthetic rubber plants, with major produc,
tion in the Federal Republic of Germany, CWE could contribute to Soviet
EUrasian supplies only 17,000 tons of synthetic rubber in FY 1953 and
about 37,000 tons in FY 1954, in addition .to an estimated 75,000 'tons
a year of reclaimed rubber. Output from planned French synthetic
rubber capacity mould not be available before FY 1955, oven if plant
construction were started by mid-1952. Thus, in view of the limited
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stocks, CUE would be dependent on ti-m Soviet Bloc for the major portion
of its rubber requirements. The USSR and astern Germany would. have to
furnish most of the synthetic rubber for the entire area under Soviet
control.
1.).ring the two years beginning in mid-1952, about 440,000 tons
of synthetic and reclaimed rubber would be available per year in the
combined area from. indlgencus production. 1/ This would be sufficient
to cover about half of the estimated 1951 consumption. If, in addition,
about 50,000 tons of natural rubber can be imported. in each of these
yoars, consumption could rise to n arly 60 percent of normal. Consump-
tion could be further increased to about two-thirds of normal, if part
of the accumulated stocks were released. Between 450 000 and 600,000
tons could be made available for consumption each year without exhausting
stocks. On the basis of the available consumption pattern, it is
believed. that these supplies would be sufficient to cover all military
and essential civilian requirements.
0,0 Textiles
Continental Western. Europe normally imYorts about two-thirds of
its textile fiber supplies from overseas areas. If these imports
wore cut off, dom stic consmption of apparel fibers in the area,
currently amounting to 2 million tons, or about 9 Icc.s. oor person--
three times the per capita consumption in the Soviet Bloc--would
decline to about the same level as now prevailing in. the Ploc. Cotton
consmption would bo reduc-d to practically zero, and wool consumption
would decline to about 20 percent cf normal. NO relief could bo
expadted from an expansion of synthetic fiber output, as the basic
raw materials required for this nurrosa (coal, sulphur, etc.) would.
probably be allocated to higher priority uses. However, the output
of flax and hemp would undoubtedly be increased in an attempt to
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partially replace the iraports of hard fibers and jute from overseas
sources.
In Soviet Bloc countries, almost the entire 1.8 million metric
tons of apparel fibers curr.oily processed are from indigun-us sources.
These Processed fibers provide an annual domestic consumption of .1ss
than 3 kgs. per person. It is likely that fiber consumption in East-
ern Europe would not br, reduced much below present levels, and that
fibers would not be exported to CWE in significant quantiti
??-??
In view of the ample stocks of textiles and textile products
in the hands of consumers and distributive channels, OWE would not
be seriously affected for several years by the sharp reduction of
supplies of new textile fibers which would occur under Soviet occupation.
Increased reprocessing of fibers and textile products would also alleviate
the situation. Tho cutting-off of industrial fiber imports would create
some problems of adjustment, but the levels of agricultural and
industrial activity in. CW-z:, arc not likely to he materially affected by
these shortages. Current stocks of industrial fibers and products are
hiph and more systematic efforts would undoubtedly be made to re-use
them.
Soviet Bloc consumption of these industrial fibers is already
limited by the existing controls on East-st trade which great:Ly
reduced imports of jute, abaca, sisal and henequen by Soviet :Bloc
countries. Soviet Floc countries have replaced these imported fibers
increasintly by indigeneus fibers particularly flax and hemp, in the
making of rope, cordage, twin, bagging end other industrial products.
A further reduction of imports of hard fibers will have no serious :
effect on the Soviet Sloe.
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V. PRINCIFLL SOVIET GAINS
A. Introduction
1. Increase in General Economic Potential.
The main contribution of Continental Western Europe to the
Soviet military effort would be in broadening its economic base by
supplying steel, aluminum and other metals basic chemicals, machine
tools and other machinery, optical and precision instruments, elec-
tronic equipment, and transportation equipment to the USSR. The ex-
cess petroleum refining and metal smelting and refining capacity that
would mist in CUE under Soviet occupation would provide an important
cushion against war damage. In the loner run., the unlimited ability
of the Soviet Union to draw on Western Europe s technical skills, its
patents, and its industrial know-how, world be even more important,
CUE would be a substantial drain on the USSR in petroleum, but even
in this case Western Euro els essential requirements, amounting to
about one-third of normal, could be met without reducing civilian
consumption in the USSR by more than abont 20 nrcont below the FY 1952
loved. In food, OTqE would be a net rain to the USSR in the first year,
but a het liability from the second year onward as CWF, would require
sizeable Soviet shipments of grain and possibly some oil seeds -Oich
would be only partl offset by Soviet requisitions of livestock prod-
ucts in Western Europe, There would also be snme drain on Soviet
supp:.ins of certain non,ferrons metals and rubber.
2. Increase in Military Production Potential.
, -
Acquisition of CUE by the ussn would add_ a great additional
potential production capacity of arms and eonipment, which in a few
industry branches is grouter than that of the present Soviet Bloc
countries combined. Reletively little of this potential would, however,
be immediately mobilized in supnort of the Soviet war effort because,
with few exceptions, such installed and/or operational military
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?
production capacity as is currently available is coTaratively small.
Were the Soviets, therefore, to decide upon a large-scale arms produc-
tion in MT, aiming at the development of its vast potential, they
would face some of the very same problems as the member nations of
NATO in C',2E are currently facing in their offorts.to increase their
munitions production.
3. Problems of Cooversion to War Production,
The c nversion by the Soviets of ireatern European industry to
direct military production would be slower than conversion in the
ussn. Soviet industry is already largely converted since current
production of military items is high relative to the production of
civilian goods. Moreover, many Soviet pants, now producing civilian
goods, aro designed for rapid canversion (in some cases in about 90
days.) to war production, GT:T,, en the other hand, is on2y slowly
increasing its outaut of military items, and only slowly prcaaring
plants for rapid wartime conversion.
A few products of Western European Aadustries, such as
electronic equipment and certain chemicals could be quickly diverted
to military use. The electronics industry could. readily produce the
components for specialized items, such as radar, guided missiles,
and proximity fuzes. gaemica7s (such as nitric acid, ammonia, toluene,
benzene, phenols, and chlorine) could be immediately diverted from
civilian use to the manufacture of high explosives, chemical warfare
agents, and other war materials.
The raaidity of conversion in C7:12 would depend on the kind of
conversion attempted by the Soviets. There are two general courses
that could be followed: (1) Armaments production could be centered
in the Soviet Bloc, production in Western Euroe being oriented
toward supplying the Soviet armaments industry with materials,
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specialized machinery, technical and skilled personnel, and arms
components; or (2) armaments production could be divided between
ME and the Soviet Bloc. The first type of conversion could probably
be completed within one to two years, with increasing efficiency;
the second would probably require two t four years.
In general, under the assumptions of this study, the first course
is most likely to be followed in actual practice. In particular, in
armaments industries whore the USSR is strorr: (e.g., tanks, aircraft),
production is likely to remain centered in the USSR because (1) the
Soviets would axpect an Allied grcund invasion of CWE in. 1954; (2) arma-
ment production in CUE would be more exposed to air attacks. In combat
shipbuildin, on the other hand, the Soviets would probably make full
use of Western European shipyards. The Soviet decision as to which of
the two conversion planswould receive greater emphasis would, of
course, be influenced -reat1-7 by the extent to which the armaments indus-
tries in the USSR itself had suffered from air attacks.
1&. Problems of Standardization of Arms and Industrial Eouinment.
The problem 0- standardization which the Soviets would encounter
in. Ustern Europe is twofold. The first problem concerns standardiza-
tion of weapons, armaments, and munitions. The second concerns stand-
ardization of industrial. equipment. In the first ease, the Soviets
would probably not attere-t to standardize Western European military
production to Soviet types. Vauable time would be lost and production
woud.. be reduced durin the interval. Therefore, Wester. European arms
would probably be shipped to Chinese Connumist armies, to the Satellites,
or used to equip Soviet troops.
In 461c second case, Western European industrial equipment is
currently of the same general types as equipment in the USSR, The
Soviet Bloc could readily utilize superior items of equipment, such.
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as high-speed machiery, and special types of machine tools, without
any adaptation. Whereever specialized equipment could be utilized
for producing weapons and munitions of types and caliber different
from those in the USSR, the Soviets would continuo to produce the
Special types of weapons and munitions, if expedient, or adapt the
equipment for use in 6oviet plants.
B. Sectors which world Make Major Contributions
+ -7-4- J- a- -I -
,0
Apart from Western European contributions of steel, aluminum,
lead, ,4nc, and basic chemicals- which aro dL3cussed in Section IU--
the most significant Western European contributions to the USSR wo-ld
be in machinery, electronic equipment, shipbuildirg, and to a lesser
extort, aircraft, and ordnance.
1. Machinery
Continental Western European production of machinery is consider-
ably larger than that of the Soviet Bloc, In some sectors of tht
machinery industry, OWE has surplus machinery Production capacity which
would be of great value to the USSR. Through the acquisition of OWE,
the Soviet Bloc, now handicapped by the lack of variety of machinery
for filling r3pecific needs, would c'ain a wider range of types and
sizes o machines.
Availability of special machinery in Cl!:E would permit the USSR to
concentrate on production of standardireed items required in largo
quantities. This would result in a larger quantity of machinery pro-
diced due to the resultlng higher efficiency in plant operation.
Alternatively, tle USSR could acquire Western European know-how c,nd
machine tools for the production of 7,Testorn types of' specialmachinery
in the USSR.
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Although the Soviet Bloc has reached a high level of technology
in machinery production, the skills necessary for its successful
application are less widespread than in the Vest. The adquisition
of CVE would provide the USSR with a much larger pool of highly
skilled engineers and workers than is available in the present Soviet
Bloc. Also, many technological developments in Western Europe have
not been available to the Soviet Bloc,
Of particular value to the Soviet Bloc would be the acquisition
of Continental Western Europe's productive capacity in metal-cutting
machine tools. Continental Western Europe's capacity for the produc-
tion of machine tools on a one-shift basis (about 150,000 units per
annum) is roughly equal to that of the Soviet Bloc on a two to three-
shift basis. Continental Western Europefs inventory of machine tools
(about 2.3 million units) is also considerably larger than that of the
Soviet Bloc (abort 1.8 million), Besides gaining quantitatively by
addAng enormously to its total machine tool inventory and production
capacity, the Soviet Bloc would gain eualitativelY by being able to
fill its present deficionci(s in gear-making machine tools, precision
instruments, jig borers aA. the like, and the larger azd heavier
machin tools (large 7ertical and horizontal boring.mills, planers, etc.)
w'lich are produced in CWE.
C7,7 has a highly developed automotive industry which in 1951
produced 825,000 pasener cars 367,000 trucks, and 16,000 buses.
This compares with an cstmated Soviet Bloc pro&ction of 85,000
passenger cr'rs, h5C.,000 trucks, and 5,101000 'Dupes. In the event of
a Soviet occupation of C111], all passenger car production could be
converted to armament production, as Soviet needs for nassenger
cars could be atisfied by confiscating cars in ClijE. It is estimated
that 4.5 million passener cars were re7isterod in CWE at the end
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,???? Um. ????? 4,11 41,4 OW,
of 1951. Most of the Soviet roluiroments for trucks and buses could
probably also be satisfied out of the existing inventory (2.7 million
in OWE, as compared with 1.7 million in the Soviet Bloc). Most of
the plants producing trucks, as well as those producing tractors, and
some of the plants producing locomotives and rolling stock could be
converted to almament production.
CAE would also be a very rich source of anti-friction bearings
to the Soviet Bloc. Its current output of 145 million units per year
is two-thirds larger than the estimated output of the Soviet Bloc
(88 million units). By piacirg its factories on a throe-shift basis--
which would require additional skilled labor and additional high-grade
bearing stool--present production in OWE could be increased to almost
300 million units a
Traditionally,
anti-friction beani
year.
Western Europe has supplied Eastern Europe with
gs. The quality of bearings, and the range of
typos and sizes of bearings produced in Western Europe have boon far
superior to Soviet Bloc production. It is estimated that over 30
million bearings are now being imported by the Soviet orbit from
Western Europe. The acquisition of OWE by the USSR would eliminate
the shortage of anti-friction bearings in the Soviet orbit.
2. aectronic Equipment.
The acquisition of OWE would increase the Soviet production of
electronic equipment almost fourfold,
rate as of mid-l92 is 252 million U.
Bloc, and 695 million dollars in
The estimated annual production
S. dollars in the present Soviet
Moreover, since the Western
European electronics industry is currently working on a single shift
operation, production in OWE could be increased further. A 75 per-
cent increase is bAioved possible githin one year, Kivor a two-shift
operation. The Soviet potential in this field would thon be nearly
seven times what it is today.
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- The electronics industry in CWE is well-equipped to produce
the four main categories of electronic items: (1) tubes; (2) radio
pqnipment; (3) telephone and telegraph equipment; and (4) cable and
wire. Although production in specialized electronic equipment, such
as radar, is currently not on a large scale, there are ample produc-
tion facilities for producing such. equirment. Electronic r,:4.9c,aroll
in OWE is on a par with that in the US.
West Germany has the largest potential capacity for electronic
production on the Continent of urope. The industry is currently
operating at about 60 percent of capacity, based on one-shift opera-
tion. Telefunken and the German branch of Philips account for 75
percent of the tube output, while Siemens and Halske and AEG are
the larest telephone and telegraph producers. Radio equipment
accounted for 45 percent of tho 1951 total electronic production,
with telephone and telejraph equipment accounting for 25 percent
and tubes 10 percent of total production, Western Germany's cable
and wire capacity is greater than. that of any continental European
country and accounts for 20 percent of Germany's present electronic
production.
In the Netherlands, the radio and tube sectors of the industry
occupy the predominant position. The leadership in this field is
held. by Philips, not only in the Netherlands but in all. of Europe.
Philips would. be one of the greatest single assets in the Soviet -
acquisition of Tolster71 Europe, This company has the knowledge, skill,
and production. facilities lac.:ssa.xy to produce any of the special
items required by the USSR, including the facilities to produce radar,
sub-miniature tubes for VT fuzes (on which considerable research work
has been done), and electronic parts for guided missiles.
The present French electronic production can be increased by
30 pol.cont without changing the present one 8-hour shift per day.
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ilm.? Immil =ION *WWI
France is one of the few countries in urope currently engaged in
the production of radar, though on a small scale. Most of Swedunts
electronics production is devoted to telephone, telegraph, wire and
cable manufacturing (75 percent). Radio accounts for 17 percent and
telephone repeater tubes for the remaining 8 percent. Switzerland
also possesses a diversified electronic industry. The technical,
research, and production skill of the industry is high and it is
capable of producing all of the specialized items required by the
Soviets, including radar, VT fuzes, and electronic parts for guided
missiles.
3. Shipbuilding
Soviet acuisition. of CW7 would add greatly to the present
Soviet naval and merchant marine construction capabilities. The
present limited scope of naval construction in CWE, however, would
make the immediate gains to the Soviet small.. While few naval vessels
would be captured, a considerable portion of Cts large merchant
marine would fall under Sovi t control. As concerns underwater weapons,
mines, torpedoes, and component parts, CWE--particularly Western Ger-
many, Italy, and. France--would add considerably to the present Soviet
production capacity.
CWMs merchant shipbuildinr capacity', as of mid-1952, computed
at 2.9 million ?Toss tons (tonnage which can be under construction
ateny given time), is more than ten times greater than that of the
Soviet Bloc countries combined. The estimated annual rata of produc-
tion in CWE of 1.5 million gross tons as of mid-1952 may bo compared
with 109,000 tons in the present Soviet Hoc. In the event of Soviet
acquisition of C.7,7, production would probably drop to about one-third
of the mid-1952 level. Even so, production in CI 7 would be more than
three times the production capacity of the present Soviet Dloc countries.
Since the end of World War IT, shipbuilding plans in CWE have been
weighed heavily with tankers and passenger ships, but principally
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with tankers, particularly in Holland and Sweden. In the corttruc.
tion of merchant vessels, shipbuilders have been turning more and
more to the use of diesel power. In general, the trend has been
toward larger, faster, and mor- powerful merchant vessels. The
Soviet Bloc countries so far have produced no significant program
of more ship construction.
While the merchant ships under construction. in OWE would
probably fall into Soviet hands, a far more important gain would be
in the Soviet acquisition of control of a sizeable part of the merchant
shipping inventory of CW, estimated to total 24,3 million gross
tons as cf mid-1952, compared with 997,000 tons in the present Soviet
Bloc countries,
.Soviet gains resulting from the acquisition of Western Europoan
navy yards would be impressive, but currently existing production
conditions would greatly induce any short-run benefits to be derived
from it. As of mid-l92, the annual capacity in ONE is computed at
1.1 million standard displacement tons, equivalent to 2.6 times the ?
naval construction capacity of the present Soviet Bloc countries.
Production is, however, far below capacity. in OWE, with only about
112,000 tons under construction by mid-1952, compared with an
estimated 23,000 tons in the USSR, Now construction is not expected
Lo become a significant factor, as least in the first few years.
Rathor than employing the OW naval shipyards for any construction
of major combatant types, it is believed that the capacity would
be utilized for (a) repair of both naval and merchant vessels:
(b) construction of minor combatants; (c) construction and conver-
sion of merchant vessels.
The Soviet Union and hGr present .Satellites are believed able
to maintain their present trend of naval construction indefinitely.
With the acquisition of cipf, however, the program could. be speeded
up as materials and components could be obtained in Western Europe.
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ImAn Nam. AAA ???? mu. .0./0
? (A. conservative estimate of GerMany's effort in submarines alone
during 1944 is around. 300,000 tons.)
Most of theeoperationsl naval ships of the CT E nations
(approximately 816,000 tons, mid-1952) are assumed to escape to
friendly Allied ports. before a Soviet advance into Western Europe.
4. Aircraft.
The Soviets would acquire a considerable production capacity
in CW3 in air fr%mes and acre engines. The air frames production
capacity of CNE, as of mid-1952, is estimated at about 17,700 air
The acro engine production capacity in CTE, as of mid-1952,
is estimated at about 18,000 engines.
The actual production. of aircraft in. CW in 1951 was only
1,572, including about 640 combat planes, 350 of which are jet fighters.
It is estimated that CW aircraft production will run at the rate of
nearly 1100 per annthq by mid1952, but even so it will be only a
small fraction of the aircraft production in the Soviet Bloc. .1/
Whi1,2 present capacity in CWS would permit aircraft production to
be increased Ln-fold, actual output under occupation conditions is
expected to be far below that firure. If the Soviets choose to utilize
the acquired production facilities fully, it is estimated that five
years would be required to reach the above capacity fie:tires. Produc-
tion in Western Europe during the first year of the occupation would
probably be not more than 5 percent of its capacity, duo to problems
of disorglnization, reorganization, retooling and shortages of skilled
personnel,
In view of the relatively small addition that the aircraft indus-
try of CtirS could make to the Soviet Bloc aircraft inventory and to the
USSR's annual production, the Soviets would. probably not attempt to
mass produce aircraft in Western Europe. The Soviet expectatiou of an
Allied ground invasion in 1954, as is assumed for this study, and the
25X1 1/ S,5?TEnex 6
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MM.. Os. mow Mint NOM OW.
greater possibility of Allied air attack on aircraft installations
in CVE also support the thesis that aircraft production in 'Western
Europe would not be stimulated by the Soviet occupation. It is,
however, likely that some sections of the aircraft industry and person-
nel of DIIS would be transported behind the border of the USSR and that
the remainder would be used for the repair and maintonmlce of the Soviet
Air Force operating in Western Europe.
Ordnance,
Tho USSR could acquire in GEE under optimum conditions an
estimated. annual production capacity, by mid-1952, of some 8,700
armored vehicles equivalent to 14 percent of the capacity of the
present Soviet Bloc. The USSR would also acquire some of the 15,500
armored vehicles now inventoried as in-bein in OWE, In addition,
the USSR would gain an estjAated annual production capacity of about
1.0,000 artillery- pieces, 75mm and above, which iS equivalent to
about 9 percent of the capacity of the present Soviet Bloc. Some
of. the 20,500 artillery pieces now inventoried as in-hen. in OWE
would also fal2. into Soviet hands. The estimated annual production
capacity of 334,000 metric tons of explosives in CVE by mid-1952
is equivalent to 37 percent of the capacity of Soviet Bloc countries.
The annual rate of production of explosives, military and industrial,
in 0E, is estimated at alyAlt 200,000 metric- bons by mid-2952, as
compared with 390,000 metric tons in. the Soviet Bloc.
While the estimated production capacity of armored vehicles
in OWE is considerable, it is doubtful that the Soviets would utilize
this production capacity during their inititi.l.period of occupation
for other than repair and maintenance purposes, as it is currently
estimated that the USSR has some 60,000 armored vehicles in-being,
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which is adequate to support Soviet military operations for at
least a year. Utilization by the Soviets of the considerable
production capacity in OWE would be largely determined by the extent
to which production facilities in the USSR are damaged by air attacks.
As in the case of amored vehicles, the USSR is believed to
have an impressive inventory- of artillery pieces, including 110,000
ploces of 76mm and above. Also, by mid-1952, it is estimated that
the USSR will have a production capacity 10 times larger than that
of OWE. It seems doubtful, therefore, that the Soviets would feel
any great need of exploiting the artillery production capacity of
OWE to its maximum, However, in view of their anticipation of a
seaborne invasion, it seems probable that the Soviets would direct
a portion of the OVE artillery capacity to tne production of coastal
and antiaircraft Funs.
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(
SEC T.TRI TY INFORM. 57.011
d:i.s 1.., rib u.t ed s c....,71 rate iy )
NT E- )10 ( ECONOMIC )
AN .,1. EX 1
PETROL 1.1LJ.j 517PPL:1 5
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Next 9 Page(s) In Document Exempt
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SEC URI TY INF?RidtTIO N
NIE ( ECG NO MI C
ANNEX $
Altri.) BA LA NC E
(,OT I griTNTH.L-Thra:, TERN 2,11113
CO NS UMP TIO I Yi 191-52, 1952-53 , and 1953-54
????? ?????? 1.0161) 0?1?0
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COli-TINENTAL ASTERN EURC';'h*
Advance estiraace of food sue lies, consumption year 1951-52
Supply
(excluding alcoholic Leverages)
lizati on
Population. 243,841,000
food
Proddc- Trade
tion
:
ligelfV-3aa t;t e sply
Tor
----
fotal :seed
supply : and
:waste
Indus-
trial
Total
: Total
F7,,ross
:
Per Capita
&tr.:
Per Year
ier .J ay
rate :
uross
1,' E T
A
s.
k23.s.
Calories
1,000 metric tons
Viheat and
rye
(Dom.)
(Tota1)
33,791
33,791
- 435
+8,228
*7,793
33,356 4,4154
8,228
41,584 4,454
2,802
40
2,842
71
71
7,327
40
7,337
26,029
8,188
34,217
80
80
80
108.7
1:05..
85.3
26.9
112.2
840
265
1,105
Coarse
(Dora.)
31,578
- 434
31,344 4,246
22,507
1,417
66,930
4,l4
'/I--A
18.1
14.1
141
;rain
1 -.p. )s
-5,533
5,533
4,355
311
4,61-
834
78
3.4
2.7
67
(Teta].)
31,578
-53.9-11
36,877 2,946
46,925
1,758
31,649
5,-48
78
21.5
16.8
168
Race
(Dom.)
886
- 193
687 46
3
7
56
631
2.6
25
cim,.)
- 301
301
301
1.2
12
(Total)
880
* 108
988 46
3
7
56
932
3.9
37
Sugar
(Lo:-.)
41,717
- 448
4,409
15
lb
4,154
16.3
194
(Imp.)
* 929
949
949
3.8
40
(Total)
4,717
1 651
5,598
15
15
5,343
22.1
234
Potatoes
(Dom.)
64,655
- 379
62,676 14,703
17,755
1,844
34,302
7,974
114.7
219
22eat
(Dom.)
3,554
- 527
8,027
6,027
32..9
207
8
(Imp.)
307
307
307
1.3
(Total)
8,554
- 220
1,334
8,334
64.2
215
;.-ts
Dom.)
3,28
- 372
2,916
407
4.07
2,332
10.3
232
(I[2.)
-1,635
1,635
400
453
.1,18_
4.8
108
,.ectal)
3?83
+1,,83
4.551
860
460
3,621
15.1
340
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TC,TAL CLIf:RIES =ICA 'E'D A304E: STIC 1,858 IYPORTED 460 T0TLL INDICATED ABOVE: 2,318 Danestic '4,"K163
CALORIES FROM "_?:!"FIUR 395 35 TOTAL OTliEtt 430 Imported 455
2,253 495 2,748 Total 7,748
* !nciaaes the following countries: Austria, Belgium, De/IL-Li-lc, Finland, Fran,e (includ(,s S-ar), Italy, Netherlands,
:orway, Portugal, S:Dain, Sweden, Switzerland, Western Germany kincludes 6est Yugosiavia.
-2 -
S-E-C-R-E-T
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Supply
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S-E-C-R-E-T
CONTINENTAL ESTERN EUROPE *
Advance estimate of food supplies, consurilption year 1952-53
(excluding alcoholic beverages)
Utilization
Population: 245,481,000
:Produc-
: tier
Change in
stoe.fs a/
Total
supply
onood uses
Supoly for food
:seed
: and
:waste
Feed
'Indus-
trial
Total
: Total
gross
:
Extr.:
Per Capita
Per year
Per day
rate :
Gross
N E T
1,000 metric tons
%
ko.s.
kgs. Calories
Wheat and
(flora.)
33,395
"13,395
4,375
1,990
60
6,425
26,970
90
109.9
95.9
940
rya
(Stocks)
4,2C5
2,205
4,205
90
9.0
8.1
77
(Total)
33,395
+2,205
35,600
4,375
1,990
60
6,425
29,175
90
118.9
107.0
1,017
Coarse
(Dam.)
30,550
30,550
2,900
21,154
1,242
25,296
5,254
80
21.4
17.1
168
(Stocks)
4. 570
570
570
570
(Total)
30,550
+ 570
31,120
2,900
21,724
1,242
25,566
5,254
su ,,,,
21.4
17.1
168
Rice
(Dom.)
1,122
1,122
35
3
10
68
1,054
4.3
42
Sugar
(Dom.)
4,544
4,54.4
15
15
4,529
16.4
195
(Stocks)
+ 2.10
210
210
.9
10
(Total)
4,544
+ 410
4,754
15
15
4,739
19.3
205
Potatoes
(Dom.)
62,700
64-,700
14,550
15,105
1,756
31,441
31,259
127.3
c.43
Vbat
(Total)
9,136
9,136
.9,136
37.2
234
Fats
(Dom.)
2,914
b,/
2,914
476
476
438
9.9
222
(Stocks)
4. 175
175
25
25
150
.6
14
(Total)
2,914
4, 175
3,089
501
501
2,588
10.5
236
S-E-0-R-E-T
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? d,
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T3TAL CALORIES INDICATED ABOVE K0Y CUHRENT PRODUCTION:
MAL, CALORIES PROlICZEER CURRENT PRODUCTION:
TOTAL CALORIES ..?P_OY 1952-53 PRODUCTION:
S-E-C-R-E-T
2,044
410
2,4-54
172.OiI STOCKS:
W Represents stocks held at beginning of 1952-53 year over and above pipeline
depending on country) and therefore, available for consumption.
b/ Includes 100,000 metric tons of whale oil from catch of Norway in Spring of
101 FROJK 1952-53 PRODUCTION:
?ROM SID C KS
TOTLL
supplies
2,454
101
2,555
(generally 1 to 2 monthts supply,
1952 assumed available for export.
Includes the following countries: Austria, Belgium, Denmark, Finland, France (includes Saar), Italy, 14etherlands,
Norway, Portugal, Spain, Sweden, Switzerland, Western Sermany ?cludes :,,est Berlin), Tugos1LTia.
S-S-C-R-E-T
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
CONTINENTAL iiESTERN EUROPE *
Advance estimate of food supplies, consumption yoar 1953-54
(excluding alcoholic beverages)
SUPPLY UTILIZATIO
Population: 247,126,000
Product
6.2 iih.:at and
rye (Dom.)
Coarse
-.1
grain (Dom,)
.c/ Rico (Dom.(.)
.S1/ Sugar (Dom.)
ve Potatoes (Com.)
Lout (Dom.)
IV Fats (Dom.)
..:.onfood uss
Supply for 1,bod
Produc- Trade
tion
b/
Total
supply:
: 8,,d
and
: asto
Food
Indus- Total
trial
: Tot-74T-
: gross
Per Capita
Ixtr.:
rate
PJF-Toar -7_, r -Day
: Gross
: '4
6 1
1,000 m6tric tons
.
kgs.
:kgs. =
Calories
30,056
30,056
3,938
1,791
54
5,783
24,273
90
98.2
88.3
839
2#,495
27,495
2,610
13,513
1,116
22,241
5,254
80
21.2
17.0
167
1,234
1,234
60
3
? 11
74
1,160
4.7
46
3.635
3,635
12
12
3,623
14.7
156
62,700
62,700
14,550
15,105
1,786
31,441
31,259
126.5
242
7,271
7,271
7,271
29.4
185
2,524
2,524
380
380
2,144
8.7
196
TOTAL aLLORIES INDICATED ABOVE:
1,.831
CALORIES FRO .;'2.0 'frz4-?iR PRO DUC TIO N:
410
iLTiL:
2,41
- 5-
8-E-C-R-3-T
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b
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Assumes 10 percent reduction in production and consumption of food as compared with 1952-53.
Assumes 10 percent reduction in production, but no reduction in consumption as human food from 1952-53
population should use a higher proportion of coarse grains in bread.
Assumes 10 percent increase in production - consistent with World ,:iar II pattern.
Assumes 20 percent reduction in production end consumption as food from 1952-53.
as
Assumes no change in production or- consumption pattern.
Assumes reduction in meat under 1951-52 production equivalent to the arwunt estimated as produced from imported
feed in 1951-52. i;o reduction based on decreasod feeding of domestic grains and potatoes assumed.
Reduction in slaughter fat and butter on same basis as meat.
World dar II low.
Norwegian production of marine oils assumed at
* Includes the following countries: Austria, Belgium, Denmark, Finland, France (includes oar), Italy, Nether-
lands, Aorway, Portug-1, Spain, Sweden, .awitzerland, ,iastern Germany tincludes Jest r,,rlin), Yugoslavia.
-6 -
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X1
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Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
S-E-C-R-E-T
SECURITY INFO Ri'vETIO
(ECO LDNIC
ANNEX 4
MET4LS
-E-C-R-E-T
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t,
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6-E-0-R-E-T
11WNEX 4
1951
EST1MLTED PRO DUCTIO Li? lin) liPPLRENT CONS',LITTIO1,T OF SELECTE
COHT=NT:-..L JEST_Zalt EUROPE .Li-[D SOVIET HOC
1951, MID-1952 t.).nd MID-1954
hdd-1952
TT-LS
idd-1954
Production -7
lqap!..rnt
L,onsump.
Production a/
Production
Unit
Continontl
fiestern Soviet
Europe Bloc To-La
Continont:..1
Zestorn
Europe
. Soviet
Bloc TotLl
-i:ostern
Europe
Soviet
Bloc
TotA.
Continc-nt: 1
ie stern Soviet
Europe Bloc
To-t-1
iduni- Thous.
nun
330
220
550
300
200
500
365
260
625
465
330
795
Inous.
Copper m.t.
92
272
364
663
300
9-63
92
278
370
115
325
.440
iViotric
Cobalt Tons
15
950
965
1,300
950
2,250
100
1,000
1,100
600-
900
1,500
2,100-
Thous.
LeA m.t.
235
175
410
470
250
720
250
185
435
260
210
470
Molybde-kbtric
num tons
150
1,450
1,600
2,000-
4,500
3,100
5,100-
5,600
150
1,550
,700
300
1,100
1,400
Thous.
Nickel m.t.
0.5
28.5
29,0
18.0
25.0
,3.0
0.8
30,0
30,8
1.0
31.5
32.5
Stool
(Crud) m.t.
41
38
79
31
38
69
43.5
41.5
85
40-
45
49
89-
94
Thous.
2.0
15.0
17.0
25.0
20.0
45.0
4.4
16.1
1845
3.7
20.3
24.0
Thous.
Tungsten n.t.
3.7
10.1
13.8
3.7
5.5
9.4
4.8
10.4
. 15.2
11.9
16.2
Thous.
Zinc 300 225 525
tlyi 1,11 production represents motl content of
,
Pridary mt1 oxcopt for stool.
c/ Possible 1-,aximu.a =u1 production which night be eehicvd.
480 300 780 310 250 560 340
280
620
Lino production with the oxcption of stoi
S-E-C-R-E-T
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Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
6-E-C-R-E-T
? - -
SECURITY IITURMATIO
Ii-o(ECOaiMIC)
5
RUB3az, SUPLY
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
Ti,TEX 5
Production
Total
produc-
tion
RUBBER SUP?LY
(In Thousnds of -.1..;tric Tons)
lnven- Im)orts IotL.1
tory a/ (w_tur:-1) supply
Syn-
tlictic
_
i?.o-
clf:..imed
FY 1953
6'63
17.1
75.0
92.1
50.0
815.2
Soviet Bloc
257.0
76.0
333.0
286.0
2%.1
151.0
425.1
340.1
50.0
815.2
Yoar-rld?stocks
FY 195
(NE
36.8
75.0
111.8
215.c.
50.0
723.0
Soviet Bloc
270.0
76.0
346.0
TOTLL
306.8
251.0
457.8
215.2
50.0
723.0
Yoar-end stocks
580.9
302.0
882.9
310.1
100.0
1,323.0
WIC
U
vil-
r.ibl..D for
consume- Surplus or
tion deficit
600.0
11- 215.2
215.2
600.0
600.0
123.0
1:63.0
1,200.0
.f 123.0
tur. 1 rubbor.
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
SEC URI TY I NFOR:ViTIO W
-distributod sopanAoly)
CO..1.%70 C
ANNTM 6
LIC RFT
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Approved For Release 2004/01/20 : CIA-RDP92601090R000300020017-5
SECRET
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