ECONOMIC ORGANIZATION OF CZECHOSLOVAKIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01093A000300040002-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 41
• Document Creation Date: November 9, 2016
• Document Release Date: February 11, 1999
• Sequence Number: 2
• Publication Date: January 22, 1953
• Content Type: REPORT

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CONFIDENTIAL
viegir!r!Trw.
PROVISIONAL INTELLIGENCE REPORT
ECONOMIC ORGANIZATION OF CZECHOSLOVAKIA
CIA/RR PR-21
(ORB Project 23-51-T)
22 January 1953
NOTICE
The data and conclusions contained in this report
do not necessarily represent the final position of
ORB and should be rogarded as provisional only and
subject to revision. Additional data or comments
which may be available to the user are solicitodo
WARNING
THIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL
DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE
ESPIONAGE LAW, TITLE 18, USCI SECS q 793 AND 794, THE
TRANSMISSION OR REVELATION OF WHICH IN ANY MANNBM TO AN
UNAUTHORIZED PERSDN IS PROHIBITED BY LAW.
CENTRAL INTELLIGNCE AGENCY
.
D DECLASSIFIED
Office of Research and RoportzocQuHmAENNGTE IN CLA
N
0
No
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CONFIDENTIAL
CONTENTS
SUctaliary
I.
II.
. . ?
Introduction
Role of the Communist Party
.
?
?
?
?
Page
1
2
2
1. Domination of the National Assembly
2
2. Domination of Government Officials
3
3. Function of the Central Committee . I I to 0 ?
?
?
?
**
?
*
3
4. control Commission
5
5. Regional and District Organization
III, Planning Concept ? ? ? ?
1, Central Planning Board . . ? ? ? ? ??
6
2. State Planning Qffice
8
IV.
Organization of Economic Ministries **10
**** ?
?
9
1. Ministry of Heavy Engineering...?.... . ? 9 9
11
2. Ministry of General Engineering ? . . . *
.
?
?
?
?
ill
?
14
3. Ministry of Light Industry
.
..5
4. Ministry of Fuel and Power. .
?
?
,
16
5. Ministry of Metals and Oros . . . . ?
lY
6. Ministry of the Chemical Industry
18
7. ministry of Forest:, and Wood, industries
20
8. Ministry of the Construction Industry ? . . ?
.
...
.
...
21
9, Ministry of Food Processing Industrius . . ?
,
?
......
22
10. Ministry of State Control.
?
,
V.
Strengths and Weaknesses
27
1. Elements of Strength
27
2. Elements of Weakness ?
27
VI.
Soviet Penetration and Control of the Czechoslovak Economy
.
0
.
29
1. Soviet Economic and Commercial Mission
29
2. Soviet Military Mission
?
29
3, Trade Treaties . . . . .
31
4. Coordination of internal Socurity Agencies
.
?
32
CONFIDENTIAL
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CSIREPEATIAL
Appendixes Page
Appendix A. Gaps in Intelligence 34
Appendix B. Methodology35
?
41.
Appendix C. Sources and Evaluation of Sources 36
Illustrations
Figure 1. Tentative Chart of Top Level Czechoslavak Planning
Organization .7
? ? ?
Figure 2. Tentative Structure of the Ministry of Heavy Engineering . 12
Figure 3, Structure of the Ministry of the Chemical Industry . 19
Figure 4, Possible Structure of the Ministry of State Control . ? 25
Figure 5, Ministry of National Security .and Soviet Security Mission,
November 1951 ? . ? ? ? e 33
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(ORR Project 23.511)
WigaITIAL
ECONOMIC; ORGANIZATION 9'
Summarz
The central controlling body in Czechoslovakia is the Central
Committee of the Communist Party, which is divided into two secretariats,
the Politburo and Orgburo. Under the Orgburo is the Eeonomic
Depsrtmont Of the Central Committee, and it is this department which
gives impetus to all desired economic developments.
Members of the Central Committee occupy key government positions
which enable them to implement the decisions of the Communist Party.
Thus the plans of tho Economic Department of the Central Committee
appear as plans of the government Central Planning Board. Under the
Central Planning Board is the State Planning Office which is respon-
sible for the translation of policy decisions of the Central Planning
Board into directives for oarrying out the policy and for preparing
estimates of the productive capacity of the Czechoslovak economy,
Annual estimates are made under a Five Year Plant and quarterly
estimates are submitted for each current year. When economic objectives
havn been coordinated, particularly with the planntng authorities
in Moscow, the annual National Plan is presented to the National
Assembly, where it is passed into law without change.
Czechoslovak production is managed through 15 ministries, which
are coordinated through the Council .of Ministers. These ministries
are generally divided into several Principal Administrations, each
Of which controls a number of national enterprises or combines.
The national enterprises may operate a number of factories or mines,
and the factories, too, may have subsidary plants, For Slovakia,
an Area Directorate is usually interposed between national enter-
prises and the Principal Administrations,
The industrial ministries do not have sole responsibility for the
industries under their jurisdiction because of limitations to their
authority. Representatives of the State Planning Office and of the
Ministry of State Control, Soviet advisers, and Party Cadre groups
may all interfere in the operation of a plant. The problem ef coor.
dinatien under those conditions is complicated and diffLcult.
Managers of plants, consequently, cannot expect and demand full
4-711176-77F7g contains information available to CTA as of 1 July 1952,
and does not inolucle certain personnel changes made in August,
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loyalty and obedience from their workers.
Centralized planning, however, represents a major element of
strength in the Czechoslovak economy. There exist, on the other hand,
many elements of Weakness, including the arbitrary modification of
plans by the USSR which increasouthe imbalances in the Czechoslovak
economy, the overemphasis on plan fulfillment, and a growing:tendOno?
toward expanding trtive At the present time,
however, thefactors of strength seem to outweigh the elements of
weakness.
I. Introduction.
The purpose of this /N.-port is to determine the nature of the
economic structure of the Czechoslovak economy, to ascertain the . -t.
effectiveness of this structure as a tool of management, and to deter-
mine the degree of Soviet ponetration in and control over this organ-
izational structure.
Information on the subject is sporadic and spotty. Many documents
cover practically the same small segment of th._ economy, leaving very
thin coverage in other areas. In some instances it was necessary to
draw inferences from known practices in other organizational units in
Czechoslovakia or similar administrative organs in other Satellites.
The report is arranged in accordance with the progress of tho
study which began with an investigation of the function of the
Communist Party and carried through the planning process to the pro-
duction ministries and the control anparatus established by the
Soviet Union, Because of the lack of information, only 10 economic
ministries and the Central Planning Board are covered, leaving 5
economic ministries and 10 other ministries for a subsequent report.
II. Role of the Communist Party,
1. Domination of the National Assembly.
Tho Communist Party of Czechoslovakia dominates the Czechoslo-
vak National Assembly through the denntik_f; who are Communlats and who
owe their positions to the Party. The election of a few non-Communists
appears to be permitted for window dressing. The National Assembly
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seldom moots, and when it does it usually is for the purposo of
observing or celebrating a national event. It does approve the
National Plan annually, but this is a formality, sinco any opposi-
tion to Communist Party moasures is not permittod. 1/*
2. Domination of Government Officials.
Although legally accountablo to the National hssombly, the
Primo Minister, Doputy Prime Ministors, Ministors, and State Sucre,
tarios arc appointed and recalled by tho Prosidont. 1/ President
Klement Gottwald is also tho Chairman of the Central Committoo of
the Communist Party. Boforo making ministerial anpointmonts he is
prosumod to confer with the Secretary of the Cadre Dopartment of
the Contral Committoo and others on the Contra' Committoo, and
according to some roports he rocoives somo orders from tho Soviet
Ambassador in Prague. 2/ In addition, Gottwald has a number of
Soviet advisors, Li/
The Presidium of the Central Committee of the Communist Party
makos general economic polioy decisions which are gcnerally adopted by
the Czochoslovak governmont. For oxamplo, the Presidium of the Con.r
tral Committee, after investigating the problems of the Ostrava-Karvinna
coal basin recommended that the Government of the Czochoslovak Ropub-
lic take certain measures to improve the organization of production.
It proposed wage, salary, and bonus changes in specific amounts. On
the SIM) day the Council of Ministors met and approvod the proposal.
About a month lator tho samo procoduro was followed with regard to
tho iron and stool industry. .(2/ In this caso the r,:overnmentls ardors
followed the recommendations of the PrLsidium of tho Central
Committee so closely that they oven included orders to Communist
Party branches4 I/
3. runcti'011 of, the Central Committee*
The Central Committee of the Czechoslovak Communist Party is
divided between a political secrotariat (Politburo) and an organiza-
tional secretariat (Orgburo). Within the Politburo** there is
effected a fusion of tho govornment and the Communist Party, so that
* Footnote reforonces in arabic numerals are to sources listed in
Appondix Co
** Tho Politburo is made up of nine persons, as follows: President
Gottwald, Prime Minister Antonin Zapotocky, Deputy Primo Minister Jaromir
Dolansky, Minister of Socurity Karol Bacilek, Ministor of National Do-
fonso Alexoj Copicka, Minister of Foroign Affairs Viliam Siroky, Min-
istor of Information Vaolav Kopecky, Czochoslovak Cominform Reproson-
tative Pox, and Antonin Novotny. Li/
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NOM da a a yea* E.,
the Politburo acts as a polidy committee of tho government* The
Politburo is charged with the responsibility of carrying out Communist
Party policies on a daily basis, and the government officials who are
members use thoir positions to carry out theso policies. The
Orgburo consists of the Prime Minister and six becretarios, 2/ each
of whom is in charge of a department of the Contral Committoo.
Effective with the reorganization in September 1951, those six
departments are responsitae to the Central Committee, but are coor-
dinated by the Orgburo. The departments carry on the business of the
country. The ministers, as well ao members of parliament, are ordered
to report to ono or more of these departments, whore decisions are
made and ardor's given. Hero the program of the govornment is mapped
out, cabinet decrees promulgated, parliament sessions planned, indict-.
merits, court trials, and oven decisions prepared; directives are issued
for the press and radio, and regulations are formulated for the armed
forces, security police, and other government socurity agencies. In
fact the decisions cover everything from matters concerning the
President to those affocting singlo Party mombers in the loweSt
category. 12/
The Economic Department of the Communist PartyCnntral Committee
has close liaison with the State Planning Office, and the economic
ministries, Checks are maintained on the State Planning Office in
order to be assured that Party policies and objectives aro pursued
and, if nocessary, directives aro issued through the Central Committee.
This dopartmont gives impetus to all desired economic developments, 11/
even sending instructions to industrial managements. Counterparts
of the Economic Department in the Regional and District Party
committees check on the fulfillment of plans in their areas. and re-
view plans for investments in their areas to ascertain whether they
aro in accord. with Party policies. 12/
The Cadre Department of the Communist Party COntral Committee has
its coUnterparts also in Aho lowor echelons of the Party organization
as well aS.all.thrb-04h the oconomic,:structure.: _Party Cadro roprosen.
tativos arc found in the ministries, in tho production directorates,
and in the personnel offices of enterprises, factories, and plants.
Tho Party. Cadre representative is called a referent whose function is
tb-keopoapoliticAl. history -of each person 1t the arganizatiOn? in.
order to determine who is politically reliable. Referents n,lve a
voice in the selection of personnel by indicating those who are dis-
pensable. 12/
?
The effect of the Party Cadre ha a generally been tp favor the pro-
motion of Communists, thereby frequently provonting the solection_of
14
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.fted4 }am; m010
efficient personnel.
I. Control Commission,
????????111.....1.0.
The Communist Party Control Commission has the right to issue
reprimands and warnings, to rocIll members from Party or government
functions, and to expel members from the Party temporarily, This
Commission may suggost or even demand the recall of a Party member
from any position in the State economic apparatus, lh/ While these
functions are negative in character, they serve to prevent deviations
from policies of the Communist Party on the part of ministers of
other State functionaries,
Regional and District Orsanization,
Thore wore 19 Communist Party Regions and 238 Communist Party
Districts in Czechoslovakia in 39490 15/ The Regional and District
Party organizations have rather limited oconomic functions other than
forming administrative links botwoon the Central Committee of the
Communist Party and the local Party units, Large construction projects,
and important economic oporations may be chocked by these organiza-
tions directly rathur than through the local units. Review of invost-
mont and construction plans in the areas of their jurisdiction also
fails to those echelons of tho Party organization.
III. Planning Concept,
Economic planning after World War II developed haphazardly in a
rapidly changing situation in Czechoslovakia. An Economic Council was
first set up by Presidential decre(. on 25 August 1945, composed mainly
of cabinet ministers dealing in economic matters. The Economic
Council was oxpocted to formulate economic policy for the considera-
tion of tho cabinet. A Socretariat of the Economic Council headed by
a General Secretary was also established to assist the Economic
Council, lY
In November 19)45, tho Economic Council and its Secretariat began
to function, and on 3 1k:comber 1945 , an Economic Planning Office was
created to assist the Economic Council with the tochnical details of
planning. However, the Council never developed into a viable insti-
414mkhozi and by the middle of 190 it was discontinued. The Secre-
tariat of the Economic Council and the Economic Planning Office were
continued. At about the same time that the Economic Council expil'ed,
a State Planning Commission was established with the support of all
tho political parties from which it drew it powers. It was composed
of 16 members, 13 of whom wore economic exports-sthe Prime Minister,
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the Chairman of the Economic -Plann4g Office) and the General Secro..
tary of the former Economic Cob:rill
The State Planning Commission began to function by roc-westing'
economic data and suggestions from tho Economic Planning Office) the
Secretariat of the Economic Council, and the planning sections of
various ministries. In addition, it sot up its own committees for
industry, transport, agriculture, labor, and other sectors of the
economy.
Tho Economic Planning Act of 22 February 1949 was passed by the
Czechoslovak government in order to bring order into the planning
function and to eliminate the duplication of effort and jurisdictional
disputes which had developed between the three planning agoncies,
Tho State Planning Commission was replaced by the Central Planning
Board, The Secretariat of the Economic Council and the Economic
Planning Office were superseded by. a State Planning Office. 11/
For a tentative chart of the top level Czechoslovak planning organiza-
tion, see Figure 1. *
i?
a,
Plannino. Board
? 4 . . . ?
a, Structure,
The organizational sot-up defined in the Economic Planning
Act of 22 February 1949 has aryparonLly remained in effect to the pre-
sent time. In general terms, the Central Planning Board acts as an
advisory body, formulates policies for planning, and assists in tho
management of tho State Planning Office. It is composed of 16 members,
including 8 top officials of the State Planning Office, a representa-
tive of tho Economic Department of the Central Committee of the
Coymiumist Party, the President's economic counsellor, a represent-
ative of tho USSR. Council of Tfonomic Mutual Assistance, and 5? ?
others. In 1949 the mombors of tho Central Planning Board wore
listed as Jaromir Dolansky, chairmm, Eduard Outrata, Josef Pucik,
Jarosiav Fukatko, Antonin Volavka, josof Goldmann, Julius Branek)
Ludvik Frojkal Milan Reiman, Jaromir Berak) Josef Stanek, K. Pollock)
V, Hulinksy) J. Zivotsky, Sova, and J. Motola. 12
b, Liaison Channels.
The maintenance of liaison channelstas roceiwd careful
consideration.in Czechoslovak planning, This is indicated by the fact
* Egurs =lowson p.
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Figure 1
Tentative Chart of Top Level Czechoslovak
Planning Organization 12/
rontral Planning
!S nina,Office
?-? ? -
!Slovak Planningi
co_
_ .
'Slovak State ,,iStato Statiatical,
iSta ti s ti c al
Bureau I;
Legal
Social gti
Matoriali
Balancq
Bureau If
!Finance
!Accounting
TIT
inchu s try
;
PI
qs_.cgtatr_91-,
riT6Falylv--1
) 41grIclut=o ICooDoration
! A 1 n
& Food ! and
? DE V( lOflJllQflt
that the members of the Central Planning Board are also represented on
other administrattvo bodies which havG an interest in Czechoslovak
Planning. Thus Josef Goa dmann, the Deo uty Ch trmanLf, thoA3ontxia1
Planning Board, is also a member of the permanent Secretariat of
CEMA-and Ludvik Fr..'ejka is also Secretary of the Economic Department
of the Central Committee of the Communist Party, Liaison is maintained
with tho othor ministries through their respective nlanning groups
or spocialAsto.
c. Soviet. Control of Central Pimning Board,
The USSR is aBsured of control over Czechoslovak planning
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polities not only through tho pladomont of acceptable Communists on
the Central Planning Board but al$o through various pressure tech-
niques applied to munbers of the cabinet, as well as to the leaders
of the Czechoslovak CoMmunist Party and to the planning organs of the
ether Satellites .9/ In consequence of the numerous Soviet controls
over the Czechoslovak policLesItho Central Planning Board has become
a tool of the planning agoncics of the USSR.
2, State Planning Offico.
a, Structure.
At the time of establishment, the State Planning Office
absorbed the existing planning agencies or t1c5r functional subsidiaries
such as tho Economic Planning Office, the Statistical Officeland the
Price Control Office, ht the same time a Slovak Planning Office was
set up for Slovakia an 4 subsidiary of the Static) Planning Office, 21/
This Slovak Office, howevor, was made part of the main office in Prague
in Soptnmber 1951.
The State Planning Office is divided. into five bureaus,
each headed by a deputy minister, In addition, there are tho usual
advi,.nistrative ntaff units, such as tho Personnel Department and the
Control Department, ?
Each bureau has a number of departments, and tho departments have
two types of subsidiary sections; those located in the Stato Planning
Offico, and liaison sections attached to other units of the govern-
ment, The liaison sections are found in all of the other ministries
and th? p1anriin ( paItITEflt ofeadh'ministry are-rosponsible to their
respective- ministrios-for.carrying out -the pia/lane; directives of the
State Planning. Officoliaisen sections are also found in Regional.
and District government offices, and in the Czechoslovak embassies
in Moscow and oven in other Satellite capitals, The Moscow suction
is a largo office hoadod by a fnrmoo employee of the Data shoe works
in Zlin (Gottwaldov), Smallor Czechoslovak planning offices have
recontly been opened in Poland, Hungary, and Rumania' These liaison
planning sections in the various Czechoslovak ombassios are functionally
responsible to the State PThnning Office in Prague, but administratively
arc part of the Ministry- of Foreign Affairs and are accorded diploma-
tic immunity, 22/
b.
.Functions
Tho major functions of the State Planninc Office are the
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translation of policy decisions of the Central Planning Board into
directives and orders for the implementation of policy and the pre-
paration of estimates of the productive capacity of the Czechoslovak
economy. In addition, the office is rosponsible for the checking of
Flan fulfillment. For this latter purpose, all economic units in the
various ministries aro directed to cooperate with the State Planning
Office and are required to supply promptly any information which may
be requested. 22/
c, Determination of Plan Objectives.
The preparation of producAon estimates is accomplished
by what is referred to as "counter planning" on the part of the indi-
vidual plants. Counter planning consists of submission of estimates
of maximum possible output. Thrre are annual estimates under a Five
Year Plan and quarterly ostimatasfor the current year, These esti-
mates aro supported by annexes showing tho requirements for labors
material resources, power, investment, and maintenance,
The estimates of capacity output are projected forward
statisticllly in accordance with national objective nd policies.
For exampir, the policy of stressing tho development of hoavy
industry reautred an incroaso in plant production beyond currant
capacity in that sector. Needed inputs were shifted to the heavy
industry investmont account from light industry which iievised down-
ward the investment program for light industry and reduced its
maintenance allowance bolo attrition rates, 2y Thansultant plans
differed considerably from the orip;inal c:ipacay cotim-Itos -.and ?rel..
fleeted policy directives.e2V
For planning purposes, economic activities are divided into
the general categories of pr)duction, sorvices, administration, and
security, gy Thr production category IS further divided into agri-
culture, industry, construction, wa transportauion. Industrial pro-
duction is further divid0 into heavy enginec,ring, genoral onglneeru
in,light industry, chemicals, forest and wood, food processing, metals
and ores, and fuel and power. The services and the a(Jministrative
and security categoris aro also broken down into approprilte sub-
divis;ons.
d. The "Plan" Law.
After economic objectives have been determined and pro-
perly coordinated, particularly with the planning authorities in Moscow,
the National Plan i8 presented to the National Assembly and passed into
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lauflaithout change. This law odtabliShos over-all production and in- ?
vestment targets and becomes the? baSiS for the allocation of materials,
labor, investmentsfand supplies.'
Annual plans aro develeped on the basis of the Five Year
Plan, but the goals aro altered to moot changing conditions. 27/ For
example, changes were m4do'in the 1952..rlan for boAVYJ,n4Pftrrin,re4
sponsz. to Soviet demands. The 1952 Plan ';g1fsereflected,increases,'
in production for purposes of export, as well as anticipated docilm.Q.P'
in imports from the West, The annual plans not only establish yearly
targets, but present quantitative data on a quarterly basis for the
purpose of establishing bench marks against which the rate of cur-
rent production can be checked. Thus the planning process established
both a goal and a means for driving the productive economic machine
toward. greater achievement,
IV, Organization of Economic Ministries.
The administrative structure established to direct and control the
industrial sector of the Czechoslovak economy passed through a series
of changes and reorganizations, 28/ The original Ministry of Industry,
set up when the Communists gained control, shared thk; responsibility
for maintaining the Czechoslovak economy with the Ministries?of
Agriculture, Food, and Construction, This arrangement continued for
almost years while the planning procedures were being developed,
During the fAll of 1949, however, the Ministry of Industry was re,,
organized in order to strengthen !:::nd improve its control over Indus-
trial production. Four directorates were set up corresponding to the
major product classifications; (l) the Directorate of Mining, Power,
and Chemicals; (2) the Directorate of Foundries and Metal; (3) the
Directorate of Textiles, Leatwr, and Rubber; and 00 the Directorate
of Timber, Paper, Glass, aridCeramics. 29/ The usual staff departments
were continued, The actual supervisim and control of the industrial
plants were.effected-thrqugh enormous combines organized horizontally
on an industry-wide basis. This revised oranizational structure con-
tinued for little more than a year, from late 1949 to the end of 1950.
The development of greater controls over Czechoslovak industry
set the stage for further changes in the administrative. machinery.
The Ministry of Industry was divided into two separate ministries
the Ministry of Heavy industry and the Ministry of Light Industry. 3.2/
On 7-Septomber,1951, a further major reorganization was effected.
dividing the Ministry of Heavy industry into five now ministries:
the Ministry of Heavy Engineering, the Ministry of General Engineering,
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the Ministry of Fuel and Power, the Ministry of Metals and Ores) and
the Ministry of the Chemical Industry. In general, this change repro/.
sented largely the elevation of several directorates to the status of
full ministries. 21/
Miq-LIEL7-21-1LEZ EIPLI-P-Pc'ria*
The Ministry of Heavy Engineering has jurisdiction over the
production of such heavy machinery as dredges, mining plants, plants
for iron and steel furnaces, cable-making plants, bridge construction,
shipbuilding, cranes, conveyors, steam engines, compressors, boilers,
locomotives, railway cars, sugar factories, distilleries and breweries,
mills, agricultural machines, heavy combustion engines, foundry plants)
coke, plants, generators, gas works, water and gas turbines, hydro-
generators, and centrifugal machinery. 2E./ Thus, the Ministry per-
forms the function of a supervisory board which directs a series of
related production enterprises. It also coordinates the production-
planning of the various enterprises with the general plans and orders
laid down for this sector of the economy. It formulates production
policies within tho scope of the plan, but does not initiate
policies. It has some influence on the establishment of planned tar-
gets and policies through the appraisal submitted on the feasibility
of the plans and the capabilities to produce the kinds and quantities
of goods called for in the plana.
a. Structure.
Directly under the Ministry of Heavy. Engineering are
several Principal Administrations, 22/ the exact number of which has
not been reported. These Principal Administrations take the form of
government bureaus, each of which is in control of a national enter-
prise or combine. In addition, there are various staff groups, the
details of which are also unknown, but it may be assumed that they cover
the functions generally assigned to control, planning, housekeeping,
and research. A special Area Directorate for Slovakia is a part ef
one of the Principal Administrations, and forms an extra link in the
chain of command for Slovak plants. For the tentative structure of
the Ministry of Heavy Engineering in January 1952 see Figure 2.*
The names of the enterprises or combines which are under
the jurisdiction of the Ministry of Heavy Engineering have not been
reported. However, it is probable that most of the same enterprises which
wore under the jurisdiction of the Czechoslovak Heavy Mechanical Engineer,-
ing Plants National Corporation are now under the jurisdiction of the
Heavy Engineering.
b. Administrative Problems.
The authority of the Minister of Heavy Engineering is
7.-Prgure 2 follows on p. 12*
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Figure 2
Tentative Structure of the Ministry
of heavy Engineering
inIstry of
efense
",.,Walr.itiilaCWX/P4
oviet
ilitary
ssion
USSR Econo-
mic and Com-
1
1 merdial Mi;s;
1 ,
1 ,:E-C.cP11..P.U.DEI
Control
rdmncipal
inistratio
!sor Skoda_2/___
?
gaard
,,11ep.17. Engineerin-2
Principal
Administration
'for CKDA/
Smichov Plant, Prague
-,(Sugar, alcohol, chemical;
machinervl_
iKom;rno
gla_Shipyar
EmarTO la 1
'Noy_ Shayara
TIravec Kralovei
1
ateel Works 1
1Lenin Works, Pilsen
1Former1y Skodal
t
77117171)7--1 'Manufacturild-
e artmentl Department
-Shell Casing Shop
-Artillery Shop
L-Gun Shop
-Tank Shop
-Bridge Shop
-Fuses Shop
-Locomotive Shop
,-:Welding Works
?-Tempering
-Motor Vehicles
????????*"4.
Planning
-Turbines
140.ding Works
,Tempering
Ei; s.es,r_c5; b/
------,
iBrincipal
Administration
rea Directoratd
For Slovakia '
, 'Plant
1Service
LMaintenance
kools
HER Repair
-Motor Vehiale$ -Patterns
-Heavy Machine Parts ?
-Boiler Shop
-Heavy Machine Components
[
!Precision Components '
-Centrifugal Equipment
-Light Metals Foundry
Elant
Otaff '
122p,,,Eirtment'l
-Personnel
Cadre
i? Testing
1Develop
'Other
* FootneteS fibroFigure.ndllon ic,:o12a4
12 -
?
Ir.
? ?
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a. e o ent of jur 8 icttLon and con ro exercise by the USSR
missions and the Ministry oE Dortinse varies considerably be,
tween administrationa, and botwoon plants or parts of plants
b. VariouS other service and ataff functions may also be assumed
to exist, but are not shown here for convenience in drawing. 211/
O. This level is variously reported "Principal Administration,?
!!Administrative Department" and "Principal Directorate."
d. Cosko Kolbon Danok.
o. A trend toward increasing the jurisdiction of the Arms Depart-
ment has boon evident, and some recent reports indicate that
the manufacturing department has been completely absorbed into
the arms department at this plant. V
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hedged about in a number of ways. The Minister must accept the general
production targets established by the State "lanning Office. He may
point out current canabilitics for fulfilling plans, needed investments,
and so forth, but ho has no Voto pdtier oier final plans.
Control over the mannoi4 in Which the Minister executes his
responsibilities is maintained by the Ministry of State Control.
Chocks are made on whother regulations, laws, and orders aru followed
out and on how funds are spent and how materials are al1ocated4 In
addition, thu Presidium of the Communist Party may issue orders
directly to the Minister of Heavy Engineering, specifying in detail
what actions are oxpoctod of him. ./ The jurisdiction of the Minister
of Heavy Enginuering is subjoct also to the directives of the Soviet
Military Mission which maintains control over plants or parts of
plants producing items for Soviet military use. Similarly, plants
producing items for the Czechoslovak Ministry of Defense may be ro.
moved from the jurisdiction of the Ministry. For examplo, on 10 August
1951 the ontire managomont and control of a pltnt of the Skoda combine
was takon over by Soviet exports. In other cases, as at the Electro-
motor Plant at Moravska Ostrava, a Soviet advisory commission was
installed at tho production level consisting of 6 Soviet officers,
11 engineers, 21 skilled workers, and 19 political advisers, .4./
These advisers may have boon from either the Soviet Military Mission
or the Soviet Economic and Commercial Mission.
The Ministry has little control over wage policies and
recruitment of w)rkers, since the Wages Commission, the Trade Unions,
and the Ministry of Manpower have boon given jurisdiction over those
matters. The factory committees of the Communist "arty, Commurdst
Trade Union committees, and the Communist Party Cadro committees, all
function to limit the manager in variDus ways. The factory committee
may recommend the removal of the manamand the recommendation is
frequently carried out. Tho Communist Trak Union committees havo
responsibilities for the training of workers, which restrict the
managors1 administrative control. The Cadre committees can determine
who is to be purged, who is to be transforred, or who is to be given
a promotion, thuslimitting'the-manigorv auLhorit,W Fact3ery'units of the
Party also play a Part in plant security through workers, militias.
Party Trade Unionists have rosponsibility for explaining and enforcing
"arty and government docisions, for developing creative initiative,
and for assisting In the training of apprentices. 38/
Personnel,
Gustav Kliment was appointed Minister of Heavy Engineering
on 7 September 1951. When the new Ministry was set up. ProviouaT,
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ho had been Minister of Heavy Industry and before that the Ministor
of Industry. The SUCOOSSIVO appointments may ruprosent downgrA'dilig
but they aro not necessarily indications of disfavor, Most likcly
they result from a combination of developing circumstances, certain
production failures, and Derhups the preference of Klimont himself.
Re-)ortodly, when Kliment was offered the Ministry of Industry in
1948, ha at first declined. 351 During the past 4 years he has
carried out the responsibilities of tho larger ministries, although
each year there have been failures in meoting Plan targets. Never-
theless, his work has not been denounced by his Communist and Soviet
mentors, Other than the name of the minister, the personnel roster
comprising the Ministry of Heavy Engineering has not yet been reD)rted.
2. Ministry of General Euinearing.
The creation of tho Ministry. of General Engineering grew out
of the reorganization of 7 September 1951. This reorganization re-
flected the increased omphasis currently placed on those sectors )f
the economy controlled by the now ministries. To a large extent,
therefore, the reorganization may be interpreted as an evolutionary
process of administrative development coupled with an awarenoss of the
changing importance in production areas of various economic sectors.
The jurisdiction of the Ministry of Genera) Engineering is
not completely known. Apparently this ministry took over the national
corporations or general managements for vehicle production, light and
precision machinery, and electrical equipment. These corporations
had jurisdiction over the production of such items as metalworking
machines, woodworking machines, ammunition machines, screw machines,
presses, turning lathes, optical instruments, aiming devices, type..
writers, calculating machines, printing Dresses, motor vehicles,
bicycles, tractors, aircraft, electric motors, transformers, dynamos,
power station equipment, welding apparatus, radios, transmitters,
phonographs, telephones, telegraph equipment, medical appratus,
safety devices for mines lad ships, airports, roads and railways,
electrical control and measuring instruments, and batteries. 40/
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Although the names of the major plants and combines which
are under the jurisdiction of the Ministry of General Engineering
have not boon reported, it is probable that this ministry has juris".
diction over most of the same major plants and combines which were
under the jurisdiction of the Czechoslovak Precision Engineering
Plants National Corporation, the Czechoslovak Motor Car and Aviation
Works National Corporation, and the Czechoslovak Light Metal Working
National Corporation. Lli
1/.1.
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or. ???? +4...
a. Structure,
The Ministry of Cenpral Engineering is believed to con-
sist of three Principal AdminiStrations,.one for light and precision
machinery, one for automotive vuhiCles, and one for electrical
equipment. A special diroctDrate Was set up for Slovakia to cover
the Principal Administrations established in this Urea, and forms
an extra link in the chain of command for Slovakian plants. The
-'rincipal Administrations have direct control over the managers of
the individual concerns subordinate to them.
The minister is assisted by a variety of staffv,such as
a finance staff, a ]ogA staff, a planning staff, a Party Cadre
staff, a control staff, and technical research staffs, which ad.
vise and perform functions of liaison with the Stab() Planninp Office,
the Communist ?arty, offices to which the product is delivered, and
offices from which supplies and labor are procured.
b. Personnel,
Josef Jonas was appointed Minister of General Engineering
at the time of the ministerial reorgtnization in September 1951. u/
Jonas background indicates bhJt he has been a devoted Communist
for many years and that he has a good deal of managerial ability and
experience as a government bureaucrat. At the beginning of World'
War II, Jonas was arrcste,,,, for hi a paliti4a1 activity. Hu was im-
prisoned in various concentration camps, including Dachau and Buchen-
wald. Even in the concentration camps, Jonas continued political
activity,
From May 19/15/ when he was released from a concentration
camp, Jonas was employed in thu Secretariat of the Central Committee
of the Connunist Party. In 1947, he was named manager of Rude 1:Dravo.
Whet the SvobOda publishing houbd'wan mergod witH Rude,Pravo,'JonaS ho-
cane the onterPrisy .manager .Tn!Novembcr 19h9, he Wecamo.benuty Minis-
ter of Foreim Tra:;d0hc n'est he held in 1950 when he was appointed
Minister of Light incustry.
3. Ministry of Light Industry.
During the reorganization of the Czechoslovak production
ministries in September 1951, the Ministry of Light Industry lost
jurisdAction over precision machinery, wood erocessing, and paper
and cellulose manufacturers. It apparently rotained jurisdiction
over metal consumers' goods, ceramics not under the construction
industry, textiles, leather, and rubber goods.
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a, Structure,
It is believed that the four general directorates abolished
in. September 1951 (Czechoslovak General Metal Products Works,
Czechoslovak Textile Works, Czechoslovak Leather and Rubber Workd..,
and Czechoslovak Glass Works) are now the direct responsibility of
the Ministry of Light Industry. 112/ The General Directorate for
Textile,Leather, and. Rubber Works in Slovakia which was abolished
at that time is believed to be under the jurisdiction of the Slovak
section of the Ministry. Apparently-, the Ministry is divided into
Czechoslovak and Slovak sections'
It is known that the Ministry of Light Industry handles
some war orders for civilian typo of military goods such as shoes
which are delivered t) bho USSR. 4.4/
b# Personnel,
Alois Malek, the Minister of Light industry, is a member
of a workor's family and was employed in thu clothind; industry dur-
ing his youth. He was one of the founders of tho C mmunist PartY of
Slovakia,
In 1926, Malek went to the UqSR and became a member of
the Communist Party in that country. In 1939, he bec-mle a plant
director in the tSSR,., 1141,tig tkiidt0 he- was,tho dIredtor
of an enterprise which work; for the Sovi(A Army. While in the
USSR he was'graduated. from an industrial academy and from the:17,011#
tical.A.cademy,.and,twas.an official. in .the Kirgiz SSR. He was
awarded tho Order of the Red Star f3r his work,
After the war Malok returned to Czechoslovakia. and was
nut in charge of the textile plant at Slavonice. Later he became
General Director of the Czochoslovakian Textile Industry, and on 7
September 1951 he was aRpointod Minister of Light industry. by
Maluk obviously is a Soviet national by adoption, and his birth in
Czechoslovakia is only a thin camouflage for Soviut control. of Czecho-
slovak Light industry. The commissioner of tho Slovak section of
the Ministry is Samo Taac. 4y
4.. Ministrzof Fuel and Power.
The Ministry of Fuel and Power is responsible fr the mining
of coal, Hard coal is mined mainly in the aroas of Ostrava, Kladno,
and Pilsen. Brown coal and lignite are mined in northern, western,
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and southern Bohemia, western Slovakia, and southern Moravia, This
Ministry is also responsible for gas, briouetting, electricity, and
oil production. The fPrMor Czechoslovak Power Works cnntraled tho
oloctric lirht and power syst(em and the gasworks with an extensive
;rid distribution network. Steam-driven powor plants account for
about 85 percent of the generatinft clpacity, and hydrokilctriCc
plants for the remaining 15 percent. Oil production approximates
50,000 metric tons annually, and synthetip production from coal about
200,000 metric tone. A synthetic plant lcicated at Most has a
plannod capacity of about 600,000 metric tons. /II/
a. Structure.
Although little information is available on the structure
of the Ministry of Fuel and Power, it is known that jurisdiction was
retained over the former Central Management for Mining and the
Central Management for Power. In adlition, there aro the usual
staff agencies dealing with porsonn(a., finance, planning, legal, re-
search, and tho Party Cadre gr-yups,
b. . Personnel,
Vaclav 7'ekorny, formerly responsible for or mines and
petroleum installations, was appointed Minister of Fuel and Power
in Septembor 1951, Iv He is a former miner and an active member
of the Communist Party, After the war he went to Usti wid Labem
and beeaMo a member of the Local National Committee, In. 19h8 he
became Secretary of the Hostimice nad Bilinou Communist Party Com,.
cittee, then. chairman of the Regional Party committee, and soon was
elected to thc National Assembly, which position he still. holds.
In 1950 he held the position of technicAl chief of production of
the, Syntex Chemical. Combine and director of the plants c)f the for-
mer Fistag and Calcium .Corporations. Ho was appointed director of
ore mines and petroleum installations.h9/ in. January 1951 and in
September was given the fOSignmdAt Of Min1St6r of,Phel and Powers.
50 Ministg of Metals and Ozwl,
a. Structure,
The Ministry of Metals ancl Ores took over the jurisdic.:
tion of the former Central Management for iron and Nonferrous Metal,
Its major responsibility is the mining of iron ores and the produc-
tion of pig iron and crude stool. It also is responsible for tho
scrap metal collection companies, ,5:21/ It apos not have control of
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the Uranium Wines.
b. Personnel,
Jan Bilek, former director of the V.M. Molytov Ironworks
in Trinec, was appointed Minister of Metals and Ores when the Ministry
was set up. 51/ In his youth he worked in the motal rAling mills.
He joined the Communist Party as soon as it WaS formed in 1921 nnd
kept constantlY
activo in it. After the war Bilek WUB firErt a
District Party committoe chairman, then a Party. Regional chair-mon,
and finally he was elected to the Central Committee of the Communist
Bilek became manager of the Bohumin Steel Works shortly after
the war and later was made the director of the V.M. Molotov Iron.
works.
-
6. Ministry of the ChEmicll Inilustry,
Apparently the fibw-MiAintryvbf the'thu7Ilidal industry-tookover
the jurisdiction of the General Management of the Czechoslovak
Chemical Enterprises, which was abolished, 2/ This agency had been
responsible for the supervision of the national corporations pro,
ducing chemical products.
a, Structure.
The former organization of the General. ManEwment of
Czechoslovak Chemical Enterprises cives the best available clues to
the probable organization of the present Ministry of the Chomical
Industry. 1,;'.2/ This agency had the follawing staff organizations:
presidium, Party Cadre, security, planning) personnel, price control,
legal, accounting, economic, and documentation, In addition there
were tho following bureaus: heavy inorganic, heavy orginic, pharmacy,
plastics, and tannery-textile by-prcducts. For each of these bureaus
there wore departments for production, supply, sales, outside ser,.
vice, t;norming,11 quality, and research. The goneral outline of tho
organizational structure of the Ministry of the Chemical Industry
is illustrated. in Figure 3.*
b. 'Personnel,
The present Minister of the Chemical Industry is Otto
Simunek, who was aT)Lc in Decembor when Josef Mcik who hold that
position was made Minister of State Planninp;, Otto Simunek WaS forlrorly
7kRure 7-7761lows on p?.19.
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FigUro 3
Strudturo of the Ministry of the Chemical Industry
!Ministry of the Chemical Industry!
.-- ? , ;
yrosidium Cadre! !Socurityil:Taanningl :Personnel, 'Price Control:
_ .
1,0ral Accounting Economic Control Piontrol: Documentation;
1
Heavy Organic,
bopartment
Heavy Inorganici
!Department !
Pharmacy
!Department
! Plastics ! ITannery-
Tfleartmenti 'Textile
,
Mv-tro-
'ducts
iD6part-
:ment !!
7
!Supply j Production'
,ReSearChl National Corporatfm:
Palesj ? National Corporation!
Outside
o0 . ?
ervico!
National Corporation!
Plant
71,anti
QuaT.I.ity;
C 0)1a/it!
a Deputy Minister of the Chemical Industry. Simunok had been working
at secondary levuls of govornment administration since the time of the
Communist coup in 19)48. In 1949, he was made a Deputy Minister of
Food. Hu has not boon among the top officials and has Dever boon
reported to have ttkon part in public funotiou$.
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?11.1 .1. MN. men, Ida WM&
Miastty'of Forest and Wood Industries,
The announcement of tho creation of the Ministry of Forest
and Wood Industries in Septembor 195], indicated that it would take
over tho administration of the forests from the Ministry of AtrAblture
rit; W1T-3s' th6sitestlengibilitiOrot'th4,Anistrybf,LiOt Tftd5stry
lenichWore neortiod::WitYlAhewood,Andustrylle statOd-purpeAes of the
nit w Mini.Otry 'Wen: i bo' ee,6,erViti thc f 0 re8to snad to develor 4 the woo d 1. ndili".?.!.
try. 21/
Apparontly the Czechoslovakian Stato ii?-frest National Corpora-
tion was taken over intact with tho Forestry -Division from the
Ministry of Agriculturu. This national corporation is the owner of
the major forests and woods in thu country, sinco all privately
owned forests over 60 square hectares cern under its jurisdiction.
Wood lots of less than 60 square hectaroa generally are under the
administration of local. agricultural collectives. In the frontier
area, tho frontier guards havo authority to restrict the logging of
forests for security. reasons. 511/
a. Structure?
The organization of the Central Management of Wed Pro-
cessing which was also taken over by this Ministry has never boon
reported. It is known that General Directorates called Czechoslovak
Woodworking Works, Czechoslovak Pair and Cellulose Work, and
Woodworking Works in Slovakia, and Cellulose and Paper Works in
Slovakia wero abolished effective 30 Soptelrber and their functions
-/
taken over by -tho now Ministry. for Forest and Wood Industries, 56
From this information it might be assumed that the former Centra.
Managoment had the four 7cnoral directorates listod above under its
jurisdiction. Furthor it seems likely that the new organization
reflects these four groupinp:s.
b, Personnel,
Mnruk Smida, who had boon Diroctor General of State
Forests f-u- about a ye 1r, was appointed Minister of Forests and
Wed Industries at tho time the Minlstry was set up. He was a fore
mer laborer in the lumber industry and in 1929 became a membor of
tho Communist Party. He was imprisonod for 2 years before World
War II, and during the war ho was active in partisan activities. Ho
participated in the Slovak parliament and hold several positions,
including membership on tho Central Committee of tho Slovak Com,-
ralnist Party since May 1950. He also held various public jabs in ,
economic affairs, but none of Lop rank until his present anpointmept. 57/
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8. Ministry of the ConstrUdtion Industry.
The Ministry of the Construction 'Industry took over most of
the functions of the former Ministry of Technology, the construction
portion of which was called the Czechoslovakian Building Association
(Geskoslovenske Stavobni Zavody CdSZ). During 1950, the CsSZ was
divided according to four specialized national corporations, seVoral
regional enterprises, and a special machinery pool. The specialized
construction corporations were Posista, for the construction of air-
fields and highways; Barabal for the construction of railroads and
tunnels; and Konstruktiva, for the construction of wat,orworkS and
dams. 58/ Posista and Konstruktiva engaged actively in military
construction, and three other building concerns dere given military
construction work. These three are Moravostav, Stavoindustri y and
ixmastav. Late in 1950,Armtsbav was placed under the Ministry of National
Defense, 52/
Since 1950 certain additional changes apparently have boon
made. In addition to the specialized corporations listod above
there are other specialized corporations for specific functional
jobs such a$ Czechoslovak Building Enterprises for Earth Works
(CS Stavobni Zavody "Pro Inzenyrsko Stavby). 60/
a. Structure.
The present organization of the Ministry of the Construc-
tion Industry includes three typos of divisions, the area divisions,
the functional divisions including a machinery pool, and. the special
types of construction divisions. It may well be that the internal
organizations of the Ministry reflect those throe divisions, but
no recent information is available to confirm this assuleiption.
The specialized types of construction divisions, and the functional
divisions are concerned exclusively with carrying out of censtruc.,
tion projects. Apparently the area divi,sions or district directorates
are rnsponsible both for carrying out construction projects on the
one hand and for determining the need for c:nstruction projects on
the other. In the determination of what construction projects are
to be done, the district directorates have designing departments and
planning departments which, together with the District Economic Denart-
mont of the Communist Party, determine what projects are to be done
within their districts and the priorities to bo assigned to projects.
The planning departments are expoctod to make their determinations
within the scope of plans from the State Planning Office. The Com-
munist Party District Economic Department3see to it that construc-
tion plans adopted are in accordance with t7)12 Communist Party Policy
directives. LI/
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b, Personnel.
Emanuel Slechta may be considered one of the most com.
potant economic ministers for the job assigned to him. He has had
long and varied experience in the operation of the Czechoslovak
government, In 1933, at the age of 38, he was a member of the Board
of the Ministry of Posts and Telegraph, and an advisor to the
Ministry of Railways and the Ministry of -lublic Works. In Czechoslo-
vakia he was known as a competent economist, In December 1947,
Slochta was a delegate to the Economic and Social Council of tho
United Nations, On February 25, 1948, he was appointed Minister
of Public Works, 62/ In 190, he became Minister of Technology,
arid on 20 December 1950$ he was appointed to his present position.
He is also a member of the Wage Stabilization Commission, L3./ He is
reported to insist on technical proficiency in the appointmnt of per-
sonnel to his Knistry. 64/
9. Ministry of Food Processing Industries.
Although the Ministry of Food Processing Industries was not
directly mentienod in the announcements of ministerial rooranization,
the General Directorates wore abolished on 30 September 1951, there-
by changing the organization of the Ministry of Food which had
existed before that time. 65/ The abolished General Directorates
in the Ministry of Food included the Czechoslovak Sugar and Chocolate
Works; Czechoslovak Boer, Liquor, end Bottling Works; Czechoslovak
Grain Mills; Czechoslovak Milk and Fat Works; Czechoslovak Moat
Industry: the Regional Dirocotrates of the Slovak Food Industry; and
the Slovak Milk and Fat Works. In addition, there were several enter-
prises directly under the Ministry, such as the State Refrigerating
and Freezing Enterprise, 14110;t9tatiikl-TabaccooEnttmnised, and the State Salt
libtemriso01416th may tie Aesimed-to have bt4cQme the resnonsibilidty of thc
new Ministry, 'Thus all food processing enterprises such as brewerirs,
dairies, bAkeries, meat packers, canneries, dnd others arc under
the di!rection and control of the Ministry.
a, Structure,
The organization of the Ministry of Food Processing In-
dustries probably reflects the five former General Directorates,
although it is possible that bureaus have taken the place of the
abolished General Directorates, It is certain that the multitude of
State Enterprises in the food industry do not all report directly
to the Minister. In the distillery field alone there wore about 200
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State Enterprises which directed production in more than 800 dis-
tilleries and liquor factories! Oi..The recent reorganization pro-
bably has not affected these 1oWer beholons of the organization.
b, Personnel,
The Minister of Food Processing Industries is Ludmila
Jankevcova, who was appointed 21 December 1950, when the new
organization was established. Li he was a left-wing Social
Democrat, and was elected a donuty. On 25 November 1947 she was
appointed Minister of Industry, the first woman minister in the
Czechoslovak government. In 1948 she was transferred to the Minis-
try of Food, which became the Ministry of Food Processing Industries
in 1950. W
100 Ministry of State Control.
Tho Ministry of State Control is one of the newer ministries
of the Czechoal)vak government. It was set up in the reorganiza-
tion of 7 September 1951. L2/ This reorganization emphasized
political reliability rather than technical competance and gave
greater responsibility to plant managers.
The Ministry of State Control was to develon direct and
regular contacts with local governments, trade unions, and other
mass organizations, and was to use all direct links with the
masses of the workers. It was frankly stated that in the develop-
ment of this Ministry full we was made iof the exnertoftces of the
USSR.22/ It is to be expected, therefore, that this Ministry
will partake to some extent of the nature of the Soviet agency
of a similar name,
Three general functions have been assigned to the
Ministry of State Control! (1) to expose the causes of short.,
comings, (2) to prosecute those responsible for all 00fiojn=i6)s
and shortcomings, and (3) to help 1,4 the re-education of the
people as members of a socialist state. Z1/
The Ministry of State Control is also responsible for the
State Auditor's Office and the Supremo Audit Court of Slovakia
(also called the Administrative tribunal of Bratislava), In
addition it took over all special investigations of economic
matters and set un a Complaints Department which maintains
close liaison with the Trade Union, the Communist "party, and
other organizations for the control of public opinion, 2.21
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The State Auditor's Office undoubtedly continues to function
much as it did before the roorganization. The difference in its
present operations, most likely, is that it not only audits accounts
in terms of money, but also audits quantitative material accounts
and property accounts. It probably has increased powers for pre-
scribing forms, systems, and procedures for fund and materials
accounting, for proscribing principles and standards of accounting
for property, and for cooperating with the Minister of State Con-
trol in the development of accounting systems. Rendering legal
decisions and judgments concerning irregularities and deficiencies
turned up in the auditing process is probably a growing job, although
the basic function remains the same.
Although little recent intelligence has boon received
regarding the details of the investigative functions of the
Ministry of State Control, it is possible to state the approximato
functions by an analysis of pre-1948 funotions of control-type
investigative agencies, by an analysis of the investigative function
of tho Soviet Control Agency, and by an analysis of the roquire,
Plants of the Czechoslovak Communist economy for this typo of activity.
The Spociladnve:StiganAtDepartmentap9artly inveStigates the
dIsburscmenti aorlicationconemyj aedoofficiency in expenditures
figg4s and iliat-rials And Othmtmrlonrcos in production.. Invr;stiga,
tlwe,tunctians,,Gf dotertrrixIng the adequacy 'and offecti7(mcDs of minis,
turioe'g WAhods of busincsel iwpctionA an ontrol over the Uses of
fund) materials and other reoources ilb likely are lodged in this
agency. Finally the'elkpecial D.rtintions Department has the func-
tion of maiig thorQuO study off tvoublo _;pots turned no by the
comanthttpartm,ont, t1,01Contimi.st P4rty, or the council of Ministers.
The Complaints Department receives and reviews complaints
from workers, party members, or others concerning uneconomic
management, waste of financial resources, and failure by any
person or economic unit to observe the government's oconomic
legislation and policies. 73/ It also probably acts as the
administrative channel for the Control Commission of the Com,
munist Party, Complaints which are deemed valid require an
explanation from the individual or ministry concerned, and the
Complaints Dopartment probably processes these explanations.
Serious cases, and those for which no acceptable explanation is
given, are turned over to the other appropriate parts of the
Ministry of State Control for further investigation and in some
cases for prosecution.
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a. Structure.
Little information beyond a few news items is avail-
able on the organizational structtre of the Ministry of State
Control, Figure 4, therefore, represents largely an an-or-xima-
tion of what is believed to be the structure of this Cnistry,
Figure 4
rossibie StructUro the.MinistrY of State Control
,Minister of State Control!
1
Nrsonnell ........?____
lEdri,orrial ::, &
I .4,Libr afy . [Archivesi
-f - -------- .
,
i Auditor t 6.1 IC orrya ai nts i :5T-.760 i al
1
!Office1 !Department ! ' Taw sti Rati on s '
?..,__7,..?. .... ..., , _ ........?_____
Department
Slovak
Audit
,Court
i Local Govern-1
[I./lent Section
TtOet: I
Union I
SectionI
1-
-
iCommunist Fwommail 1-566rt
!Party Section Youth * Other
!Section j Section
The Ministry of State Control was heralded at first
as a very imnortant super-ministry, Probably this internretation
developed from some confusion between this agency and the Economic
Section of the Council of Ministers, which was sot up at about
the same time. Additional weight was given to the super,ministry
interpretation by certain comparisons between government agencies
of a similar name in the U5SA and in the other Satellites, which
had considerable importanco in consolidating the position of the
regimes in power,
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WIty imin ? ????? moo Cala
In Czechoslovakia, however, the Ministry of State Con-
trol does not scorn to be an important policy making body nor an
important agency for the direction of production or the consoli-
dation of Gottwald 's position. In terms of honors accorded its
top officers, it ranks well below the Ministry of Security, the
Ministry of National Defense, and the State Planning Office. A
relatively unknown person was first appointed Minister, and when
he became better known he was transferred to the Ministry of
National Defense. The second Minister is even loss roll-known
than was the first, and has not held top positions in the Communist
Party until recently.
The relative position of the Ministry of State Con-
trol is probably best understood by comparing it with the position
of the General Accounting Office in the US. It probably is more
important than an auditing office in a non-aommunist country.
because of the broader scope of government economic activity in
Czechoslovakia. Its ooutrol functions lie in the area of check-
ing up on actions taken, rather than on this formulation of
policies or operatinr, activity. It should not, therefore, bo
considered a surer-ministry, but rather a necessary and useful
arm of government to insure complianco with Communist Party ob-
jectives.
b. Personnel.
Little is known of the personnel of the Ministry of
State Control. It is known that Karol Bacilek was Minister of
State Control from 7 September 1951 until 23 January 1952. .7_W
At the time he was appointed, Bacllok was not among the current
top-rune; Communists in Czechoslovakia, although he was known in
Slovakia, since he had held the posts of Commissioner en the
Slovak Board of Commissioners and Commissioner of Information for
Slovakia.. If/
Jan Hams was appointed to be Minister of State Con-
trol on 23 January 1952, 77/ Jan Harus has boon a deputy in the
-
National Assembly for more than b / years, 78 At a meeting; of
the Presidium of the Communist Party on 6 December 1951 ho was
elected chairman of a new Communist Party Control Commission, 72/
Although he is not known to have hold any other important posi-
tions in the Communist Paty at the time he was apeointod, he
has been ropoted to be a Communist for many years. In 1938
ho loft Czechoslovakia for the USSR, and he returned in 1945. EV
This sojourn in the USSR may imply his closeness to the Soviet
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regime and may be considered one reason for the trust placod_in,bim
by authorities in Moscow.
BohuMil Kubat was reperted to be a Deputy Minister of
State Control in January 19520 .?.1/ He is not listed in CIA
biographic files and is not believed to be well-known in Czeche
slovakia.
Other members of the Communist Party Control Com-
mission may also participate in some activities of the Ministry
of State Control, These members were all appointed at the time
the new Communist Party Control Commission was sot upl Josef
Jonas, Oldrich Ruzicka, Ludovit Benada, Eduard Tumas, Front! oak
Portkat, and Josef Svohoda. 2/
V. Strength3and Weaknesses.
1, Elements of Stron,,,th.
The limitations of the available information restricted
this report largely to the application of Soviet procedures to
the problem of running the Czecholovak economy, Theory and
practice are often in conflict, The ideoloical objectives seem
to be uppermost. As the Practical difficulties are dealt
the operational Picture is expected to be revealed,
In theory at least, the basic organizational structure of
the Czechoslovak economy appears to be soundly conceived, The
various departments cover what, aoncar to be homogeneous segments,
of the economict and each organ is an inbegravnit in itself. No
area of economic activity is omitted, Long-term targets are
establishedland annual planning with quartely supplements make
Possible working adjustments in the lontorm Program. The con-
trol of the program by the Communist "arty insures constancy ,f
Purpose and continuity of the program,
2. Elements of Weakness.
In the Planning process the greatest weakness appears to
be the constant modification of targets to meet Soviet objctives.
Plans must be approved by Moscow before adoption by the Czechoslo-
vak Council of Ministers. Those modifications imply that the
plans are not adapted to the CzechwIlevak economy, but rather to
the economy of the Soviet Bloc, Consequently, until complete
integration is attained in the Bloc, Czechoslovak planninc!, will
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increase rather than decrease problems of imbalances in the economy,
both In materials as well as in ftnencial allotments. Because
of the directed emphasis upon the expansion of heavy industry,
the scope of those problems of imbalances will increase rather
than diminish. .
A second element of weakness lies in the inherent tendency
for the natienal planning Process to create an administrative
hierarchy resulting in increased overhead. This er)blem is n
limited to the increasing propertion of nenpreductive laber, but
affects individual Plants through the requirement for an Increas-
ing number of reports. For example, one textile manager com-
plained about the multiplicity of reports which his plant was
required to send to five different minietriee. V/
The emphasis on the overfUlfillment of goals creates
another weakness. This overemphasis en outnut leads t.:, inaccurate
reporting and the tendency for responsible adminietrators to
"protect themselves" by adhering strictly to the letter rather
than the intent of the directive. This "paper performance" and
the tendency to "nlay it safe" on the part of plant mankwrs
create further imbalances which ultimately affeet the civilian
economy. 84/
In addition, Soviet suspicion of Czechoslovak plannire,; has
generated confusion in the planning M'OCOS3v Members of the Cen-
tral Planning Board have been criticized for their independent
nationalistic attitudes. 85/ As a result it appear e that the
implementation of the economic plan may net always be based
on the over-all objectives dictated by the USSR. This eiteation
Lad s to further confusion by the tendency on the pact ef Soviet
advisers in Czechoslovakia -b?e by-pass the Central Planning Board
by issuing directives on their own initiative in order to imple-
ment their immediate objectives. LSI
Another element of weakness is the need for a centinued
build-up of new motivations and incentivns for the dwinlling re-
wards to labor for work effort, Present incentives lose their
affect, particularly when tied in with ever-increasing norms.
The lag in coal and steel production, for example, apparently is
caused in part by poor worker-response to the motivations of
ahockworker honors on the one hand and for of arrest on the
ether. ?.2/
Obviously, another major weakness is the lack of coordina-
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tion between the various economic ministries and the duplication
of effort resulting therefrom, The serious nature of
ar
f tahninspenrotTy3
blem is suspected by the Otochosiovak government,,,an
some organizational changes, seer h to confirm this suspiction.
Until more information ha 's boon developed with reference to
operating procedures within the various ministries, hoWover,
it will not be possible to expose this weaknesS in dotaili
VI, Soviet Penetration and Control of the Czechoslovak Economy.
1. Soviet Economic and Commercial Mission,
wg.o. to, m.o...., ?
The Soviet Economic and Commercial Mission attached to the
Soviet Embassy in Prague is the official Soviet representation in
Czechoslovakia, with a branch office for Slovakia at the Soviet
Consulate General in Bratislava. 23,/ Numerous Soviet factory
assistance groups and technical aid groups report directly to
the ?,liission. The formality sf a Czeclioslovak request for aid
usually observed. The Soviet aid groups and technicians are
on the payrolls of the various onternrises to which they are
assigned. Through those groups, the Soviets receive re,ports on
the fulfillment of planned production in the plants.
The Soviet Economic end CommercialMissj:,QA :?.:Latervones at the
top levels through liaison with economic ministers and through.
Soviet experts assigned .be the ministries. 89/ It intervenes at
the State Enterprise level through advisors to appropriate
Czechoslovak industrial officers, and at the plant 'level through
the technical aid ;reuns. 90/ Since the main objective this
Soviet Mission is to contr7 and maximize .Czechoslovak. produc ,:don
in the interests of the USSR., intervontion is usually directed
to changes in production plans to increase production and tho
rate of production nor worker, lithough thci re is no require-
ment that the CzechesL-.)vaks must accept these suggestions, in
practice, -however, they always do so. In offect? the Soviet
Economic and COMMOrcial MiSSi on han hec:.-MIS the managing agency
of much of Czechoslovak production, a/
2, Soviet Military Mission.
The Soviets also control the Czechoslovak economy through
the Czechoslo-vak military appratus which is -dominated by the. Soviet
Military Mission. The -presence of the Soviet armed forces has
strengthened Soviet military influen.ce to such an e xtent that
anyone in the Czechoslovak military establishrrpnt will be mmoved
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at Soviet suggestion. Formal official relations are maintained
between the Soviet Military Mission and the Ministry of National
Defense and other Czechoslovak authorities through so-called
army protocol. The Soviet MiObion has Czechoslovak liaison
officiers at its disposal, and has contact with the office of the
President through the Presidnetts personal military adviser,
General Satorie. Contacts with the Czechoslovak Communist Party
arc through the Military. Secretary of the Central Committee of
the Communist Party.
The Soviet Military Mission has four sections: (1) War
Industries and Armaments, (2) Army Organization, (3) Army. Politi-
cal Education, and 04) Military Training,
The War Industries and Armaments Section has the greatest
economic influence ."Special Soctiona" in Czechoslovak factvrios
are sot up to produce Soviet military equipment exclusively, and
Soviut personnel are on hand ostensibly to assure that both the
quantity and quality of production conform to USSR military
specifications. At times, tho Soviet technicians in administer,
ing the Special Sections take over the administration of the
whole plant, although the top administrative positions are almost
always filled. by Czochoslovak nationals. The Czechoslovak
arms industry has boon reported to bo under the full control of
the USSR. 92/ The Soviet groups in the factorios contain varying
numbers of persons according to the size of the factory. The
largest groups aro in factories in Pargue, Kladno, Pilsen, and.
Brno, Permanent groups of Soviet special technicians are known
to be in CKN-Sokolocva, CKD!-Stalingrad, Avia,-Litnany, CKD-Slany,
Stalin Works in Most, Ringhofer,Tatra, Skoda-Pilsen-Doudlovco,
Tatra-Koprivnice, Zbrojobka-Brno, Zbrejobka-Strakonice, Exolosia,"
Semtin, Ostrova-Vitkovice, Trinec, and Dvur Kralove Ironworks,
and the Bratislava explosives plant.
The Army. Organization Section has effected a complete re-
organization of the Czechoslovak Ministry of National Defense
and. of the Czechoslovak army. Soviet influence caused the re-
moval of General. Svoboda as Minister of National Defense, and also the
removal pf Gener41 Reicin. .All top posts in the army are now held
by .persons Whoar5. fully acceptable to tho USSR, The :knowledge that
thoSovicts can remoyo any person wilo does not measure up to Soviet
standards 71,papowerful.inagence on Czechoslovak decisions involving
war production.
7-6esko Kolbon
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?
1Tie Army Political Education Section works closely with
the Czechoslovak Communist Party in directing political training
in the army'. It has relatively little economic effect, except
in withdrawing various facilities from civilian use in order to
make them available for purposes of military education.
3, Trade Treaties,
Trade treaties have also been used by the IISSR0
to dominate the Czechoslovak economy. Since 19/]8, the Czechoslo-
vak economy has been more and more oriented toward the USSR, and
exports to the West have boon progressively limited to cover only
necessary imports of raw materials and to assure a reserve of
foreign exchange. This orientation toward the East has resulted
in a dependence upon the USSR for increasing amounts of raw
materials and basic food commodities. Since the USSR can fix
prices and delivery quotas, and since Czechoslovak trade with the
USSR is of less importance to the Soviets than it is to the
Czechoslovaks, the Soviets can sot the terms of trade almost at
will. Tho trade agreement of 1950, for example, provides for
substantial Soviet control over the Czechoslovak economy. 22/
Czechoslovak trade with the other Satellite countries is
influenced both by directives from the USSR and directives from
the Council of Economic Mutual Assitance, 2L/ The exchairman
of the Czechoslovak Chemical Board is reported to have said, "Ship-
ments to Iron Curtain countries wore made under instructions from
Russia...,."' 95/ The Council of Economic Mutual ASSistance can
influence Czecn-slovak trade in the West through a gold pool.
Before Czechoslovakia can use this fund, the USSR must be asked
for the release of foreign exchange. The bilateral intor-Bloo
economic councils, such as the PoltshrOzochoslovak Council, are
responsible to the Council, and the Soviets also have direct
influence over the Central Planning Board and the State Planning
Office. Economic plans are worked out by Czechoslovak specialists
and Communist Party loaders with loading Soviet officials who
come to Prague for short visits. Soviet specialists are appointed
to various parts of the State Planning Office. Before an
economic plan is adopted, furthocmore, it is presented to offi-
cials in Moscow for approval and frequently is revised at length
in Moscow. During 1950, for example, the Czechoslovak Minister
of Planning, Jaromir Dolansky, is reported to have spent 2
months in Moscow preparing the 1.951 Plan. Soviet ordoos concern-
ing plan fulfillment reportedly are relayed to the Czechoslovqcs
through the Soviet Ambassador in Prague.
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4. Coordination of Internal Security A7encies1
The ability of the Soviets to detect and effect the re-
moval of "unsympathetic" personnel from their positions and even
to request their arrest andlrial is secured largely through the
control and influence of the Soviets on the Czechoslovak internal
security apparatus. A covert Soviet Security Mission is stationed
in Czechoslovakia and takes anectivo part in the Czechoslovak
internal security apparatus. In fact, the Soviet Security Mission
provided the impetus for the formation of a separate Czechoslovak
Ministry of National Security, There are no written agreements
covering the relationship between the Soviet Security Mission
and the Czechoslovak Ministry of National Security. Soviet
security agents work independently of the Czechoslovak govern-
ment and are stationed. in Bubenec as guests of the Office of the
President, reporting only to the MVD in Moscow. Through this
contact with the Office of the President, tbaSoviet Security
Mission exercises control over the Ministry of National Secu-
rity and also over the major subdivisions of the National Secu-
rity Corps, These relationships are illustrated in Figure 5i-g-
the organization chart of the Ministry of National Security and
the Soviet Security Mission.
* Figure follows on p. 33.
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Figure 5
Ministry of National SecUrity and Soviet Security Mission 2z/
Novombor 1951
:MVD
!Moscow :
Office, of the Prosidentr-- Soviet Socurity
. . _
Mission
; Czechoslovak C abineti
Other Ministrie
. _ .
Criminal Police
Mini stry of National
'Security
Secret Security Sbor Narodni Bezpocnosti
Group 11 (National Security
_ _
' Corps)
, Tr 0 t sk yi t e
; Titoist

; Section
_
1
1
, Factory ;
;Workers ,
! Militia 1
Offensive Section ;
' .
'Intelligence '
'
, -
Defensive Section -'
; Counter , : !Frontier
' Intellieencel I !Guard
Headquarters 'Prague
_
: Passport! ', Work
and ! IC amps
i Visa
Headquarters Regional '
1
(Several)
?.13.4.t..alions; ; District Communist Party I, _ District ;
I Security Unit HQ
I Companies Local Communist Pariir! !Local ;Local Government ;
&curl tK Agqn:I_ . 1HQ. _ , 1 Socurity Unit
Platoons !
i
I Communist Informants
! Home
/ Confidants'
_
liaison
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APPENDIX A
GAPS IN INTELLIGENCE
In the reporting of information on the Czechoslovak administra-
tive organization) the basic source of the data was usually
official documents or reports taken from official documents.
Practically no information was available on actual operating pro-
cedures. Consequently) it was impossible to prepare a flow
chart of procedures for the planning processes) for the dissemina-
tion of the Plan documents, for the allocation of the materials
required in the industrial process, or for the distribution of
the manufactured products. This represents a major gap in the
intelligence available on the functioning of the economic organ-
ization df Czachoslovak economy.
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ApPBNDIX B
mEallonotoGy
This report on the economic organization of Czechoslovakia
was necessarily limited to the top administrative levels of
some of the more important ministries, to the role of the Com-
munist Party, and to the extent of .5oviet Penetration and con-
trol of the Czechoslovak economy. All information available
from CIA sources and other IAC agencies was exploited. An
effort was made by the usual research processes of comparison,
analysis, and interpretation to present, a reasonable exposition
of the operation of the economy. The paucity of the information
presented greater difficulties than the analysis or interpreta-
tion of the data. The processes employed involved the use of
the customary tools of research -- collnctjon, enumeration,
analysis) and interpretation.
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APTIENDIX C
SOURCES AND EVALUATION OF SOURCES
1. Evaluation of Sources.
In the preparation of this report, tho basic reference materials
used included CIA Library documents, State Department reports,
the Biographical Register, and the Industrial Register. Generally,
information based on official Czechoslovak bulletins and reports
wore accepted at face value, although it was rertliz(A that a
groat difference existed betwoon tho official interprutation
of a directive and thu actual implomentation of it. Also, in-
formation confirmed by one or more sources was generally regarded
as probably true. In some instances, reports from untested
sources were accepted if they appeared to bo reasonable and were
not refuted by other informaLion. Difficulties encountered be-
cause of the lack of information were greater than those caused
by inaccuracies or misleading statements on Liao part of the
various sources from which the information was obtained.
2. Sources.
????????1,111...11.0010.?
1. CIA RT-1083,50 (5I-73/0 p. 5.
2. Czechoslovak Constitution of 1948, Article VII.
17. Ibid.
18. YETJ,
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