LIGHT INDUSTRY IN THE USSR 1950-65

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A002100120001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 52
• Document Creation Date: December 23, 2016
• Document Release Date: August 14, 2013
• Sequence Number: 1
• Publication Date: September 1, 1961
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
SECRET-, N? 3
Economic Intelligence Report
LIGHT INDUSTRY IN THE USSR
1950-65
CIA/RR ER 61-40
September 1961
CENTRAL INTELLIGENCE .AGENCY
Office of Research and Reports
I Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
ICIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
SECRET
Economic Intelligence Report
LIGHT INDUSTRY IN THE USSR
1950-65
CIA/RR ER 61-40
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.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
FOREWORD
The purpose of this report is to evaluate the performance of Soviet
light industry during 1950-60, to study the goals set for light industry
for the Seven Year Plan (1959-65), and to make judgments about the prog-
ress of the industry toward reaching these goals in 1965.
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
CONTENTS
Page
Summary and Conclusions
I. Introduction
II. Development During 1950-60
A. Production and Growth
B. Factor of Quality
C. Consumer Supplies and Prices
1
5
7
7
10
13
1. Supplies in General
13
2. Prices
15
D. Administration
17
III.
Seven Year Plan (1959-65)
19
A. Goals
19
B. Expanding Capacity
21
1. Over-All Investment
21
2. New Equipment
22
C. Raw Materials
24
1. General
24
2. Agricultural Fibers
24
3. Chemical Fibers
26
D. Achieving the Plan and Catching Up with the US .
?
?
?
27
Appendixes
Appendix A. Geographical Location of Soviet Light Industry 29
Appendix B. USSR: Value Components of the Index of Produc-
tion of Light Industry, 1950-60 and 1965 Plan
Appendix C. USSR: Capital Investment in Light Industry . .
- v -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
31
35
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Appendix D. USSR: Marginal Capital-Output Ratios
for Various Branches of Light
Industry
Appendix E. Methodology
Page
.37
Tables
1. USSR: Indexes of Production of Light Industry,
Producers Equipment, and Total Industry,
1950-60 7
2. USSR: Production of Light Industry, Selected
Years, 1950-60 8
3. USSR: Indexes of Production of Light Industry,
1950-60 11
4. USSR and US: Prices of Selected Consumer Goods
and Dollar-Ruble Ratios, 1955 16
5. USSR: Production of Light Industry, 1958 and
1965 Plan 20
Illustrations
Figure 1. USSR: Indexes of Production of Light
Industry, Producers Equipment, and Total
Industry, 1950-60 (Chart)
Following Page
8
Figure 2. USSR: Cotton Textile Industry (Map) .
Figure 3. USSR: Wool Textile Industry (Map) . . 18
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Following Page
Figure 4.
USSR:
Silklike Textile Industry (Map) .
18
Figure 5.
USSR:
Linen Industry (Map)
18
Figure 6.
USSR:
Leather Footwear Industry (Map) .
18
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3 '
S-E-C-R-E-T
LIGHT INDUSTRY IN THE USSR*
1950-65
Summary and Conclusions
Light industry** in the USSR has been notably backward by comparison
with its counterparts in many Western countries. In the allocation of
the nation's resources) state planners traditionally have limited light
industry in its share of capital funds, skilled labor, developmental
research, and the like. As a result of gradual modifications since 1959
of the earlier system of priorities, a more favorable climate has devel-
oped for increasing production of goods for personal consumption in spite
of the fact that planned rates of growth are below those achieved earlier
in the 1950's. Khrushchev's decision to expand production of consumer
goods appears to have been motivated in part by the need to stimulate
workers by greater incentives in order to achieve increases in the pro-
ductivity of the Soviet labor force. Indeed, Khrushchev's plan to catch
up with and surpass the US in important items of industrial production
requires such increases in productivity. Increases in production of
consumer goods are needed also because higher personal incomes have con-
siderably improved the consumer's ability to pay and thus created greater
demand.
Growth of light industry during 1955-60 was slow compared with growth
of total industry and that of producers equipment. During this period
it is estimated that production of light industry increased by 36 per-
cent) whereas total industrial production increased by 49 percent and
producers equipment by 87 percent. Earlier in the 1950's, light indus-
try, while still in the period of postwar recovery from a low base, grew
at a faster rate than that for producers equipment and almost as fast as
that for total industry.
Between 1950 and 1960, supplies of consumer goods were low compared
with those in the US and many countries of Western Europe. Production of
cotton fabric had increased by about 65 percent, and production of ready-
made clothing and leather footwear had more than doubled. Although sup-
plies were becoming more adequate in relation to demand, improvements in
* The estimates and conclusions in this report represent the best judg-
ment of this Office as of 15 July 1961.
** The term light industry as used in this report covers production of
textiles, clothing, and footwear. The term consumer goods refers to pro-
duction of light and food industries and includes also consumer durables
and other goods for personal consumption.
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
quality failed to keep pace with the over-all progress of the industry
as plant managers pressed hard to meet their goals for quantity. As a
result, the retail stores by 1960 were plagued with accumulations of
unwanted or unsalable merchandise, but the demand for more goods of
better quality increased.
Any direct improvements in light industry that may have resulted
from the decentralization of industrial administration in 1957 have been
obscured by the generally improved status of light industry -- a situa-
tion that has evolved since the late 1950's. However, for the most part,
plans have been fulfilled or exceeded, indicating that, under the adminis-
tration of the sovnarkhozes, management of lielt industry has heen rea-
sonably effective. Major problems still to be solved relate mainly to
the quality and design of products and to their distribution.
By comparison with the US, Soviet production of even the most basic
items of textiles, clothing, and footwear is low, as shown by the follow-
ing data per capita for 1960.
Commodity
Unit
USSR
US
Cotton fabric
Square meters
23
52
Silklike fabric
Square meters
3.2
15.4
Wool fabric
Square meters
2.1
2.3
Hosiery
Pairs
4.5
10.1
Leather footwear
Pairs
2.0
3.4
At the same time, prices paid for such goods in the USSR are exceedingly
high by comparison. For example, the average Soviet worker earning 800
rubles* a month paid more than 200 rubles, or one-fourth of his earnings
for the month, for a pair of shoes that in the US would cost about $10.
In spite of the current emphasis on production of consumer goods, it
is estimated that light industry in the USSR during the Seven Year Plan
(1959-65) is scheduled to grow at an average annual rate of only 6.3
percent, or below the estimated rate of 7.3 percent achieved during the
preceding 7-year period (1952-58). The relatively higher levels of pro-
duction that had been achieved by the beginning of the Seven Year Plan
make annual increases in percentage more difficult to achieve. The
growth of light industry, furthermore, is tied closely to the Soviet
* Unless otherwise indicated, ruble values in this report are given in
current old (pre-1961) rubles and may be converted to US dollars at a
rate of exchange of 4 rubles to US $1. This rate does not necessarily
reflect the value of the ruble in terms of dollars.
- 2 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
capacity to produce agricultural raw materials, and planned rates of
growth in these areas are relatively low. Chemical fibers, now in use
in light industry as supplementary fibers, will be utilized more exten-
Sively in the future to support the expanding production of light in-
dustry. Production in physical units of cotton fabric during the Seven
Year Plan is scheduled to increase by 33 percent; silklike fabric, by
76 percent; wool fabric, by 65 percent; and leather footwear, by 45 per-
cent. Achievement of these goals, which is quite feasible, should pro-
vide the Soviet consumer with considerable increases in supplies of
textiles and footwear. The consumer will be introduced to a number of
new products, such as the various fabrics of synthetic fibers and blends,
and will find noticeable improvement in the supplies of factory-made
clothing and knitwear.
Because of Khrushchev's promise ultimately to surpass the US in pro-
duction of consumer goods, Soviet light industry in the years ahead faces
its greatest challenge and compared with the past will receive a consid-
erably greater part of the nation's scarce economic and technical re-
sources. But fulfillment even of the Seven Year Plan for light industry
depends on the ability of the industry to solve a number of major prob-
lems, such as the modernization of plants, the improvement of industrial
processes, and the introduction of new commodities, and also depends on
the success of other industries, particularly for raw materials. Soviet
agriculture will be hard pressed to provide increasingly greater quan-
tities of natural fiber, and the overburdened chemical industry is charged
with supplying rayon and synthetic fibers in substantially greater quan-
tities than it has supplied in the past. Shortfalls in production of tex-
tile fibers, however, could be offset by increased imports in order not to
jeopardize the program for production of consumer goods. Thus, given a
continuation of the favorable climate for growth that now prevails, light
industry may still be able, in spite of the sizable problems that it faces,
to reach the goals that are planned for 1965.
- 3 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
I. Introduction
Production of goods for personal consumption has been one of the
areas most neglected in the Soviet economy. Primary emphasis on heavy
industry has exacted great sacrifices in the comfort and well-being of
the people of the USSR for more than 40 years. Seldom has this sacrifice
been admitted officially and never more pointedly than when Khrushchev,
in a speech in January 1961, 1/* stated, "Neglect for the material re-
quirements of the working people and the concentration of emphasis on ...
social and moral forms of incentive and reward has retarded development
of production and the raising of the living standards of the working
people."
Under the Soviet system, supplies of light industry goods have been
characterized by continual shortages of many items and by quality which
is low even by the standards of the Soviet consumer. In an economy
where production increases are stressed but where consumer preferences
are scarcely reflected, improvements in quality are effected very slowly
and changes in style or model are adopted reluctantly. As a result of
such conditions within the industry, the Soviet people generally appear
rather shabbily dressed in spite of exceedingly high prices paid for
clothing.
Historically, Soviet leaders stress the backwardness of Russian in-
dustry before the revolution of 1917, but Russian light industry in fact
had become relatively advanced. Light industrial production began on a
large-factory basis in the 18th century, when the old handicraft indus-
tries based on serf labor began to give way to the factory system using
hired labor. Under the reign of Peter the First, a number of textile
plants were built and equipped with imported British machinery, and thus
the first impact of the industrial revolution on Russia was through the
introduction of textile manufacturing. Russia's economy for some time
was largely agricultural, and these early industries supplied only a
smR11 part of the basic needs for textiles, clothing, and footwear. Other
branches -- notably knitting, garment making, and shoe manufacture -- were
not organized on a factory basis until much later.
The early textile plants sprang up in areas where labor supplies were
greatest rather than in agricultural areas where the raw fibers were grown
and easily available. This development gave rise to the present pattern
of concentrations of light industry at Moscow, Leningrad, Kalinin, and
other highly populated areas. Although modified to some extent over time,
the old geographical pattern remains predominant (see the maps, Figures
2 through 6**).
50X1
** Following p. 18, below. For detailed information on the geographical
location of Soviet light industry, see Appendix A.
-5-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Soviet ligbt industry under Stalin's leadership endured many years
of austerity extending to the early 1950's. For a brief period of time
following Stalin's death, light industry in 1953-54 realized sizable in-
creases in production under the leadership of Malenkov and his policy of
more goods for consumers. Khrushchev, in his first days of policymaking,
reestablished the old priority system, and once again light industry,
along with other consumer industries, was relegated to its traditional
subordinate position in the Soviet economy.
In spite of the renewed emphasis on growth of heavy industry during
the early years of Khrushchev's leadership, considerable increases in
production of consumer goods were achieved, raising the prospect that
the emphasis given consumer goods under Malenkov had left its mark and
prevented a complete reversion to the earlier neglect of consumer goods
under Stalin. Even limited increases in supplies of goods tended to
foster among the population the hope for an increasing number of amenities
in the future and to intensify further the desire for goods that they re-
alized were readily available in the US and most of the countries of
Western Europe.
By the late 1950's the consumer sector was being looked on with re-
newed favor. Khrushchev, following his first visit to the US in 1959,
intensified the program for consumer goods by a series of administrative
actions designed to increase production of consumer goods and to improve
the consumer's status generally. Moreover, in an apparent about-face of
his position in 1954, he simultaneously launched his propaganda drive to
surpass the US in production of consumer goods.
Other things being equal, a significant increase in the flow of goods
to consumption may be expected to promote greater satisfaction among the
people, augment the popularity and stability of the regime, and raise in-
dustrial productivity. It is assumed that Soviet policymakers are aware
of these factors and also appreciate the propaganda advantage of being
able to proclaim to the world that their system has been able to make
rapid gains in national strength while providing at the same time for a
high level of living.
- 6 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Development During 1950-60
A. Production and Growth
Reflecting the decisions of Soviet planners rather than the de-
mands of consumers, light industry during the period 1950 through 1960
grew less rapidly than Soviet industry as a whole and much less rapidly
than heavy industry, according to estimates of this Office. The relatively
low position of light industry on the scale of priorities in the Soviet
economy is traditional. By 1960 the estimated output of light industry
was 1.8 times the 1951 level, but total industry had grown to 2.2 times
the 1951 level and producers equipment to 3.0 times, as shown in Table 1.
Table 1
USSR: Indexes of Production of Light Industry,
Producers Equipment, and Total Industry W
1950-60
1951 = 100
Year
Light Industry 12/
Producers Equipment 2/
Total Industry al/
1950
84
101
88
1951
100
100
100
1952
105
101
106
1953
115
115
117
1954
128
133
132
1955
135
158
148
1956
143
188
160
1957
152
216
173
1958
163
239
185
1959
174
272
202
1960
183
295
220
a. Indexes, computed by this Office, were weighted by 1955 prices.
The base year, 1951/ is used instead of 1950 because it represents the
point at which production of light industry regained the pre-World
War II (1940) level.
b. For detail on the construction of this index, see p. 33, below, and
the methodology, Appendix E.
c. 2/
d. 1/
- 7 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
The early 1950's constituted a period in which light industry
was expanding to the extent that the index for light industry almost
kept pace with the indexes for producers equipment and for total indus-
try. During 1955-60, however, light industry, although still increas-
ing at a substantial rate, began to lag further behind, as shown by the
indexes in Table 1* and the data in the Chart, Figure 1.** During this
period, production of light industry increased by 36 percent, whereas
the total industrial production increased by 49 percent and producers
equipment by 87 percent.
These measurements in growth only partly indicate the real gap
between the consumer industries and the high-priority industries, inas-
much as they ignore relative sizes of the industries in the base year of
the index. In that year, 1951, light industry, having just recovered its
prewar level of production, was capable of producing far fewer goods than
were required to fill even the basic needs of a large Soviet population.
But the industries producing machinery and heavy equipment, having ex-
ceeded by 1950 the prewar production levels by a substantial margin, be-
gan their expansion from a much larger base.
Although consumer gains since 1950 have been gradual by Western
standards, basic necessities in clothing and footwear were fairly well
provided for by 1960. The physical production of the major commodities
of light industry for selected years since 1950 is shown in Table 2.
Table 2
USSR: Production of Light Industry
Selected Years, 1950-60
Commodity
Unit
1950 2/
1955 2/
1960
Cotton fabric
Million linear meters
3,899
5,905
6,387 12/
Silklike fabric
Million linear meters
130
526
810 12/
Wool fabric
Million linear meters
155
252
342 12/
Linen fabric
Million linear meters
282
306
559 2/
Sewn garments 21
Million 1955 rubles
(value added)
4,585
8,620
12,400 LI/
Knit outerwear
Million pieces
47
85
111 12/
Knit underwear
Million pieces
150
346
471 12/
Hosiery
Million pairs
473
772
96412/
Leather footwear
Million pairs
203
271
418 2...)/
a.
b. 21
c. For the methodology, see Appendix E.
d. Estimate based on plans.
* P. 7, above.
** Following p. 8.
- 8 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
300
280
260
240
220
200
180
160
140
120
100
80
USSR: Indexes of Production of Light Industry,
Producers Equipment, and Total Industry; 1950-60
Producers
Equipment
1-
Total Industry
Light
Industry
/
.//
/
..,'
/
/
/
io
.o.
/
I
I
I
.I
/
/
.I
.0 I
/
1951
= 100
---
/
/
1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960
*Indexes computed by this Office.
35304 7-61 Figure 1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Among the various branches of light industry, economic growth
measured in constant rubles during the 1950's was uneven. Cotton fab-
ric, the major textile and the most important single commodity of light
industry, showed the smallest growth, whereas the silklike fabrics,
produced in small quantities in 1950, showed a rapid growth as the new
synthetic fibers were added to an expanding production of rayon (see
Table 3*). Rates of growth during this period for the clothing and
footwear industries were midway between these extremes, resulting on
the whole in more than doubling production of these items for 1950.
During the 10-year period (1951-60) the average annual rate of increase**
in production of all light industry was 8.2 percent, and for the major
commodities of light industry the individual rates, in percent, were as
follows:
Commodity
Average Annual Rate
of Increase
1951-60
Cotton fabric
5.2
Silklike fabric
20.2
Wool fabric
8.4
Linen fabric
7.1
Sewn garments
10.4
Knit outerwear
9.0
Knit underwear
12.1
Hosiery
-7.4
Leather footwear
7.5
Since 1950, marked shifts have occurred in the distribution of
textiles according to type. Cotton fabric, which comprised 87 percent of
physical production in 1950, declined sharply in its share of total fab-
ric during the 10-year period because of gains in other natural fibers
and in rayon and synthetic fibers. The silklike fabrics, comprising a
small share in 1950, made the greatest gain by 1960, and wool and linen
made nominal gains, as shown in the following tabulation:
* Table 3 follows on p. 11.
** Average annual rates of increase are computed at the compound rate
for the stated period, including the terminal years.
- 9 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Type of Fabric
1950*
1960**
Cotton
87.3
79.0
Silklike
2.9
10.0
Wool
3.5
4.2
Linen
6.3
6.8
Total
100.0 100.0
The relative importance of fabrics in terms of value differs
markedly from their importance in terms of physical production. Because
the prices of fabrics vary widely -- from 8.32 rubles per meter for cot-
ton to 116.10 rubles per meter for wool (average retail prices in 1955) --
production measured on the basis of value gives wool and the silklike fab-
rics greater shares in the total. The following tabulation shows the per-
centage distribution of fabrics in terms of estimated value of production:
Type of Fabric
1950***
1960***
Cotton
55.9
42.4
Silklike
7.1
20.4
Wool
31.0
31.7
Linen
6.0
5.5
Total
100.0
100.0
B. Factor of Quality
Products of Soviet light industry generally are low in quality,
a fact that continues to evoke complaints from consumers. Although un-
accustomed to textiles and clothing of high quality, consumers neverthe-
less are sensitive about the high prices that they are required to pay
for such goods and expect in turn at least durability if not fine quality
or style. Even durability, however, is often sacrificed in striving to
meet goals for production.
Some of the factors that contribute heavily to the poor quality
of consumer goods can be enumerated. Textiles generally are lighter in
weight and narrower in width than those produced in the US and many coun-
tries of Western Europe. Thread counts are lower, and yarns receive less
twist. Irregularities in yarns and fabrics, which are prevalent, result
**
*-3HE
Computed from data in Appendix B.
- 10 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Table 3
USSR:
Indexes of Production of Light Industry 2/
1950-60
1950
= 100
Commodity
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
Cotton fabric
100
122
129
136
143
151
140
143
148
158
164
Silklike fabric
100
134
173
308
398
405
578
619
650
616
623
Wool fabric
100
114
123
135
157
163
173
183
195
210
221
Linen fabric
100
111
91
102
102
108
136
150
171
187
198
Sewn garments
100
114
128
143
170
188
207
209
229
253
270
Knit outerwear
100
126
136
140
162
181
181
191
206
221
236
Knit underwear
100
132
157
183
218
231
232
249
266
293
314
Hosiery
100
126
124
129
143
163
170
179
188
196
204
Leather footwear
100
118
117
117
126
133
141
156
175
192
206
a. computed from value data in Appendix B.
- 11 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
from the use of raw materials of low quality and from a lack of precision
in the spinning and weaving processes. A group of US specialists who
visited the Soviet cotton textile industry in 1959 reported the attitude
of the industry on quality as follows
Mills are somewhat concerned about the quality
of the raw cotton they get, but they have to use
what is furnished and turn out as good a product
in maximum quantity as they can. Since they have
little responsibility for the product after it
leaves the plant, they have no strong incentive to
be concerned about anything more than meeting min-
imum standards.
Such a lack of concern for quality is equally evident throughout
the textile industry and in production of garments and knitwear as well.
Soviet clothing, for the most part, is extremely shoddy, ill-fitting, and
unattractive. Until recently the lack of interest in fashion, the inex-
perience of the so-called fashion designers, and the poor quality of
textiles going into clothing were largely responsible for these backward
conditions in clothing manufacture. According to the criticism by the
industry itself, designing centers tend to create styles suitable for
custom tailoring but hardly adaptable for large-scale production. Con-
sequently, styles with which plants are already familiar contribute most
to the fulfillment of quotas and through use attain a certain permanence.
Little attention is paid to special-purpose clothing, such as that de-
signed for work, home, office, sports, dress occasions, and the like, so
that choice in apparel is extremely limited. Another major fault is rec-
ognized to be that of sizes. Currently, garment sizes are based on crude
averages of popular measurements, with a few standard sizes produced in
great numbers without regard for consumer needs. Soviet hosiery is
largely a cheap cotton product, of not very durable quality and of unat-
tractive appearance, typical of US hosiery of perhaps 30 to 4o years ago.
As late as 1955, almost 80 percent of Soviet hosiery was cotton.
Quality of materials and workmanship also is lacking in footwear.
In order to meet production quotas, footwear manufacturers, like clothing
manufacturers, continue year after year to produce somewhat standardized
models in a narrow range of sizes as a means of achieving production goals.
Customer complaints concern shortages of extra large and small sizes in
adult shoes, shortages of all kinds of children's shoes, and the generally
cheap quality that means ultimately a lack of durability. Reports show
that as much as 10 percent of a year's output of footwear from a given
factory has been returned as defective. 2/
- 12 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Shoes made from materials of good quality and of good construction
are available, but exceedingly high prices restrict such purchases to upper
income groups. Artificial suede and other simulated leathers, which are used
to extend the supplies of genuine leather, are far less durable materials
for making shoes, although composition soles, which are used extensively,
probably are an acceptable substitute for leather. Neither pigskin nor
goatskin is as durable by comparison, yet these materials are used widely
throughout the industry, especially for children's shoes. A further lack
of durability results from construction methods that often either are out-
moded or are geared to maximum output rather than to producing a high-
quality product. Many of the Soviet plants producing footwear are poorly
equipped, and some are merely consolidations of small handicraft enter-
prises, where hand labor is still used extensively.
C. Consumer Supplies and Prices
1. Supplies in General
That the Soviet consumer is better off today than he was in
1950 is indicated by the fact that by 1960 almost 50 percent more cotton
fabric and nearly twice as many pairs of leather shoes per capita were
produced. In addition, although consumer prices are still high, the
price trend has been downward during the 1950's. Although the Soviet
consumer may realize that his situation does not compare favorably with
that of his counterpart in the US or other Western countries, comparisons
with his own past experience are of first importance, and, in this re-
gard, times are better. The Soviet definition of a high standard of
living differs markedly from that established in the West in that it in-
cludes meeting basic requirements but does not include catering to the
desire for luxuries. Thus the higher standard of living limits rather
stringently the pattern of Soviet consumption. Most light industry
goods are included in the "necessary requirements" prescribed by the
Soviet officials, although the tendency will be to produce the utili-
tarian types of commodities rather than the luxury. items.
Consumption per capita of textiles, clothing, and footwear
based on total supplies of these commodities is still far below that of
the US in spite of sizable increases in production of consumer goods dur-
ing the 1950's. Soviet consumption per capita of the major commodities
of light industry compared with consumption of those produced in the US
in 1959 is as follows*:
* Products of light industry in general are neither increased appreciably
by imports of manufactures from abroad nor decreased by Soviet exports of
these goods. Consumer goods from factories abroad are, nevertheless, to
be found in urban markets -- fabrics, readymade clothing, shoes, and vari-
ous other commodities produced largely in the countries of Europe, both
Eastern and Western, and in China.
-13-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Commodity
Unit
USSR
US
Cotton fabric
Square meters
21
52
Silklike fabric
Square meters
3.3
15.1
Wool fabric
Square meters
2.1
2.7
Hosiery
Pairs
4.4
10.6
Leather footwear
Pairs
2.0
3.6
Levels of consumption also are low by comparison with stand-
ards set by the Soviet government in 1958 as "scientific" consumption
norms. 12/ These norms call for 58 square meters of textiles per person
compared with consumption in 1959 of only about 29 square meters. The
norms call for 3.5 pairs of leather footwear per person, but in 1959
only 2 pairs per person were available.
Recent developments in the consumer situation have stimulated
Soviet officials to revaluate the factor of demand. Supplies of consumer
goods have increased to the point where some of the major scarcities have
been eliminated, and disposable incomes have increased as a result of wage
increases, pension increase's, tax reductions, and the like. Thus whereas
consumers in periods of scarcity bought whatever was available to fill a
particular need, now buyers are able to exercise choice in making pur-
chases or may choose not to buy at all in the hope that more desirable
goods will be forthcoming. As a result of these changes, troublesome
imbalances have developed at the retail level where goods of substandard
quality or undesirable design accumulate. It is recognized, moreover,
that as the availability of goods increases, the more important becomes
the effect of price on demand. 11/ The fact that demand can be manipu-
lated by regulation of prices is looked on as a factor that will become
increasingly useful to the Soviet government in maintaining the needed
balance in consumer supplies.
Recognizing the increasing seriousness of the present supply
problems, the Soviet government proposes to resolve the imbalances by
attempting first of all to measure consumer demand and translate these
results into detailed planning for production of light industry. Unlike
planning in the past, Soviet officials now proclaim that public demand
will be the basis for planning production. The burden of responsibility
will rest with the republic ministries of trade both for measuring the
demand and for placing production orders which accurately reflect that
demand. Such a responsibility includes the serious tasks of eliminating
shortages, promoting the distribution of new commodities, eliminating
production of goods of undesirable quality or design, and creating re-
serve stocks in order to stabilize supplies. The proposed basis for
estimating demand involves statistical measurement at the retail level,
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
where studies of data and estimates will be made by the trade organiza-
tions for use in establishing detailed plans. Changes in the structure
of demand that occur because of further growth in personal incomes sup-
posedly would be estimated from the analysis of family budgets of vari-
ous segments of the population. 12/
2. Prices
Although sizable reductions in prices were made in the USSR
during the early 195016* (reductions in price since 1955 are comparatively
negligible), prices of consumer goods in relation to wages are notoriously
higher than comparable relationships in the US. Recognizing that compari-
sons in the costs of living for the two countries involve many complex
relationships, certain comparisons can be made that strongly suggest
degrees of difference in costs to consumers. The average earnings of
workers and employees in the US amounted to about $11-oo a month in 1959,
whereas those of the Soviet workers and employees were about 800 rubles,
or a ratio of 2 rubles for each dollar.** A ruble, however, will buy only
2 to 8 percent as much clothing or footwear as a dollar will buy for the
US consumer. In the USSR, almost half a month's pay is required to buy a
woman's rayon dress and at least 2 months' pay to buy a man's topcoat
(see Table )i.***).
The setting of prices of consumer goods by the Soviet govern-
ment is directed toward achieving definite economic ends. Through the
regulation of prices, the state is able (a) to stimulate on the one hand
the consumption of goods in ample supply and on the other to curtail
consumption of goods that are in short supply and (b) to accumulate in
the process a sizable part of its budget income. For example, shoes
with soles of synthetic materials may cost the Soviet consumer half as
much as shoes with leather soles, even though the cost of production of
the two may not differ greatly. Such pricing techniques are extended
also to include most of the so-called luxury items or any commodity the
consumption of which the state wishes to curtail.
Retail prices reflect not only the cost of producing the com-
modity but also the profits of the producing plant, marketing costs, and
the turnover tax, which is that part paid directly to the state budget
fund. This arbitrary markup of retail prices by the state accounts in
large part for the high consumer prices. The turnover tax on products
of light industry may account for as much as 50 percent of the retail
price of a given item and in some cases even more.
* In 1950, prices of a wide range of commodities in textiles, cloth-
ing, and footwear were reduced by 10 to 25 percent in comparison with
the levels of 1949. Again in 1953, prices of a number of these items
were reduced by an additional 8 to 20 percent.
** For the methodology, see Appendix E.
*** Table 4 follows on p. 16.
-15-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Table L.
USSR and US: Prices of Selected Consumer Goods and Dollar-Ruble Ratios 21
1955
1955 Prices
Commodity
Unit
Ruble Price
Dollar Price
Dollar-Ruble Ratio
(Purchasing Power of the Ruble)
Textiles
Cotton dress print
Square meter
15.80
0.40
0.03
Woolen (all wool)
Square meter
85.94
2.10
0.02
Rayon (spun)
Square meter
51.37
1.20
0.02
Sewn garments
Men's topcoats
Each
2,093
47.30
0.02
Women's topcoats
Each
637
19.10
0.03
Workshirt and trousers
Set
128
6.30
0.05
Children's coveralls
Each
77.90
2.10
0.03
Women's rayon dresses
Each
323
11.20
0.03
Children's cotton pajamas
Each
24.18
1.70
0.07
Knitwear and hosiery
Women's rayon underwear
Each
22.80
0.80
0.04
Women's nylon slips
Each
104.43
3.40
0.03
Men's cotton underwear
Each
28.20
1.40
0.05
Children's cotton underwear
Each
7.98
0.40
0.05
Men's cotton pullovers
Each
43.79
1.35
0.03
Men's cotton hosiery
Pair
5.14
0.40
o.o8
Women's nylon hosiery
Pair
35.98
1.60
o.o4
Leather footwear
Men's shoes
Pair
220.91
10.00
0.05
Women's shoes
Pair
155.75
6.70
0.04
Children's shoes
Pair
47.85
3.40
0.07
a. For the methodology, see Appendix E.
-16-
S-E-C-R-E-T
Declassified in Part- Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
D. Administration
The organization and operation of industries producing consumer
goods until 1958 was centrally planned, directed, and controlled by an
administrative apparatus that radiated from Moscow. The administrative
apparatus controlled an estimated total of 4 million workers and employees
in light industry -- about 90 percent in state industry, the rest in local
and cooperative industry. The Ministry of Industrial Consumer Goods,*
one of 44 ministries that formed the apex of industrial administration of
the vast Soviet productive apparatus, was responsible for the adminis-
tration of the various branches of light industry. As the industry in-
creased in size and complexity, numerous problems, which had persisted under
centralized control, appeared to become worse -- problems ranging from the
planning of production through to final disposition of commodities. Al-
though operational problems such as these were related generally to the
whole of industry, certain problems in light industry were perhaps more
acute because of general neglect. Shutdowns, for example, were not un-
usual, because deliveries of materials were behind schedule; the need
for specialization was evident as small plants diversified their opera-
tions and reduce their efficiency; and the further need for consolidation
was pointed up by an overburdened transportation system.
As a solution to the increasing complexity of managerial prob-
lems that beleaguered the controlling ministries, management of in-
dustry was decentralized by the economic reorganization in May and June
1957. The Ministry of Industrial Consumer Goods was abolished, and
the management of light industry was transferred to the newly formed
regional Councils of National Economy, or sovnarkhozes. Under the new
system of management, production is planned at the union** and repub-
lic levels by the respective gosplans. Administration of light indus-
try is the responsibility of the regional sovnarkhozes, although super-
sovnarkhozes at the republic level have been created in three large
republics -- the RSFSR, the Ukrainian SSR, and Kazakh SSR -- for the
purpose of coordinating the various activities of the administrative
units. Light industrial goods are distributed by the state and coop-
erative retail trade organizations that are controlled by the republic
ministries of trade.
There is evidence that management of light industry since de-
centralization in 1957 has improved to some degree. Plans for the most
part are being fulfilled -- some substantially exceeded -- but progress,
which can be attributed to the reorganization alone, is difficult to
* Early organizational names included the Ministry of Light Industry
and the Ministry of Light and Food Industry.
** In April 1960, long-term planning was transferred from Gosplan, USSR,
to the State Scientific Economic Council (Gosekonomsovet), USSR.
-17-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
assess because of the generally more favorable policy toward consumer
goods that has developed since the reorganization. Still, many serious
problems have yet to be worked out. Many of the items produced are
defective, poorly designed and 'sized, disproportionate in quantity in
relation to demand, and inefficiently distributed. These conditions
are accentuated by increasing demand for goods of better quality and
variety by consumers who now can afford to pay and who are often willing
to wait. Yet plant managers claim that they are unable to solve many
such problems because of restraints imposed by the republic ministries
of trade which, through orders and contracts for specific types of goods,
-largely determine production of a plant.
Local industry and cooperative enterprises, which also produce
light industrial goods, are administered by the local sovnarkhozes.
Utilizing raw materials of the immediate area and industrial scrap,
these plants produce sizable quantities of clothing and footwear for
local consumption, particularly in nonurban areas. Local industry,
although administered locally, is included in the state industrial sys-
tem, but cooperative industry is not included.
The cooperative producers are collective groups of artisans and
handicrafters who make a substantial contribution to Soviet light indus-
try at relatively little cost to the state. The cooperatives, in addi-
tion, serve the important functions of broadening the product mix and of
providing a degree of stability to the supply of consumer goods that
state enterprises, with hiel volume production but with less diversity,
have not provided. Nevertheless, since 1955 a number of industrial co-
operatives engaged in production of consumer goods have been transferred
to the status of State industrial enterprises, reducing the importance
of cooperatives as a source of manufactured consumer goods. Cooperatives
in this way have served as a means of transition from the system of private
enterprise of small craftsmen to their eventual assimilation into the
state industrial system. Whatever value the cooperatives have had in
the Soviet system in the past, it now appears that they will not long
endure as cooperative organizations operating outside the state system.
As craftsmen, members of cooperatives have continued to offer valuable
skills of which the state is in need, but as entrepreneurs they have
withered on the vine of cooperative enterprise. Presently, in the offi-
cial view, their activity parallels that of local industry, and thus
their existence is no longer justified. Already a number of cooperatives
have been transferred to the sovnarkhozes on a trial basis, with result-
ing improvement through specialization of operations. As a further de-
velopment, a general reorganization now is underway to consolidate the
cooperatives with enterprises of local industry.
-18-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
USSR: COTTON TEXTILE INDUSTRY
1950-1960
o Major textile center
? Other textile center
lijit) Cotton-growing area
PRODUCTION
29732 241
?
BILLION
LINEAR 5
METERS
3
I050
000.000./????...www.'"".?
I1252
1954
II255
1058
1960
Figure 2
Vishn
Volochek
Brest Ckleav6,
elite %Chelyab
MOSCOW AREA
Leninakan
PERSONS PER
SQUARE KILOMETER
ri Over 50
n 10-50
I?I Under 10
o
'II
*
Chim I "AA
Tashken livid
lurtelikia? ?
Igthaba
inabad
Pereval
0
F Ivanovo urmanov? Istsovo
,.. _ .. mpodnik,
avo,...
KaniN'Irkia:?."0"rym,
Nineshma
Zalesskiy . Shuya
O.-- p? . --,
Teykovo. ?.Ar.
0? vicnega \
?
.Yu?ha
.Ka thin Pereslavl'.
j Yakhrom:
0.yySokovs4k Strunino.:" .Yur yev.Porskiy
Sorino ?nrabanovo .
, lisgraare. ? ft, \rfk:a:Sarcedsidt:0:vieh..zi uoyeVIvaodimir
? Kovrov
0Yegor'yevsk C
,Ded?vsk.Ramensi:k;:'4:16, ?Kurovskoye
crUndo:?Sobinka
(--.8alabanovo Dreevznioavskly
? urom
f..r. ...-'-
/-----"M ReuteePs_ .....
.......S.e.r,..gukho.k.
6 .ozeturyits' Posed
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
USSR: WOOL TEXTILE INDUSTRY
1950-1960
9733 2-61
. .
. ,
SOO
MILLION
LINEAR 200
METERS
100
o Major textile center
? Other textile center
PRODUCTION
112110
?
allin
Riga
Kaunas
Srilcoinsk
siOtim ?
,berno,y/
?
nayevtsy
? .Kiev
hern sy ?
0 504, Lubfl
Kr enchug
at
1052
7904 1056 1958
1060
Figure 3
Qing ad
nski
umyorshinsk
Raka?vo
r'kov
0
sKrasno ar
e'nnom
Kutatii
bilis
0
e ?Kufm' or %?umen'
azykovo
? ?Int,._ _V. I. LeniA
Surs
erbent
Yereva ?Kiro bad
Baku
PERSONS PER
SQUARE KILOMETER
ni Over 50
n110-50
Under 10
a
0
Semi. alatinsk
Ala-
a
linaba
0
Ulan-Ude
MOSCOW AREA1-1
Vo
*Kabrazin
.6 ovo avidovskly
Rumyantsevke:ikthsTW4ryar..?0
kozlovo
Mantkhr p.lvanteyevka
.?Monino
17.kao_ddmvskts1/74 Star. Kupavna
_Parana. artrota
0
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
USSR: SILKLIKE TEXTILE INDUSTRY
1950-1960
o Major textile center
? Other textile center
PRODUCTION
Figure 4
MILLION
LINEAR 500
METERS
29734 2-67
1250 salsa 1934 1956 7956 1960
Mogi Iv
.Kiev
.Be defy
.Vitebsk
MOSCOW AREAP
Makharadze
Kutj
c.TeIa'
?N( ha
.Stepalakert
Ordubad
PERSONS PER
SQUARE KILOMETER
Fl Over 50
El 10-50
F-7 Under 10
Bolshdvo
.NaroTomin k
o
.Kirzhach
.Noginsk
?Filinonovo
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
29735 2.61
USSR: LINEN INDUSTRY
1950-1960
o Major production center
? Other production center
Flax-producing area
PRODUCTION
11111
500
MILLION
LINEAR 400
METERS
200
Figure 5
1050
1852
10521
1056
1050
1860
MOSCOW AREAt.-3
\.Tutayey
.Bezhetsk
Kostroma
Krasnyy,
Tkachi .'-`hteri,khta
yevelS
GavrilovTarn.
? *Privolzhsk r
Rostov
Puchezh'.
PERSONS PER
SQUARE KILOMETER
71 Over 50 .
n 10-50
[l Under 10
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Kokhma.?
Shuya
.VYaznik
Stepantsevo. (,,
Metenlu.cf'
1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
USSR
LEATHER FOOTWEAR INDUSTRY
1950-1960
o Leather footwear factory
PRODUCTION
MILLION
29736 2-61
400
10.3
IPSO 1060 1954 1056 1066 1060
Figure 6
,eKounas
r oVelikiye Lb
c4.
nyus
01
TaIlin
Ta r
Leningrad
Lutsk
L' ov
hgor
?Kiev
oKishenev
Ps 4s
Simferopol
Orel
Uryano sk
V r nezh ciocuirletsk
?Balathov
no ugansk
RQstovo
gy,
Stalingrad
rasno\tar
L
tavropor
0
eteerdlovs4
Kazan'
?OrIyabr'slay
Kut isi _Otd
jys 413t)
bit isi-
"Yerevan
PERSONS PER
SQUARE KILOMETER
n Over 50
n10-50
El Under 10
ikidzej
Baku
0
shkhaba
t.
arrlyShIOV
Novosibirs
1171..
Karaganda
zha bu
Krasnoyarsk
C:9
emi latinsk
Irkutsk
MOSCOW AREAI-.-1
0
Moscow
Oka
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
III. Seven Year Plan (1959-65)
A. Goals
Goals for light industry under the Seven Year Plan require an
average annual rate of increase of 6.3 percent.* This rate is lower
than the rate of 7.3 percent that was achieved during the previous
7-year period. Thus the rates of growth called for by the Seven Year
Plan are significantly more moderate than is suggested by Soviet propa-
ganda of the past 2 or 3 years.
The, lower rate of growth scheduled for light industry under the
Seven Year Plan can be attributed largely to the fact that achievements
during 1952-58 brought light industry to a much higher level of produc-
tion, so that, from the higher industrial base, annual percentage in-
creases are more difficult to achieve. Moreover, light industry still
is basically dependent on supplies of agricultural raw materials, al-
though chemical fibers and other synthetic materials will, by 1965,
make up a greater share of the total. Thus rates of growth for light
industry strongly reflect the planned availability of raw materials.**
Further growth of light industry requires additional investment
in the construction of new plants or in acquiring new machinery or proc-
esses. Furthermore, as the level of production moves closer to the
level of demand, light industry is faced with the added tasks of broad-
ening the assortment of goods and introducing improvements in quality --
both of which, while improving output of the industry, would tend also
* Average annual rates of increase are computed at the compound rate
for the stated period, including the terminal years. The rates, in per-
centages, for the Seven Year Plan are compared with those of the preced-
ing 7-year period (computed from data in Appendix B) as follows:
* *
Commodity
Average Annual Rate
of Increase
1952-58
1959-65
Cotton fabric
2.8
4.2
Silklike fabric
25.3
8.4
Wool fabric
8.0
7.4
Linen fabric
6.4
4.o
Sewn garments
10.5
7.5
Knit outerwear
7.3
7.4
Knit underwear
10.5
10.0
Hosiery
5.9
5.0
Leather footwear
5.8
5.4
See C, p. 24, below.
7 19 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
to slow the rate of growth. The same can be said of the introduction of
new commodities -- notably a wide range of commodities to be made of syn-
thetic materials.
Goals for physical production under the Seven Year Plan compared
with production in 1958 are shown in Table 5.
Table 5
USSR: Production of Light Industry
1958 and 1965 Plan
Commodity
Unit
1958 2/
(Volume)
1965 Plan
Volume 12/
Index
(1958 = 100)
Cotton fabric
Million linear meters
5,790
7,700 E/
133
Silklike fabric
Million linear meters
845
1,485
176
Wool fabric
Million linear meters
303
500
165
Linen fabric
Million linear meters
481
635
132
Sewn garments 1/
Million 1955 rubles
(value added)
10,500
17,400
166
Knit outerwear
Million pieces
97
160
165
Knit underwear
Million pieces
399
780
195
Hosiery
Million pairs
888
1,250
141
Leather footwear
Million pairs
356
515
145
a. le
c. The lower limit of the range of planned production for 1965 of 7.7
billion to 8.0 billion linear meters.
d. 15./
Through the achievement of the goals of the Seven Year Plan, the
Soviet consumer, by comparison with what he has known in the past, will
find considerable improvement in the supply of consumer products of light
industry, and to some extent the material incentives, which Khrushchev
desires, will have been provided. Consumers will notice significant in-
creases in the availability of textiles and footwear, will be introduced
to many new products such as the various fabrics of synthetic fibers and
blends, and will find noticeable improvement in the supplies of factory-
made clothing and knitwear.
- 20-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
In addition to solving problems of shortages of raw materials,
achievement of the plan requires that a number of other arduous tasks
be performed; industrial capacity must be increased by the construction
of new plants and the modernization and reequipment of existing plants;
and new products must be brought into production, especially those made
from synthetics, requiring the mastery of completely new production
processes and manufacturing techniques.
B. Expanding Capacity
1. Over-All Investment
To support the expansion of production of consumer goods,
light industry during 1959-65 is scheduled to receive greater allotments
of capital funds than were invested in the previous 7-year period. In-
vestment in state enterprises of light industry as originally announced
in the Seven Year Plan was to total 33 billion 1955 rubles, or 2.6 times
the investment of the preceding 7-year period.* Additional investment
funds of 25 billion to 30 billion 1955 rubles called for by Khrushchev
have subsequently been allocated for the development of the textile and
footwear industries and for the expansion of the agricultural production
of raw materials for these industries. 1.Y The division of this invest-
ment among the manufacturing light industries, the raw material base
provided through agriculture, the chemical industry, and the builders of
machinery for light industry is not clear, but directly or indirectly
light industry will profit from all these investments.
Light industry is thus becoming more capital-intensive as
additional new plants are brought under construction, as the reconstruc-
tion of old plants continues, and as modernization of equipment pro-
gresses. A reflection of the cost of expanding the industry is seen in
a shift in the marginal capital-output ratio. For the Seven Year Plan
in relation to the preceding 7-year period, the marginal capital-output
ratio derived from Soviet over-all plans for light industry is calculated
from official data as 0.40 in contrast to 0.16 for the earlier period, as
shown in the following tabulation 12/:
Increments to Production Capital Investment
(Billion 1955 Rubles)
(Billion 1955 Rubles) Ratio
1952-58
76.4
12.6
.16
1959-65
83.3
33.0
.40
See Appendix C. In addition to capital investment in state enter-
prises, funds amounting to several billion rubles are believed to be
provided for investment in cooperative enterprises that produce the com-
modities of light industry. As cooperatives are brought into the state
system, these funds presumably would be added to the capital investment
fund for light industry.
- 21 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
In past years, substantial increases in production have been
achieved fairly economically through expansion of existing plants and
modernization of equipment, but future expansion will depend to a greater
extent on the more costly construction of entire new plants.*
2. New Equipment
the USSR is intent on
becoming one of the leading nations in production of cotton textiles by
1965, rivaling the US in the size of its production. The magnitude of
this task is indicated by comparing the Soviet spindle strength with that
of other countries which lead in production of cotton textiles. Among
the leading countries in cotton textiles according to the number of
spindles in place in 1959, the USSR occupies fourth place as shown in the
following tabulation:
Country
Million Spindles
US
20.3
118/
UK
19.9
12/
India
13.5
22/
USSR
11.5
21/
China
9.2**
Japan
9.0 22/
During the course of the Seven Year Plan the cotton textile
industry is scheduled to put into operation 7.7 million new spindles.
If this goal is achieved, the total spindle count for the USSR would, by
1965, amount to 19.2 million spindles, or 95 percent of the number of
spindles in the US in 1959.
Soviet planners admit, however, that the Soviet machine build-
ing industry has neither the plant capacity nor the skilled personnel to
design and build the new textile machinery needed to support planned ex-
pansion. In fact, the lesser but equally vital task of replacing wornout
machinery in existing textile plants has already proved burdensome. Fur-
thermore, the Seven Year Plan prescribes the additional task of moderniz-
ing other textile processes, including replacement of old style looms
with modern automatic looms and installation of more modern systems of
finishing, such as printing, dyeing, bleaching, pressing, and applying
waterproof or wrinkle-resistant finishes.
* For a more detailed analysis of the marginal capital-output ratios,
see Appendix D.
** Estimated.
- 22 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Procurement of textile plants and machinery from Western
manufacturers plays a major role in expanding the capacity of the textile
industry and has the added advantage of contributing substantially to the
technological advancement of the industry as well. The purchase of ma-
chinery abroad lessens the pressure on the machine building plants at
home and at the same time saves costly research and designing time by
making possible outright copying of the most advanced models produced by
Western industry. Such intentions are noticeably demonstrated by Soviet
purchasing officers who persist in their efforts to procure from Western
firms the very newest and most modern equipment even in cases where con-
ventional machinery is clearly more suitable for a particular operation.
For example, when Soviet engineers and officials negotiated for large
purchases of textile machinery from the US company Intertex Interna-
tional, Inc., in 1960, they were persistent in their efforts to buy only
the finest equipment of the latest model while bargaining hard for the
best terms possible. The Soviet buyers showed no interest in other suit-
able machinery and equipment recommended for purchase at lower prices.
Plants for production and processing of synthetic fibers, and
to a lesser extent rayon fibers, appear to hold the highest priority in
purchases from Western firms. Prominent among these are plants and proc-
esses for production of synthetic fibers not yet available in substantial
quantities in the USSR, such as dacron, orlon, and nylon 66 (Du Pont ny-
lon). In addition, purchases are being negotiated for processes already
well established in Soviet industry, including plants and methods for
production of viscose filament and staple, acetate filament and staple,
and a cellulose plant to supply raw materials for production of these
fibers. The USSR has sought even to buy from a British firm a plant
for production by the continuous polymerization process of kapron (nylon
6), a type of nylon that has been in full-scale production in the USSR
since 1950. Such a purchase obviously was motivated by the desire to
modernize Soviet processes through the acquisition of advanced technology
from Western industry rather than by the development of such improvements
internally.
Although the USSR has indicated a strong interest in and pref-
erence for US processes and models of equipment, negotiations also have
taken place on a large scale with firms in several West European countries
such as the British firms of Courtalds, Ltd., and Interfil, Ltd., and the
West German firms of Friedrich Alfred Krupp, Inc., and Von Kohorn Interna-
tional. On a lesser scale, manufacturing and trading firms in Italy and
Sweden also have participated in the Soviet purchasing program. The USSR
began negotiations with Japan for sizable quantities of textile machinery
for the first time in 1958. In general, machinery of Japanese make can
be bought well below the prices of machinery in the US and West European
countries -- as much as 25 percent lower than the prevailing international
prices. 2.3../ Japan, therefore, may prove to be an important source of tex-
tile machinery during the Seven Year Plan.
-23-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
By contrast the USSR appears to be generally less interested
in obtaining technology and equipment for other branches of light indus-
try, such as the garmentmaking, knitwear, and footwear branches that, in
general, are more backward than is the textile branch. It appears, there-
fore, that the program of expansion and reequipment of light industry is
geared primarily to production of textile fabrics. One official of light
industry, in fact, has stated that "fast progress in cloth weaving" is
the basic task for the Seven Year Plan. 2L/
C. Raw Materials
1. General
Providing increasing quantities of raw materials will be one
of the major factors limiting the future growth of light industrial pro-
duction in the USSR. Production of cotton and wool by Soviet agricul-
ture is expected on the whole to fall short of the goals of the Seven
Year Plan. Moreover, even the planned output of most natural fibers
will barely support the planned increase in textile fabrics. For ex-
ample, for 1959-65 the physical output of cotton fabrics is to increase
at an annual rate of 4.2 to 4.7 percent, whereas that of cotton fibers
is to increase between 3.8 and 4.9 percent. 22/ Soviet planners appear
to have become more realistic in recognizing that Soviet agriculture can
no longer, as it has in the past, supply fibers in adequate quantities to
support the planned expansion of the textile industry. Future goals for
fabrics are dependent on the assumption that rayon and synthetic fibers
can be produced in quantities adequate to supply the requirements of the
expanding textile industry over and above that which agriculture can pro-
duce. The importance of chemical fibers in the entire expansion program
is emphasized by the fact that for 1959-65 the output of silklike fabrics
is to increase at the average annual rate of 8.4 percent, ..2g although
production of chemical fibers is to increase 22 percent annually. 21/
Woolen plants in particular are to rely on increasingly larger quantities
of synthetic fibers, if, indeed, woollike synthetics can be produced suc-
cessfully by the chemical plants as planned. Cotton mills also are to
receive large quantities of synthetic fibers that are suitable for blend-
ing with cotton fiber, probably lavsan or nitron -- the Soviet counter-
parts of dacron and orlon.
2. Agricultural Fibers
Soviet agricultural production of textile fibers -- princi-
pally cotton, wool, and flax -- is expected, on the whole, to fall some-
what short of the goals of the Seven Year Plan. Production of cotton in
1965 is planned at 5.7 million to 6.1 million tons,* an increase of 30 to
40 percent above production at the beginning of the plan in 1958. During
Tonnages are given in metric tons throughout this report.
- 24 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
the first year of the Seven Year Plan, because of unusually favorable
growing conditions, cotton production increased by as much as 7 per-
cent, but in the following year, 1960, adverse weather conditions re-
sulted in a drop to the level of 1958. Thus during the first 2 years
of the Seven Year Plan, Soviet agriculture has made little, if any,
progress toward the ambitious goal for production of cotton in 1965.
Irrigation networks now under construction in the USSR are
expected to expand cotton acreage by some 20 to 25 percent toward the
end of the Seven Year Plan. Several large irrigation projects designed
to increase acreage planted to cotton are underway in Soviet Central
Asia, including the project on the Golodnaya Step and the one in the
Central Fergana Valley. A small increase in cotton yields -- 5 to 10
percent -- probably is planned by 1965, even though the USSR already
claims Soviet cotton yields to be the highest in the world. Soviet
yields compare favorably with those in the US in the irrigated lands
of California, Arizona, and New Mexico. New acreage brought into pro-
duction, however, even with irrigation, does not produce peak yields
for several years. Because of these limitations, it is estimated that
production by 1965 will reach about 5.5 million tons instead of 5.7 mil-
lion to 6.1 million tons as planned.*
Nor are the ambitious goals for production of wool expected
to be reached. During the Seven Year Plan, production of wool is sched-
uled to increase from 322,000 tons in 1958 to 548,000 tons by 1965, or
an increase of 70 percent. Planned improvements in breeds for increased
yields may be difficult to achieve, and the size of herds will be limited
by the fact that Soviet agriculture is unable to expand production of
livestock feeds and to prevent annual fluctuations in feed supplies.
Thus, in total numbers of sheep, the herds by 1965 will be considerably
smaller than the increase of 57 percent called for by the plan. Soviet
production of wool by 1965 then would reach a level of only about 500,000
tons, or about 10 percent short of the planned goal.
Planned increases in production of fiber flax are to be
achieved both through increased yields and through expansion of acreage
planted to flax. Special emphasis is being placed on expanding the
principal flax-growing regions, where increases in new acreage are ex-
pected to amount to about 20 percent. Increased use of mineral ferti-
lizers and improved agrotechniques will promote further the increases
in flax fiber that are planned. Thus it is expected that the goal of
580,000 tons of flax fiber will be produced in 1965.
* Data on production of agricultural fibers are unpublished estimates
in the files of this Office.
-25-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
3. Chemical Fibers
As early as May 1958, Khrushchev in his decree outlining
plans for the chemical industry had announced his plan for a large rayon
and synthetic fiber industry designed to increase production and reduce
the cost of textiles and clothing. EL?/ The decree called for capacity
for production of rayon and synthetic fiber to be increased almost five
times during 1959-65. To equip the new synthetic fiber industry, the
USSR would, Khrushchev said, rely heavily on the machine building indus-
tries of the "brother countries." To save time in machine designing and
manufacturing, he further proclaimed, "It would also be expedient to
order part of this equipment in capitalist countries, primarily the US,
West Germany, and Britain."
Research in synthetic fibers in the USSR is, nevertheless,
much further advanced than is indicated by progress at the production
level. As late as 1958, Soviet laboratory research on synthetic fibers
was estimated to be only 2 to 4 years behind that of the US and Western
Europe. 22/ On the basis of these substantial achievements, therefore
the USSR is in the process of expanding its rayon and synthetic fibers
industries as scheduled by the Seven Year Plan. Supplies of basic mate-
rials needed for production of synthetic fibers -- coal, petroleum, and
natural gas -- are cheap and abundant in the USSR, as is cellulose, the
basic material for the manufacture of rayon. To date, the USSR has used
these inexpensive materials to develop a sizable rayon industry, which
produces viscose and acetate rayon, and a small synthetic fiber indus-
try, which produces mainly kapron. Complete plants for production of
kapron, which were confiscated in East Germany following World War II
and reconstructed near Moscow, served as a nucleus for the Soviet syn-
thetic fiber industry. Other synthetic fibers, for which technology
was acquired readymade from European countries and the US and which
are already produced in small quantities, are to be produced in much
greater amounts. These fibers include two additional types of nylon --
anid and enant -- in addition to nitron (orlon); lavsan (dacron); and
khlorin, a polyvinyl fiber.
Soviet officials have emphasized repeatedly the importance
of synthetic fiber for reducing in the long run the cost of textiles
and clothing, more specifically for reducing labor inputs required for
production of fibers. In general, labor inputs are higher for natural
fibers than for chemical fibers, but in producing chemical fibers labor
costs often are small compared with the cost of capital equipment and
cost of materials. For example, the cost of labor in production of
viscose staple on an efficient large scale in the US is only about 13
percent of the total cost of production. 12/ In production of acetate,
labor inputs are even less, whereas in both cases capital and materials
costs are high. By contrast the inputs of labor required for production
of cotton and wool make up a large share of the total cost.
-26-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
A heavy burden falls on the chemical industry for supplying
fairly soon the sizable quantities of fibers that light industry will
require. Although the program for these fibers is lagging, it is still
too early to predict the outcome by 1965. In 1960, rayon and synthetic
fibers still made up only 15 percent of the total textile raw materials,
and the 1959 plan for construction of plants to produce chemical fibers
was fulfilled by only 45 percent. 211 Bringing into full production the
chemical fiber plants already under construction could overcome the lag
and put the chemical fiber program on schedule.
Thus the fulfillment in 1965 of the goals for lielt industry
depends in large part on an unprogressive agricultural sector for sup-
plying increases in natural fibers and on an already overburdened chemi-
cal industry for providing large quantities of rayon and synthetic fibers.
Should agriculture and the chemical industry fail to meet their require-
ments to light industry, the official program for increasing the supplies
of textiles to Soviet consumers would be placed in serious jeopardy. In
this event, Soviet planners would have to look abroad for large quantities
of textile fibers with which to supplement domestic supplies.*
D. Achieving the Plan and Catching Up with the US
Khrushchev has seen fit to promise the people of the USSR the
highest standard of living in the world by 1970; a promise that somewhat
surprised the long-neglected Soviet consumer and the world at large.
Having endured tens of years of scarcity and privation at the time when
Western standards of living were rising steadily, Soviet consumers were
impressed by the prospects, however vague, of one day leading the world
in consumer goods. That the USSR might surpass the US in consumption
* The USSR, a net exporter of cotton, annually exports large amounts of
its total production of cotton mainly to its European Satellites. The
total export in 1959 amounted to 22 percent of production. Although in-
creasing domestic requirements appear to strain the ability of the USSR
to continue such extensive export, these commitments appear fairly rigid
as indicated by the export pattern of recent years. On an unginned basis
(converted at the rate of 3 to 1), the USSR imported 6o,000 tons of cotton
and exported 1.01 million tons in 1955, 12/ imported 327,000 tons and ex-
ported 957,000 tons in 1957, 33 and imported 571,000 tons and exported
1.03 million tons in 1959. 34 Imports of wool, chiefly from China and
other Asian countries, amount in recent years to more than one-third of
Soviet domestic production. It may develop that the Soviet need to im-
port cotton and wool in the future may coincide with other Soviet motives
abroad, setting optimum conditions for imports of these fibers that are
available for purchase or barter. Indeed, it may prove that to purchase
is more economical than to produce in cases where problems of agricul-
tural or industrial expansion become pressing.
-27-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
could not fail also to impress the underdeveloped countries of the world,
as well as some Western countries which have levels of consumption far
below those of the US. Khrushchevis "standard of living," however, allows
only for basic necessities in personal belongings and explicitly excludes
the so-called luxuries such as automobiles and many of the convenience
items considered basic to households in the US. Still, even in basic
commodities, the USSR is far behind the US and many other Western coun-
tries. Soviet production per capita of fabrics in 1960 was only 44 per-
cent of US production,* and this rate would afford a supply of clothing
and household textiles far from adequate, at anywhere near the standards
set by most Western countries, to clothe a population that exceeds that
of the US by about 20 percent. Production of leather footwear is only
about one-half that of the US, and gross insufficiencies exist in amounts
of readymade clothing and knitwear available to the population. The USSR
promises to boost its textile production to 8.2 billion square meters by
1965, but the US produced almost 12.5 billion square meters in 1960.
Thus Soviet light industry in the years ahead faces its greatest
challenge, and achievement of even the 1965 goal is dependent on utiliza-
tion by this industry of a considerably greater part of the scarce eco-
nomic and technical resources than it has utilized in the past. Given
the funds and the continuing emphasis on consumer welfare, the 1965 goals
probably can be achieved, but to achieve for the Soviet people the highest
standard of living in the world is entirely another matter.
How well the USSR "succeeds" in catching up with or surpassing
the US in consumer goods will depend to a large degree on the Soviet in-
terpretation of performance. On the one hand, Soviet officials relate
their annual production to catching up with US levels of production; on
the other, they denounce the US for being grossly wasteful and excessive
with regard to consumption. Thus for purposes of comparison and of
propaganda, the choice is theirs.
* For the methodology, see Appendix E.
- 28 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
APPENDIX A
GEOGRAPHICAL LOCATION OF SOVIET LIGHT INDUSTRY
Although the plants of light industry are widely dispersed throughout
the USSR, they are concentrated most heavily in the industrial centers of
Moscow and Leningrad and their suburbs. These cities, which because of
their large supplies of labor became the centers of early industrializa-
tion, remain almost 100 years later the heart of the industry. Under the
Soviet regime a plan for dispersion of industry has resulted in new plants
being located away from the industrial areas and in closer proximity
either to the sources of raw materials -- Central Asia, Transcaucasia,
Siberia, and the Far East -- or to other important centers of population.
Cotton Textiles
Of cotton textiles, 80 percent are still produced in the Moscow and
Leningrad areas far from the cotton-growing regions of Uzbek SSR, Turkmen
SSR, Tadzhik SSR, Kirgiz SSR, Kazakh SSR, the Volga, and Transcaucasia.
Uzbek SSR, noted for high crop yields and expert technology of cotton
growing, produces two-thirds of the cotton grown in the USSR. The largest
cotton combine in the country, and claimed to be the largest in the world,
has been built since World War II at Kamyshin in the region of the lower
Volga. Equipped with more than half a million spindles, its scheduled
capacity is 1 million meters of cloth a day. Two other large combines,
only slightly smaller in capacity than Kamyshin, contribute heavily to
the supply of cotton cloth. One, the Barnaul cotton combine in West
Siberia, supplies the vast Siberian and Far Eastern regions with a vari-
ety of cotton cloth products. Another of these combines is located in
Tashkent, the capital and industrial center of Uzbek SSR. Other impor-
tant combines, although smaller in capacity, are located at Gori, indus-
trial city of Georgia; at Stalinabad, where cotton is grown in the fer-
tile valleys of Tadzhik; and at Kherson, a Ukrainian port city near the
cotton-growing lands of the steppe.
Wool Textiles
Wool textiles, like cotton, are produced principally in Moscow and
Leningrad. In spite of Soviet attempts at dispersion of the industry by
construction of new plants in the Ukrainian SSR and the Georgian SSR,
the greater part of wool textiles is still produced in the older indus-
trial areas. Their production includes worsted and woolens of finer
quality, whereas fabrics of coarser wool are produced by plants scattered
throughout the Ukrainian SSR and the Volga regions. Construction of new
wool combines near the sheep-raising regions, however, has brought about
a degree of decentralization of production. Combines built since World
- 29 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
.7,1A-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
War II or presently under construction are found at Bryansk in Western
RSFSR; at Chernigov farther south in the Ukrainian SSR; and at Baku in
the Caucasus, Sverdlovsk in the Urals, and Kansk in East Siberia.
Silklike Textiles
Silklike textiles of rayon and synthetic fiber are manufactured at
12 major plants which, ranging in capacity up to 30 million meters a
year, account for a large share of output. Because the industry has
developed in part from the natural silk industry and in part as a branch
of the chemical industry, the plants manufacturing cloth of rayon and
synthetic fiber are widespread. For example, the principal plants of
the industry are located at Moscow and Kalinin in the central industrial
region, at Kiev in the Ukrainian SSR, and at Leninabad in Tadzhik SSR.
The first rayon plant was built by an English industrialist at Mytishchi,
near Moscow, before the revolution. Subsequently, during earlier 5-year
plans, rayon plants were built by US companies, one of which is operating
at Klin near Moscow.
Linen
Linen is produced principally by seven major plants, ranging in ca-
pacity up to 10 million meters a year, and by at least an equal number
of smaller plants. Major plants are located in the central industrial
region at Gortkiy, Kostromi, and Vyazniki; in the European North at
Vologda and Krasavino; and at Panevezhis in the Baltic region. Con-
struction of plants with capacities of 23 million meters at Rovno and
Zhitomir in the USSR was underway in 1959.
Leather Footwear
Factories producing leather footwear are concentrated most heavily in
the areas of Moscow and Leningrad. Large-scale enterprises also are lo-
cated in cities of the Baltic area, at Kiev in the Ukrainian SSR, at
Tbilisi in the Georgian SSR, at Kishinev in Moldavia, at Dzhambul in
Kazakh SSR, and at Ul'yanovsk and Kazan' in the Volga region. In spite
of such dispersion the distribution of this industry still does not cor-
respond with the needs of the population. Millions of pairs of shoes are
shipped annually from the central regions to the far reaches of the coun-
try, but, at the same time, hides and skins are shipped in the opposite
direction.
Clothing Factories
The industries producing knitwear and sewn garments are located in
major cities in the USSR. A number of plants were constructed during the
Fifth Five Year Plan (1951-55), and others are still under construction
in 1960 or are planned for completion in the next few years. In order to
disperse these industries, plants in the central industrial areas are
being modernized but not expanded, whereas new plants are being located
in areas of lesser industrialization.
-30-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
APPENDIX B
USSR: VALUE COMPONENTS OF THE INDEX OF PRODUCTION OF LIGHT INDUSTRY*
1950-60 AND 1965 PLAN
Commodity
1955
Million 1955 Rubles
Average
Retail Price
per Unit
(Rubles)
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1965 Plan
Cotton fabric
8.32
32,440
39,670
41,966
43,971
46,509
49,130
45,402
46,492
48,173
51,168
53,140
64,064
Silklike fabric
31.54
4,100
5,488
7,096
12,616
16,306
16,590
23,718
25,390
26,651
25,232
25,547
46,837
Wool fabric
116.10
17,996
20,434
22,059
24,265
28,212
29,257
31,115
32,972
35,178
37,849
39,706
58,050
Linen fabric
12.24
3,452
3,843
3,133
3,537
3,513
3,745
4,688
5,190
5,887
6,450
6,842
7,772
Sewn garments
4,585
5,227
5,869
6,556
7,794
8,620
9,491
9,583
10,500
11,600
12,400
17,400
Knit outerwear
47.70
2,242
2,814
3,053
3,148
3,625
4,054
4,054
4,293
4,627
4,961
5,295
7,632
Knit underwear
28.00
4,200
5,544
6,580
7,700
9,156
9,688
9,744
10,472
11,172
12,292
13,188
21,840
Hosiery
7.56
3,576
4,521
4,423
4,627
5,103
5,836
6,071
6,388
6,713
7,001
7,288
9,450
Leather footwear
170.67
34,646
40,790
40,449
40,619
43,521
46,252
48,982
54,102
60,759
66,561
71,340
87,895
Tbte.1
107,237
128,331
134,628
147,039
163,739
173,172
183,265
194,882
209,660
223,114
234,746
320,911.0
Index (1951 =
100)
84
100
105
115
128
135
143
152
163
174
183
250
* For the methodology, see Appendix E. For production in absolute quantities, see the tabulation on the next page.
- 31 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Production in Absolute Quantities 2/
Commodity
Unit
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1965 Plan
Cotton fabric
Million linear meters
3,899
4,768
5,044
5,285
5,590
5,905
5,457
5,588
5,790
6,150
6,387
7,700 12/
Silklike fabric
Million linear meters
130
174
225
400
517
526
752
805
845
800
810
1,485
Wool fabric
Million linear meters
155
176
190
209
243
252
268
284
303
326
342
500
Linen fabric
Million linear meters
282
314
256
289
287
306
383
424
481
527
559
635
Sewn garments
Million 1955 rubles
(value added)
4,585
5,227
5,869
6,556
7,794
8,620
9,491
9,583
10,500
11,600
12,400
17,400
Knit outerwear
Million pieces
47
59
64
66
76
85
85
90
97
104
111
160
Knit underwear
Million pieces
150
198
235
275
327
346
348
374
399
439
471
780
Hosiery
Million pairs
473
598
585
612
675
772
803
845
888
926
964
1,250
Leather footwear
Million pairs
203
239
237
238
255
271
287
317
356
390
418
515
a. Except for sewn garments.
b. The lower limit of the range of planned production for 1965 of 7.7 billion to 8.0 billion linear meters.
- 32 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
A comparison of the computed index with the Soviet index of produc-
tion by light industry for 1950-60 (1950 =
Year Computed Index
100) can be made as follows:
Soviet Index
1950
100
100
1951
120
N.A.
1952
126
N.A.
1953
137
143
1954
153
N.A.
1955
161
178
1956
171
191
1957
182
201
1958
196
217
1959
208
240
1960
219
N.A.
The index for light industry as computed above includes only finished
commodities and is free of multiple counting. The index is weighted by
Soviet retail prices of 1 July 1955. The Soviet index on the other hand
is an index of gross production, including both semifabricates and fin-
ished commodities -- for example, both yarns and fabrics. Thus multiple
counting is extensive. Wholesale prices of the enterprise as of 1 July
1955/ which include factory costs and profits but exclude trade markups
and turnover taxes, were used to weight the Soviet index.
Between 1950 and 1959 the Soviet index shows a growth of 2.4 times,
whereas the computed index shows a growth of about 2.1 times. These dif-
ferences in growth are not large, however, considering that 10 years of
production are represented by the indexes. Because of the differences
in the commodities covered, the weighting systems used, and the problem
of multiple counting, it is difficult to determine the precise reasons
for the higher Soviet index. It is reasonable to suppose, however, that
the combination of production data and weighting system which showed the
highest growth would be chosen to represent the over-all growth of the
industry.
-33-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
APPENDIX C
USSR: CAPITAL INVESTMENT IN LIGHT INDUSTRY
Total light industry 2/
Million 1955 Rubles
Ratio
of Planned Investment
1959-65
to Actual Investment
1952-58
Actual
Investment
1952-58
Planned
Investment
1959-65
12,600
33,000
2.6 to 1
Textiles 12/
9,000
25,000 si
2.8 to 1
Cotton 1/
3,848
7,812
2.0 to 1
Silklike 2/
743
7,088
9.5 to 1
Wool 1/
1,312
3,843
2.9 to 1
Other textiles
3,097
6,257
2.0 to 1
Knitwear and hosiery I/
527
1,853
3.5 to 1
Sewn garments I/
893
1,785
2.0 to 1
Leather footwear W
2,180
4,362
2.0 to 1
a.
b.
c.
d.
e.
f.
lt/
As originally announced. Investment
171
Residual.
Estimate based on 1960 planned
subsequently has been increased.
investment of 255 million rubles. 3i3/
-35-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
APPENDIX D
USSR: MARGINAL CAPITAL-OUTPUT RATIOS FOR VARIOUS BRANCHES OF LIGHT INDUS1EY
1952-58 1959-65
Investment 21
Increments to
Production12/
Capital-Output
Ratio
Investment 21
Increments to
Production 12/
Capital-Output
Ratio
(million 1955 Rubles)
(Million 1955 Rubles)
Total light industry
12,600
81,329
.155
33,000
111,280
.297
Textiles
9,000
46,454
.194
25,000
60,834
.411
Cotton
3,848
8,503
.453
7,812
15,891
.492
Wool
1,312
14,744
.089
3,843
22,872
.168
Other textiles
3,840
23,207
.165
13,345
22,071
.605
Knitwear and
hosiery
527
9,633
.055
1,853
16,410
.113
Sewn garments
893
5,273
.169
1,785
6,900
.259
Leather footwear
2,180
19,969
.109
4,362
27,136
.161
a. From Appendix C.
b. Computed from data in Appendix B.
- 37 -
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14: CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
The table above compares Soviet investment in light industry with
increments to production, actual and planned, computed from data on
production in Appendix B and Appendix C. The ratios thus computed dif-
fer from the "official ratios" announced by the regime* and based on
increases in gross value of production. For example, the capital-output
ratio for light industry for the Seven Year Plan, as computed above, is
1.9 times higher than that for the previous 7-year period, but the offi-
cial ratio is 2.4 times higher. Even though some difference in the
capital-output ratios as derived by the two methods was expected, the
ratios are still close. The official ratio is based on the value of
gross output for all light industry, including production of semifabri-
cates, whereas the computed ratios are based on the value of production
of finished products only, net of multiple counting.
Although the ratios for light industry as a whole, as computed above,
will just about double during the Seven Year Plan, ratios for individual
commodities in some cases show higher increases, reflecting significant
changes that are taking place in particular branches of light industry.
The capital-output ratio for the cotton textile industry is approximately
the same for both periods. On the other hand, the capital-output ratio
for "other textiles" was low for 1952-58 and high for 1959-65, an actual
increase of as much as 3.7 times. Even though investments for the early
period were high, the capital-output ratio for "other textiles" is low
because of the large increment to production that was achieved during
this period.
Possible reasons for this remarkably high increment to production
from investments in "other textiles" include the following: (1) unused
capacity may have been brought into production, (2) cotton textile sys-
tems may have been converted to weaving silklike fabrics (this was done
rather extensively in the US during the 1930's), (3) blends of rayon and
cotton may have been counted as silk and thus reported under "other tex-
tiles," and (4) new capacity for silklike fabrics probably is realizing
more fabric per unit of investment (not counting the initial investment
that is required to produce rayon fiber) because of the use of a contin-
uous filament rayon that requires less processing in the yarn stages.
Another explanation might be that the industry was realizing the results
of major investment made before 1952, but this possibility appears un-
likely in view of the investment priorities of the period.
The higher capital-output ratios for cotton, wool, knitwear, sewn
garments, and footwear for the Seven Year Plan probably are indicative
of the increased investment in new plant and ancillary facilities that
will be required to meet output goals, in effect a decline in the mar-
ginal productivity of capital. In the past a larger share of increases
in capacity has come from modernization programs that are less costly
* See III, B, 1, p. 21, above.
-38-
S-E-C-R-E-T
, Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
than new construction programs. The especially large increase in the
capital-output ratio of "other textiles" probably reflects the initial
impact of the new program for synthetic fibers. New plants, advanced
processes, and new equipment, much of which is being purchased abroad,
require major investments. At the same time the problems of training
personnel and acquiring new techniques will tend to keep production
low. Thus the relatively high ratio of capital to output for "other
textiles" reflects the changing technology and increased role of in-
vestment in this industry and, in part, the lag between new investment
and the resulting gain in output rather than definite decline in the
marginal productivity of capital. In this branch of light industry,
major increments to production may be forthcoming in subsequent periods
beyond the Seven Year Plan.
-39-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
APPENDIX E
METHODOLOGY
Soviet-US Price Ratios
As far as possible the items chosen for the dollar-ruble comparison
values in Table 4 were selected as typical of items purchased by Soviet
consumers. Soviet prices (average urban-rural prices) and commodity
specifications are from official Soviet bulletins of retail prices for
1955 or for later years adjusted to 1955 levels, but few price changes
have occurred 'since 1955. US prices are of commodities chosen to match
as closely as possible the Soviet commodity in quality and type. These
prices, which were selected from the Sears Roebuck catalog for 1955,
were adjusted for transportation cost and for the retail differential
factor.
Index of Production for Light Industry, 1950-60
Production data are from official sources including the various hand-
books and reports of plan fulfillment.. The average retail prices for
1955, which are used as weights, were either officially announced or were
derived from official retail price bulletins. Average retail prices for
the various fabrics were reported. .12./
Production Series for the Garment Industry
The production series for sewn garments was obtained by moving 1958
production, reported officially in terms of value added, L4-110/ back to
earlier years using the official index for value of production. 41
Planned production in 1960 is given,122/ as is the 1965 Plan. j7 For
the purpose of constructing an index, the use of the value-added series
to represent sewn garments eliminates the multiple counting of fabrics.
Production Per Capita of Fabrics, USSR and US in 1960
Total Production Production
of Textiles Population Per Capita
(Million Square Meters) (Million) (Square Meters)
USSR
6,466
214.0
30.2
US
12,491
180.1
69.4
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
S-E-C-R-E-T
Average Earnings in the USSR and the US
The average earnings of workers and employees in the USSR for 1959
were 9,550 rubles. W Comparable wages in the US were derived from 1959
gross wage and salary disbursements (nonagricultural) and employment,
excluding agricultural employees, proprietors, self-employed workers,
unpaid family workers, and the armed forces./IV
-42-
S-E-C-R-E-T
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
,CIA-RDP79R01141A002100120001-3
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
R
Next 3 Page(s) In Document Denied
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
50X1
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3
SECRET
SECRET
Declassified in Part - Sanitized Copy Approved for Release 2013/08/14:
CIA-RDP79R01141A002100120001-3