ECONOMIC BACKGROUND TO THE DYESTUFFS TRADE/ ECONOMIC DIFFICULTIES AND GERMAN DOMINATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000500130161-6
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 14, 2016
• Document Release Date: March 6, 2000
• Sequence Number: 161
• Publication Date: August 5, 1953
• Content Type: REPORT

Approved For Release 2002/05/01 : CIA-RDP80-00809A000500130161-6
SECURITY INFORMATION
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
COUNTRY Bulgaria Hungary Yugaslavia Rumania
SUBJECT Economic Background to the Dyestuffs Trade/ Economic
Difficulties and German Domination
PLACE ACQUIRED
(BY SOURCE) .......
DATE ACQUIRED
(BY SOURCE)
T.u o0cwn.T OO.T.I.. 1N00 *TIO. ?TT[cTI.. TH[ .NTIono OV[.. I
01 T.[ YNIT[0 .T.TO. WITHIN TM[M[.XIM. 01 TITI[ IT. TTCTIOTT T.T
..0 TW [. 01 T.[ Y.I. coot. Al .M[.0[0. ITI ~~wl1T10. o. TIVL
LATISH oT ITS CONT[MT. TO 04 Nan V T .Y TN u..MTNQOIICO .CN000 lT
DAT^ DISTR. 16
NO. OF PAGES 6
NO. OF ENCLS. 1
SUPP. TO
REPORT NO.
1. Of all the countries adversely affected by the First World War, one of the greatest
areas of dislocation was Eastern Europe. The old Austro-Hungarian Empire had been
broken up and what had been a single economic unit covering a large free trade
area was split into a number of countries each with its own currency and tariffs.
Three new countries bad been formed out of it, and parts of its territories added
to neighboring states. Trade was virtually at a standstill and the slump years
1920-23 and the severe inflation following them did little to improve the situation.
Despite fineacial aid and export assistance, none of these countries could be des-
cribed as being on their feet when the 1930 slump came and by 1931 foreign exchange
controls were in force in all countries except Rumania. The first half of the 1930's
saw some steady improvement in the commercial positions of these countries, but by
the mid-thirties the international situation was already becoming unsettled. Hitler
came to power in 1933 and 1935 saw the outbreak of war in Abyssinia. The boom year
1937 was followed by a sharp recession in trade in 1938 while the following year saw
the outbreak of World War II.
2. Clearly then, the countries under review have, since 1920, been subject to an almost
continuous series of commercially disrupting influences and trading conditions have
seldom been "normal". Generally speaking, their trade became more widely distributed
in the twenties but was later diverted largely to Germany. Indeed the outstanding
change in the direction of trade of all these countries was the growth of the
importance of their transactions with Germany. This was largely due to Germany's
willingness to buy many products tram them at prices higher than those prevailing
in the world market. The advantages accruing to the Eastern European countries from
this were, however, counterbalanced by the fact that the Germans blocked the resul-
tant balances and were consequently able to dictate what products their cuatomer
should take from them. The extent bo which individual German firms recognized the
implications of the wider economic picture is illustrated by the fact that in Bulgaria
IG Farben,while maintaining their on organization for marketing dyes, participated
in other organizations handling Bulgarian exports to Germany. In fact, the superior
position of the Germans in the dyestuffs markets of these countries pre-1939 was a
reflection of their total trade relationships. In some cases, Germany was absorbing
as Touch as 5096 of the countries' total trade.
G1lRIJUT I ON 40
CONFIDENTIAL
SECURITY INFORMATION
Y 4I R -- L 1? I r n l ____ _ _
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9.
The information available on the dyestuffs eonsurni.no industries prior to 1939 is,
in most cases, severely limited; however, such information as is available is given
below in order to assist in the Dormation of a picture which may be adjusted to some
extent in the light of the even scantier post-World War II Information
C.
Bulgaria
4. The main dyestuffs consuming industries in Bulgaria were 219 textile establishments,
employing 19,000 workers. There were in addition, 48 tanneries, four paper factories
and 16 soap firms.
Yugoslavia
6. Pre 1939, the textile industry was the largest in the country apart from agriculture.
It employed 74,000 workers in 424 different firms.
7. Rumania possessed 558 textile firms, 147 paper firms, 164 leather firms and 33 soap
firms.
8. The course of imports of dyestuffs into tr^3e countries prior to 1939 (19111+ in the
case of Bulgaria) (see graphson pages 4 and 5 ), varies considerably, the Bulgarian
showing little change in level over twenty years while the Yugoslav and the Hungarian
show marked upward trends, especially the latter. Figures for Rumanian imports of
dyestuffs are few, but the sequence from 1.932 to 1940 is sufficient to indicate the
general pre-war level.
In three cases separate figures for imports of Indigo are available; Bulgaria
imported between 30/40 tons per annum, Yugoslavia 35/45 tons per annum and Rumania
approximately 20 tons per annum. No indication of. strength is available.
Recovery and Reconstruction - 1945/47.
10. In each of these countries, after World War II, foreign trade became a State monopoly.
The first Hungarian nationalization covered only coal mining and electricity under-
takings, and although pressi& was exerted on the commercial banks, they were not
taken over until 1947. In Bulgaria, up to 1947, the nationalized sector coveted only
insurance. r'--- mines and the alcohol and tobacco industries, as well as rail trans-
port. In Rumania there was no nationalization _.:., until mid 1948. Mixed Soviet-
Ru_*inian -mpanies were, however, forae1 in oil. sir-transport, banking and timber
and later on in coal, metallurgical, chemical. a.. t,r?ieam equipment. State
enterprises had, however, been imports... in pm-s-vac hur,ania, 'n Yugoslavia, a very
ambitious Five-Year Plan wet launched in 1946.. was not carried out, however,
partly because it proved to be excessive in rslati .; the resources available
and partly because of political difficulties which resulted in a breakdown of trade
with other Eastern European countries end the Soviet Zonr-.
Industrial Expansion and the Emergence ot the Erc,rosic. Bloc -. 1947/1n.
11. The next phase in the development of these !ountri_; was the one in which they
ovc_took their 1938 production levels (s-:: ept in u:_gicuat u e) and in which the size
of the nationalized section of industry rose in moot eases from 10-400 to over 90%.
It was during this period that the general det,_rioiutierr of East-West relations took
place with the resultant tightening of lint:,, hetwe'?n r,Ie Eastern Europeai. governments.
1949 saw the formation of the Eastern European Co,ux.i 1 of Mutual Economic Assistance
with its hoadnuorters in Moscow. Moreover, it war u, this year that the Eastern
Europen: 7rweriments first devoted cons.iderekie sum!: i i er.Zenditure on defense. Long
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term plans that were relatively more generous to the consumer v re drastically
revised. In the middle of the following year (1950) the European Payments Union
became effective under the r:spices of The Organization for European Economic
Cooperation (OEEC) in the West, and the politinal divi -ton was translated into the
ec')nomic sphere.
12. Post World War II trade between East and West reached its highest point in 1949, but
even then it was substantially below the already low levels of the period immediately
prior to the War. In 1952, however, a certain in.:rease in trade took place mainly
between West Germany and Rumania, Benelux and Austria and Bulgaria.
Requirements and Availability of Dyestuffs
13. A rough idea of the dyestuffs requirements of the four countries under review can be
obtained by examining the pre-1939 level of unnorts and nuking adjustments in the
light of the change in per c a p i t a consumption of fibres since 1938 , ee Enclosure
(A)7. The result can only be approximate be?:ause the Governments of these countries
`dre in a position to adjust what would lie normal demands by extensive price manipula-
tion and production control. Moreover, there ere three large producers of dyestuffs
within the Eastern bloc, USE, Poland and Czen.noslovakia, each of which has been
developing its dyestuffs industry at some considerable rate. In 1949 the Hungarian
nationalized dyestuffs industry claimed that its production of dyestuffs was
sufficient to supply the domestic market, but since UNRRA stated in 1946 that the
whole coal-tar industry was small and that neither dyestuffs nor intermediates were
manufactured, the claim appears to be excessive, No statistics of the trade in dye-
stuffs between East European countries are available.
14. In overall total weight of dyestuffs produced the Eastern bloc may well be self-
sufficient but since one of their major industrial problems is modernization of
equipment, it is unlikely that they are self?su ficient in the higher quality products.
Imports of Dyestuffs & Organic Pi dents from Major
Producing Countries of the West (tons)_
Country
Bulgaria
Hungary
Rumania
Yugosl
avia
10
'50
'51
'52
149
'So
' S l
'52
' ? 4 9
'SO
'51
'52
149
15O
'51
2
France
4
-
-
0
28
13
9
9 -
-
-
2
-
28
134
Germany
0
45
6
40
312
41.7
203
79; 7
14
44
83
63
61
183
269
Italy
-
-
0
-
85
45
61
13
83
lol
130
Switzerland
25
12
11
19
141
151
171
136 1i.5
$ 7
34
16
68
7
15
UK
C
15
1
1
51
1
1
-I
3
0
1
14
42
47
120
USA
-
-
-
-
6
-
_!
-
19
19
2
12,
TOTAL
29
72
18
60
623
627
445
228 205 104 113
249
230
428
800
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 Approved For Release 2002/05/01 : CIA-RDP80-00809A000500130161-6
oT
rrWDENTIAL/US QvFICZ4LS ONLY--SECURITY MUMNTION
BULIIARIA-? M CM Cdr' DYES 1920-52
LArter 1945 - Imports From Western World Oniir7
D
Ill I III I I I I l.~ I I I I I I l I I I I 1 1 k~ I I
HUNGMY-IMMM OF DYES 1950-52
After 1945 - Imports From Western World on1i7
I~ I I I I I I I I I I I I I LI I i I I I l I I l l l I
22~ 24 26 28 30 32 34 36 38 4o 42 44 i.6 46 50 52
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