ECONOMIC - BUDGET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700220247-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 16
• Document Creation Date: December 15, 2016
• Document Release Date: August 12, 2003
• Sequence Number: 247
• Publication Date: April 28, 1953
• Content Type: REPORT

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COUNT(41' gun
SUBJECT Economic - Budge
HOW
PUBLISHED Daily newspapers
WHERE
PUBLISHED Budapest
DATE
PUBLISHED 17 - 21 Dec 1952
LANGUAGE Hungarian
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DATE DIST. c 8 Apr 1953
NO. OF PAGES 16
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
fc-omment: The following report on Hungary's national budget for
1953 is based on the 17 - 21 December 1952 issues of Nepsza-ra, Szabad
Ea, and Magyar Nemzet, with the bulk of the information coming from
Nepszava.
The published reports are characterized by a paucity of budgetary
figures. There are indications in the reports, however, that a great
deal more data was disclosed in the National Assembly than to he rreoc.
On the basis of supplementary recomue-ndations, apprupriatLor,, for
working capital were cut by 100 million forints for c tal1u.rgy and 30
million forints for transportation in the Course of the cudae:r r.Hbnr,e.
Since inventories in both of these industries cones:,!. t s L
of coal, and in view of the well-known coal shortage in Hurut sr;; , !' e,
conclusion seer warranted that these cuts may have hcr,r. ^, U r t.: rF-1.: :
stockpile: of cowl.
It may be of intere:;t to note the frequent reference
arc in the budget debate to Soviet ass Lstunc': and to the _ra_ . , .. ..
of Soviet methods in many lie 7
The 1953 national budget was introduced ir. the Hungarian :i t : ,rt1 Ar:: -aT
by Minister of Finance Ynroly Olt on 16 December 1952. The highl:.::t t.h~?
mini,ter's budget soeech follow.
Due to the increaae in the production and delivery of a~ritt:l'.ur,; ??..!
bot:r by the. prod,icern' coop>ratives and by independent peaor,r.t-, '.h_ %tebi1i y
of the Hungarian currency was strengthened in 1952. This favcrrtt:- Iovelccr::_r!
is also reflected in the final accounts for the year.
SFendi!..? w.re ;?%'c':?.: -
ally kept within the limits of appropriation, while actual
budgetary total.. As a result, the 1952 accounts are expected it's err s {5 tarp' .tr
of 150 million forinto over the original budget eatiortte.
5TATF.
ARMY
CENTRAL .... ___.k~)_..__ ?..=_.._.
CLASSIFICATION CONFIDENTIAL
NAVY r+SRS _ DISTRIBUTION
AIR FBI
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The fact that 1952 closed with a budgetary surplus has further' increa:r.d
the stability of the forint. The quantity of consumers' goods available at,
fixed prices has increased considerably, and the monetary system 1 fulfilling
its function satisfactorily. The velocity of c L-?culation of money vas ateppad
up in 1952. As a result, the increased volume of trade required a smaller
amount of currency.
Every branch of Hungary's national economy received much help from the
USSR in 1952, and the economic ties between the two countries are assuming
increasing proportions.
The minister then cited figures fot publishe], indicating the growing
economic depression in the capitalistic camp, due largely to the restriction'
on East-West trade imposed upon the Western countries by the US.
The minister's speech continued.
The 1953 national budget is balanced, with revenues of 52,739,000,000
forints and expenditures of 51,864,ooo,ooo forints, resulting in a aurplun of
875 million forints. The revenues are derived largely from the socialized sec-
tor of the national economy. Turnover taxes, profits, and other payments dl,,
from state enterprises total 10,152.000,000 forints, or 76.1 percent of the total.
1'he largest revenue item, amounting to 27,690,000,000 fori:.ta or 52.5 porc,:,,t r,"
tal revenues, fe derived from the turnover tax. Revenues from the profits of stets
enterprises will arrount to 8,85?,=000 forints, or approximattcly > bi ;1ton forin':~,
more than in 1952.
The estimate of increased revenues from profits is based on the expectation
that production costs will be reduced. One of the most important prerequisites
for a reduction of production costs is systematic conservation of materials and
greater productivity. Productivity, in turn, demands an even pace in production,
based on technological discipline. Another factor in productivity is the it.no-
vation movement, which has already produced substantial savings. During the
first 6 months of 1952, econ:miies due to innovations totaled 850 million forints.
Although progress has been made in reducing costs, the enterprie mar,ager__nts
will do well to devote greater attention to the economic and firsrctal hapects
of production -- in hort, to increased profits from operat.i:,n:,.
Next to the revenues originating in state enterprise , 1rc.cimz :rcm the co-
operatives also shows good progress. Tax revenues are budget_d at 936 million
forints for 1953, ai ccupared :rich 502 million forints in 1952, or, the expe^..ta-
tion of the continued development of priducrr?s' artisans', and pecsant coop.-r-
ati.ves. Taxes paid by the general populat;cn represented 1t, percent of total
revenues in 1952, but are reduce to 8 percent in the 1953 t?adget. Revecue
from the general pop-.r/.anon also include the proceeds of the th'rI Feace Loon,
which was overs'.rbscribed by one billion forints.
Savings dept, ited with the National savings Bank repro =-nt another 1. r c
revenue item. Althoughn swings deposits increased by 27 percent in 1952, the
results are not sat; ir,faotory. Demand for expensive cona?rrei- ' cods , such as
furniture, radio sets, and motor bicycles, is increasing. it would be advisa-
ble for the mass organizations to conduct a: cor,tituing campaign. to educate the
public to save money.
Budgetary e~xpendttures of 51.e 14,000,000 forints in 10i5j v_1- exceed 1952
expenditures by 9,283,000,000 forint_ The rise in expenditure;- reflect:. an
estimated increase of 16 percent in industrial production, at, well as '.nerea-;us
in capital invectment:e and in appropriations for cultural, and .dense
purposes; The bulk of the 1953 expenditures will serve the farther M.,veloonrent
of Hungary's national economy. Appropriations for rconor.ic purer.;,.-. ',t P,.!.
31,721,000,000 f,-c ins or 61.2 Dercent of total expendllnre . fhi.a amoi,ra in-
cludes 19,019,000,000forints, or 37 percent of total exper.d1t?,r'-: ,c'.' ted to
the realization of a vast investment program. A large pa:t of the invratme:a
appropriations will serve to increase the raw material supply -- the devr~].nrarc?nt
of coal mining, metallurgy, and power production.
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Building activity on the largest construction prcjectr of the Fi 't-'ie:sr
Plan will be continued in 1953. Production will be started at the Sztalirr
Vasmu (Stalin Ironworks), as well as at the 700-cubic-meter firr_ace, the tuo
huge open-hearth furnaces, and the coking plant at Diosgyor. Rebuilding of
the Diosgyori Kohaszati Muvek (Diosgyor Metallurgical Works) will be contiz,Ued
and will result in the doubling of production in these plants. Ncrk -rill also
be continued on the Ircta, 1'azincbarcika, and. Tiszaiok construction projects
and the Budapest subway.
According to the Five-Year Plan, Hungary's coal production is ::u 'Le in-
creased by 4,500,000 tons in 1953. To finance this task, 1,200,000,000 fot? 5
are appropriated in the 1953 budget. Through these investnertr. n' Mine well
be opened and existing mines will be expanded and aeahanized. Four n e:+ nines
will be opened at Komlo alone in 1953.
Agricultural investments are budgeted at 2,730,000,000 ferinr,s. ? iia ap-
propriation will finance the F,uchase of agricultural machines, the i igatior:
of 50,000 cadastral yokes, and an increase in the supply of fertilizers to five
times the prewar volume.
Appropriations for cultural purposes total 3,610,003,000 fort-its, that :.s,
747 million forints more than in 1952. The Nepetadion ('people's Stadiun), the
largest Hungarian sports project, will be opened in 1953; however, most of the
new cultural projects will be created in the province. By the end of 1953,
2,000 motion-picture theaters will be in operation and the nunter of public
libraries, hospitals, clinics, day homes, and nursery schools will be increased
considerably.
Expenditures for the building of dweiiings will be increased by 50 perce:t
in 1953, as compared with 1952. The building industry has two short-
comings: building projects ar= not completed by the target dates, end the cost
of production of the industry -16 too high. Feauctton of produot.in- c_sto i
therefore, one of the most important current tes'ro of the bii'_di:~~, ins;:,~:?ry,
Another task of rational importance :r- ti e_ accelerati.T. of re rci :.tty
circulating capital. By increasing the velcciiy of c1T'C'.1,ation by a s,.gie day,
a total capital of 200 million forints would be liter ated. ; t. is , tho:rrfore., on
entirely realistic plan Lc attempt the liberal-Lon of one billion innate 0,z-nigh
the acceleration of capital circ.;la'.tor: .-. 195 In this ._:~:.? tcJ, Hungary
must follow the example set by the USSR. The amoinI approp:tot.e-d .or research
institutes is in excess of )a4 million forint . The exist!:.g reerarch 1r.. t'_tuce;
will be enlarged and, in edaition, the Kozpor:.; K-zsiai Kutar:c :ntezet. Central
Chemical Research institute) and Kiserleti Crvo5tudonanvi r:ata`_o Tntezet !Tn=ti-
tute for Experimental Medical Resear(h) w.L re created.
Hungary will con. :.nue to dev-?te psr'to::,l:u u' .rnei? to f_:'L"at; ,:., The n'om-
her of secondary .,drool pupiis rose from = ,t: tT: .19 1 -: 110,000 It '9;; , an:,
the number of uraversi'..y .t,,nert_ iT:_re ro t-o,0Ci3 .using t.t:e =as
rently, foes times as nary -:ale-nts e.re ~nrci,ed il.;rgaris:, univer'-:r _
etltutes of higher learning ac ?9: .ng he 5ortny :eiv: _r n: port ice. cfJ
dents of working cla or peasant origir, c'?:in,ed to ri:=e !n all in-
stitutions, and schola:snip, hams Gee:, awar-led to the majority of 't'c?-
dents. The 1.9113 budget provides over 00 militcm forircts fur
addition to compensation for the loss of earning:.. The
distributed among the most o?lrrstrnding viii %e re It, :todeOtj in f r tt:e Cir: t.
time. Special scholarship:- extended to sc1CCT:cr Cdui!dnCe; . tt:3ytr, : 3u ^.+:ry
and abroad serve to build ?op high-level
In 1953. 48 million forints 'will be :pent on the
as compared with 36,600,000 forints in 1952; "5,300,000 f_rtnt;, t're ?'ai's5:.og r,f
secondary schools 1.10,:00,000 forints In 195-1; 15?b c:tl"iiOC for-in.
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(98,500,000 forints in 1952); and 435,400,000 forints on the building and main-
tenance of workshops, homes, and schools for industrial apprentices, For sports
and physical education the 1953 budget provides 29 million forints more than wa',
appropriated for 1952.
Appropriations for public health and social welfare p?:L-pose amount to
5,907,000,000 forints for 1953. This figure represents 11.4 percent of total
expenditures and is an increase of 901 million forints over 1952? Medical per-
sonnel will be increased and new hospitals will be built at Diosgycr, Sztalinvarory
and Salgotarjan. The network of clinics will be expanded; an amount 42: million
forints in excess of the 1952 appropriation has been provided for this purpose
for 1953. Nev clinics will be opened at Miskolc, Szolnok, Tatabanya, and Aika.
For maternity, infant, and child welfare the 1953 budget provides =04 mil-
lion forints, or 74 million forints more than the appropriation for 195. As an
additional welfare measure, 120 million forints were appropriated r--
creation and vacation program.
Under the compulsion of US imperialism, the capitalist world, together with
Yugoslavia, is preparing for war. For the maintenance of peace, Hungary's army
and state security organs must be strengthened. For this reason, the 1953 bud-
get provides 7,381,000,000 forints, or 14.2 percent of total expenditures, for
defense purposes, as compared with 5,905,000,000 forints in 3.952.
Administrative expenditures show a relative decline and amount to 2,Q ,OJO,CAO
forints, or 3.8 percent of the 1953 budget, The state administration does not
function satisfactorily, and elimination of bureaucracy and waste will be one of
the government's main tasks in 1953.
CONFIDENTIAL
The budgets of local. councils form a considerable part of the national bui-
get and total 4,772,000,000 forints, as against 3,906,000,000 forints, In 1952.
The increase is due largely to cultural and social projects, for which 500 mil-
lion forints more were appropriated for 1953 than for 1952.
Revenues in 1953 are estimated at 875 million forints in excel: of ;hose for
1952. Successful implementation of the budget requires strict enforcement of econ-
omy measures in all branches of the national economy. To fulfill this task, the
enterprise managers, as well as all workers, must devote must: more attention to
financial questions and the reduction of production costs,
Report of the Deputy Minister of Finance
After the budget speech of the Minister of Finance, Tstvan Antos, Dep7aty
Minister of Finance, gave the following report.
Appropriations for heavy industry total 11,400,000,000 foric.t.s, the hulk of
which is earmarked for investments. Other appropriations are,. 2,460,000,X0
forints for the Ministry of Metallurgy and Machine Industry, 2,1+50,000,000 fo:^r-a.;
for the Ministry of Mining and Power, 1,600,000,C00 forints for ttv~ :Mitnistr;, of
Chemical Industry, and 630 million forints for the Ministry of Eailding MatoriaL'
Industry. These figures show that in 1953 huge suns will be devoted to the ex-
pansion of Hungarian coal mining, metallurgy, and power; and of petrvleu.n, alu-
mina, aluminum, and cement production. Approximately 9.3 percent of total in-
vestments have been earmarked for the development of the machine industry. A
number of important factories will be placed in operation, including the Uebre-
ceni Gorduloceapagygyar (Debrecen Roller Bearing Factory) and the Soroksnrl
Vasontode (Soroksar Iron Foundry). Large amounts have also been appropriated for
the expansion and modernization of the Ganz Vngon-es rotpryar 1Gauz Railroad Car
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and Machine Factory), MAVAG (Magyar Allami Vas-, Acel- es Gepgyar, Hungarian
State Iron, Steel, and Machine Factory), Beloiannisz Gyar (Factory), Gheorghiu
Dej Hajogyar (Shipyards), Gyori Vagongyar (Gyor Railroad Car Factory), etc.
Largely as a result of these investments, production of the machine industry
will be increased by 30 percent in 1953.
In the field of agriculture, 2,200,000,000 forints are budgeted for in-
vestments in the agricultural machine stations and state farms and forests. In
addition, long-and medium-term loans totaling 1,100,000,000 forints will be ex-
tended to producers' cooperatives for investment purposes. The agricultural
machine park of the state fauns will be increased to an extent where 95 percent
of the harvesting and 88 percent of the cultivating work will be performed by
machine power on the state farms. The socialization of agriculture has cre-
ated a great demand for trained personnel. To meet this demand, the Ministry
of Agriculture and the Ministry of State Farms and Forests have appropriated
300 million forints for agricultural education.
In view of the planned increases in industrial and agricultural produc-
tion, the transportation system will be called upon to perform greater tasks.
For this reason, appropriations for railroad investment purposes are 60 per-
cent above those for 1952, and highway traffic, as well as the network of agri-
cultural narTOW-gauge railroads, will be expanded considefably.
To raise the general standard of living, the 1953 budget provides over
150 million forints for investments under the jurisdiction of the Ministries
of Light Industry, Food Industry, and Produce Collection, and 200 million
forints for the expansion of the network of retail outlets, for the improve-
ment and control of quality, and for research institutes operating under the
Ministry of Domestic Conmerce. It is estimated that the turnover of the state
retr.il stores will increase by 13.5 percent and that of the cooperative stores
by 12 percent in 1953.
Appropriations for education, the development of the sciences, and miscel-
laneous cultural institutions total approximately 3,600,000,000 forints, as
against 2,x'63,000,000 forints for 1952. The 1953 appropriations include 160
million forints for general schools, 1!i million forints for secondary schools,
and 137 million forints for institutes of higher learning. Approximately 92
percent of the appropriations for general schools and 58 percent of those for
secondary schools appear in the budgets of the local councils. Specialization
is stressed both in the schools- and in the institutes of higher learn-
ing. The approprtattou, for rr:.cation also include 361 million forints for
adult education. The to._.1 nn:.unt of 3i660,000,000 forints devoted to cultural
purposes consists of two man Items, 3 billion forints for sctool education and
600 million forints for pnp.irtr edu-_a.ion rpron,igandaJ.
The hulk cf the rcavr_::ur. _;5 will continue to come out of the socialized
sector. Turnover taxes, profits, and other payments to be received from the state
enterprises will total sera. 10,100,000,000 forints, while revenues from the co-
operatives are budgeted rat 9^6 million forints. Among the revenue items origi-
nating in the state e terpriees, the greatest increase will he shown in the pay-
mart of profits, which w.ll he 83 percent above the corresponding 1952 figure.
This favorable development i:; largely a result of cost reduction.
The budget system of local council,- is coordinated with the national bud-
gTet. The expenditures of the ..ouncils are balanced in part by local revenues
and in part by appropriations from the national taxes collected by the councils.
Thus, tax revenues from thr general population appear largely ira the budgets of
the local councils. This s;*stern provides a powerful incentive to the councils
to do their utmost to collect the income tax.
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The savings of the population also play an important part in assuring a
balanced budget. The proceeds of the third Peace Loan, together with savingb
deposits, represent 2,100,000,000 forints in revenue in the 1953 budget.
Address of the President of the National Assembly
The next address, devoted largely to the further development and mechani-
zation of agriculture, was delivered by Imre Dogei, President of the Hungarian
National Assembly.
Doges reported that, at present, the machine park of the agricultural ma-
chine stations includes over 9,450 tractors and 180 harvesting combines be con-
tinued: Approximately 82 percent of the crop on the state farms and 43 percent
of that on the producers' cooperatives were harvested by machine power in 1952.
As a result of the unfavorable weather during the 1952 growing season, the ad-
vantagee of large-scale farming on the producers' cooperatives over the oper-
ations of independent peasants on small plots of land became even gore evident.
Crop results were above the average on all state farms and producers' cooper-
atives which employed Soviet agrotechnical methods.
In analyzing the budget figures, Dogei called attention to the fact that
74 million forints were appropriated for churches and religious sects. He men-
tioned that appropriations for the expenditures of the Council of Ministers are
,gets of
budgeted at 36,400,000 forints. Dogei then gave data on the 1953 bud
the National Wages Commission and the National Manpower Commission. LNo figures
given
Comparison Between Hungarian and !,5 Budgets
Erno Milialyff., Deputy Minister of Culture, compared Hungary's 1953 budget
with the 1952 - 1953 budget of the US as follows: The American budget totals
85,500,000,000 dollar;. If indirect military expenditures are added to the di-
rect expenditures for defense, 93 percent of total expenditures are devoted to
preparations for war in the US. In short, the current American budget indicates
an increase in the militarization of the national economy and in the profits of
the monopolies engaged in the production of war materials. In contrast thereto,
the Hungarian budget is based on human values. The current budget, for example,
provides 2,500,000,000 forints for infant and maternity care, schools, and rec-
reation for children, and :1,860,000 forints for the support of the fine arts.
Speeches on Foreign Policy
Ferenc Ke1eti addressed the Natior3l Assembly on the foreign policy of the
Hungarian government. According to Keleti, the aims of Hungary's foreign policy
are loyalty to the rSn, friendship with other peoples, and the defense of peace
and Hungary's iwlopendenc.e. He stressed that Hungarian foreign policy is based
on Stalin's pence policy, ani that, although the enemy has attempted to drive a
wedge between Hungary and the Soviet people, Hungary will never deviate from its
alliance with the USSR. He added that the tragic example of the Yugoslav people
proves that outride the peace camp only servitude and exploitation by the American
capitalists exist.
Jeno Katona spoke of the Vienna Peace Congress, terming it the culmination
of the greatest popclar movement of history. Turning to the war in Korea, Katona
said that the attack of th:e Anglo-American bloc represented a change from prepa-
ration for war to open hostilities.
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CONFIDENTIAL
Gyorgy Parragi, speaking next, described Yugoslavia and Austria as the two
most important deployment areas of American imperialism against Hungary. He
said that the hatred felt by the Hungarian people is increasing by leaps and
bounds in view of the activities of the imperialists and Titoists in organizing
attempts against Hungarian peaceful construction work. J o figures were pub-
lished on the budget of the Ministry of Foreign Affairs.]
Ministry of the Interior
In connection with the budget of the Ministry of the Interior, Kalman
Pongracz, President of the Executive Committee of the Budapest City Council,
spoke of the work of the local councils. He pointed out that workers are
taking an increasing share in local council activities and mentioned that last
September, 15,344 local committees with a membership of over 200,000 were in
existence. He added that the number of enterprises operating under the local.
councils also has increased.
Pongracz then spoke of the Hungarian police which, he said, guarantees
the safety of the workers. He continued as follows:
While criminality in the capitalistic countries is increasing at an un-
precedented rate, the number of criminal acts in the People's Democracies has
diminished. The majority of criminals are members of the former ruling classes,
including generals, the sons of former high ministerial officials, etc. Large
numbers of these enemies of the Hungarian people are being unmasked by the po-
lice. Traffic police work also showed gratifying progress. Although traffic
in 1952 increased by 20 percent over 1951, the number of accidents diminished.
Pongracz also reported that the budget provides 87 million forints for the
development of the fire department, including procurement of fire trucks, pumps,
and other equipment.
In conclusion, Por-gracz introduced an amendment providing for an increase
of 13 million forints in the appropriations for children's homes and day homes.
The Defense Budget
The budget of the Ministry of Defense was discussed by Istvan Kristof, Ex-
ecutive Secretary of the National Council of Trade Unions. Kristof said that,
in view of the war prer:.rations of the imperialists, failure to create a well-
equi;.trtd and Datrioti~ army would be criamircl. He stated that the defense bud-
get Le proportionate the appropriations provided for economic, eoci:il, and
cultural purposes. ",o figures gi.ver..7
Ministry of Public Health
Istvan Reok, discu_sed the budget of the Ministry of Public Health. Accord-
ing to Reok, the recent rcaclutions ::f the Council of Ministers on temporary
disability pensions, district medical service, and industrial accident prevention
represent real progress. Public health has improved considerably since libera-
tion, and both adult and infant mortality has diminished. Currently, 8,000-
10,000 fewer infants die per year than under the Horthy regime. In 1953, clinic
hours are to be increased by 40 percent and the dental service is to be expatded.
The new 300-Led Orszagos Cnkologiai Intezet. (National Institute of Oncology) is
to be opened on 1. Janu:,rv 1953. Nc budgetary figures given]
Ministry of relining and Power
The budget of the Ministry of Mining and Power was discussed by Irrse Par d i .
who said that app.opriat ions, for investments in coal mining total 1,233,000,000
forints. LThe preceding statement appeared in Nepszava. The report of Z ar
Nemzet on this s,;hied 'nrids as fnllnwc: "Pardi panted out shat the minlstrv
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has appropriated 4,508,000,000 forints for investments in 1953, as compared
with 3,153,000,000 forints in 1952. The 1953 total includes 3,293,000,000
forints appropriated for the creation and development of industries engaged
in the production of basic raw materials.")
Pardi's report continued: This total includes 500 million forints for
the development of the Komlo mines, which are to supply the Sztalin Vasmu with
coal. Appropriations for the manufacture of mining machinery are 27.1 percent
greater for 1953 than for 1952. As a result of this investment program, 65
percent of the underground transportation will be mechanized and 19 percent,
or 4,500,000 tons, of the coal mined will be loaded mechanically. In 1953,
nearly one million tons of coal will be mined mechanically, that is, 2? times
as much as in 1952. The budget also provides a considerable sum for technical
training. Currently, there are 65 secondary technical schools in Hungary, as
compared with 10 to 12 prior to liberation.
Pardi stated that the 1953 budget provides 499 million forints for the
development of o:l production. Two new oil fields are to be opened, and oil
production is to be increased by 23 percent in 1953.
He continued: Power production is to be increased by 17.6 percent in
1953, bringing it to 211.7 percent of 1938 production. The budget provides
24 million forints for the electrification of villages and 334 million forints
for the development of the nonferrous metals industry. Bauxite production
will be increased by 17 percent and aluminum production by 51 percent in 1953.
Production in the chemical industry increased by 31.4 percent in the first 10
months of 1952. During 1953, a coking and nitrate-producing plant will be com-
pleted in Borsod Megye [Kazincbarcika?Z. Building of a new chemical combine
will also be started next year.
Pardi also reported that 518 million forints have been appropriated '-or
construction of dwellings and city development and that modern new cities are
to be built at Komlo, 'I rpalota, and Barcika. He said that appropriations for
workers' welfare, accident prevention, and social investments total 40,750,000
forints.
Ministries of Building and Building Materials Industry
The budgets of the Ministries oi. Building and Building Materials Indus-
try were discussed by Ferenc Re3zegi as follows:
The manufacture of ey. tvators and cranes was begun on a large scale in
1952 and progress was made in the mechanization of manual labor processes. Sev-
eral difficulties were, howl+v-r, encountered, the most important being a lack
of cooperation between the bui.'_diw3 and building materials industries. Produc-
tion increased in both inditsti ier? :r, 1952, as compared with 1951. However, wtdle
the building industry f'nlfilled it annual. plan for 1952, several large building
projects were not completed on time. The building materials industry also ful-
filled its annual plan; here, too, hctiever, numerous possibilities .?or better
production results unexploited, especially in the utilization of machin-
ery. Production in 1953 := to be stepped up by 16 percent in the building in-
dustry and by 12.2, percent in the building materials industry.
The work contest tnovemert made progress in both industries in 1952. How-
ever, it still lacks adequate organization and in many cases is merely window
dressing. Good progress wa. shown l?y the Stakhanovite movement. Currently, 8.9
percent of the workers employed in the building industry and 9-10 percent of
those in the building mate:sale industry are Stakhanovites.
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Ministry of Metallurgy and Machine Industry
JDZSef 14ek1s discussed the budget of the Ministry of Metallurgy and Ma-
chine Industry. He paid tribute to Premier Stalin and the USSR for the un-
selfish aid extended to Hungarian heavy industry.
Total production of the industries operating under the jurisdiction of
the ministry increased by 30 percent in the first 11 months of 1952, as com-
pared with the corresponding period of 1951, while completed production dur-
ing the same period increased by 34 percent. These two figures indicate that
metallurgy and the machine industry made greater advances than Hurgarian in-
dustry as a whole. The 1953 plan calls for further increases of 24 percent in
total production and 23.8 percent in completed production in metallurgy and
the machine industries.
In 1952, the productivity of labor increased by 18.2 percent in term:. of
the value of products per capita, and a further increase of 13 percent must be
attained in 1953. During 1952, the number of workers employed in metallurgy
and the machine industries increased by 24,000.
Mekia then gave a detailed analysis of the plan fulfillment of the in-
dustries under the jurisdiction of the ministry. He also discussed existing
defects, which included uneven flow of work and month-end speed-up. He said
that, if these defects are corrected, the 1953 plans can be fulfilled, that
is, production can be increased by 44.3 percent in pig iron, 18.5 percent in
open-hearth steel, and 28 percent in electrosteel, as compared with 1952. He
stated that an independent Ministry of Metallurgy will be created next year
in view of the fact that metallurgy now represents one of the biggest Hungarian
industries.
Mekis continued: In the machine industry, increases during the first 11
months of 1952, as compared with the corresponding period of 1951, amounted to
45.1 percent in completed production and 46.1 percent in total production. Pa--
ticularly good progress was made in the production of agricultural machines.
During the first 10 months of the year, deliveries of disk cultivators increased
by 19 percent and of harvester combines by 450 percent, as compared with the cor-
responding period of 1951. Daring 1953, harvester combine production will be
stepped up by 268.5 percent, as compared with 1952. The ministry economi2ec
100 million forints in investrnent^ during the current year. Good results were
achieved in the use of substitut~-e for nonferreur metals, and in the first 9
months of 1952 pro,;uctior, coEts were reduced by 7.5 percent.
Mekis stated that, under current plans, machine exports will be stepped up;
the machine industry is expected to fill the gap in Hungarian exports which re-
sulted from the poor harvest. Ue added that, in response to ''rno Gero's speecr
before the Central Cornittee of the Hungarian Workers Party ion 30 November 1'~J,
workers have pledged to effect a :eduction of 100 million forints in the combined
working capital of the indo tries under the jurisdiction of the aiaistry.
Tn conclusion, Mekis autmit'ed an amendment increasing appropriations for
labor protection by 15 million forints.
Ministry of Justice
The budget of the Ministry of Justic- wasdi.icussed by Istvan Kadan, Secre-
tary General of the DISZ (Dolgc::o Tfjak Szovetsege, Federation of Working Youth).
Kadas extolled the administration of justice as practiced tinder socialism In con-
trast to the practice in the capitalistic countries, where the profit. motive, var
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propaganda, and aggression inevitably lead to demoralization and violence. He
said that in all capitalistic countries the courts of Justice serve the inter-
ests of capitalists and oppress the workers and that the same situation pre-
vails in Yugoslavia. Kadas asserted that, in contrast to the capitalistic cotn-
tries and Yugoslavia, the Hungarian National Assembly has enacted laws defend-
ing peace, outlawing war propaganda, and creating a happy future for the people.
Aladar Halasz spoke of the institution of lay judges, who are elected by
popular vote and participate in the administration of justice on an equal basis
with the professional judges.
The next speaker was Minister of Justice Gyula Decsi, who said that the
administration of justice in Hungary was improved and democratized in 1952.
He termed the laws enacted during the year, particularly the law on marriage,
the family, and guardianship, proofs of this trend. He mentioned that the new
criminal code became effective on 1 January 1952 and that, beginning with Jan-
uary 1953, 10,000 lay judges will participate in the administration of justice
under both the criminal and civil codes.
The minister then denounced the administration of justice in the capi-
talistic countries. He spoke as follows: In the US, the persecution of Com-
munists and progressive citizens is increasing, and the US, together with the
Tito gang, continues to send spies and saboteurs into Hungary. These agents
and murderers are caught by the State Security Authority, and the Hungarian
courts must deal with them with great severity. In contrast to the US and
Yugoslavia, the Hungarian administration of justice, based on the Soviet model,
is of the highest order. io budget figures given)
Ministry of State Farms and Forests
The budget of the Ministry of State Farms and Forests was discussed by
Jczsef Seregelyi. According to Seregelyi, in the single year of its existence
the ministry achieved good results in the development of state farms, improved
the livestock, and introduced organized plant cultivation. He continued: Ap-
proximately 93 percent of the arable land operated by the state farms is com-
posed of large tracts, on which Soviet methods can be used to advantage. Cur-
rently, the state farms are mechanized to a greater degree than were the 'best
estates under the Horthy regime. Due to the generosity of the USSR, large num-
bers of combines and Zetor tractors were introduced in Hungary.
Seregelyi then dealt with the operating results of the state farms in de-
tail: By the end of 1952, 230 state farms were electrified. The afforestation
plan was fulfilled 83 percent and the timber exploitation plan t36 percent by
1 December 1952. The 1953 afforeetat.ion plan provides for an increase of 86.5
percent over the 1952 plan.
The next speaker, Laszlo Nan.asi, Secretary-General of the National Fed-
eration of Cooperatives, also paid tribute tc the USSR for the help which it
had extended to Hungarian agriculture. Nanasi pointed out that, while cotton
was introduced in Hungary from the USSR only 3 years ago, in 1952 the area
planted in cotton was ten times larger than in 1950, and average 1952 cotton
crops in Hungary were greater than in Turkey and Syria. He added that rice
was produced on 35,000 cadastral yokes in 1952.
Ministries of Light industry and Local Industry
Sandor Seprenyi discussed the budgets of the Ministries of Light Industry
and local Industry.
First taking up the Minictry of L+.ght lr.,iustry, S?-!prenyi spek= as follows:
During the coming year the main task of light industry will be to e:Liminate e.ct t
ing shortcomings in quality, especially in sane, knit goods, and cloth manufac-
ture. Other tasks are greater economy, better utllizat.ton of the machinery, in-
creased productivity, and reduction of costs. For research institutes servingthe
light industry, 12,300,000 forints worn anpropri.ated for 1953.
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In the textile industry, the countrywide speed-up movement has resulted
in production increases of 10-15 percent in some of the large mills. During
1953, several new textile mills will be completed, including the Kaposvari
Fonoda (Kaposvar Spinnery), which will be the most modern spinning mill in
Central Europe; a cotton-processing plant at Szekszard; and the straw cellu-
lose factory at Szolnok.
Following the Soviet model; the light industries will be required to pie
pare production master plans in 1953. These plans will contain a breakdown of
work methods, machine operations and maintenance, and manual operations. In
the field of professional education, 18 secondary technical schools are engaged
in training supervisory personnel for the light industries. For the building
of workers' dwellings, 104 million forints were appropriated in the budget of
the Ministry of Light Industry.
Turning to the budget of the Ministry of Local Industry, Seprenyi said
that production was increased by 215 percent in the state enterprises and by
68 percent in the artisans' cooperatives operating under the Jurisdiction of
the ministry. He continued: Plans call for a production increase of 30 per-
cent by the state enterprises and 33 percent by the cooperatives in 1953. How-
ever, the main task will be improvement of quality. Appropriations for invest-
ments in the local industries total 141 million forints.
Ministry of Food Industry
The budget of the Ministry of Food Industry was discussed by Miss Margit
Dekany as follows:
As compared with 1949, the production of the Hungarian food industry in-
creased by 39.7 percent in 1950 and 87.1 percent in 1952 and will be stepped
up by 106 percent in 1953. While in the capitalistic countries the standard
of living is declining, the demand of Hungarian workers is supplied abundantly
by the food industry. The meat-processing industry, for example, increased its
production in 1952 by 17.4 percent, as compared with 1951, and this ratio will
be further increased to 31.8 percent in 1953. L'No budget figures given]
Ministry of Domestic Commerce
In discussing the budget of the Ministry of Domestic Commerce, Mrs Jozoef
Csikesz stated that, despite the crop failure, the turnover in consumers' goods
increased by 10 percent in 1952 over 1951. Retail trade in 1953 is to exceed
1952 figures by 13.2 percent in the _tate stores and 8.1 percent in the cooper-
atives.
The improvement in the standard of living, Mrs Csikesz said, may be meas-
ured by the fact that in 1952 per-capita consumption of bread increased by 7.9
percent; of flour, by 31.8 percent; meat, 4.6; fat, 46; and sugar, 24.5. Mrs
Ccikesz added that these increases included a certain amount of stockpiling and,
therefore, should not be regarded as accurate measurements.
Discussing distribution, she said that, in general, it f'ir,ctioned smoothly
and there were no serious difficulties in the supply of consumers' goods. How-
ever, she stated despite adequate quantities, seriou' shortcomings exist, partic'x-
larly in the quality and variety of the available gods. She mentioned as other
shortcomings of distribution the facts that food stocks are handled improperly
in the state stores, that speculators are accumulating large stocks, and that,
here and there, distribution is still unsatisfactory.
Following the Soviet pattern, Mrs Csikesz continued, the system of shop rh -
taurants was expanded in 1952, but in the public restaurants there is still much
room for improvement: the monotony of menus must be improved and the kitchens
and dining rooms must be cleaned.
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She stated that 4,000 new retail outlets were opened in 1952, and that,
as a result, retail trade is almost entirely in the hands of the socialized sec-
tor. In 1953, she added, the rebuilding of the Gellert Hotel will be started
and a new network of retail outlets will be placed in operation to serve the new
residential developments and building projects.
Daniel Nagy, speaking next, stated that during the first 11 months of 1952,
cooperative sales increased by 13 percent, as compared with the corresponding
period of 1951. Nagy then described the Socialistic purchase system which was
introduced in Hungary in 1952. Under this system, purchases may be made by a
single agency for the entire peasant population of a whole megye.
In 1953, he said, approximately 71.4 percent of exports will consist of
industrial products, and machine exports will be 81.5 percent greater than in
1952.
Ministry of Foreign Trade
Andras Horvath analyzed the budget of the Ministry of Foreign Trade, as fol-
lows: .
In 1952, Hungary's imports increased by 57.2 percent and exports by 67
percent, as compared with 1951. During the coming year the proportion of ex-
ports of manufactured products in total exports will be increased to 71.4' per-
cent, as compared with 62.8 percent in 1950. Heavy industrial products repre-
sent an increasing proportion in the total. volume of industrial exports.
Hungary's trade with the USSR increased by 82.9 percent in 1952. Trade
with other People's Democracies also showed substantial increases. The main
task of the foreign trade agencies remains the further expansion of Hungary's
trade with the USSR and other friendly countries. In regard to the capital-
istic countries, Hungary's foreign trade is increasing with the Near, Middle,
and Far East, as well as with South America, despite the efforts of the Ameri-
can and British aggressors to handicap economic relations between the Soviet
bloc and the capitalistic countries. L"N-o budget figures given)
Ministries of Education and Higher Education
Gabor i{erek gave the following information on education and the budgets
of the Ministries of Education and Higher Education.
Currently, 1,205,000 children are registered in the general schools The
number of secondary school teachers increased by 2,448 in 1952. The number of
secondary school pupils increased by 11,543 over 1951, and recently several new
secondary schools, were opened, raising the total to 425, as compared with 285 In
1937 - 1938. The number of university students increased by 8,000 in 1952. At
present, Hungarian children are educated not only in general subjects, but also
in patriotism and loyalty to the USSR.
The 1953 budget provides 1,978,000,000 forints for education. Recently,
the Ministry of Higher Education was created, following the example of the USSR.
Hundreds of new schools and nursery schools will be opened in 1953, and the num-
ber of students particularly in the secondary technical schools, will be increased
considerably.
Ministry of Postal Affairs
Rezso Basta discussed the budget of the Ministry of Postal Affairs and said
that the ministry is endeavoring to improve postal service, particularly in the
most backward rural areas. He reported that telephones have been introduced in
over 7,000 villages, farms, and machine stations since 191;9, and an aiditional
400 villages are to be given telephone service in 1953.
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CONFIDENTIAL
it
A huge increase took place in the newspaper delivery service in 1952, and
special newspaper trains were introduced. Currently, over 500 million copies
of newspapers per year are handled by the postal service.
The development of wired radio is indicated by the fact that subscribers
now number 100,000, as compared with 45,000 in 1951. It is planned to add
120,000 new subscribers in 1953.
Economies resulting from innovations in the postal service amount to
11,800,000 forints per year L1952!. The material conservation movement pro-
duced additional savings of 7,822,000 forints in 1952. A new telephone ex-
change at Sztalinvaros serving 1,500 subscribers is already in operation. The
1953 budget provides substantial appropriationslfor the development of tele-
phone service in the new cities, including Sztalinvaros and Komlo.
During the coming year, the most modern automatic telephone exchange serv-
ing 4,000 subscribers will be placed in operation in Miskolc, and the third ra-
dio relay station, operating on 13 kilowatts, will be built. The new station is
designed to improve reception of broadcasts by the Kossuth Radio in the western
and southern megyek of Transdanubia. In 1953, preparatory work will also be done
with the help of the USSR for the introduction of television in Hungary.
Ministry of Produce Collection
The budget of the Ministry of Produce Collection was discussed by Ivan
Darabos, who described difficulties encountered by the ministry in fulfilling
its task in 1952 as follows: Spring frost and summer drought resulted in poor
crops, although most megyek succeeded in fulfilling, and even exceeding, their
grain delivery obligations. The kulaks did all n their power to block plan
fulfillment. After the enemy had learned that the fulfillment of the grain col-
lection plan could not be handicapped, he resorted to the old method of accumu-
lating large bread and flour stocks. However, these attempts, too, were over-
come by the party and the government, and the orderly distribution of plentiful
supplies to the workers was assured. Despite the drought, the independent peas-
ants completed their grain deliveries, and are fulfilling their corn delivery
obligations, at an earlier date this year than in 1951. So far, over 100,000
independent peasants have fulfilled their delivery obligations 110 percent.
Jozsef Czeh said that the work contest movement has assumed large pre
portions both on the producers' cooperatives andiiamong the independent peas-
ants and was largely responsible for the satisfactory results in the fulfill-
ment of delivery obligations.
The next speaker was Minister of Produce Collection Jozsef Tisza, who
stated that at the end of November 1952 the independent peasants had fulfilled
their delivery obligations 99 percent in wheat, 104.3 percent in bread grains,
and 89.6 percent in corn. He said that the majority of independent peasants
also fulfilled their delivery obligations in hogs and slaughter cattle, but that
the best performance in the fulfillment of delivery obligations was achieved by
the leading producers' cooperatives.
The minister then described the defects of the 1952 collection system Lnot
further discussea7, which are to be eliminated in,1953.. He continued: the im-
mediate problem of the ministry is the enforcemect of the collection plan in sev-
eral megyek, including Bacs-Kiskun and Coongrad, where serious difficulties exist.
The government has reduced the delivery obligations in fall crops; as a result,
there will be no excuse for the nonfulfillment of quotas, ho budget figures
given
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Ministry of Finance
In connection with the budget of the Ministry of Finance, Ferenc Nezval
made the following statements:
Taxes and profits from the enterprises operating under the jurisdiction
of the ministry will amount to 906,200,000 forints in 1953. The volume of sales
of the artisans' and peasants' cooperatives is increasing considerably. As a
result, estimates of revenues from this source were stepped up by 400 million
forints, as compared with 1952. Tax revenue from the cooperatives and social
organizations is budgeted at 936,200,000 forints. Taxes payable by the general
pope 5tion in 1953 will total 4,280, 000,000 forints, or 77 million forints less than
in Government bond issues, including the third Peace Loan, have reached a
total of 5 billion forints. Nine drawings carried out during the last 3 years
resulted in the repayment of 482,445,300 forints, and in the course of 1953 a
total of 477,290,000 forints will be repaid by seven drawings. Savings de-
posits increased by 27 percent in 1952. However, many workers are still hoard-
ing cash and must be re-educated.
The budget provides 1,373,000,000 forints for the development of pro-
ducers', peasant, and artisans' cooperatives, and 225,800,000 forints for the
building of peasants' and miners' dwellings and for rural electrification. Pro-
vision has also been made in the budget for the development of the various so-
cial institutions operated by the local councils. fNo figures given,
Minister of Finance Karoly Olt then recommended supplementary appropria-
tions totaling 4 million forints for infant care and hospital extensions.
The minister added that, despite the good results achieved, there are
still numerous defects: Accounting discipline must be tightened, especially
in the building industry, the cooperatives, agriculture, and commerce. More-
over, many enterprises still fail to enforce economy.
Ministry of Transportation
In discussing the budget of the Ministry of Transportation, Sandor Gaspar
said that the Hungarian railroads attained record performance in 1952. Freight
traffic increased by 15 percent and passenger traffic by 9 percent, while operat-
ing costs were reduced by 4.1 percent, as compared with 1951.
Gaspar then discussed the 1953 plans and appropriations for railroads and
other means of transport, as follows:
The 1953 budget provides 1,300,000,000 forints for the railroads. It is
estimated that railroad traffic in 1953 will increase by 11.7 percent, while op-
erating costs will be reduced by 4 percent, as against. 1952.
In inland navigation, freight traffic is expected to increase by 5.7 per-
cent in 1953, as compared with 1952. The budget provides a substantial sum for
increasing the number of river vessels which will serve Sztalirvaros, for expand-
ing the Budapest free port, and for building a 2,000-ton seagoing ship.
In view of the expected growth in traffic, appropriations for investments
in transportation are 31 percent higher than the corresponding figure for 1952.
The investments include bridge building, expansion of railroad stations, track
laying, electrification, and procurement of rolling stock, including 110 passen-
ger cars.
Complaints are very numerous about the delayed arrival of trains, especially
in the winter months; the Hungarian State Railroads must reduce these delays to
a minimum.
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C011FIDENTIAL
Truck transportation increased by 63 percent in 1952, as compared with
1950, and in 1953 the increase will reach 71 percent of 1950. The main task
of the highway bus traffic is to serve commuting miners and other workers.
The mileage covered by buses transporting workers will increase by 41 percent
in 1953.
Approximately 50 percent of the 1953 investments of the ministry are ap-
propriated for the building of the Budapest subway. The remaining wreckage of
the Budapest Erzsebet Bridge will be salvaged, and the ministry is preparing
plans for the reconstruction of this bridge.
Gaspar then stated that the budget also provides 60 million forints for
additional working capital of the enterprises of the ministry, but that work-
ers have pledged to economize 50 percent of this item. Accordingly, he recom-
mended a reduction of 30 million forints in the appropriation for working cap-
ital of the transportation enterprises.
Ministry of Agriculture
Speaking on the budget of the Ministry of Agriculture, Gergely Boros dis-
cussed especially the problems of the machine stations and producers' coopera-
tives. During the first 9 months of 1952, he stated, the machine stations per-
formed 32.6 percent more tractor work than in the corres onding period of 1951.
As a result of the provisions of the budget ~ot stated , he continued, the
number of combines is to be increased by 200 percent, cultivators 31.7 percent,
and reapers 32.4 percent.
Boron reported that, by employing Soviet methods, Hungarian producers' co-
operatives achieved good results despite the drought. For example, the Szabad
Elet (Free Life) producers' cooperative harvested an average of 14 quintals of
wheat per cadastral yoke, while the independent peasants in the came village had
an average of only 7.5 quintals. The Lenin producers' cooperative had an aver-
age of 21.3 quintals of fall barley; the Gyozelem (Victory), 17 quintals of oats;
and the Voroshilov, over 100 Quintals of potatoes per cadastral yoke.
Boros added, however, that work discipline must be tightened on the pro-
ducers' cooperatives.
He declared that Hungary has reached that phase of the class struggle where
the conflict is sharpest in the village.
Jozsef ?iagyistok, speaking nest, warned the producers' cooperatives, as well
as the independent peasants, to rely on their own work instead of looking to the
government for help. He stated that the ministry will make twice as much impramd
seed available in 1953 as in 1952.
Ministry of Culture
The budget of the Ministry of Culture was discussed by Bela Szalai. He
called attention to Stalin's "Economic Problems of Socialism in the USSR," which
explains the importance of ideological and cultural work during the formative
period of socialism. The figures of the budget of the ministry, Szalai stated,
speak for themselves: Appropriations for cultural investments total 131 million
forints, which include the cost of a new building for the Magyar Tavirati Iroda
(Hungarian Telegraph Agency) and a round film factory. For cultural purposes the
budget provides 223 million forints, in addition to 76,500,000 forints appropri-
ated for the cultural activities of the mass organizations.
Miss Jelan Majlat spoke of the progress which Hungary has achieved in liter-
ature, the theater, music, and the fine arts. She asserted that artistic products
must serve the fight for socialism and peace, but that results so far have been
disappointing. As another cultural task she mentioned deeper understanding and
better interpretation of the masterpieces of Soviet artists.
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Supplementary Appropriations
Finance Minister Karoly Olt declared that he approved all supplementary
recommendations submitted in the course of the budget debate. Deputy Finance
Minister Istvan Antos then announced that the Economic and Finance Committee of
the National Assembly had examined the supplementary recommendations and recom-
mended their enactment.
Accordingly,, appropriations were reduced by 100 million forinta for the
Working capital of the Ministry of Metallurgy and Machine Industry and by 30
million forinta for the working capital of the Ministry of Transportation. Ap-
propriationa were increased by 15 million forints for labor protection; 1,5C4CC0
forints for infant care; 3 million forinta for children's homes; l0 million for-
inte for day homes; and 3 million forinta for hospitals.
To sum up, expenditures were reduced by 130 million forinto and increased
by 32,520,000 forints. The balance of 97,480,000 forints will be added to the
reserve fund at the disposal of the Council of Ministers. As a result, the to-
tals of the budget as originally submitted will not be changed by the amendments.
The 1953 national budget, together with the modifications recommended by
the Economic and Finance Committee, was then passed by the National Assembly on
20 December 1952.
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