DCI'S SPEECH FOR STATE GOVERNORS 27 APRIL 1954

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01443R000200240005-0
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 24
• Document Creation Date: November 9, 2016
• Document Release Date: October 23, 1998
• Sequence Number: 5
• Publication Date: April 15, 1954
• Content Type: SPEECH

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il 3.954
PEW TOSTAfl OC
27 April 1954
IKTKOMICTION
At this meeting a year ago, we re eyed the Communist
Orbit from various aspects - its military strength, its
economic war-making potential and its political and psycho-
logical warfare tactics against the free world.
But et the time - only two months after St in's death -
the lialenkov regime was just beginning its so-c led "new
look." The big question that naturally arose was Would
this "new look" have any real effect on basic Communist
attitudes and ambitions? Did new leadership in the Kremlin
mean new policies, or only new faces?
We now have had 12 more months expert nee with this
Ilalenkov regime and have seen the Kremlin in action under
various circums lances the Bast German riots of June, the
Soria purge in July, thermonuolear experiments in August,
the new agricultural policy in September, the Serlin Conference
$o I think ve can answer this question about the
Communist "u *w look" with more certainty today. Therefore,
I would like again to go over with you these military, *canonic
and political factors and soe what effect the "new" has had,
and what of the "old" still remains.
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UNMLItIl IAL
IMITAXT
1. 4sic Weapons. In the military fisld
prin-
cipal and most ominous development of the past year was the
explosion last August of a Soviet atomic device employing
thermonuclear principles the principle of the X-bomb. You
say
have seen the films o Operation Ivy" shoving the first
of our own thermonuclear explosions. With the results of our
own tests still fresh in mind, I hardly need emphasize the
significance of development* in this field in the Soviet Onion.
The Soviet Union has been developing and stockpiling
stosic weapons since 1949. With the addition of the therso-
nuclear principle to their atomic armament, they have sig-
nificantly increased the potential destruction that can be
unleashed against the West and the United States This Soviet
nuclear energy program will probably continue to expand.
Eowevor, the total destructive power which such a program
can produce will continue to be smaller than that which can
be unleashed by the free world as retaliation to aggress ion.
2. Prelim% lsong-range Somber's. The question that
inevitably arises is: Can the Lovist Onion deliver this
weapon if the Kremlin should so choose? The answer in that
it can. While as the Director of the rsx recently pointed out,
is section was cleared by the Suclear Energy Division,
h the Atomic Energy Commission on 14 April 1954.
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it is ible for an atomic weapon to be do ivered by agents
and other similar means the sore convention 1 method at
this time of course would be by bombing attacks from 1on-
rsne aircraft.
Tho present Soviet los range air force 1* adequate
to conduct such attacks on a limited scale. They v* about
* thousand T11-4 medium bombers (similar to the Aso lean 0-29).
On two-say missions these aircraft could deliver atomic
weapons to most points on the Eurasian land mass to Canada,
and, if stripped down to the extreme nortbwstern United
States. By us in aerial refueling or by flying one-way
missions, TU-4s could mak* bonbing attacks against any point
in the United States.
One-way missions would, of course, mean a great
sacrifics in aircraft and in we trained crisis even though
tb? Russ ians might hope to save some crises by such means as
rcovery by submarine. But the fact that a single aircraft
caa unleash such massive destruction on an American city
probably would make the Soviets more willing to accept such
losses. Nevertheless, the T11-4 is still not really an ideal
intercentinental carrier.
3. X Somber Development. W. know, bover, that a bigger,
longer- ange bomber is already in sn advanced stage of development.
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We bay 05n occasjouaj test and ehibjtjor
their type-31 bort a four-engine aircraft
ities fall Btw5n those of the TV-4 and our
large aircraft are probably also under develo
is yet known to be in operational units,
tion, 1 must warn you not to believe all
lusitan aircraft development that appear in the press,
when they are accompanied by convincingpictures,) The best
In
a on
way to characterise the present stage of Soviet bomber develop-
ment might be to say that they are on the threehhold of having
an operational intercontinental bomber.
4. Ground o . While the most spectacularSoviet
a Imes during the past year have been in atomic armaments,
the Communists have not neglected their vast array of conven-
tional weapons of war. Vero I might just briefly summarise
the statistics, which rather eloquently remind us that we
are faced with a formidable adversary: The Soviet Sloe con-
inues to maintain the largest armed forces in the World,
now estimated to total 10 million men, of whom at least four
million are under arms in the USSR alone. The Soviet Union
alone could probably mobilise 13 million men within a year.
The ground forces of the USSR have available a supply of batt
proved armored Vehicles estimated to total more than 40 thousand.
S. Air Forces. Soviet operational air forces have an
authorized total of about 20 thousand planes including about
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usand jt f1ghtsrs and about thr
tuzo
nd twin-jet
Ltght bombers. Both these aircraft types are neat for
the mission for which they are intended.
6. 1 rorcos. 'tussle's naval threat continues to
cose mainly from
approximately 360 submarines,many of
them long-range, and from its growing fleet of modern cruis-
ers, radii adaptable as fast surface raiders. We know that
the Soviets av? been making extensive efforts in the field
of guided miesiles, but we seem to have beat them to the punch
in developing actu&1 operational units equipped with these
weapons.
7. Of ire glebilitilt. With. thie array of &riaed
engt now trained and ready, the Communist Bloc as a whole
possesses preponderant military power in Europe and the Far
East, and oan launch direct attacks on the 'western hemisphere
as well, The forces of the Soviet Union alone are judged
capable of waging major campaigns - all at the same time
Western Europe, the Middle East and mainland Asia.
S. pummary. In short, the "new look" of the M 1 nkov
regime bss not in any sense diminished the naked military
capability of the Soviet Union. In the field of atomic
&Rents in fact the past year has seen a substantial increase
de potential of their atomic weapons stockpile. At the same
time heir conventional military power - ground, naval and air -
*ewe the most formidable on the Eurasian land mass.
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3COM
wish to emphasize this point of a sustained military
potential because one of the most common interpretations of
the new look" in the Soviet economy -the much-publicised
consumer goods program with which you are familiar - is that
somehow the Soviet military capability has been diminished.
This is not true, as we shall see in a moment.
It is true, however, that in the field of internal econ-
omics the Selenkov regime his introduced some changes which
can be described as "new." Renee I would like to deal with
those economic aspects in a little more detail to see what
these changes do - and do not - mean.
2. The Stalin Ira During the Stalin era he rapid
build-up of heavy industry and armaments plants was accom-
plished at the expense of a rise in the standard of living.
In fact the Russian standard of living - already incredibly
by probably deteriorated under the successive five-year
plans begun in 1928. It is well for us to remember this les-
son of how such the Soviet people can endure, and how swift
was the transformation of their country from the complete
collapse following the First World War. The mighty industrial
power which today can challenge the combined strength of the
Western world was created in less than 30 years.
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Co
0 am. But now say the
Soviet leaders, it is time to do something for the poop
It is time they had more to eat more clothing better houses.
This d*ciaion has given a new look" to the Soviet economy and
planned goal for consumer goods to be raised
tiMe during the past year. Premier Malenkov explains
ii in typical Marxist terms. The economy, he,
aobid a stage at which there is a sufficiently
heavy industry to permit a rapid expansion in
the outputof consumer goods.
So there is a new department store on So.covs Red
Square ere Skis ovite ladies can buy perfumes with such
exotic names as ishormen's Ya ry Tale'; and such capitalist
innovations as whiskey are being offered for sale in Soviet
markets. (Remarkably, the Russians have not claimed the
invention of this particular beverage.) The "now loot" has
been given great fanfare in the Soviet press, and the leaders
elaim that it shoes their great interest in the welfare of
their people and is a proof of the peacefulness of their
intentions.
S. YU forts and Item!sts of Achievement. There is no
doubt that they attach great importance to the success of the
program. Agriculture and consumer goods Industrie* are being
allocated more resources and are receiving more attention
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than hey ever enjoyed under talin. Pood is
sot in great quantity, but with great urgency
even like to import some of our surplus butt*
?ing imported -
They would
but so far
they have bad more success in trade with other countries than
With VS la its haste to import foodstuffs the V8SR has
Paadsd its iaPnrts more rapidly than its exports. As a
it has been forced to ship larger quantities of gold than
in rcsnt years to several Kuropean countries in order to
replenish its exchange balances. This unusual move has
received quite a bit of publicity iA the *est, but the gold
shipmeats are simply a part of the urgent progras to get
More consumer goods,
Actually, the goals which the Sovjit leaders have
set for themselves in this program are quite sodest. The
advertising campaign has created a picture considerably more
glowing than the small sine of the plan deserves. Reverthe
lees, limited as are the real objectives, it is not likely that
the program will be fulfilled in all its aspects.
4. The Agricultural Program. Agriculture is the
el" of the Soviet economy. The leaders in the
it and they are trying to do something about
the measures they are taking can only be described as
t*. Many of them will probably fail.
a. Land Reclamation, In February, the Sovie
leaders nmounced an extensive land-reclamation program to
"Achille
Kremlin kno
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expand .heat cultivationin Kazakhstan and part?f Siberia.
A similar attempt i
he 1930s failed - for the same reason
that it will undoubtedly fail in the 1950s. Rainfall in
these areas is considered by most geographers to be inade-
quate for permanent settlement and land cultivation. We ma
look for a new Dust Bowl in Central Asia.
Grandiose agricultural schemes have become COUROn
in the Us 8* in recent years. Such programs as the Construe-
tion of farm villages1 the planting of vast forest shelter
belts, crop-rotation schiamie, mergers of colleotive farmsand
various irrigation projects hsvo been publicized as revolu-
tionary events in Soviet agricult 1 developmentbut each
One has either been abandoned or
nothing.
b. Tax Policies. Last September the Soviet govern-
ment passed several agricultural decrees which included
measuree to increase farm incomes and to reduce taxes thus
reversing the old policy which discouraged individual owner-
ship of livestock. The principal purpose of the high agri-
cultural taxes in past years was to force the peasants to
give up what little livestock they had been allowed to keep
and to transfer it to the state and collective farms. This
program was extremely unpopular among the peasants, who treat
their livestock like members of the household, and the Soviet
aecompl ished virtually
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leaders have admitted that it contributed to the decline
in the total number of cove in the WSW They have recently
published data showing that there were fever cows in 1953
than in 1928, before collectivization.
C. Machine Tractor Stations. The decrees also
placed a greater emphasis on the role of the machine tractor
stations, *toe* permanent staffs were considerably expanded
with tractor drivers, mechanics, agronomists and other
agricultural specialists. The stations are now to take a
such more active part in directing and fulfilling the agricul-
tural plans.
4. Prospects. gradual improv
may be achieved if ?uffioj.t fertilizer, farn itschine
in igrioulture
and skilled labor are provided. But the scarcity of natural
resources and the organisational shortcomings of the huge
collective farms probably will continuo as almost i'Ll-Cirabotir
barriers to any rapid rise in the standard of living.
S. Conclusions. What does all this mOssi In terms of
our etiolate of the Soviet threat? Unfortunately, we cannot
take such comfort from the "new look" in the Soviet economy.
The consumer goods program, even if 100 per cent fulfilled,
would not seriously affect the more formidable aspects of the
economy. According to the figures published by the government
of the USSR defense expenditures in 1953 were not reduced
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the high love s of he
rate of increase has dropped
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period, although the
an y. There is no
decline in the growth of isdustrisi output, Which is so
important to the Soviot defense fort. For exam le in
1953, 52 million metric tons of crud* potroloun 'were pro-
duced, as comparod with 44 million in 1952; and raw stool
production for 1953 shows an increase of nearly 4 million
Metric tons over 1952. In the light of these facts the
small-scale program to expand the output of consumer goods
cannot be regarded as striking proof of long-term poacoful
intentions.
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in one phrs
doals first
t a policy
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roma POLICY
h* field of to
CO
O I think has boon rster aptlysc d
A*bsaaador lohlon who from 12
md h tae tromlin s foreign mem s, calls
"peed* at no price.'
u . In Xore for ins e. thi
ommu iota mad* pe h ps thoir groatest concession - and
swallowed thoir bittorest pill in accopting tho loss of 13,000
Chinos* prisonors who would not return to thOir Communist-
dominated homes, lowevor on tho *id* of tho Kremlin
ledger, tit* resultant trump in Korea starves to losson tho
military burden that Communist China pesos to tho Moviat anion
and also minimisos the danger of expanding hostilitios.
2. Trado 01fonsivo. Tho Soviot Union has gained such
at littlecost from its recont maneuvers in the field of
las Wiest trads. Actually, there has boon littlo signifi
cant increase so tar in the lovols of this trado and only a
ssaii improvement is in prospoct this year. TOt the reaction
of certain govornmonts to these trado of fors has weakened
Wostorn solidarity and is bringing about a major roduction
in tho scope, of controls.
II. Oth Gostures. A n of other viot Isovee have
co?t the Iromlin *von less.
in Lwow
I ifted many of the hoavy
ns of occupation in Germany and Austria which the West
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has n
relations ha
Tugoslavia.
and 'van sm
arn official
4. The
and transpa
of which the
But are they
ad or had long eiuc0 ramoved. Biploast1.?
been restored with soveral countries,notably
Io'vJet diplomats have shorn up at part ie amiable
and on %OW Tear's Day showored surpr sad !est-
gifts of caviar.
Iti kenos. Those gturea, soma of them obvious
nt hal% boon for the *ost part the stuff out
Soviots haw, fashioned thair "peaco" campaign.
willing, whoa the chips ara (loin to pay Oa
'rico for a raal lasting peso*? Prasidant lisenhover in his
speech last year sot forth certain issues which certainly must
be eolvad if ea sr a to achiavo such a pima - the issues of
Germany, Austria and Urea, and, I am eartain the lortsidont
would now add, Indochina. Thai's problome, whioh hal% plagued
tho world for almost ten years aro th0 truost measure of
intention, and* I be Lova, are so racognised by the great
majority of tha free world. Let us see what the Communiet
wow look" has bo's'n toward them, issues.
b. Geran7. On Geruany Nelotov at ths lenin Con
pre raft(' proposals that he knew ver* unacceptable to tha Want.
110 insists(' that Germany be prohibited from joining in Wastern
Wong* afforts. In answoring the lestarn plan for frail
?
alactions, ha suggestad a Warne which would szolude anti-
Communist partials and iteravoid any outsido suparvision that
might guarantor* a fres choice.
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4. On Austria, Molotov tumid down tbst.
eosin ry's pl dopendence by refusing to to
poaco troaty t provided for an indefinito continua
tion of tho milit
cupation and unloss Austria was for
bidden to join in any Sostorn alliance or coalition.
7. Confer* The Lemon of Soros. and Indochina
of *our discussion at this moment in Genova. I
cOrtainly do not wsnt to pre-judge this meeting from which
Ortain of our loads apparontly hop o for so much. Znstid,
oaks only ssy that none of the information available to mos
in advanco of this conforms o would indicate that the Communist*
vo undergono any substantial champ, of 'mart on these two
U011.
8. area 86 6 ? in Zat, on the quips ion of Urea
*11 f the intolligenco would iadicato osaatly the opposite.
Stce the No/roan truest last July, tho Communists beim exerted
fforts to robuild North Nor* a member of the Orbit.
and Peiping hsvo signod aid agreements with North Soros
and are oonding au incroasod amount of heavy industrial *quill-
moot consumer goods and tochnical assistanco. Communist
China continues to m intain over 700,000 troops in Korea,
and large numbers of Soviet advisors aro also on the seen*.
All tho *widen** leads us to believe thsrefore, that tho
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Communists entrench g themselves in North KOrIs and
have no intention of breaking the present stalemate.
9.
(TO be written with 1t est available information.)
10. Summary. On the record todats, I believe fee must
say that Soviet foreign policy has shown greater flexibility
over the past year, with tactical adjustments made to adver-
tise Soviet "reasonableness" and to remove some of the minor
Irritants o
last-West relations, The Kremlin has been will-
ing to come to international conferences but has preferred to
talk on issues of its wen choosing. At the some time the
Soviet Vnion has proved consistently unwill ng to ma any
sacrifice in its power position or to reach substantial
agreement on any of the truly key issues in international
affairs.
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rant.
y one
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the Orbit itself and the look"
its most eons *mous ?*turGs
mar d ort of the lialenkov rostra to disagree to
tee if
from its Stalinist predecessor. The attack on the cult of
the leader, the denunciation of polies lawlessness and the
impressions of concern for the eelfare of the people all carry
overtones of anti-Stalinism. Tactical as those measures may
prove to be they have probably served the new regime well by
lying it a breathing space to consolidate its authority.
1
in t1e v
haw
program.
There have been some concessions
every major group appears to
some ic benefits from the consumer goods
Matyear's ty decree freeing certainnonpoli.-
ttcai
sone s has affected AB estimated million peopl.,
The morale of the managerial class has probably been
boTht*rad by moves which give economic bureaucrat greater
independiec? in production planning and in the manipulation
of g capital end credit.
Then too, there is evidence of rel on in the
'here of c1tur&i policy, ehich might even ually bring to an
end the harsh artistic regimen imposed mince 1946. The more
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ntly shown tower
c and
painting, and recent appeals by loaders in the arts for has
bureaucratic interference in their creative activity, are
signs of ucb a development.
2. The Krvalin Succession. The big ueetiou bsbtdn
--
surfacedevelopments, however, is the political sucoes-
sioD the Kremlin. It is, of course quite cier that
since the Seri* purge, Malenkov has emerged a ?bief spokes-
man of the now regime. with Khrushchev playing an reasingly
strong role, particularly in the area of agricultural policy,
The official theory, continually repeated, is that the
eadership is collective but it should be remembered that
it WAS under Uio guise of this theory that Stalin consoli
dated his own power.
Then too it is sti11 unclear other the as ria
purge Was the last act in r.solviuE the crisis or Just the
first act in a continuing drama. Sven if the redistribution
of authority seems to be proceeding with relative smoothness
it must always be k in mind that the external Mho, of
unity in a totalitarian system may conceal the moot profound
internal cleavages.
Romer I think our **ii ?z' on has h] pd
to put e question of a power struggle in bettir pe spectiv
Yoz inly whatever else one may say about recent Soviet
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devielo s, it remains a fact that their n? agricultural
and con user goods progr
their consisten ttern in
foreign relations and their impressive military developments
*11 represent a well-coordinate ours* of action. Therefore
even if the men of the Kremlin are lighting among themselves
they are still able to present a strong and united front in
facing the outside world.
3. 0-Soviet 'haat ons. We also see this unite
front and ll-coordinated policy in the Kremlin's relations
with the Orbit. Perhaps the most prominent feature of 'Waco,-
Satellite relations is the conspicuous effort of the Valentov
regiue to enhance the prestige of the Chinese Communists.
This was evident in the unusual honors paid the Chinese in
Stalin's funeral ceremonies, the frequent demands for C insult
admission to the UN, and, most recently, the fare uous efforts
toward acceptance of Communist China as one of the. BigFive
powers.
Moscow and Peiping still appear to agree that the
lovilt role iu the Far last is to formulate the over-all
progras? to act as a deterrent to Western -military action
against China and to supply bar with economic and military
aid. Although Peiping nay be dissatisfied with the level
or terms of this aid, it has almost %,:tertainly been, sub5tantts.1
enough to deter any Chinese thoughts of defection.
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Moscow appears to have accepted China's role
Lu their joint control of North Korea which until the
Chinese intervention in late 1950 was strictly a Boyle
satellite. Although Wmcow still controls the Korean regime
it now shares the economic burden with China, which also bears
the primary military responsibility. In brief, then, despite
recurrent rumors of Sino-Soviet disputes, and the probability
of some friction and compromise in their relationship, there
Lu no reliable evidence of a quarrel on any major matter.
4. Sauter% European Satellites. in Eastern Europe,
loecow apparently has weathered the most dramatic challenge
to its control - the last German riots of last June. As
with the power struggle in the Kremlin, we cannot say with
crt&1nty what deep and long-lasting effects this *vent may have.
But present evidence, again, forces us to conclude that the
Soviet Army has re-established the shaken puppet regime in
East Germany and successfully exerts control over the rest
of the Satellites.
Accordingly, these. Sat?lijti&s tiavs followed Bosco,
in adopting new economic policies eaphasiziul consumer goods
and agriculture.
TbiraadJustiiext of their plans biks created on-
arab e confusion among the local Communist party members
and has given rise to many serious economic problems. The
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modest relaxation of the program to collectivis agriculture
resulted in an unexpected number of withdrawals from the
cooperatives, particularly in Nungary and Csechoslovakia.
The relaxation of strict controls over the move-
ment of workers in Czechoslovakia, Mungary and Poland, together
with the attempt to shift industrial workers to the farms has
created what is theoretically impossible in a Poples
Democracy - unemployment. As a result, there have been
dislocation of labor, distress and uneasiness, which in
the case of 4Ungary have resulted in what the government
terms a "real crime wave.
In a large measure, the 'mace or failure of the
"new course" in *astern Surope will depend on its acceptance
by the party membership and its support by the working popu-
lation. This popular cooperation is being sought through
party congresses currently being held throughout the Satel-
lites.
On the longer tirm, however,
n
suggeststhat the new course will be only *arginally,ucssful
if it is limited to the relatively short tise p.rto?1950
no, planned.
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in conoluson, let us briefly su a ise the main out-
lines of the new look in the Coanunist world.
In milit affairs the Communists thersonuclear
capability has added significantly to their atomic arsenal.
At the mane time they maintain, trained and ready, the
largest body of armed forces in the world.
In both the Soviet Union and the Orbit, there are as
econosic policies which emphasise consumer goods and increased
agricultural production. Kowever, the industrial base of the
Orbit the production of its steel sills and oilf tilde, has
not been materially affected. They can and are, producing
materials of war.
In foreign policy, the Kremlin has isphasizad the
*VP* ranee of peace, but in the major areas of last -West
disagreement has shown no willingness to pay the price of
a substantial settlement.
Within the Orbit there rinain imports long-range
questions about the Krealin power struggle and relations with
the Sate]. it* countries:, lowever, at this time all evidence
indicates that political control inside and outside the Soviet
Union is effictive and united in facing the Western world.
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a
Wes
would say that th* men in the Xr*nlin and their
clearly engaged in a long-haul
armaments race With the
but they are not making the short-tern preparations we
believe would be likly if they were planning general hos-
tilities in the immediate future.
The new Soviet leadership
to develop new weapons and new
to pay off at some future date.
wish 1 could tell you that t
immediate future, however, there
danger that from their relative
in* tad
trategic cone
se
to
tilde
Yin
igned
as good neve. In
ontinues to b the very
isolation the men in the
X?ali nay miscalculate Western determination or misinter-
Western intentions, and thus plunge the world into war
in spite of their own longer-rang* calculations.
There is also a danger that internal pressures in the
Krenlin, in the =SR or in the wider reaches of the Soviet
Orbit night cause Soviet leaders to take rash action in the
international field even in the face of their own better
judgment.
we must never forget that ay, in the ntir0
postwar era, the massive shadow of Soviet military force is the
backdrop for Soviet diplomacy, Soviet propaganda, Soviet
economic warfare and local Communist aggression. The Soviets
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operate roil' the old principle that power
vith an apparent villftgnis to use that power,
effective sometimes more effective -than power i
oup ed
t as
sot ion.
.r.zore, whatever may be our current calculations of
Serie intent is must constantly strive to maintain the
strips& h and vigilance of the free world. It we allow our
moral and material defonwes to deterior*te, we will run
the grave risk of either inviting intensified Soviet aggres-
sion or of exposing ourselves and our allies to Soviet blackmail
and intimidation.
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MEMORANDUM FOR: kt
. Dulles
Attached is a draft for your Governors,
Briefing on 27 April. I believe you wanted
to receive this preliminary version by today.
15 April.
M. Amory has a copy of it and, I believe,
expects to comment on it shortly.
IS April 1954
(DATE)
i_FORM NO. 10.101 JAN 1952
(47)
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