GUSIMZ AND USIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00046R000500110006-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 27, 2016
• Document Release Date: May 23, 2013
• Sequence Number: 6
• Publication Date: May 31, 1955
• Content Type: REPORT

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C)LA
INFORMATION REPORT INFO ERORT
CENTRAL INTELLIGENCE AGENCY
This material contains information affecting the National Defense of the United States within the meaning of the Espionage Laws, Title
18, U.S.C. Secs. 793 and 794, the transmission or revelation of which in any manner to an nrnxthorized person is prUhiblted by Yaw.
S-E-C-R-E-T
COUNTRY
SUBJECT
DATE OF INFO.
PLACE ACQUIRED
DATE ACQUIRED
Austria
GUSIMZ and USIA
REPORT
DATE DISTR.
NO. OF PAGES
REQUIREMENT NO.
REFERENCES
31 May 1955
20
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SOURCE EVALUATIONS ARE DEFINITIVE. APPRAISAL OF CONTENT IS TENTATIVE
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INFORMATION REPORT INFORMATION REPORT
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bUX1
COUNTRY
SUBJECT
SECRET
USSR/Austria
1. Organization
2. Organization
on A/0 Kabel
DATE OF INFORMATION
PLACE ACQUIRED
of GUSIMZ'
of USIA with Emphasis
Division
THIS IS UNEVALUATED INFORMATION
ARMilelermanemankcalitaMilinitedet=161111111101111111
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REPOR.
DATE DISTR. 27 Apr 55
NO. OF PAGES 19
REFERENCES:
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SOURCE
I. Organization of GVSIMZ
1, The Chief Directorate for Soviet Property Abroad (GUSIMZ) was
created soon after World War II to control former German and
Japanese plants and firms which were located in Soviet-occupied
areas. (See page 17 for organizational chart.) In 1950 GUSIMZ
was dirc.otly,subordinate to the Council of Ministers and had the
following directorates:
a. First Directorate -
b. Second Directorate
c. Third Directorate
d.
e.
The
The Directorate for Soviet Property in
Germany (USIG)
- The Directorate for Soviet Property in
Austria (USIA)
- According to source, the Third Directorate
included:
(1) The Directorate for Soviet
in Hungary (USIV)
(2) The Directorate for Soviet
in Bulgaria (USIB?)
The Directorate for Soviet
in Rumania (USIR?)
Directorate for China1
(3)
The Directorate for Finland'
Property
Property
Property
Source could provide no further details on the breakdown of
GUSIMZ.
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2. In 1952 the offices of GUSIMZ were located in a large (seven or
eight-story) brick and masonry building on Chkalovakaya 'Jlitsa in
Moscow approximately 400 in. from the Kursk RR Station. A large
sign in front of the building proclaimed this to be the office
of Chief Directorate of Soviet pronertv Abroad attached to the
Council of Ministers of the USSR. Source bei. eve ,c1.,:ro,ral. Small&r
buildings behind this main structure also belonged to GUSIMZ.
3. Late in 1953 or early in 1954, GUSIMZ was made subordinate to the
Ministry of Foreign Trade under I.G. Kabanov as part of Malenkov's
ministerial reorganization scheme. In September or October 1954,
GUSIMZ was one of several organizations which suffered a drastic
.cut in personnel during Malenkov's economy drive. At this time
source claim's MIK lost about 75 percent of its staff personnel
in Moscow-. Part of the work force which was left remained in the
same building and part was transferred to another building in
Moscow. As of December 1954, there were only three directorates
remaining which were subordinate to GUSIMZ. These were: the
Directorate for China (Upravleniye po Kitaya); the Directorate
for Mining and Mineral Resources (Gorno-Rudnoye Upravleniye); and
the Directorate for Austria and Finland'(Upravleniye po Avstrii
a. Directorate for China - source could provide no information
concerning this directorate but he recalled hearinz'tha it
was still in Pxiatence
b. Directorate for Mining and Mineral Resources - this direc-
torate Was formed in October 1952 when USIV was liquidated.
At this time while other USIV enterprises were sold to the
Hungarian Government, jointHungarian-Soviet stock companies
were formed of all USIV and Hungarian-owned mining and
petroleum enterprises. These companies, however, were
actually controlled by the Soviets and were subordinate to
the Directorate for Mining and Mineral Resources of GUSIMZ.
Petrole,an and mining enterprises and organizations in East
Germany, Rumaniii? Bulgaria, Austria and Finland were also
subordinate to ;:rlis directorate. Source believes that the
Soviet Petroleum Directorate (54; in Austria was subordinate
to this Directorate of GUSIMZ and hot to the Directorate for
Austria and Finland.
c. Directorate for Austria and Finland - source believes that
all Soviet economic organizations in Austria and Finland
Other than those controlling mining and petroleum enter-
prises and the Military Bank in Austria were subordinate to
this directorate of GUSIMZ.
Soviet Economic Organizations in Austria
4. There were seven Soviet economic organizations in Austria which
altogether employed between 1,100 and 1,200 Soviet employees in
addition to tens of thousands of Austrian workers. About 85
percent of the Soviets and better than 95 percent of the Austrians
employed were CP members. These organizations were known as:
the Directorate for Soviet Property in Austria (USIA); the
Military Bank; the Central Commercial Office; the Danube Shipping
Directorate; the Lumber and Agricultural Directorate; the Soviet
Petroleum Directorate (SMU'; and Vienna Film.
a. USIA was the principal Soviet economic organization in
Austria, employing between 550 and 600 Soviet and perhaps
25,000 Austrian personnel, the vast majority of whom worked
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in Subordinate plants. It was created in 1947 to control
former German industrial plants and merchandising firms in
Austria which had been taken over by the Soviets after World
War II.
b. The Military Bank was the only Soviet Bank in Austria and was
Subordinate to the State-Bank of the USSR (Gosbank) but had .
close ties with GUSIMZ. All financial dealings which involved
Soviet enterprises in Austria were handled through this bank.
USIA plant directors were permitted to keep only up to 5,000
schillings" in cash overnight at the plant for daily needs.
Anything above this amount which the plant may have received
during the course of the day had tQ be deposited at the
Military Bank by the same evening.3
C. The Central Commercial Office (Tsentralnaya Kommercheskaya
Kontora TsKK) source claimed to know very little about, but
he believed it was on an organizational level with USIA rather
than subordinate to USIA. ei He thought the principal functions
of the TsKK were as follows:
(1) To transact all trade negotiations which involved either
extended monetary payments or barter between enterprises
of USIA, smu, and the Directorate for Lumber and Agri-
culture on he one hand and firms in satellite or
foreign countries on the other. Most transactions
between USIA enterprises and satellite firms were on a
barter basis. Some consumer goods obtained in this way
were sold through Voyentorg stores (Soviet PX8) or through
stores of the Retail Trade Department (Otdel Roznichnoy
Torgovli ORT) of USIA.
(2) To procure strategic materials on the black market.
? Source had no further information on this aspect of the
? TsKK's duties. Subordinate to the TsKK was a unit
called the Conjuncture Bureau (Konyunkturnoye Byuro)
which employed two or three Soviets and several Austrian
workers. This unit was concerned with price levels,
stock quotations, and any worldwide business news.
Periodically this bureau issued economic news bulletins
in Russian which were meant primarily to aid Soviet
officials in Austria. However, these bulletins
invariably came out much too late to be of any service
to USIA plant directors; therefore, the latter relied
on their own commercial experts in the plants to keep
abreast of market trends, availability of material,
price levels, etc. in Austria and in other countries.
d. The Directorate of Danube Shipping controlled all former
German vessels and possibly some port facilities along the
Danube River. Source knew nothing further about this
? directorate except that he thought the principal cargo
carried was probably petroleum.
e. The Lumber and Agriculture Director te controlled former
Winan agricultural and timbeF-Iands in Austria. Part of the
lumber obtained was used for the needs of USIA enterprises,
SOMS Was sold in Austria and the rest was sold abroad. The
agricultural land was rented to Austrian farmers.
SMU, which controlled all petroleum extraction and refining
TiTerprises in Austria as well as the sale and distribution
of petroleum products in Austria and abroad, was subordinate
to the Mining and Mineral Resources Directorate of GUSIMZ.
f.
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Since 19530 SPlu has been the only really profitable Soviet
edonotic-organization in Austria and, therefore, was the
primary source of income for maintaining the CGF in Austria.
Vienna Film was a former German motion picture concern which
was taken over by the Soviets after World War II. The
director of Vienna Film and his principal deputies were
Soviets while the rest of the staff, including most of the
technicians, actors, etc., were Austrians. This was a
relatively small concern which produced movies in the German
language which were shown in Austria and possibly to some
.extent in the satellites. The films were not of a propaganda
nature but Were produced purely for commercial purposes. The
technical direction, photography, and props used were
exceptionally poor and the films were not at all popular.
Source believed that Vienna Film, like the TsicK, was not
Subordinate to USIA but was on an organizational level with
USIA and al.M though it was much smaller and considerably
less important than the latter organizations.
Recent Important Changes
Prior to 1953 the activities of Soviet economic organizations suoh
as USIA, SMU etc. which were subordinate to GUSIMZ were practi-
cally uncoordinated in Austria. There was an office in Austria
subordinate to GUSIMZ which gathered data on all Soviet organi-
zations and submitted periodic statistical reports to GUSIMZ, but
this office had no directional authority over these organizations,
Could not settle disputes between them, and could not coordinate:
the overall Soviet economic effort in Austria. In the latter
part of 1953, a central controlling office was finally established.
The bead of this office was Zhelnin, who was the plenipotentiary
of the Minister of Foreign Trade. Zbelatin had a Soviet staff of
about 15 individuals and was granted directional authority over
all Soviet economic organizations in Austria with power to make
onthe-spot decisions on most matters and send reports directly
to the Minister of Foreign Trade, avoiding regular GUSIMZ channels
whenever necessary in order to speed up action on important
matters and avoid bureaucratic red tape.
The creation of this position and the arrival of Zbelnin and his
staff was hastened by the following developments: Following.
Stalin's death and Beriya's downfall, the Soviet Government
suddenly sharply curtailed the purchase of goods from USIA plants.
Many of these plants which had been operating profitably on the
basis of Soviet orders were faced with an almost complete
financial catastrophe. Some of these plants which had been
shipping as much as 90 percent of their production to the USSR
Isuddenly found themselves with Soviet orders which amounted to
no more than 10 percent of their production. Plant directors
were told to find markets elsewhere, in Austria, the satellites,
and in the West. However, most plants bad difficulty replacing
Soviet orders because of the following reasons.:
a.. Very little capital had been invested in Soviet plants in
Austria since the war to replace old machinery with better,
modern equipment.
b. Competition from non--Soviet plants in Austria and throughout
the West had meanwhile grown much stronger.
C. *IA officials in general and Soviet plant directors in
particular, who had been producing goods almost exclusively
for the Soviet Union, had very little or no idea of how to
compete on the capitalist market.
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At first, Most of these plants continued to work at their previous
rate of production; but, since they were not able to find markets
readily, most of the goods were sent to warehouses. Meanwhile,
the Military Bank-began to grow short of funds and would advance
no more credit to these plants. Finally, many of the plants were
forced to release a considerable number of their Austrian
employees and to sell goods at a heavy loss, which in some
instances amount to 50 percent. Source estimated that the total
number of Austrian employees released by USIA grew to about
J0,000,by the middle of 1954.
As a result of all this, many Soviet USIA officials were replaced
during the latter part of 1953 and 1954. Because the organization
had ceased, to be 'profitable, Malenkovv-recommended that USIA enter-
prises be sold to the Austrian Government, However, principally
for political reasons it was decided to discard this idea; instead,
a three-year rebuilding plan -J was put into effect with actual work
commencing in 1954 to remodel USIA plants, improve workers' living
and working conditions, install modern equipment and machinery,
etc. The principal aims of this plan were to make Soviet plants
in Austria Communist showplaces, put them on a competitive level
with similar plants throughout the world, and strengthen the
Soviet position in Austria politically and economically.
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it
said openly that the office of the Plenipotentiary of the Minister
of Foreign Trade in Austria was to be abolished as of 1 January
1955. He believes the reason for this may be that Zhelnin, like
most other Soviet officials in Austria from plant directors on
up, was afraid to use any initiative in making independent
decisions. This situation was the natural outgrowth of large
staff reductions in GUSIMZ and other government organizations in
the USSR by Malenkov. Everyone was afraid to exercise initiative
because if he should be wrong he would be removed from his posi-
tion. This fear of making independent decisions prevailed all
the way up the line to the Minister of Foreign Trade. As a
result, Moscow was flooded with memoranda requiring decisions.
Since only the most important problems could be taken to the
Council of Ministers, most of the smaller problems remained
untouched, and no action was taken.
II. Organization of USIA
9. USIA is by far the largest of the Soviet economic organizations
in Austria. (See page 18 for organizational chart.) The head of
thisAmdutrial and merchandising complex was Phr Aleksandrovich
Gritchin., who came from Moscow early in 1954 and replaced the
former head of USIA, Okopov. Directly under Gritchin were two
deputies and one assistant. Next in subordination were staff
sections and operating divisions. The various USIA plants were
under the Jurisdiction of these operating divisions. The entire
"USIA administrative staff from Gritchin to the level of plant
directors was located in the large five-story Trattnerhof
Building in Vienna.
a. Lavrenov, the First Deputy Chief of USIA, replaced Kalashnikov
early in 1954. As chief engineer and deputy for technical
matters Lavrenov had the following principal responsibilities:
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1) Overall responsibility for the condition of machinery and.
equipment in USIA plants and the approval of plans for
capital investment and capital repairs in USIA plants.
2) Supervision of production plan fulfillment by USIA plants.
3) Overall responsibility for safety and fire prevention
measures in USIA.
4) Supervision of chief engineers in USIA's staff sections
and operating divisions.
5) The production section of USIA was subordinate to Lavrenov.
b. Anatoliy Kirilovich Krutko, the Second Deputy Chief of USIA,
came to Austria from East Germany where he had worked for
five years. He replaced Filimonov, the former Second Deputy
Chief early in 1954. Krutko had the following principal
responsibilities:
1) Responsibility for guaranteeing and executing commercial
agreements for USIA.
2) Overall responsibility for dispatching salesmen to various
countries to obtain orders for USIA plants.
3) Responsibility for the procurement of raw materials.
4) Supervision of the procurement of creJdit from the Military
Bank for USIA administrative units and plants, and the
utilization of this credit.
5) The commercial and finance staff sections of USIA were
subordinate to Krutko.
c. Rozhkov, who came to USIA in 1953 from East Germany, was the
assistant to Gritchin in charge of USIA personnel matters for
both Soviet and Austrian personnel. Rozhklv had a staff of
about five to eight assistants whose main functions included
watching over the "minds" and behavior of USIA employees,
regulating leaves, and setting up foreign language classes
for Soviet officials.
10. Altogether there were nine staff sections in the central ?
administration of USIA. Each ofthese sections had about 10 to
20 employees, less than half of whom were Soviets.
4. First Section - source did not know who was chief of this
section. This section, also known as the "Secret" section
(Sekretnyy Otdel), employed about 10 persons - all Soviets,
and was a classified documents' registry and repository.
The section was located in two rooms on the sPcond floor of
the Trattnerhof.and included a reading room and a registry room. No
Austrians were permitted to enter this section. The
procedure for reading any documents was as follows: Any
Soviet official who wished to see a document was obliged to
show' his personal identification to a guard upon entering
the reading room. The individual then went to a window Of
the registry which faced the reading room and requested the
particular document he wished tosee, which was logged by
title and assigned a number. Personal identification was
submitted to the clerk behind the window in exchange for the
document and returned when the document was brought back.
Since personal identification had to be shown to the guard
also upon leaving the reading room, no one could walk out
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with a classified document. Documents were handed out on a
."need to know" basis. For instance, a Soviet official not in
any way connected with production could not normally see a
classified document pertaining to production matters unless
he could prove his need toSee such a document. This proof
was usually obtained on the basis of a phone call to his
Superior.
b. The Labor and Wage Section (Otdel Truda Zarplaty). The
chief of this section was Kutyurin, who replaced Yershov in
the summer of 1953. .The section consisted of two or three
. Soviets as well as several Austrians and performed the
following functions:
1) Established and controlled wage norms for all Austrian
workers in USIA.
2) Authorized pay raises and changes in categories of work
for Austrian workers.
3) Set the norms for the number of Austrian workers of
different categories in various USIA enterprises.
4) Authorized the issue of special clothing to plant workers.
0. Administrative-Housekeeping Section (Administrativno -
Khozyaystvennyy Otdel - AKh0). The chief of this section,
Konovalov, had two or three Soviet employees and several
Austrians under him. This section had the following
?responsibilities:
1) Supervision of the char and maintenance staff.
2) Supervision of the upkeep of living quarters and assign-
ment of apartments to USIA employees.
3) Provision and distribution of office supplies.
4) Distribution of non-classified Austrian mail.
5) A dining hall for USIA employees, a nursery for children
of USIA employees, and USIA,s motorpool, which included
a maintenance garage and a fleet of trucks and staff
oars, were all subordinate to this section.
d. Accounting Section (Bukhgalteriya). Iyevlev became chief of
thin section after the death of the former chief, Shchedrin,
in the summer c.L' 1954. There were three or four Soviets in
this section in addition to several Austrians. This section.
obtained balances from the various operational divisions such
as A/o Kabel, made out total quarterly and yearly balances
for all of USIA,and forwarded these to GUSIM through
Gritchin and Zhelnin. Austrians worked on all phases of
calculation but were given various fictitious figures to add
to the balances so as to hide any profit and to reflect a
loss. Balances were later corrected by Soviet employees.
Source does not believe that these attempted subterfuges
really prevented the Austrians from knowing the true picture.
e. Planning Section (Planovyy Otde14. There were less than 10
employees in this section-, 3 or of whom were Soviets. The
chief of this section was Ivan Ivanovich Lykov. The princi-
pal responsibility of this section was to pollect, review,
and revise various quarterly and annual economic plans from
the A/bs, to prepare consolidated plans for USIA and forward
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these to GUSIMZ for approval. This section also checked on
Plan fulfillment and reported periodic progress to GUSIMZ.
The process Worked in the following wayl
1) Detailed production plans were first prepared by each
plant in the USIA complex for the coming year. These
were submitted to the planning section of the appropriate
A/O, such as A/O Kabel, to which the plant was subordinate.
2) The planning section of the A/0 checked and revised the
lplans of its subordinate plants and prepared a consoli-
dated plan which was forwarded to the Planning Section
Of USIA.
3) After review and revision of these plans, the Planning
Section of USIA prepared a consolidated plan for all A/bs
and forwarded this to the Directorate for Austria and
Finland of GUSIMZ.
4) After further revision and review, GUSIMZ returned the
overall plan to USIA, where it was once more broken down
and channeled first through the USIA Planning Section,
then through the A/0 planning sections, and finally to
the plants. The plans drawn up by the plants were
supposed to be realistic, based on previous experience
and advance estimates, but in actuality they were not, and that
for the following reasons Each higher planning section
invariably increased the production plans it reviewed,
since it suspected plant director of deliberately
drawing up unrealistic plans in order to be able to ful-
fill them. Thus, by the time a given production plan
reached GUSIMZ, was approved and returned to a plant,
it was considerably higher than it had been originally.
At the same time, experienced plant directors, knowing
this would happen, deliberately drew up low estimates
in order that they would be able to fulfill the revised
approved plans that would be returned to them. Approved
production plans for goods to be shipped to the USSRof
course, received priority handling since they were rigid
and had to be fulfilled in terms of the type of item to
be produced, the total quantity required, and their total
monetary value. The remainder of the overall plan which
was approved by GUSIMZ had to be fulfilled only in terms
of motetary value of goods produced for USIA as a whole.
Therefore, the overall plan could be changed with respect
to quantity and types of goods produced. In unusual
circumstances it was even possible with approval from
GUSIMZ to lower the total USIA production plan in terms
of value of goods produced. This happened in ;.953 when
the USSR drastically reduced its orders and left many
USIA plants in dire circumstances. Thus, on paper the
yearly plan was always fulfilled. The mechanics of
changing approved plans worked in the following way:
a) If a plant director who was given a yearly production
plan of 50,000,000 Austrian schillings to fulfill
discovered after the first or second quarter'that it
would be impossible for him to fulfill this yearly
plan, be would make this known to the general
director of the A/O to which his plant was subordinate.
If the plant director's reasons for not being able to
fulfill the plan were justifiable, the general
director of the A/0 could lower this plan, for
example, to 40,000,000 Austrian schillings for this
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plant. At the same time, hie would make up the deficit
by increaSing by 104000,000 Austrian schillings the
plan of some other subordinate plant or plants which
looked as though they would overfulfill their plan
by that amount. The only thing which concerned the
A/0 general director was his ability to meet the
production plan set for his A/0 in terms of total
value of goods produced, except for planned production
of goods slated for the USSR.
c) If it became apparent that the A/0 general director
would not fulfill his plan by the end of the year, he
would refer the problem to the Chief of USIA. The
latter could then go through the steps outlined above
without referring the problem to higher authority as
long as the total USIA plan could be fulfilled in
terms of monetary value.
d) If it became apparent that the total USIA plan would
fall short, it was up to GUSIMZ to lower the plan.
f, LegalSection (Yuridicheskiy Otdel). The chief of this
peCtion was Yuriy Aleksandrovich Utenkov. In addition, there
,
were two or three Soviet employees and three or four Austrians
Who were lawyers. The principal responsibilities of this
section were to advise the Chief of USIA and to assist USIA
A/bs with regard to any legal problems which arose. Source
knows nothing about this section except that the Soviet
lawyers did not have much to do because they were not familiar
with Austrian law.
g. Commercial Section (Kommercheskiy Otdel). The chief of this
sectiOn was Genadiy Fedorovich Lesnov. Source estimated that
this section had 15 to 20 employees, less than half of whom
were SOviets. Most of these employees were commercial
specialists who freg4ently traveled to satellite countries..
The baste., responsibilities of this section were as follows:
1) Coordinating and assisting the work of commercial
sections in the various A/Os.
2) Assisting USIA enterprises in securing orders from
internal (Austrian) and external (Western and satellite)
markets, i.e.,. establishing trade agreements in the name
of USIA.
Assisting USIA enterprises in obtaining needed materials
through trade agreements, particularly those materials
which were difficult to obtain on the internal market,
such as high quality steel, aluminum, copper, tin,
chrome, and lead.
h. Finance Section (Finansovyy
four Soviets employed here.
of the section chief. This
responsibilities:
1) Checking budgets for commodity-material needs of USIA
plants; these were submitted to the USIA Finance Section
by the finance sections of the various A/Os. On the
basis of approved budgets, credit for working capital
(kredit v oborotnyy kapital) was advanced to the plants
by the Military Bank..3
Otdel). There were three or
Source did not know the name
section had two principal
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Closely supervising the finance sections of various A/bs
to see that all funds advanced to USIA plants were properly
utilized.
i. Production Section (Proizvodstvennyy Otdel). Ivanov was chief
of this section, which had about 10 workers, four or five of
whom were Soviets. This section had the following principal
responsibilities:
1) Gathering periodic information on the extent to which
planned production had been fulfilled by individual A/bs;
and working out consolidated statistical production
reports for all of USIA.
Checking on the extent of fulfillment of the plan for
capital investment and capital repairs by individual
A/Os and working out consolidated reports for all of USIA.
3) Checking on the installation of safety and fire prevention
measures throughout USIA.
4) Studying all time, labor, and money-saving suggestions
submitted by USIA employees and deciding on the extent
of the reward which should be paid for accepted ideas.
11. There were seven operating divisions within the administrative
framework of USIA; they were organized according to different
branches of industry and were directly concerned with the manage-
ment of USIA plants within their jurisdiction. These operating
dividions were actually called Stock Companies (Aktsionernyye
Obshdkostva A/bs), and each had a symbolic name, such as
"Cable, "Open Hearth", etc. These seven operating divisions or
A/bs were as follows:
a. A/b Podgmnik - The general director of this A/c was
Cherednichenko. All machine building plants in USIA were
subordinate to this divisions and it was considered the most
important A/0 in terms of the total number of workers
employed in its subordinate plants and the monetary value of
goods produced, which source estimated was in the neighbor-
hood of 20500,000,000 Austrian schillings per year. The
largest plant in this A/0, as well as the largest Soviet
plant in Austriawas called "Voyt". This plant produced such
items as rolling mills for steel plants, large turbines,
cranes, etc. It employed between 2,500 and 3,000 workers and
had a yearly output which totaled between 200,000 and 300,000
Austrian schillings.
b. A/0 Marten - The general director of this A/c was Lyapukhin.
All USIA ferrous and non-ferrous metallurgical plants were
subordinate to this A/00 including iron foundries, steel
rolling mills, and some non-ferrous processing plants. This
was considered the second most important A/0 with an output
Which totaled about 2,000,0000000 Austrian schillings in
1954.
c, A/0 Kabel - The general director of this A/0 was Sergey
Vasilyevich Gladkiy. It was considered the third most
important A/c, the subordinate plants of which had a total
output of between 650,000 and 750,000 Austrian schillings in
1954. Plants subordinate to this A/0 produced all types of
electrical machinery and equipment, cables, photographic
equipmenli, optical equipment, storage batteries, etc.
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d. A/O Tekstil Ryzbov was the general director of this A/0
until November 1954 when he was removed and sent back to
Moscow, supposedly after being accused of sending faulty
material to the USSR. Source did not know the name of the
Iwif general director. Several textile plants producing yarn
and cloth as well as leather goods factories were subordinate
to this A/o.
e. A/o Vkus - Source did not know the general director. Subor-
dinate to this A/0 were several sugar refineries as well as
alcohol, cognac, and vodka plants and some food canning
plants.
f. A/0 Tsement - Medvedev was the general director:of this A/b.
Cement plants and plants producing various construction
materials as well as construction firms were subordinate to
this A/0. One of these construction firms was called "POR"
and was engaged in the construction of office buildings,
homes.; schools, bridges, etc, both for USIA and for Austrian
concerns.
g. .A/0 Lako,7Kraska - The general director of this A/0 was
Fadeyev. Paint and lacquer plants as well as automotive
repair plants and bicycle plants were subordinate to this
Prior.to 1954, plants under this A/0 had been subordinate
to two separate A/bs: Lako-Kraska and AutoVelo. Most of
the plants were small and some of them were in such a poor
state of'repair that: large capital investments were needed to:
make them operate at a profit. The Soviets tried to sell or
even give some of these plants to the Austrians but the latter
would not accept them, In 1954 some of these plants were
closed, . As a further economy measure, personnel cuts were
Made In the administrative A/06 and they were combined into
One A/0 under the general directorship of Fadeyev.
12., On an administrative level with the A/bs in USIA was the Depart-
ment of Retail Trade (Otdel Roznitchnoy Torgovli ORT).. Source
did not know who the chief of this department was nor did he
know the number of its employees. There were well over .100
retail Stores subordinate to ORT which sold all types of consumer
goods to Austriana. These stores were the main outlets not only
for some of the consumer goods produced by USIA enterprises but
also for goods obtained from satellite countries through barter
trade agreements with USIA plants. Since articles obtained from
satellita countries in this manner were brought into Austria
without any import duties, goods were ordinarily sold in ORT
stores up to 25 percent cheaper than in Austrian stores. SOte-
times prices On individual items were extraordinarily low..
Source recalled that on one occasion in 1954, bicycles obtained
from East Germany were selling for 250 Austrian schillings when
Similar bicycles were selling in Austrian stores for 1,200 to
1,300 Austrian schillings. Source claimed he took advantage of
this opportunity to buy two bicycles for himself. On another
occasion, radios made in Hungary were selling for 300 Austrian
schillings while equivalent radios were sold in Austrian stores
for 600 to 800 Austrian schillings. These fantastically low
pricep were made possible because of tremendous overproduction
-
of SOW consumer items. For instance-, bicycles in East Germany
were turned out apparently with no other thought than to fulfill
and overfulfill the plan and eventually had to be -unloaded at
these extremely low prices.
13. Al). A/bs were organized along the same administrative lines,
except that there were a few more people employed in the subor-
dinate sections of the more important A/080 like Pod&nik and
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-12-
Marten than there w ? nd A/0 Lako-Kraska. Since
and since this was 50:0
r most important operating division of the
seven A/b8 in USIA, it serves as a good typical example. (See
page 18 for an organizational chart.)
a. Organizationally A/0 Kabel was set up along the following
lines: The General Director of this operating division,
Sergey Vasilyevich Gladkiy,had a secretary named Pechatnaya,
one deputy, and eight assistants each of whom headed a
section. In addition to this, there were 13 subordinate
plants. Altogether there were 45 Soviets working in this
A/O, of whom 33?were Party. members. Twenty-three of the 45
were plant directors and 19 of the 23 were Party members.
In addition to this, there were about 30 Austrian employees
working in the administrative sections of the A/0 and several
thousand Austrian employees in the plants.
b. F6dor Nikiforovich Baranov was chief engineer of A/O Kabel
and deputy to General Director Gladkiy. He was chiefly
responsible for supervision of the following:
1) Capital investment in plants
2) Capital repairs in plants
3), Safety and fire prevention measures in plants
4) Research work in plants
5) The quality of production in plants.
He. also assisted the director in checking on the fulfillment
of planned production in plants subordinate to the A/0.
14. :The sections of A/0 Kabel were similar to the staff sections of
:USIA except for the fact that there was no Legal Section, no First
Section, and no Administrative-Housekeeping Section. There was,
however, in addition to the other regular sections, a Sales-
Supply Office-, Until September 1954 there, had been legal sections
in all A/bs but these were liquidated because they were
considered unnecessary. The following is an outline of the
sections in A/0 Kabel.
a. Personnel Seotipn - the cpief of this section was Gregoriy
Ivanovich Puurev. Puzyrev's assistant for Austrian' personnel
was a Soviet named Nikolay Sergeyevich Leonov, An Austrian
interpreter and two or three. other Austrians. also worked in
this sedtion. The principal functions of this section Were
to watch behavior of Soviet personnel in A/0 Kabel and its
subordinate plants both on and off the job, and to regulate
and. arrange leave for Soviet personnel. Information on
personnel was collected through individual Soviets, chauf-
feurs, and interpreters, the latter of whom source considers
most important because of their extensive contacts and
required presence at every meeting which their bosses hold
with foreigners. In source's opinion, all ex-Nazi chauffeurs
are unquestionably recruited as4spies against their bosset.
Source feels certain that-puzyrev, as well as every other
Soviet employee of every personnel section in Austria or the
Soviet Union, is an employee of the mm (KGB) assigned to
the particular enterprise, division, or section with which
he is working. The Personnel Section of A/0 Kabel kept
personnel files on all Soviets in A/b Kabel with the exception
of the chief, whose file was kept in the Personnel Section
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of USIA Once a year the section wrote a personnel evaluation
On every SOViet worker which was read to the worker but not
given to him,
b. Production .Section - the chief of this section was Nikolay
SaVioh Volytets. There were two other Soviets in this
.Section: Fiedosenko who handled matters pertaining to plant
Capital investments and capital repairs, and Yevgenly
Aleksandrovich Smykov who handled matters pertaining to
:labor safety and fire prevention measures, fulfillment of
planned production, etc. Four Austrians also worked in this
section.
0. Finance Section - the chief of this section was Aleksandr
Ivanovich Iyevlev. Another Soviet named Levehenko and two
Austrians also worked in this section. The principal duties,
of this section were to draw up the financial budgets for
A/0 Kabel,plants in cooperation with plant officials on the
basis of which, after approval by the Finance Section of USIA
and the_Military Bank, working capital was advanced to the
plants. This section was also directly responsible for seeing
that the plants utilized the advanced credit as prescribed
by, the approved budget.
d. Commercial Section - the chief of this section was Nikolay
Fedorovioh Shikhovtsov. There were three other Soviets in
this section, one of whom was named Karyagin, and three
Austrians. The principal duties of this section were as
f0;10wal
1) Breaking down aRd. distributing orders which dame from the
USSR to the various plants in A/0 Kabel:..
2) Seeing that goods -Ordered for" the USSR and satellite
countries were prOdu0e&and dispatched on schedule.
Supply and Sales -Office (Shabsbyt Kontora) - this office was
POMetimes palled EVA (Ein-und Verkaufsabteilung der Elektro-
induPtrie) by the Austrians. The chief of this office was
Mikhail Vasilyevich Arlashin One other Soviet worked in
this Office as well as 10 to 15 Austrians. This office was
set up principally to assist plants in the procurement of
raw materials and in the sale of finished products not
intended for the USSR, through other than ORT channels. It
was in effect a. trading firm which sent representatives
abroad. According to source, this office was a useless
bureaucratic appendage. Prior to the establishment of EVA*
each plant had its own representatives abroad. These were
replaced, however, by EVA men who: did not know producti0.0
problems well enough to deal with foreign firms. In
addition, foreign orders had to be processed through this
*moo, thereby making the process so extended and invOlve&
that orders were frequently cancelled or never placed because
of the length or time taken to make, process, and send out
estimates.
f. Planning Section - the chief of this section was Vasiliy
Nikitich Semin who had one Soviet assistant named Klavdiya
Sergeyeva. This section reviewed detailed yearly plans
which had been worked out by individual plants, made out /Ai.
general plan for A/0 Kabel, and passed this on to the Planning
Section of USIA. Flans received from subordinate plants
included production plans, plans for profit, plans for out-
put per worker (in Austrian schillings), and plans for
lowering cost of production (in percentages). After these
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g.
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plans had had been revised and had come back through appropriate
channels approved by GUSIMZ0the Planning Section of A/0 Kabel,
together with planning sections of individual plants, worked
out detailed plans for each quarter and each month in terms
Of types, quantity, and value of goods to be produced. This
section also inforned the Planning Section of USIA of the
fulfillment of the plans on a monthly basis.
Accounting Section - the acting chief of this section was
Georgiy Azarevich Andreyev. It was expected that Moscow
sould send someone to fill this post. There were two other
Soviets in this section and 8 or 10 Austrians. This section
Checked all balance accounts for individual plants and
submitted total quarterly and yearly balance accounts for
A/4 Kabel to the Accounting Section of USIA.
b. Wage and Labor Section - the chief of this section was
Nazarov. There were four Austrians but no Other Soviets in
the section. This section received planned figures on the
total number of Austrian workers to be employed by A/0 Kabel
for the coming year from the Wage and Labor Section of USIA,
broke this down to individual plants subordinate to A/4
Kabel, and submitted needed data to the Planning Section or
A/o Kabel. Fay raises to Austrian workers in A/0 Kabel .
plants and norms for the number of workers to be employed in
each category were also worked out in this section and
submitted for approval to the Wage and Labor Section of USIA.
15. There were 13 plants subordinate to A/b Mel, eleven of which
had Soviet general directors and two of which had Austrian
general directors. These were:
a. Siemens SchUckerLI, Vienna II. This plant had a total staff
of about 10100. The planned output for 1955 was about 8o,000,000
Austrian schillings. Production included electric motors,
transformers, generators, and a great variety of other
electrical machinery and apparatus. The Soviet General
Director of the plant was Sergey Nikolayevich Dyachkov. The
chief engineer, commercial director, and chief accountant
in the plant were also Soviets.
b. Siemens SOhuker II, Vienna XXI. This plant had a total
staff of about 900. The planned output for 1955 was about
10,000,000 Austrian schillings. This had been.increased'
from the original 1954 planned output of 50-550000,000
Austrian schillings bplause of a large Soviet order for
hydraulic generators.? Production included transformers,
generators, and electric motors of all sizes and types. The
General Director of the plant was Ivan Stepanovich Khaylov.
In addition to the director, the chief engineer and chief
accountant were also Soviets.
0. AEG-Union, Vienna XXII. This plant had a total staff of about
750. Initially the planned output for 1954 was 500000,000
Austrian schillings, but this figure was lowered to meet the
actual output which was about 42,000,000 Austrian schillings.
Production included electric motors, generators up to
25,000 kw, transformers up to 31,500 kva, relays and
switches, and various small miscellaneous items. The general
director, the chief engineer, and the chief accountant were
Soviets.
d. Brown Boveri, Vienna X. This plant had a total staff of about
800. The planned output for 1955 was about 550000,000
Austrian schillings. Production included electric motors,
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generators, transformers, transformers, and miscellaneous electrical appara-
tus. The General Director of this plant was Aleksandr
Ivanovich Krupnov. In addition to the director, the chief
engineer was also a Soviet.
e. Wiener Kabel, Vienna XXI. This plant had a total staff of
about 1,200. The planned output for 1955 was about 200,000,000
Austrian schillings. Production included principally various
types of cable and insulated electric wire. The General
'Director of this plant was Sergey Ivanovich Ignatyev. In
addition to the general director, the chief engineer,
commercial director, and chief accountant were also Soviets.
f. Ariadne, Vienna XXI. This plant had a total staff of about
200. The planned output for 1955 was about 300000,000
Austrian schillings. Production included cable and various
types of insulated wire. Sergey Ivanovich Ignatyev was also
the general director of this plant. There were no other
Soviet officials.
g. Sichtermann, Vienna XXV. This plant had a total staff of
about 100. The planned output for 1955 was about 20,000,000
Austrian schillings. Production included light cable and
insulated wire of all types. The General Director of this
plant was Polushkin. There were no other Soviet officials.
h. Paul Goerz, Vienna X. This plant had a total staff of about
600. The planned output for 1955 was about 40,000,000 Austrian
sohillings. Production included photographic apparatus,
optical apparatus, and electrical measuring instruments. The
General Director of this plant was Sergey Afanasyevich
Kuznetsov. Betsides the director, only the chief engineer
was Soviet.
i. Afa-Varta, Vienna XXV. This plant had a total staff of about
500. The planned output for 1955 was about 100,000,000
Austrian schillings. Production included storage batteries
of all types and sizes ranging from automobile to submarine
batteries. The General Director of this plant was Fedorenko.
The chief accountant was the only other Soviet official.
j. Eisenbahnsignalwerke, Vienna XX. This plant had .a total
staff of about 100. The planned output for 1955 was about
8,000,000 Austrian schillings. Production included various
types of railroad signal equipment, both electrical and non-
electrical. None of the officials in this plant was Soviet.
k. Elin, Vienna XXV. This plant had a total staff of about 60.
The Planned output for 1955 was about 10,0000000 Austrian
schillings. Production included separate east iron parts
for small motors and generators. A new Soviet General
Director arrived in 1954. Source could not remember his
name. There were no other Soviet officials in this plant.
1. Osram, Vienna XXV. This plant had a total staff of about
350. The planned output for 1955 was about 30,000,000
Austrian schillings. Production included all types of
electric lamps0 fluorescent lamps, light switches, sockets,
plugs, etc. The General Director, Ivan Aleksandrovich
Andronov, was the only Soviet official in this plant.
m. Haeusermann - Gars am Kamp. This plant had. a total staff of
about 45. The planned output for 1955 was about 4,000,000
Austrian schillings. Production included metallic sign
plates of various types. No Soviet officials were at this
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1.
2 .
3.
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plant. Production at all A/0 Kabel plants was considerably
below peak capacity. This was generally true for all USIA
plants. As an example, source estimated that AEG Union of
A/o Kabel, which had a planned output of 50,000,000 Austrian
schillings, could have fulfilled a plan up to 200,000,000
Austrian schillings if working up to full capacity on a
three shift 24-hour day basis.
50X1
50X1.
Coen:______thought that these directorates were
numbP!red six anseven.
See-
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???1111?IN.
Organization of GUSIMM
Ministry of For-
deign Trade
Kabanov
GIISIMZ
Yushin
Directorate for
China
Directorate for
Austria and
Finiand
Miningsad Mineral
Resources
Directolate
Plenipotentiary -
of the Ministry of SIET Matters.
Foreign Trade in
Austria
Voelnin
Central
Commercial
Office
Luther and
Agricultural
Directorate .
Regular Channel
-,-----Alternate or Special Channel
-1USIA
_ Gritdhin
LII?????????
50X1
Danube
Shipping
,ilbdtamrata,
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Vienna
Film
cia
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Organisation of USIA
Chief of USIA
Grit44in
2nd Deputy
KODItko
s
re; i Commercial
'Section
0 ri
W 1 1Lesnov
Finance
Sect ion
(Chief ?)
50X1
let Deputy
Lavrenov
Assistant for
Personnel
Rokhkov
.?
cE-1
TP
:c6
Production
Section
Ivanov
1st Sec-
tion
(Chief 9)
Labor and
age See-
ion
Mutyuri
Administra-
tive House-
keepingalt.
Xenovalov
Accounti
Section
Iyevlev
Planning
Section
1.0ov
Legal
Section
Utenkov
Operating Divisions
A/6 Pod&
mnik
Chrednieh-
enko
Metall*
gical
Plants
A/0
s.
'Marten
Lyapukhin
IP
Machine
Building
lants
4/6
-Kabel'
Gladkiy
k
A/0
!'Tekstil3
.(Gen Divt;
A463
((len Div?)
A/6
'Tsement'
Medvedev-
l A/0
Isako-
y''-
.1Eraska
adoyev
,of
'Trade
ORT Dept.
Retail
((len
[Div 1)
Textile
Plants
lectrical
achinory
and Appikr
atus Plan
Food Can-
tqL:nd
S Plants
.Subordinate lents
Construe-
tion
Material
Plants
Paint and
Lacquer
Plants
Retail
Trade
Stares
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OrKanization of Kabel
I General Director
A/O Kabel
Gladkiy
Chief Engineer
Baranov
Sections
Commercial
Section
Shikhovtsov
NLIPersOnnel
ig
o
com I
Section
Puzyr6v
Production
Section
Volynets
Finance
Section
Iyevlev-
Supply-Sales
Office (EVA)
Arlashin
Planning
Section
Samin
-
IAccounting
Section
Andreyev
50X1
Wage and
Labor Secti
Nazarov
Siemene-Sehue
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Austrian Gen. Dir