EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. AND OTHER SOVIET BLOC COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000500020022-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 138
• Document Creation Date: December 15, 2016
• Document Release Date: February 18, 2004
• Sequence Number: 22
• Publication Date: October 23, 1961
• Content Type: MIN

Approved For Release 2004/03/11: CIA-RDP64B00346 00500-5
EXPORT OF STRATEGIC MATERIALS T HE
U.S.S.R. AND OTHER SOVIET BLOC COUNTRIES
HEARING
SUBCOMMITTEE TO INVESTIGATE THE
ADMINISTRATION OF THE INTERNAL SECURITY
ACT AND OTHER INTERNAL SECURITY LAWS
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
EIGHTY-SEVENTH CONGRESS
0
U.S. GOVERNMENT PRINTING OFFICE
76E9 WASHINGTON : 1991
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/
COM 4ITTEE ON THE JUDICIARY
JAMES O. EASTLAND, Mississippi, Chairman
ESTES KEFAUVER, Tennessee
OLIN D. JOHNSTON, South C olina
JOHN L. McCLELLAN, Arkan as
SAM J. ERVIN, JR., North Carolina
JOHN A. CARROLL, Colorado
THOMAS J. DODD, Connecticut
PHILIP A. HART, Michigan I
EDWARD V. LONG, Missouri'
SUBCOMMITTEE To INVESTS
ACT AN
ALEXANDER WILEY, Wisconsin
EVERETT McKINLEY DIRKSEN, Illinois
ROMAN L. HRUSKA, Nebraska
KENNETH B. KEATING, New York
NORRIS COTTON, New Hampshire
IIIRAM L. FONG, Hawaii
]ATE THE ADMINISTRATION OF THE INTERNAL SECURITY
OTHER INTERNAL SECURITY LAWS
DAME O. EASTLAND, Mississippi, Chairman
THOM S J. DODD, Connecticut, Vice Chairman
OLIN D. JOHNSTON, South C rolina ROMAN L. HRUSKA, Nebraska
JOHN L. McCLELLAN, Arkan as EVERETT McKINLEY DIRKSEN, Illinois
SAM J. ERVIN, JR., North Car lira KENNETH B. KEATING, New York
NORRIS COTTON, New Hampshire
J. G. SOURRRNE, Counsel
BE JAMIN MANDEL, Director of Research
Approved For Release 2004/03/11 : CIA-RDP64B00346R000500020022-5
i
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
CONTENTS
Page
Witness: Joseph A. Gwyer-------------------------------------------
4-68
EXHIBITS
Exhibit No. 1. Letter to Joseph A. Gwyer from Burnham Finney, dated
March 12, 1959----------------------------------------------------
9
Exhibit No. 1-A. Letter to Joseph A. Gwyer from Burnham Finney, dated
April 3, 1959-------------------------------------------------------
9-10
Exhibit No. 1-B. Letter to Joseph A. Gwyer from Burnham Finney, dated
April 15, 1959------------------------------------------------------
10
Exhibit No. 2. Letter to Joseph A. Gwyer from J. O. Ellison, dated
November 17, 1958-------------------------------------------------
11
Exhibit No. 2-A. Letter to J. O. Ellison from Joseph A. Gwyer, dated
March 27, 1959--------------- ---------------------------------
12
Exhibit No. 2-B. Letter to Joseph A. Gwyer from J. O. Ellison, dated
March 31, 1959-----------------------------------------------------
12-13
Exhibit No. 3. "Metalworking Production's Russian Survey," by Norman
chinery and Instruments Is a Matter of Paramount Importance------ 68-73
Stubbs and Peter Trippe-------------------------------------------- 15-18
Exhibit No. 4. Letter to Joseph A. Gwyer from Nate White, dated
October 17, 1960-----------------------------------------------
Exhibit No. 4-A. Letter to Joseph A. Gwyer from Nate White, dated
December 15, 1960------------------------------------------------- 23
Exhibit No. 4-B. Letter to Nate White from Joseph A. Gwyer, dated
December 20, 1960------------------------------------------------- 24
Exhibit No. 4-C. Letter to Joseph A. Gwyer from Nate White, dated
December 28, 1960------------------------------------------------- 24
Exhibit No. 4-D. Letter to Nate White from Joseph A. Gwyer, dated
January 6, 1961--------------------------------------------------- 24-25
Exhibit No. 4-E. Letter to Joseph A. Gwyer from Nate White, dated
January 24, 1961--------------------------------------------------- 25
Exhibit No. 4-F. Letter to Nate White from Joseph A. Gwyer, dated
January 27, 1961--------------------------------------------------- 25
Exhibit No. 4-G. Letter to Joseph A. Gwyer from Nate White, dated Feb-
ruary 3, 1961------------------------------------------------------ 25
Exhibit No. 5. "Washington Wire-U.S. Foreign Economy Gearing to
`Three Worlds'"--------------------------------------------------- 30
Exhibit No. 6-Appendix I. "High Reliability and Durability of Ma-
Exhibit No. 7-Appendix II. "Soviet Metal-Cutting Machine Tools : As-
sertions and Facts"-------------------------------------------------
73-84
Exhibit No. S.
"Mutual Defense Assistance Control Act of 1951"--------
36-38
Exhibit No. 9.
CoCom-The Battle Act-------------------------------
44-45
Exhibit No. 10.
"McCarthyltes and Export"---------------------------
49
Exhibit No. 11.
"No, Such Metal Is Not Needed by Machine Manufac-
turers!" ----------------------------------------------------------
49-52
Exhibit No. 12.
"U.S. Discredits Soviet Trade Activity"--------------
52-53
Exhibit No. 13.
"Dodd Accused of Reviving Cold War Days"----------
53
Exhibit No. 14.
"U.S. Canceling of Exports to U.S.S.R. Hit"------------
53-54
Exhibit No. 15.
"Presidential Determinations Made January-September
1960" re Mutual Defense Assistance Control Act of 1951--------------
56-57
Exhibit No. 16. "East-West Trade in Europe"----------------------
60-65
Exhibit No. 17. "On Trading With the Communist East"--------------
66-68
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
AND OTHER SOVIET BLOC COUNTRIES
MONDAY, OCTOBER 23, 1961
U.S. SENATE, SUBCOMMITTEE
To INVESTIGATE THE ADMINISTRATION
OF THE INTERNAL SECURITY ACT
AND OTHER INTERNAL SECURITY LAWS,
OF THE COMMITTEE ON THE JUDICIARY,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:30 a.m. in room
2300? New Senate Office Building, Senator Kenneth B. Keating
presiding.
Also present: J. G. Sourwine, chief counsel; Benjamin Mandel,
research director; and Frank W. Schroeder, chief investigator.
Senator KEATING. The subcommittee will come to order.
Mr. SOURWINE. Mr. Chairman, may I be permitted to interrupt?
At the executive sessions which opened this committee's investigations
into this field, Senator Dodd, the vice chairman, made a short state-
ment relating to the committee's jurisdiction. May I respectfully
suggest that this be ordered laid into the record at this point?
Senator KEATING. That will be received in the record preceding
my opening statement. It does set forth the basic jurisdictional au-
thority of the committee.
(The statement referred to follows:)
Senator DODD. I want to make a brief statement so that all will be
aware of what we have in mind here before we proceed.
The basic authority of this subcommittee stems from Senate Resolu-
tion 366 of the 81st Congress, 2d session. Among other things, the
subcommittee has authority to conduct a complete and continuing
study and investigation of the administration, operation, and enforce-
ment of the Internal Security Act of 1950, and the administration,
operation, and enforcement of other laws relating to the protection
of the internal security of the United States.
We have requested representatives of the Departments of Com-
merce, Defense, and State to give us information regarding the
administration of the Export Control Act and related functions pur-
suant to the Munitions Control Act and, more particularly, the ship-
ment of strategic materials to the Soviet Union and Soviet bloc nations.
It is a matter of public knowledge that the challenge of Soviet power
presents today a triple threat: first, military; second, economic; and
third, subversive. And, as long as the principles of international
communism motivate the regimes in Moscow and Peiping, we must
expect that their single purpose will be the liquidation of our form of
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
2 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
free society and the emergence of a sovietized, communized world
order.
To promote their objectives they have determined-cost what it
may-to develop a military establishment and a strong national econ-
omy which will provide a secure home base from which to deploy
their destructive foreign activities. Khrushchev is convinced that
the final victory of communism can be achieved mainly by nonmilitary
means. At the 21st Congress of the Communist Party of the Soviet
Union, Khrushchev stated that the economic might of the Soviet
Union is based upon the priority growth of heavy industry. He
believes this should insure a Soviet victory in peaceful economic
competition with the capitalist countries and that development of the
Soviet economic might will give communism the decisive edge in the
international balance of power.
It is essential that the United States does not play into the hands
of the Soviets in helping them achieve their military and economic
objectives. With this in mind, the subcommittee is seeking to learn
the policies that are being carried out in the export of items to Soviet
bloc countries.
Senator KEATING. These hearings have to do with our Govern-
ment's export control policies and are long overdue. The basic
statutes in this field go back more than a decade. The manner in
which these statutes are being administered, the standards they estab-
lish, and their general effectiveness have not received the intensive
consideration by Congress which the subject warrants.
It is apparent that our exports may have national security, as well
as economic and foreign policy implications. The concern of this sub-
committee is in the field of internal security, but we all recognize
that this issue cannot be isolated from the others in a comprehensive
review of the subject.
The fact that the subcommittee has scheduled these hearings does
not necessarily imply, as far, at least, as the acting chairman is
concerned, any criticism of the existing laws or their administra-
tion. However, it is a matter of record that the procedures for the
granting of export licenses were substantially revised earlier this year
after a subcommittee investigation of a proposed shipment of ball
bearing machines to the Soviet Union. One of the purposes of this
hearing will be to determine whether these new procedures are
adequate to protect against future shipments of strategic materials
to the Soviet bloc.
The difficult problems involved in controlling exports to the Soviet
bloc reflect some of the most fundamental issues of the cold war. The
Soviets have made their objectives of world conquest all too plain.
Khrushchev has threatened our annihilation and burial on more than
one occasion. Under these circumstances, it would be ridiculous and
suicidal for Americans to contribute in any way to Soviet strength.
On the other hand, a cold war is not a hot war. We maintain diplo-
matic relations with the Soviets. We have cultural exchanges. And
we do business with them. The time may come when a total embargo
of trade with the Soviets may have to be considered, but our respon-
sible leaders have not yet proposed such a course. As a result, deci-
sions have to be made day by day and item by item as to what we can
and cannot safely trade with the Soviets. These decisions must be
Approved For Release 2004/03/11: CIA-RDP64B00346R0005000200
 Approved EXPORTROFe STR '1` GIr :L/JJ ,JyJZS- 4; gQ0R 00050
under continuous review, ideally so as to serve as a positive weapon
for America in the cold war struggle, but at the very least to make
certain that we are never serving Soviet cold war objectives.
Personally, I believe there should be a presumption against any
exports to the Soviet bloc. I don't believe there is as sharp a distinc-
tion between economic and military items as is assumed, since any-
thing we furnish to the Soviets in the way of economic goods helps
them concentrate their efforts on military production. Moreover, our
conflict with communism is economic as well as political and we have
nothing to gain in this struggle by helping the Reds build up their
economy by filling in gaps in their own production.
We must also make certain that American export policies are not
frustrated by the failure of other free world nations to cooperate. If
the Soviets can buy strategically important goods and machines from
West Germany or Italy, our policy will not be effective and the one we
may be hurting most is the American manufacturer. At the same
time, I do not believe that we should license exports of such goods from
this country just because alternative supplies exist, since broadening
the base of supplies is also strategically important to the Soviets.
It is also essential that there be safeguards against the transship-
ment to the Soviets of goods destined for other countries. There have
been reports of such shipments from our friend and neighbor, Canada.
In the case of such dubious neutrals as Ghana or Guinea, the danger of
transshipment increases. And in the case of outright Communist
States such as Poland and Yugoslavia, the danger, in my opinion,
reaches perilous proportions.
There is elaborate machinery, both national and international in
character, designed to deal with these situations. But there is very
little information as to how well the machinery is working and what
standards are being applied. I hope that these hearings will serve to
illuminate this whole subject.
Firm conclusions at this stage are not warranted, since all the testi-
mony has not yet been heard. However, on the basis of the subcom-
mittee's investigations to date, I want to express concern about several
matters:
First whether our defense agencies are playing a subordinate role
to the &mmerce Department in determining policy and making deci-
sions in individual cases?
Second, whether we have taken steps to cut down on the volume
of exports to the Soviet bloc as a result of the Berlin crisis?
Third, whether it is wise to apply a different standard to Yugo-
slavia and Poland from that we apply to the Soviets?
Fourth, whether we have done everything possible to obtain more
cooperation from our allies on shipments to the Soviet bloc as well
as Red China (on which, of course, we have a total embargo) ?
Fifth, whether we are takinm sufficient precautions to prevent ship-
ments to so-called neutral ancT even friendly countries from getting
into Communist hands?
Sixth, whether we are sufficiently utilizing our export policies as
an affirmative weapon of the free world struggle against communism?
Seventh, whether we are giving too much weight to economic inter-
ests-such as the balance-of-payments problem-and too little weight
to the interests of national security and foreign policy in issuing ex-
port licenses?
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved ForE be s& ( /AQ ( : CJ ff4 ff%$6R?RR5J00020022-5
And, finally, whether adequate technical advice is available to pre-
vent mistakes in the classification of items as nonstrategic, such as
in the case of the ball bearing machines, upon which we held hearings
some time ago.
It must be emphasized that this trade is not a two-way street. The
United States is sending to the Soviet bloc two or three times the
volume of goods which we import from these same countries and the
volume and ratio in Russia's favor are increasing rather than decreas-
ing. This period of international crisis is no time for a business-as-
usual attitude. In my opinion, this is a very appropriate period to
review the impact on our national security of trade with the Soviet
bloc and I am confident that these hearings will shed a great deal of
light on this subject.
I am pleased to welcome here this morning as observers at these
hearings three of the members of the House select committee dealing
with this same general subject, the chairman of that committee, Con-
gressman Kitchin, Congressman Lipscomb and Congressman Latta.
We are glad to have you here with us, and we hope that we will each
mutually gain from the information which these subsequent hearings
will develop.
We are glad to know that you have recognized the seriousness of
this problem as we have, and that you are going into it in your own
investigation.
Mr. Gwyer, would you rise and raise your right hand, please?
Mr. Gwyer, do you solemnly swear the evidence you give in this
proceeding will be the truth, the whole truth, and nothing but the
truth, so help you God?
Mr. GWYER. I do.
TESTIMONY OF JOSEPH A. GWYER, SENIOR RESEARCH SPECIALIST,
LIBRARY OF CONGRESS
Senator KEATING. Would you give your full name and your address
and present assignment for the record?
Mr. GwYER. My name is Joseph Anthony Gwyer.
Senator KEATING. That is G-w-y-e-r?
Mr. GwYER. G-w-y-e-r. I reside at 3223 Gainesville Street SE.,
Washington. I am a senior research specialist with the Library of
Congress, currently on leave of absence.
Senator KEATING. You have a brief statement which you would
like to make preliminarily to being asked some questions?
Mr. GWYER. Yes; I do, Mr. Chairman.
Senator KEATING. Proceed, Mr. Gwyer.
Mr. GWYER. Only a few days ago Nikita Khrushchev bared before
the world the goals of the Soviet Union for the next 20 years. View-
ing his boasts, we cannot escape the conclusion that we are today en-
gaged in an all-out economic war with the Soviet bloc nations and that
these nations gave themselves 20 years to make good their boast in this
death struggle for world supremacy.
And examination of historical facts points out many errors of
judgment committed by the Western European nations as well as the
United States. The United States and Western Europe have helped
tremendously in building the U.S.S.R. which today is threatening us
Approved For Release 2004/03/11: CIA-RDP64B00346R0005000200
 Approved For Release 2004/0311A ECK-RC o6 ~ 0 6 00500QJ20022-5
EXPORT OF STRATEGIC
with political destruction. I think it would be proper at this time
to quote to you a statement from Lenin, made in 1920 before the
Eighth All-Russian Congress of the Soviets. In referring to the
trade with foreign countries, he said that in order to obtain all sorts
of equipment, it will be necessary to bribe the capitalist nations with
the bait of profit. The all sorts of equipment which the Soviets will
thus obtain will permit them to raise themselves on their feet and then
defeat these capitalist nations in an economic war.
This statement of intentions was successfully carried out during
the 1920's and 1930's and is being carried out with considerable suc-
cess today. In the early 1920's2 by granting mineral concessions, the
Soviets obtained from the United States and from other countries
key types of industrial equipment, plus trucks and tractors for their
agriculture. The services rendered by the French industry in early
days of Soviet aviation were great. French manufacturers shared
with Americans the credit of helping the Soviet Union to build its air-
power. The Italians provided the Soviets with Fiat cars, airplane
engines, dockyard equipment, and ships. Germany, to a large extent,
became responsible for building up the Soviet machine tool industry.
The first Soviet; watch factory began functioning with the machinery
purchased from the United States. Americans were also busy devel-
oping one of the largest Soviet iron and steel centers at Magnitogorsk.
They also were instrumental in organizing and supervising the work
on the largest hydroelectric dam in Europe, at that time the largest on
the Dneiper River. The American know-how and equipment were
largely responsible for erecting the largest Soviet automobile plant
at Gorky. These are but a few examples where western interests
contributed greatly to the growth of the Soviet industrial might.
During World War II, the almost unlimited help extended by the
United States to the Soviet Union involved, besides supplies of purely
military character, equipment of industrial nature. It is estimated
that of the approximately $11 billion worth of goods shipped to the
Soviet Union up until 1947, between $1/9 billion and $1 billion was
accounted for by equipment of purely industrial nature, for example,
machine tools of all sorts, processing equipment, et cetera.
During the last 2 or 3 years, visitors to the Soviet Union, having the
opportunity to visit some leading Soviet industrial plants, casually
reported observing American machine tools still being used.
Much has been said about the Soviet progress since the end of World
War II. Most of the reports on the subject deal basically with the
positive attainments by the Soviets. Since 1957, the era of sputniks
created an impression that the progress in the fields of science and
technology by the Soviets is so great that it almost equals that of the
greatest industrial nation of the world, the United States. Research-
ers on the Soviet Union tended to overemphasize her positive gains,
completely sidestepping the critical areas which are still abounding
in the Soviet industrial system. Attempts to publish material of a
critical nature were usually nullified by a stereotype answer by some
publishers, that critical appraisals of Soviet deficiencies only create a
false sense of complacency on the part of the American reader.
The truth is that Soviet attainments are basically in areas which
can be described as propagandawise spectacular and as a rule have
only military or paramilitary application. The industry as a whole,
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64BOO346ROO0500020022-5
bb EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
apart from the military areas, is plagued by chronic deficiencies. The
area of machine tool production, so closely related to the overall
mechanization and automation of industrial processes, is a case in
point.
Senator KEATING. Thank you very much, Mr. Gwyer.
There was one statement in your presentation that I would like to
ask you about, if you can shed any light on it.
In the first page of your statement you say, in referring to the trade
with countries, Lenin said that "in order to obtain all sorts of equip-
ment, it will be necessary to bribe the capitalist nations with the bait
of profit."
Can you shed any light on why it is that the Soviet Union should
come to the United States for synthetic rubber and pay more per
pound than similar rubber could be purchased for in Western Europe,
for instance, in Italy, on which we have some evidence now? Can
you explain in any way why that would be so?
Mr. GwYER. Mr. Chairman, basically the Soviet aims are twofold :
First, by placing an order on the American market, despite the fact
that they have to pay a higher price per ton or unit of measure, they
may set up a precedent. 1First, in terms of trying to loosen an item
from the Battle Act list, if this synthetic rubber is on the Battle Act
list, and then in setting up a contact, a commercial contact, with
American industry.
American industry was always in a position to deliver twice or three
times as fast as European counterparts. Consequently, you have a
gain for the Soviets in terms of time element involved.
Second, the fact that an order was placed with the United States,
thus serving the purpose of establishing commercial contacts or com-
mercial pipelines to the United States.
Senator KEATING. I think that is very helpful.
Counsel?
Mr. SOURwINE. Following that inquiry by the chairman, may I ask
if, in your judgment, the mere existence of trade relations with the
United States and the purchase of various items from the United
States gives the Soviet Union a propaganda poll; does it do them
any good propagandawise to have the world know they can buy
here?
Mr. GwYEr. There is no question about it. The fact that the order
was obtained, if it was obtained from the United States, would serve
as an example for the Western European nations to look for U.S.
leadership in this area for expanding commercial trade with the
Soviet Union.
Mr. SounwiNE. Mr. Chairman, the question was raised with the
-Lenin statement about bribing capitalism with extra profit. We have
the precise text of this particular statement, one paragraph and, per-
haps it might be offered for the record at this time.
Senator KEATING. It will be received.
The statement follows :
Lenin stated in his "Report on Concessions" delivered on the 21st of Decem-
ber.1920, the following:
"It is necessary to bribe capitalism with extra profit. Capitalism will get
the extra profit-God with it (begone), with this extra profit-and we will get
the basics (equipment) with the aid of which we will strengthen ourselves, will
finally get up on our feet and then defeat it (Capitalism) economically."
Approved For Release 2004/03/11: CIA-RDP64B00346R00050D22-5
 Approved -o It#s qqf fg/IJA~ fp?~4 p 6q.%005000 f 0022-5
Mr. SOURWINE. Mr. Gwyer, do you have information respecting
the publication of misinformation about Soviet production in tech-
nical publications in the United States?
Mr. GWYER. Yes; I definitely do.
Mr. SOURWINE. Will you go into that, please, at this time, in your
own words?
(Persons named by Mr. Gwyer and representatives of publications to
which the witness referred were sent excerpts from his testimony and
invited to comment. The replies received are printed as app. IV at
p. 94.)
Mr. GwYr R. Perhaps the best illustration of misinformation may
be gleaned from correspondence I had with two officials, one an offi-
cial of an American machine tool distributors association; the other
one with the editor of a leading trade publication here in the United
States : McGraw-Hill's American Machinist.
When I published my article on Soviet machine tools in 1958 I
received a letter from the west coast-I think you have that letter
as one of the exhibits-a letter signed by Mr. James 0. Ellison,
in which he states
Senator KEA-rINO. Who is Mr. James Ellison?
Mr. GwYER. He was, in 1958, president of the American Machine
Tools Distributors Association, if I have the correct title of the asso-
ciation. In his letter he says that his views are directly opposite to
mine, because the information he gathered from American publica-
tions is that the Soviets do have these tools, which I questioned in my
report.
In 1958 also, in December, I was invited to a meeting on the De-
partment of Commerce grounds, for the purpose of hearing results
of a survey made by McGraw-Hill Publications. This is a machine
tool survey in the United States.
After the end of the presentation by Mr. Burnham Finney, the
editor of American Machinist, a McGraw-Hill publication, I had a
very brief chat with him, and I told him that I was working on a paper
which I think he should consider for publication by American Ma-
chinist, because the paper would deal basically with the machine tools
in the Soviet Union, the existence of certain types of machine tools,
the extent to which they affect the degree of mechanization and auto-
mation, and so on.
He indicated great interest in my proposal, and suggested that
I send the draft of the paper at the nearest possible time, the nearest
opportunity. I finished the paper in December of 1958, and I mailed
the paper to the publisher just before the end of the year. If I can
recall, it was either the 29th or 30th of December 1958.
I hadn't heard from him for about 6 weeks. Consequently, I phoned
to his office in New York, and inquired, "You exhibited interest in my
paper, and in the last 6 weeks I haven't received a reply from you."
So he indicated to me that he will follow through with the letter.
I received the letter, in which he acknowledged the receipt of the
paper. He stated also that he has a competent editor rewriting the
paper in order to conform to the journalistic style of the American
Machinist since my paper was a purely academic paper, with each
statement documented. He also indicated that he was going to drop
most of the references I made to every single statement I made or
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprrved Fg @ay;gRfa*l1 !&}kQp6ogWWRP00020022-5
whatever claim I made, and also that the paper will be scheduled for
publication some time in April of 1959.
I think it was the middle of April of 1959 when I received a letter
from Mr. Finney in which he said that "We do regret, but we are
pulling this one here out of print."
I think the exact phraseology he used, he said, "We are pulling it
out from our issue," I think May 3 or May 4 of 1959.
Then he said that although he was in favor of publication of this
paper, there was a divergence of views on the editorial staff of the
American Machinist.
As a result of deliberation finally they decided against publication,
and one of the reasons he cited in his letter to me was that-
we had competent people go to the Soviet Union, they have observed the Soviet
industry, they observed machine toolplants and, consequently, they have in the
past published a number of articles dealing with the subject.
Furthermore, he added that merely critical appraisal of the deficien-
cies existing in the Soviet Union will have a tendency to create a com-
placency on the part of the American reader.
I have obtained copies of the articles written by the two individuals
he referred to in his letter, and I found out that both of them are
Britishers. They are the editors or associate editors of the McGraw-
Hill publication in London, a counterpart of the American Machinist
in New York, and that these people visited the Soviet Union sometime
during either 1956 or 1957, and their views were not too well accepted
by the British reader.
If I can quote directly, the British were alarmed and flabbergasted
by the statements made by these two individuals. I think one of them
is Mr. Tr Pe, the other one is Mr. Stubbs, both of them editors of the
McGraw-Hill publication in London.
Some publications in England, judging from the tone of their edi-
torials and their comments, classified these two individuals as definitely
spreading pro-Soviet propaganda in Great Britain.
I presume that, perusing through the collection of all of these ar-
ticles which I have included as one of the exhibits, you will find definite
propaganda line by the Soviets : First, trying to sell to the Western
World, especially Western Europe in this case, the fact that the Soviet
industry, the machine tool industry specifically, is all powerful ; that
they produce a large quantity of machine tools, that the technology
embodied in these machine tools is equal, perhaps, or may be even
superior to that of the West.
Furthermore, these two editors indicated that the productive capac-
ity of these machine tools and efficiency as a whole in producing them
is much greater than that of Great Britain. Of course, this was the
point which the British reader immediately disputed.
Furthermore, they advocated liberalization of trade between the
Soviet Union and Western Europe, and I think there is a list in one
of the articles, of items which the Soviets, despite the claims of having
the capability to manufacture these machine tools, were trying to ob-
tain from Western Europe.
Mr. SouRwINE. Mr. Chairman, at this point it might be well to get
some of these exhibits that are mentioned actually into the record.
I show you three letters addressed to you on the letterhead of the
American Machinist, all signed by Mr. Burnham Finney, the dates
Approved For Release 2004/03/11: CIA-RDP64B00346R000500 22-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 9
being respectively, March 12, April 3, and April 15, 1959, and I ask
you if these are the letters which you actually received and to which
you referred here?
Mr, GWYER. This is the one I would like to quote, because I would
like to -put this on the record
Mr. SouRwINE. First, before you uote it, let us just identify them.
These are the letters that you receive?
Mr. GWYER. Yes, sir. These are letters I have received, and they
are addressed to me, and this is a communication between myself and
Mr. Finney.
Mr. SouRWINE. These are communications from Mr. Finney to you,
are they not ?
Mr. GWYER. Correct.
Mr. SouRWIN"E. May I ask that these three letters go in the record,
Mr. Chairman?
Senator KEATING. Yes; they will be received.
(The documents referred to were marked "Exhibit No. 1, No. 1-A,
and No. 1-B" and read as follows :
AMERICAN MACHINIST,
New York, N.Y., March 12, 1959.
Mr. JOSEPH A. GWYER,
Washington, D.C.
DEAR MR. GWYER : I am sorry indeed about the delay in publishing your article
on Russia.
It was not possible to use it in February because we are doing an extensive
rewrite of it and the staff member who has the assignment has been jammed
with an emergency job.
He will have the revision ready, however, next week and will ask you to take
a look at it. I should say that the article will appear in either the first or
second April issues.
I am sure that you will agree with me that the revised article is much easier
to read than the original.
Before long you will receive a check for $100 in payment for your article.
With my best regards,
Sincerely,
EXHIBIT No. 1-A
AMERICAN MACHINIST,
New York, N.Y., April 3, 1959.
Mr. JosEPH A. GwYER,
Washington, D.C.
DEAR MR. GWYER: I am enclosing the rewrite of your article on Russia and
hope that you will agree with me that it has been tightened up a lot, shortened,
and made more readable.
The article as originally written was entirely too long and had to be condensed
somewhat to get into available space. Even as it is, it will take four pages, and
we publish few articles that long.
For space reasons, we have been forced to take out the footnote references
appended to your original manuscript. We feel that we have covered this
omission adequately at the beginning of paragraph 6 on page 1, which reads :
"For the answer we must go to the Russians themselves, to their technical
magazines and literature." Anyone who wishes the exact references-and I
doubt if anyone will-can write us after reading your article.
You will notice that we have not used the Russian spelling of names but have
substituted the English version instead. "Gorkky" is an example. We have
referred in previous articles to the Gorky automobile plant, so we are being
consistent.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
10 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Your article Is scheduled for publication in our issue of May 4. Therefore
I would appreciate your going over the rewrite immediately and if you detect
any errors or wish to make any criticisms or suggestions, please write me
without delay.
I feel sure that your article will be the subject of considerable comment.
Sincerely,
Mr. JOSEPH A. GwYER,
Washington, D.C.
EXHIBIT No. 1-B
AMERICAN MACHINIST,
New York, N.Y., April 15,1959.
DEAR MR. GwYER: I am sorry to have to tell you that we finally have decided
not to publish your story on the Soviet machine tool situation. I therefore am
returning to you herewith your original manuscript and the rewritten version
of it. You are free to submit either one, as you may see fit, to another magazine
for possible publication. You also are entitled to retain the honorarium which,
I believe, you already have received.
From the time that we first received your manuscript there has been a division
of opinion within our staff as to the desirability of publishing it. I personally
was in favor of it and even had a competent staff editor spend many hours re-
writing it. Just in the past 10 days I have had misgivings about publishing the
story and the decision now against it is irrevocable. We therefore are pulling
it out of our issue of May 4.
Two years ago we published a series of eight articles on the Russian machine
tool and metalworking industries, the first printed anywhere on the subject.
This series covered a considerable portion of the general facts in your article,
but obviously went far beyond your facts because our author actually visited a
number of Soviet plants and saw conditions for himself.
From our knowledge of what Russia is doing, based on visits of our own people
plus talks with others who have been there, we believe it a mistake to publish an
article such as yours which merely is critical of Russian accomplishments and
tends to lull the reader into a sense of false security about Russia's advances
In the years immediately ahead.
I appreciate your having sent us the manuscript in the first place and I regret
the length of time that has passed before this final decision was made.
With my best wishes
Sincerely,
BURNHAM FINNEY, Editor.
Mr. SOURWINE. If you want to read from one of them, identify the
letter you are reading from.
Mr. GWYER. I want to quote a paragraph here saying that :
From our knowledge of what Russia is doing, based on visits of our own
people plus talks with others who have been there, we believe it a mistake to
publish an article such as yours which merely is critical of the Russian accom-
plishments and tends to lull the reader into a sense of false security about Rus-
sia's advances in the years immediately ahead.
Mr. SOURWINE. There are two sides to that coin, aren't there?
While there may be an argument that if you say something derogatory
about the Russian machine tool industry, you are lulling tie American
people into a false sense of security as lie indicates, isn't it also true
that if we accept the thesis that the ussian machine tools industry is
a very progressive one and has accomplished at least as much as we
have, then we remove an argument against shipping our machine tools
to Russia?
Mr. GwYER. I believe that this is one of the factors which has to be
considered very seriously because, to some extent, the limitations on
export of certain types of technological know-how rest on the fact
that we know that the Soviets do not have this type of technological
Approved For Release 2004/03/11: CIA-RDP64B00346R0005006?22-5
 Approved oRR I o set OQz /R
IW 11 .TEIA RDPa4B~003U6R 000500q?~0022-5
know-how ; anc[, in opposite, whenever we know than an item is avail-
able in commercial quantities, consequently, the value of it as a stra-
temic item ceases to be of paramount importance.
~4r. SOURwINE. Mr. Gwyer, you mentioned correspondence you had
with Mr. J. 0.. Ellison.
Mr. Gwi ER. Yes.
Mr. SOURWINE. I show you a letter to you signed by Mr. Ellison
dated November 17, 1958; a letter from you to him dated March 27,
1959; and a letter from him to you dated March 31, 1959, and I will
ask if this is correspondence in which you participated? These letters
are from your files, are they not?
Mr. GWYER. Yes, sir; these are the letters which I have exchanged
with Mr. Ellison.
Mr. SOURWINE. I offer these for the record, Mr. Chairman.
Senator KEATING. They will be received.
(The documents referred to were marked "Exhibit No. 2, No. 2-A,
and No. 2-B" and read as follows:)
Mr. JOSEPH A. GwYER,
The Adjutant General's Office,
Washington, D.C.
HARRON, RICHARD & MCCONE CO.,
or NORTHERN CALIFORNIA,
an Francisco, Calif., November 17, 1958.
DEAR MR. GWYER : I have read with considerable interest your article in
the current issue of Ordnance under the title "Soviet Machine Tools." Your
opening remark that machine tools are of central importance to the achieve-
ment of military capabilities demonstrates an understanding of machine tools
which I hope is shared by many people in our military establishments.
Due to the fact that the machine tool industry is so small by comparison
with other industries in our country, it is not generally understood by very
many people outside of the industry.
While I find your article to be an exceptionally well documented observation
based principally upon statistics as available in the Library of Congress, I
feel that your assumptions are almost diametrically opposite to the opinion
of we who are in the machine tool industry. I hope that my remarks will not
be taken as critical which is certainly not my intention.
Specifically your conclusion that "despite the Russian gain in statistical
numbers, the Soviet Union still remains and will remain for some time to
come well behind the United States in machine tool production" might have
been plausible had the industry remained static in the proportions which you
referred to in 1955. However, this has not been the case and since you did not
point out the rather tragic decline in machine tool production in this country
since 1955 I am curious to know whether or not you are aware of it and if you
are aware of the fact that the Iron Curtain countries in the year 1958 will
produce possibly five times as many machine tools as we will in America.
The leaders in our industry who have had the opportunity to see Iron Curtain
machine tools in the year 1958 draw the conclusion that in many cases they
are equal to ours although, on a broad base, we still enjoy some degree of
superiority in the productivity of our machines but nothing in the magnitude
of 5 to 1 nor 3 to ]i.
It occurs to me that a much more realistic appraisal of the subject is in
order and without burdening you with unsolicited details I want you to know
I would be very happy to respond to any specific questions you may have and
to tell you that in my opinion I could make information available to you based
on my knowledge of this general subject as it applies to American machine
tools which could substantially alter the impression which I believe you have
left with other of your readers. -
If you do choose to respond, it would be most helpful to me to have you
expand on your remark that it is not the purpose of your survey to awaken the
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
12 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
uninterested or those who underestimate the Soviet industrial capacity. There
may be an underlying justification for this statement which escapes me and I
Would consider it a great personal favor to have that point explained.
I shall look forward with keen interest to your reply.
Yours very truly,
EXHIBiT No. 2-A
WASHINGTON, D.C., March 27,1959.
Mr. J. 0. ELLISON,
Harron, Rickard & McCone Co.,
San Francisco, Calif.
DEAR Ma. ELLISON : I am really sorry about the delay in replying to your letter
of November 17, 1958, which eventually reached me the last week of December
I was planning to write to you then and I hoped to include a reprint of a study
on Soviet mechanization programs which I submitted to the American Machinist
during the last days of December. As you can see from Mr. B. Finney's letter,
the study is still in the mill, hence the delay.
A reexamination of my conscience tells me that I owe you at least a reply
without going into a polemic on the merits or demerits of my study of Soviet
metal-cutting machine tools. To be frank with you, I do admit that since 1955,
the relative position of the U.S. machine tool manufacturers worsened, to put it
mildly, and the industry as a whole can be described in the jargon of industrial
economists as a "sick industry." Since the purpose of my study was to deter-
mine the Soviet strength or weaknesses in this respect, I have not taken into
consideration the cyclical movements of the American machine tools industry
which is extremely sensitive to the ups and downs of the business cycle.
During the past year and even perhaps now, the Soviet industrial strength or
weaknesses are being exploited for either political or economic reasons. Some
circles tend to underestimate Soviet industrial capacity and some go to the ex-
treme of swallowing Soviet industrial propaganda hook, line, and sinker, accept-
ing Soviet claims to industrial prowess at face value.
I personally do not subscribe to either approach, since in my judgment both
are wrong and harmful. Subjectivity in lieu of objectivity, despite certain polit-
ical or economic gains, however lasting, generates seeds of disaster, and this is
the reason for my cryptic remark that I do not want "* * * to placate the
`alarmist', who daily both extols and bemoans Soviet industrial strides, nor to
awaken the uninterested or those who underestimate the Soviet industrial
capacity."
Please return the enclosed study, since this is the only draft I have available.
Sincerely yours,
JosEra A. GwYER.
EXHIBIT No. 2-B
HARRON RICKARD & MCCONE CO.,
or NORTHERN CALIFORNIA,
San Francisco, Calif., March 31, 1959.
Mr. JOSEPH A. GWYER,
Washington, D.C.
DEAR MR. GwYER : Your letter of March 27 is much appreciated. Since that
time I find that we have several mutual friends from whom I have learned a
little more of your very interesting background. It was very thoughtful of you
to send me the draft of your article which is to appear in an early issue of
"American Machinist."
In the hope of becoming better acquainted with you and having the opportu-
nity to discuss the subject of Russian machine tools with you in person. I shall
refrain from any detailed comment on your draft of the new article. It might
be fair, however, to say that the general impression which I think the readers
will gain from this article will not be a very accurate reflection of the true posi-
tion of the Russiansand their machine tool capacity. It appears to me that you
are describing the Russian machine tool capacity as being considerably more
disorganized and less effective than it actually is. I do not challenge the inter-
pretation which you have made of your source material but I would say the
Approved For Release 2004/03/11 .CIA-RDP64B00346R000500020022-5
 Ie,sJJ IA1,~-AP~~43~ 80500Q0022-5
Approved
source material as such is about 180? opposite to some of the other studies which
have been made of Russian machine tool capacity and which have appeared in
print recently.
I think of one article in particular which appeared in "American Machinist"
which would be very contradictory of some of the statements in your proposed
article. The statement that in all of Russia there are no more than 100 automated
lines in use today would be one of the most contradictory statements.
I hope you will not gain the impression that I have any personal desire to
take issue with you for personal reasons. On the contrary I suspect that we
both have a very great concern over the relative position of our own machine tool
industry in America and that of the Soviets. This is attested to by your closing
sentence which ends with the word "disaster."
It occurs to me that any information disseminated on Russian machine tools
at this time should be as accurate as possible because any inaccuracies will tend
to favor one or the other of the extremes which you mentioned in your letter of
March 27. I for one hope that the day will come in the near future when a more
accurate appraisal of their position will become known in this country.
Thanks again for the material which you have sent me. You will find it at-
tached as you requested.
Yours very truly,
J. 0. ELLISON.
Mr. GWYER. Mr. Chairman, may I quote from the letter of Mr.
Ellison to me?
Senator KEATING. Now again, just remind me who is Mr. Ellison?
Mr. GWYER. Mr. Ellison is a machine tool distributor, he is asso-
ciated with Harron Rickard & McCone Co. of Northern California. In
1958 he was president of the American Machine Tools Distributors
Association.
Senator KEATING. Yes; you may quote whatever you think is
essential.
Mr. GwYER. This is a letter dated March 31, 1959, and he says,
and I quote :
I do not challenge the interpretation which you have made of your source
material but I would say the source material as such is about 180? opposite to
some of the other studies which have been made of Russian machine tool capacity
and which have appeared in print recently.
Senator KEATING. You do not know what he is referring to there,
whether he is referring to the statements in the British counterpart
of the American Machinist?
Mr. GwYER. To continue this letter, he says :
I think of one article in particular which appeared in American Machinist
which would be very contradictory of some of the statements in your proposed
article. The statement that in all of Russia there are no more than 100 auto-
mated lines in use today would be one of the most contradictory statements.
Senator KEATING. That statement was in your article?
Mr. GW YER. Yes ; correct.
Senator KEATING. Is that statement true today or would you update
that some now?
Mr. GwYER. Today I would say that the Soviet Union has less than
200 transfer machines in operation, and this is borne out by evidence
as presented by Soviet trade journals.
Senator KEATING. And for some of us less schooled in this field, a
transfer machine is what brings about complete automation, is it?
Mr. GwYER. Yes. It is a system of operations where a semifinished
product undergoes machining and, at the end of the line, emerges as a
completely finished product ready for assembly.
76369--62-pt. 1-2
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
14 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
During the machining processes, the gaging is done automatically ;
consequently, there is no human hand touching this specific item dur-
all the machining operations.
Senator KEATING. And in Soviet Russia, in the Soviet Union, you
would say there would be less than 200 in all kinds of industry of such
machines in operation?
Mr. GwYER. Yes. Most of the Soviet transfer machines are used
by the automotive industry in the Soviet Union. There are very
few outside. But basically the automotive industry is the primary
user of the transfer machine, as we understand it.
Senator KEATING. As a standard of comparison could you give us
any idea of what the comparable figures would be in this country?
Mr. GwYER. I would venture not a guess but an estimate based on
the machine tool survey made by McGraw-Hill which was discussed
in December 1958, during the meeting with Mr. Burnham Finney.
On one of the pages he had the quantity of in-line automatic lines,
transfer machines, as we understand it. There is a reference to
approximately 8,000, the bulk of which are used by the automotive
industry.
Senator KEATING. In this country?
Mr. GwYER. Yes; and he has also a figure of 8,000 rotary machines,
which differ in a sense in that an item moves more or less in a rotary
fashion.
Senator KEATING. I am trying to arrive at a figure comparable to
the estimate of the figure of 200 which you gave us for Russia. lVrould
the comparable figure be 8,000?
Mr. GwYER. I would venture a guess, and I would say it is a calcu-
lated guess in the sense I do not have the exact figures and, perhaps,
these figures may be misleading. I don't have this reference here at
my elbow, but I think this could be very easily ascertained.
Senator KEATING. All right, Counsel.
Mr. SoUrwINE. If you are through with those documents, let the
reporter have them.
I show you now an issue of Metalworking Production, a weekly
journal on plant and production engineering. Have you seen this
before?
Mr. GwYER. Yes, I have.
Mr. SourwINE. Do you have some comment that you wish to make
in connection with this publication?
Mr. GWYEr,. Well, as I indicated before in my testimony, this is a
Russian survey dealing basically with the Soviet machine tool
industry.
Mr. SouRwINE. There is a particular item in there which is such
a survey, is it not? Is the whole publication a Russian survey?
Mr. GwYER. Yes; the entire publication deals with the Soviet ma-
chine tool industry. Actually it is a collection of articles which
appeared in this British publication over a period of time, and some
of these articles were used by the American Machinist here in this
country.
Mr. SouRwiNE. You say this is a Russian survey. You mean it is
a survey of the Russian
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Mr. GwYER. Of Soviet machine tool industry, prepared by Norman
Stubbs, editor, and Peter Trippe, associate editor, Metalworking
Production, which is a British McGraw-Hill publication.
Mr. SouRWINE. Is this the publication which you indicated was re-
garded by some as containing Soviet propaganda?
Mr. GWYER. Yes, it is.
Mr. SOURWINE. Are there any particular portions of this publica-
tion which should be in our record verbatim, or is it sufficient if the
entire publication is put in the record by reference and held in the
committee files?
Mr. GwYER. Well, I would hesitate to recommend inclusion of the
entire book since there is a limitation as to how much material you can
place in the record.
Actually, every single article contains distorted information and,
perhaps
Senator KEATING. When you say "distorted," you mean distorted in
the manner of painting the Soviet industrial potential as greater than
it is?
Mr. GWYER. Yes; that is correct.
The portrayal of Soviet machine tool plants is, perhaps, out of
focus. They are uplifting, they are building up the facade, let us
put it this way.
Mr. SOURwINE. Mr. Chairman, I think the witness ought to be
asked to document this. Might I ask that the order be entered that
the witness be given time to examine this carefully and prepare for
the committee excerpts from the article or articles in this publica-
tion which he considers to be misleading, with his own statements
and sources to show how they are misleading?
Senator KEATING. You could do that for us, couldn't you? Not
now, I don't mean for you to do it now, but I mean if you had a little
time for it, you can do it?
Mr. GWYER. Oh, yes, definitely. It is very easy.
Senator KEATING. All right.
Mr. SouRwiNl,. If this may be done, if the order could be that this
study when it is presented to the committee could go into the record
at this point?
Mr. GwYER. Correct.
Senator KEATING. That will be so ordered.
(The information referred to was marked "Exhibit No. 3" and
reads as follows:)
EXIIIBIT No. 3
(Mr. Gwyer's statement regarding the matters in the Russian sur-
vey published by Metalworking Production, is as follows:)
METALWORKING PRODUCTION's RUSSIAN SURVEY, BY NORMAN STUBBS, EDITOR.
AND PETER TRIPPE, ASSOCIATE EDITOR, METALWORKING PRODUCTION, BRITISH
MCGRAW-HILL PUBLICATION, NOVEMBER 1956-MARCII 1957
This survey deals with the machine tool and metalworking Industries In the
U.S.S.R., in all their aspects. The reports were prepared by Metalworking
Production editors, following personal visits to the U.S.S.R. Mr. Norman
Stubbs was in Moscow in August 1956 and Mr. Peter Trippe visited Moscow
in November 1956.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
16 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Of the 10 articles presented in this Russian survey, the following were either
fully or in part published by the American Machinist (New York).
Date and pages in American
Machinist
Some First Impressions From Moscow-----
1
N. Stubbs----
Nov. 19, 1056, pp. 121-124.
Metalworking and the Sixth Five-Year Plan-
1
+
-----do--------
Dec. 3, 1956, pp. 137-140.
Soviet Research and Development----------
31+
do--------
Dec. 17, 1956, pp. 116-119.
The Moscow Automatic Ball Bearing
39+
P. Trippe-----
San. 14, 1957, pp. 147-154.
Factory.
Machines by the Thousand-----------------
62+
----- do--------
Feb. 11, 1957, pp. 146-150.
Special Machines in Less Than Nine
83+
- -do--------
Feb. 25, 1957, pp. 178-181.
Months.
Grinding Plant To Have an Automated
101+
-----do--------
Mar. 11, 1957, pp. 166-168.
Line.
The Man Behind the Machine .............
113+
-----do--------
May 6, 1957, pp. 168-170.
One article under the heading "The Embargo and the U.S.S.R." prepared by
Norman Stubbs did not receive a mention from the American Machinist, This
article appearing on pages 21 to 28 of the Russian survey deals with machine
tools that are in short supply. It also goes into the political ramification of the
embargo, which appears to hamper to a large degree the Soviet drive for greater
industrial development.
Here is a quotation from page 22 of the survey :
"* * * it is not surprising that many of those interviewed spoke strongly
about the embargo. There is no doubt that the embargo is a major thorn in
the Soviet's side. All our contacts were friendly enough, and our reception
everywhere was most cordial, but they made it perfectly plain that they re-
garded the embargo an affront. A significant slant on this question was given
by the head of Stanko-Import, which is the export-import organization. Ile
quoted a case where sale of machines from a firm in England were banned
under the embargo. But, he said, they were able to obtain similar machines
from Switzerland. Clearly, such substitutions would amount to a mere drop
in the ocean compared with the Bulganin-Khrushchev #1,000 million shopping
list. (See M.P., May 4, 1956, p. 493.) Metalworking production needs in this
list are tabulated opposite. And that list, he pointed out, was only one of
machines in which they were most interested-not necessarily from the United
Kingdom. It certainly did not represent their total requirements.
"It will be recalled that this list represents part of the Bulganin-Khrushchev
#1,000 million trade proposition which was announced earlier this year. This
proposition would involve orders worth something between #360 and #450
million for the engineering industries alone, for delivery between 1957 and 1960.
The huge demand for machine tools includes #27 to #36 million worth of transfer
machines. As the position stands at present, of course, practically all the ma-
chine tools which the U.S.S.R. would like to buy are prohibited by the embargo,
and where this does not apply, it is difficult to see how, with our own home
commitments, we could supply more than a small percentage of requirements
with existing capacities. The call for transfer machines and multi-unit-head
machines, which are not covered in the embargo, indicates the tremendous drive
which the U.S.S.R. are making in the field of automation, because their own pro-
duction is considerable and has a high priority in the present plan. Further,
they are actively engaged in advanced designs and in the development of
standardized unitized machines which will doubtless widen the scope of auto-
mation well beyond that of the made-to-measure transfer machine. But their
own rapidly expanding capacity in this field, considerable though it is, does
not seem to be enough, and they would be most willing to buy from us to supple-
ment their own output * * *.
"* * * There is no doubt that the U.S.S.R. consider the embargo as an affront,
but they maintain that it would not embarrass themin carrying out the plan;
we were told that the plan had taken such a possibility into account. This list
shows some of the equipment they are seeking to buy in the metalworking fields.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve4f ,RW% ,#A A?IllEh FpPfABO@ y 0005QQ'020022-5
"Metalworking Equipment Needs
Metal-cutting machine tools:
Transfer machines ------------------------------------------- #27-#36m
Special and multiple head machines---------------------------------- 500
Grinding machines :
Planetary------------------------------------------------------ 40
Gear cutters and shavers_______________________________________ 00
Optical profile'-----------------------------------------------40
Thread--------------------------------------------------------- 40
Broach and spline---------------------------------------------- $0
Gear cutters (up to 160-inch diameter)'----- ----------------------- 10
Gear planers (up to 64-inch diameter) 1______________________________ 25
Profile millers, multispindle'---------------------------------------- 25
Universal pattern milling machines--------------------------------- 100
Jig borers'----?---------------------------------------------------- 45
Relieving lathes--------------------------------------------------- 47
Thread milling machines 2------------------------------------------- 20
Autolathes,4 and 6 spindle'----------------------------------------- 40
Metal-forming machine tools :
Mechanical "Maxi" presses, capacity 6,000 tons'-------------------- 30
Mechanical "Maxi" presses 500-2,000 tons2-------------------------- 70
Extruding presses, capacity 15,000-25,000 tons----------------------- 2
Hydraulic forging presses, capacity 3,000-15,000 tons 1________________ 10
Drophammers, double action steam or air, falling weight 4-6 tons 2------ 50
Drophammers, steam or air, falling weight 15 tons 1__________________ 3
Plate and section straightening/ machines----------------------------- 16
Bolt, cold heading machine 372 inch capacity up--------------------- 70
Nut-forming machines---------------------------------------------- 70
Foundry equipment :
Automatic 4-cycle molding machines--------------------------------- 140
Automatic sand mills---------------------------------------------- 11
Shell molding machines-------------------------------------------- 50
Automatic core-blowing machines___________________________________ 300
Boxless molding machines------------------------------------------- 140
Molding machines, in the line_____________________________________ 100
Molding machines, capacity 100 boxes per hour----------------------- 70
Core makers------------------------------------------------------- 65
Full automatic 5-station core-blowing machines----------------------- 100
Universal core-blowing machines ----------------------------------- 130
Molding machines for boxes of 1.5m. x 1.5m. capacity 20 and 40 tons____ 20
"1 Complete embargo.
"2 Partially embargoed, part subject quantitative control. Other items can be exported
freely,"
There is a definite attempt to minimize Soviet deficiencies and shortcomings,
magnify out of proportion Soviet achievements, how limited they may be.
The following quotations are typical phrases abounding throughout the entire
survey.
"* * * at this stage it is sufficient to say that, in our experience, these organ-
izations are on a fantastic scale and are quite unlike anything we know in this
country * * * ."
"* * * the machines in general, have an air of quality about them-notably
the lathes and millers and the few grinders that are on display. * * *"
"* * * but, with reference to copying, it must be said plainly that the U.S.S.R.
are indeed showing increasing originality in design. We and they may look
at the embargo in various ways. But one thing it undoubtedly is doing is to
stimulate Soviet production of machine tools and, one may be sure, the design of
new and better machine tools, and that they would do anyway * * * ."
"* * * the Russians, by their own reckoning, are unable yet to produce any-
thing like the quantity of machine tools that they could very well use today. But
it was our impression that their industry is speedily filling the gaps in the types
and sizes of machines available, and they already have some designs of their
own that are quite unique. * * *"
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approv d For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
A EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
"* * * in short, it seems fair to say that automation in Russia today, is
generally more broadly based than in the West. In some respects it is further
advanced. In others it is behind, and notably so in those promising numerical
control of the punched card or tape type. Even so, development of those de-
vices, too, is undoubtedly in train-and they could come along quickly. * * *"
"* * * The automatic ball and roller bearing factory in Moscow is the most
advanced production unit of its kind in the world. * * *"
"* * * It has been implied in articles in the Western press dealing with auto-
matic factories in the Soviet that these projects are showpieces. To believe
that would be a very dangerous rationalization, for it would seriously under-
estimate the ability of Soviet engineers in the production engineering field, and
we might well find ourselves left standing in the race for production * * *.
This factory [bearing] is no showpiece-it has been planned and put in operation
on a purely realistic basis. It is a practical working unit, and it is the shape
of things to come * * * "
"* * * We can vouch for their efficiency in their operation * * * "
"* * * There is, clearly, a danger in assessing the quality of another country's
machines in terms of one's own production standards. We would be most unwise,
probably, to make machines with as little supervisory control. But in these
plants, it seems to work * * * "
"* * * But talking with Soviet engineers, there was never a mention of politics
unless one includes the embargo discussed in sorrow more than anger * * * "
"* * * In this plant again [Sverdlov in Leningrad] was evidence of the
change that has taken place since the beginning of the war, and, even more
markedly in the years since the war. Nearly all the old machines are of British,
American, or continental extraction, while the few replacement machines are
Soviet built. They have clearly made up their minds, embargo or no embargo, to
rely on their own resources, although it seems certain they would buy if they
could get reasonable delivery periods. * * *."
"* * * Russians don't drink unless they are proposing a toast * * * ."
"* * * We had many frank discussions, and no punches were pulled on either
side-and both sides enjoyed it thoroughly. The words most commonly heard
were `peace,' `interchange' and `understanding.' One, or all, of them figured in
the toast at every lunch and dinner we attended-and there were quite a number
of them. It is easy to say that these were simply diplomatic lipservice, but-in
our experience anyway-it simply wouldn't be true. * * *"
"* * * The social side of Soviet plants is surprisingly similar to our
own * * * "
A rebuttal to the exaggerated claims made by both N. Stubbs and F. Trippe
can be readily found in statements by responsible Soviet officials cited in two
studies I have introduced in the record. These two studies are "Appraisal of
Soviet Mechanization and Automation" and "Soviet Metal-Cutting Machine Tools :
Assertions and Facts."
Senator KEATING. Let me ask, with reference to these 200, roughly,
transfer machines : We have rather recently shipped transfer machines
to the Soviet Union, haven't we?
Mr. GWYER. I am not aware of actual shipment.
Senator KEATING. You are not aware of it?
Mr. GWYER. Judging from the information that was published over
the period of the last 5 or 6 months, there is a consideration involved.
but I don't think there was any actual shipment of transfer machines
to the Soviet Union.
Senator KEATING. They have requested the shipment of transfer
machines?
Mr. GwYER. Yes, I presume there is an application, and I think this
can be ascertained by glancing over some of the material that was
published during the last 3 or 4 months.
Mr. SOURwINE. Might I suggest, Mr. Chairman, we hold this as an
item to ask the departmental people about when they come up here.
Mr. GwyER. Mr. Chairman, since we are on the subject
Mr. SOURWINE. Yes.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R00050flV0022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Mr GWYER (continuing). -of individual instances where there
is a conflict of information and how the information which is pub-
lished in this country affects the thinking on the part of the reader,
in line with the two letters I introduced as evidence, I would like to
bring also for the record a statement made by the Director of the
Central Intelligence Agency in reference to the production of machine
tools in the Soviet Union and in the United States.
Senator KEATING. Is this in the form of a letter to you?
Mr. GwYER. No. This is taken from an address by Allen Dulles, Di-
rector of Central Intelligence, to the Edison Electric Institute, New
Orleans, La., April 8, 1959, 2:30 p.m. central standard time. "The
Challenge of Soviet Power."
On page 9 of the release, in reviewing some of the factors that make
up Soviet industry, Mr. Dulles refers to the following :
Here are a few examples : While the Soviets last year were producing only
1 automobile for every 50 we produced, they are turning out 4 machine tools to
our 1.
Now, I don't think it is an intentional misstatement of fact, but coin-
paring the total production figures for the Soviet Union and the
United States, Mr. Dulles employed here an apple and orange techni-
nictue. Where the totals for Soviet Union included all types of ma-
chine tools, light garage and hobby type variety, light industrial types,
and heavy industrial types manufactured during that year, I think
they produced about 135,000 of them in 1958 and for the United States
he assumed the figure of 35,000, all of them heavy industrial type
machine tools.
Senator KEATING. In other words, if he had used the heavy indus-
trial type for Russia
Mr. GwYER. For the United States, sir, heavy industrial types for
the United States only and all machine tools for the Soviet Union.
Senator KEATING. My question is, if he had used only the heavy in-
dustrial types for the oviet Union as he did for the United States,
what then would have been the result?
Mr. GwYER. The figures would be not only 50 percent lower but I
presume would be almost on a par with that for the United States.
Senator KEATING. Would be what?
Mr. GwYER. Would be equaling those of the United States.
Senator KEATING. In other words, they were producing equal to the
United States in heavy machine tools.
Mr. GwYER. Yes; I do agree. But the ratio is not 4 to 1, but
rather 1 to 1.
~enator KEATING. 1-to-1 rather than 4-to-1.
Mr. GwYER. Yes.
I should add to this one here again a misstatement, and this appeared
on the 19th of October in the New York Times in a brief analysis by
Mr. Harry Schwartz of the claims made by Khrushchev during his
recent 7-hour marathon before the [Communist] Congress.
Mr. SouRWINE. Can you identify this article by the headline?
Mr. GwYER. Yes. The headline is "U.S. Lead Substantiated by
Harry Schwartz."
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
20 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
This appears on page 14 of theNew York Times dated October 19,
1961, and he said :
There are many important production areas in which the Russians have
narrowed the gap with the United States substantially, and some where Soviet
output is actually ahead. The brightest comparison for the Soviet Union is in
machine tools. Last year's Soviet production of 154,000 machine tools was not
only more than three times that of the United States, but also 60 percent better
than the United States' production in 1952.
Senator KEATING. Let me put it the other way.
Mr. GwYER. Yes.
Senator KEATING. If you took the heavy machine tools on both
sides, you say that the figures would have been about even rather
than 4 to 1.
Mr. GwYER. Completely disregarding the productivity of machine
tools, though most of the technical experts, machine tool experts, agree
that the American machine tools are much more productive than the
Soviet; if we take the numbers alone as a criterion, I would say that
this is relatively even.
Senator KEATING. Now, if you took the production of all machine
tools in the United States rather than just the heavy machinery, how
would that compare with the 135,000 figure for Russia?
Mr. GwYER. The United States in the year in question, as referred
to by Mr. Dulles, produced approximately the same number of
machine tools as the Soviets did.
Senator KEATING. Both in heavy and in total?
Mr. GwYER. And in light; correct. Asa matter of fact, the Ameri-
can statistics, as compiled by "Facts for Industry," Bureau of Census,
Department of Commerce, gave the figures for the United States as
roughly 118,000 to 130,000 or 135,000 for the Soviet Union.
Senator KEATING. I see.
Mr. GwYER. This year-not this year, last year-1960, according
to these figures, we have produced just as many or perhaps more than
the Soviets did, and our classification excludes the garden type, hobby
shop garage variety machine tools, and items like, say, a drill press,
which is used for personal purposes in someone's basement. Actually
we don't consider that as a machine tool.
Senator KEATING, Do we have any technical advantage in our pro-
duction of machine tools?
Mr. GwYER. Yes; we definitely do. There is no question about
the technological supremacy built into American machine tools, and
the Soviet requests for machine tools. American machine tools have
been known over the years, and some of the machine tools which we
produce here in this country cannot even be duplicated abroad.
I think the hearings by Senator Dodd in the early part of this year
have proved very well this point.
Senator KEATING. Proceed, counsel.
Mr. SounwINE. Mr. Gwyer, may I ask that that publication be
returned and the order be that it be held in the committee's files as
part of this record for reference.
Senator KEATING. And to be subject to this analysis by Mr. Gwyer.
Mr. SouawINE. Yes.
Do you need this for the analysis, is it the only copy?
Mr. GwYER. This is the only one copy.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved Fo Re] apf,~ggffi3QAI , 9A-FYP6 0(} 4.%! ,00050PQ20022-5
Mr. SOURWINE. Let it be retained, with the Chairman's permission.
Mr. Gwyer, I show you the following correspondence, aletter to
you under date of December 15 by Nate White business and financial
editor of the Christian Science Monitor; another letter to you from
the same individual dated December 28, 1960; a copy of your letter
of January 27, 1961, to Mr. White; his letter to you of February 3,
1961; a tearsheet from the Christian Science Monitor of Tuesday,
January 31, 1961; your letter to Mr. White under date of January 6,
1961; your letter to Mr. White under date of December 20, 1960. I
apologize to the Chair for not having those in chronological order
as they should have been.
All this material was furnished the committee from your files; is
that correct?
Mr. GWYER. Yes, sir; these are.
Mr. Soui wINE. Will ou tell us briefly what the significance of this
correspondence is, why' you thought it would be of interest to this
committee?
Mr. Gwin. Yes. Last year I was approached by Mr. White and
he asked me for a brief interview. He was trying to get the benefit
of my thinking on the Soviet machine tool situation.
Senator KEATINO. Who is Mr. White?
Mr. GwYER. Mr. Nate White, editor of Christian Science Monitor,
business and financial editor.
He went to the Soviet Union last year and he made a comment to
me when he said. that, "I thought that Portugal was a poor country,"
referring to the wealth of the Soviet Union, and since his trip to the
Soviet Union as a tourist left a certain imprint on his mind about
the Soviet position that the Soviet Union occupies as an industrial
power, he decided to write a series of articles in the Christian Science
Monitor portraying the various aspects of Soviet development over
the number of years.
He asked my advice about material he should include in his article
dealing with machine tools.
I gave him practically all the material I had on hand. He had a
copy of my article I published in Ordnance magazine dealing with
the Soviet machine tools, and starting from there he wrote an article.
He was kind enough to send the draft of his article for my review,
my criticism, my opinion. I think specifically he asked me to write
down comments.
After reading his article I replied that since the information in the
paper which I just wrote is fully documented, and this information
based on Soviet sources it would be, say, beneficial to the readers of
the Christian Science Monitor to have a comparison of views of the
American visitors to the Soviet Union visiting machine tool plants
with the views of what the Soviets themselves think about their own
industry.
I sent my material, together with the manuscript, to Mr. White,
and shortly afterward I received a reply in which he said that he
gives preference to the people that visited the Soviet Union, to their im-
pressions, their observations; consequently, he will not be in a posi-
tion to use the material I provided him with, although he left a refer-
ence in his paper to my views saying, in brief, that Mr. Joseph A.
Gwyer, Washington, D.C., does not agree with the views expressed by
the visitors, which he summarized in the form of an article.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approyyd Fofi lffs ,2pfflq G1~ : I S6T0PA~6~.q%0 00020022-5
In reply to his letter, I wrote a brief letter to him asking politely
to strike any references to my name since I believed that the use of
my name, together with the usage of the names of visitors to the Soviet
Union, would lend only some sort of credence to his position. I dis-
agreed with the contents of his article.
Consequently, the fact that he would say that Gwyer "disagrees with
my article," would not serve any purpose and I asked him to delete my
name or any references to my name, my writings, from the records.
The article was published. Here is a copy of it, and it contains very
vague data which we hear repeated over and over again.
Senator KEATING. Do you reach the conclusion that the writers of
the article-I think we must assume they are sincere and genuine-
were misled by what they saw or were only shown certain things?
Mr. GWYER. This is beside the point, but actually this is a sum-
mary of views of various people who went to the Soviet Union. These
views are not necessarily of people who are familiar with machine
tools or machine tool production. Consequently, they are only ob-
servations or cursory statements.
Senator KEATING. Are any of them machine tool people?
Mr. GWYER. Not machine tool people as such, that is, machine
tool engineers. Quite a few of them are familiar with machine tools,
being people who are involved in production of various types of equip-
ment in the United States.
Senator KEATING. I think we neglected-we did take it in executive
session-I think we neglected to qua] ify you as a witness.
Mr. Gwyer, you tell us, will you, about your education.
Mr. GwxEiz. I am-I will reply in the negative-I am not a ma-
chine tool expert. I have engineering training, but I received a
bachelor's degree in business administration, and a master's degree
in industrial economics. I am not a machine tool engineer.
Senator KEATING. I am not talking about that. I am trying to
find out what you are, not what you are not.
Would you tell us where you went to college, what degrees you got,
and what your experience has been.
Mr. GWYER. I went to Warsaw Polytechnical Institute in Poland.
Senator KEATING. That is where you received your AB degree?
Mr. GWYER. No. That is where I was studying engineering. Then
after a brief service in the U.S. Armed Forces, 1942-46, I went to school
under the GI bill here in Washington, D.C., and I received my bach-
elor's degree in business administration at American University, and
I also received my master's degree in industrial economics here in
Washington, D.C.
Senator KEATING. Then immediately you went to the Library of
Congress?
Mr. Gwrsii. Yes. I did some post-master's degree work, toward
my doctorate, but I haven't finished this work, and I am currently with
the Library of Congress.
Senator KEATING. How long were you with the Library of
Congress?
Mr. GwYER. I started with the Library of Congress in 1950, and I
was with the Library until 1954. I spent a short time with a local
corporation here in Washington, D.C., called Council for Economic
& Industry Research, and then in 1955 I went to the Pentagon and I
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R00050920022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
was with the Department of the Army as a military intelligence
research specialist.
I returned to the Library in 1958 where I occupy a position as
senior research specialist in industrial engineering with the specialty
of equipment analysis in terms of the productivity of equipment,
availability of equipment, obsolescence of industrial equipment in the
Soviet Union; quality control and related items.
Mr. SOURwiNE. You have then spent a number of years in detailed
study of Soviet economic situations and Soviet production of various
kinds?
Mr. GwYER. Yes; I have.
Senator KEATING. You read or write the Russian language?
Mr. GwYER. Yes ? I do read.
Mr. SoT IwINE. tan you read Russian trade publications and trade
journals?
Mr. GwYER. Yes; I do in the process of my work; I go through
a number, a large number, of Soviet trade journals and publications.
Mr. SoURwIN:s. You keep yourself or try to keep yourself current
with regard to activity of this nature in the Soviet Union as reported
on currently in the Soviet journals?
Mr. GWYER. That is correct.
Mr. SouRwINE. Mr. Chairman, may I ask that the correspondence
that the witness has just testified to with respect to Mr. White go
into the record at this point?
Senator KEATtNO. It maybe received.
(The documents referred to were marked "Exhibit No. 4" through
"Exhibit No. 4-G" and read as follows:)
Mr. JOSEPH A. GwYER,
Library of Congress, Washington, D.C.
DEAR MR. GwYER: It was good of you to give me the time last week. I would
appreciate receiving any information you may assemble on the subject and
having a copy of your Princeton talk. I have run into some conflicting infor-
mation and I am trying to digest it and understand it.
All the best.
Sincerely,
NATE WHITE,
Business and Financial Editor.
THE CHRISTIAN SCIENCE MONITOR,
Boston, Mass., December 15, 1960.
Mr. JosEPH A. GwYER,
Library of Congress, Washington, D.C.
DEAR MR. GwYEa: Here is the article on machine tools for my industrial series
on the U.S.S.R. which begins in our paper December 28. This article is currently
scheduled for January 31.
I have had trouble getting truly first-rate, first-hand reports on the machine-
tool industry in the U.S.S.R. today, and have been deeply appreciative of your
help and comments. If you see holes in the article or if there is additional
information you think it should include, I would appreciate it if you would let
me know.
Cordially,
NATE WHITE,
Business and Financial Editor.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approd For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
EXHIBIT No. 4--B
Mr. NATE WHITE WASHINGTON, D.C., December 20,1960.
,
Business and Financial Editor,
The Christian Science Monitor, Boston, Mass.
DEAR MR. WHITE: In reference to your letter of December 15, 1960, in which
you are asking for my comments and suggestions on your article re : Soviet ma-
chine tools, I am enclosing a copy of a recently completed study titled "Soviet
Metal-Cutting Machine Tools : Assertions and Facts." This article fully ex-
presses my views and opinions on the subject.
I hope you find it interesting and informative and perhaps adequate enough
for inclusion in the Christian Science Monitor series on "The U.S.S.R.: Eco-
nomic Giant?"
Should this be the case, I will be more than happy to rush the original (bond)
to you together with a copy of my Princeton talk and a brief biographical sketch
of myself.
In all fairness I would like to inform you that this enclosed contribution on
Soviet machine tools has already stirred a stormy controversy and a public
"thrashing out" of this subject will be of a great service to all of us. Should I
be proven wrong, I will not hesitate to go with the opinion of those who rationally
and logically can point out gaps or shortcomings in my approach to the whole
problem.
Hope to hear from you soon.
Sincerely yours,
EXHIBIT No. 4-C
TIIE CHRISTIAN SCIENCE MONITOR,
Boston, Mass., December 28, 1960.
Library of Congress, Washington, D.C.
DEAR MR. GwYER : For the period over which my series of articles on the
Soviet Union will be published I am going to send you the Christian Science
Monitor every day. It was easier for our list department to handle this special
mailing this way (for the next 3 months) than to try to make spot mailings
of the issues containing the articles.
Normally the U.S.S.R. articles will be on Tuesdays and Thursdays with the
following exceptions (today, December 28), Wednesday, January 11, and Wed-
nesday, March 8.
Again I wish to thank you for your help in producing this series.
Sincerely,
NATE WHITE,
Business and Financial Editor.
Mr. NATE WHITE,
Business and Financial Editor,
The Christian Science Monitor, Boston, Mass.
DEAR MR. WHITE: Enclosed are the original (bond) copy of my study "Soviet
Metal-Cutting Tools : Assertions and Facts," draft of my Princeton talk, and
tearsheets from Machinery containing my "Appraisal of Soviet Mechanization
and Automation." I am also returning copy No. 9 of your article "The U.S.S.R.:
Economic Giant?" No. 10.
Since my article on Soviet machine tools is of a purely academic character,
I doubt if you can use it in its original form. It has to be rewritten to conform
to the journalistic style of the Monitor. What I have in mind, and the decision
will be up to you, is a rewrite that would incorporate the views of American
observers contained in your article with Soviet statements and data contained
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 25
in mine. Such an approach, in my opinion, will give the reader a better chance
to compare and evaluate the various estimates of Soviet machine tool progress.
I hope that we may discuss this subject further.
Cordially,
Mr. JosEPH A. GWYER,
Washington, D.C.
DEAR MR. GWYER: I have considered this thoroughly, but what I have come up
against is a flood of competent material from people who have actually visited
the Soviet machine-tool factories and seen their machines in operation. These
are presidents or engineers of some of our finest organizations, and they have
extended through the steel, electrical, plastics, petroleum, automobile, and even
into the machine-tool organizations. So I have decided to accept the firsthand
material against the very weighty evidence which you have provided from your
Soviet literature research. What we have been after are the people who have
actually been there and seen the machine tools in operation. And I think I
have finally achieved that.
I appreciated having a visit with your mother, and I enjoyed seeing you in
Washington.
With all good wishes.
Sincerely,
NATE WHITE,
Business and Financial Editor.
Mr. NATE WHITE,
Business and Financial Editor,
The Christian Science Monitor, Boston, Mass.
DEAR MR. WHITE : Thank you for the return of my manuscripts. You will
recall, that during our conversation on October 11, 1960, here in Washington,
on the subject of Soviet industrial development, you said that the Christian
Science Monitor would not publish anything about me or my writings without
my consent.
Since I disagree with most views and opinions based on conducted tours of
the Soviet industries rather than on broad and serious research, I cannot per-
mit my name to be used in a. way that would imply either concurrence with or
opposition to the gist of your findings. I therefore kindly request that my
name or any reference to my writings be deleted from the series "The U.S.S.R.:
Economic Giant?" No. 10, containing data on Soviet machine tools and any
subsequent issues.
I appreciate very much your interest in my writings.
Sincerely,
JosEPH A. GWYER.
Mr. JOSEPH A. GWYER,
Washington, D.C.
EXHIBIT No. 4-G
THE CHRISTIAN SCIENCE MONITOR,
Boston, Mass., February 3, 1961.
DEAR MR. GWYER : I have deleted all reference to you in the article. I had
reduced the section about you to one in which I said that you were in basic
disagreement on the whole question. However, at your request I have removed
this.
With all best wishes,
Sincerely,
NATE WHITE, Business and Financial Editor.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11 :CIA-RDP64Bq 4~F ( 500020022-5
26 EXPORT OF STRATEGIC MATERIALS TO
Mr. SounwiNE. Mr. Gwyer, have you given consideration to the con-
troversy as to whether there should or should not be an embargo on
shipments to the Soviet Union, specifically with respect to an embargo
on machine tools to the Soviet Union?
Mr. GwYEn. Yes; I gave considerable thought to this problem, and
in the process of my research over the last 3 or 4 years, I was either
directly or indirectly involved in trying to assess the Soviet capability
of manufacturing certain types of machine tools and also trying to
determine the areas where the Soviet industry is deficient in certain
types of machine tools.
Mr. SOURWINE. On the basis of your studies and your expert
knowledge in this area, do you have a firm conviction one way or the
other as to whether there should be an embargo on machine tool ship-
ments to the Soviet Union?
Mr. GwYER. I never was a spokesman for the Government because
I never entered any direct negotiations regarding an embargo.
From my personal standpoint, on the basis of the data. I have
studied over a number of years, I think that every single machine
tool is strategic and should be withheld from the Soviet bloc.
Mr. SounwINE. You are aware, are you not, that various mem-
bers of the committee have expressed the opinion that there should
be an embargo on machine tool shipments to the Soviet Union?
Mr. GwYEi.. Yes, I ain aware. I am aware of the statement made
by Senator Dodd, the vice chairman of this subcommittee, a statement
made on August 18 1961.
Mr. SOUR-WINE. ,I believe that the presiding Senator here today
has also made statements along this same line.
Are you aware also of the position taken, officially, by the Govern-
ment of the United States in this regard ?
Mr. GwYER. Well, I am aware of what. has been released for pub-
lication by the Department of Commerce.
I am familiar with the statements released to the press by Secre-
tary of Commerce Hodges, and Secretary of State, Mr. Rusk.
Mr. SounwINE. What is your Government's official position in this
regga~rd, as you understand it?
Mr. GwYER. Well, the problem of restrictions on strategic ma-
terials going to the Soviet Union appears to fluctuate with the hi-
ternational tensions.
Since the tensions in Berlin are so great it appears that the various
agencies here in Washington, D.C., concerned with export control
are trying to tighten up the restrictions on the shipment of strategic
items to the Soviet Union.
Senator IDEATING. It is pretty late to tighten up when a crisis arises,
is it not?
Mr. GwYER. Well, this reminds me of an item which was taken up
by the Senate Internal Security Subcommittee. During, I think,
February, the statement was made, I think either by Senator Dodd or
by one of the other members of the subcommittee, that while taking
up the Bryant case of grinders they did not object to the shipment of
grinders by Jones & Lamson.
Now, these grinders left the United States, and this is official in-
formation. I think some were shipped in April, some were shipped in
May of this year. These are complex grinders; perhaps they are not
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R00050Q020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. G
as precise as the grinders manufactured by Bryant, but just the same
the are strategic equipment.
I ~think personally that Jones & Lamson shouldn't have been al-
lowed to ship these grinders to the Soviet Union.
Mr. So izwINE. Should not have been?
Mr. GwYER. I. beg your pardon, sir?
Mr. SoURwINE. You say "should not have been"?
Mr. GwYER. They should not have sent these items to the Soviet
Union.
Mr. SOURWINE. In other words, you are saying that while the com-
mittee may have done some good in whatever sense it had responsibil-
ity for stopping the shipment of the precision grinders on the minia-
turized ball-bearing races that were made by Bryant, that the com-
mittee didn't go far enough, and it should have made an effort to stop
the Jones & Lamson shipments also?
Mr. GwYER. It is true-you have to view the approach used by the
subcommittee in perspective. Actually the Bryant grinders were
basically grinders intended for use by the military, and the strategic
value of these grinders was greater than the strategic value of the
Jones & Lamson grinders.
If you take the qualifications used by the administrator of the Battle
Act list, you have grinders, these manufactured by Bryant being stra-
tegic items, and the grinders manufactured by Jones & Lamson, as
strategic of lesser importance.
Consequently, I think the committee, the subcommittee-I am
sorry-emphasized the strategic value of the Bryant grinders.
Mr. SOURWINE. You don't have to go easy on the committee. The
fact remains your testimony is that the Jones & Lamson grinders
should have been stopped, too; is that correct?
Mr. GwYER. Yes; I think they should have been stopped.
Mr. SOURWINE. This is in line with what I take to be your ex-
pressed view that any machine tool shipments to the Soviet Union
from the United. States area mistake.
Mr. GwYER. I hate to bring into a picture people who are not
directly involved in this inquiry, but a very good friend of mine from
the Department of Defense said that "I would rather send them a gun
than a machine tool because a mun can be used X times and the gun
is done, it is finished. A mac Line tool can be used over and over
again to manufacture these guns. It is almost unlimited."
Senator KEATING. I am afraid maybe he was a little too low rank-
ing to have his views carry enough weight.
lWIr. GwYER. Well, I think he is influential, but very simply he may
be overruled. I think he testified before this subcommittee.
Senator KEAi'ING. Let me ask you this-we encountered it when
we had the inquiry into these grinders-the story was put to us that
these machines are available in European countries, so if we don't
ship them from here the European countries will ship them.
Would you give us your views on that argument?
Mr. GwYER. I would pose an answer to your question, your inquiry,
by posing a question. Why are the Western European nations al-
lowed to send similar equipment? You see, there is an interrelation-
ship between the two. This brings us to-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
28 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Senator ICEATING. There is no question that they have a different
list and they do not have as strict control over what they ship as
we do.
Mr. GwYER. Well, we have a much stricter list. I presume, as
a member of this committee, you have access to the Battle Act list
which is classified. That list contains in general terms more items
than the international list maintained by CoCom, and each country,
individual country, has a modification, as a matter of fact, of a CoCom
list.
I am aware of the British modifications of the CoCom list al-
though there is a close agreement between the two, although the nrit-
ish are much more lax in trying to stick to the particular line as
indicated by the CoCom agreement.
Mr. SOURWINE. Mr. Gwyer, something you said a moment ago
might have left the impression that you accepted the statement that
there were available in Western Europe machine tools, specifically
grinders, comparable to the Bryant grinders on which shipment was
stopped. Is this true or do you have knowledge to the contrary?
Mr. GwYER. No, I have knowledge to the contrary and, actually,
if we review the testimony and the documents presented to the sub-
committee, Senate Internal Security Subcommittee, we find that the
position of the Commerce Department as justifying issuance of
license that these machines are available in Europe, Western Europe,
and I say equally productive machines, similar machines, capable
of performing identical functions or similar functions, proved to be
Wrong.
Mr. SouxwINE. In other words, you agree with the conclusion the
committee reached on this point?
Mr. GwYER. Yes, I do; and I would question statements that similar
equipment is available in Western Europe, consequently there is no
sense in denying this equipment from being licensed to the Soviet
Union.
Mr. SOURWINE. This is a statement which we reach or hear many
times in justification of one kind of shipment or another, is it not?
Mr. GwYER. That is correct.
Mr. SomRwiNE. And you are saying you think it very often is not
true?
Mr, GWYER. I think very often it is not true.
Mr. SOURWINE. Do you know where the Commerce Department
got its, what you call misinformation, about the availability of the
grindino' machines in Western Europe?
Mr. GWYER. I couldn't comment in open session. I would be glad
to answer this question
Mr. SOURWINE. You say you do know?
Mr. GwYER (continuing). In executive hearing because
Mr. SoURwINE. Are you saying you do know but you can't give us
an answer in open session because it is classified information?
Mr. GwYER. That is correct, sir.
Senator KEATING. Your views will be respected, and we will ask for
that in executive session.
Mr. GwYER. That is right, sir.
Senator KEATING. Although I think we have that evidence in our
records as a result of our investigation before.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approves ipa-R eb Q~~ (~3/ A ) 4O6 P Q. 00050~B20022-5
Let me ask you this: Do you believe that it is possible to separate
Poland and Yugoslavia from the overall economic setup of the Soviet
Union and Eastern Europe?
Mr. GwYER. Of course, my views are my personal views, based, per-
haps,on
Senator KEATING. I realize that.
Mr. GwYER. Based, perhaps, on knowledge of the situation in cen-
tral Europe, knowledge of the situation in Poland, the political aline-
ment in Poland and Yugoslavia.
Personally, I think it is a mistake to extend aid both to Poland and
Yugoslavia.
Senator KEATING. In other words, if we are going to deny machine
tool shipments to the Soviet Union, we should deny them to Poland
and Yugoslavia ?
Mr. GwYER. That is correct, Mr. Chairman.
Can I bring, Mr. Chairman
Senator KEATING. Yes.
Mr. GwYER. This is an item here, which perhaps the subcommittee
would like to enter on the record. During the Bryant hearings con-
ducted earlier this year, the vice president of Bryant Co. stated that
Bryant was allowed to send some grinders to Poland "a year or so ago."
If we look at the transcript of the testimony given before the Senate
Internal Security Subcommittee we will find that these grinders are
almost exclusively of military value, of military usage, to produce
military hardware, military equipment.
Now, the question may arise in your mind, perhaps, as to why these
grinders were allowed to go to Poland. This is-I am putting this in
the form of a question.
Senator KEATI NG. I judge it has arisen in your mind.
Mr. GwYER. I think it was a mistake because I presume these
grinders wound up in the Soviet Union, and since the Soviet Union
could not duplicate, could not copy, these grinders, they decided to
purchase 45 of these grinders from the United States. This is my
line of reasoning.
Senator KEATING. In other words, you feel that there is a very great
danger, if strategic goods are shipped to Poland or Yugoslavia, they
will wind up benefiting the economy of the Soviet Union .
Mr. GwYER. I believe that this is a distinct possibility, although I
don't know to what extent the various Government agencies respon-
sible for licensing do enforce the rule that an item shipped to Poland
is to be used exclusively by the Poles.
Senator KEATING. These grinders that we are talking about were
designed for missile ball-bearing manufacture, weren't they ?
Mr. GwYER. That is correct, sir.
Mr. SOURWINE. Mr. Gwyer, I show you a photocopy of a column
that appeared in Metalworking News, Monday, August 21, 1961,
headed `Washington Wire, U.S. Foreign Economy Gearing to `Three
Worlds'."
Have you seen this article before?
Mr. GwYER. Yes, I have.
Mr. SomRwlNE. Do you have a comment with respect to it.?
763G9-62- pt. 1--3
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Mr. GWYER. Yes, because this deals closely with the suggestion ad-
vanced by Senator Dodd on the Senate floor on August 18 in which
Senator Dodd asked specifically that the United States, in concert
with our Western allies, declare an embargo on machine tools and
chemical processing equipment going to the Soviet bloc nations.
This article here refers to both Secretary of Commerce Hodges and
Secretary of State Dean Rusk reviewing economic sanctions that the
United States might take against the Soviet Union.
A few days ago, and I quote here this Washington wire, "they con-
cluded no action along this line was needed now," and I emphasize
"now."
Senator KEATING. What is the date of this?
Mr. Gwym. This is August 21, 1961, Metalworking News-"but
they took pains to make sure. the Russians knew the matter was being
studied."
Actually, taking an action such as an embargo, economic sanctions
against the Soviet Union, I think is a matter of national urgency,
and I don't think it should be discussed publicly, in a sense. This
should be an executive session. We either take sanctions or we don't
take sanctions.
Revealing this information that these are being studied may serve,
I think, dutious purposes because the Soviets, reading this type of a
release, will say, "they are just still bickering about whether they
should apply sanctions against us or not. Let us keep on tradin ."
Mr. Sourw1NE. May this article be received, Mr. Chairman
Senator KEATING. It may be received.
(The document referred to was marked "Exhibit No. 5" and reads
as follows :)
EXHIBIT No. 5
[Prom the Metalworking News, Aug. 21, 1961, p. 22]
WASHINGTON WIRE-U.S. FOREIGN ECONOMY GEARING TO "THREE WORLDS"
(By the staff of the Washington Bureau)
WASHINGTON.-U.S. foreign economic policies are getting about as compli-
cated as those three-level superhighway systems around big cities.
According to one high-ranking Government official in the foreign economic
policy field, the old, simple concepts of "protectionism" and "free trade" are as
out of date as the model T.
At any rate, the Government's foreign economic policies now are being geared
to "three worlds." These are :
1. The new-developing areas, who want market stability for commodity
prices while they also seek to enter the ranks of industrialized nations producing
manufactured products for sale abroad for dollars, or other hard currencies.
2. The older, industrialized "trading partners" of the United States including
those who are working through the Common Market in Europe to create a
dynamic, fast-growing economic bloc. It's now accepted here as a sure thing
'hat Britain, Norway, Denmark, and other countries will join the Common
afarket after suitable negotiations. Still uncertain is how Sweden, Switzerland,
Austria, Spain, and Portugal will ultimately fit into the giant West Europe
trading bloc.
3. The Communist bloc challenge. Here the prospects are said to be that
more export surpluses will be dumped into world markets by the Soviet Union
and its trading partners, as time goes by, and that this will be done to disrupt
markets and cause economic troubles for free world nations.
Approved For Release 2004/03/11: CIA-RDP64B00346R0500020022-5
 Approved ERF J Je ses 004/03/11 : CIA-RDP64B00346R000500020022-5
RATEGIC MATERIALS TO THE U.S.S.R. 31
BERLIN PROBLEM
If the Berlin situation keeps on getting worse, don't be surprised if West
Germany, the United States, Britain, France, and other countries start applying
economic pressures on East Germany.
West German Chancellor Konrad Adenauer has threatened the East German
regime that Bonn may cut off all trade-and East Germany is getting a large
volume of industrial equipment and other goods from West Germany now.
The East Germans have replied that they would counter this with another
Berlin blockade.
Outside of Germany, the North Atlantic Treaty Organization headquarters
near Paris currently is working on broader "economic countermeasures" that
the NATO allies would agree to apply, not only against East Germany but the
Soviet Union if Moscow keeps prodding the world to the brink of world war III
over the Berlin issue.
If an economic blockade is put on East Germany later this year, it won't
be done by West Germany acting alone. It'll be done by the entire NATO
bloc, acting in unison.
Commerce Secretary Luther Hodges and Secretary of State Dean Rusk also
have been reviewing what economic sanctions the United States might apply
against the U.S.S.R.
A few days ago, they concluded no action along this line was needed now,
but they took pains to make sure the Russians knew the matter was being
studied.
ECONOMIC BOOM
The business outlook for the remainder of 1961 and the first half of 1962 is
being tagged by some economic forecasters as the makings of another economic
boom.
That kind of talk hasn't been heard much since late 1959, when almost every-
one got over enthused about the "sizzling sixties."
It does appear to be a safe bet that key Government economic indicators will
reflect month-to-month gains during the rest of this year.
In July, for example, the Federal Reserve Board's industrial production index
hit a new high of 112. The previous peak was 111, in January 1960, when busi-
ness was accumulating inventories of durable goods at a rapid pace.
So far in the current business recovery cycle, inventory accumulation has been
more gradual.
The business community seemingly views the defense spending buildup about
the same way AFL-CIO President George Meany sized it up the other day after
a White House conference.
He said bigger defense spending would mean more jobs and less unemploy-
ment-but the real impact of this probably would not come until early next
year.
The Federal Reserve Board noted, incidentally, that prices of basic commodi-
ties "generally have shown little change since July 25 when an increase in
defense spending was announced."
Mr. SOURWINE, You mentioned CoCom; so that the record may be
quite clear, what is CoCom?
Mr. GwYEii. CoCom is a committee which functions specifically to
unite or synthesize the views of most of the NATO countries in
Europe, then the United States and Canada and, to some extent,
JaTat,
called a coordinating committee. It is part of a consultative
group which we use as a way, one way, of trying to enforce an em-
bargo on items which we in unison or in CoCom agree shouldn't be
shipped to the Soviet Union.
Mr. SOURWINE. It is a vehicle for international cooperation between
this Nation and our allies and friends in Western Europe for the pur-
pose of preventing the shipment of strategic goods to the Soviet bloc;
is that a fair statement?
Mr. Gwr m. Yes, I think so; it is a fair statement.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
32 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Mr. SouRwINE. To what extent do you consider that this has been
successful or, to put it another way, do you know of any outstanding
instances of strategic shipments from Western Europe to the Soviet
bloc despite the work of CoCom?
Mr. GWYER. Yes.
Mr. SoIRWINE. Would you tell us about some of these?
Mr. GwYER. Yes. Despite the CoCom arrangements, Great Brit-
ain, France, Italy, and West Germany are expanding their trade with
the Soviet bloc nations, and items which enter the trade between
East and West are definitely of a strategic nature.
Mr. SomRwINE. Now, France, within the last 2 months, shipped a
30-ton tube-drawing frame to the Soviet Union, did it not?
Mr. GwYER. Yes; they have.
Mr. SOURWINE. Manufactured specifically for the Soviet Union.
Mr, GwnER. Yes.
Mr. SouRwiNE. This was a tube-drawing frame with a daily capac-
ity of as much as 92,000 feet of tube.
Mr. GWYER. Yes.
Mr. SouRwINE. Would this have been possible of shipment under
our own restricted list?
Mr, GwYER. Well, you see I have to qualify my answer. The
CoCom list is a classified list, secret. I don't know what items enter
into the CoCom list. I am aware that this 30-ton press or tube-
drawing machine is on a positive list.
Mr. SOURWINE. In other words, we couldn't have shipped it from
this country.
Mr. GWYER. Definitely we couldn't.
Mr. SOURwINE. You can't say whether its shipment was a violation
of the CoCom list?
Mr. GwYER. That is correct.
Mr. SOURwINE. But we would have considered it strategic, we do
consider it strategic, and it couldn't have been shipped from this
country?
Mr, GWYER. Correct.
Mr. SouRWiNE. Do you also consider it to be a matter of strategic
importance?
Mr. GwYER. I definitely do.
Mr. SomRwINE. You say it should not have been shipped to the
Soviet Union from any Western nation?
Mr. GwYER. That is correct.
Mr. SOURWINE. The United States still maintains a substantial lead
over the Soviet Union in automation and the development of automa-
tion, does it not?
Mr. GwrER. Yes we do.
Mr. SouRwINE. hen the United States ships even the plans for
an automated machine to the Soviet bloc, isn't that a strategic gain
for the Soviet Union?
Mr. GwrER. Well, yes, it definitely is, because the erection of a plant
or erection of a piece of equipment without the blueprint or drawings
would be impossible.
Mr. SOURWINE. Do you know whether it is true that the Soviet
Union or other Soviet bloc nations can secure plans and blueprints for
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovedE For glee s RA~EG~ / MAfiERiAADf 0 4 R005008 JO022-5
automated machines from the United States even in cases where they
can't get the machines themselves?
Mr. GWYER. I would hesitate to answer because I don't know specific
cases.
Mr. Sounwil E. You do not?
Mr. GWYER. I know, for instance, that in the case of Bryant grind-
ers, specifications and drawings for these grinders were sent to the
Soviet Union before the actual contemplated shipment of grinders.
But this was shipped after the initial issuance of a license. I don't
think it would be possible if the license was withheld as of the date of
the shipment of these drawings.
Mr. SOURWINE. Well, the committee has received information that it
is possible for the Soviet Union to make inquiry respecting a machine
or an automated process ostensibly for the purpose of determining
whether they want to buy it, and that the American manufacturer or
producer is, in some instances, permitted to furnish that information
even while the administration is still considering whether it will grant
a license for the shipment of the machine itself.
You have no information with respect to that?
Mr. GwYER. No information with respect to that. I can merely
comment that there is a great gap between a drawing and a finished
product. It is quite possible that the Soviets might be seeking out
the technical data since they know that a finished item, or piece of
equipment, cannot be sent either by the United States or any of the
CoCom countries.
Consequently, they would try then to cash in on the technical know-
how in the specifications or drawings-call it basic technical data-
but I could not cite a specific case.
Mr. SouRwINE. I show you a translation from the Russian, and I
will ask you if you can identify it and tell us what it is and what its
significance is.
Mr. GwYER. This is a summary of papers and reports prepared for
the plenary session of the Technical and Economic Council of the
State Committee on Automation in Machine Manufacturing in the
Soviet Union.
This plenary session was held in February of this year, and the
main emphasis of this plenary session was devoted or was oriented
toward problems associated with increased reliability and service life
of machines and instruments.
This is significant because the various participants in the discussions
during this plenary session emphasized the fact that Soviet equipment
is substandard in terms of quality; that machine tools are not as
efficient as the Soviets would like to have them; that the raw materials
going into production of many industrial items are of questionable
quality, and that the Soviet industry, as a whole, is
suffering f rom
chronic deficiencies which, if not corrected, will defin
itely retard the
growth and develo ment of Soviet industry.
Mr. SOURWINE. Do you know who translated this article?
Mr. GWYER. Yes; I know because I did some editing on it myself.
Mr. SouRwINE. You can say that it is an accurate translation?
Mr. GwYER. Yes ; it is an accurate translation.
Mr. SotmwINI:. This is an article from a Soviet publication?
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprRyed Fo. ' 81"n ;%J/ (j1 MC - g6VgW"P.%500020022-5
Mr. GWYER. Yes.
Mr. SOETRWINE. At a session in which their own experts were con-
sidering their own capacity?
Mr. GWYER. Yes.
Mr. SoURwINE. And it points up the deficiencies in their capacity?
Mr. GWYER. Let me just cite a few names and titles associated with
it.
Mr. SomRwINE. Is that correct?
Mr. GwYER. Yes; it is correct.
Mr. SOUR-WINE. May I ask that this go into the record?
Senator KEATING. Yes; it will be received, and you may cite an in-
stance which you have in mind.
(The translation above referred to was marked "Exhibit No. 6"
and is printed as app. II at p. 68.)
Mr. GWYER. You have a statement by Goremykin, Deputy Chair-
man of the Technical-Economic Council; a statement by Nezhdanov of
the All-Union Scientific Research Institute of Electromechanics; a
statement by Kuznetsov, chief designer of electrical machinery at the
Kharkovskiy electromechanical plant, one of the largest in the Soviet
Union.
You have a statement by Sprishevskiy, director of All-Union Scien-
tific Research Institute of the Bearing Industry ; a statement by Re-
shetov, who is the head of the famous Experimental Scientific Re-
search Institute of Metal Cutting Machine Tools; and so on.
These are, more or less in a nutshell, the personalities participating,
and this is a very vital problem of reliability of equipment in the So-
viet Union.
Mr. SoURwINE. From what you know of the subject yourself and of
the persons who are quoted and of the source of the article, are you in
a position to form a judgment as to whether this article accurately
reflects conditions?
Mr. GwyER. This article definitely portrays the problems the Soviets
face, and also I will say by inferential analysis that they are the areas
in which the Soviets would like to have some help from the West.
Mr. SouRWINE. It shows why they come to us for a lot of stuff,
doesn't it?
Mr. GWYER. That is definite.
Senator KEATING. What is the data of this meeting?
Mr. GwYER. This publication is dated May 1961. The meeting was
held in February of 1961, sir.
Mr. SOURWINE. I show you a typed draft of an article headed
"Soviet Metal-Cutting Machine Tools: Assertions and Facts," under
your own byline. I will ask you if this is an article that you pre-
pared 2
Mr. GwYER. Yes. This is an article which I prepared and which
figures quite largely in some of the discussions we have on machine
tools here in Washington, D.C.
Mr. SOURWINE. This article was prepared for official use, was it?
Mr. GwYER. No; it was not. It was prepared on my own time, my
own resources, on Saturdays and Sundays. But I made this article
available to anybody interested in the problem of Soviet machine
tools.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve 8fi4R%I pG4/P/11n,RC91ALSF o IMOOU I R? 9005Q 020022-5
Mr. SOURWINE. Meaning you made it available to the Government?
Mr. GWYER. Yes. I think it was available to the Department of
Defense. The Department of Commerce has a copy of it, I think,
and the Department of State.
Mr. SOURwINE. Has this article been published?
Mr. GWYER. No ; this article has not been published and again I had
problems in publishing this article.
Mr. SouxwiNE. May this article be inserted in the record, Mr.
Chairman?
Senator KEATING. Yes.
The article on "Soviet Metal-Cutting Machine Tools; Assertions
an Facts," above referred to was marked "Exhibit No. 7" and is
printed as app. II at p. 73.)
Mr. SOURwINE. Do you want to summarize your conclusions from
this article?
Mr. Gwi-ER. Yes. If the chairman will bear with me, there is a
page and half of basic conclusions.
American machine tool engineers are particularly interested in the
growth and development in the Soviet metal-cutting, machine tool
industry. The latter, if judged by statistics alone, manufactures large
quantities of metal-cutting machine tools.
Some of the reports on this subject assert that the Soviet machine
tool industry has-
as assumed a quantitative lead over the machine tool
industries of the United States and other free world countries; that
Soviet machine tools are relatively modern, and that some units are
produced three to four times more efficiently. A survey of unclassi-
fied Soviet technical literature does not support the above assertions.
Quite to the contrary, it shows that the Soviet industry specializing
in the production of metal-cutting machine tools lags behind the
United States in terms of output of physical units and is, at least,
15 to 20 years behind the United States in machine tool technology.
The past and current Soviet emphasis on quantity rather than qual-
ity of machine tools exerts a detrimental effect on the production of
modern equipment.
Plant managers and employees alike are reluctant to retool for new
models. This is especially true when it means a protracted down
time, foregoing lucrative premiums for reaching and surpassing as-
signed quotas with obsolete World War II models.
In 1956, from 90 to 96 percent of the Soviet industrial-type, metal.-
cutting machine tools-and when I say industrial type I say these are
the heavier ones--90 to 96 percent of Soviet industrial-type, metal-
cutting machine tools programed for production in lots greater than
10 units by the 48 plants of the former Ministry for Machine Tool
and Tool Industry were of World War II design.
Although the Soviets have made some progress since 1956, their
situation as of this moment is unsatisfactory. This may explain the
Soviet drive to dump on the markets of underdeveloped countries of
the world at a constantly increasing scale the relatively inefficient
and obsolete machine tools manufactured at home and the paradoxical
desire, in view of their boasted technological supremacy, to acquire
Western Europe's and America's most advanced metal-cutting machine
tools.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appro ved For Release 2004/OT3 ~1 :SjWA 4#0%j6F ?RR.;00020022-5
EXPORT OF STRA IC A
This can be only because the latter have built into them the tech-
nical and engineering knowledge the Soviets are not in a position to
duplicate.
I think this more or less brings into focus the basic findings of
the study.
Mr. SOURwINE. That is very important in view of the quotation
that has previously been referred to, making a comparison between
American machine tool production and Soviet machine tool produc-
tion, simply on the number of units; isn't that correct?
Mr. GWYER. That is correct.
Mr. SOURWINE. You are saying the Soviet machine tools are essen-
tially obsolete?
Mr. GWYER. Yes ? they are.
Mr. SolRwINE. knd they are dumping them on the underdeveloped
countries and trying to get for their own use as much as they can of
the machine tools which are not obsolete and which are produced in
the United States or in Western Europe?
Mr. GwYER. Correct.
Mr. SOURwINE. Do you have further comment regarding that article
or does that summary cover it?
Mr. GWYER. No; this covers it fairly well. Actually I don't think-
it won't be necessary to go further.
Mr. SouRwnNE. Mr. Chairman, I have some questions about the
Battle Act, and it might be a good idea to put a copy of the act into
the record at this time.
Senator KEATING. That will be received at this time.
(The document referred to was marked "Exhibit No. 8" and reads
as follows:)
(EXHIBIT No. 8)
Public Law 213-82d Congress
Chapter 575-1st Session
H.R. 4550
AN ACT To provide for the control by the United States and cooperating foreign nations
of exports to any nation or combination of nations threatening the security of the
United States, Including the Union of Soviet Socialist Republics and all countries under
its domination, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited as the
"Mutual Defense Assistance Control Act of 1951".
TITLE I-WAR MATERIALS
SEc. 101. The Congress of the United States, recognizing that in a world
threatened by aggression the United States can best preserve and maintain
peace by developing maximum national strength and by utilizing all of its
resources in cooperation with other free nations, hereby declares it to be the
policy of the United States to apply an embargo on the shipment of arms, am-
munition, and implements of war, atomic energy materials, petroleum, trans-
portation materials of strategic value, and items of primary strategic sig-
nificance used in the production of arms, ammunition, and implements of war
to any nation or combination of nations threatening the security of the United
States, including the Union of Soviet Socialist Republics and all countries under
its domination, in order to (1) increase the national strength of the United
States and of the cooperating nations; (2) impede the ability of nations threat-
ening the security of the United States to conduct military operations ; and (3)
to assist the people of the nations under the domination of foreign aggressors
to reestablish their freedom.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved ~96 I8f sf3%* 493/ 1AT TPgDFCP01 , X00500 0022-5
It is further declared to be the policy of the United states that no military,
economic, or financial assistance shall be supplied to any nation unless it ap-
plies an embargo on such shipments to any nation or combination of nations
threatening the security of the United States, including the Union of Soviet
Socialist Republics and all countries under its domination.
This Act shall be administered in such a way as to bring about the fullest
support for any resolution of the General Assembly of the United Nations,
supported by the United States, to prevent the shipment of certain commodities
to areas under the control of governments engaged in hostilities in defiance of
the United Nations.
SEC. 102. Responsibility for giving effect to the purposes of this Act shall
be vested in the person occupying the senior position authorized by subsection
(e) of section 406 of the Mutual Defense Assistance Act of 1949, as amended, or
in any person who may hereafter be charged with principal responsibility for
the administration of the provisions of the Mutual Defense Assistance Act of
1949. Such person is hereinafter referred to as the "Administrator".
SEC. 103. (a) The Administrator is hereby authorized and directed to deter-
mine within thirty days after enactment of this Act after full and complete
consideration of the views of the Departments of State, Defense, and Commerce;
the Economic Cooperation Administration ; and any other appropriate agencies,
and notwithstanding the provisions of any other law, which items are, for the
purpose of this Act, arms, ammunition, and implements of war, atomic energy
materials, petroleum, transportation materials of strategic value, and those items
of primary strategic significance used in the production of arms, ammunition,
and implements of war which should be embargoed to effectuate the purposes
of this Act: Provided, That such determinations shall be continuously adjusted
to current conditions on the basis of investigation and consultation, and that all
nations rebeiving United States military, economic, or financial assistance shall
be kept informed of such determinations.
(b) All military, economic, or financial assistance to any nation shall, upon
the recommendation of the Administrator, be terminated forthwith if such
nation after sixty days from the date of a determination under section 103(a)
knowingly permits the shipment to any nation or combination of nations threat-
ening the security of the United States, including the Union of Soviet Socialist
Republics and all countries under its domination, of any item which he has
determined under section 103(a) after a full and complete investigation to be
included in any of the following categories : Arms, ammunition, and implements
of war, atomic energy materials, petroleum, transportation materials of strategic
value, and items of primary strategic significance used in the production of arms,
ammunition, and implements of war : Provided, That the President after receiv-
ing the advice of the Administrator and after taking into account the contribu-
tion of such country to the mutual security of the free world, the importance
of such assistance to the security of the United States, the strategic importance
of imports received from countries of the Soviet bloc, and the adequacy of such
country's controls over the export to the Soviet bloc of items of strategic impor-
tance, may direct the continuance of such assistance to a country which permits
shipments of items other than arms, ammunition, implements of war, and atomic
energy materials when unusual circumstances indicate that the cessation of aid
would clearly be detrimental to the security of the United States : Provided
further, That the President shall immediately report any determination made
pursuant to the first proviso of this section with reasons therefor to the Appro-
priations and Armed Services Committees of the Senate and of the House of
Representatives, the Committee on Foreign Relations of the Senate, and the
Committee on Foreign Affairs of the House of Representatives, and the President
shall at least once each quarter review all determinations made previously and
shall report his conclusions to the foregoing committees of the House and Senate,
which reports shall contain an analysis of the trade with the Soviet bloc of
countries for which determinations have been made.
SEc. 104. Whenever military, economic, or financial assistance has been term-
inated as provided in this Act, such assistance can be resumed only upon deter-
mination by the President that adequate measures have been taken by the
nation concerned to assure full compliance with the provisions of this Act.
SEc. 105. For the purposes of this Act the term "assistance" does not include
activities carried on for the purpose of facilitating the procurement of materials
in which the United States is deficient.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approod FoE ftps,2gq ftq j :QI1& f 4 09AJ61 .%%Q 00020022-5
SEC. 201. The Congress of the United States further declares it to be the
policy of the United States to regulate the export of commodities other than
those specified in title I of this Act to any nation or combination of nations
threatening the security of the United States, including the Union of Soviet
Socialist Republics and all countries under its domination, in order to strengthen
the United States and other cooperating nations of the free world and to oppose
and offset by nonmilitary action acts which threaten the security of the United
States and the peace of the world.
SEC. 202. The United States shall negotiate with any country receiving mili-
tary, economic, or financial assistance arrangements for the recipient country
to undertake a program for controlling exports of items not subject to embargo
under title I of this Act, but which in the judgment of the Administrator should
be controlled to any nation or combination of nations threatening the security,
of the United States, including the Union of Soviet Socialist Republics and all
countries under its domination.
SEC. 203. All military, economic, and financial assistance shall be terminated
when the President determines that the recipient country (1) is not effectively
cooperating with the United States pursuant to this title, or (2) is failing to
furnish to the United States information sufficient for the President to determine
that the recipient country is effectively cooperating with the United States.
TITLE III-GENERAL PROVISIONS
SEC. 301. All other nations (those not receiving United States military, eco-
nomic, or financial assistance) shall be invited by the President to cooperate
jointly in a group or groups or on an individual basis in controlling the export
of the commodities referred to in title I and title II of this Act to any nation
or combination of nations threatening the security of the United States, includ-
ing the Union of Soviet Socialist Republics and all countries under its
domination.
SEC. 302. The Administrator with regard to all titles of this Act shall-
(a) coordinate those activities of the various United States departments
and agencies which are concerned with security controls over exports from
other countries;
(b) make a continuing study of the administration of export control
measures undertaken by foreign governments in accordance with the pro-
visions of this Act, and shall report to the Congress from time to time but
not less than once every six months recommending action where appro-
priate ; and
(c) make available technical advice and assistance on export control
procedures to any nation desiring such cooperation.
SEC. 303. The provisions of subsection (a) of section 403, of section 404, and
of subsections (c) and (d) of section 406 of the Mutual Defense Assistance
Act of 1949 (Public Law 329, Eighty-first Congress), as amended, insofar as
they are consistent with this Act, shall be applicable to this Act. Funds made
available for the Mutual Defense Assistance Act of 1949, as amended, shall be
available for carrying out this Act in such amounts as the President shall
direct.
SEC. 304. In every recipient country where local currency is made available
for local currency expenses of the United States in connection with assistance
furnished by the United States, the local currency administrative and operating
expenses incurred in the administration of this Act shall be charged to such
local currency funds to the extent available.
SEC. 305. Subsection (d) of section 117 of the Foreign Assistance Act of 1948
(Public Law 472, Eightieth Congress), as amended, and subsection (a) of
section 1302 of the Third Supplemental Appropriation Act, 1951 (Public Law 45,
Eighty-second Congress), are repealed.
Approved October 26, 1951.
Mr. SOURWINE. Are you familiar with the Battle Act, Mr. Gwyer'?
Mr. GwyiR. Yes; I am.
Mr. SOURwiNE. Are you familiar with the administration of the
Battle Act?
Mr. Gw1 R. To a limited extent, sir; yes.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R00050QQ20022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 'J
Mr. SoURwINE. Can you tell us to what extent the Battle Act
is enforced in accordance with its provisions and its basic principles,
and to what extent there is opportunity for what might be called
amendment of the act through exceptions .
Mr. GWYER. Judging from the reports prepared on a semiannual
basis, and these are called reports to the Congress, Mutual Defense
Assistance Control Act of 1951, which is referred to briefly as the
Battle Act there was very little use of the provisions provided by this
act for the last 10 years.
One of the provisions of the Battle Act is that the United States
should deny both economic and military aid to any country which
ppasses on or sends on or licenses shipment of strategic items to the
Soviet bloc nations.
Mr. SOURWINE. Has this provision been enforced?
Mr. GWYER. I personally haven't seen a single reference to specific
cases where American aid, both military and economic, was denied
to a country because of a violation.
Senator KEATING. Was there a violation? In other words, were
there such transshipments?
Mr. GWYER. Yes; there are numerous violations, but the problem
here enters into a purely political realm, where political considerations
become paramount, and a decision to withhold both economic and mili-
tary aid becomes a matter of national concern, and this is up to the
President of the United States to enter into the picture.
I haven't seen, I haven't read in all these reports, including the 14th
Report to the Congress on the Administration of the Mutual Defense
Assistance Control Act, I haven't seen a single reference where sanc-
tions were used.
Mr. SoURWrNE. Is the Battle Act absolutely mandatory in that
regard or does it give discretion to the President or elsewhere in the
executive branch ?
Mr. GWYER. Well, it is entirely up to the President of the United
States to invoke the provisions of the Battle Act. if you see certain
cases where there were shipments made either by Great Britain or
from Italy or from Germany to the Soviet bloc countries, there was
a justification made before the CoCom group, and the administrator
of the Battle Act, after taking into consideration all the factors, both
political and nonpolitical, made a ruling or recommendation that
the Battle Act not be used or the provisions of the Battle Act were
not to be used or shouldn't be used to enforce, as I say, an exception
to the provisions as envisaged by this act.
For instance, we have not a specific but a general hypothetical case.
The Soviet Union places an order in Great Britain prior to a CoCom
discussion. That item or the items on order are of strategic nature.
Now, this already creates a pressure on the CoCom group on the
part of the British representatives to the CoCom who favor relaxa-
tions of tensions through trade with the Soviet bloc, to take this item
off the international list.
You have the discussions, say, 6 months or 7 months or 1 year after
placement of the order, and the British position is "Let's take this item
off the list," and I am reasonably sure that because of the pressure
the item is dropped from the list.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
4U EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Consequently, the order is met despite the fact that the order was
placed with the British firm 6 months or 7 months or maybe 1 year
before the amendment of the international list to which we all
agreed.
Mr. SOURwINE. Does the Battle Act depend entirely upon the
CoCom list or does it refer to shipments of strategic materials by
western European nations on the criteria which we would apply in
determining what is and what is not strategic?
Mr. GWYER. Yes. Well, you put it in the proper perspective. But
there are the interacting forces which tend to reduce the number of
items which are on the Battle Act list.
Mr. SOURWINE. Now, specifically under the Battle Act we are sup-
posed, unless the President decides otherwise, to withhold aid to na-
tions which ship strategic goods to Soviet Russia.
Mr, GwYER. Yes.
Mr. SouRwINE. Is that correct?
Mr. GWYER. Yes; that is correct.
Mr. SounwiNE. Take the case of the 32-ton tube-drawing machine
we talked about.
Mr. GwYER. Yes.
Mr. SouRwiNE. This certainly is a strategic item.
Mr. GwYER. Yes.
Mr. SouRwINE. Whether or not it is on the CoCom list, it is a
strategic item.
Mr. GwYER. Yes.
Mr. SouRWINE. It has been shipped by France to the Soviet Union.
Would this be a basis under the Battle Act for the withholding of
aid to France unless the President decides otherwise?
Mr. GwYER. This is a question which I would hesitate to answer
because it involves the highest responsible level of policymaking.
Mr. SOURWINE. I am not asking you about the policy but only
asking you about the applicability of the Battle Act, if you know.
If you don't know, you can't testify, of course.
Mr. GwYER. I would rather say I don't know, because I would
be guessing here-not guessing but trying to infer in a case of this
sort but my inference might be wrong.
1V1?r. SouRwINE. I don't mean to force you, but this is of considerable
importance to the committee because, on the one hand, if the Battle
At is adequate legislation and does give us the basis for applying
sanctions wherever strategic materials are shipped, then there is no
amendatory legislation needed.
On the other hand, if the Battle Act has, say, a loophole to the
extent that an item may be shipped if it is not on the CoCom list,
since we don't actually control the CoCom list but are only in posi-
tion to negotiate about it, then there might be need for further legis-
lation which would strengthen the hand of this Nation. Do you see
why I am asking the question?
Mr. GwYER. Yes; I see, because right at the relation between CoCom
and the Battle Act list rests the problem which we are facing today.
Mr. SouRwiNE. Do you know, in that regard, whether the Battle
Act is adequate to give us the authority to apply sanctions if the ad-
ministration decides that they should be applied or whether it is
inadequate in this regard? Again, if you don't know, you can say
so.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved FoRR of seRa~r`z~3/2~;R6Q040050gQ20022-5
Mr. GWYER. Yes; I do know. But if you look today on the situa-
tion in western Europe, the time for the application of the economic
or military sanctions is gone.
These countries which were built up with American capital, with
American investments, in 1951 and 1952 would comply with, say,
the demand on the part of the United States when they were de-
pending on our help.
Today this situation is different. We could withhold economic
or military aid from West Germany. If I can recall correctly, sev-
eral years ago when there was talk about pulling American troops out
of West Germany, there was an indignant protest on the part of the
Germans that we were pulling our defenses out of central Europe, that
we were there to protect the West Germans, not only to fortify our
international position.
Consequently? in 1952 or 1955, whenever West Germany was
depending on our aid to a large extent, we could with the threat
of the usage of the provisions as listed in the Battle Act, have com-
pliance on their part to stop shipping items which we consider strategic
to the Soviet Union, to the Soviet bloc.
Today, if you read the quarterly reports, if you go over the testi-
mony of Mr. Stassen given before the McClellan committee in 1956
it appears to me that the political considerations are overriding, and
the employment of the Battle Act and the provisions of the Battle
Act today just cannot be had.
Let us take a hypothetical case. We maintain bases in Italy. We
know that Italy is sending a terrific amount of material which is of
a strategic nature, pipeline equipment, pipeline components; we know
also that this material goes to the Soviet Union to build the pipelines
which the Soviets will use, as a matter of fact, to compete with the
Western European oil producers.
Italy, which buys large amounts of oil from the Soviet Union,
passes on to the Soviet Union also the equipment of a strategic nature.
We have bases in Italy. I think there is a Jupiter base-Jupiter
bases. I think the Army has X number of bases, missile bases.
For instance, you have a statement on the part of the Italian Gov-
ernment saying that, "All right, if you try to apply restrictions on
us, if you try to deny us this military aid or economic aid, very simply
we are going to abrogate the treaty which allows you to maintain
bases on our soil."
This is a political consideration. I couldn't go into the merits of
it or the advantages or disadvantages of it, but this is something we
have to take into consideration before we begin to think about apply-
ing the provisions of the Battle Act, and I think, reading these
reports to the Congress by the Battle Act Administrator, this is the
general theme you can get from the summarizations here, that this
is the case. Political considerations do take first role in decisions of
this sort.
I do not know if I made myself clear on this. But
Senator IDEATING. You mean that political considerations out-
weigh, in your judgment, the considerations of our own national
security; is that it?
Mr. GwYEi. This is the general impression I gathered over the last
3 or 4 years working in the field of Soviet machine tools; yes.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approkgd Fot ggsgF2%Q4/ ,/o1' :Rl RC#gg0q~i6~%0~Q 00020022-5
Mr. SouRWINE. Mr. Gwyer, are you familiar with the fact that
the United States has OK'd the shipment of jet aircraft to Yugo-
slavia?
Mr. GwYER. Yes; I am familiar with it, as much as I read various
accounts in the daily press.
Mr. SOURWINE. Have you read anything about this in the Russian
or Yugoslav press ?
Mr. GwnER. No. I have not.
Mr. SOURWINE. Are you aware that the United States, at the same
time it is approving the shipment of these jet aircraft to Yugoslavia,
is holding up shipment of wheat to Yugoslavia because it is said we
are displeased with something that happened at the Belgrade
Conference?
Mr. GWYER. Well, I am aware of it as far as the jets, they have
been shipped already; the trainers and jets, Sabre jets have been
shipped already. Consequently, the horse is out of the stable.
Mr. SOURWINE. You say the jets have been shipped?
Mr. GwYER. Yes; they have been shipped. This is the impression
I gathered from reading some of the accounts.
Mr. SOURWINE. Can you shed any light on the question of why we
should ship jet aircraft and withhold wheat?
Mr. GwYER. Well, I would very simply answer this by saying that I
personally would be opposed to sending wheat or jet aircraft or any
item to Yugoslavia. Although Yugoslavia is, for all propaganda pur-
poses, outside of the Soviet bloc, the spokesman for the Communist
Party in Yugoslavia, Mr. Tito, I think, still thinks in terms of world-
wide communism, and what guarantee do we have that these jets
will be used by the Yugoslavs? I don't know.
The promise, I presume, made by the recipient of these aircraft is
that they will be used by Yugoslavia, the Yugoslav air force. But you
may have also a secondary effect of it. These Sabre jets and Navy
trainers winding up in Yugoslavia will free X number of old obso-
lete aircraft which are being used today in Yugoslavia; these might
be sent to Indonesia or some other place for cash, much more than
Yugoslavia actually paid for either the Navy trainers or the Sabre
jets.
Mr. SOURWINE. Against whom is there any possibility that these
jets are going to be used?
Mr. GWYER. Well, I don't know how they are going to be used, and
I don't have the slightest idea.
Mr. SOURWINE. Is there any possibility in your mind that these
jets will be used by Yugoslavia against Russia?
Mr. GwYER. I personally doubt if the Yugoslavs will fight. the
Soviets.
Mr. SOURWINE. Or against any other Iron Curtain country?
Mr. GwYER. I don't know.
Mr. SouRwINE. Do you have any knowledge with respect to the
Yugoslav production and need for wheat ?
Mr. GwYER. No. My knowledge of Yugoslavia is very limited. I
emphasize, I would like to reemphasize, that my basic area of interest
is the Soviet Union, Soviet industry basically.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For ReleR,W0P0005Q~
EXPORT OF 020022-5
Senator KEATING. The committee will recess now until 2:30 this
afternoon.
(Whereupon, at 12:30 p.m., a recess was taken, to reconvene at 2:30
p.m., the same day.)
AFTERNOON SESSION
Senator KEATING. The subcommittee will come to order.
I want the record to indicate that representatives of any of the publi-
cations that have been named by this witness this morning, or any of
the individuals who were mentioned are at liberty to come before the
subcommittee to present any views they may have on the handling of
Mr. Gwyer's manuscript for publication.
In the interest of fairness, we shall hold the record open pending
communication with these individuals and publications and counsel
will notify the persons named that they will have an opportunity to
present any views they may wish to present to this subcommittee at
a later date.
Counsel will proceed.
TESTIMONY OF JOSEPH A. GWYER-Resumed
Mr. SouRwINE. Mr. Gwyer, I show you a 2-page memorandum on
CoCom and the Battle Act and ask you if this is a memorandum
which you prepared?
Mr. GwYER. Yes; I prepared this one just recently. This is based
on the Ninth Report of the Administrator of the Battle Act to Con-
gress.
Senator KEATING. Is that the last report?
Mr. GwYER. The ninth, not the last. The last is the 14th, dated
December 20,1960.
Mr. SouRWINE. This is, then, a report that you prepared 5 years
ago?
Mr. GwYER. No ? I have not prepared
Mr. SOURWINE. how long ago was the ninth report of the Battle
Act issued?
Mr. GwYER. I think the ninth report was issued in 1957, if I am
not mistaken. I. am not positively sure about the date.
Mr. SouRwINE. When did you prepare this memorandum?
Mr. GwYER. I prepared this memorandum just a few days ago; I
think it was Friday, Friday night.
Mr. SouRwlNE. Why did you base it on the ninth report instead of
on the most recent report?
Mr. GwYER. Because the ninth report contains a very detailed
reference to the setting up of the structure of the CoCom, the ad-
ministration of the CoCom.
Mr. SOURwINE. Which is what this memorandum is mainly con-
cerned with?
Mr. GwYER. That is correct, sir.
Mr. SOURWINE. I believe, sir, I read this memorandum as supple-
mentary to the testimony the witness gave this morning about CoCom,
and it would be useful in the record.
Senator KEATING. It may be received.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appro4gd ForER Ik4s?I2,Q1a1',:Rt/11EgRPp4gO E 8100020022-5
(The memorandum referred to was marked "Exhibit No. 9" and
reads as follows:)
EXHIBIT No. 9
CoCOM-THE BATTLE AcT
Early in 1949 the United Kingdom and France formulated an Anglo-French
list of strategic items, which was similar to, but less comprehensive than, the
U.S. lists. The United Kingdom and France sought to induce individual OEEC
countries to apply this list. Those countries and others that had already begun
restricting security exports to the bloc, developed an acute awareness that the
maintenance and extension of individual country controls could be frustrated
unless a cooperative device was constructed.
By mid-1949 it became apparent that further progress depended on a multi-
lateral approach to the strategic trade control problem, for coordinated and
simultaneous action was essential to effective regulation to dispel the feeling
that country A was doing more than country B was willing to do to restrict
strategic trade with the bloc. In November 1949, therefore, the bilateral list
negotiations were transferred to a multilateral forum and an informal con-
sultative group (CG) was formed in Paris by the United Kingdom, France,
Italy, The Netherlands, Belgium, Luxembourg, and the United States. Member-
ship was shortly expanded to include Norway, Denmark, Canada, and the Fed-
eral Republic of Germany. These 11 members were subsequently joined by
Portugal, Greece, Turkey, and Japan, bringing the current total membership to
15 in this informal, voluntary organization. All the NATO signatories, except
Iceland, belong to the CG.
At the outset, members of the Paris group formulated three lists of con-
trolled goods. covering items for embargo, quantitative control, and further
consideration. These lists subsequently became international lists I (embargo),
II (quantitative control), and III (exchange of information and surveillance-
that is, items kept under scrutiny which may require control if exports to the
bloc appear to be excessive or if new technical or other information indicates
the need for more stringent control).
Beginning with the original Anglo-French list as established in 1949, there
were progressive additions to the lists agreed upon internationally for embargo
and for quantitative or quota control. By April 1952, the three international
lists contained some 400 listings, or about 100 less than the items or parts of
items covered by the U.S. security lists at that time. The international lists
are those which all the cooperating countries have accepted as their minimum
levels of control on the items listed. Each cooperating country has its own
national control list in administering its export controls and implementing the
international understandings.
The multilateral organization on international export controls began operating
in Paris in January 1950. The consultative group, which coordinates the
strategic trade controls of the 15 members, including the United States, and
provides a forum for discussions and negotiations relating to economic defense,
is composed of representatives with the rank of minister. Two subordinate
working committees perform the day-to-day task of coordinating free world
trade controls, overseeing enforcement, and recommending improvement meas-
ures. One is the coordinating committee (CoCom), which was conceived at
the same time as the CG and began functioning in January 1950. The other
is the China committee (ChinCom), which was established in September 1952,
with Japan's accession to the group. CoCom is concerned with trade controls
applying to the European Soviet bloc ; ChinCom concentrates on controls over
shipments to Communist China, North Korea, and North Vietnam-controls
which are,more extensive and stringent than those in effect against the U.S.S.R.
and its European satellites. All CG members may participate in CoCom and
ChinCom.
The multilateral, cooperative trade control program coordinated by the Paris
organization is unique. The group is informal, and participation is voluntary.
The unanimity rule prevails with respect to agreements reached, but the final
decision in matters before the Paris committees lies with each participating
country. The desire for uniform action is the dominant principle that prevails,
and it is recognized that there are differing legal, administrative, and policy
problems inherent within the sovereignty of the participating countries.
There are criteria for adding and deleting items from the international lists,
and for upgrading and downgrading them. Provisions are made for exceptions
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64N0,460050020022-5
EXPORT OF STRATEGIC MATERIALS TO T
authorized on the basis of prior consultation, before- and after-the-fact notifica-
tion, and special justification.
Many of the activities of CoCom are kept secret, because public disclosure
would provide technical and other useful information to the Sino-Soviet bloc
to the detriment of free world security, would precipitate and intensify delicate
political problems abroad, and would engender commercial pressures in the coop-
erating countries. Such disclosure could and would be exploited by Com-
munist propagandists in their campaign to divide and weaken the free world.
In December 1951 and January 1952, the 61 countries then receiving military,
economic, or financial assistance from the United States were informed of the
provisions of the Battle Act and were given the lists of strategic items deter-
mined by the administrator under the act. The major provisions of the legisla-
tion are explained. to the Washington representatives of each of these govern-
ments. The important non-Marshall Plan countries were invited to use these
lists as guides for their own export controls.
By the end of 1951 and before the Battle Act became law, the cooperating coun-
tries had already adopted controls which included the overwhelming number of
items on the U.S. security lists covering exports from this country. Discus-
sions in CoCom had resulted in the steady expansion of the lists of commodities
agreed for control. Substantial additions had been made in Communist China
controls after the aggression in Korea. In addition to the list expansions, con-
stant progress was made in coordinating export licensing and customs procedures
for the regulation of exports. The foundation was also laid for controlling the
movement of strategic trade through free ports. These achievements were
striking in view of the domestic, economic, and political problems that had to be
met and overcome in adjusting export control systems to security objectives.
(The following letter from Hon. Douglas Dillon, former Under
Secretary of State and now Secretary of the Treasury, was later
ordered into the record at this point:)
TrrE SECRETARY OF THE TREASURY,
Mr. J. G. Souxwmm, Washington, November 7, 1961.
Chief Counsel, Internal Security Subcommittee, U.S. Senate, Washington, D.C.
DEAR MR. SouRwINE : Thank you for your letter of October 30, advising me
of the Internal Security Subcommittee's invitation to comment upon the testi-
mony offered by Mr. Gwyer on the administration of the Battle Act. As the
testimony refers to responsibilities which I no longer exercise, I do not believe
it would serve any useful purpose to have me take the time of the committee
with personal testimony. I will, however, set forth in this letter some comments
from my own recollections in the event they may amplify the statements offered
by Mr. Gwyer.
As you are aware, the Battle Act provides for the embargo of two separate
categories of strategic materials. Shipments which are knowingly permitted
by any country to the Soviet bloc of items in the first category, that is, arms,
ammunition, implements of war, and atomic energy materials, terminate the
U.S. economic, financial, or military assistance to that country upon the recom-
mendation of the Battle Act Administrator. Items in the second category are
generally those items considered strategic other than items of the first category.
With respect to this second category, Congress has given the President discre-
tion to direct the continuance of aid if unusual circumstances indicate that
termination of aid to a country which has knowingly permitted their shipment
to the Soviet bloc would clearly be detrimental to the security of the United
States. All of the items mentioned in the excerpt from Mr. Gwyer's testimony,
which you furnished me, fall into the second category and, so far as I can now
recall, the President in each case determined that termination of aid would be
detrimental to U.S. security. Each of these shipments was made by a nation
which is a participant in the Coordinating Committee, which sits in Paris. Pre-
sumably, if the shipping nation understood the item to fall within the list of
embargoed strategic materials, it submitted the question of shipment to CoCom
and CoCom voted unanimously to permit the shipment. I can recall no instance
in which a country shipped a strategic item to the Soviet bloc against the dis-
approving vote of a participating member of CoCom. On some occasions,
there may have been a difference of opinion among participating countries as
to whether an item fell within the definition of embargoed items. In such case,
great reliance had to be placed upon the good faith of the nation initially
76369-62-pt. 1--4
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
46 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
charged with making the determination. Such reliance was obviously appropri-
ate, since the adherence by all participants to CoCom was in the common interest
of the participating countries, and presumably any nation which did not recog-
nize this obvious fact would withdraw.
Accordingly, in making his determination that termination of aid with regard
to the shipment of a particular strategic item of the second category would be
detrimental to U.S. security interests, the President generally was merely con-
firming an earlier decision of the U.S. Government not to object to CoCom to
the shipment. Moreover, I cannot recall any instance in which a failure to sub-
mit the question of a shipment to CoCom, or a CoCom determination to permit
a shipment of such items, was of sufficient importance to warrant termination of
otherwise programed assistance to an ally, granted in the interests of our mutual
security.
The foregoing then are the general principles which led to my recommendations
as Battle Act Administrator to the President, and presumably to the President's
determinations which I subsequently reported to the Congress.
I also note that all but two of the cases in question involved shipments to
Poland for use in the Polish civilian economy. Under the last administration,
and I believe today, Poland has for reasons of policy been accorded somewhat
different treatment than other members of the Soviet bloc. Indeed, in section
101 of the Battle Act, Congress directed the President to assist "the peoples of the
nations under the domination of foreign aggressors to reestablish their freedom."
The shipment to Hungary, mentioned by Mr. Gwyer, was made in satisfaction of
a commitment undertaken before the condensers in question were placed on the
embargo list. In the case of the cable shipped by France, the Government of
France took the position, with which we differed, that the cable in question did
not fall within the definition of proscribed items. While there was an honest
difference of opinion between our Governments as to the strategic nature of the
shipment, the relationship between the two Governments made it, in our opinion,
unwise to apply Battle Act sanctions to enforce our point of view.
In sum, my recollection of the facts does not differ from those set forth by Mr.
Gwyer in the extract of his testimony which you forwarded to me. My judg-
ment is that the actions taken were justified by the circumstances existing at the
time.
I would appreciate it if you would show this letter to the chairman of the sub-
committee and to Senator Keating and convey to them my thanks for this oppor-
tunity to comment.
Sincerely,
DOUGLAS DILLON.
Mr. SOUnwINE. I show you an article, Mr. Gwyer, entitled "Some
Critical Aspects of Soviet Mechanization and Automation Program,"
and ask you if this is an article you prepared?
Mr. GwYER. Yes; this is an article which I originally submitted
to the American Machinist, McGraw-Hill, for publication in Decem-
ber of 1958. As I testified this morning, this article was pulled
out from their May issue, scheduled for May publication.
Senator KEATING. Was this the article about which you testified
this morning?
Mr. GWYER. Correct, sir, although this article was rewritten to con-
form to the journalistic style used by American Machinist, with the
deletion of all the documentation and references.
Then I submitted this article to Ordnance, American Ordnance
Association publication in Washington, D.C., which also rejected it,
with the explanation that there was a time element involved, since
I wanted to have this item as soon as possible in the press. They could
not accommodate this article in the immediate issue.
Ordnance magazine is published every two months.
After receiving this in an envelope from Ordnance Association,
I submitted it to Machinery, New York, a publication of the Industrial
Press, and it was published in October of 1959. I presume that the
subcommittee has the journal proper, with the final version of this
article.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved or Release 2004/03~i1 : Qlhfq~ 6 QY.Jq 000509920022-5
EXPORT OF One observation I would like to make at this time. A reference to
a passage which was deleted from the text, since the motivations for
deletion was that this is editorializing, advocating something which
I, as a research analyst, should not go into, but should just merely
report the facts and analysis based on these facts.
With your permission, Mr. Chairman, I would like to quote this
passage.
Senator KEATING. It is short, is it?
Mr. GWYER. It is very short, sir.
In discussing the period of time which it would take the Soviets to
attain the (roals of full mechanization and automation, I said that
it is doubtful if the Soviet Union could attain these goals within the
indicated period of time.
It is very doubtful, since a progress toward full automation can only be
achieved through a, uniform mechanization and this the Soviet Union is lacking.
Furthermore, her progress will be slowed down by inadequate number of de-
signers, prototype makers, production engineers, and other highly specialized
personnel. It may take her 15 to 20 years with the best training programs and
with a full complement of required machines and instruments. This period
could be shortened to some extent should the Soviet Union go beyond her sphere
of interest for direct and indirect help. There are some indications to this
effect contained in Soviet East-West trade proposals, where the primary Soviet
interest rests in modern machine tools, and equipment for her chemical industry,
and in the engineering know-how, especially that of the United States. Is it
not paradoxical that the U.S.S.R., whose aim is to destroy the free world through
an economic and political penetration, would turn to the United States, the
champion of the free world, for economic help? This zigzag in Soviet foreign
policy should be scrutinized in every detail, since it has become a matter of
vital importance for the west in general and the United States in particular
not to allow themselves to be outpaced by the Soviets in areas of technological
and economic progress that would further Soviet gains in the economic war.
Lending of support to the Soviet industrialization drive might nullify all West-
ern attempts to contain politically the Soviet Union and might constitute a re-
treat which eventually may end in a national disaster.
Senator KEATING. That was struck out of even what was published,
is that right?
Mr. GWYER. Correct, sir.
Mr. SOURwINE. Mr. Chairman, I would suggest that this article be
put into the record as an appendix to the record, but not received as
part of the record.
Senator KEATING. It will be received in that manner.
(The document referred to is printed as appendix III at p. 84.)
Mr. SouRwINE. Mr. Gwyer have you made a study of Soviet press
response or reaction to the U.S. policy with regard to exports to Iron
Curtain countries?
Mr. GwYER. Yes, I have.
Mr. SouiiwlNE. What can you tell us about this?
Mr. GwYER. The Soviets, over the period of the last 2 or 3 years,
were publishing more or less on a periodical basis in the leading
journals, articles which, in a sense, were basically aimed to create an
atmosphere that would favor a mutually satisfactory trade between
the Soviet bloc nations and the United States. These articles ap-
peared in periodicals such as the Economic Gazette, the Problems of
Communism, the Economic Problems, Economic Planning, and so on.
Shortly before the end of the last year, the drive was intensified
up to such a point that, practically every single day, there was a
reference either in the Soviet press or on Soviet radio broadcasts, to
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
48 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
the effect that trade between the U.S.S.R. and the United States is the
only means of reducing international tensions.
Shortly after this subcommittee, under the chairmanship of Senator
Dodd, influenced the Commerce Department to cancel the license for
shipment of high .precision, high-speed grinders to the Soviet Union,
the Soviets intensified their propaganda drive, emphasizing over and
over again that this is not the way to reduce international. tensions.
Specifically, I would like to quote an article that appeared in
Ekonomicheskaya Gazeta dated-for the benefit of the non-Russian
speaking audiences, this is the Economic Gazette-dated January 21,
1961.
Senator KEATING. Your quotation will not be long? I would rather
put it in the record if it is going to be long.
Mr. GwYER. Since this item will be introduced in the record, I may
say that-there are only two lines here :
It expresses the hope that the quarters shaping the trade policy of the United
States would take a more realistic position on the question of Soviet-American
economic relations.
Senator KEATING. Did they have reference specifically to this ball
bearing machine shipping?
Mr. GwYER. No; this one does not. This is one of the run-of-the-
mill articles dealing with the general pattern of East-West trade.
Senator KEATING. You speak of propaganda. That is published in
Russian, is it not?
Mr. GwYER. Yes, this is published in Russian for Russian consump-
tion.
Senator KEATING. What propaganda value does it have outside
Russia?
Mr. GWYER. This item was radio teletyped in English to Europe
on January 21, 1961, at 0834 Greenwich mean time.
In direct reference to Senator Dodd, I would like to quote brief
statements made here by Radio Moscow, and this was again propa-
ganda beamed to eastern North America on March 4,1961.
Senator KEATING. And to European countries, too, or just here?
Mr. GwYER. North America. Actually, I think, broadcasts to the
eastern North America are heard very well throughout northern
Europe, and western parts of Europe. As a matter of fact, I think
I heard this one here myself, listening to Soviet broadcasts and watch-
ing for the reaction of the Soviets to the cancellation of the license.
Since this is quite extensive coverage, I wonder if you would like me
to-
Senator KEATING. We will receive it in evidence and proceed. We
will receive all these in evidence.
Mr. SOURwINE. I have two others which perhaps might be offered
this same way, Mr. Chairman, rather than having the witness com-
ment on them, if the Chair pleases.
Here is an article from Izvestia, March 7, 1961, referring specifi-
cally to the activity of this committee. The caption in the Russian
newspaper is "McCarthyites and Export."
Senator KEATING. It will be received.
Mr. SOURwINE. The English translation, of course, is what should
go in our record.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 49
(The document referred to was marked "Exhibit No. 10" and reads
as follows:)
EXHIBIT No. 10
[From Izvestia, Mar. 7, 1961, p. 1]
MOCARTHYITES AND EXPORT
The Washington AP correspondent reported recently that the U.S. Depart-
ment of Commerce annulled a previously issued license to the "Bryant Co." for
export to the U.S.S.R. of 45 precision grinders.
How can this decision be explained?
Judging from the report by Senator Thomas Dodd, Democrat, of Connecticut,
it is nothing more nothing less but the security of the United States and that
of the "free world." Dodd, appearing as the vice chairman of the Senate In-
ternal Security Subcommittee described the decision of Commerce Department
as wise. "* * * denying the Soviet Union these machine tools," said Dodd, "and
retaining them for the American industry, the Secretary of Commerce strength-
ened the free world and weakened the Communist world."
What kind of nonsense the overvigilant Senator is spilling S
It is necessary to point out that the grinder business is being dragged for
quite a while. In the first place, their (grinders) shipment to the Soviet Union
was held up last year by the Eisenhower administration. Then, the prohibi-
tion of sale was reversed on the basis that the U.S.S.R. could purchase such
machine tools in other countries. With the advent of the Kennedy administra-
tion, the Secretary of Commerce Luther Hodges, under pressure from the busi-
ness circles became inclined to allow the sale of these machine tools. It was
then that Dodd rushed in with a malicious attack against the development of
trade with the U.S.S.R. He also asserted that the U.S.S.R. was interested in
these machine tools for their rockets.
Is it possible to think of a more flimsy argument to interfere in the develop-
ment of trade between the United States and the Soviet Union. The whole
world is aware that in rocket technology the United States lags well behind the
U.S.S.R. Does Senator Dodd know that Soviet automatic (space) station
launched from a huge satellite is moving in the direction of Venus.
Senator Dodd not only stopped American industrialists from making profit-
able deals but also denied bread to many workers. Learning about the stupid
decision of the Commerce Department, many are praising both Dodd and Hodges.
Today in Izvestiyakh (sic) we are publishing information on the hard con-
sequences of unemployment (in United States). Among other things, the devel-
opment of trade on mutually satisfactory terms could considerably lessen the
suffering of many thousands unemployed in the United States.. But Senator
Dodd is not interested in this. He saddled his wornout cold-war horse and by
rushing him he is demonstrating that the late Senator McCarthy still has fol-
lowers in the United States.
N. KUZNETSOV.
Mr. SoURWINE. Here is a statement by the Chief Specialist of
the State Committee for Automation and Machine Manufacturing
with the Council of Ministers of the U.S.S.R. from the Economic
Gazette of September 11, 1961, and the English translation.
Senator KEATING. It will be received.
(The document referred to was marked "Exhibit No. 11" and reads
as follows:)
EXHIBIT No. 11
[Source: N. Shamin, chief specialist of the State Committee for Automation and Machine
Manufacturing with the Council of Ministers of the U.S.S.R.]
"NET NE TAROY METALL NUZIIEN MASHINOSTROITELYAM !" (NO, SUCH METAL IS
NOT NEEDED BY MACHINE MANUFACTURERS) (IN EKONOMICHESKA, GAZETA,
SEPT. 11, 1961, P. 10)
The development of all branches of national economy depends to a large extent
on metallurgy. The volume of metal produced, its grades, and high quality
are obviously very important to the machine manufacturing industry-the lattex
being the heart of a modern industrial development.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
50 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
During the later years, the rate of growth of metallurgical output rose very
sharply. New blast furnaces and open-hearth furnaces, unique in terms of ca-
pacity, both metal rolling and other equipment introduced into being, considerably
increased the general industrial potential of the country. The metallurgist
learned to produce new types of steel and steel shapes, the technical-economic
indices were improved in general for various metallurgical enterprises.
But the requirements of machine builders grow and today it is important to
talk not only about successes but also about deficiencies apparent in the develop-
ment of metallurgy, about shortcomings which in final analysis may lead to
quite undesirable consequences.
Let us begin with the fact that power, chemical, transport, food, and other
branches of machine manufacturing require metal of a new type with specific
properties. We need heat-resistant, erosion-resistant, spring, nonmagnetic
steel with specific strength and wear-resistant properties, capable of use in ag-
gressive media, at high temperature, etc. Among others the process, and basi-
cally the rate of growth of development of such steels and alloys as of now are
altogether unsatisfactory. Resistance alloys, for example, are being produced
in extremely limited amounts, and the quality of these leaves much to be desired.
In their place we are compelled to use alloys containing high amounts of defi-
cient nickel.
There is a great need for so-called automatic steel which possesses high degree
of machinability. As of now the metallurgists are producing obsolete types of
such steel. During the last 30 years we have developed only one grade of high
alloywell machinable steel for the watch industry.
It is interesting to note that the machine builders themselves in their own
plants using whatever means available at their disposal successfully produced
various types and grades of high quality metal. This is to a known degree a
paradox since a metallurgical enterprise equipped with the highly capable and
modern equipment and technology, it is much more simple to produce high quality
metal. Prior to the war the new Kramatorsk plant produced one grade of non-
magnetic steel for making parts for electric generators. The need for this metal
is great. But, metallurgists spreading their hands haven't produced similar
type of metal.
Case like this can be only considered as a manifestation of narrow-mindedness
and indifference to the interest of the entire national economy. This can be at-
tested by the situation in respect to rolled steel. The number of grades of rolled
steel is very limited, altogether about 600-type sizes, when foreign firms produce
them in several thousands of type-sizes. More than 60 years existed the old
grade of I-beams and sleepers, but it took 5 years for the metallurgists to decide
in January of 1960 to go into production of this type of product in new grades.
On rail mills similar to the one in the Azovstal plant, the steel men in the
United States produce beams with a shelf width of up to 300 millimeters, but
we are turning them out with widths of only 185 millimeters. It is known that
a beam of this width can take a much greater load and consequently will permit
savings of many tons of metal.
The limited assortment of rolled steel denies the designer the possibility of
using all the advantages of low alloy steel. The gist of it is that its increased
strength characteristics often do not permit the use of profiles of smaller di-
mensions since such substitute does not provide the- necessary margin of strength.
For a number of grades (I-beams, sleepers, and others) it is necessary to establish
intermediate sizes.
The industry did not master the production of pipes for ball bearings up to
25 millimeters- and above 180 millimeters. A large economy of metal, up to 50
percent, may be found by using profile pipes and bend profiles, but metallurgists
are still manufacturing only the most simple types of pipe and bend profiles
which give only a very limited effect.
June 1959 plenary session of the Central Committee of the Communist Party
of the Soviet Union adopted a resolution on the wide use of the oil and gas
industry of drill pipes of reduce (sic) and small diameter. But industry is
compelled to use pump-compressor pipes in place of drilling pipes because the
latter are not being manufactured by the metallurgists. The industry does not
produce flangeless well pipes whose use would reduce by a factor of two the
number of threaded joints and would improve the air tightness as well. The
extra tolerances of oil pipes in terms of diameter and weight amount to a loss of
between 20,000 to 25,000 tons of pipes.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved pprr Release 2004/03/11: CIA-RDP64B00346R000500020022-5
XPOR`r OF STRATEGIC MATERIALS TO THE U.S.S.R. 51
There is no production of sheets, strips, and pipe coated with plastic which
Is widely used by foreign industry.
Curiously enough there is apparently no organization which would compel
metallurgists and steel rollers to produce for the industry necessary types of
products. The creation and planning of new types of grades is obviously a job
for VNIIMetmash. Director of this institute Comrade Tselikov promised to
tackle this problem, but obviously he forgot about his promises. In any case,
there are no results in that direction coming from the work of the institute.
It is obvious that the development and production of new grades steel and also
of rolled steel should be more fully considered in the objectives for new tech-
nology on par with the objectives for the production of most important machines
and equipment.
Great apprehension is caused by the low quality of metal. Quite often metal
is delivered without proper heat treatment, not straightened with the crushed
edges and with a great decarbonized core, contaminated with foreign and detri-
mental mixtures, with extremely great tolerances in terms of size, and with
unstatisfactory micro-macro structure.
The wide use of welding and automation of technological processes demands
from a metal increase requirements. This means a lowering of detrimental ad-
mixtures and a maximum homogenity in terms of chemical composition, struc-
ture, mechanical Properties, and also in terms of shape and uniformity of geo-
metric dimensions. The country gave metallurgists all the necessary means to
fulfill these requirements ; new units for gas and sulfur purification were
built, open hearth furnaces were equipped with the ducts made from heat re-
sistant refractories (bricks), some of them were converted for the use of the
purest natural gas, furnaces were automated, powerful milling mills were
erected, and modern auxiliary equipment was provided. Many billions of rubles
went into the development of metallurgy but a corresponding return from the
metallurgists in terms of increase quality of production was not realized.
The level of mechanical properties of carbon and alloy steel during the past
decades did not change. The allowance for the content of detrimental of admix-
tures remains as it was, and the content of admixtures such as copper, arsenic,
and nickel even increased above the original standards. The finishing of metals
judging from the current output did not improve.
Foreign firms during the last years considerably increased the quality of pro-
duced metals and especially the mechanical properties of most commonly used
carbon steel CT-3 by its thermal finishing during the production process. Such
a finishing can be attained without any considerable capital investments also
by our metallurgical plants.
Increase product quality could give the state a tremendous advantage. Here
are a few examples :
According to the 7-year plan, we are supposed to double the output of steel
wire cable and in order to attain this it is contemplated to build three wire cable
plants out of a cost of 150 million rubles. This construction could be avoided
if the service life of wire cable was doubled. The work of the Kharkov mining
institute and the mining institute of the Academy of Sciences of U.S.S.R. show,
that it is possible to increase the service life of wire cables used in mining by a
factor of anything between 2 and 4. All it is necessary is to improve their de-
sign and basically to increase the quality and uniformity of the wire strand.
Second example : Tool steel-increasing the tool stability by a factor of 2 would
eliminate the need for a construction of a new tool plant. In order to attain this
it is necessary to lower the carbide nonuniformity of high speed steels, to provide
the steel with a good structure, without the decarbonize core, with a uniform
and pure (free from detrimental and foreign admixtures in a chemical composi-
tion). It is obvious that it is also necessary to pay attention on the quality of
the sharpening of tools. Up until now, gear and slot milling is carried out in our
plants at cutting speeds of 30 to 38 meters per minute, about one half as fast as
on establishment of better foreign firms.
Heating elements of electric furnaces manufactured by our metallurgical
plants from resistance alloys, perform five to six times less in terms of time than
elements imported from abroad. The excessive use of deficient, highly expensive
metals, for example nickel is the result.
It is possible to present still a number of examples proving that a low quality
of metal brings the country tremendous losses. Specifically because of the low
quality of transformer iron, the country is losing power equal to that generated
by the Volga GES IM Lenin.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
52 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
One of the causes of all these deficiencies, of these shortcomings Is the un-
satisfactory state of standardization. Isn't it strange that despite the fact that
procedures are turning out low quality items, the metallurgists do not violate the
standard requirements, which almost is on the edge of appearing defective.
The standard is a powerful lever leading to the improvement of product
quality. Its increased requirements should lead to a continuous improvement
of the product, to Its increased service life and strength. And what is attained
in reality? And actually the requirements of GOST are being reduced in com-
parison with the results attained in practice.
From 245 melts of steel type 27 SG conducted on the Kirov plant in Leningrad,
only one did not correspond to the standard requirement for the breaking down
point. Remaining were15 to 20 percent higher than those required by GOST.
The standard specifies that the flow limit of widely used steel type 40 Kh
should be equal to 90 KGmm. From 184 melts conducted by the Kuznetsk com-
bine, only 10 gave lesser results. The flow limit of remaining steel was 15
percent higher than specified by the new standard which is being prepared for
official sanction.
It should be directly stated here that the position taken by the Committee on
Standards does not facilitate a constant improvement of product quality because
a poor standard not only makes defectives legal but also prevents their elimina-
tion. And today when the objectives of the program of the Communist Party
sets forth before our country these great objectives, the practice as above should
be completely changed.
The most important, It's now time to understand (learn) that metal should
not be produced for the sake of metal. This metal is necesary in the first place
by the machine manufacturer, and consequently the requirements of this most
important branch of the national economy should be considered and should be
binding in the development of Soviet metallurgy.
Mr. SOURwINE. I-Iere is an English translation of an article which
appeared in the Economic Gazette of January 21, 1961, at page 4,
which was also a Tass radio teletype in English to Europe.
Senator KEATING. It will be received.
(The document referred to was marked "Exhibit No. 12" and reads
as follows :)
EXHIBIT NO. 12
UNITED STATES DISCREDITS SOVIET TRADE ACTIVITY
[Moscow, TASS, radloteletype in English to Europe, Jan. 21, 1961, 0843 GMT-L]
(Text) Today's Economic Gazette devotes a lengthy article to Soviet-American
trade. It expresses the hope that the quarters shaping the trade policy of the
United States would take a more realistic position on the question of Soviet-
American economic relations. The line toward curtailment of Soviet-American
trade so far resulted only in the loss by American industry of many billions
worth of orders, the paper says. Is it not too high a price to pay for the fore-
doomed attempt of the anti-Soviet circles in the United States to halt the de-
velopment of certain branches of Soviet industry, the paper asks. This be-
comes particularly clear, the paper stresses, in view of the economic difficulties
now experienced by the United States-millions of unemployed and the diffi-
cult position of the dollar.
As stressed by the newspaper, the Soviet Union from the very first days of
its existence has been advocating peace, international cooperation, and develop-
ment of international trade on the basis of equality and mutual advantage. Now
that the peace forces in all parts of the world are persistently fighting to avert
another war, such trade becomes a particularly effective means of easing interna-
tional tensions.
In this connection the paper points out that the tremendous economic and
technical achievements of the Soviet Union have made the bankruptcy of the
policy of restricting trade with the U.S.S.R. evident to everyone. Now that there
is a new upsurge In the economic development of the Soviet Union, Soviet for-
eign trade organizations can offer the United States traditional items of So-
viet-American trade in greater quantities than ever before, as well as a number
of new goods.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovedxpoR e] apfR?921193l~nrEOISR~?g6AR0~3 0005020022-5
Economic Gazette points out that the U.S.S.R. is now trading with mutual
advantage with more than 80 countries, including Britain, France, and the
German Federal Republic, the total annual volume of trade exceeding $10 bil-
lion. Life has long since proved, the article says, that the principles of the
'Soviet foreign trade system in no way infringe upon the interests of the So-
viet Union's partners in economic operations. These interests are fully guaran-
teed by the equal trade treaties and agreements which carry the signature of
the Soviet Union.
The paper concludes by stressing that the arguments advanced by the op-
ponents of the development of Soviet-American trade are groundless and that
Soviet foreign trade activity is discredited most of all in precisely the coun-
tries which have no substantial trade contacts with the Soviet Union.
Mr. SOURwINE. Here is a broadcast from Moscow in Hungarian to
Hungary, February 20, 1961, which also is a specific commentary
on the activities of this committee.
Senator KEATr.NG. It will be received.
(The document referred to was marked "Exhibit No. 13" and reads
as follows:)
EXHIBIT No. 13
DODD ACCUSED or REvIvING COLD WAR DAYS
[Moscow, in Hungarian to Hungary, Feb. 20, 1961, 2030 GMT-L (Victorov commentary) ]
Senator Dodd began his career as an agent of the Federal Bureau of Investi-
gation, that is to say, as a police agent. He has kept his policeman's mentality
up to this day. Those who doubt this should scrutinize the Senator's speech
at the so-called American-German conference. According to UPI, Dodd said
at that conference that the primary objective of U.S. diplomacy should be
nothing more nor less than the so-called liberation of East Germany and East-
ern Europe. In plain language this means subjugation. To achieve this tar-
get, said Dodd, suitable disruptive activities should be pursued.
What can one say about such statements, of which even Dulles would have
been envious? Such statements can be described only as brazen intervention
in the internal affairs of sovereign states, the majority of which maintain
diplomatic relations with the United States. Dodd belongs to that circle of the
U.S. Democratic Party which is trying to revive in America's policy, not Frank-
lin Roosevelt's noble traditions, but the methods of Truman and Acheson who,
as is well known, laid the foundations of the cold war. But the days when
gentlemen like Dodd and their protectors decided the fate of the world have gone
forever.
The political countenance of Senator Dodd has been known for a long time.
Linus Pauling, the well known U.S. scientist and peace fighter, said of him :
"I believe that be is one of our enemies who is in the imperialists' camp."
We must agree with Pauling's words. Dodd's speech was aimed at sharpening
the international situation and at reviving the most terrible days of the cold
war. Mr. Dodd has rendered a very bad service to the people of America.
Mr. SouRwINE. Here is the English translation, the text of a Mos-
cow broadcast in English to eastern North America, March 4 1961,
specifically referring to the cancellation of exports to the U.S.S.R.
Senator KEA:CING. It will be received.
(The document referred to was marked "Exhibit No. 14" and reads
as follows:)
(EXHIBIT No. 14)
U.S. CANCELING OF EXPORTS TO U.S.S.R. HIT
[Moscow, in English to eastern North America, Mar. 4, 1961, 2319 GMT-L (unclassified]
(Nina Alekseyeva commentary)
(Text) The discussion over selling the Soviet Union a shipment of grinding
machines started while Eisenhower was still in office. American idustrialists
pointed out that such a bargain was feasible, and profitable as well. Even the
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appr ed FoE p, ss,2994AG/$/11 . CIA-RDP64B00346R000500020022-5
IC MATERIALS TO THE U.S.S.R.
Commerce Department approved the deal. But now it has decided to annul
the export license previously handed out. What is behind all this?
Roscoe Drummond of the New York Herald Tribune explains the denial by the
fact that the United States is afraid that these machines will help the Soviet
Union to breach the gap in the field of rocketry. If such is really the case, then
something is wrong somewhere. First of all, American specialists themselves
consider that the United States is several years behind the U.S.S.R. in the build-
ing of rockets, and if we speak about help in this field then probably the United
States needs it most of all. What is more, the machines under discussion are
very remotely connected with rockets.
Senator Dodd, vice chairman of the Senate Internal Security Subcommittee,
said ; "The CommerceDepartment had made a wise decision." He considers that
the decision strengthens the so-called free world and weakens the Communist
world. I do not know whether this decision strengthens or weakens one world
or the other. One thing is certain. It intensifies the cold war.
As for the assertion concerning the weakening of the Communist world through
such measures, I think Senator Dodd is making the same mistake his predecessors
made 10 years ago. They followed a discriminatory trade policy toward the
Soviet Union, thinking that it would retard the industrial development of the
U.S.S.R. However, it was precisely in these 10 years that the Soviet Union
made astounding progress in its national economy. The U.S.S.R. was the first
to build (word indistinct) station, the first to fire earth and solar sputniks into
space. The U.S.S.R. was the first to send a spaceship bound for Venus.
Senator Humphrey was right when he said that America's containment trade
policy often serves as a stimulant for the Soviet Union to step up and expand
industry. Of course, the case really does not concern a few dozen grinding ma-
chines. We have done without them so far and will manage without them in
the future.
I believe that Luther Hodges' decision was prompted by the reluctance of in-
fluential American circles to establish normal trade relations with the Soviet
Union. We regard the normalization of trade between our two countries as one
of the factors improving Soviet-United States relations. The Soviet Union is
showing by its deeds, not by words, that it is doing everything possible to relax
tension between our two countries right now and we think that the normalization
of Soviet-United States trade relations could be one of the most important steps
toward liquidating this tension.
Mr. SOURWINE. That concludes the list of those offerings.
Mr. Gwyer, you testified this morning, not in great detail, with re-
gard to the administration of the Battle Act. Are you familiar with
the 1960 survey of the strategic trade and control program? I show
you this volume.
Mr. GWYER. Yes; I am.
Mr. SoURWINE. Will you comment on that, please?
Mr. GWYER. The provisions of the Battle Act of 1951 require the
Administrator of the Battle Act to provide the President with a re-
port on any determination made pursuant to the first proviso of this
section; also the Senate Foreign Relations Committee, the House
Foreign Affairs Committee, and other committees of Congress-there
are six committees, altogether, interested and the six committees were
informed on the foreign determinations made from January through
September of 1960.
To recap, the provisions of the Battle Act state that the United
States, if necessary, as directed by the President, may use economic
and military sanctions against any country which trades with the
Soviet bloc in items which we do consider strategic. This is com-
munication-there is X number of communications by the Adminis-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved V 0500980022-5
trator of the Battle Act, Douglas Dillon, then Undersecretary of the
State Department.
Mr. SouRwINE. You need not read these communications. They
can be offered for the record, if you have comments about them. Do
you have comment about them?
Mr. GWYER. I have a comment, since these are items which we do
consider strategic, but they were shipped anyway to the Soviet bloc
nations.
Senator KEATING. What kind of items are those?
Mr. GWYER. Cable and communications equipment to Poland for
civilian use.
Senator KEATING. I didn't hear that.
Mr. GwYER. This is cable and communications equipment to Poland
for civilian use; grinding machines to Poland for civilian use; con-
densers to Hungary; cable to Soviet Union from France; borax ship-
ments from Italy to Poland; shipments of certain bearings to Poland
from Japan.
The provisions of the Battle Act were not used and, in the words of
the Administrator of the Battle Act :
I recommend that the United States, in its own security interest, should con-
tinue aid to these countries.
Senator KEATING. Who was the Administrator then?
Mr. GwYER. Douglas Dillon, Under Secretary.
Senator KEATING. Does he, in that communication, go into detail
as to wh he reaches that conclusion?
Mr. (LAYER. If we go into the cable and communication equip-
ment Poland for civilian use, Mr. Dillon goes to explain that this rep-
resented this part of telecommunications network to be on Polish terri-
tory and which was to connect Poland with various Western countries
through Denmark.
Senator KEATING. Is there anything to stop the Poles, when they-
from using it for a purpose that it was not asked for?
Mr. GwYER. I personally don't think so; unless the Department of
Commerce, through its enforcement agencies, can see to it that this
item is used for this specific purpose and for nothing else. But I
could not comment on the role played by the Department of Commerce
in this case.
Similarly, I don't think we have any assurances that an item which
was received by Poland or by Hungary, despite the declarations on
the part of either of these two countries that this item will be used
exclusively on the territory of either Poland or Hungary, that these
items will not wind up eventually in the Soviet Union. I could not,
in all honesty, go into it and say that we have or we do not have ways
of enforcing it.
Mr. SOURWINE. Do you know of any way we have of enforcing it?
Mr. GWYER. No; I do not.
Mr. SouRwINE. May the particular communications which are
printed in this report which have been commented upon be included
in the record, Mr. Chairman?
Senator KEATING. They may be received.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprgyed For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
55 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
(The communications referred to, as printed in the 14th (1960) re-
port of the Administrator of the Mutual Defense Control Act to Con-
gress, were marked "Exhibit No. 15" and read as follows:)
EXHIBIT No. 15
APPENDIX D, (PP. 31, 32)
PRESIDENTIAL DETERMINATIONS MADE JANUARY-SEPTEMBER 1960
Section 103(b) of the Mutual Defense Assistance Control Act of 1951 pro-
vides that the President shall report any determination made pursuant to the
first proviso of this section to the Senate Foreign Relations Committee, the
House Foreign Affairs Committee, and the Senate and House Appropriations
and Armed Services Committees. The six committees were informed of the
following determinations made from January through September 1960:
"DEPARTMENT OF STATE
"WASHINGTON 25, D.C., January 16, 1960
"SIR : The President on January 7, 1960, determined, pursuant to Section
103(b) of the Mutual Defense Assistance Control Act of 1951, that United
States aid be continued to Denmark, the Federal Republic of Germany, France,
Italy, and Japan because the cessation of such aid would clearly be detrimental
to the security interests of the United States.
"The President, in his letter to me directing that aid be continued, also di-
rected that, in compliance with the reporting requirement of Section 103(b) of
the Act, I inform you of his determination, to which purpose this letter with
enclosure is sent.
"Very truly yours,
"DOUGLAS DILLON
"Under Secretary
"DEPARTMENT OF STATE
"WASHINGTON 25, D.C., December 81, 1959
"DEAR MR. PRESIDENT: As required by Section 103(b) of the Mutual Defense
Assistance Control Act of 1951 (Battle A.ct), I am advising you herewith of
certain shipments to the Soviet bloc of Control Act embargo items by countries
receiving United States assistance and recommending to you that assistance to
these countries be continued.
"This report covers shipments which have not been covered by any previous
Presidential Determinations under Section 103(b) of the Control Act. The
countries involved in the shipments and the circumstances under which they
were made are as follows :
"Denmark shipped $145,000 worth of cable and communications equipment to
Poland for civilian use. This represented that part of a telecommunications
network to be on Polish territory and which was to connect Poland with various
Western countries through Denmark.
"The Federal Republic of Germany shipped to Poland for civilian use a
grinding machine valued at $11,514; and shipped to Hungary $3,214 worth of
condensers. These latter represented a prior commitment ; that is, a commit-
ment had been entered into to export these before they were put under embargo
in August 1958. It has long been recognized that, in the absence of unusual
circumstances, prior commitments are to be honored.
"FRANCE
"France shipped $692,086 worth of cable to the Soviet Union. This was part
of a larger quantity licensed for shipment by French authorities who considered
cable of those specifications not covered by the definitions of embargoed items.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved EXPOR R OFasTRA00GI.31 AJr l fl - ~ 0~3 ~00050ff 20022-5
United States authorities did not agree with this interpretation and consider
this item to be covered by the Battle Act embargo. France also shipped $34,500
worth of electronic tubes to Poland for civilian use.
`ITALY
"Italy shipped borax valued at $11,260 to Poland for civilian uses.
"JAPAN
"Japan shipped $7,040 worth of certain bearings to Poland for civilian use.
"CONCLUSIONS AND RECOMMENDATIONS
"Except for the French cable to the Soviet Union and the German condensers
to Hungary, the circumstances of which are explained above, all the shipments
enumerated above went to Poland for specified civilian uses. All but the French
case were presented for consideration in the international security trade control
body (COCOM) before the export was authorized. The exporting countries
listed above have cooperated for ten years in controlling strategic shipments to
the Soviet bloc. The European countries mentioned make important contribu-
tions to the North Atlantic Treaty Organization. United States aid to these
countries is largely military aid, enabling them to meet their NATO obligations,
thus enhancing the security of the free world, including the United States. In
the light of the foregoing considerations and having taken into account each of
the statutory criteria set forth in the first proviso of Section 103(b) of the
Battle Act, I recommend that the United States, in its own security interest,
should continue aid to these countries.
"The recommendations in this letter are based on the advice of Vice Admiral
Walter S. DeLany, USN (Ret.), my Deputy Administrator for the Mutual
Defense Assistance Control Act, and are also concurred in by the Departments
of Defense, Treasury, and Commerce, and the International Cooperation
Administration.
"Respectfully submitted,
"DOUOLAs DILLON,
"Under Secretary.
"The President,
"The White House."
Mr. SouxwINE. Mr. Gwyer, in the case of materials for export
which are not strategic in our normal commercial relations with West-
ern European countries, is it safe always to regard the same items or
articles as nonstrategic in dealing with the Soviet bloc, and if not,
why not?
Mr. GwYE>i. A terminology of strategic or nonstrategic should be
considered against the background of the nation which uses the item
labeled either strategic or nonstrategic. In our dealings with the
Western European nations an item which is nonstrategic by all the
definitions may be strategic to the Soviet Union.
An item may be considered as strategic when it is of dire need by a
certain economy which, without it, is impeded in its operation. You
may have a directly military strategic item and may have a nonmilitary
strategic item. Both of these are equally contributing to the develop-
ment of a country. Since the Soviet Union is a state where the govern-
ment is in full control of all the facilities, manpower, resources, an
item which, by our definition, is defined as nonstrategic, this item going
into the Soviet bloc may decome strategic through inference. An
item the Soviets need may be produced in the Soviet Union, but in
order to do this they would have to divert resources and manpower and
facilities for that purpose. By purchasing this item abroad, they are
in a position to channel their resources, their manpower, into produc-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
58 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
tion of items which they do consider of either military or propaganda
value.
There is a problem of shifting these resources, rather than having
these resources used to produce either buttons for the army uniforms,
or perhaps a potato peeler, or items of this sort. Of course, I am
trying to minimize the importance of the term "strategic." I don't
think we have a potato peeler on the positive list but just for analogy
pur oses, the fact of the Soviet Union purchasing 50 million potato
peelers, say in Western Germany, will allow them to channel the
manpower and the facilities and the machine tools or hydraulic presses,
or whatever they use for this purpose, for production of items of
direct military use.
Mr. SOURWINE. I think perhaps your illustration of potato peelers
is a little unfortunate. Are you trying to say that anything which
the Soviet Union wants and which we ship to them can be said to
have some measure of strategic value because, if they need it at all,
their acquisition from us releases some productive capacity within the
Soviet Union? Is this the point you are making?
Mr. GwYER. What I am trying to point out is that an item by Soviet
standards is strategic when they have to set up certain priorities to
produce an item which requires the machine tools and facilities and
floor space and manpower. If they are in a position to purchase this
item abroad, this releases this segment of their industry to produce
something which they need and which they cannot purchase abroad.
Mr. SoURwINE. Are you leading up to or are you stating the con-
clusion that we shouldn't ship anything to the Soviet Union through
the Soviet bloc?
Mr. GwYER. Well, there are two schools of thought. One is that
we have to maintain some sort of trade relations with the Soviet
Union for the sake of diplomatic relations. I personally believe that
any item of significance, and the Soviets are purchasing the items of
significance on the Western markets, should not be sent to the Soviet
Union.
Mr. SouRwINE. Do you have any information, Mr. Gwyer, respect-
ing the shipment of diesel electric locomotive trains from the United
States to the Soviet bloc during 1960?
Mr. GwYER. No ; I do not have direct information on the shipment.
Mr. SojrRWINE. Do you have any direct information respecting any
particular shipments in recent years from the United States to the
Soviet bloc which you consider of major strategic importance other
than the grinding machines that we have already talked about?
Mr. GWYER. Yes.
Mr. SOURwINE. Tell us about them.
Mr. GwYER. You have-now, again, I have to distinguish between
the Soviet bloc nations as identified by the Department of Commerce.
My definition of Soviet bloc nations includes Poland and Yugoslavia.
Senator IDEATING. You mean they don't classify them as Soviet
.bloc?
Mr. GwYER. No; they do not classify them as Soviet bloc nations
for export purposes, trade purposes. There are instances of ship-
ments of rubber, metal-scrap metal, to be exact-of vehicles, of
loaders
Mr. SouxwINE. Loaders?
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approves fpoS ebe?!W,&%t/13/Al q42W6 0R.IW0050( IP0022-5
Mr. GWYER. Yes, sir. Actually, if someone would refer to the Bu-,
reau of Census monthly reports on actual shipments of goods from the
United States to these countries, including Yugoslavia and Poland,
they would have a list of maybe 150 or 200 items, or so, which are
quite significant in terms of their strategic value to the Soviet Union.
They perhaps may not be classified by our standards as either of pri-
mary strategic importance or even secondary strategic importance,
but they are strategic to the Soviet Union.
Senator KEATING. Are you referring to shipments to the Soviet
Union on the one hand?
Mr. GWYER. Soviet Union, Poland, Bulgaria, Czechoslovakia, Ru-
mania, Hungary, Yugoslavia, and Poland. If we take these countries
and lump them together, because they should be lumped together, then
you have a complete picture of the Soviet bloc.
Mr. SounwINE. Have you made a compilation of these items from
the Commerce Department reports? You are just telling us what you
happen to remember ? You have not made a list of them ?
Mr. GwYER. Personally, I would hesitate to comment on it because
of the nature of the work I am doing right now. Perhaps you under-
stand my position. I am aware of X number of shipments
going on to the Soviet bloc nations, but this ties up with the position I
am holding at the present time.
Mr. SounwINE. Mr. Gwyer, do you mean that you have information
which you have received in a classified way that you can't discuss in
an open public hearing ?
Mr. GwYER. No; this is not of a classified nature, but perhaps be-
cause of my association with the group I am with right now-this will
be entirely up to the committee chairman-should I divulge it or not?
Mr. SounwINE. All right, we accept that.
I show you, Mr. Gwyer, an excerpt from the publication, Swiss
Review of World Affairs, April 1961, headed "East-West Trade in
Europe."
Is this an article to which you have called the committee's
attention?
Mr. GwYER. Yes; I have.
Mr. SounwINE. What was your purpose in calling this to our
attention?
Mr. GWYER. Basically, looking on the statistics covering the East-
West trade, the figures for trade between the United States and the
Soviet Union or the Soviet bloc, are relatively insignificant in com-
parison with the overall total trade between the Soviet bloc nations
and the nations of Western Europe; namely, Italy, West Germany,
France and Great Britain.
Mr. ?ouRwlivNE. Is this an article which you consider authentic and
reliable?
Mr. GwYER. Yes; I do, because these figures can be found also in
Soviet publications dealing with the foreign trade.
Mr. oURWINE. You are suggesting, then, that this article be in-
eluded in our record?
Mr. GwYER. I would like to see it included in the record.
Mr. SoURwINE. May it be included, Mr. Chairman?
Senator KEATING. Received.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprcv(yd Fo 1b%sS,?%,Y 1C C R~ ~~? 0~3 E6R00 QR00020022-5
(The document referred to was marked "Exhibit No. 16" and reads
as follows:)
EXHIBIT No. 16
[From the Swiss Review of World Affairs, April 1961]
EAST-WEST TRADE IN EUROPE
By a correspondent
Although the Communist countries of Eastern Europe occupy a very
important place on the Continent as far as their area, population, indus-
trial, and agricultural output are concerned, their exchange of goods
with the non-Communist countries of Europe is comparatively small.
Nevertheless, the past 3 years have shown that in spite of numerous
barriers, European East-West trade is expanding. In view of the long-
term agreement concluded last year between the U.S.S.R. on the one
hand and Britain, Italy, and the German Federal Republic on the other,
one may expect a further growth of this trade.
Of the $46.7 billion worth of goods imported by the OEEC countries in 1959,
only $1.68 billion worth came from the East bloc, and of the $43.7 billion worth
of goods exported by the OEEC countries in the same period, only $1.4 billion
worth went to the East bloc.
There are severalreasons for the relative insignificance of trade between the
OEEC countries and the East bloc. Most of them have their origin in the bloc's
economic system. The government monopoly of trade in the Communist states,
the inconvertibility of East-bloc currencies and the endeavors of East-bloc na-
tions to arrive at a favorable or at least equalized balance of trade on the basis
of exclusively bilateral relations, prevent the volume of trade from growing to
any larger extent, although there is a tendency in that direction. All East-bloc
currencies being "internal" and their export a criminal offense, trade is con-
-ducted on the basis of the dollar and only surpluses are settled in cash. Quite
generally, East-bloc trade has the character of barrier transactions. The East
bloc exports so as to be able to import. When an East-bloc state achieves any
considerable export surplus, the resulting foreign exchange is, as a rule, used to
pay for excess imports from other countries. Only in the case of an emergency-
when it is absolutely impossible to achieve an export surplus or when the urgent
.need of certain goods justifies their purchase in the eyes of the planners-pay-
ment may be effected in gold, preferably through the U.S.S.R.
Up to the present these peculiarities of East-bloc trade have influenced also
the formation of export prices. In fixing these prices East-bloc trade authorities
were not bound by the domestic structure of prices and costs ; they observed
world-market prices and fixed their own below these.
The East bloc's endeavor to achieve a favorable balance of trade is clearly
visible. Like the 18th century Mercantilists, the Communist trade functionaries
today are trying to sell more than they intend to buy. Beside Finland, Italy,
and the German Federal Republic, Great Britain is the most important trade
partner of the East bloc in Europe.
The bloc's principal trade partner among the Scandinavian countries is Fin-
land. In 1059 Finland took nearly half ($207 million) of Scandinavia's im-
ports from the East bloc, and exported to it for $196.5 million. Finland's princi-
pal trade partner among East bloc countries is, of course, the U.S.S.R. Nearly
three-fourths of Finland's imports from East bloc countries came from the So-
viet Union ($147.3 million in 1959), and three-fourths of its exports went there
($140 million in 1959).
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve(t e0.Fa?663M4T:ItIAL-OZ 064bb0 -46 0050 20022-5
Trade between the United Kingdom and the East bloc
[In millions of pounds]
--------------------------------
S
U
S
R
7.4
6.8
3.7
4.6
.
.
.
-----------------------
d
--------------------------------
l
P
4.1
4.8
1.3
3.4
3
an
o
-------------------------
lovakia
h
--------------------------------
C
1.2
1.2
5
4
os
zec
---------------
tern Germany
Ea
------------------------------------
-
.6
.7
.9
.
2
s
--------
-
aria
Bul
--------------------------------------
.2
.2
----------
.
g
----------------
------------------------------
R
.
5
.6
.5
umanra------------------------
China--------- ------------------------------------------------
2
.2
3.7
1.9
5.6
15. 3
Source: From Obroty W. Brytanil z krajami socjalistycznymi, in "Rynki Zagraniczne," Warsaw,
Apr. 21, 1960.
Particularly problematic is the trade between Germany and the East bloc.
In addition to the general difficulties, it involves problems dating from the
Second World War. Germany, to be sure, has made many efforts to normalize
these trade relations and to expand trade, especially with the U.S.S.R., Poland,
and Czechoslovakia.
Trade between the German Federal Republic and the East bloc'
[In millions of dollars]
total
t bloc
---------------------------------
E
285.6
325.4
277. 2
314.3
as
,
---------------
R
S
S
-------------------------------
U
-
92.0
105.4
72. 1
91.0
.
.
.
------ ----------------
-
l
d
--------------------------------
P
70. 9
81. 0
78.8
70.0
an
o
-------------------------
Czechoslovakia-------------------------------------------------
49.3
56.2
61. 2
59.9
1 Without Eastern Germany, China, North Korea, Mongolia, and North Vietnam.
Source: From Monatsberichte der Deutschen Bundesbank, December 1960.
Italy, Greece, and Austria also increased their trade with the East bloc. The
biggest rise, however, was registered by Italy's imports from the U.S.S.R.
Italian imports from the U.S.S.R. rose from $39.7 million in 1958 to $78.48
million in 1959. In the cases of Italy, Australia, and Greece it is typical that
imports from the East bloc considerably exceed their exports to it.
Trade between Italy, Austria, Greece, and the East bloc
[In millions of dollars]
It
l
--------------------
100.2
154.6
85.8
118.4
a
y -----------------------
Austria
-------------------
120.0
134.0
118. 4
133.6
---------------------
Greece-----------------------------------------
39. 6
38.2
37.4
33. 5
Source: From: Mandel Grecij z Krajami socjalistycznymi, in "Rynki Zagraniczne," Warsaw, Suly 9,
1960; OEEC Foreign Trade, Overall Trade by Countries, October 1960; Nachrichten ffir den Aussen-
handel, Frankfurt, March 14, 1960.
7,6869-62--pt. 1-5
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprcd Fon o@s@F2QQ4AQ ~ :A&7FQpS6Qi@0 61Rq 00020022-5
Two tendencies can be noted in the European trade with the East bloc: (1)
trade keeps increasing, without yet amountingto a considerable part of the total
OEEC foreign trade; (2) the East bloc has maintained a favorable balance of
trade. While the trade surpluses of the various East bloc countries vary, it is
clear that the striving for a favorable balance of trade has been successful so
far.
EAST-WEST TRADE FROM JANUARY TO SEPTEMBER 1060
In the course of the past year, too, European East-West trade increased in
some cases quite considerably. The East bloc states, to be sure, were unable to
maintain their pursuit of a favorable balance with certain European countries.
It is particularly interesting to observe the type of goods principally involved
in East-bloc trade. Generally speaking, the East bloc keeps offering and de-
manding the same kind of goods. Britain's imports from the U.S.S.R. are mostly
timber (logs and boards), grains, hides, manganese ore, oil products and-fish;
about one-third of Britain's timber requirements are supplied by the U.S.S.R.
In 1959 Soviet exports of timber (logs and boards) to Britain reached #27.9
million, and in the course of the first 9 months of 1960 they already came to
#20.5 million.
During the first 9 months of 1960 Britain imported hides for #5.7 million (in
1959, #8 million), and wheat for #2.4 million (2 million tons), against #3.3 mil-
lion (2.7 million tons) in 1959, from Soviet Russia. Britain's next biggest East
bloc supplier is Poland. Poland's principal exports to Britain were meat (115.3
million in 1959 and #11 million in the first 9 months of 1960) ; dairy products
(16 million in 1959 and #5.3 million in the first 9 months of 1960) ; timber (logs
and boards) (3.84 million in 1959 and #3.86 million in the first 9 months of
1960).
Britain's principal exports to the East bloc are machinery, ships, chemicals,
iron, steel, and nonferrous metals. During the first 9 months of 1960 U.S.S.R.
imports of machinery from Britain were valued at #15 million (against #10.5
million in 1959). About one-fourth of this was composed of textile machines.
Poland imported machinery valued at #4.1 million in the first 9 months of 1960,
against #5.7 million for the whole of 1959. On the other hand, British exports
of copper declined (15.5 million to the U.S.S.R. in 1959, but only #1.3 million in
1960). Exports of ships, by contrast, increased greatly. During the first 9
months of 1960 the value of ships exported from Britain to the U.S.S.R. came to
#4.5 million, against #3.4 million for the whole of 1959. (From: Accounts relat-
ing to Trade and Navigation of the United Kingdom, September 1960.)
West German trade with the East bloc also increased considerably. The
principal partners, beside the U.S.S.R. were Poland, Czechoslovakia, Hungary,
and Rumania.
The principal West German exports to the East bloc countries in the first 9
months of 1960 were machinery (to Poland for $11.5 million, to the U.S.S.R.
for $38.9 million, and to Czechoslovakia for $8.2 million) ; steel tubes valued at
$24 million (84,000 tons) to the U.S.S.R.; iron and steel (ingots and rolled)
valued at $10.8 million (65,000 tons) to Czechoslovakia; copper in different
shapes to the U.S.S.R. for $16.9 million (75,500 tons), to Czechoslovakia for
$3.7 million (52,704 tons) and to Hungary for $3 million.
French imports from the East-bloc nations were composed mainly of fuels,
timber, meat, minerals, etc. The total value of fuels imported from the East
bloc countries in the first 9 months of 1960 was $51.5 million (17.88 million
tons). The principal suppliers were the U.S.S.R., Poland, and Rumania. The
U.S.S.R. supplied coal and oil, Hungary coal only, and Rumania oil only. The
value of timber supplied by the East bloc was $7.2 million. The principal
suppliers were the U.S.S.R., Poland, Czechoslovakia, and Rumania. Larger
quantities of meat were supplied only by the U.S.S.R. and Hungary. (From:
Statistique mensuelle du commerce exterieur de la France, September 1960.)
France supplied mainly iron and steel, powerplants, chemicals, etc. The
value of French exports to the East bloc of iron and steel was $75.78 million,
and the value of powerplants more than $30 million.
Italy imported from the East bloc mainly fuel. It took 3.7 million tons of
coal from the U.S.S R. and 5.7 million tons from Poland in the first 9 months
of 1960, at a total value of $13.6 million. At the same time Italy imported
from the U.S.S.R. 2.7 million tons of oil valued at $34.7 million. (From
Statistica mensile del commercio con 1'estero, September 1960.)
The principal goods imported by Sweden from the East bloc were fuels and
foodstuffs. During the first 7 months of 1960 Sweden imported fuel from the
U.S.S.R. and Poland to the value of $23 million, while imports of foodstuffs
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovecLK9615e WR k3/4,IIA DR64EIg0i~ Q0050 0022-5
amounted to $11 million. (From : Manadsstatistik over handeln, No. 8, 1960.)
Iron ore was the principal Swedish export to the East bloc, valued at $13.5
million.
West German imports from East-bloc countries in the 1st 9 months of 1960
[In millions of dollars and thousands of tons]
Wheat
Meat
and
eggs
Cotton
Coal
Oil and
oil
products
Man-
ganese
ore
Non-
ferrous
metals
U.S.S.R.:
Value------------------------
4.3
----------
8.8
10.6
----------
15.9
3.9
Tons-----------------------.
65
----------
14
134.7
----------
047
93
Poland: Value------------------
----------
15.5
----------
----------
4.2
-----
Czechoslovakia:
Value-----------------------
----------
----------
----------
3.8
5.0
----------
----------
Tons-------------------------
----------
----------
----------
48
769
----------
----------
Rumania: Value----------------
----------
----------
----------
----------
----------
9.1
----------
Hungary:
Value-----------------------
----------
10.9
----------
----------
----------
----------
----------
Heads-----------------------
---------
152,600
----------
---------
------- --
----------
----------
1 Livestock.
Source: From Der Aussenhandel der Bundesrepublik Deutschland, Tell 3 July-September 1960.
East-bloc, trade with the Scandinavian and Benelux countries
[In millions of dollars]
East-bloc total ----------------------
445.4
413.9
170.1
228.1
194.6
184.7
U.S.S.R-----------------------------
348.1
310.4
66.1
95.8
28.5
10.5
Poland------------------------------
69.2
56. 6
12.6
16.4
27. 5
28.5
Source: Wrost obrotow Skandynawla z krajami socjallstycznymi, in: Rynki Zagraniczne, Warsaw, July
16, 1960, and Wymiana Beneluksu z krajami socjalistycznymi, in: Rynki Zagraniczne, Warsaw, May
24, 1960.
Se
Janua
ptem
ry
ber
to
1960
Belgium-Luxembourg ---------------- ------- - -- --
52.7
77.7
6.4
7.4
6.9
4.5
France--?----------------------------------------
1
11.3
162.3
12.7
18.6
10.2
12.6
German Federal Republic ----------------------
2
74.2
280.9
34.4
30.4
26.5
26.9
Italy---- -----------------------------------------
1
97.8
129.9
21.9
13.4
12.1
10.6
$olland-----------------------------------------
70.6
42.6
8.7
5.2
10.5
4. 5
Austria------------------------------------------
1
25.1
107. 7
13.6
12.0
10.3
10.7
Denmark----------------------------------------
56.3
35.1
6.1
2.8
5.4
3.8
Greece-------------------------------------------
40.7
29.8
3.9
2.2
2.9
1.5
Iceland------------------------------------------
14.0
13.2
1. 5
0.8
1.9
1.3
Ireland----------------------- --------
4.4
0. 5
0. 5
0.01
0.3
0.0
Norway-----------------------------------------
35.8
31. 4
4.2
8.1
3.9
3.5
Portugal -------------------- -------------------
4.6
6.0
0.7
0. 8
0.1
0.4
Spain (January/July)----------------------------
7.5
12.3
1.4
1.4
Sweden------------------------------------------
84.2
76.8
93
9.6
7.8
8.1
Switzerland-------------------------- ---
33.4
42.3
3.8
4.6
3.1
4.5
Great Britain------------------------------------
2
69.5
212.9
35.9
27.0
34.3
18.8
Source: From OEEC Foreign Trade, Overall Trade by Countries, December 1960.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprved Fob F elease 2004/03/11: CIA-RDP64B00346R000500020022-5
X ORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
The range of goods imported and exported by the smaller European countries-
Denmark, Belgium, and the Netherlands-did not differ much from the pattern
already mentioned. Belgium imported-in much smaller quantities, of course-
grains, fuel, foodstuffs, and timber, mainly from the U.S.S.R., Poland, East Ger-
many, and Czechoslovakia. Exports to the East bloc consisted mainly of iron
and steel, electrical machinery, and copper. (From Bulletin mensuel du com-
merce exterieur de l'Union Belge-Luxembourg, September 1960.)
The Netherlands imported chiefly wheat, tanned leather, and fuels. In addi-
tion, China supplied them with rice, soybeans, and oilseed. The main articles
of export were ships (to Poland), chemicals and drugs., (From Maandstatistik
van do in-, uit- en doorvoer per Land, January to August 1960.)
Denmark's chief imports were foodstuffs, fuels, and timber. Danish exports
to the Soviet bloc consisted mainly of machinery of different kinds, fish and
dairy products. (From Vareomsaetningen med uitlandet, September 1960.)
LEADING PARTNER : THE U.S.S.R.
The outstanding partner in East-West trade is the U.S.S.R. While Soviet
trade with non-Communist European countries accounts for only a fraction of
total Soviet trade-75 percent of it being with the East bloc countries-trade
with non-Communist Europe follows immediately after.
In 1958 Soviet imports totaled 17.39 billion rubles ; the share of non-Commu-
nist European countries amounted to 2.36 billion rubles. Total imports rose
to 20.29 billion rubles in 1959, and the share of European countries to 2.87 bil-
lion rubles. In 1958 Soviet exports were somewhat smaller than imports,
amounting to 17.19 billion rubles ; exports to non-Communist European countries
amounted to 2.6 billion rubles. Exports rose in 1959 to 21.76 billion rubles, and
Europe's share to 3.29 billion rubles.
The principal Soviet exports were coal, crude oil and oil products, logs and
sawn timber, and wheat. Out of a total of 11.1 million tons of coal 3 million
tons, valued at 195.4 million rubles, went to the OEEC countries, while out of
a total of 24.8 million tons of oil and oil products in 1959, 10.29 million tons,
valued at 657.9 million rubles, went to Europe. Out of a total of 5.9 million
tons of wheat in 1959, 1.15 million tons, valued at 290.5 million rubles, were
exported to OEEC countries. Since these figures are taken from official Soviet
statistics which state the value of imports and exports in rubles, they are quoted
here in the same currency. Although the official rate of exchange, prior to Jan-
uary 1, 1960, was 4 rubles to $1, it is not advisable to convert Soviet figures into
other currencies.
U.S.S.R. trade with the OPEC countries
[In millions of rubles]
Austria -----------------------------------------------
253.8
326.9
88.6
159.3
Great Britain Belgium ------------ ------------------------------------------
291.5
64.8
F 363.4
38.8
582.2
92.1
662.7
109.0
Holland---------------------------------
170.8
227.9
266.8
Greece-----------------------------------------
67.6
49.2
156.1
63.9
Denmark------------------------------------------------------
157.0
52.9
56.2
106.5
Iceland--------------------- ----------------------------------
F44. o
49.5
49.5
47.9
Spain-------------------------------------------------- .......
r19.9
20.1
22.4
11.5
Ittaly------ -----------------------------------------------------
141.1
211.1
154.2
311.9
Norway------------------------ -------------------------------
64.8
68.9
68.5
70.8
Portugal -------------------------------------------------------
7.6
7.1
3.4
5.2
German Federal Republic -------------------------------------
288.3
408.4
262.5
357.1
Finland--------------------------------------------------------
548.8
568.5
468.6
578.1
France---------------------------------------------------------
322.3
402.0
348.4
351.0
Switzerland----- ----------------------------------------------
14.0
18.8
12.1
17.9
Sweden--------------------------------------------------------
112.3
166.5
120.8
177.4
Total----------------------------------------------------
Source: From Vneshynyaya torgovlya U.S.S.R. za 1959 god, Vneshtorgizdat, Moscow, 1960.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovedEK%Ppl&f%32MQ~/41,&!A DFo6 0;6 0050 0022-5
No official Soviet figures are available at this time of writing regarding the
trade between U.S.S.R. and the OEEC countries in 1960. They can, however, be
gathered from the statistics published by the OEEC countries.
During the first 6 months of 1960 U.S.S.R. exports to Italy were valued at
$52.3 million, U.S.S.R. imports from Italy at $37.5 million. During the same
period Soviet exports to Austria amounted to $16 million, and imports from
Austria to $18.7 million.
In comparing the development of Soviet trade with the OEEC countries and
overall East-West trade in Europe, one is struck by the growth of the Soviets'
share. Not only have the Soviet foreign trade practices set the pattern for the
entire East bloc, but the Russians have apparently succeeded in getting hold
of most of the other East bloc countries' trade with the West.
Trade between the U.S.S.R. and some European countries, January to September
1960
German Federal Republic -------------------------------------
135.6
119.2
84.0
54.9
Sweden--------------------------------------------------------
67.2
85.9
Denm ark------------------------------------------------------
100.3
74.8
109.2
44 3
Holland ---------------------------------------------------------
33.65
28.8
19.09
19.69
Great Britain --------------------------------------------------
22.8
17.28
11.08
6.48
France---------------------------------------------------------
27.8
4.7
Source: From accounts relating to trade and navigation of the United Kingdom, September 1960;
Monatsberichte der Deutschen Bundesbank, October 1960; Statistique mensuelle du commerce ext6rieure
de la France, September 1960; Mandatsstatistik over handeln, No. 8,1960; Vareomsaetningen mod utlandet,
September 1960; Maandstatistiek van do in-, uit- on doorvoer per Land, January August 1960.
Mr. SOURWINE. I show you an article from the same publication
May 1961 entitled "On Trading With the Communist East." Is that
in the same category?
Mr. GwYER. Yes; it is, and in my opinion, the estimate of the sit-
uation, if you will pardon my military parlance, it is extremely good
and perceptive in the sense that the author perfectly well under-
stands the basic motivations guiding the Soviets in trying to stim-
ulate and expand trade with the West. There is one specific passage
here, and it is very brief, Mr. Chairman I would like to introduce
for the record, and this is in reference to long term trade agreements
between the Soviet Union and the countries they enter into the agree-
ment with, and I quote :
Long-term economic ties and diplomatic immunity, moreover, provide them-
this means Soviets commercial attaches-
with excellent opportunities for the economic espionage and for the establish-
ment of Western business and industrial interests that are in sympathy with
them.
Every Western businessman entering into trade relations with the Communist
East must realize that he is not making contact with a market in the Western
sense of the term ; the Communist market is not based on consumer demands,
but on the arbitrary political decisions of the Soviet foreign trade authorities.
Mr. SOURWINE. You suggest that this article also should be in the
record?
Mr. GWYER. In its entirety, sir.
Mr. SOURWINE. You consider it reliable and authentic?
Mr. GwYER. Yes; I do.
Mr. SoURwINE. May it be received, Mr. Chairman?
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprpyed For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
66 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Senator KEATING. It is received.
(The document referred to was marked "Exhibit No. 17" and reads
as follows:)
ExHInIT No. 17
[From the Swiss Review of World Affairs, May 1961)
ON TRADING WITH THE COMMUNIST EAST
(By Willy Linder)
Parallel with a series of articles reporting the facts and figures of East-
West trade, the Neue Zurcher Zeitung has recently published some criti-
cal comment on this issue, of which the following, by a member of its
financial editorial staff, is an example.
No one at all familiar with the history of the Soviets and with the writings
and declarations of their rulers can be ignorant of the fact that the cold war is
being waged not only by political, but also by economic means. Stalin, it will
be remembered, wanted foreign trade to serve political aims. This principle
continues to be applied, though of course Communist tactics in economic policy
have changed considerably with the dramatic emergence of the Soviet Union
on the world-political stage. No propagandistic smoke screen can hide the
political aspect of Soviet foreign trade. The signs revealing that the old
Stalinist motivation continues to apply in economic relations with the capitalist
countries are too evident not to be seen. One example among many was
Xhrushchev's declaration at the 28th Party Congress that "from the fact that
we advocate peaceful coexistence and peaceful competition with capitalism one
should under no circumstances conclude that the struggle against the bourgeois
ideology and against the remnants of capitalism will be relaxed by our people ;
our task consists in a continuous attack on the bourgeois ideology and the un-
masking of its antisocial and reactionary character."
Despite the transparency of Soviet intentions, the use of seductive slogans,
trying to persuade the West to expand its trade with the Communist empire,
seems to have considerable success. The tendency to make a distinction between
trade and political relations with the Communist East can be observed at
work in the free world, and often even influential organizations appear only
too ready to put the counterfeit currency into circulation. The movements
going by the concept of "neutral economic contacts" are no rarity any longer;
Great Britain is particularly active in this direction. Such conduct would seem
to reveal a considerable measure of political naivete, and a readiness to forget
the lessons of history.
In every planned economy foreign trade is bound to become a neuralgic point,
for it is here that the planning system comes up against systems organized along
different lines. Here the economic planners must fear that disturbing elements
will enter their system from the outside, and find themselves confronted with
the problem of how to make it secure against such disturbance. The means by
which this problem has been solved in the Soviet Union is the government
monopoly in foreign trade, which was introduced at the end of the twenties
and has stayed in effect ever since. It involves a measure of protectionism that
far exceeds what could have been achieved with an ordinary protective tariff
system, which was also discussed in the Soviet Union. The government monop-
oly in foreign trade in fact is an inevitable consequence of the planned economy
which has to operate according to the intentions of the controlling authorities.
During Stalin's era Soviet trade was characterized by the restriction of
importation to producer goods, in order-to quote the dictator-"to obtain the
necessary technological equipment even before the victory of the proletarian
revolution is achieved in one or several of the capitalist countries." Another
characteristic was the pursuit of autarchical aims. Apart from the fact that
the political aim of autarchy corresponds to the principle of central planning,
the Soviets obviously feared that they might become too dependent economically
on the capitalist countries. It is hardly surprising under these circumstances
that in the thirties Soviet foreign trade dropped below the modest level that
prevailed in Tsarist Russia.
In the postwar period the defensive Stalinist formula ; that is, the aim of
preventing the Soviets from becoming economically dependent on capitalist
countries, has been given an offensive twist insofar as an effort has been made
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R0005(f020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
to attach economically weaker countries to the Soviet economy. In the course
4f such efforts considerable political capital may be invested when circumstances
demand, as in the cases of Iceland, Finland, and Yugoslavia.
In a truly virtuoso manner this pattern has been applied in building up the
Eastern Communist market properly speaking, that is in the economic integra-
tion of the satellite nations within the Comecon. (Compare Swiss Review of
World Affairs, March and April 1961.) It has long ceased to be a secret that
the economic dependence of the satellites is being deliberately developed for
political purposes. The sovietization of, that is, the systematic withdrawal of
freedom from, these countries has already progressed very far and it is clear
that the Soviets intend to assure the unity of the East by means of this
enslavement.
From this point of view the argument that Soviet concentration on antra-East-
bloc trade has been encouraged by the embargo imposed by the United States
and the NATO powers on goods of strategic importance, appears greatly weak-
ened. Although the embargo hit the Soviet Union at a vulnerable spot, its impact
should not be overestimated. For to the extent to which the West sends
strategically nonimportant goods to the East, the Soviets are put in a position
to transfer productive power to their industrial centers of gravitation. As a
result of the imperfect mobility of the factors of production, however, the effect
of the embargo is only partially compensated. For this reason there can be no
doubt that by means of a forced propagation of East-West trade the Soviets would
like to ultimately break down the embargo or at least weaken its effect.
By its very nature Soviet planned foreign trade must observe the official plan-
ning periods. This explains the Soviets' tendency to seek long-term trade agree-
ments, to combine the trade agreements with consular arrangements, and to
demand diplomatic immunity for the members of their trade missions. It is clear
that such long-term economic agreements with the East bloc can considerably
reduce the West's freedom of movement, since they make short-term adjustments
to changing conditions difficult or impossible. In addition, the Soviets' fidelity to
agreements Is always a doubtful matter. They do not hesitate to break agree-
ments for the sake of some tactical advantage. Long-term economic ties and
diplomatic immunity, moreover, provide them with excellent oportunities for
economic espionage and for the establishment of contact with Western business
and industrial interests that are in sympathy with them. Every Western busi-
nessman entering into trade relations with the Communist East must realize
that he is not making contact with a market in the western sense of the term ;
the Communist market is not based on consumer demand, but on the arbitrary
political decisions of the Soviet foreign trade authorities.
The sporadic demand that can be observed arising in some of these Communist
markets is a result of the imperfect functioning of the planned economy. Para-
doxically, the safety valve for the correction of either an excess or a lack of pres-
sure in the planned economy is trade with the capitalist nations. It can thus
be said that the free world, which entrusts its individual enterpreneurs with a
large measure of economic responsibility, helps to keep the mechanism of the
Communist economy functioning. That sporadic demand, moreover, can be a
result of an effort to level out the development of the various branches of the
planned Soviet economy, which in fact is characterized by striking discrepancies.
One way to even out these discrepancies and in general to reduce the lag behind
the West is to purchase highly qualified industrial goods in the West. Thus the
free world supports the Soviets in their efforts to raise their economy to Western
levels without having to make a corresponding productive effort of their own and
without exposing themselves to competition. In this connection numerous
Western enterprises appear most eager to supply the Soviets with highly qualified
goods while losing potential markets in the developing countries.
A further unfortunate aspect of East-West trade consists in the fact that a
market situation in which a monopolistic (Soviet) demand meets with a diversi-
fied (Western) supply always leads to more advantageous prices for the former.
By continuing to compete for orders from the East, the West actually helps the
East to realize its political aims-at low prices ! That the Soviet Union does
not make use of this opportunity even more frequently is not due so much to the
reserve of Western entrepreneurs as to the fact that the industrialized countries
have for some years now been absorbed in their own economic expansion. By
developing its trade with the free world the Soviet Union is of course not pri-
marily interested in an improvement of the situation of the Russian consumers.
The planned economy can hope to function fairly well only on the condition that
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
68 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
it accepts chronic shortages-only then can it expect to have an adequate outlet
for its production, which is not regulated by the needs of the people. For this
reason the Soviets must repudiate the system providing for a diversified supply
of consumer goods.
The fact that by an uncontrolled and unconditional trade with the Communist
East and the free entrepreneurs of the West support the economic foundations
of the very regime that constitutes the greatest danger to them should at least
persuade them to establish a concerted policy. An international organization
such as the OECD could assume the task of coordinating Western policy in
trading with the East. Such a procedure could correct the impression that cer-
tain interests in the West do not seem to realize the threat of Soviet totalitarian-
ism, and do not properly appreciate the nature and importance to them of
political freedom and its institutions. It would make clear that there Is no
"neutral" trade with the East.
Senator KEATING. Thank you very much, Mr. Gwyer. That will
conclude your testimony.
Tomorrow, we will hear from witnesses of the Defense, Commerce,
and State Departments. I cannot give the names of them, because
we have asked for those to appear who can furnish specific informa-
tion with regard to shipments, and it is probable that there will be
more than one representative of each of these departments. They
will appear tomorrow morning and the hearing is now adjourned
until 10 :30 tomorrow morning.
(Whereupon, at 3:30 p.m. the hearing was adjourned until 10:30
a.m., Tuesday, October 24, 1961.)
APPENDIX I
EXHIBIT No. 0
[Translation-Stusslan ]
("Mekhanizatsiya I avtomatizatsiya proizvodstva," No. 5, May 1961, pp. 48-51)
HIGH RELIABILITY AND DURABILITY OF MACHINERY AND INSTRUMENTS Is A MATTER
Or PARAMOUNT IMPORTANCE
The plenary session of the Technical and Economic Council of the State Com-
mittee on Automation in Machine Manufacturing with the Council of U.S.S.R.'s
Ministers, held in February, was devoted to problems associated with the in-
crease In reliability and service life of machines and instruments.
The plenary session was opened by P. N. Goremykin, Deputy Chairman of
the Technical-Economic Council.
V. T. Nezhdanov (All-Union Scientific Research Institute of Electromechan-
ics) spoke on the causes of Inadequate reliability of currently manufactured
low-voltage equipment. For instance, the series A-2000 automatic equipment has
a low carrying capacity, contacts get overheated, contact points become fused :
e.g., the Ul'yanovskiy Plant has developed new types of automatic equipment
with a longer service life. Cartridges used to burst in series PR-1 fuses, and
now this series Is being replaced by improved PR-2 series. Contacts burn out
In the knife switches manufactured by the Uflmskiy Plant. Direct current con-
tactors operate unsatisfactorily, and a new KPV-600 series has been developed
in which a number of deficiencies of earlier, contactors were eliminated. Nezh-
danov expressed an opinion that one of the causes of this low reliability can be
attributed to the insufficient volume of testing of products ; it often happens that
the materials used do not correspond to requirements expected from equipment.
B. I. Kuznetsov, chief designer of electrical machinery at the Khar'kovskiy
Electromechanical Plant, pointed out that in the field of machine building the
work of classifying and studying the causes of unreliable operation and of
exploring ways for improving reliability is not carried out in a satisfactory way.
An average of about 20 percent of all machinery installed is subject to general
overhaul every year. Small capacity electrical machines account for a large
percentage of damages.
The overwhelming majority of damages Is accounted for by stator and arma-
ture windings. One of the causes of a premature breakdown of machines is their
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved;E e1 a?6120~MMK4T I 'O215P 64b0 46*0050&020022-5
improper operation. The quality of manufactured electrical machines is not
always at the proper level. For instance, at the electric power stations of the
Soyuzglavenergo, 37 percent of damages to generators and 25 percent of damages
to electric motors were caused by manufacturing defects.
A frequent cause of machinery breakdown is the excessive heating of insula-
tion; it is necessary to use insulating materials with a greater resistance to
heat. Besides the protected structure, a closed air-ventilated structure is being
provided in the development of new series of electric machines, both intended
to improve their operation ; use is being made of heat-resistant wires, varnishes,
etc.
A. I. Sprishevskiy, Director of the All-Union Scientific Research Institute of
the Bearing Industry, discussed measures taken to increase the reliability of
bearings. The Institute develops new methods of calculating and designing
methods (for high frequencies in particular) which will increase the reliability
of bearings ; the design of bearings is being modernized in order to improve con-
tact stresses along the width of raceways. The Institute is also conducting
work to develop new designs of highly reliable bearings. The introduction of
automated lines, which would include automatic transfer and inspection ; sort-
ing, lubricating, and packing operations are of tremendous importance. Wider
use should be made of heat-resistant steels.
Doctor of Technical Sciences D. N. Reshetov (Experimental Scientific-Research
Institute of Metal-Cutting Machine Tools) reported the work being done to
Increase the reliability of machine tools. The yearly expenditure for restoring
the productive capacity of existing machine tool stocks is higher than the whole-
sale value of new machine tools manufactured during the same year. The cost
of a general overhaul on the average amounts to 35 to 70 percent of the cost of
machine tools, while the labor input it requires is higher than the labor input
required for the manufacture of new machine tools. A total of one-third of all
Soviet machine tools are employed in repair operations.
The following are the main causes of breakdowns : tearing away the workpiece
from the chuck or fixture ; tool breakage ; collision of moving parts with each
other or with stationary parts ; gear shifting at high speed ; removal of chucks
from spindles having threaded ends (stripping of threads) ; accidental engaging
of a cutting tool into the work piece with the presence of a considerable backlash
in the feed screw ; breakdown of elements of automatic electrical and hydraulic
systems. The machine tools should be equipped with power indicators ; chucks
and mechanized clamping should be improved ; wider use should be made of
travel limiting stops; standards for an optimum shape of tooth-roundness and
system of gear shifting at slow speed should be introduced.
Wear is the basic factor which determines the durability and, consequently,
also the reliability of machine tools. Among the driving gears, crowns of teeth
shifting gears are subjected to greatest wear. A barrel-shaped rounding of
crowns increases durability, two or threefold.
Open "friction assemblies" (otkrytye uzly treniya) should be eliminated; use
should be made of hardened guides, running screws, and lubrication should be
improved. In order to increase the resistance to wear, various materials should
be used-e.g., friction pairs and metal-plastic.
Increased reliability of lubrication may be attained by the use of forced lubri-
cation with a volumetric control or blocking which would stop the function of a
machine because of lack of lubricant.
The reliability of transfer machines is characterized by the frequency of break-
downs and the duration of the time lost in restoring the workability of tools and
fixtures ; electric, hydraulic, and pneumatic equipment ; loading, transfer, and
clamping devices ; and other machine tool mechanisms.
The observed breakdowns (otkazy v rabote) of hydraulic drives are caused by
wear of valves, wear of control elements, upsetting of controls (because of inade-
quate fixation, low quality of springs, etc.) and also because of the breakdown. of
electrical equipment. In modern automated machine tools the requirements for
the reliability of electrical equipment, and especially electrical apparatus, are
continuously increasing. At the present time, the percentage of breakdowns in
automatic machine tools and transfer machines caused by breakdowns of elec-
trical equipment is considerable and must be drastically reduced.
The majority of malfunctions is related to the operation of relay-contact
apparatus.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Apprcjed Fors&2Wjq36j iv~As6406000020022-5
It is essential to take the following measures : increase the service life of equip-
ment; design series of electrical equipment having common reliability, dimen-
sion, and methods of assembly requirement ; standardization of two categories of
electrical control equipment according to its durability, areas of application, etc. ;
introduction of contactless equipment without moving parts.
A reliability index for machine tools should be included among the more impor-
tant factory indices. It is essential that the manufacturing plant be respon-
sible for the average service life of manufactured tools and interested in using
assemblies and equipment that would assure a realistic increase in the service
life of machines.
V. I. Roshchupkin, Deputy Director of the State Design and Scientific Research
Institute for Petroleum Machinery, reported on endeavors to improve petroleum
machinery. Mechanization of labor consuming drilling, extraction and refining
processes and transition to automation of these processes depend to a large
degree on the reliability of machinery, mechanisms, equipment, and installa-
tions. The experience of his Institute demonstrates that sometimes even well
engineered machines and mechanisms do not show a degree of reliability of all
the elements of the system which would expedite their automation.
Frequently, the low quality of materials has a negative effect on the dura-
bility of products.
The use of general purpose electrical equipment in drilling installations results
in a sharp drop in reliability. In many cases the service life of machines is
shortened owing to a lack of match between electrical equipment and operating
conditions. It is necessary to manufacture special electrical equipment for
certain types of machines and installations.
The reliability of manufactured machinery could be greater if institutes and
manufacturing plants had greater possibilities of testing individual assemblies
and machines. The difficulty of finishing large new equipment under laboratory
or plant conditions is a specific trait of the machine-manufacturing petroleum
industry.
It is necessary to carry out the final finishing under industrial (field)
conditions.
The Institute is conducting experimental investigations oriented at a maximum
improvement of the reliability and durability of petroleum equipment.
A. D. Gridin, Chief Engineer of the State Experimental Institute of Design
and Construction for the Coal-Machinery Industry, said: "Owing to the multi-
plicity of links in the consecutive chain of equipment operating in coal mines, an
insufficient reliability of individual machines brings about a considerable decrease
of the time of useful work. Downtime of coal combines due to breakdowns and
shutdowns of the conveyor operation amount to 20 to 25 minutes per shift."
In order to improve the reliability and durability of mining machines it is
necessary to study their loading conditions to analyze the breakdowns and shut-
downs occurring during their operation; to design mining machines making
maximum use of already developed standardized assemblies ; to make wide use
of hydraulic drives ; . etc.
The technological equipment used in the textile industry of the U.S.S.R. is not
sufficiently reliable-said V. A. Shalashov (VNIILtekmash). Downtime caused
by during-shift repairs, . . . result in a low coefficient of equipment utilization.
One of the causes of low reliability of textile equipment is the fact that the
precision and resistance to wear of assembliesand parts anticipated in the design
is not being observed by the manufacturer.
The fact that textile equipment is very poorly equipped with automatic control
devices and instruments represents another important cause of its low reliability.
The automatic control systems used in worldwide practice are usually either
specially designed for or are adapted to the control of technological processes
employed by the textile industry. Soviet electrical engineering and instrument-
making industries do not manufacture them.
One of the causes of unreliability is the low quality of the so-called auxiliary
materials (shuttles, etc.) which are an inherent part of textile machinery ...
In worldwide practice shuttles are made of hard wood, while in the U.S.S.R.
they are made of beech ; as a result a shuttle serves for 1.000 instead of 2,000
hours. Auxiliary materials are being manufactured without taking into account
increased speeds for which modern equipment is calculated.
S. I. Akopyau, Director of the Automobile and Tractor Scientific Research Institute, told of the of inadequate reliability of tractors are low resistance to wear and insufficient
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved el?os ,QQ4f3/ MAT 4jW34?.R%00500'Qg0022-5
strength. Low quality of products (electrical equipment, rubber, lubricants, and
fuels) reduces the reliability and durability of tractors and accelerates their
wear. Also inadequate servicing impairs the reliability and operation of trac-
tors. Thus, the wear and tear of D-54 tractors is on the average two- or
threefold higher with the majority of the users than with those who observe
basic rules of servicing.
There is an inadequate inspection of design and manufacturing technology of
new model tractors before their release for lot production. Plant tests are
usually conducted on an inadequate scale, accelerated stand testing is prac-
ticed on a very limited basis, and forced operational testing is not employed at
all. It is necessary in nearest future to introduce into tractor manufacturing
the most wear-resistant coatings and platings which as of now are not being
used at all,
Academician A. I. Berg submitted a report which points out that one of the
chief indices of reliability of most machines is the full use of their capacity at a
minimum outlay for repairs. In electrical, water, gas, and heat supply systems
and in refrigeration, the key factor of reliability is the continuity of supply
of the above agents.
In electric power systems the use of automatic protection and control, as well
as of telecontrol, telesignal, and telemetric devices, which at the Moscow Regional
Power System Administration operate with a utilization factor of 96-99 percent,
is inadmissibly delayed. Complex automation and telemechanization of electric
power systems, which present sure means of improving the reliability of the elec-
tric power base of the country, are still developing very slowly.
In metallurgy the reliability of the basic operating units depends mainly on the
reliability of support equipment. Thus, interruptions in operations of charging
devices frequently hinder the normal operation of blast furnaces. (Enumera-
tion of specific cases of breakdowns.)
In blast and open hearth furnace shops-control, measuring, and regulating
devices frequently break down owing to large quantities of dust and aggressive
gases in the air and sharp temperature variations. (Enumeration . . . . )
Automation, which is the best guarantee of safety and of the high product
quality, is being introduced but slowly in the chemical industry. The absence
of a continuous and reliable automatic control of raw materials frequently
upsets the optimum conditions of equipment operation. Universal pneumatic
regulators break down early tinder the effect of aggressive environment (medium).
Breakdowns occur in servomechanisms owing to insufficient protection against
corrosion or gumming.
In chemical processes a breakdown of one piece of equipment in a produc-
tion flow causes a violation of the technological process along the entire line and
also causes defectives which contribute to heavy losses. For instance a break-
down of one of the links in an equipment complex for the manufacture of a
viscose fiber only in one day causes losses amounting to five percent of the value
of the unit. (Enumeration....)
Inadequate reliability of many agricultural machines is often one of the causes
of an overextended timetable for both planting and harvesting. The reliability
of self-propelled agricultural and other machines equipped with internal com-
bustion engines depends to a large degree on the performance of ermines. Thus,
the formation of cracks in cylinder blocks, caps, and sleeves, and breakage of
connecting rods and crankshafts in diesel engines result in the s`a.ndstill of
numerous machines and considerably increase the cost of their opcration.
In the machine manufacturing the reliability of operation of equipment not
only predetermines the high quality of products, but is also a prerequisite' for
the effectiveness of its overall automation. The reliability of equipment opera-
tion and of manufactured machines depends to a large extent on the quality of
basic materials supplied to machine manufacturing plants. The automation
equipment is especially sensitive to the deviation of their indices from the rated
values. (Enumeration .... )
The overwhelming majority of manufacturing equipment mechanisms is set
into motion by induction motors of 0.6 to 100 kilowatts; there are over 12 million
of these units in the U.S.S.R. with a total capacity of 70 million kilowatts.
.They consume 40 percent of the total electric power generated in the country.
However, their service life is not long. More than 20 percent have to undergo
a general overhaul after 3 to 4 years. About 90 percent of the motors break
down as a result of damage to windings traced to improper winding operations
and the poor quality of insulation compositions with which they are impregnated,
insufficient protection against breakdown conditions, mismatch between the
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appr7 ed Fc ' Jam, / jd P6f4g~ p U.S.S.R.
type of the motor and the conditions of its use, and other reasons. As a con-
sequence, whole shops for rewinding of motors employed by mining transporta-
tion equipment have been set up at numerous mining enterprises.
Numerous defects in electric drive operation cause a premature wear of switch-
ing equipment. The guaranteed mechanical resistance to wear of Soviet a.c.
contractors lies within the limits of 5 to 10 million cycles instead of the 20
million of some foreign-made contactors. Actually, the average number of
cycles is about 20 percent of that guaranteed. The basic cause of premature
breakdown in contractor operation is traced to deficient manufacture.
(Enumeration ....)
Increased reliability of elements, components, and whole units of engineering
equipmentstill does not solve the problem of reliability of a whole unit, united
by a single system of automatic control. The use of little-sensitive, inert, or
unstable pickups does not provide true information on the status and changes
of controlled parameters.
Lack of stability of mechanical, heat-resistant, chemical, or radiation prop-
erties of the medium quickly leads to a breakdown of memory units of pickups.
Unreliability of many pickups is one of the basic reasons for breakdowns in
the functioning of automatic control systems.
Other frequent cause of breakdowns in automatic control systems is accounted
by unreliable contact devices installed in potentiometers, relays, commutators,
and shot-off equipment.
Not enough attention is paid to the problem of reliability despite huge losses
incurred by the national economy as a result of breakdowns and downtime of
industrial equipment.
In a number of organizations we already have ways and means for centralized
followup of individual factors contributing to the unreliability of technical
equipment. Thus, the State Committee on Radloelectronics of the Council of
Ministers U.S.S.R. has more than 130 laboratories at industrial enterprises
investigating and Improving elements of radioeleetronic equipment according
to one single plan. The Moscow Regional Power System Administration has
a central inspection service for breakdowns, which registers and investigates
all cases of breakdowns in the Moscow United Power System, while the inspec-
tion service of the Main Power Administration of the Gosplan U.S.S.R. generalizes
and analyzes the data on breakdowns of power systems on a statewide scale.
Evidently, this practice could be extended to other branches of the national
economy.
Theoretical and experimental investigation of all Indices of reliability should
be substantially expanded. The scarcity of nomenclature of scientific instru-
ments having a high degree of precision lowers the quality of experimental in-
vestigations and renders doubtful the authenticity of results obtained. In order
to ensure the reliability of newly developed devices It Is essential to equip labora-
tories with modern instrumentation. Scientific instrument manufacturing is
far from satisfying the requirements of national economy or the needs of science.
One of the most frequent causes of unreliable function of machines Is the dif-
ference in the service life of its Individual units, assemblies, and parts, as a re-
sult of which the downtime of machines often exceeds the length of operation.
The sums of money lost for repair in some cases exceed ten times the cost of
machines. For instance 30 percent of tractors, up to 60 percent of automobiles,
up to 25 percent of construction machinery are systematically idle. Diesels in-
stalled on dump trucks manufactured by the Minsk Plant with a load capacity
of 25 tons work only 1,000 to 1,200 hours, that Is three to four months, prior to
a general overhaul ; electric motors or vibrators function 200 to 300 hours ; lu-
bricating pumps used In hydraulic drives of machines have a service life of
800 to 1,000 hours; many assemblies of agricultural machinery do not last a
..single season. There Is a need for a method of calculating designs for optimum
service life with an economic justification of the length of service of Individual
parts and assemblies which undergo a maximum wear, as well as the design in-
volved, taking Into consideration the obsolescence of equipment.
Plants should have at their disposal good experimental shops with fully
modern and constantly modernized equipment which would permit to inspect and
make more precise the technology of manufacture with the Idea that it would
be possible to install on manufactured equipment the latest achievements and
In such a way facilitate the preparation for a lot and mass production.
During the plenary session a report was delivered by the Chairman of the
State Committee for Automation and Machine Manufacturing with the Council
of Ministers of the U.S.S.R., A. I. Kostousoy.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved Ie set 03/11: CIA-RDP64B00346R000500 20022-5
A0 /0I MATERIALS TO THE U.S.S.R. 3
In a resolution accepted by the plenary session, basic measures were outlined
for the increase of reliability of machines, equipment, and instruments. In
particular, the need was pointed out for a search for new methods which
would contribute to a drastic improvement of reliability. To this end the Insti-
tutes should intensify the respective scientific investigations and develop the
following theories on : the reliability of technical devices, the calculation of the
reliability of complex multielement systems, the forecast of failures, and the
automatic provision of reserve power. They should work out and ratify a single
terminology for reliability, and make researches for new materials and semi-
products which, owing to their physical and chemical properties, would suit the
conditions under which the manufactured machines, apparatus, and instruments
would be used. They should study the nonstationary processes in systems and
the dynamics of machines, equipment, and instruments in order to ascertain the
reliability of their operation under transient conditions. It was found necessary
to organize at the Scientific Research Institutes of the State Committee on Auto-
oration and Machine Building laboratories to study reliability and to work out
a method that would predetermine on a scientific basis the economically sound
service life of equipment and technical products, taking into account their phys-
ical wear, repair costs, and obsolescence. On the basis of these methods it will
be possible to work out the indices of maximum durability.
When working out and comparing specifications it will be necessary to in-
clude in them the characteristics of operational conditions, standards of relia-
bility, and of optimum service life and methods of reliability inspection. Calcu-
lation and experimental materials characterizing the reliability provided for in
the design should figure in technical projects. A systematic study of operational
conditions of machines, equipment, and instruments should be organized with
the participation of designers. A regular modernization of designs with substi-
tution of elements and assemblies having a lowering effect on reliability should
be carried out. Methods of accelerated testing of materials and designs and the
technical means required for this purpose should be worked out on the basis of
modern techniques.
It is necessary to introduce a progressive technology providing for a higher
reliability of manufactured goods; to develop specialization and cooperation in
the production of standardized parts and assemblies, and also of completing
parts ; to organize effective control of the conditions of material and semifabri-
cated items coming to a plant; to introduce means of continuous control (in-
spection) on machine units which automatically would assure the required toler-
ances during the machining processes ; to apply widely self-adjusting systems
of automatic control and of optimizing control machines ; to conduct acceler-
ated testing of manufactured machines, equipment, and instruments. It is nec-
essary to organize an accurate and consolidated system for collection of sta-
tistical data on the operation of machines, equipment, and instruments, and
also a qualified processing of these data and an analysis of subsequent informa-
tion on obtained results for the scientific research, design, and industrial organi-
zation ; to increase the quality of employed materials and in the first place the
quality of lubricants; and completely revamp and improve the organization of
repair.
APPENDIX II
EXHIBIT No. 7
SOVIET METAL-CUTTING MACHINE TOOLS : ASSERTIONS AND FACTS 1
(By Joseph A. Gwyer, Library of Congress, Washington, D.C.)
Recent scientific developments in the Soviet Union, culminating with the
launching of the Sputnik, have reawakened the interest of the American people
in the technological and industrial progress of that country. During the past
four years, numerous studies and reports have been written on the various as-
pects of the industrial and technological race between the United States and
the Soviet Union. Unfortunately only few were on the subject of metal-cutting
1 NOTE.-The subsequent discussion is limited to metal-cutting machine tools only. The
Russian definition of functions of metal-cutting machine tools (metallorezhushchiye stanki)
is the name given to any machine of that class, which taken as a group, can build other
machines and includes such as lathes, drilling machines, borers, grinders, etc.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
74 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
machine tools, which are of central importance to the achievement of an indus-
trial capability. American machine tool engineers are particularly interested in
the growth of and developmental trends in the Soviet metal-cutting machine
tool Industry. The latter, if judged by statistics alone, manufactures large
quantities of metal-cutting machine tools. Some of the reports on this subject
assert that the Soviet machine tool industry has assumed a quantitative lead
over the machine tool industries of the United States and other Free World
countries, that Soviet metal-cutting machine tools are relatively modern, and
that some units are produced three to four times more efficiently.
A survey of unclassified Soviet technical literature does not support the above
assertions. Quite the contrary, it shows that the Soviet industry specializing
In the production of metal-cutting machine tools lags behind the United States
in terms of output of physical units and is at least 15 to 20 years behind the
United States in machine tool technology. The past and current Soviet em-
phasis on quantity rather than quality of machine tools exerts a detrimental
effect on the production of modern equipment. Plant managers and employees
alike are reluctant to retool for new modes. This is especially true when it
means a protracted downtime foregoing lucrative premiums for reaching and
surpassing assigned quotas with obsolete World War II models. In 1016, from
92 to 96 percent of Soviet industrial-type metal-cutting machine tools programmed
for production in lots greater than 10 units by the 48 plants of the former Min-
istry for Machine Tool and Tool Industry were of World War II design. Al-
though the Soviets have made some progress since 1956, their situation as of
this moment is unsatisfactory. This may explain the Soviet drive to dump
on the markets of underdeveloped countries of the world the relatively inefficient
and obsolete machine tools manufactured at home at a constantly increasing
scale, and the paradoxical desire (in view of their boasted technological
supremacy) to acquire Western European and America's most advanced metal-
cutting machine tools. This can be only because the latter have built into them
the technical and engineering knowledge the Soviets are not in a position to
duplicate.
According to Soviet reports, the fulfillment of production goals as set by the
Seven-Year Plan (1959-65), will depend on how successful is the Soviet machine
tool industry in solving the problem of producing technologically modern and
complex equipment suitable for automation. Soviet progress in this respect has
been very slow, suggesting that the fulfillment of goals is in great danger, hence
such great Interest of the "Stankoimport" in Western machine tool technology.
Perhaps most characteristic of the existing situation is the statement by the
Director of ENIMS, A. P. Vladzievskiy, who, on 21 March 1961, before the
gathering of Moscow's scientists, stated that "* * * the personnel of the insti-
tute together with workers of machine tool manufacturing establishments
pledged themselves to produce precision automatic machine tools, which until
now had to be procured from abroad, particularly from the U.S. We have fully
resolved, said the speaker, to overcome the lag in this important area * * *'
Comparisons of efficiencies in manufacturing machine tools here and in the
U.S.S.R. are of questionable value since it would be erroneous to equate man-
hour requirements for a modern, 1961 model jig borer or grinder manufactured
in this country with a World War II model jig borer or grinder manufactured
in the Soviet Union today. The Soviets themselves report that the labor pro-
ductivity in their industry specializing in the manufacture of metal-cutting
machine tools is only 53.7 percent of that of the U.S. machine tool industry.
Furthermore their calculations assume that their currently manufactured
machine tools are on approximately the same technological level, an assumption
quite absurd in view of available data. Perhaps the best proof of Soviet in-
efficiency can be found In the case of the much-talked-about 1K62 lathe manu-
factured by "Krasnyy proletarly." Only by introducing mass-production methods
has the Soviet Industry reportedly decreased the man-hour requirements to pro-
duce this relatively simple machine to a level about 20 percent below that re-
quired for similar equipment manufactured only on a small lot basis In the
United States.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S,R. 75
The above conclusions are based on a review of data which is readily avail-
able to anyone willing to scan the vast holdings of Soviet technical journals
and monographs in the Library of Congress. The subsequent discussion, which,
for obvious reasons is fully documented, covers (1) the overall volume of metal-
cutting machine tools manufactured in the Soviet Union and the volume of
industrial-type metal-cutting machine tools' manufactured in 1956, (2) the
obsolescence of industrial-type metal-cutting machine tools, (3) degree of con-
centration, (4) production of transfer machines, and (5) productivity.
The assertion that the Soviets are outproducing the United States machine
tool industry, at least in units, may be dismissed by simply referring to the
Facts for Industry, a U.S. Bureau of Census publication. For the years 1956,
1957, 1958, and 1959, this publication gives the United States industry credit for
manufacturing more or almost as many metal-cutting machine tool units as the
Soviet reportedly manufactured during the same period.
In comparing the output of their machine tool industry with that of the
United States, the Soviets use Bureau of Census figures for the simple reason
that their totals for various years include both light and heavy metal-cutting
machine tools, Soviet figures give man-hour requirements per industrial-type
machines (excluding casting and forging operations) ranging from 50 to 137,000
man-hours.' A definite indication as to the size and complexity of some of their
industrial-type machine tools may be found in their 1956 production program,
which shows that only 122 models were produced in 48 plants entering the former
Ministry for Machine Tool and Tool Industry on a 10-units-or-more lot basis, the
lots ranging in size from 10 to 6,000 units.' The totals for the 118 lots, for which
figures were supplied, amount to 32,000-54,000 units.
These machine tools are basically what we call the industrial type and they
correspond, at least in their outward appearance and their function, to American-
made machine tools. In 1956, the Soviet Union claimed a production of 124,000
metal-cutting machine tools. If the latter figure Is correct, the question arises
as to the nature and character of the 70,000 to 92,000 units that were not pro-
duced on a lot basis. Available data show that prior to the outbreak of World
War II, the Soviets were manufacturing about 200 models of machine tools and
during postwar years stepped tip the number of all kinds of models to about
1,500 in 1956. How many of these models were manufactured in 1956 is not
known, although the Soviets refer to a figure of 847 models' of which about 270
models as being produced.' These models produced in 1956 ranged in size from
the 82-kg. (0.0 kw.) Model 2A106 upright drill valued at 1,050 rubles to the 80-ton
(28 kw./spindle) four-spindle milling planer valued at 567,800 rubles.' On the
assumption that the higher figure of 847 models of industrial-type machine tools
is the correct one and with data on hand that only 118 models were produced in
lots greater than 10 units, another question arises. How large is the production
share accounted by the 729 models (847 less 118) produced in lots smaller than
10 units each?
From the above it is clear that if all these models were produced in lots of
up to 9 units each, the total could not exceed 6,561 units.
The veracity of the figures listed in the 1956 production program can be
ascertained from the following table. It shows an agreement between the pro-
duction program for various types of machines and the official metal-cutting
machine tool production figures for the Soviet Union.
s Noxs.-Industrial-type metal-cutting machine tools are defined as "* * * power driven,
metal working machines, not portable by hand, that cut metal in the form of chips * * * "
' Kuznetsova, K. and G. Sergeyeva, "0 sopostavlenii urovnoy prolzvoditel nosti truda
v stankosstroyenii SSSR I SShA", in Vestnik statistiki, No. 6, 1960, V. 26.
a Zhdanov, A. I., Metodika opredeleniya ekonomicheskoy effektivnosti modernizatsil
oborud ovaniya, Moscow. Gosplanizdat, 1959, pp. 97-109.
8 Bol'shaya Sovetskaya Entslklopediya, Vol. 40, p. 480.
7 Kuznetsova and Sergeyeva, op. cit., p. 26.
4 Shuvalov, In. A. and V. A. Vedenskly, Metallorezhushchlye stanki, Moscow, Mashgiz,
1958, pp. 221-240.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
76 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
TABLE I.-Comparison of official totals for 1956 with the production program
Official
totals, units
Number of
models
world war
If models
------------------------------
Turret lathes
2, 619
1,830-
3,130
(4)
---
Automatic and semiautomatic lathes---------
1, 798
1,110-
2, 550
(8)
Milling machines --------------------------
8, 596
4, 400-
8,980
(18)
Gear cutting machines-----------------------
2, 390
1,250-
2,880
Borers
------------------------------
678
310-
930
(4)
--------
Planers
-----------------------------
427
440-
760
(3)
---------
chers
Br
----
332
200-
600
(2)
o
--------------------------------
Grinders-------------------------------------
5,225
3,180-
6,500
(20)
Total ----------------------------------
Sources: For official 1956 U.S.S.R. totals, Ts.S.U. pri Sovete Ministrov SSSR, Narodnoye khozyaystvo
SSSR v 1959 godu. Statisticheskiy yezhegodnik, Moscow, Gosstatizdat,Ts.S.U. SSSR, 1960, p. 211. For
the 1956 production program-Zhdanov, op. cit., pp. 97-109.
The above agreement strongly suggests that In 1956, out of the total number
of 124,000 metal-cutting machine tools manufactured in the Soviet Union, only
32,000-54,000 units produced in lots greater than 10 units and a maximum of
6,500 units produced in smaller lots were of the industrial type, that is ' * *
power-driven, metal-working machines, not portable by hand, that cut metal
in the form of chips," and valued at a minimum of 4,000 rubles each. Even if
the higher figure of about 60,000 units is used, we may safely deduce that in 1956,
more than 50 percent of Soviet metal-cutting machine tools manufactured were
small units.
A further substantiation of the validity of this conclusion may be found in
the following calculations. Between March of 1955 and the end of 1959, the
Soviet stock of metal-cutting machine tools rose from about 1.7 million to about
2.0 million units, an increase of about 300,000 units.' During the same period
the Soviet industry reportedly manufactured about 640,000 units (90,000 during
the ten months of 1955, 124,000 in 1956, 131,000 in 1957, 138,000 in 1958, and
147,000 in 1959).'o Since the past replacement rate for wear, tear, and ob-
solescence has ranged from 1.0 to 1.1 percent per annum and there is no in-
formation available to contradict these figures for the 1955-60 period, it should
be assumed that about 100 thousand units from the newly produced machine
tools were used for that purpose during the 1955-59 period. This leaves us
with a figure of 540 thousand units to augment the existing stocks. Actually,
the stocks show an increase of about 300 thousand units only, strengthening this
author's conviction that the 240 thousand or more units do not belong to the
category of industrial machine tools and that even the Soviets could not classify
them as such for such inventory purposes.
It appears to this author as utterly inconceivable that the Soviets would
bypass such a propaganda morsel as the assertion that they are outproducing
the United States if they could only substantiate such an accomplishment. On
the contrary the Soviets constantly emphasize the relative backwardness of
their machine tool industry and the hope to attain the "present U.S. levels of
output" at least in physical units, by 1965.
Approximately two and one half years ago, this author stated that "* * *
It may be reasonably assumed that the bulk of current models turned out by
the Soviet industry approach in makeup, speeds, rate of feed, etc., the U.S.
models made during the late 1930's and during World War II * * *." 11 Since
then, the information reaching us on the "modernity" of Soviet machine tools
tends to change the above assumption into a firm and soundly based conclusion.
Some of this data follows.
In 1959, a study was published in the Soviet Union on the subject of indus-
trial plant modernization, and one of its appendixes carried a list of 118 models
of machine tools which in 1956 were produced in lots of -10 or more units by
plants entering the former Ministry for Machine Tool and Tool Manufacturing
Y Narodnoye khozyaystvo, op. cit., p. 76.
10 Ibid., p. 241.
a' Gwyer, J. A., "Soviet Machine Tools", in Ordnance, vol. 43, No. 281, Nov.-Dec. 1958,
p. 419.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 77
Industry (MSiIP)1e An analysis of this list shows that (1) these 118 models
with only very few exceptions were industrial type machine tools; (2) they
were manufactured in lots ranging in size from 10 to 6,000 units each in 48
major plants; and that (3) their combined output was between 32 and 54
thousand units as contrasted with the figure of 124 thousand for the Soviet
Union as a whole. A further inquiry into this list shows that approximately
55 models were of the pre-World War II design, 34 models were introduced
during the 1945-48 period, and 4 were introduced during the 1949-51 period.
Dates of introduction into production of the remaining 25 models cannot be
ascertained as of this moment 13
The combined output of pre-World War II models was 24.5 to 41.1 thousand
units (76 to 77 percent of the total) and those of the 1945-48 design was 5.3
to 10.5 thousand (16 to 19 percent of the total.) The following table brings to-
gether the age of models, number of units produced in 1956 in each age of design
group and the respective percentages :
TAnLE II. 1956 production program of 118 models of machine tools manu-
factured by 48 MSiIP plants
[In lots of 10 to 6,000 units]
Pre-World War II models -------------_------------------
1945-48 models----------------------------------------------
1949-51 models----------------------------------------------
Undetermined age------------------------------------------
Total-------------------------------------------------
Number of
models
Total of units
manufactured
24,586-41,000
5,271-10,540
500-860
1,453-1,530
Percentage
of total
76-77
16-19
1.5-1.6
6.5-2.4
It is apparent from the above table that about 96 percent of Soviet industrial
machine tools produced in 1956 on a lot-greater-than-l0-unit basis were of pre-
World War II and 1945-48 design.
Judging from the following statements by Soviet authorities on the obsolescence
of Soviet machine tools, the situation during the 1957-60 period changed very
little if any in this respect.
(Year statements were made precedes statements.)
1959: "The Moscow Plant for Internal Grinding Machine Tools has been pro-
ducing for the past 10 years a thread grinder which in terms of precision is
inferior to grinders manufactured abroad. Furthermore grinders produced at
this plant are of poor quality * * * " (Sources: Ganshtak, op. cit., p. 11; also
Promyshlenno-ekanomicheskaya gazeta, 24 May 1959, p. 1).
1957: "The Yegor'yevsk Plant "Komsomolets" is still producing gear-cutting
machine tools whose cutting speeds are three times lower and power of the drive
twice lower than of the same type of machine tools manufactured abroad * * *"
(Source: Pavlov, P., Snashivaniye I amortizatsiya osnavnykh fendov, Moscow,
Gosfinizdat, 1957, p. 140).
1959: "The Khar'kov Machine Tool Manufacturing Plant produces rotary
grinders for which there is an extremely great demand, but these grinders are of
an old design and. do not correspond to requirements of the industry. In 1957
the plant designers turned out a series of general purpose rotary grinders (14
universal, 3 automatic, and 9 semiautomatic units) but as late as 1959, the direc-
tors and managers of the plant did not take any measures to implement their
production * * *" (Source: Promyshlenno-ekonomicheskaya gazeta, 24 May
1959, p.1)
19 Zhdanov, op. cit., p. 97-109.
18 Ministerstvo stankostroyenlya SSSR, Metallorezhushchiye stanki, Katalog, Moscow,
Ts. B.T.I., 1949; also Ayzenshtadt, L. A. and S. A. Chikhachev, Ocherki po istorli stankos
troyenlya SSSR, Moscow, Mashgiz, 1957.
14 NOTE).-For the sake of brevity, the documentation of these statements consists only
of the name of publication, its number and date, and pages on which the statement can be
found. In instances where the information is derived from a monographic study, the docu-
mentation follows the standard accepted procedure.
76369-62-pt, 1-6
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
78 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
1959: "The Middle Volga Plant in Kuybyshev is still manufacturing a 1937
model relieving lathe, Model 1A81 * * *" (Source: Promyshlenno-ekonomiches-
l.aya gazeta, 24 May 1959, p. 1).
1960: "Soviet machine tool industry exceeded the 1959 production goals by
3.8 percent. This was attained by sidestepping the programs for the produc-
tion of modern and efficient machine tools as evidenced by the fact that the
Vitebsk and Kbar'kov machine tool plants, Vil'nyus plant for grinders, and
others continued in 1959 lot production of many machine tool models of obsolete
design, first introduced about 10 years ago * * *." (Source: Mashinostroltel',
No. 7, July 1960, pp. 3-4.)
1960: "* * * The 'Zahl'giris' Plant manufactures a 6P10 milling machine
at a cost of 32,000 rubles. The model 6N11 milling machine, similar to the
6P10, although more efficient, is manufactured by the Dmitrov Plant at a cost
of 13,730 rubles * * *." (Source: Voprosy ekonomiki, No. 5, May 1960, p. 61.)
1960: "* * * The Alapayevsk Plant started in 1958 production of a lathe
about 10 percent more efficient than the 1K36 and 1K37 models. Because of
the increased efficiency and precision of this new model it was decided to in-
crease its price by 30 to 50 percent above the price for the older models.
Actually the cost of manufacturing of this new lathe was 3.5 times as high as
for the original models * * *." (Source : Voprosy ekonomiki, No. 5, May 1960,
p. 62.)
1960: "* * * Moscow plant for grinders is still inadequately developing the
work preparatory to the production of high precision gear grinders. The de-
velopment of designs for precision grinders for the ball bearing industry is held
up at the Leningrad plant im. Il'ich. Production goals for special purpose
and unit head machine tools are not being met by Kolomna and Kramatorsk
plants for heavy machine tools * * *." (Source: Stank! i instrument, No. 7,
July 1960, p. 2.)
1960: "* * * Two-thirds of the 1958 output of machine tools by the im.
Kirov Plant in Vitebsk consisted of obsolete units. Plant management was
awarded for high output * * *." (Source: Voprosy ekonomiki, No. 5, May
1960, p. 65.)
1959: "* * * Horizontal borers mod. 2656 and 2620A manufactured in 1958
and 1959 by the Sverdlov Plant in Leningrad had defective electrical sys-
tems * * *. Grinders manufactured in Khar'kov are hazard to operate * * *.
The 6N82 milling machine manufactured in Gor'kiy is shipped to "customer"
plant without tools * * *." (Source: Promyshlenne-ekonomicheskaya gazeta,
19 Aug. 1959, p. 2.)
1960: "* * * The attention of the Union-Republic Councils of Ministers and
of the Economic Councils should be drawn to the unsatisfactory fulfillment of
the plan for developing and producing models of new and highly important
machines, etc. in 1959 and the first quarter of 1960. According to the plan 759
new types of industrial equipment were to have gone into lot (series) production
in 1959 and the first quarter of 1960, but the plan was fulfilled for only 425
of these * * * One of the reasons for this is that in a number of cases, the
first models were of poor quality and were shipped to consumers without final
finishing and testing * * *" (Source: A. Kostousov in Pravda, 15 July 1960,
p. 2.)
1960: "* * * Numerically controlled milling machines so essential to auto-
mation are being assembled on a lot (series) basis at the Gor'kiy plant. A.
Aristov and I. Yermak, both members of the State Committee on Automation
and Machine Manufacturing of the U.S.S.R.'s Council of Ministers, express
"regret" that the Soviet machine tool industry will be able to produce only 60
numerically controlled machine tools plus 400 attachments in 1961 * * *"
(Source: Isvestiya, 29 June 1960, p. 4. )
1960: "* * * A. Vyatkin, Chairman of the Committee on Standards, Meas-
ures, and Measuring Instruments with the Council of Ministers of the U.S.S.R.
stated that the Soviet industry specializing in production of standard tools,
jigs, fixtures, and other engineering accessories currently produces one-half of
the amount of standard cutting tools required by the industry and practically
no special tool and other engineering equipment such as attachments, dies for
forging and molding and accessories. Production of these is scattered through
numerous tool shops attached to most matching manufacturing plants which
manufacture them, using obsolete equipment and techniques at a cost two to
three times as high as it would take to manufacture the same in a specialized
plant * * *" (Source : Standartizatsiya, No. 8, Aug. 1960, p. 5.)
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT' Olt` STRATEGIC MATERIALS TO THE U.S.S.R. 79
1960: "* * * All Soviet machine tools, including the 1K62 lathe (Krasnyy
proletariyu) have defective and improperly designed safety features * * *"
(Source: Ekonomicheskaya gazeta, 20 Sept. 1960.)
1960: "* * * Some of the recently designed grinding machine tools for the
bearing industry by the im. Il'ich Plant in Leningrad are less productive than
similar old grinders modernized by local talent * *"' (Source: Stanki i in-
strument. No. 9, Sept. 1960, p. 2.)
1959: "* I * The Soviet machine tool industry began production of internal
grinders capable of spindle speeds of 80,000 r.p.m. * * *" (Source: V. V. Kon-
onenko, Osnovnyye napravleniya razvitiya peredovoy tekhniki i tekhnologii v
mashnostroyenii, .Kharkov, Izd-vo Khar'kovskogo univ. 1959-60.
1960: "* * * Successful accomplishment of the program of development of
Soviet precision machine-tool manufacture depends to a large degree on timely
and qualitative supply of machine tool manufacturers with components and
materials. Soviet bearing industry, the largest user of precision machine tools,
owes the greatest debt to machine tool builders; this industry has not as yet
provided the machine tool builders with high quality bearings of a required
assortment and has not yet solved the problem of producing bearings for internal
ditorial, Stanki i instrument, No. 4, Apr. 1960, p. 1-2.)
1960: "Soviet Union contemplates production of a total of 1,300 numerically
controlled metal-cutting machine tools during the 1959-65 period." (Source:
Gavrilov, A. N., S rremennoye sotstoyaniye napravleniya razvitiya teklcnologii
mashinostroyeniya i priborostroyeniya, Moscow, Mashgiz, 1960, p. 304.)
1960: An interview with designers and management of an OKl3 experimental
(design bureau) in Odessa conducted by the editors of Ekonomicheskaya gazeta
presents number of features of the production program of numerically controlled
machine tools at the Odessa Machine Tool Plant im. Kirov. The interview
makes an impression that these machines were produced for show purposes and
none is used in production processes. The im. Kirov Plant built its first numeri-
cally controlled million machine "OF 11" in 1958 and subsequently the model
"OF-46" machine. As of the date of the interview the plant was working on
three improved versions of the "OF-41."
Designers and builders in Odessa are peeved on ENIMS. The latter, during
one of the machine tool conferences in 1959, announced that it had finished
drawings for recording and (sensing) reading devices to be used with numeri-
cally controlled machine tools. After numerous excuses and delays, designers
of the Im. Kirov plant got hold of these drawings only to find them far from
completion. In the opinion of these designers, ENIMS does not want to be
bothered with the task of designing unified and standardized programing com-
ponents and does not want to coordinate the work in that direction by many
plants in the field. (Source: Ekonomicheskaya gazeta, 24 Dec. 1960, p. 3.)
1960: Recently installed transfer machines at the Khar'kov's plant "Sere i
molot" specializing in manufacture of diesel engines, are hand loaded and un-
loaded, and pieceparts coming off the line are reworked by a battery of indi-
vidually operated machine tools installed behind transfer machines. These
transfer machines are referred to as the "Wings of the Seven-Year Plan."
(Source: Ekonomtelaeskaya gazeta, 18 Nov. 1960, p. 3.)
1960: "* * * Notwithstanding the fact that (Soviet) industry has few hun-
dred transfer machines in operation, these in relation to the total stock of
metal-cutting machine tools contain only 0.7 percent of all the machines * * *.
Automatic and semiautomatic machines make up 6.5 percent of the existing
stock * * *. The extent of mechanization and automation of production proc-
esses appears to be the highest in auto and tractor plants (CAZ, ZIL, KhTZ,
and STZ). Even in these plants one may notice fully automatic machining side
by side with manually operated machine tools. Fully mechanized machine
tools, operating on an automatic cycle, can be counted in single units and in the
best case in tens of units in plants outside of the automotive industry * * *."
(Source: A. P. Ivanov, Mekhanizatsiya I avtomatizatsiya tekhnologlcheskikh
protesessov v mash inostroyenii, Moscow, Mashgiz, 1960, p. 12.)
1961: Multispindle automatic lathes manufactured by the Kiyev Plant for
Automatic Machine Tools, race grinders produced by the im. Il'ich Plant in
Leningrad, semiautomatic lathes turned out by the Yeysk Machine Tool Manu-
facturing Plant are less productive and more difficult to operate than modernized
old equipment these new machine tools are to replace. (Source: Izvestiya,
31 May 1961, p. 3.)
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 App?Wved For Release 2004/03/11 : CTIA-RLpP~B~Q410500020022-5
U EXPORT OF STRATEGIC MA ERIA S
1961: Attempt to start production of roller bearings for railroad axles is
stymied by lack of production equipment. The plan to set up transfer machines
for this purpose in Saratov, Tomsk, and Khar'kov bearing plants is hopelessly
snagged because the Moscow Economic Council which began planning for these
transfer machines three years ago has been very tardy and in fact has a "let
it go attitude" (na samotek). None of the three bearing plants received as yet
these machines. (Source: Ekonomicheskaya gazeta, 16 May 1961, p. 3.)
1961: "* * * The construction of the Kuybyshev Jig Borer Plant scheduled
for completion in 1961 is proceeding very unsatisfactorily. Only one-half of
funds appropriated for 1960 was used * * *. The reconstruction of the 'Kom-
somolets' plant specializing in manufacture of urgently needed gear generating
machine tools is delayed * * * Moscow's im. S. Ordzhomikidze plant did not
complete on time five transfer machines for ZIL (Likhachev Automobile Plant).
The Kiyev Plant for Automatic Machine Tools did not organize lot production
of new model 8-spindle auto and semiautomatic lathes * * *." (Source: Edi-
torial in Stanki i instrument, No. 4, April 1961, pp. 1-2.)
1961: "* * * The retooling of the ZIL plant is held up by delays in deliveries
of special machine tools and transfer machines. The machine tool manufac-
turing plants guilty of delays are Moscow's 'Krasnyy proletariy,' im. Ordz-
honikidze, and the Grinder Plant. Khar'kov Machine Tool Manufacturing Plant
and Kiyev Plant for automatic Machine Tools ; and also Minsk, Korsun'-
Shevchenko, Sterlitamak, and Yevsk machine tool plants * * *. Instead of
originally planned 34 transfer machines, ZIL has a scaled-down-agreement for
only 15 machines * * *." (Source: Ekonomicheskaya gazeta, 25 May 1961, p. 2.)
1961: Soviet industry is deficient in the following types of precision machine
tools ; gear milling, gear shaving, gear grinding, broaching, numerically con-
trolled machines, and precision die forging presses (mechanical). (Source :
Ekonomicheskaya gazeta, 8 April 1961, p. 2.)
1961: V, Vasil'yev, Deputy Director of ENIMS describes some of the British-
made machine tools at the Moscow (Sokolniki Park) British Exhibit (May-June
1961). He writes that "* * * it is obvious, that the Britishers strived to show
their best metal-cutting machine tools and principally the types which are not
produced by the Soviet industry * * *." Among the 20-some types of machine
tools, representing seven British firms, are: six-spindle automatic lathe (toler-
ance of work to 0.001 mm.) made by BSA; jig grinder (tolerance of work to
0.005 mm) made by Matrix; centerless roughing grinder (tolerance of work
to 0.025 mm.) made by Farmer Norton ; thread grinder made by Matrix ; and
centerless grinder equipped with automatic inspection system and wheel wear
compensator, made by Matrix. (Source: Ekonomicheskaya gazeta, 3 June 1961,
p. 4.)
An analysis by the size of lots show the following distribution :
Number of models
Size of lots
(units)
Units manu-
factured
Percentage
of total
67 models-------------------------------------------------
10- 100
2,210- 3,730
7- 7
43 models------------------------------------------------
101- 500
6,600-14,200
21-26
10 models-------------------------------------------------
601-1,000
5,000-10,000
16-19
4 models--------------------------------------------------
1,001-2,000
4,000- 8,000
12-12
3 models--------------------------------------------------
3,001-4,000
9,000-12,000
28-22
1 model---------------------------------------------------
5,001-6,000
6,000- 6,000
16-11
118 models------------------------------------------
----------------
31-810-53,930
100-100
Source: Zhdanov, op. cit., pp. 97-109.
A crude confirmation of the validity of this analysis especially for lot sizes of
500-1,000 and 1,000-plus units can be found in a study by A. G. Omarovskiy on
the distribution of manufacturing industries of the U.S.S.R." According to
to his figures 55.7 percent of industrial machine tools manufactured in 1956,
presumably by these 48 plants, were in lots of 1,000 units or greater, 13.8 percent
in lots of 500-1,000 units, 16.1 percent in lots of 100-500 units, and 14.4 percent
19 Omarovskly A. G., Spetsializatsiya prolzyodatva i razmeshcheniye mashinostroitei'noy
promyshlennost SSSR, Moscow, Mashgiz, 1959, p. 153.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 81
in lots of up to 100 units each. The Soviet Union had then about 78 machine
tool manufacturing Plants."
How many of these 78 plants specialized in production of metal-cutting ma-
chine tools alone is not known. Information available shows that at least 48
of them were specialized in such production and that these 48-plus plants ac-
counted for 93.2 percent of the total value of metal-cutting machine tools manu-
factured in the Soviet Union in 1956.17 Of these 48 plants, only 14 employed
production line techniques, a method of manufacturing where the machine tools
and other equipment are arranged by sequence of operations instead of by
grouping machines of the same kind into departments. These 14 plants pro-
duced about 40 percent of all Soviet machine tools.18
According to this author's findings, the following 13 plants listed in the 1956
MSiIP production program and one unlisted plant ("Zhal'giris") manufactured
about 40 percent of machine tools produced by the Soviet Union in 1956.
TABLE IV.-List of Soviet plants which accounted in 1956 for about 40 percent
of the total output of machine tools
City
Name of plant
Specialization
Number of
models I
Total output
(in units)
Moscow________
Gor'kiy--------
"Krasnyy proletarly"_____-_
Gor'kiy Milling Machine
Screw cutting lathe -__------
Milling machines
-
4 (3)
5,140- 8,360
Plant.
----
------
12 (11)
2,580- 5,180
Odessa ---------
Do ---------
'
Plant im. Lenin __.._____.____
Plantim. Kirov-------------
Drilling machines ----------
Milling machines
5 (5)
7,600-11,300
Yegor
yevsk
___
Khar'kov---___
" Konrsomolets"________
Machine Tool Manufactur
Gear cutting machines------
Gear cutting and grindin
2 2 (2)
6 (4)
9
060- 1,100
920- 2,100
Kiyev----------
ing Plant im. Molotov.
Plant for Automati
M
g
machines.
T
(5)
1,160- 2,250
c
a-
chine Tool.
urret lathes, auto- and
semiautomatic lathes.
4 (4)
740- 1,660
Vitebsk v__--___
Vitebs_____.__
Milling Machine Plant-
Dressing Machine Tool
Milling machine ------------
Sharpeners
3 (3)
1,100- 2, 300
Plant .
__________________
3 (3)
1,160- 2, 400
Kuybyshev--__
Chkalov----- .__
Middle Volga Plant ---------
Ohkalov Machine Tool
Lathes -------------------
Shapers and slotters screw
3 (3)
1,160- 2,400
Tbilisi ---------
Plant.
Plant im. Kirov_________
-
cutting.
Lathes
2 (2)
700- 900
Saratov--------
____
Saratov Machine Tool
Plant
----------------------
Gear cuttin and
g grinding
4 (4)
6 (4)
1, 940- 3, 560
270- 840
Novo-Vil'nya
.
"Zhal'giris"-----------------
Drilling machines. and milling ma-
m
(7)
5
000- 6
000
chines.
,
,
T
otal
---------------------------
63 (53)
31,030-48,350
I Numbers in parentheses indicate the number of pre-1948 models.
Source: Number of models and total output Zhdanov, op. cit. pp. 97-109. The origin of models: Yedinaya
aistema planoao-predupreditel'nogo remont? Moscow, 1V~asbglz, 1957 pp. 207-270. Data for the
' Zbal'giris" plant are from Ts.S.U. (pri Sovete Ministrov SSSR v tsi&rakh v 1959 godu. Moscow,
Gosflnizdat, 1960; also Vestnik atatiatiki, No. 6, 1959.
A brief recap of the preceding discussion and of the data listed in Tables I
to IV definitely points out the following salient features of the Soviet metal-
cutting machine tool industry; (1) only about 50 percent of metal-cutting
machine tools produced in 1956 were of industrial character, (2) about 90
percent of industrial machine tools manufactured in lots of 10 units or greater
were produced in 48 plants, (3) about 80 percent of the industrial machine
tools were produced by 14 plants employing line production techniques, and
(4) 92 to 96 percent of industrial machine tools manufactured in 1956 were
of World War II design. Information published in 1959-61 tends to support
the theory that the bulk of Soviet metal-cutting machine tools manufactured
today is relatively obsolete and that the Soviets have not solved the problem
of production of technologically modern equipment.
TRANSFER MACHINES
The problems the Soviets have in solving production problems of complex
and highly specialized equipment is evidenced also in the difficulties they have
manufacturing automatic transfer machines. These machines designed to com-
1e Ibid, p. 155.
27Ibid, p. 88.
u lbid, 1,68, (Note' It has been reported that In 1958, the Soviet industry manu-
lactured >r 810 metal-cutting machine tools using the production line method,)
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2~Q041( / 1 - PqdB 4#I QP500020022-5
&2 EXPORT OF S RA MA A
plete a series of machining operations at successive stations, and to transfer
the work automatically from one station to the next are of great demand and
the information published in Soviet technical publications indicates that the
Soviets are placing heavy emphasis on the production of transfer machines during
the current Seven-Year Plan (1959-65). A total of 1,300 transfer machines are
to be produced during this period. These machines are currently manufactured
by the Ordzhonikidze plant in Moscow, by the MinskPlant for Automatic Lines,
Special Unit Machine Tools and Presses; by the "Stankokonstruktsiya" Plant;
by the NIITMS (Scientific Research Institute of the Tractor Machine Manu-
facturing); by Stankoliniya Plant; and by Stankoagregat Plant. The latter
two are in Moscow.
Somewhat nebulous remarks by a Western observer that visited the Ordzhoni-
kidze Plant in 1959 suggest that "* * * machines of this sort, ranging from
simple units to intricate multiple station machines, are produced in this factory
at about fifty a month * * *." As matter of fact the Ordzhonikidze Plant, the
largest manufacturer of transfer machines in the Soviet Union is producing
only about two or three such machines per month. The entire 1958 output of
transfer machines in the Soviet Union amounted to 29 machines of which only
19 with a total of 138 stations, were manufactured by the Ordzhonikidze Plant 10
During the 1951-55 period, the plant built 18 transfer machines, and in 1957
it turned out 7 transfer machines.'*
During the first four months of 1961, this plant completed ten transfer machines
and it was putting finishing touches on the eleventh transfer machine. The
group of ten machines went to ZIL and Yaroslavsk motornyy zavod, and the
eleventh (8 stations) is intended for the Vladimirskiy elektromotornyy zavod.21
The entire output of transfer machines in the Soviet Union during the 1946-50
period was 41 transfer machines, during the 1951-55 period 67 transfer machines,
during the 1957-58 period 61 transfer machines` to be quite
The production goal of 250-270 transfer machines in 1965 appears
unrealistic in view of the past rate of development.
PRODUCTIVITY AND MASS PRODUCTION
Some critics of Western production methods employed in machine tool manu-
facturing conclude that "* * * in the West there has been a failure in industrial
organization and a failure of technological efficiency in the machinery-produc-
tion industries * * *." In this author's opinion, the above conclusion is nothing
else but a sweeping generalization, wholly unfounded and above all indicating
the lack of knowledge of production problems both here in the United States and
in the Soviet Union. It is obvious to anyone that machine tools are not in the
same category as automobiles and here in the United States only profit motiva-
tions determine the quantities of machine tools produced. Consequently,
futile to advocate a mass production of lathes just for the sake of producing
them, when the demand for these is relatively low. In the Soviet Union, whose
metal-working industry is relatively inefficient, the lathe is the easiest item to
manufacture. Repeated references are made by the Soviets themselves to the
effect that quotas for highly specialized metal-cutting machine tools are not met
but the output of such machines as standard lathes constantly exceeds the re-
quired goals. In 1958 alone, the Soviet output of lathes exceeded 58,000 units, of
which 3,000 were turret lathes, 4,100 units automatic and semiautomatic lathes,
and over 50,000 units were standard lathes. The output of drilling machine
tools for that year exceeded 40,000 units2s Obviously, the Soviets are not per-
turbed by the high output of such machines, since surpluses of this kind can be
used very effectively as weapons 'of economic warfare in underdeveloped coun-
tries. roletariy" plant to employ mass
It appears only logical for the "Krasnyy p
production techniques which in the case of the 1K62 lathe allowed the Soviets
such economies that the man-hour requirements for a similar lathe. Right here,
in this particular case of a lathe, is the Soviet industrial inefficiency plainly
19 Yezhegodnik Bol'sliny Sovrtokoy F?ntsiklopedii 1959, p. 597-59R.
90 Arapov. I. 1., "Stnnkostroltel'nyy zavod imen? Sergo Ordzhenikidze", in Mashinostroi-
tel', No. 1, Nov. 195R, p. S.
m Ekonomicheslcaya gaxeta, 20 May 1961, p. 1.
Qs V1adzivevsk1V. A., "Problemv razvitlva, stankostroyeniya v 1959-1965 godaich", In
Planwoye khozvaiytyo, No. 3, March 1959, p. 46.
23 "Stankostroyeniye-Ekonomichesoye obozreniye," in Ekonomicheskaya gaxeta, 17 May
1961, p. 2-3.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved Fxxp6 ease Q4 1 l4~ ftgP, b4E ,( 3 6R0005000~R022-5
Evident-since only by introducing mass-production methods they have report-
edly decreased their man-hour requirements to a level just below that of the
United States manufacturing similar equipment on a small lot basis.
The U.S. productivity is the highest in the world and the Soviets are dreaming
to attain it. One of the greatest obstacles to matching American productivity
is the problem of manual labor, due in the main to shortcomings in the organi-
zation of intraplant transport, repair work and maintenance of equipment, and
servicing of tools. The following table brings together data on the manpower
requirements in Soviet, United States, and British machine-tool manufacturing
plants.
TABLE V.-Manpower structure in U.S.S.R., U.S., and Rriitish machine-tool
manufacturing plants
Total number of workers------
Of these in percentage:
Dir etlaber_______________
Indirect labor_____________
Total in
9 large
plants
48.2
51. 8
Total in
the largest
plant
(G.)r'kiy
Milling
Machine
Plant)
54. 5
45
6
Total in
10 plants
65.9
34
1
Total hr
the largest
plant
73.1
Total Ill
11 plants
73. 5
Total in
the largest
plant
70.4
Repair and service of
.
.
26.9
26. 5
29.6
machine tools-. ----_
nopair and service of
electrical equip-
ment................
Transport -------- ___
St
2.7
10.3
2. 5
11.4
1.2
1.8
1.3
2
9
.8
1
3
7
orage--------------
Toolroom__________
3.0
8.7
1.3
8
8
2.6
3
0
.
4. 6
.
1.7
1.2
Inspection and control__-
Other support operations .....
3.7
14.0
.
3.2
11
4
.
6.3
15
4
1.7
8.9
3. 1
2.1
3.3
1.2
.
.
6.3
16.0
21.2
Source: S. 1 heynman, "Nekotnryye ekonomichcskiye problexny organizatsui
vQdstva," in 1 sprosy ekonomiki, No. 1, Jan. 1960, p. 40. Data for the U.S.S.R. i clude Gor kiy Milling
Machine Plant (1959), "Krasnyy proletariy" in Moscow (1958), and seven other large machine tool plants
(1956). Data for the U.S. and Great Britain were taken by Khoynman from Anglo-American Council on
Productivity, Illetalworlcing Martine Tools, 1953, pp. 18-19.
The Soviet Union is not the only country in the world mass-producing machine
tools. It is a generally known fact that Brown & Sharp here in this country uses
mass production methods on one of its models and that a Brazilian manufacturer.,
Giordani Romi, produces lathes at something around 200 man-hours per machine.
This method of production definitely reduces costs but it also restricts improve-
ments in design, a practice which the U.S. machine tool manufacturer is unwilling
to follow. The reasons are more than obvious. The necessary condition for
mass production is the ability to absorb large production and here in this country
and also in other industrialized areas of the world, the demand for simple lathes
does not justify mass production methods. A different situation exists in the
Soviet Union which has been for the past four decades and still is plagued by
shortages of machine tools and the mass-produced Model 1K62 shaft-turning
lathe, just as its predecessor 1A62, and 1D62 Models is finding a ready market.
The fact that class-production methods restrict improvements is clearly shown in
the history of these three lathe models.
Lathes are the most commonly used metal-cutting machine tools in the Soviet
Union. These, as of 1 January 195G, constituted about 33 percent of all Soviet
machine tools and even today these still make up about 30 percent of all the
currently employed machine tools.
The 1D62 Model, commonly referred as the DIP-200 (the initials DIP mean
"dognat' I peregnat' "-"catch up and surpass" the United States) was first
produced in 1932 by "Krasnyy proletariy" plant in Moscow. This 4.3-kw. lathe
with spindle speeds ranging from 12 to 600 r.p.m. was manufactured on a large-
lot basis well into the late forties, when it became replaced by a modified Model
1A62 lathe. The latter was equipped with a 7.0-kw. motor and had spindle
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
84 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
speeds of 11.5 to 1,200 r.p.m. The production of the 1A62 Model started in 1949
and continued into 1957, when it in turn was replaced by the "much discussed"
Model 1K62 shaft turning lathe 24
According to the same source, the "D" and "A" Models could, not be used with
tools of high speed steel and the operation of these required an excessive amount
of time and effort. Despite these defficiencies, which were not corrected because
of the peculiarities of Soviet mass-production methods employed in their manu-
facture, the Soviet Union kept on producing them just the same. Information
gathered from various manufacturing establishments in the Urals shows that
DIP-200 (1D62) lathe makes up about 10 percent of all metal-cutting machine
tools used in that area and using this sample, Genshtak '6 estimates, that in 1957
the Soviet Union had in its machine tool stock about 170-180 thousand such units.
Since the Model 1K62 (10-kw. motor and spindle speeds of 12.5 to 2,000 r.p.m.)
Is an improved version of the DIP-200, it stands to reason that it is earmarked
for its replacement, and only mass production methods could provide large quan-
titles of this type of a machine tool. Some Western observers visiting the
"Krasnyy proletariy" plant in Moscow expressed an opinion that it takes 200
man-hours to produce the 1K62 model and impressed by the efficiency and speed
of assembly lines went on to voice a view that the Soviet machine tool industry
as a whole is becoming more efficient than the machine tool industries of Western
Europe or the United States. To emphasize the contrast between East and West,
they even asserted that the Model 1K62 makers are three to four times as efficient
as their Western counterparts.
A review of facts, and these are based on official Soviet data, shows that the
Soviet machine tool industry never laid a claim to efficiencies greater than that
in the West, in the United States in particular. A recent study published in a
journal of the Central Statistical Administration by the Council of Ministers
of the U.S.S.R." shows that the labor productivity, an excellent measure of effi-
ciency, in the Soviet machine tool industry is about 46.3 percent lower than
that in the United States. The average number of man-hours to produce a
standard lathe in the Soviet Union is about 615, and this figure excludes cast-
ing and forging operations." At no time have the Soviets claimed a 200 man-
hour lathe, and only in one instance a claim was made by Yu. Maksarey,
Chairman of the State Scientific and Technical Committee of the Council of
Ministers of the U.S.S.R. that "* * * it takes 20 percent less man-hours to
produce Model 1K62 lathe at 'Krasnyy proletariy' than it does to manufacture a
similar lathe in the United States. * * *"
A question arises as to how these Western observers arrived at the 200-man-
hour figure? None of them made a close study of the production cycle and most
of them asserted that they were told by the plant personnel that it takes only
200 man-hours to produce the 1K62 lathe. Since available data for Western
Europe and the United States give 750-800 man-hours as the average for a
standard lathe, and Maksarev's estimate of the man-hour content of the 1K62
lathe is 20 percent below the above figure, the 200 man-hour lathe will remain
to be a vague assertion, till the authors of this assertion come with substantial
and definite proof to the contrary.
APPENDIX III
"APPRAISAL OF SOVIET MECHANIZATION AND AUTOMATION"
SOME CRITICAL ASPECTS OF SOVIET MECHANIZATION AND AUTOMATIZATION PLAN
By Joseph A. Gwyer *
Introduction.-It is of great importance that the American people should be
given an insight into the Soviet mechanization and automatization program
since its technological and economic consequences may affect, in the not too
distant future, the economic, and political position of the United States in its
economic and ideological struggle with international communism. Khrushchev's
a Prokopovich, V., Tekbnlcheskiy progress v stankostroyenii, Moscow, Moskovskly
Rabochiy, 1957, p. 86.
ds Ganshtak, V. I., Ocherki po ekonomike mashinostroitel'noy promyshlenhosti SSSR,
Moscow, Mashglz, 1957, p. 241.
Kuznetsova and Sergeyeva, op. cit., p. 81.
Ibid., p. 27.
'e Comment: The technical content and accuracy of this article are the sole responsibility
of this author.
*The author is a research analyst at the Library of Congress, Washington 25, D.C.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11 CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 8,5
intimations, in his 14 November 1958 speech' before the graduates of Soviet
military schools, that the Soviet Union will by 1970 outproduce the United States
both in per capita output and in production in absolute terms, should not be
dismissed as a more boast, but should be analyzed in the light of Soviet existing
and future capabilities. It should be pointed out that Khrushchev did not say
directly that the Soviet Union will attain the highest standard of living in the
world but implied that the highest per capita production should give the Soviet
Union the highest standard of living. In the Soviet Union the term "highest
standard of living" is synonymous with the highest output per capita, even if the
lion's share of the output never reaches the consumer but is channeled into
military goods or capital equipment intended for increasing the economic war
potential of the country.
Since the American public is unaware of the significance of the emerging
economic and technological competition between the U.S.S.R. and the West
there is a lack of realization that the ultimate survival of the Free World
depends almost entirely on how well the United States can counter Soviet eco-
nomic offensive, which, as the Seven Year Plan progresses, will undoubtedly
become more vigorous. A possible rapid progress of overall mechanization and
automatization in the U.S.S.R. coupled with a significant drop in the cost of pro-
duction may create the possibility of an expansion of Soviet exports tied to the
program of political domination of undeveloped or underdeveloped areas.
Since Khrushchev placed heavy emphasis on overall mechanization and auto-
matization of manufacturing processes as the chief means of attaining the highest
per capita production, this survey is intended to provide the reader with back-
ground for the consideration of the tools and facilities the Soviet Union either
has or would like to have at her disposal to wage successfully the economic
and technological war against the Free World. The limits of this survey of
unclassified Soviet literature must necessarily be drawn arbitrarily, and data
on the progress of mechanization and automation in nomnanufacturing indus-
tries are not included.
The scope of this survey includes (1) a historical survey and the status quo
of automatization in the Soviet automobile and bearing industries; (2) Soviet
mechanization profile; (3) critical deficiencies in the Soviet automatization pro-
gram; (4) economic considerations; and (5) observations and conclusions based
on the above data.
Historical Survey and Status Quo of Automatization in the Soviet Automobile
and Bearing Industries.-Since automatic manufacturing processes are most
suitable for production in long series, the automobile and tractor industries and
subsequently the bearing industry of the Soviet Union were the first to introduce
automatic processes. The first Soviet automatic production line designed by
I. P. Inochkin was placed in operation in 1940 at the Stalingrad Tractor Plant.
Its function was to bore, machine, and trim STZ-NATI tractor hubs ; to band,
drill, and broach seats for bearings ; and to perform other operations. This line
consisted of four metal-cutting machine tools and a specially designed forge
press ; it was linked by a conveyor and supplied with loading devices. It was
served by one tool setter in contrast to seven workers that were required to
perform identical operations prior to "automatization." In 1940, on the insti-
gation of A. I. Volkov, the 1 GPZ (Gosudarstvennyy podshipnikovyy zavod-
State Bearing Plant) in Moscow placed in operation an automatic line for
grinding tapered roller bearings. This line consisted of six centerless-type
grinders linked with pipes which served as conveyors of tapered rollers. At
present this line is functioning at the 9 GPZ.
Also in 1940, the 1 GPZ set in operation an automatic line for grinding the
faces of ball bearing races. The line consisted of three vertical grinders linked
with conveyors into which were built demagnetizing devices. Each individual
grinder was equipped with a control device that would compensate for the
wear of the grinding disks. An automatic line for grinding piston rods was
placed in operation at the Gor'kiy Automobile Plant. It consisted of six cen-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
8 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
terless-type grinders linked with aconveyor. The line included also three auto-
matic loading devices and two elevators and was served by only one operator.
A similar line, but consisting of two grinders, was introduced at the ZIL Auto-
mobile Plant in Moscow.
An automatic production line, designed by the Giproavtotraktoroprom and
equipped by then 1 GPZ was placed in operation by the latter. This line per-
mitted a simultaneous turning of twelve different-size bearing races, using
locally available multi-spindle semiautomatic lathes.
The Stalingrad Tractor Plant designed and placed into operation two auto-
matic lines for machining of suspension arms. Each line consisted of four
automated engine lathes and one special horizontal borer.
In contrast to the above=mentioned lines designed and built around con-
ventional equipment, the period between 1948 and 1953 witnessed the de-
velopment of automatic lines built around specially designed machine tools and
other equipment. The Khar'kov Tractor Plant's automatic transfer machine for
machining cylinder blocksfor the DT-54 tractor consisted of twenty unit ma-
chine tools and was served by five workers. Similar automatic transfer machines
were placed in operation at the Stalingrad and Minsk tractor plants and at the
"Serp i Molot" plant in Saratov. The ZIL Automobile Plant in Moscow intro-
duced four automatic transfer machines in 1946, three more in 1950, and one
in 1956. Similar automatic transfer machines were placed in operation at the
MZMA (Moskovskly zavod malolitrazhnykh avtomobiley-Moscow Plant for
Small-Displacement Automobiles) ; Gor'kiy Yaroslavl', and Kutaisi automobile
plants ; and at the Minsk Tractor Plant. Modern automatic mass-production
lines were also introduced at the following plants: at theKuybyshev plant "Av-
totraktorodetal' "-for valves ; at the Novorossiysk plant "Krasnyy dvigatel' "-
for piston rods ; and in the Odessa `October Revolution" plant-for piston rings.
During the 4th and 5th Five-Year Plans various agencies designed a total of
ninety-four automatic transfer machines, but only seventy-eight of these were
actually built.2 Despite the great efficiency of automatic transfer machines,
the costs of manufacturing these are very high and the length of the designing
and manufacturing cycle is very long. In a number of cases, this cycle was so
long that upon the delivery to the customer plant these transfer machines had
to be modified and some components modernized. One of apparent causes of high
cost and length of the manufacturing cycle appears to be the lack of specialized
establishments for such a task and the absence of a centralized production of
automatic devices. Individual sections of transfer machines are manufactured
by numerous machine tool plants and instrument factories, on a piece-to-piece
basis, As an example, the equipment for one of the 1 GPZ automatic lines was
manufactured by eighteen machine-tool and instrument-manufacturing estab-
lishments wholly unprepared for such a task 8 The assembly of line com-
ponents was usually carried out by the customer plant, adding further to the
overall delay. Quite often other than standard equipment was made by the
customer plant still adding to the overall cycle. According to ENIMS data, as
of 1 November 1954, a significant number of automatic transfer machines
delivered to customer plants in 1952 and 1953 have not been placed in operation 4
2 Rezervy povysheniva rentabel'nosti mashinostroltel'nykh predpriyatiy (Reserves for
Increasing the Profitableness of Machinery Manufacturing Establishments), Moscow,
Gosfinizdat, 1957, p. 69.
3lbid, p. 70.
d Did, p. 71.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R00050 020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
The actual efficiency of individual automatic transfer machines varies as
can be judged from the following table :
TABLE I. Economic indices for various Soviet automatic transfer machines
Indices
Annual output per
worker (in units)
Annual output per
1 production worker
(in units)
Cost of machining
per unit (in rubles)
(1) Name of plant
(2) No. of the automatic transfer machine
Using
On auto-
Using
On auto-
Using
On auto-
(3) Type of product
conven-
matic
conven-
matic
conven-
matte
tional
transfer
tional
transfer
tional
transfer
methods
machine
methods
machine
methods
machine
(1) Minsk Tractor Plant _.________________
(2) A849-A580-----------------------------
1,460
2,900
1,800
4,850
14.51
14.58
(3) Machining diesel motor cylinder heads-
(1) Yaroslavl' Automobile Plant ---------
(2) 1A50-1A57----------------------------
Machining diesel cylinder-head sur-
(3)
1,92p
3,150
1,920
16,000
8.83
4.68
faces--------------------------------
(1) Yaroslavl' Automobile Plant---------
2 )) IA58-1A78___________.._____________ _
(3) Machining diesel cylinder-head sur-
1,140
8,150
1,140
16,300
11.57
9.36
faces--------------------------------
(1) Gor'kiy Automobile Plant --__________
(2) 1A443-1A448---------------------------
4,090
49,120
4,090
98,240
2.04
1.44
(3) Cylinder heads for Pobeda motor-----
rk
Pl
t
______________
(1) Kha
an
ov Tractor
(2) lC44-lA713---------- .-----------------
840
7,190
1,040
10,790
200.50
151.60
(3) Cylinder heads for DT-54 tractor_____
(1 ZIL ---------------------------
(2 1A692-1A700--------------------------
3,750
8,570
4,290
12,000
7.76
5.55
(3 Inclined boring of ZIL-150____________
(1 "Serp I Molot" (Saratov)_____________
(2 (
~ (2A081-2A095) )___ _____________________
1,000
11,700
1,250
22,400
43.87
70.95
Cylinder heads________________________
Source: Rezervy povysheniya rontabel'nosti mashinostroitel'nykh predpriyatiy (Reserves for Increasing
the Profitableness of Machinery Manufacturing Establishments), Moscow, Gosflnizdat, 1957, p. 74.
According to official Soviet sources the cost of each of the four automatic
transfer machines placed in operation in 1946 at the ZIL Automobile Plant was
7.4 million rubles ; the cost of each of the three placed in operation in 1950 was
4.6 million, and the cost of the last one introduced in 1956 was also 4.6 million
rubles'
As of 1957, the ZIL had nine automatic transfer machines and expansion
plans call for a total of fifty such lines to be in operation by 1965. The present
complement of seven such machines at the NZMA is to be augmented to twenty-
nine by 1965' The more immediate targets for 1960 are for augmenting the
present ten automatic lines at the Gor'kiy Automobile Plant to seventy ; the
Chyelabinsk Tractor Plant, which at present does not have any, is to have at
least five lines, and the Stalingrad Tractor Plant is to introduce more than
twenty automatic and semiautomatic lines.' The "showcase" of the Soviet auto-
mation program is undoubtedly the First State Bearing Plant (1GPZ) in Mos-
cow. By the end of 1957 this plant had nine automatic lines and had plans for
6 Ibid, p. 63.
0 Zvorykin, A. A., Avtomatizatsiya proizvodstva I yeye ekonomicheskaya effektivnost'
(Automation of Production Processes and its Economic Effectiveness), Moscow, Izd-vo
Znaniye", 1958, p. 21.
4 Dumler, S. A., Potochnyye metody proizvodstva v mashinostroyenti (Flow Methods of
Production in Machinery Manufacturing), Moscow Mashgiz, 1,858, p. 4-5.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApproMQd For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
thirty-seven by 19659 During the 1951-57 period the plant placed in operation
seven automatic lines, rebuilt 950 machine tools, and equipped 650 machine tools
with automatic attachments.' The plant claims to have the "first in the world"
fully automated ball bearing shop.
During the past seven years the output of bearings was doubled without adding
new equipment. It should be added here that most of the machine tools used
at the 1 GPZ are on the average twenty to twenty-five years old." Specifically,
thirty-three four-spindle semiautomatic lathes more than twenty years old were
completely rebuilt. This "modernization" consisted of replacing spindle drums,
equipping the lathes with automatic operators and specially designed trans-
porters, and replacing the bearings. Similar "modernization" took place on
fifty-seven multispindle (Model 1261P) semiautomatic lathes.
Soviet Mechanization Profile.-The most definitive manifestation of tech-
nological progress is the expanded use of machinery and mechanical processes.
The primary purpose of the Soviet drive for overall mechanization has been to
reduce the kind of labor required to turn out a product. A lesser but still press-
ing consideration is the amount of labor which during the 1959-1965 period and
perhaps during the latter part of the sixties may become not as plentiful as is
commonly thought because of the extremely low birthrate during World War II,
the very high infant mortality, and high manpower losses during the correspond-
ing period.' Despite strenuous efforts to mechanize during the past thirty years,
the mechanization of Soviet manufacturing processes is far from being adequate.
In branches of Soviet industry where the mechanization of primary production
processes is quite extensive, the volume of operations performed by manual labor,
especially in supporting operations is quite large.' A considerable volume of
manual labor goes into lifting, conveying, and material storage operations, qual-
ity control, etc. Of these, conveyor and material storage operations are the
most critical, since they do account for 25 to 30 percent of total volume of labor
expended in manufacturing operations. According to the census of 5 May 1954,
the following are percentages of manual workers engaged in industrial opera-
tions : 's ferrous metallurgy-34.6 percent ; coal mining-44.1 percent ; machinery
manufacturing-48 percent ; lumbering-67.8 percent ; and building construe-
tion-69 percent. On the average more than 55 percent of the 7.2 million workers
employed in 15 various ministries responsible for these operations were perform-
ing manual labor.
The automobile manufacturing industry is considered to be one of the most
mechanized industries in the Soviet Union. Despite its salient importance, this
industry also suffers from inadequate mechanization of primary processes and
the complete absence of mechanization of supporting operations. Specifically,
studies show that because of this the volume of manual labor going into the
manufacture of the MAZ-200 automobile at the Minsk Automobile Plant
amounted recently to 44.3 percent and into the manufacture of the ZIS-585 dump
truck at the Mytishehi Machinery Manufacturing Plant to 47.8 percent 14
In such heavy machinery manufacturing establishments as Kramatorsk, Ural-
mash, Yuzhuralmash, Irkutsk, and other plants, manual labor accounts for 50
to 70 percent of the total labor employed at these installations. In plants which
up till recently were administered by the Ministry for Instrument Making (Min-
isterstvo Priborostroyeniya), where by Soviet standard the mechanization is at
its highest levels, manual workers make up from 35 to 40 percent of total of
workers employed and in some cases as high as 60 percent 1' In many plants
s Zvorykln, op. cit., p. 21.
? "Shire vnedryat' avtomatizatsiyu proizvodstvennykh protsessov" (Automation of Pro-
duction Processes Should Be Introduced on a Wider Scale), in Mekhanizatslya Trudoyem-
kikh I Tyazhelykh Rabot, no. 4, 1958, p. 3.
10 Rezervy ., op. cit., p. 54.
71 Rybkin, N. P. and A. M. Gevorkyan Novaya tekhnologlya v mashinostroyenii (New
Technology in Machinery Manufacturing;, Moscow, Izd-vo "Znaniye" 1958, p. 39-40.
1 Kuzmnin, I. I. "0 zadachakh razvit ya kompleksnoy mekhanizats{i I avtomatizatsii v
SSSR" (On the 15evelopment of Overall Mechanization and Automation in the U.S.S.R.),
in Vestnik Akademii Nauk SSSR, v. 28 no. 7 1958 pp. 9 (The author is Vice-Chairman of
the Council of Ministers and Chairman of the state Planning Commission).
13 Strumilin, S. G., Ekonomicheskiye problemy avtomatizatsii proizvodstva (Economic
Problems Arising from Automation of Production Processes),, Moscow, Gospolitizdat, 1957,
p. 22.
14 B;akulev, G. P. "Zadachl ekonomicheskikh nauk v oblasti avtomatizatsii proizvodstva
v prom yshlennostl't (Role of Economic Sciences in the Realm of Production Automation in
the Industry), in Sesslya Akademii Nauk SSSR po nauchnym problemam avtomatizatsii
proizvodatva, 15-20 oktyabrya 1956. (Plenarnyye zasedaniya), Moscow, 1957, p. 241.
' Ibid.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. 89
producing complex machines and equipment requiring line production and auto-
matic machine tools, the movement of heavy parts, unloading of raw materials,
and other supporting operations are carried out haphazardly mostly by hand,
and often by skilled labor diverted from their primary duties." Soviet industrial
engineers found out that such a partial mechanization created scheduling diffi-
culties and did not solve production problems, but on the contrary complicated
them out of proportion to benefits achieved. The lack of mechanization of sup-
porting operations almost always affected the operations of main shops, causing
in many instances interruptions in operations and inadequate loading of equip-
ment ; consequently "crash programs" to catch up with the backlogs were usually
followed by extensive breakdowns of both equipment and production schedules"
Critical Deficiencies in the Soviet Automatization Program.-Introduction of
automatic processes into manufacturing operations depends largely on the
availability of appropriate and suitable production facilities which in them-
selves offer an area for a technological development. One of the retarding
factors to such an introduction is the inadequacy of existing Soviet production
facilities, especially those of the machinery and automobile manufacturing
establishments.20 The responsibility for alleviating this "deplorable" condition
rests with the Gosplan U.S.S.R. (State Planning Commission), Gosekonomko-
missiya U.S.S.R. (State Economic Commission), and the respective Ministries.
These groups are required to take Into consideration, when drawing annual
and future plans for the development of the Soviet economy, the available
industrial equipment requiring replacement because of obsolescence and to
provide in individual plans for appropriate establishments for the production
of modern machines and equipment on a scale that would permit the replace-
ment of obsolete units and complexes. Very little replacement of worn and
obsolete equipment has been done during the past two or three decades and the
general attitude of the responsible agencies to this problem can be found in the
commonly expressed complaint that it Is "not by skill but by numbers" (Ne
umenlyem a chislom) that things are accomplished in the U.S.S.R." This
biting and critical observation, uttered before a large audience attending the
U.S.S.R. Academy of Sciencies session on automation held in 1956 in Moscow,
is quite representative of that group within the Soviet Union which would
rather dispense with the stereotype propaganda in official pronouncements
and point out deficiencies in all their realities.
What can be seen in the U.S.S.R in the realm of automatization? Obviously
not too much. This state of affairs can be explained by the fact that the
U.S.S.R. Is barely entering the economic phase of industrial developments
referred to as "automation."" In particular, the Soviet pool of metal-cutting
tools in 1957 consisted of about 1,840,000 units, but there were altogether only
about 100 automatic transfer machines in operation." Conventional production
lines are more numerous, but this is an unassuming beginning when "* * *
one considers that manual labor is used along production lines to a large extent
(more than 50 percent of all operations along the production line are performed
by manual labor) * * *." "
According to preliminary computations of the Gosplan U.S.S.R. during the
1959-1965 period the Soviet Union should introduce 1,400 automatic lines which
will require 12,000 to 14,000 metal-cutting machine tools." The supply of auto-
matic and semiautomatic machine tools suitable for inclusion in automatic lines
remains inadequate. A considerable portion of machine tools manufactured
in the Soviet Union consists of general purpose units and according to Kuzmin
only a few of these can be equipped with rapid action set-up, clamping, measur-
ing, and other attachments."
16 Rotsbteyn, A. I., Metody izmereniya proizvoditel'nosti truda v promysblennosti (Meth-
ods of Measuring Labor Productivity in the Industry), Moscow, Gosstatizdat, 1957, p.
29-30.
17 Ibid.
Is Pervukhin, A., "Moral'nyy iznos oborudovaniya I normv amortizatsii" Obsolescence
of Equipment and Amortization Rates), in Voprosy Ekonomiki, no. 1, 1957, pp. 122-123.
19Fedorov, I. F., "Vystupleniye" (Presentation),, in Sessiya Akademil Nauk SSSR po
nauchnym problemam avtomatizatsii proizvodstva, 15-20 Oktyabrya 1956. (Plenarnyye
zasedaniya) p. 257, Moscow, 1957.
20 Strumilln, op. cit., g 24.
A Gwyer, Joseph A., 'Soviet Machine Tools" in Ordnance, v. 43, no. 231 Nov.-Dec. 1958,
p. 417.
A Strumilin, op, cit., p. 24.
98 Kuzmin, op. cit., p. 11.
"Ibid., p. 9.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appro~l For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
E. PORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
As of 1955, the total number of automatic and semiautomatic machine tools in
the U.S.S.R. was less than 50,000 units.' The overall structure of Soviet ma-
chine-tool output does not hold promises for a speedy program of automation.
Soviet industry is experiencing shortages of modern automatic and semiauto-
matic machine toools, while her machine tool manufacturing establishments are
turning out an unduly large percentage of engine lathes, as can be seen from
the following table :
Engine lathes_____________________ ----------
32.40
32.00
29.80
29.80
28. 70
25.5
24.6
Turret lathes -------------------------------
2.22
2.25
2.18
2.30
2.50
2.2
2, 1
Milling machines ------ _----------- _________
5.37
5.88
5.47
6.24
6.28
8.9
8.8
Gear-cutting machines_______________
2.73
2.25
2.48
1.63
1.68
2.1
1.9
Broaching machines________________
.38
.26
.24
.28
.26
.4
.4
Grinding machines___________________________
5.68
4. 26
3.67
3.35
3.38
4.5
4.4
Source: Rybkin, A. P., and A. M. Gevorkyan, Novaya tekhnologiya v mashinostroyenii, (New Technol-
ogy in Machinery Manufacturing), Moscow, Izd-vo "Znaniye," 1958, p. 42.
Engine lathes comprise more than 30 percent of Soviet machine-tool stocks
and are produced at a rate of about 30 percent of the total annual output. The
output of turret lathes is considered by the Soviet as inadequate (2,825 units
in 1955 and estimated 2,977 units in 1957). The output of broaching machines
(307 units in 1955 and estimated 364 units in 1957) is also inadequate and the
inability of the Soviet machine-tool industry to satisfy domestic needs prompted
the U.S.S.R. to seek out Western producers with the idea of purchasing their
equipment. The growth of the instrument industry is retarded to some extent
by the insufficient output of grinders (3,959 units in 1955 and estimated 3,960
units in 1957). Although in absolute numbers the output of grinders did not
change during the 1951-1955 period, its percentage of the total of machine
tools produced in the U.S.S.R. dropped from 5.68 percent in 1951 to 3.38 percent
in 1955. A critical situation also exists in the supply of gear-cutting machine
tools 28 The Soviet Union up till 1950 relied to a large extent on imports of bevel
and spiral gear generators and despite strenuous efforts on the part of ENIMS
(Eksperimental'nyy nauchnoissledovstel'skiy institut metallorezhushchikh
stanliov-Experimental Scientific-Research Institute for Metal-Cutting Machine
Tools) the demand has not been met by the Soviet machine-tool industry. The
output of gear generators rose from 1,658 units in 1950 to about 2,600 in 1957.
According to Rybkin and Gevorkyan, the demand for the following two groups
of machine tools has not been met by the domestic industry and their critical
supply is a retarding factor in the Soviet program for overall mechanization and
automatization: Group 1-grinders, jig borers (with program control), and
gear-cutting machine tools ; Group 2-four-, six-, eight-, twelve-, and sixteen-
spindle, vertical semiautomatic lathes suitable for machining piece parts up to
800 mm in diameter.24
A survey made during the midyear of 1958 of the production quotas for
various types of machine tools shows that the six-month plan for production of
highly complex units was not met by the machine tool industry, while the
quotas for little productive and outmoded units were surpassed by some 4500
units 28 If the situation in regards to some types of machine tools appears to be
critical, the state of affairs in the instrument and electronic industries charged
with the responsibility of providing the automatization program with suitable
devices and instruments is even more critical as can be judged from the follow-
ing excerpts from papers delivered at the October 1956 session of the U.S.S.R.
Academy of Sciences on problems of automatization.
25 Strumilln op. cit. p. 10.
2? Prokopov(ch, A. Te., Tekhnicheskly progress v stankostroyenit (Technical Progress in
Machine-Tool Manufacturing), Moscow Moskovskly Rabochiy, pp. 16-17, 1957.
27 Rybkin and Gevorkyan, or. cit., p. 43.
as Yevenko, I., "Proverka i ekonomicheskiy analiz vypolneniya planov" (Review and
Economic Analysis of Plan Fulfillment), in Planovoye Khozyaystvo, no. 10, Oct. 1958, p. 7.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve Fpq~ fZejga ?9Pq P 3 ~ Iq1f4 fg~ 0034 ff0050 20022-5
According to these, there is still a considerable lag in the field of manufacture
of analogue devices when compared with foreign countries. The greatest drag
on the manufacture of these is exerted by the shortage of high-grade parts and
components which should have been supplied by the Soviet radio-industry
factories." A paper by B. T. Kolomiets points out that Soviet industry has not
yet sufficiently well coordinated and exploited the findings of scientific research
organization investigating the use of semiconductors, thus creating a lag in
their application."0 A paper by 0. V. Slezhanovskiy was devoted to a survey of
the status of the Soviet electronic industry and in. particular of electric motors
in the U.S.S.R. and abroad. The paper notes that the U.S.S.R. lags consid-
erably in volume of output of semiconductors and pumpless mercury rectifiers,
of a complete line of magnetic amplifiers, and of saturated reactors." Lecturers
and participants in discussion on the subject of "Telemechanization of Manu-
facturing Processes" have noted that despite its great technological and eco-
nomic advantages, telemechanization is used in the U.S.S.R. on a very limited
scale, and only in power systems and to some extent in transport.
An obvious retarding factor to its wider employment in other branches of the
Soviet industry is the lack of facilities capable of manufacturing telemechanical
apparatus suitable for general industrial use. Even the telemechanical apparatus
for Soviet power systems is of very poor quality." The above paper emphasizes
that the lag of Soviet electrical equipment and instrument output behind that of
Western European countries is deplorable in regards to nomenclature, quality,
and rate of production " As a specific example, one of the co-authors of the
above study cited a case where 82 percent of the automation equipment compon-
ents scheduled for one of the units of the Kuybyshev Hydroelectric Power Station
were found defective at the site prior to installation and had to be shipped
back to the manufacturer for a complete reworking.84
These shortages and deficiencies were previously recognized by the Central
Committee of the Communist Party of the U.S.S.R. and the Council of Ministers,
both of which resolved during the 20th Congress of the Communist Party (1956)
to adopt measures for a rapid development of industries charged with the
responsibility of providing necessary automatization equipment. These resolu-
tions envisaged the construction of 39 new and the reconstruction of 17 existing
instrument manufacturing plants during the 1956-1960 period at an approximate
cost of 3 billion rubles." Despite the urgency, the progress in this direction was
slow, and only 20 percent of the program was accomplished during 1956 and 1957.
As of 1958, many instrument-manufacturing plants were still without testing
facilities, adequate laboratories, and design bureaus."
Automatic equipment cannot be produced unless and until sufficient personnel
qualified to design and build it becomes available. Even if its production be-
comes technically possible, there still is the problem of specialized labor to
operate and service it. Many factors present in the Soviet Union impede the
development of overall automatization. The most important of these are :
(1) the use of obsolete equipment not suitable for automatization, (2) an insuffi-
ciently developed instrument industry, (3) an insufficient number of automation
"Trapeznikov, V. A. and B. Ye. Kogan. "Sostoyenlye I osnovnyye napravienlya razvitiya
elektronnogo modellrovanlya v avtomatike" (Electronic Analogues, the Prospect for their
Development and of their Use in Automation), in Sesslya Akademii Nauk SSSR po
nauchnym problemam avtomatizatsii proizvodstva, 15-20 oktyabrya 1956. (Osnovnyye
problemy avtomatichcskogo regulirovaniya I upravlenlya), Moscow, 1957, p. 310.
30 Kolomiets., B. T., "Poluprovodniki I ikh primenenlye v avtomatike" (Semiconductors
and their Application in Automation) in Sessiya Akademii Nauk SSSR po nauchnym
problemam avtomatizatsii proizvodstva, 15-20 oktyabrya 1956. (Nauchnyye osnovy
postroyeniya teklmicheskikh sredstv avtomatiki), Moscow, 1957, p. 54.
11 Shiezhanovskiy, 0. V., "Sostoyaniye avtomatizirovannogo elektroprivoda v vedush-
chikh otraslvakh promyshlennosti" `Status of the Automated Electric Drive in Leading
Branches of the Industry), in Sesslya Akademii Nauk SSSR po nauchnym problemam
avtomatizatsli proizvodstva, 15-20 oktyabrya, 1956. (Nauchno-tekhnicheskiye problemy
avtomatizirovannogo elektroprivoda), Moscow, 1957, p. 168-172.
aa"Resheniye sovesrchanlya elektrikov institute Gidroenergoproyek" (Resolutions of
the Conference of Power Engineers of the "Gldroenergoproyekt' Institute), in Novoye v
proyektirovanii elektricheskoy chasti gidroelektrostantsiy, Moscow, Gosenergoizdat, 1957,
p. 218.
as Ibid.,, p. 220.
as Losyatinskiy, A. Z., "Ob uluchshenit skhem I apparatury avtomatiki gidroagregatov
na osnovanii opyta ekspluatatsil I naladki" (On the Improvement of Automation System
and Apparatus for Hydroelectric Power Units Based on Experimental Operations and
Loads), in Novoye v proyektirovanii elektricheskoy chasti gidroelektrostan.tsiy, Gosener-
goizdat, Moscow, 1957, p. 145.
+s Kuzmin, op, cit., p. 14.
" Ibid., p. 15.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appro~2d Forr9 s% Q9 Jk: 9 ,19@4 Q0 RWQ5O0020022-5
specialists, (4) poor organization of scientific research in the field of automa-
tion of manufacturing processes, and (5) the lack of scientifically founded
methodsfor the design and construction of required equipmentS7 Confirmation
of item (3) above can be found in Kuzmin's article published in the summer of
1958, in which he states that there was not a single school of higher education
in the Soviet Union with faculty for training automation specialists." The fact
that in 1955 the U.S.S.R. surpassed the U.S. In the number of engineers (586,000
to 550,000) is a meaningless boast, points out Strumilln'B According to the lat-
ter, Soviet engineers learned well the steam-locomotive end of business, but long
experience with steam created only shellback habits as shown in the difficulties
encountered in attempted transition from steam to electric-diesel type of loco-
motive. Automation requires modern education and training programs, new
tests, new and special schools, and, according to Strumilin, these are still lacking.
An unfavorable effect on the development of automatization of production
processes is being created by the inadequacy of theoretical concepts. If the
development of linear theory of regulating one parameter can be considered
as basically adequate, the theory of regulating systems with several regulated
magnitudes related to a technological process, still appears to be only in the pri-
mary stage of development. The Soviet Union considers herself on par with the
West (U.S.) In the realm of the theory of automatic control, but she admits
that in terms of level and volume of automation of industry she is "sub-
stantially" well behind'
Economic Consideration.-Soviet economists and industrial planners are in
general agreement that overall mechanization and automation would permit
the following: (1) increased productivity of equipment without increasing its
size, (2) reduced volume of support equipment, (3) decreased production areas
through a reduction in the quantity of primary and support equipment and
through a more rational production-area layout, and (4) reduced equipment
costs in connection with its reduction in size and weight" Though this agree-
ment exists in principle, there are still signs that Soviet economists have not
reached an agreement on the basic definitions and criteria of economic effective-
ness of automatization, and even as late as 1958 have not worked out the theory
of "profitableness" and economic effectiveness for an automation program that
could be instituted in a socialist state.'
These problems were pointedly underlined by I. F. Tevosyan, former Vice-
Chairman of the Council of Ministers of the U.S.S.R. during the XX Congress
of the Communist Party when he stated that "* * * Soviet economic and
planning agencies in solving industrial economic problems were the least of
all concerned with the per-unit cost of production. According to Fedorov,
the Soviet Union for the past thirty years, had followed the same concepts of
applied economics, which over this long period became dogmas ; these concepts
are outmoded, and Soviet planning methods, accounting and wage systemns, and
methods of setting standards only enhance bureaucracy and irresponsibility,
both of which hinder the introduction of new and progressive economic meth-
ods." Lossiyevskiy claims that automation of production processes in the So-
viet Union has been made very difficult because of an almost complete absence
of data on plants to be automated, on their status and dynamic features, and
because of difficulties encountered in attempting to conduct experimental automa-
tion studies under normal production conditions.46 Many production processes
are not well suited for automation not only because of inadequate mechaniza-
tion levels but also because the existing Soviet equipment is technologically not
adaptable." A compelling handicap appears to be the existence of expensive
84 Shumilovskiy, N. N. and V. L. Lossiyyevskiy, "Osnovnyye zadacbi razvitiya nauki v
oblasti kompleksnoy avtomatizatsii proizvodstvennykh protsessov" (Fundamental Objectives
of Science in the Overall Automation of Production Processes), in Sessiya Akademli Nauk
SSSR Po nauchnum problemam avtomatizatsii proizvodstva, 15-20 oktyabrya 1956.
(Komp eksnaya avtomatizatstya proizvodstvennykh protsessov), Moscow 1957, pp. 7-26.
88 fiuzmin op. cit., p. 16.
88 Strumilin, op. cit. pp. 35-36.
40 Lossiyevskiy, V. L, "0 zadachakh avtomatizatsii proizvodstvennykh protsessov" (Ob-
jectives If. Automating Production Processes), in Avtomatizatsiya proizvodstvennykh
protsessov, v. II. Akademiya Nauk SSSR, Moscow, 1958, p. 9.
.41 Lossiyevskiy, op. cit., p. 10.
48 Kuzmin, op. cit. pp. 16.
48 XX s'yezd KPS~S, Stenograflcheskiy otchet (Twentieth Congress of the Communist
Partof the Soviet Union), Moscow, Gospolltizdat, 1956 p. 221.
44f edorov, I. F., "Vystuplenlye" op. cit., p. 258.
95 Lossiyevskiy. op. cit., p. 8.
" Ibid.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovedERoottaIMSW2Q1W0 /3MTCM DR64 0946RD0050 0022-5
plants equipped with such machinery, since the decision to modernize for auto-
mation versus scrapping of existing equipment and its replacement with new
automatic or semiautomatic machines suitable for automation is quite a difficult
one. In various branches of the Soviet industry, the automatization in what-
ever form it exists is only partial, and embraces individual pieces of equip-
ment in the technological chain of manufacturing processes.
The value of capital expenditures going into the automatization of Soviet
chemical, petroleum, and metallurgical industries runs at a level of about 2 to
4 percent of total new investments, while in the U.S. capital expenditures for
automatization of these industries range from 15 to 25 percent of the total 47
The ratio of capital expenditures for the automatization of automobile and
tractor manufacturing processes is higher but since Soviet planners recognized
the primary need for overall mechanization prior to wider introduction of auto-
matization, the new investments are relatively insignificant.
Conclusions.-Soviet propaganda claiming technological and economic gains
is exaggerated and its primary purpose is to make the Free World believe in
U.S.S.R.'s industrial invincibility. Aided to some extent by those who accepted
at face value her claims to industrial prowess, the Soviet Union during the
past two years succeeded in creating this impression. Her spectacular tech-
nological achievements, attained through crash programs conducted at the ex-
pense of research and development not contributing directly or indirectly to
the military effort, are lacking in depth and breadth and her nonmilitary in-
dustries contain little that the West should envy or be alarmed about. These
conclusions are based on facts drawn from official Soviet sources. The fact
that the Soviet Union is constantly expanding her primary industries does not
attest to similar expansion in manufacturing industries. The continuous and
relentless drive for quantity rather than for quality has resulted in para-
doxes, and has created material and technological bottlenecks from which the
Soviets may not extricate themselves.
The 1958 Brussel's Fair was an ideal place for the U.S.S.R. to exhibit samples
of her industrial "might." The industrial exhibits with machine tools, instru-
ments, etc., were impressive to the untrained eye and to the uninformed on-
looker. These exhibits, coupled with skillful narratives and baskets-full of
handouts, achieved their purpose by creating an impression that the Soviet
Union has as much or more, and as good if not better machines and equipment
than the West. In reality the machines and instruments exhibited are in critical
demand in the Soviet Union. This scarcity, and the fact that what is available
is of substandard quality, retard the Soviet Union's industrial development in
general and her attempts to "automate" in particular. A Western labor leader,
recently a visitor to the U.S.S.R., related that when he visited a Soviet machinery
plant he observed that most of the machine tools and other equipment in use
were obsolete. To his inquiry as to the whereabouts of the new and numerous
modern machine tools the Soviet Union claimed to have, an obviously unrehearsed
Soviet worker replied : "Well, some of these are at the Moscow Fair, and the
rest must be in Brussels." Perhaps this quip is far fetched, but when one
considers the facts, this straight and simple reply echoes an element of truth.
What has the Soviet Union achieved in the realm of overall mechanization and
automation since 1955? Some answers to this question can be found in the
findings of the All-Union Conference of Soviet industrial workers which took
place at the Kremlin on 12-16 May 1958, to discuss some of the more urgent
problems facing the Soviet industry in this respect 98 The findings of the Con-
ference point out, that despite such achievements as Sputnik, atomic energy
programs, etc., there are still serious shortcomings which have to be alleviated.
Despite the resolutions of the XX Congress of the Communist Party of the Soviet
Union (1956) to accelerate the automatization of manufacturing processes, the
progress in that direction has been slow. Theoretical studies of automation are
still carried out on an inadequate scale and same can be said about the studies
of technological processes that could facilitate the introduction of mechanization
and automatization. The modernization of the technological apparatus to meet
the requirements of automatization was quite inadequate. The number of avail-
able semiautomatic and automatic machine tools and automatic production lines
is insufficient and numerous technological processes still require a large expendi-
ture of physical effort (manual labor). The mechanization level of storage and
47 Strumilin, op. cit., pp. 12.
49 "Za pod'yem kompleksnoy mekhanizatsit I avtomatizatsit proizvodstva" (For the Rice
In Overall Mechanization and Automation of Production Processes), in Avtomatika I
telemekhanika, v. 19, no. 6, June 1.958, p. 517-518.
76869--62--pt. 1-7
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appr9)ted Fo Bgjas 22A( jJ1 mq1 64P0 6F,
.Q.q( 500020022-5
handling operations is low. Soviet industry is lacking a unified technical policy
on principal problems of automation. There is a drift and disjointedness in in-
strument manufacturing and a significant lag in designing of new methods and
apparatus for automatic control, especially of data units for the control of physico-
chemical processes, etc. The training of personnel in rudiments of instrument
manufacturing and automatization of manufacturing processes is also inadequate.
Economic studies of the efficiency of automatization are lagging and the inter-
change of technical data dealing with automatization is very poor. Among
other serious shortcomings are the slow rate of introduction of leading practices
and an over-long lag between the data of pertinent inventions and their practical
Implementation.
Some of these findings have been echoed by Khrushchev ae who, in his 14 Novem-
ber 1958 speech before the graduates of Soviet military schools, stated that in
order to attain the economic goals set forth by the Seven-Year Plan (1959-1965),
it is of primary importance for the Soviet Union to expand the production of the
most modern machine tools, equipment, instruments, and other means for overall
mechanization and automatization. This is quite an undertaking when one con-
siders that in 1955 the Soviet per capita physical output of capital equipment
was only about 28 to 30 percent of the per capita output of the United States
during the same year 60
Can the Soviet Union attain these goals within the indicated period of time?
It i very doubtful, since a progress toward full automation can only be achieved
through a uniform mechanization and this the Soviet Union is lacking. Further-
more her progress will be slowed down by inadequate number of designers, proto-
type makers, production engineers and other highly specialized personnel. It
may take her 15 to 20 years with the best training programs and with a full
complement of required machines and instruments ?1 This period could be
shortened to some extent should the Soviet Union go beyond her sphere of inter-
ests for direct and indirect help. There are some indications to this effect con-
tained in Soviet East-West trade proposals, where the primary Soviet interest
rests in modern machine tools, equipment for her chemical industry, and in the
engineering know-how, especially that of the United States. Is it not paradoxical
that the U.S.S.R., whose aim is to destroy the Free World through an economic
and political penetration, would turn to the United States, the champion of the
Free World, for economic help? This "zig-zag" in Soviet foreign policy should
be scrutinized in every detail since It has become a matter of vital importance
for the West in general and the United States in particular not to allow them-
selves to be outpaced by the Soviets in areas of technological and economic
progress that would further Soviet gains in the economic war. Lending of sup-
port to the Soviet industrialization drive might nullify all Western attempts to
contain politically the Soviet Union and might constitute a retreat which even-
tually may end in a national disaster.
The sole responsibility for the content and technical accuracy of this article
rests with the author.
APPENDIX IV
(The following comments were reeeived by the subcommittee from
persons mentioned by Mr. Gwyer and representatives of publications
to which he referred:)
IIARRON RICKARD & MCCONE CO., OF NORTHERN CALIFORNIA,
San J aneisco, Calif., November 8, 1961.
Mr. J. G. SoURwINE,
Chief Counsel, Internal Security Subcommittee,
U.S. Senate,
Committee on the Judiciary,
Washington, D.C.
DEAR MR. SOURWINE: I appreciate your letter of October 30 and am grateful
to Senator Keating for having extended the opportunity to appear before your
subcommittee. I am embarrassed to say that I om not familiar with the in-
formation which was being pursued by the committee in this instance and
accordingly cannot predict the value of any testimony I might give.
OltPravdo., 15 Nov. 10S, p.
00 Itotshteyynn, op. cit., p. 14.
El Struudlin, op. cit., p. 24.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved lRcwR Iea$es2O 4i O3rt1 CIA 1* 1P i4BW3 Q05000X022-5
The testimony which you attached to your letter would seem to have estab-
lished in the record the fact that I have differed wholeheartedly with Mr.
Joseph A. Gwyer, who testified before the subcommittee on October 23. This is
certainly a correct representation in that I have read two articles which were
written by Mr. Gwyer, one which appeared in Ordnance magazine ; another
which was written and to the best of my knowledge not published. Both of his
articles seem to convey the impression that the Soviets are lagging far behind
America in the production of machine tools. This seems to be so completely
contrary to all available information by reliable authority as to have raised
some serious questions in my mind regarding Mr. Gwyer and his source of
information.
If by chance your subcommittee finds it is seriously concerned with an ap-
praisal of the American machine-tool industry as compared to that of the Iron
Curtain bloc in general or the Soviets in particular, I believe that you will
have many expert witnesses available to you for testimony. I for one should
be happy to cooperate if called upon to do so. In that connection I might
venture the personal opinion that the Soviets are at the present time producing
machine tools for their own use at a rate higher than 4 to 1 over the production
of machine tools in America for American consumption. I should also like to
offer the opinion that if this present rate continues through the balance of the
1960's Mr. Khrushchev's prediction of industrial supremacy will become a tragic
reality for all Americans to acknowledge. This opinion is shared by many
responsible people in the executive branch of the present administration.
In view of my rather strong apprehension about this situation I hope it is
understandable that I would differ with Mr. Joseph A. Dwyer.
I will appreciate your comments or suggestions if you feel that I could serve
the interests of the subcommittee further.
Yours very truly,
J. 0. ELLISON.
MACHINERY,
PUBLISHED BY THE INDUSTRIAL PRESS,
New York, N.Y., November 1, 1961.
COMMITTEE ON THE JUDICIARY,
U.S. Senate, Washington, D.C.
(Attention of J. G. Sourwine, chief counsel, Internal Security Subcommittee.)
GENTLEMEN : Answering your letter of the 30th, there is a very simple explana-
tion for the action taken by Machinery's editors in connection with the article
contributed to Machinery by Mr. Joseph A. Gwyer in 1959, which is that
Machinery is a technical journal dealing with the facts about the technique
and practice of the metalworking industry. Its articles have to do with these
facts rather than with any expressed opinions, however soundly based they
may be.
You may rest assured that no one in this organization has the slightest desire
'to protect the interests of the U.S.S.R.; quite the contrary. I' or some time now
we have refused to accept Russian subscriptions or to renew those which had
previously been in effect.
Sincerely yours,
THE NEw YORE TIMES,
Mr. J. G. SOURWINE, November 1, 1961.
Chief Counsel, Internal Security Subcommittee,
U.S. Senate, Washington, D.C.
DEAR MR. SounwiNE : Thank you for your letter telling me of Mr. Gwyer's
brief citation to material I wrote for the New York Times. I do not see any
need for me to testify since at worst Mr. Gwyer, in the excerpt you sent me of
his testimony, accuses me of having made a mistake, which is always possible.
The excerpt you sent me does not, however, document or prove in any way that
the quoted excerpt from my writings is a "misstatement" as charged, and at the
moment I believe that what I wrote was accurate. Additional evidence could
change my mind, of course.
It does seems to me, however, that it would be fairer to all concerned if your
record contained the full text of my article-a copy of which is enclosed-rather
than the brief excerpt. Also I would hope that your record would note that
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 App6gved For Rerea0je i OA` Cyd lliAgRiR P~4 V. gW500020022-5
EXPO
the following statement appeared in Fortune magazine for October 1961, page
109:
"In metalcutting machine tools, Soviet 1960 production of 154,000 tools ex-
ceeded U.S. output in its best recent year (1952) by 60 percent, and was more
than triple U.S. production for 1960."
If I am in error on this point, as Mr. Gwyer seems to believe, then I err in
very respectable company. But I repeat, I have as yet seen no evidence to
convince me that either Fortune or I is wrong on this point.
The text of Mr. Schwartz' article follows :
[New York Times, Oct. 19, 1:9011
U.S. LEAD SUBSTANTIAL.
By Harry Schwartz
Premier Khrushchev's declaration of confidence that the Soviet Union would
soon outproduce the United States appeared to be based upon the success his
country has had in narrowing the U.S. production advantage. But the U.S. lead
in the economic race is- still substantial.
Any attempt to give a precise evaluation of the present status of the competi-
tion comes up against the fact that conclusions depend upon what one measures
and even how one measures it.
Last June, for example, President Kennedy focused on total production of all
goods and services-what economists call the gross national product-and re-
ported that the Soviet Union in 1959 produced only about 47 percent as much as
the United States.
But Premier Khrushchev prefers to focus on industrial production alone, de-
claring that Soviet factories and mines now produce more than 60 percent as
much as their U.S. counterparts. This makes the U.S. lead less imposing and, by
Premier Khrushchev's reckoning, the Soviet Union will have caught up by 1970
or earlier.
One of the reasons for the discrepancy is that the U.S. economy has much more
in the way of services-ranging from those performed by beauticians and barbers
to those of teachers, insurance agents, and lawyers-than does the Soviet
economy. Washington tends to include services in its comparisons while Moscow
normally leaves them out.
There are many important production areas in which the Russians have nar-
rowed the gap with the United States substantially, and some where Soviet
output is actually ahead.
The brightest comparison for the Soviet Union is in machine tools. Last year's
Soviet production of 154,000 machine tools was not only more than 3 times that
of the United States but also 60 percent better than the U.S. record year of
machine-tool production, 1952.
Steel provides the Russians with other comforting statistics. This year the
Soviet Union will produce about 71 million metric tons of steel, about 80 percent
of the expected U.S. output.
There are commodities in which Moscow refuses to compete, notably auto-
mobiles. U.S. production of automobiles in 1 good week has usually in the recent
past been equal to normal Soviet output in an entire year. Similar though less
extreme comparisons hold for goods such as television sets, refrigerators, and
the like.
THE CHRISTIAN SCIENCE MONITOR,
Boston, Blass., November 1, 1961.
Mr. J. G. SOURWINE,
Chief Counsel, Internal Security Subcommittee, U.S. Senate, Washington, D.C.
DEAR MR. SOURWINE : Thank you for your letter enclosing the testimony by
Mr. Gwyer in which he mentions his contacts with me, and thank Senator
Keating also for the opportunity to comment.
Mr. Gwyer has correctly stated the relationship, and I have nothing to add.
His material was thorough to the point of being exhaustive, but it was not
firsthand. It was a researchist's work, and did not stack up with the firsthand
reports which were given me by businessmen who had actually seen Soviet
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved6F?96 l8psf,39, 4~/ 1A~ 1F o6%R0~4~? 0050 0022-5
machine tools at work. So I accepted the firsthand reports since they were
from competent men, and offered to state Mr. Gwyer's total disagreement and
use some of his points in disagreement. However, he seemed to feel this would
compromise him and asked me to eliminate his name altogether from the article,
which I did. I am enclosing may correspondence with hint, which I would like
to have returned after it has served any purpose useful to you. I have also
attached the article in question with the authorities italicized from whom I
drew my material.
Sincerely, NATE WHITE,
Business and Financial Editor.
Mr. White's article, "Tooling for Communism," was published on the first page
of the second section of the Monitor's edition of January 31, 1961. He introduced
it in part as follows :
"World communism increasingly is machine made.
"The Soviet Union exports machines to countries which need machines. And
it attempts to export communism with the machines.
"This is the most significant threat to the free societies in the Soviet machine-
tool industry.
"Some Western experts scoff at the Soviet machine-tool industry. 'They can
only produce pliers and monkey wrenches,' said one production man. But this
view is not supported by the preponderant evidence, largely assembled by several
teams of U.S. experts in different industries who have visited Soviet industrial
plants."
* * * * * *
Among those quoted was Benjamin C. Buerk, president of the Buerk Tool &
Machine Corp., Buffalo, N.Y., who visited the Soviet Union in August 1959.
Mr. Buerk said in part :
"The most impressive plant was the Krasny Proletary Works in Moscow,
builders of machine tools, specializing in the manufacturing of engine lathes on a
production-line basis. Here we saw the use of automation in the production of
a lathe with about a 16-inch swing, made in various bed lengths. The major
components such as the bed, headstock, and carriage are produced at a series of
machining stations with automatic transfer mechanisms between each station.
"This is an interesting example of the application of automation techniques in
the manufacture of machine tools. Nothing I know of in this country compares
with it. * * *
"We saw other instances of mass production applied to such things as the
manufacturing of ball bearings, for example. We also visited two plants which
manufacture heavy equipment such as large turbo and hydroelectric generators
for power stations, large electric motors, huge steam turbines, and similar
equipment.
* * * * * * *
"At the U.S.S.R. Exhibit of Economic Achievement in Moscow, we saw an
exhibit of machine tools, I was frankly surprised to see examples of advanced
development in such things as electrochemical discharge machines, automatic
grinding machines, and numerical control."
Mr. White cited a "recent" study by Franz Wolff-Cammaerts, secretary-gen-
eral of the European Committee for Cooperation of Machine Tool Industries.
This official estimated that the 1953 total machine-tool production of the U.S.S.R.,
East Germany, Czechoslovakia, Hungary, and Poland at 29.9 percent of the
total world production. Of this production 20 percent was for export.
It is certainly true, Mr. White added, that the United States and Canada,
accounting for 23.8 percent of the total world output, and Great Britain and
non-Communist Europe with 39.9 percent of the world output, provide a vigorous
world competition for the Communist bloc.
Three other Americans who visited Russia were quoted in Mr. White's article.
"We saw generator and turbine plants in Leningrad, ball-bearing and ma-
chine-tool plants in Moscow, also their first atomic-energy plant for power de-
velopment," John R. Campbell, consulting engineer of Rutherford Campbell
Engineers, Inc., Buffalo, N.Y., tells The Christian Science Monitor. "The in-
dustrial plants we saw were quite up to date and efficient."
"I got the feeling (in a woolen mill in Moscow) that they had their workers
driven to fever pitch and managed to get the most possible out of them by keep-
Approved For Release 2004/03/11 CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
98 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
1ng them at this zealous, competitive level. Their equipment was bad and in-
eRicient, much of it obviously confiscated in Germany at the close of the war,"
reported Frank King, "Their of the women's division of Pendleton Rvoolen
Hills, Portland, Oreg., "`Their quality was poor. * * *"
J. L. Singleton, senior vice president of Allis-Chalmers Manufacturing Co.,
reported : "I visited plants which manufacture transformers, steam turbines,
hydraulic turbines and electrical rotating equipment such as generators and
motors. I must say that the Soviets are making a tremendous effort, but at
the same time I was impressed with the great odds under which they are work-
ing. I felt that they were doing a commendable job in hydraulic turbines but
otherwise their products could not be sold in this country on a competitive basis.
"In their factories I saw no innovations in machine tools and practically no
electronic controls as we know them in this country. As a matter of fact, for
the most part, the machine tools I saw were other than Soviet manufacture. In
one plant concerned with the manufacture of steam turbine blades they are still
using American-made machine tools marked `war finish' that were furnished by
us during Lend-Lease. * * *"
To Nevin L. Bean, technical assistant to the general manager of the automatic
transmission division of Ford Motor Co., the story is quite different, Mr. White
wrote.
"In an interview in his office at Ford's Plymouth, Mich., division, Mr. Bean
expressed his concern that complacency would blind the people of the United
States to the Soviet industrial threat," Mr. White said. "Mr. Bean, accom-
panied by A. C. Hall, vice president for engineering of the Martin Co. and Weldon
Brandt of Westinghouse Electric, visited the Soviet Union in 1955 and was host
to a return group of Soviet engineers. Through various sources he has kept
himself abreast of the Soviet machine-tool production.
"While he felt that Soviet plants and standards did not measure up to U.S.
systems, Mr. Bean saw enough of Soviet production to warn that the U.S.S.R.
would make "giant production strides," expecting that by 1965 "many of their
production facilities will be comparable to ours." Mr. Bean felt that the U.S.S.R.
engineers showed "a high quality potential" in machine tools, production tech-
niques, and engineering know-how.
"In the recent interview Mr. Bean told this writer that he felt the Soviets had
come abreast of U.S. production techniques in many fields, and that it would be
foolhardy for westerners to assume that the people of the U.S.S.R. were standing
still.
"Mr. Bean reports as follows on the Ordzhonokidze Machine Building Plant
in Moscow : "The plant specializes in building machine tools for boring. Tools
old, but in good shape, much equipment of American manufacture including
gear grinders, turning equipment, etc. * * *"
Mr. Ball said that, at the Experimental Scientific Research Institute Machine
Building, Moscow, "among the machines that they showed us that were par-
ticularly interesting were : a gear-grinding machine, somewhat similar to a
Gleason-very well designed and built ; an automatic balancing machine for
rotors for a variety of sizes-worked very satisfactorily ; an electroorosion
machine which produced a piece accurate to one-half millimeter."
Mr. White also drew upon the American. Machinist/Metalworking magazine,
a McGraw-Hill publication, for some statistical information and he quoted Mr.
H. H. Whitmore, executive vice president of Jones & Lamson Co., machine-tool
builders of Springfield, Vt., regarding prospects for future competition from
the Soviet countries.
AMERICAN MACHINIST,
New York, N.Y., November 10, 1961.
Mr. J. G. SounwiNE,
Chief Counsel, Internal Security Subcommittee,
U.S. Senate, Washington, D.C.
DSAR MR. SouawiNu : Glen Bayless of our Washington bureau has sent to me
your letter of October 30 offering us the opportunity to make any statements
that we may wish before your committee pertaining to the recent testimony by
Joseph Gwyer.
Though I am perfectly willing to testify, if the committee so desires, I believe
that I can save the time of the members, and yours, too, by asking you to read
and put into the record the attachments to this letter.
Mr. Gwyer exhibited to the committee and commented 'critically on a series
of articles written by Norman Stubbs and Peter Trippe and published in Metal-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B0034RR0005Qff20022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.
working Production, McGraw-Hill's publication in London. The series ap-
praised the status of Soviet Russia's machine tool industry. Mr. Gwyer said
that my own magazine, American Machinist, had printed this series, too.
When Mr. Gwyer made this statement he apparently was not aware that, prior
to publication in American Machinist, the original articles had been completely
rewritten and substantially cut in length, with personal opinions deleted and
the facts and technical observations retained. I am attaching, and asking you
to read and put into the record of the committee, a reprint of the articles as we
published them in American Machinist.
To our best knowledge this series in American Machinist was the first printed
in this country describing the size, scope, and the general setup and organiza-
tion of the Russian machine tool industry. We believe now, as we believed
then, that this series in American Machinist was an accurate appraisal, includ-
ing the pluses and minuses. Our findings, as recorded in this series, have been
substantiated by both American and European industrialists and trained ob-
servers who have visited Russia.
Mr. Gwyer, in his testimony before the committee, indicated that Russia's
machine tool performance might have been overstated. I am attaching, and ask-
ing you to read and put into the record of the committee, an article that we
published in the October 16, 1961, issue of American Machinist giving the world
production of machine tools in the calendar year 1960.
The source of our figures in this article is the office in Brussels of the secre-
tary-general of the European Committee for the Cooperation of the Machine
Tool Industries. This committee represents the combined machine tool indus-
tries of all our West European allies.
The figures disclose that Russian production of machine tools attained a new
peak at 183,500 units, compared with 160,000 in 1959 and 152,000 in 1958. Our
American industry built only 34,000 machines in 1960. The figures also dis-
close that the Communist countries, headed by Russia and including China,
built more than 1 million machine tools in the 3 years of 1958, 1959, and 1960.
This total is larger than the output of our own American machine tool industry
from the end of World War II up to now.
Over many years we have published in American Machinist many articles
reporting the plans, technical developments, and performance of Russia's metal-
working industry. If you think that your committee would be interested in
reading these articles and having them put into your record, I shall be glad to
send them to you.
I hope very much that this letter and the attachments will be of help to you
and the committee in your deliberations.
Sincerely,
BURNIIAM FINNEY. Editor.
[Reprinted from American Machinist, Nov. 19, 1956, to May 6, 1957]
REPORT or RUssIA
PART 1 FROM REVOLUTION TO AUTOMATION IN 87 YEARS
Moscow.-Autolnation and still more automation is the front-runner in the
impressive upward surge in Soviet Russia's production and in its technology.
This young nation that 25 years ago had no machine tools is coming up fast
in the race for world leadership in metalworking. What's happening in manu-
facture of aircraft, agricultural machinery, automobiles, machine tools, and
heavy capital equipment of all kinds is convincing evidence that the Russians
have been working around the clock to industrialize as fast as possible what
has been, and to a great extent still is, an agrarian nation.
The U.S.S.R. has just completed its fifth 5-year plan. Its industrial expansion
goal, a very ambitious one, was attained ahead of schedule. Russia is now in
the early stages of its sixth 5-year plan, which spells out a further massive
expansion of industrial facilities by 1960.
In order to understand better and appreciate more fully the vast significance
of what is going on in Russia's metalworking industries-its amazing develop-
ment up to now, and what is likely to happen in the years ahead-one must bear
in mind exactly what kind of a job faces the Soviet leaders.
Russia, as an industrial nation, is unique. Its Government has to administer
an area of more than 8%-million square miles-three times the area of the
United States, four times that of all the countries of Western Europe put to-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
100 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
gether, and covering one-sixth of the inhabited land surface of the earth, Russia
has more than 200 million inhabitants, and the birth rate is increasing.
Less than four decades ago, at the time of the revolution (1918), the great
mass of the Russian people was illiterate. In fact, some of the remote national
groups that were to make up the U.S.S.R. had no written language at all. Against
this, Russia had always had a nucleus of pure and applied scientists (notably
mathematicians) of world renown. No industrial development would have
been possible without that nucleus.
Those are the basic facts we must know if we are to appreciate both the
achievements and the shortcomings of today's Soviet industrial expansion.
It is, for instance, clearly more realistic to consider Soviet industrial develop-
ment in terms of rate of progress rather than judge figures for production of
capital equipment, heavy industry, and so on, at their face value. The latter
are Impressive, it cannot be denied. But the rate of development is staggering
when ,it is appreciated that the present-day program has been built up in a
handful of years from a predominantly peasant population with no technological
knowledge.
Shortcomings are evident, too
That there are many shortcomings cannot be doubted-some of them are there
for all to see. Even in Moscow itself, once one leaves the hotel, houses of ex-
tremely low standard are evident, and, during a car trip a bit further out, we
noted that the large new building projects were soon replaced by evidence of
even lower living conditions-approaching squalor-with some wooden shacks
in the most dilapidated condition. Many houses also were in a bad state of
repair.
Against this, there are new groups of multiple-unit houses going up ; but
even these (or at least, those we have seen to date) have sheet metal roofing.
Whether this is typical or not, it Is impossible to say in this introductory report,
and it would not be fair to judge by the evidence of a single short tour outside
Moscow. Neither does housing yet seem to be ideal even for the higher executive.
For what it is worth, we quote an American visitor who was in Moscow at the
same time as ourselves. He told us that he had visited the director of a
works in Leningrad with his son, and was astonished to find him living with
his family in only a two-room apartment. Clearly the pressure of the program
has caused hardships. Clearly, also, it has achieved spectacular results.
Moscow is a city of contrasts. One of the most impressive sights in the city,
for Instance, is the 500-acre United Soviet Agricultural and IndustrialExhibi-
tion. In this permanent display, the Soviet has a strong morale booster. Here
is a remarkable presentation of the best of Russia's achievements. And, above
all, the exhibition serves as a cultural center in which the many nationalities
and types of people represented in the U.S.S.R. can meet with each other.
Here, too, they can study the latest methods, techniques, and products. En-
gineering equipment is proudly featured-with machine tools allocated a promi-
nent and attractive "palace" to themselves.
There can be no doubting the value of this exhibition, and we shall be describ-
ing the exhibits in greater detail later on. The cost must have been fantastic-
and with the appalling state of some of the living quarters in and around Mos-
cow, one might well wonder what sacrifices paid for it.
In no other country we have visited have we seen anything quite like this
great park, with its beautifully laid out grounds and, most important, the in-
dividual "palaces," many of which are in the characteristic style of the territory
they represent. Each displays its products, indicates the scope and scale
of its activities, and workers from the different states sent to Moscow on short
study courses take in visits to the exhibition as part of the course. The dis-
play In the machine-tool palace is extensive and impressive.
Naturally, with the Soviet policy and power to implement rationalization,
the competitive element as we know it is absent, although there was some
evidence that lack of competition was compensated for by the enthusiasm it
generated and inspired. It must be added, however, that such evidence is not
very concrete. Certainly, everything possible is done to boost morale and stimu-
late keenness, and we met many people who had great confidence in "the sys-
tem" and were working enthusiastically to further their own advancement both
technically and academically.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved lfxqrof?~elWgAQ4ffl~/IIA~ga-BPF~4W,~t@.q.gPO5099?0022-5
Priority for heavy industry
Automation is literally at the forefront, not only at the machine tool palace,
but, more significantly, in the present 5-year program. Soviet preoccupation with
automation can, of course, be traced back to historical necessity-it is a natural
development in building up a powerful industrial potential starting from a
population which was entirely unskilled technically. Such conditions, we be-
lieve, make first for mechanization, secondly for automation in various forms,
and finally for highly complex integrated lines-an entirely inevitable develop-
ment.
The trend has been consistent and has grown progressively from the early
days of Soviet industrial programs right up to the present time-forced by an
inescapable necessity to "deskill" the work and put all the skill into the machine.
This policy has clearly been an indispensable factor in attaining the present
industrial output.
Automation is simply one more aspect of a fundamental principle that has
been energetically pursued ever since the Soviet came into being. Throughout
the history of the Soviet, it has been emphasized that the development of heavy
industry is a prerequisite for raising the country's production forces and for
transforming it into an economically powerful state.
To quote Marshal Bulganin in his report to the 20th Congress : "As hitherto,
the leading role in the department of the socialist economy will be played by
industry-primarily by heavy industry, the production of means of production."
The latter phrase might well be taken as a slogan for the present 5-year plan--
and, indeed, for those that preceded it. It is certainly evident in the figures
for the plan itself. As far as implementation is concerned, it is also evident
in the organizations, not only in factories themselves, but in the remarkable
bodies set up for research and development in machine tools, cutting tools, in-
struments, and so on, of which we shall say more later.
At this stage, it is sufficient to say that, in our experience, these organizations
are on a fantastic scale and are quite unlike anything we know in this country.
It is also, of course, evident in Russia's technological training program.
No machine tools 25 years ago
Before appraising the problems to be overcome if the Soviet program is to be
fulfilled, it is necessary once again to consider the Soviet machine tool industry
in its proper historical setting, because, here too, it is only by appreciating the
rate of development that the plan can be seen in its correct perspective.
One way of illustrating this is to consider the growth of a factory which we
visited in Moscow. We are not in a position to compare this plant with others
in the Soviet as we have not, at the time of writing this report, had the oppor-
tunity of visiting others, but its history of development is broadly the history
of development of machine tools in the Soviet Union.
This plant, the Ordzonikidze machine tool factory, was built in 1930-32. This
date is significant, for, previous to this, there had been virtually no machine-tool
building in the Soviet at all. Thus, the present potential of capital equipment in
the Soviet has been built up from scratch in only 25 years.
The Ordzonikidze plant employs 3,500 people. Initially, its activities were not
confined to machine tools. The policy at first was deliberately to copy foreign
machines in order to get into production quickly without having to call on de-
sign resources which were not available. Russia turned to America for the pat-
tern : started building turret lathes of 65-millimeter bar capacity which were
direct copies of a Warner & Swasey machine. In 1934 Ordzonikidze produced its
first semiautomatic multitool lathe-a copy of the Fay automatic. In 1937 came
the first multispindle automatic-a copy of the Cone machine.
With these machines as the base, Ordzonikidze built up experience in the
shops and the design office. These were the only three types of machines made
until the beginning of World War II when Russia modernized and improved
tooling. War production, however, still remained on similar lines with some
special types added.
After the war, some interruption was caused by need to reconstruct war-
damaged factories but, this completed, Ordzonikidze introduced unit-head pro-
duction machines. Ordzonikidze now makes 11 unit heads in different models
and sizes, based on 3 types. In the same period (1946-48) the plant also did
modernization and experimental work on its own automatics.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
102 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Production of automatics of original design and construction, in addition to
semiautomatic machine tools, started in 1950-52. Power was increased and
speeds raised. Design was considerably modernized, and features included
constant cams and adjustable linkage, lifting of the drum when Indexing,
mechanized motor of the camshaft in setting, and mechanized swarf clearance.
Semiautomatics now feature 60-kilowatt motors and maximum speed has been
increased from 230 to 1,300 revolutions per minute. A smaller model has had its
maximum speed raised from 320 to 1,300 revolutions per minute. One multitool
machine we saw has 200 millimeter diameter capacity, with maximum speed of
2,000 revolutions per minute. It gives four automatic cycles, which the plant
considers adequate.
We were told that six cycles would be considered too much, since it would
Indicate that too much metal was being removed. The latter point is of some
interest. Such a practice comes under the category of "uneconomical usage,"
and is directly in line with the directive for the 5-year plan, wherein economy of
metals is emphasized.
Machine tool designers are called upon to lighten machines as much as possible
without impairing their operating efficiency and, in all industries where it is
practicable, to look for substitute materials.
There is much skip turning on the smaller machines. Two automatic speed
changes are provided. The actual feed is also constant in copying-that is to
say : the geometric sum is constant, the vertical and horizontal feeds related.
The same plant Is also making a special vertical boring machine for roller
bearings, and has already built a large floor-plate boring machine which is now
somewhat out of date but is in process of being redesigned.
Transfer machine major feature
Compared with the original three copies of 20 years ago, the major feature of
Ordzonikidze production is now transfer machines, which have been in produc-
tion since 1948. These are heavy machines. It was noted that the plant is today
turning and grinding on its transfer lines, notably on pistons, rings, electrical
motor shafts, and so forth. In turning rings and pistons, and also gears, vertical
spindle elements are used.
Several machines were seen in course of construction, including a large duplex
machine for cylinder heads in which substantial broadly based heads were pro-
vided for milling cuts, and in which provision was also made for manipulating
the heads automatically, turning through 180?, and so on.
Another indication of the progress made by this plant in 22 years : initially it
had 15 to 20 designers. Today, there are several separate design offices for dif-
ferent machines and, altogether, 400 designers and draftsmen are employed.
The shops are quite well laid out, with plenty of space in the aisles, but the
assembly bay is cramped. The floor is firm, but again some sections of the as-
sembly bay are not so good. Those concerned are aware that there is room for
improvement and do not appear to be sensitive about it. The engineer we were
talking to appreciated the point when we told him that we liked his machines
but not his floor. They also have minor troubles with undesirable workshop
practice, of a type, it should be said in fairness, with which we are not un-
familiar here. The same engineer grimaced when he saw that we had noticed a
young fitter using a file as a punch.
In the plant itself, most of the items are imported-seine are prewar and others
wartime acquisitions. Very few of the machines we saw in this plant seemed to
be postwar. Among those noted were two Butler planers and a whole battery
of medium-sized Billeter & Klonz machines. There was a Kendall & Gent miller,
a small Cincinnait (British built) ; a Beliat-Gray planer-miller (this was one
of the few postwar machines) ; a fairly elderly large Giddings & Lewis floor-
plate horizontal boring machine; Milwaukee millers; a Girards radial and a
Wotan grinder.
Russian-built machine tools
But, lest it be thought that Ordzmiikidze is entirely equipped with imported
machines, it should he added that the Russians are also taking some of their
own medicine. In the turret lathe section we noticed quite a few copies of
Warner & Swasey machines, bat we did not see any Russian-built copying lathes.
There are some important Russian machines in the plant, notably a large
horizontal bo;Ing machine, built in Leningrad and of the very latest type; and
a large and a medium sized planer-both looked good. The Soviet planer had a.
table 2? meters by 10 meters. The borer had all electromechanical controls,
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved -GIW9ARq//VAmiAI -Dg~4RQ3R1(00504830022-5
no handwheels, and amplidyne drive. In addition we saw a fairly new Soviet
spiral bevel gear grinder and others for spur gears. There did not seem to be
really anything out of the ordinary about this equipment but, on the whole, it was
in pretty fair condition. We were told that a particular point was made of
maintenance,
Tooling and methods in this plant were generally conventional, with emphasis
on carbide tooling. Although ceramics were noted elsewhere, there were none
here. A homemade induction heater was in use for hardening gear teeth.
As far as the rate of working was concerned, there was certainly no rush and
tear about the place and, unless efficiency deceived, one would say that the pace
was not as fast as in the best British and American shops.
As one of the founder machine tool factories in the Soviet, this plant has con-
sistently developed along a typical pattern and is geared to take its place in
providing machine tools based on up-to-date design principles which will doubtless
play their part in implementing the 5-year plan.
PART 2. RUSSIA'S SIXTH 6-YRAR PLAN
Moscow.-Soviet Russia has every intention of usurping the United States'
dominant lead in world production and technology by 1960, when the U.S.S.R.'s
just-begun sixth 5-year plan will end.
The new plan calls for an even more intensive industrial and economic develop-
ment program than the fifth 5-year plan, which, according to Russia's own official
figures, chalked up this impressive record in the years 1950 through 1955:
Industrial output increased by 85 percent.
"Production of the means of production" increased by 91 percent.
Total metalworking output increased by 220 percent.
And Russia's industrial production increased 220 percent in the years 1940 'to
1955.
In still another field, Russia intends to build mechanized automatic rolling
mills of types comparable to the world's best.
Russia urgently needs to economize on metal. This is borne out not only by
plans to greatly increase iron and steel output, but by specific instructions aimed
at the machine tool designer.
Russia still has far too many old lathes, most of them totally inadequate for
modern turning. Ivor example, some of them have spindle speeds of only 150 to
400 revolutions per minute. But at Ordzonikidze new types of lathes are being
built with speeds up to 2,000 revolutions per minute.
Lacking, too, are enough automatics and semiautomatics, boring, gear-cutting,
grinding, forging, and stamping machines. And foundry machines presently in
use have only about one-third to one-fourth the capacity of modern equipment.
To quote from the directive for the sixth 5-year plan, "In designing and pro-
ducing lathes, machines, and equipment, the machine builders must pay particu-
lar attention to lowering expenditure of metal by improving designs, using eco-
nomical rolled shapes, and replacing metal with plastics."
Russia's instrument manufacturing and electronic industries will come in for
a good deal of attention. To provide sufficient quantities of control equipment for
automation, Russia is scheduled to build 32 specialized instrument plants within
the next 5 years. Research and laboratory facilities will be enlarged, doubtless to
allow for increased production of computing equipment. Look for Russia to
adopt the principles of numerical control on a large scale.
Modernization of existing machine tools will be a big factor in the program.
The Russian Government has often implied that its plants have to build too
many of their own fixtures and gages, with insufficient help from machine tool
builders. That situation will be corrected by a special department of Russia's
major developmental organization, ENIMS.
Automation will play a vital role in Russia's forthcoming industrial boom. As
Bulganin himself said in a recent speech, "the economic effect of automation
in engineering works is high. Our up-to-date production lines make it possible
to reduce the number of workers to between approximately one-fifth and one-
tenth of what it was, and to curtail working time in processing to the same
extent."
Those gains are impressive by any standards, but the Russians still aren't
satisfied with their industrial, technological, and economic progress. The sixth
5-year Ian calls for an even greater effort to achieve Russia's goal of world
Industrpial leadership.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
104 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Take for example production of machinery-the "production of the means of
production"-that is the heart and soul of the program. This is planned to
increase 70 percent by 1960. Compared with 1940, this means that the Soviet
will have to increase machine production 560 percent over its 1940 quota. To
accomplish this end, Russia is preparing to turn out an unprecedented quantity
of modern machine tools, automation equipment and instruments, forging and
stamping machines. Keeping pace will be tremendous expansions of electric
power producing facilities, and of the iron and steel, oil, coal, and chemical
industries.
Russia's Government is well aware that the country still has far too few
machine tools. Last year, various engineering ministries were sharply criticized
for holding up Russia's production potential. It is fully appreciated that the
machine tool industry must keep well ahead of other industries. That is why
an 80-percent increase in the output of machine tools is vital to the sixth 5-year
plan.
To accomplish this, metalworking plants must be reequipped with the newest
in lathes, forging and stamping machines, with foundry equipment, and with
automatic and semiautomatic lines. Output of lathes, for example, will be
almost doubled by 1960, comprising at least half the total output of machine
tools during the next 5 years. Production of multitool lathes will increase
nearly 150 percent, and output of automatic and semiautomatic lines and of
automated equipment will go up nearly 400 percent.
More forming, stamping machines
A high priority will go to forging and stamping equipment under the sixth
5-year plan to achieve twice the production of this type of equipment, and to
increase output of heavy presses by at least 300 percent by 1960. And precision
forging will be more widely applied than before.
Output of modern foundry equipment, to replace manual operations and bull
labor, is expected to increase by as much as 700 percent. Not only that, a large
number of specialized foundries will be built in various parts of the country.
It is hoped that a much higher output of precision castings will thus be obtained,
thus saving both on metal and on subsequent machining operations.
"Automation must be widely employed in all industries. This task confronts
the heavy and light industries alike. Automatic computing machines which can
themselves determine the most advantageous regimen of production processes
and maintain it, and also establish and control quality assignments, must play
an important role in automation."
This would imply that Russia is deeply interested in applying numerical
control to production. So far, it hasn't been determined whether the Soviet
Union has gotten past the theoretical stage.
That brings up a pertinent question. Is Soviet research out of touch with
industry? Even the Russian report to the 20th congress brings up the point,
"A spirit of smug complacency and self-satisfaction has taken root in some
scientific institutions. It would be a good thing if those institutions were
swept by the fresh breezes of criticism and self-criticism, and if they went in
more for creative discussion of scientific problems. This is the only way to
eliminate the shortcomings which retard the development of science and, in
particular, to put an end to the misguided tendency of certain scientists to act
as the sole arbiters in their particular branches of science."
That is strong comment. It is, of course, not an exclusive Soviet problem.
Adverse comments to the contrary, though, Russia's scientists have succeeded
in applying the principles of automation to the production of automobiles,
trucks, electric motors, sewing machines, and many other metalworking products.
And there is an impressive solidity about the transfer machines now being
built for large components. High rates of metal removal are being achieved in
milling cuts on large cast iron components. The heads on these machines are
standardized and of substantial construction.
In contrast with these heavy units, standardized unit heads are also available
for high-speed operation on quite small parts, using rotary indexing machines
with automatic feed of the components at the loading station. Step drilling of
smaller diameter holes at high speed is featured, too.
There is no doubt that the Soviet has come a long way in developing these
machines. An example of such advanced technique is the incorporation of
turning and grinding stations on lines for pistons, rings, and armature shafts.
It should be appreciated that automation means much more than transfer
machines to the Soviet. The latest trends show a serious endeavor to provide
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved f9fA$le se?RfflJ913~1MATEllAIARDP664T10303,4U6SR010050q( 0022-5
flexibility in automated lines. An important trend in this respect is toward units
with standard table heights that can be incorporated into a line as required, and
the use of general-purpose machines with appropriate linking arrangements.
Russia plans during the next 5 years to bring into service not less than 220
automatic and semiautomatic lines and shops. In the radio and electronic fields,
extensive mechanization of, and automation of production of standard parts will
be carried out. It is also planned to automate assembly of electric motors.
Considerable specialization in the production of machines is called for, and it
is clear that, up till now, there has been too much duplication. The engineering
industry heads the list here. It is pointed out that many ministries and de-
partments are manufacturing vital equipment entirely outside their fields of
production, and that one and the same type of machine is being produced by sev-
eral ministries or departments when it could more efficiently be centralized in
one.
For Instance, the Ministry of Agriculture has up till now been turning out
about 10 percent of all the metalcutting machines, and 24 percent of all the form-
ing machines and presses produced in the country. Such machines, in conse-
quence, have often been obsolete technically and production cost has been high,
because they have been made in comparatively small batches, and with insuf-
ficient technological knowledge.
Because of the present lack of specialized foundries, and forging machines ana
press factories, large quantities of castings, forgings, dies and fixtures, and
other items in large-scale usage have had to be produced by Individual plants,
at high cost and poor quality. As already mentioned, improvements in foundry
and metal-forming equipment are envisaged in the next 5 years to overcome this
situation :
"The aim must be to have every enterprise producing technically uniform prod-
ucts, to standardize parts and units to the maximum, and to organize their mass
production as specialized enterprises."
This is not to imply that the variety of equipment available to Russian in-
dustry will grow less ; on the contrary, it envisages a growth of sizes and types
of product ; but these must then come under strict specialization of both design
and production.
It is appreciated that Russian productivity has not increased in an adequate
ratio to its technology, and that this is not solely the result of inadequate pro-
duction planning and engineering, but is also a function of irrationalities in
the system of output quotas and wage rates-a surprising admission.
Apart from the introduction of more modern machinery, Russian productivity
in the next 5 years will be helped by the expansion program for power supply
which, it is claimed, will increase the power per industrial worker by 60 percent.
The brief details in the foregoing major requirements called for in the pres-
ent 5-year plan were taken largely as our basic terms of reference when dis-
cussing the situation with Soviet engineers.
In an interview, with the Deputy Director of the Ministry of Machine Tools
and Small Tools, it was confirmed that the figure of 250,000 tons of machine
tools (the expected total Soviet output for 1956) is not, as first thought, totally
inclusive.
Overall production is in fact more than double this figure, since it applies only
to metal-cutting. Previously, there was some doubt as to whether this was so
or whether the figure included forging machines and presses. It seems clear
that these are not included and, in fact, forming and foundry machinery will
amount to another 150,000 to 180,000 tons.
Emphasis on metal forming
We had confirmation, as envisaged in the report to the 20th Congress, that,
during the present plan, the emphasis will be on metal-forming machines, and
a senior member of the directorate of the Ministry of Machine Tools made it
clear that it is looking to such machines to make a major contribution to in-
creased productivity. One aim, as already mentioned, is to produce more close
forgings, making the utmost use of automation.
Asked whether powder metal techniques were included in this category, the
Deputy Minister told us that Russia is not looking for any major developments
in that field, although powder metallurgy is being used to some extent for the
production of tools. The lost wax process is also exploited where practicable.
Incidentally, we saw evidence of this at the Moscow United Soviet Exhibition,
notably for sewing machine parts.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
106 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Shell molding, we were informed, is being used only on a limited scale. Solid
crankshafts have been cast by this method, but are not in general use. "Bake-
lite" sand mix-the word "Bakelite" is the actual term used-is considered too
expensive yet to justify wider application.
The West's embargo on machine-tool shipments to the Soviet is decidely a
thorn in Russia's side, Russia badly needs certain types of machine tools listed
under the embargo, although officials claim it won't hold up the sixth 5-year
plan.
The head of Russia's export-import organization made it plain, too, that the
Western machine-tool makers, themselves, were not to blame. He had found
them eager enough to sell their wares within the limits imposed by heavy order
books. Some of them recalled the benefits of prewar sales, he said, and the
Soviet could remain a big customer. West German firms in particular, would
very much like to gain access again to the Russian market.
Asked whether the Russian aim was to become self-contained as far as the
production of machine tools was concerned, he replied, "Not necessarily." Na-
turally the embargo has had a bearing on Russia's attitude and, embargo or no,
the Soviet is continually broadening the spread of its products.
The expansion of machine tool production under the sixth plan by no means
represents only increased output of current types. Here are figures quoted to
indicate the revised shape of the program of types and sizes, according to plan.
Figures relate to the end of the 5-year period.
1950
1955
1960
Metal cutting-------------------------------------------------
435
790
1,200
Presses,forming machines.-----------------------------------
99
240
500
Foundry and diecasting---------------------------------------
26
50
120
woodworking------------------------------------------------
111
156
159
Elephant machine tools are a feature of the Russians' building program too,
and steps have been taken to insure that Russia can meet demand for these
machines, to some extent at least, despite the ban. Asked what the maximum
sizes are, the reply was, "Any size we may need." As a guide to the order of
size of machines built to date these figures were quoted ; a boring mill for work
up to 18 meters diameter ; a planer with a table 5 meters wide by 18 meters long ;
a center lathe with center height of 11/2 meters-bed could be any length required.
What capacity Russia has for producing these large machines was not revealed.
Even so, it was explained that the Soviet would very gladly have bought
these machines from the West, and also other specialized types required in re-
latively small quantities,, because it would have taken less cost and effort, he
declared. Russia, for example, was not particularly anxious to build its own
machines for producing marine reduction gears. The Russians clearly appre-
elated the considerable know-how involved, and they could probably have used
the design and production capacity to better advantage.
But, by force of circumstances, the Russians had to introduce them into their
program. Now the machines being turned out are capable of doing the job.
Import and export of machine tools are handled by a state organization, Stanko-
Import, which has its headquarters in :Moscow. It is very clear that the Rus-
sians would like to buy if the West would sell. However, the Russians seem
fairly confident that, if the embargo continues to be applied, they will be able to
meet many of their needs elsewhere.
In conversations with heads of Stanko-Import, we also discussed European ma-
chines and were told that deliveries of Hauser machines were good, but de-
livery was slow from Societe Genevoise.
One unexpected discovery during our visit to Stanko-Import was that in
spite of a shortage of machine tools, Stanko is prepared to export Soviet-built
ones. Inconsistent though it may seem, we were told that Stanko would export
standard types, and we were quoted prices on milling machines and horizontal
boring and milling machines up to 200-min. diameter spindle.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved Ie se AQr /1 A ~C pP~4 3 F R.050q 0022-5
Prices, we were informed, would be "adjusted according to competition." The
head of the organization, who gave us this information, added that he would
be no more specific than to add that "they were also businessmen."
We could obtain no figure for the volume of machines which Russia would be
prepared to export. Asked whether the U.S.S.R. would be prepared to license its
designs, he admitted that it is a possibility. Prestige is obviously one factor
behind the decision to export, and, doubtless, a competitive element.
Among a complete set of catalogs, in categories, which we obtained from
Stanko-Import, is a well-produced publication in English listing Soviet gear
cutting machines. This includes gear shapers, straight bevel gear generators,
spiral and hypoid. bevel gear generators, gear bobbing machines, horizontal gear
cutters, gear tooth chamfering machines, gear shavers, gear testing machines,
spline hobbers, gear grinders, thread millers, thread grinders, and nut tapping
machines.
The introduction to the catalog is worth quoting : "Machine tools produced in
the U.S.S.R. are outstanding for their high efficiency, convenience, and safety
in operation and long service. The first class material, perfect modern design,
and skillful workmanship provide accuracy, high efficiency, and durability of
the machine tools. Steady improvement of machine-tool design in the U.S.S.R.
aims at the increase of productivity, accuracy, reliability, and dependability of
machine in operation, as well as the reduction of operator's fatigue by improving
and convenient placing of all operating controls and the all-increasing automatiza-
tion of operation. Stanko-Import is able to offer a wide range of machine tools
both universal and special types, including automatic transfer machines and
automatic workshops."
PART E. RESEARCH AND TRAINING
As indicated earlier, research organizations in the Soviet are on an enor-
mous scale. The main machine-tool research organization, ENIMS, for instance,
employs no less than 1,000 scientific workers, plus 1,000-or-so nonscientific work-
ers in the adjoining and associated development works--and this organization is
solely concerned with metal-cutting machinery. There are other institutes, not
so large, which deal with metal-forming machinery, abrasives, and cutting tools.
Approximately 2,500 to 3,000 people are employed in them.
Twenty-five-year-old ENIMS is the center for machine-tool development. Ideas
are fed both ways, from the research organization outward and from plants in to
the organization. A good deal of autonomy is granted to firms in building up
their own design staffs ; but all ideas must be submitted to the Ministry of
Machine Tools at a fairly early stage for consideration by a council. All uni-
versal machine projects must be approved by the Ministry,
Experimental research setup
The experimental works, where prototypes and development are carried out,
is directly under the director, as are the scientific board and engineering board.
Two main sections under the deputy director are the responsibility of the
assistant chief engineer, who is responsible for engineering research, and the
chief designer. Subsections under research include general research, electrical
hydraulic, automation, machining methods, metallurgy in relation to machine
tools, and units and mechanisms. On the design side are sections for lathes,
automatics, and milling and planing. The grinding section is again subdivided
to include plain and universal grinding, surface grinding, polishing and honing,
and so on. A section for gearcutting research includes sections for production of
spur gears, bevel gears, a research laboratory, and a modernization bureau.
The present trend toward automation of Soviet industry goes much further
than the already plentiful supply of highly complex linear and rotary indexing
machines. A whole range of so-called standard machines is being developed,
which can be dropped, as it were, into an automated line at will. These ma-
chines are one of the important projects at the ENIMS metal-cutting research
organization in Moscow ; prototypes are being built at the Stanko-Konstructia
plant, said to be in Leningrad.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
108 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
All machines in the standard range are built with uniform table heights, so
that they can be readily linked together to form an automated line. And they
have special design features that cover handling through each machine's cycle,
from picking up through the cycle of operations to ejection of the finished part.
This trend is obviously not only going to make it a great deal easier to build
up automated lines, but will also offer flexibility and open the way for auto-
mated lines in operations where a special transfer machine would not previously
have been justified.
Among machines of this type either in production or in development are a
gear bobber with adjustable vertical column and overarm to suit flow and load-
ing of line; a two-spindle copy miller ; a vertical lathe with magnetic lifting of
work and pneumatic loading ; a centerless grinder with friction-type feed tube ;
a gear shaver ; an automatic grinder with automatic loading and size checking ;
a spline-broaching machine ; and a dynamic balancing machine with automatic
correction by drilling.
The All-Union Cutting Tool Institute is a separate organization set up in 1944
to design tools and test for the too] industries and plants. It operates broadly
on the same principle as ENIMS. There are three main branches. Of these, the
design department has three sections, or laboratories, which carry out research
into standard techniques, tools for automation, and gearcutting tools.
The second department is technological and deals with special problems relat-
ing to production of tools, including machinability by standard techniques, weld-
ing of tools, foundry tools, shaping, and application of carbide tips.
The third is a metallurgical department with mechanical, physical, chemical,
heat treatment, high-frequency heating, and metallography laboratories.
A special laboratory is engaged in machinability and cutting-tool tests. Other
engineering departments include standardization, economy, and organization of
tool production. The institute is also responsible for technical information and
published work, and gives technical help to factories. In addition, there are an
experimental plant, a measuring laboratory, and another laboratory for the use
of radioactive elements.
Briefly, the main terms of reference for the cutting tool institute are as
follows : design of tools, development of technical problems of production, Investi-
gation of cutting problems, testing of cutting tools, and standardization.
Factories compete for skilled labor
In a Moscow factory we visited, shift work was in force, but the management
admitted needing far more workers than It could get. At present, the plant is
advertising for labor, and there is plenty of competition for the worker.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve ?oHeAa$R~4~3A~84!00054Pq20022-5
D 0
?0
c o
C d C
0
O1 C_ .- N
c 7
U) L
'L Q? a.
T_II
I
L
76369-62-pt. 1-8
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApproM" Fod,, R' sV99JA1gWC I : 1 6 00346R000500020022-5
'!'~ HE U.S.S.R.
Workers are divided into eight categories of skill and qualifications, the
qualification being determined by test. Periodically all workers must go through
a special course to bring them up to date, these courses being organized by
trades. Initially, workers come from special schools or classes which they can
enter after 10 years at other normal schools.
The first year at these is spent at the school and the second at the works. Dur-
ing these 2 years, basic information is provided on theory of metals, drawing,
estimation, and so forth, the syllabus depending on the work which the youth will
take up subsequently. Large works have their own associated schools.
Some workers may still come through without having attended the special
school. In this case the works provides instructors and basic theoretical in-
formation required for the job.
Typical wages are those of fourth-degree workers, who average about 980
to 1,000 rubles a month. The sixth-degree worker takes home about 1,200 to
1,300 rubles.
Pay is on a piecework basis, but bonus incentives can also be employed.
Engineers come from technical institutes and schools. Mainly, they work in
the shops for 2 to 3 years. Workers with high qualifications can go to
evening schools, technical colleges, or high schools. Of the 3,500 workers at the
Moscow plant we visited, 200 were engaged in further education of this kind.
Ages of these students vary from 20 to 50.
One aspect of the competition for labor is that it is leading to construction
of housing accommodation by factories seeking labor. Once built, housing is
handed over to the local soviet.
Engineers are represented by a society of engineers, which is divided into
cectio?ns covering all branches of engineering, such as mechanical, production,
electrical, and so on.
A study of directives and reports on the sixth 5-year plan indicates that the
Soviet is well aware of the need for higher labor productivity and better man-
agement. The improvements envisaged will affect certain aspects of wage
earning.
Output geared to wages
Present practice is often to make output quotas correspond to a definite wage
level, and not to technical and efficiency levels already achieved. The plan
demands that order should be brought into the system of wage rates in industry
without delay so that technically substantiated output quotas can be introduced
on a mass scale.
It is also admitted that there are wide discrepancies in the payment to workers
in the same trade, and often even in the same locality. Considerable improve-
ment is also called for in existing systems of payment for engineers, technicians,
and economic executives.
It is planned that part of the remuneration received by this category should be
strictly dependent on the basic performance indices of the enterprise concerned.
Briefly, to quote the report ; "We are faced with the very important and urgent
task ; to put in order the system of fixing rates and payments for factory workers
and engineering personnel."
Other plans that will affect labor during the next 5 years include (1) raising
the wages of the lower income categories of workers, (2) going over beginning
in 1957 to a 7-hour working day and (3) reducing the working day on Saturday.
Working day for workers between 16 and IS is to be reestablished at 6 hours.
Further development of education is looked upon as one of the key problems.
In addition to secondary schools, both general and specialized, there will be
further expansion of correspondence and evening courses. During the current
plan, 6.3 million students will complete secondary schooling.
Room for improvement
Development of polytechnical training in the general school has not been
adequate so far, and the plan calls for improvement. There are also extensive
plans to increase training of specialists. At present the Soviet employs 5.5
million in this category. In the current period, it is planned that no less than
4 million specialists will be trained in the higher and specialized secondary
schools. This is nearly as much as in the two previous 5-year periods combined.
It is interesting to note the breadth of education the Soviet is calling for in its
specialists. This is clearly indicated in Bulganin's report ; "Economic and
cultural development requires a marked improvement in thetraining of special-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIgQF0005QQQ20022-5
EXPORT OF STRATEGIC MATERIAL
lsts ; they must be conversant with the latest achievements of Soviet and foreign
research and engineering. What is needed is a much more intimate combination
of theoretical and practical knowledge of production,"
PART 4. RU98IA'S "AUTOMATIO FACTORY"
Moscow.-Russia has in full production 2 automatic lines for manufacture
of 1.5 million bearings a year in a plant in this city. Facilities are available for
making 900,000 ball bearings and 600,000 tapered roller bearings a year without
the use of a single human operator.
These fully automated production lines are each an integrated manufacturing
unit, having been converted by the Russians from what previously was a semi-
automatic operation. They are part of a plant that turns out more than 1,000
types of bearings in sizes from 1.18 to 63 inches in diameter, weighing from 300
grams to 4.5 tons. The bearings are made to international sizes.
The automatic lines, from the plant director down to the cleaner, require only
178 workers on 2 shifts, or 89 men a shift, These workers, who include all
maintenance men and electricians, control the automatic instruments and keep
in repair more than 600 types of special machines or machining units, which
embrace 127 main units. These main units consist of 70 metal-cutting machines,
a small number of presses for marking and other purposes, and 50 grinding
machines (as segregated from other metal-cutting machines).
Half the workers, one-ninth the time
Previous semi-automatic production lines, though highly automated, took
nearly twice as many workers. More than that, the entire production cycle con-
sumes one one-ninth of the time that it did. The reason is simple : there is no
human intervention from the time of receipt of the rough tube from which the
rings are made until the wrapped and labeled cartons come out the other end.
The whole Moscow line has been planned on a basis of segmented automation,
using buffer storage hoppers. This setup not only overcomes varying production
times for different operations-it also allows buildup of stocks for each section
to keep machines supplied in the event of a breakdown of any preceding part of
the line.
The ball and roller bearing production lines, in a plant 394 feet long with two
bays, occupy an area of about 21,526 square feet. The project took only 6 months
on the drawing board. Building and installing the machines and actually getting
into production added only 18 months more. Each of the two lines, one for ball
bearings and the other for roller bearings, runs through four main sections-
turning, heat-treating, grinding and assembly.
A number of advanced techniques are used. The heat-treating cycle includes
deep freeze. Centerless grinding methods have been adapted to internal grind-
ing-for ball-bearing track forms as well as for roller-bearing bores and taper
races. Centerless superfinishing with rubber wheels is also employed.
By using new techniques internally and externally for taper races, the Rus-
sians claim they :improve mutual accuracy between the inner and outer track.
And, contrary to expectations, centerless grinding of ball raceways and grooves
has achieved much greater accuracy.
The method of superfinishing with a rubber wheel achieves metal removal
of not more than. 10 to 20 microns from internal surfaces of roller bearings
for an exceptional surface finish of grade 9v-10a on the Soviet scale, which
ranges from grade 1 to grade 14-the highest finish obtainable. In general,
the accuracy limits are comparable to those of top bearing plants in the West.
Once the Russians decided to make bearing manufacture fully automatic,
the project proceeded with tremendous speed. The reason for the short cycle
is that the Government gave top priority to the project.
All available organizations-design and research bureaus, machine-tool mak-
ers, and the project's own design staff-were focused in a concerted effort.
Design and engineering staff of the plant itself numbers among the hundreds.
And in Russia it is a much simpler matter to standardize than it is under
our own system of free enterprise. Thus orders for special machines can be
spread through the entire machine tool building industry-and each machine
tool plant has facilities for making specials. Widespread standardization
insures that all machines, irrespective of where they are made, can largely
be made from standard parts at a minimum cost in a short leadtimc.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appror l For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
In the Moscow plant, mechanization and automation has gone on for 5 years,
and an even more ambitious program is scheduled for the next 5 years. Tech-
nical development is along three lines : Designing and creating new automatic
lines, modernizing existing processes and machines, and converting semiauto-
matic operation to fully automatic, integrated production units.
Questioned as to whether a line as completely integrated as the Moscow
bearing one doesn't offset its advantages by a loss of flexibility, Moscow plant
engineers said that this had been allowed for in the planning stage-that every
machine tool in the line has been designed to accommodate work 15 percent
larger or smaller than that for which it was developed. This gives the line
a 30-percent overall flexibility with no major alterations other than resetting.
Is a fully automatic line worth the trouble? The Russians' unanimous an-
swer-yes. Primarily, this Moscow bearing line is regarded as just a beginning,
not the ultimate. The experience gained in building it will be followed in
building new lines that can produce other types of bearings with even higher
degrees of accuracy. And when the right time comes, the machines in the
Moscow line could be transferred to other, not fully mechanized plants. In fact,
this year-old plant is already considered by the Russians to be out of date. This
goes a long way to explain the success of Russian production.
Proof that the Russians are sincere in regarding the Moscow line as just a
stepping-off point is that they placed no restrictions on technical details nor on
photographs, such evidence that they figure if Western plants copy the line,
Russia by that time will be well into far more advanced techniques.
Maintenance does not provide the complications which might be expected.
Centralized control immediately indicates any failure. Most control equipment
is electromechanical and numerical control is not used, although the Russians
may one day use it.
How the line works
In considering the Moscow bearing line, it has often been reported in the
Western press that it and similar lines are merely showpieces. To believe this
is dangerous and a serious underestimation of Soviet abilities. This line is
no showpiece-it is a realistic, practical working unit, and it is the shape of
things to come. Its many new techniques have been developed on principles
tested and proved in Western plants.
Now to the operational details : The Moscow lines make the rings and
assemble two standard series of ball and roller bearings. Balls, rollers, and
cages are made elsewhere. The building is not new, and the present layout
is hampered by longer conveyor runs than would be needed in a tailored-to-fit
building. But the plant is well lit, is adequately heated in winter, air-
conditioned in the summer. Floors are clean, with all swarf carried under-
ground.
The entire plant is centrally controlled by the dispatcher's desk. Indicating
signals show which processes are operative, which nonoperative, and which
are under maintenance. Meters show the number of rings that have passed
through each section on each shift and for the entire month. The same is
true for assembled bearings. Number and types of rejects are also indicated.
Centralized installations are employed by swarf removal, refrigeration for
heat treatment, cooling liquids, washing fluids, etc. Ancillary services include
a repair shop, tool crib, and a grinding wheel and abrasive maintenance section.
Not a single operator is to be seen on the line.
Rough tube stock and rings come in through doors in the center of the
long wall (see (A) on plant layout), are delivered to hoppers (B) and storage
(C), preparatory to turning operations. For taper rings, the raw material
comes in rings which are loaded into hoppers to feed the automatic lathes.
The hoppers have conical rotating floors and are so designed that blanks are
orientated for conveying to the lathes. Each hopper carries 250 to 300 chrome
steel blanks, which are picked up by an enclosed distributing conveyor (fig. 1).*
A vertical flight takes them above the level of the lathes, then in a short hori-
zontal run to the main feeder for the turning section battery of six lathes (D)
and (E).
Ball bearing rings are turned from tube stock on another battery of bar auto-
matics (F) and (G). Lathes for turning the taper rings are all basically simi-
lar in design. Three turn inner rings, three turn outers. Each lathe is a duplex
8-spindle model with a spindle at each end, is center-loaded. Of the four
spindles at each head, one is a loading station, two are work stations, and the
fourth is a transfer station.
*EDITOR'S NOTE).-Numbered illustrations are not published in this document since the
` UVAU" "I I nu(! El 3f '4'B010346R000500020022-5
Approved' or I eleases
 Approved l@psgAgg4 fR/I1 ~gf~-,gD,g,6l4p,Rg0050 0022-5
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Appr.Q v d For Release 20~/~(3fJ1 :QrWq4fA~0
EXPORT OF S A I M R500020022-5
11
Blank is received from the first head by means of a special loading and trans-
fer arm (fig. 2), mounted on a rugged overarm. It moves between the two heads,
loading blank into the first bead and transferring it after machining to the head
at the opposite end-and finally feeding the machined component to a conveyor.
Then the OD is turned from the longitudinal slide and the end face is surfaced
from the cross slide, and a chamfer put on the bore. Next, a button tool finish-
turns the OD from the longitudinal slide, and more chamfering and forming are
done with a single tool that feeds in longitudinally, and by a radius cutter and
button tool on the cross slide.
Work moves across to the opposite head and is loaded (fig. 2). It is then held
on the OD and a button tool on an angular slide turns the taper form for the
race, while a second tool on the cross slide surfaces the end face. Then two
tools on the taper angle finish turn the track and chamfer the lip of the bore
while a radius tool turns the face.
The external taper rings are then unloaded onto a conveyor. They are turned
by three of the six machines, the others turn internal taper rings in an operation
similar to that for the external rings. Final operations on the external surfaces
for the inner taper ring are carried out on two single-spindle automatics (H)
that have the same operational cycle. Their major operation-finish turning the
race-is done from the rear slide by a 1.18-inch wide adjustable tangential-action
cutter and covers the whole surface of the track. Cutting speed is 393.6 feet
per minute. The same slide carries two tools for facing the OD of the flanges,
while four other tools (two in the top slide, two in the front slide) carry out
grooving and chamfering. Operating time is 7 seconds per piece. Spindle does
not stop for loading and unloading.
Carbide tooling is used throughout, but because average tool life is only 4
hours, special methods have been evolved to cut idle time : holders are held by
the cutting force, require no clamps ; a simple tool presetting method allows di-
rect mounting on the machine with no further adjustment-to a consistent
accuracy of 0.0008 to 0.0012 inch. Time needed to change 16 cutters is only 12
minutes.
Tool life is prolonged by efficient chip breaking, which involves controlling the
chip form as it is produced, imparting a movement to the tool-holder to facilitate
chip-breaking, and crushing the swarf in the machine. A central coolant system
supplies the entire plant. Swarf disposal is done with underground conveyors
that feed into a main trunk conveyor (J) that takes it outside.
By comparison with the taper rings, methods for turning ball bearing rings are
more or less conventional and do not warrant description. The outer rings are
turned on a bank of four two-spindle automatics (F), while the inners are turned
complete on two six-spindle automatics (G).
All inner and outer rings for taper and ball bearings are marked after turning.
Outer taper rings are conveyed directly from the duplex automatics to one
of four automatic marking machines (L), other taper rings come directly from
secondary turning operations on lathes (FI) to the unit (K), while ball bearing
inner and outer rings go from automatics (F and G) to marking units (M
and N).
The marking head is horizontally mounted (fig. 3), and a six-station indexing
disk is mounted on a vertical axis. As an empty station comes opposite the
incoming conveyor, a ring drops into position in the indexing disk. As the
disk indexes, it comes between the head of the unit and the stamping head.
Work is supported from behind while the stamping head feeds forward, stamps
and withdraws.
At the next station, the marked ring drops onto the conveyor shown at left
in fig. 3. The whole operation is coordinated as part of the cycle.
After stamping, rings go into the automatic heat-treating section, which is
in the same bay but on the opposite side and traveling in the opposite direction
to that of the turning section, so that when heat treatment is completed, the
rings return to the center of the line. Because of differences in cycle times for
turning and heat treating, a buffer stock has to be held in special magazines
between the two sections. Three heat-treating lines are fed by four magazines.
Generally, these magazines (0), (P), (Q), and (R) store work enough for two
shifts-each holding as many as 3,300 ball bearings rings or 1,000 roller rings.
From the incoming conveyor, rings enter a vertical zig-zag temporary wait-
ing section then go into the set-at-an-angle oval magazines.
Once inside the magazine (fig. 4), rings lie on their faces in compartments
and circulate around the magazine in rows. Rings arrive at the oven con-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved~FalBs~Yf/(P/1 : CIA-RDP64B00346R000500020022-5
G ATERIALS TO THE U.S.S.R. 115
veyors in level rows of five at predetermined times so as to make full use of
oven conveyor width. Release of rings from the magazine is controlled by a
cam arrangement that releases five at a time. They leave the conveyor in a
vertical position, but turn through 90? in the loop so that they are flat when
they arrive at the oven conveyor (fig. 5).
A different distributor is used for ball bearings : the inner ring goes inside
the outer before alinement. Ovens are electrically heated-those for inner taper
rings (S) and ball bearing rings (T) having a reciprocating heat-resistant
steel sheet that acts on the vibratory feed principle. One reciprocatory motion
of the sheet is made every 6 seconds, inching the rings through the oven at
desired speed.
The other oven (U), for outer taper rings, uses a conventional through-
conveyor because vibratory methods might produce out-of-roundness. Furnace
temperature is 1,594? F.
Rings then go by conveyor (fig. 6) which dips clown in a V-shape to an oil-
quench bath (V), (W), and (X) under the floor, then up again to the washing
machines (Y), which use warm water and soda. After air-jet drying, the rings
get the deep-freeze treatment (Z) at 6.8? F. to reduce residual austenite and
insure dimensional stability. Cycle : 40 min.
Next the rings pass through the tempering furnaces (a) (fig. 7) at 302? F.
completing heat treatment. Rings then go into storage magazines (b), are doled
out as required and conveyed to two automatic surface grinders (c) (fig. 8)
with face-ground rings ejected, passing through a demagnetizing ring because
magnetic chucks are employed. Face-ground rings are fed into another battery
of storage magazines (d). It is necessary to use such magazines on both the
inlet and outlet sides of the surface grinding operations to balance the time
differentials between heat treatment, surface grinding and other grinding, which
are considerable. The surface grinders work on both inner and outer rings,
but even so it is necessary to operate them only 3 to 4 hours a day.
Outside rings are surface ground during the first half of the shift, inner ones
the second half. Change-over takes only 30 minutes. During the operation,
a gaging unit checks size and makes automatic compensation for wheel wear.
After rings are surface-ground on one side, they are turned over in a conveyor
link for grinding on the other side.
Four storage magazines (d) feed four automatic grinding lines: (1) One
for grinding outer taper rings. (2) one for inner taper rings, (3) one for inner
ball rings, and (4) one for outer ball rings. All OD's, except for the inner taper
rings, are ground on pairs of automatic centerless grinders (e), (f), and (g)
(fig. 9). These do the job in two passes, where seven passes were formerly
required. Improved output is achieved by employing large wheels of 29-inch
diameter.
The taper track on the OD of inner taper rings is produced on two other
centerless grinders (h) by the plunge-grinding method (axis of the wheel is
set over at predetermined angle, while control wheel is beveled-contacting
surface is at an angle to its axis, which in turn is at an angle to both the axis
of the workpiece and the grinding wheel).
Conveyor feed into the grinders is controlled by a roller running on top of a
ring as it enters the grinder line. When the ring moves forward, an arm car-
rying the roller moves down to bring the next ring into waiting position. Ex-
cept for the inner races for taper bearings (where output from OD grinding is
balanced with subsequent operations), further buffer magazines (j), (k), and
(1) are provided because the entire day's quota is produced in one external grind-
ing shift, as against two shifts for internal grinding operations that follow it.
A battery of eight internal centerless grinders (m) are used on inner taper
rings. Whereas a shoe is employed in grinding the taper OD, in this case the
work is located by two control wheels and a driving wheel. Similar machines
(n) rough and finish grind the inner taper races of outer rings. This is done by
setting the work over at the required angle. Throughout these. operations, the
ring has a cylindrical member attached to its small diameter. This supports,
but does not hold, the ring, and it forms an integral part of the ring through
grinding and superfinishing-to insure against distortion. Subsequent opera-
tions carried out on the inner taper ring include finish grinding of the taper
OD on two centerless grinders (o), and grinding the inside face of the rib
(flange) to provide the correct plane to take the rollers' axial thrust (p).
Eleven special machines grind the races of ball bearing outer rings, grinding
and superfinishing internal surfaces, including the ball groove itself. The work
is driven by centerless principles : the wheel is radiused and enters the bore to
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B0034RR000500020022-5
116 EXPORT OF STRATEGIC MATERIALS TO THE
contact the formed ball groove ; wheel head swings with a reciprocating motion
around an axis which produces the desired radius. Internal grinding of the
bore of inner ball bearing races in done on a bank of four centerless grinders
(r), and another group of four grinders (s) grind the ball grooves on their OD,
using form wheels (fig. 10). The two special machines for plunge-grinding the
taper track of inner roller rings are shown in figure 11. Figure 12 shows the
external form grinders, and figure 13 shows a special centerless internal ball-
groove grinder.
After grinding, the finished rings go to magazines (t), then are washed before
assembly, which is done in a temperature-humidity controlled room.
Automatic inspection and gaging machines (u), such as the one shown in figure
14, have a number of inspection heads in line, and the componentspass through
them on an in-line transfer principle. Gaging is pneumatic-electric. Bearings
outside tolerance are indicated by warning signal lamps, and rejected rings are
automatically separated out. Good components go to the assembly machines,
while rejects are either corrected or scrapped.
The automatic assembly machine (v) for taper roller bearings (fig. 15) has
four stations: (1) Cages are taken from the magazine and placed automatically
on a table fixture; rotary indexer then takes work to (2) where rollers drop into
position in the separator and the inner ring is assembled, (3) a gaging head (see
fig. 15) automatically inspects for correct number of rolls and rings and posi-
tioning, (4) cage is loaded and finished assembly is transferred to completed-
bearing inspection units, after the outer ring is assembled.
The ball bearing assembly unit is an integration of four machines-one that
grades the rings (w), one that delivers the ball (x), one that assembles (y), and
one that controls radial spacing (z). All four units are tied electronically and
synchronized.
The unit that does the actual assembly works this way: (1) Rings are deliv-
ered and the balls placed in the rings, (2) half the cage is assembled, and the
balls radially spaced within it, (3) the second half of the cage is pressed into
position, and (4) the completed assembly is checked for any absence of
components.
After assembly, ball and roller bearings go through inspection machines, then
through a unit that demagnetizes and removes the inners from the outers and
channels them onto parallel tracks into an anti-corrosion-treatment unit (fig. 17).
Then the bearing assemblies are cooled to 30? F. with freon gas. This congeals
greases or anticorrosion compounds before water vapor can enter.
Last step (fig. 18) : Packing bearings automatically in paraffin paper-boxes
are automatically made up from cardboard, bearings go into the boxes, which
are sealed, labeled, and transferred to a table where they are wooden-crated for
dispatch.
PART 5. RUSSIA'S CONVEYORIZED MACHINE TOOL PRODUCTION
Moscow.-The Russians are building high speed, universal lathes on a produc-
tion line in Moscow at a rate of one every 15 minutes. Twelve thousand of
these machines come off the assembly line in a year's time. They are built in
much the same way that an automobile is made, only to closer tolerances. Re-
member that the 12,000 units represent the year's work of only one factory. And
there are other plants in Russia also producing lathes.
2,000 big lathes a year
Take the new factory at Razan, about 120 miles outside Moscow. Initial
production will be 2,000 large lathes a year (47.24-inch swing over bed, 10 feet
between centers). The director of the plant believes that he eventually can get
production up to twice that number, or 4,000 a year.
Go on down to Odessa on the Black Sea, a long plane flight from Moscow.
Here is a plant devotedexclusively to making 4-ton radial drills. Some 2,000 of
them a year. And the plant director says that the single production line off
which they come has nowhere near reached its full capacity for turning out
radials.
Outproduces United States, Britain
Measure this performance, which utilizes practices heretofore unknown in
machine tool building, against the output of machine tools in the United States
and Great Britain. In 1950, U.S. lathemakers produced 12,194 lathes of all kinds
and sizes, or just about the number turned out in the Krasnoff Proletaril plant
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R. ] 17
in Moscow. In Britain, 14,407 lathes were built in 1951, the latest year for which
figures are available. During 1956, U.S. radial drill builders shipped 1,088 ma-
chines, whereas at Odessa the Soviets are already turning out 2,000 a year.
Yet the Russians claim it takes only 18 months from drawing board to actual
production on such a line, including design and manufacture of needed special
machines, and sometimes the buildings to house the line.
It's capable of turning out 12,000 of these small, high-speed universal produc-
tion lathes a year--that's something like 4 an hour-in a single plant and some-
where between 2,000 and 4,000 of the bigger (3 meters between centers) lathes
a year in a new plant at Razan and 2,000 4-ton radial drills like this one per year
on a single line that has "nowhere near reached its capacity."
How is it possible to get and then maintain such a phenomenal production
rate? Perhaps there are two reasons. One is the tremendous driving force
from within that seems to impel all workers, from the director down to the
sweeper, to press on toward attainment of greater and greater production
volume. The other is the use of conveyorized assembly, such as one finds in
any up-to-date auto plant.
Take the Krasnoi Proletarli plant. One of the oldest Soviet plants, it has
been turning out machine tools for less than 30 years, specializing in two types
of lathes ; standards and specials.
At the time of my visit, the lathe production line had just been changed over
to a new model, and other alterations were in progress. The Russians are so
shop proud they put boardings around any major reconstruction in the shop.
They also must work under a Government decree that new building (brick and
mortar) is prohibited.
It then becomes very difficult to design a line with an efficient layout in this
already overcrowded plant, in which 1,000 workers are on the lathe line and
3,000 on special machines.
"Insurmountable" difficulties are a challenge the Russians seem eager to meet.
During World War II, Krasnoff Proletarii was transferred to the Ural Moun-
tains-down to the last screw. The plant was moved back one March after the
war. By April it had already produced 25 lathes. The same speed of production
planning goes on today. Changeover to the new model was made in November
1956. Last of the old models came off the line on October 27. By November 6,
the first five new machines had been assembled. That meant installing, retooling,
and producing the first machines all within a 10-day period.
The new model, a redevelopment of the previous one, is classified by the Rus-
sians as a universal screw-cutting lathe. It has higher speeds, more power than
the old model plus stepless speed variation. It accommodates work up to 18-inch
diameter, has speeds to 3,000 revolutions per minute, through a mechanical fric-
tion-drive variator. Feeds range from 0.177 to 0.0008 inch per revolution.
Drive is from a 14-kilowatt motor. The lathe will produce all threads used in the
U.S.S.R.-including English, continental., metric, and module. The lathe itself
as well as the production line was designed at the Krasnoi Proletarii plant, as
were many of the special machines.
200 max-hours per lathe
At Krasnoi Proletarii it takes about 200 man-hours to build a lathe-or one
complete lathe a month from every man working on the line. The Russians claim
that because of their "true production line technique" they can build the equiva-
lent of a $7,000 American lathe for about $3,000. Whether or not that price in-
cludes payment for the services of Government-owned machine tool research
that went into the lines and products could not be determined.
Here is a quick walk around the Krasnoi Proletarii lathe line:
Apron castings are drilled on a multispindle drilling machine designed and
built at the plant. Unit heads carry out all the drilling, boring, and tapping
operations required on the casting, from two sides. Castings are fed to the oper-
ator on an ordinary roller conveyor, machined, and moved on another roller con-
veyor. Operating cycle is automatic except for loading and unloading, and a
hydraulic lift is provided by the machine. When operator loads a casting onto
the lift, a lever brings it up to machine height. Cycle time on this machine :
2 minutes.
Another multidrilling machine carries out all drilling and ancillary operations
on other castings, employing a centrally mounted drum indexing fixture, which
brings components into position for duplex drilling operations from multiple
heads.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
118 EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
Special milling setup
Face milling of apron castings is done on a seven-spindle special milling
machine setup. Castings are pneumatic-clamped in line, with each casting
clamped independently by lever. Two large diameter side and face cutters
mounted on a spindle in the left head, and supported from an overarm on the
right-hand head, carry out a straddle milling operation. The other two cutters
are mounted on the main spindles and face mill the ends. Inserted tooth cutters
are used. Two main spindles do vertical milling, while two others set at an angle,
do angular undercutting and slotting. Output is 40 castings per shift.
Two other special milling machines do the overall machining of the base.
Roughing is done on one machine, and casting is finish-milled on another. In
roughing, two cutters on an auxiliary horizontal head, machine one side of the
casting, while two angular and two vertical heads mill the faces of the slide-
ways. The other two faces are milled by a cluster of cutters mounted on a
horizontal arbor on the other side of the machine. Another cutter on another
horizontal head mills surfaces on the second side of the casting.
An opposed-head duplex machine bores the headstock castings. Two coin-
ponents are mounted side by side and roughed and finished by the same machine
by indexing the fixture. A number of vertical indexing machines, built at the
plant, are used for such operations as multidrilling of covers, machining levers,
and pulleys.
The assembly and painting sections have four separate conveyors : one for
headstock assembly, two for subassemblies, and one to carry the lathes through
spray painting. Headstock conveyor is the platen type, driven by a chain.
Headstocks, placed on platens, move along the conveyor rail. At the end of the
line, each assembled headstock is lifted off its platen by an overhead hoist and
transferred to a bench on the other side of the gangway, where it is run up and
tested through the gears. Between-machine and between-operation handling
is poor by comparison with the rest of the line-such as a slinging operation
to move the headstocks from the assembly line to the testing section.
Empty platens return to the beginning of the line, traveling upside down along
a floor-level track just under the assembly track. The headstocks take about
15 minutes to pass each station along the line, with the conveyor moving con-
tinuously. Actual output is 40 assembled headstocks per shift. After testing,
headstocks go by roller conveyor to the final assembly line. The other sub-
assembly conveyors, which are similar in operations, also converge onto the
same line, which is so long that it literally disappears into the distance, and
it Is full of lathes. I counted 25 positions along the conveyor, and I think there
are more than that. One complete lathe comes off the line every 15 minutes.
Main conveyor indexes
The main assembly conveyor operates on the indexing principle. When it is
idle, the machines rest on the floor, straddling the conveyor so that it is only
loaded when transferring. Every 15 minutes, the conveyor carries all the ma-
chines forward one station. A jacking system lifts the conveyor, raising the
machines slightly off. the floor and moving them forward. Conveyor then stops,
is lowered into its static position, waits 15 minutes, then goes on. Conveyor thus
moves only the distance between stations, always returning to its original posi-
tion.
The test section, primarily because of plant layout difficulties, is not con-
veyorized, so machines have to be lifted into the test section by sling and out
again onto the conveyor that leads into the spray paint area. Aside from head-
stock and final inspection, little testing goes on at Krasnoff Proletarii, or in any
other Russian tool plant, for that matter.
Because of plant layout troubles, the lathe does not go straight through from
dressing to painting. Instead, the paint section is on the floor above, and a
conveyor takes the dressed machines to a lift. Then a closed-loop conveyor takes
them through three painting booths, and then to the shipping department.
It is interesting to note that the Krasnoi Proletarii line has been copied and
Is now in production in Communist China.
. The lathe plant at Razan, about 1.50 miles from Moscow, is brandnew, and is
just now getting into production. It has three main shops, including a new
setup for producing a new model of lathe. In all, Razan employs 5,000 workers---
1,200 of them on the new line. Like Krasnoi Proletaril, Razan turns out quite a
few special machines, but its principal product is a new 41, ton lathe with a
swing of 47.24 inches. This lathe can be produced on one line with a choice of
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
EXPORT OF STRATEGIC MATERIALS TO THE U.S.S.R.
60, 80, or 120 inches between centers. It has a standard range of 24 speeds up
to 1,250 revolutions per minute, but this can be increased to 2,000 revolutions
per minute with change gears. By comparison with the smaller Krasnoff Prole-
tarii model, Razan's lathe is underpowered, using the same 14-kilowatt motor.
The Razan lathe can be fitted with a hydraulic copying device that is mounted
in the rear of the machine and can be set for copy turning or facing.
A unique feature of the lathe is use of plastic sliding surfaces throughout.
This has been done for some time on reconditioned machines in Russia, but
this is the first time plastic slides have become standard on a new model. The
Russians claim plastics can be used with complete reliability and with no loss
of accuracy, and that on the contrary, plastics achieve high precision more
readily, with a minimum of friction. Plastics gave the Razan people some
trouble at first because of instability, but a system of preworking the plastic now
makes it stable. Tests show that the plastic sliding surfaces wear only 0.0001
inch per 1,000 worming hours, and that under normal conditions it need be re-
placed only once in 4.5 years.
At the moment, Razan plans to turn out about 2,000 of these lathes a year,
but that schedule may be doubled when the plant gets into full swing. The shop
for producing these lathes has three lines, two of them side by side for ma-
chining, and the other for assembly-it's conveyorized. All three lines run the
length of the shop. At the head of the assembly line, headstocks are assembled.
The next section of the line assembles the saddle, and the balance is given over
to main assembly and test.
Razan's production thinking revolves around this credo, "All manual work on
the assembly line should be avoided, and this is even more important than han-
dling between stations." The basic idea is to adopt automotive production tech-
niques to machine tool output, but to maintain tolerances not achieved in auto
production. Razan's lathes are basically the same as those of Krasnoi Proletarii,
but because Razan is newer, its lathe has improvements in details such as plastic
ways. Soon, when all bugs are ironed out, testing, painting, and final test
will all be included on the main assembly conveyor. Two test methods will be
used : under actual load, and a hydraulic test rig. The line is so designed that
the test failure of a machine will not hold up the entire line. Because the entire
line at Razan is laid out from scratch and not a revamped one like that at
Krasnoi Proletarii, layout is more efficient.
"Dry-running" the line
Even before Razan had a roof over its head, machines were set up in a spare
bay in one of the other shops so that trainees could learn to operate them. In
this way, a complete dummy line was set up and before the new building was
completed, almost every machine in it was "dry run" on test components. Thus
it became perfectly practicable to close the dummy line down on a weekend,
transfer the machines to the new conveyorized line, and reach full output the
next week.
Some Razan specials
Some of the special machines at Razan : three 11-spindle special milling
machines (built at the Gorki plant) for machining the three different base
lengths of the lathes (total floor-to-floor time for overall machining of the
3-meter base will be 3 hours, 50 minutes) ; two multihead machines that carry
out all drilling, boring, and milling operations on the saddle, one to each side
of the casting, in 12 minutes ; a 7-spindle unit that does all milling operations on
the apron casting, including grooving, in 5 to 6 minutes ; a duplex double-head
machine that mills two castings at once in 6 minutes; another duplex that
mills all the holes in the gearbox in 12 minutes; a machine for turning tail-
stock bodies that has opposing heads, carries five spindles, and rotary-indexes
parts through roughing, semifinishing, finishing and grooving, and chai$fering ;
special machines for grinding the inner taper of spindles ; and vertical 6-station
rotary transfer machines for use on gears, flanges, etc.
The Odessa radial drilling machine plant was bombed out, then moved to the
Urals in World War II, has since been rebuilt from the ground up on the original
site. Today, it employs 2,000 workers, including 288 engineers. Its production
techniques are similar to those of Krasnoff Proletarii and Razan. It manufac-
tures 15 types of radial drills in capacities up to 35, 50, 75, 100, and 140 milli-
meters, turning out 2,000 of them in all per year. Annual output has increased
from five radials in 1946 to the present 2,000. The plant has 11 conveyorized
lines, including subassemblies, the main assembly line, and the paint shop.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approll Fob ~RpV9 noIj 00020022-5
The heads for the heavier models (with gearboxes) are assembled on fixtures
that run on rails, but heads for other models are assembled on a closed-loop
mecianized conveyor, which has six working stations on either side, and has
horizontal fixtures that project at right angles. The fixtures are supported on
heavy mountings with a trunnion on top that allows the fixtures to negotiate
the radius at each end of the line. Fixtures run between rails on the base of the
conveyor unit.
Assembly is progressive around the conveyor, so that the finished assembly
returns to the loading point for unloading.
e main assembly conveyor operates on the same step-by-step principle as
th~.t dgcribed at Krasnoi Proletarii, indexing one station per hour. Sequence
of assembly: (1) machine base, (2) column is added, (3) radial arm is assem-
bled, (4) head is assembled, (5) electrical components are added, (6) and (7)
final assembly on head and other details, and (8) finishing.
Then assembled machines are transferred to another conveyor, at right angles
to the main assembly line, for painting. It takes a machine l hour to go through
spray-painting.
Testing is cursory, to say the least. Take a machine with a capacity of
2.7Q inches in diameter, with speeds from 11 to 1,400 revolutions per minute.
Complete test appears to be making the machine drill through a test piece at 112
revolutions per minute, spindle speed with a feed of 0.049 inches per revolution.
This sort of thing seems to be standard throughout Russia's machine tool indus-
try,where the attitude toward inspection seems to be that every man along the
line is responsible for the quality of his work and that if the components are
right, and assembly is right, the finished machine is bound to be right.
PART 6. ALL MAJOR RUSSIAN MACHINE TOOL PLANTS MAKE SPECIALS, TOO
Moscow.-Every major Russian machine tool plant is set up to build special
machines on a sizable scale, as well as general-purpose tools. Such plants are
organized into two distinct and separate divisions, each with its own staff. This
concept is believed to be different from that of any other major machine tool
building country.
There are some machine tool builders in the United States and in Britain
who build standard machines and specials In the same factory, but only in Rus-
sia are all major machine tool plants dual-purpose.
It is this dual-building concept, the Russians say, that is behind the Soviet
Union's ability to engineer, construct, and equip a complete machine tool plant
in 18 months or less-and to build the special machines for it in half that time.
In previous Reports on Russia we have discussed the functions of ENIMS,
Soviet Russia's overall industrial planning and developmental organization. And
we have discussed how Soviet plant-building principles are put into operation.
In this report we shall discuss how intricate special machines are built to meet
short leadtime plant opening deadlines.
Obviously, once a plant has gotten through the drawing-board stage much of
the 18 months allowed for getting it into production has already elapsed. That
leaves an average of 9 months to build the special machines it needs, and you
would expect to find huge plants planned and set up to do nothing but produce
special machines in specific fields-say one making special lathes for Russia's
automated ball bearing lines, another making special grinders, and a third manu-
facturing multispindle planomillers such as those used in some of Russia's
big machine tool plants.
Planning "almost casual"
Nothing could be further from the truth. Overall planning for production
machines in Russia seems almost casual-the crux of such planning lies in the
ability of every major machine tool plant in the U.S.S.R. to make specials in
addition to its standard machine products. The specials are usually allied to the
plant's standard lines; i.e., special grinding machines are produced in standard
grinding machine plants.
Generally, Russia's metalworking industry is organized this way : each plant
has a standard machine or range of machines that it can make on a production
basis, plus facilities to build specials, semispecials, and machines needed in rela-
tively small quantities. There are even a few plants that have no real standard
product, but which turn out a wide variety of machines to user specification.
Such machines are nearly always standard types retailored to fit a particular
job.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RAJB$(34.R0090020022-5
EXPORT OF STRATEGIC MATERIALS S.
This system of distributing the manufacture of special machine tools through-
out the entire industry seems to work very well, but it is possible only because
rigid overall control of the plan is maintained and because rigidly enforced
standardization allows a project to be carried out without hindrance from manu-
facturers' variations.
That doesn't mean that makers of machine tools are limited to building blindly
on someone else's designs, or that users are restricted to a narrow choice of
specials. On the contrary, many machines are designed and built right In the
same plant, and users have a wide choice of available machines, plus the right
to initiate special designs and techniques if the line seems to warrant it and
known methods are inadequate.
Overall control of machine tool standardization rests with ENIMS, Russia's
machinery research and development organization. This has resulted in a con-
ception of standardization that insures that table or transfer heights, for
example, will follow rigid standard specifications. That makes it easier to
design a standard range of bases, columns, rotary indexing mechanisms, and
so on. Heads are also standardized, not only those for multidrilling, but heads
for much larger units such as those on planomillers.
The basic idea is not to limit the variety of useful machines or combinations
of machines, but to cut out unnecessary machines and duplication of prototype
work, Because commercial competition is nonexistent in Russia, no plant
keeps design or development secrets from another. Russia's industrial attitude
seems to be that free exchange of information is essential in cases where several
groups are thinking along the same lines. The use of highly standardized com-
ponents and well-tried methods makes for effective application of the tested
work of other prototype designers.
Apart from the overall control vested in ENIMS, where there is considerable
freedom of design, a plant setting up a new line frequently designs and builds
many of its own special machines. Even those plants specializing in very high
quantity production of machine tools are expected to provide their quota of
specials and small-run tools.
At Krasnoff Proletarii in Moscow, where 12,000 production lathes are turned
out a year, facilities for making specials occupy a good-sized part of the plant and
employ three-fourths or more of the total work force of 4,000. Krasnoff Pro-
letarli not only built many machines for its conveyorized lathe line, it designed
and built special duplex lathes for turning taper races in the automated Moscow
bearing plant. The same shop, incidentally, is turning out a crankshaft grinder
on a production basis, a special machine for turning the airfoil section of gas-
turbine blade, vertical rotary transfer machines with both eight and six stations,
plus a variety of machine tools for internal combustion engine plants, such as
crankshaft grinders, lathes, and a machine for profiling webs.
Lead screw correction
Krasnoff Proletaril has also developed its own method of correction for pro-
duction of precision lead screws. It's said to achieve an accuracy of 0.000060
Inch per pitch, with error over 11.81 inches not exceeding 0.000087 inch. Cumu-
lative error over a length of 8.2 feet is about 0.000874 inch. The method is used
primarily on a lathe that performs finishing operations on lead screws, but it
can also be used in inspection and for lead screw correcting.
Another of Krasnoff Proletarii's own designs is a camshaft-turning machine
that maintains a true cutting angle throughout the lobe by continuous adjust-
ment in relation to rise of the cam. The lead-screw correction method and the
true-cutting technique are the only two developments about which the Russians
are reticent to give details.
I was invited, almost ordered, to look at Krasnoff Proletarii's laboratory and
development section, which in any nation where the free enterprise system exists
would be kept under lock and key in most cases as far as the press or visitors
are concerned.
Of particular interest was a program-controlled lathe for turning out stepped
shafts which can carry out any program to a total sequence of 10. It can cope
with differences in diameter of steps up to 0.39 inch achieving tolerances within
0.0000 inch on length and 0.002 inch on diameter. Where more than one pass
is required, the increase of cut is set in automatically as part of the program
at the beginning of each cycle.
Also shown to me was a hydrocopying device intended as an accessory to oper-
ations where copying is required only occasionally. The machine has a cam
plate mounted on the front, and particular attention has been paid to easy mount-
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approvgo f or FR gp0 4/Il,]ticrC ,MPA6LIB993MPtq.9~0R.020022-5
lug and removal of the attachment-only 8 minutes is needed to remove the
standard tool post and put the attachment in its place.
Russia's machine tool plant at Odessa turns out some 2,000 radial drilling
m4 fines a year, more than total U.S. annual output, and in addition produces
vertical honing machines in 3 standard sizes from 7.09 to 19.68 inches for the
automotive and allied industries. Odessa also produces seven types of hori-
z0ut l and vertical borers, some with inclined heads for boring V-cylinder blocks.
Like Russia's other machine tool plants, Odessa turns out specials, too-
special heads for radials, radials designed for automatic lines, superfinishing
machines, and automatic storage hoppers such as those employed on the Moscow
automatic bearing lines.
Standard units are used wherever possible in the machine tools produced
at Odessa-but it's not always possible. For example, the Odessa people have
had a. good deal of trouble in manufacturing equipment for cylinder block lines-
table heights must vary with the blocks being made. But aside from that and a
few other diversions from the norm, standardization has been carried as far as
possible to simplify machine tool building and to make it more economical.
One notable unit in Odessa's large experimental shop was an outsize honing
machine, so big it had to be assembled in a pit. The 28-foot-high machine has
a honing capacity of 19 inches diameter, a stroke of 9.2 feet, and a spindle speed
of 420 revolutions per minute. Also under construction in the same shop is a
smaller model (47.25 maximum stroke, 400 revolutions per minute spindle speed,
5-minute operating cycle).
Heavy radials at Odessa
Also under construction at Odessa are several heavy transportable radial
drills. One such has pushbutton traverse along the bed, offers preselection of
speeds, using a hydraulic change, allowing 20 to 900 revolutions per minute in
12 steps. It is designed for holes from 0.629 to 1.97 inches, weighs 7.1 tons, can
work in any plane and at any angle, has an arm that swings through 360? on
the vertical column, and a head with 00? vertical adjustment and 360? rotation.
Main horizontal arm can be swung either 10? above horizontal or 30? below,
using a hand wheel. Machine has nine spindle speeds from 0 through 850
revolutions per minute. Feed box, on the head, has four feeds ranging from
0.0039 to 0.016 inch per revolution. A reversing spindle permits right or left
hand rotation, and there are facilities for depth control, permitting accuracy
to ?0.0039 inch.
It was interesting to see at one end of the Odessa experimental shop a large
planer made in Siberia. It seems that machine tools of various kinds have been
made in Siberia for several years-and Siberia occupies an important place in
Russia's plans for its future industries. Siberian plants are manned by volun-
teer workers who have the same status in the country as commandos or shock
troops in wartime.
Next to the Odessa plant's experimental shop is its instrument shop, which
seems to be more preoccupied with making keys and small components than
with instruments as such. A third shop is given over to hydraulics. It is a
long bay filled with a number of special machines in various stages of assembly
or ready for test, including :
A hydraulic, semiautomatic precision borer for tractor wheels. This duplex
machine bores from opposite ends in a sequenced time cycle. Work is loaded
into a fixture and hydraulically clamped, then a pushbutton starts the cycle
and the workholder moves back into position between the two heads. Heads
feed in and bore the diameter, then the shoulder is machined. This isn't ordi-
nary turning-it is an operation carried out by fine boring tools that have a
radial movement imparted to them through the spindle.
Transfer machines for automotive production include an eight-spindle cylinder
borer that uses transfer rails incorporated as an integral part of the table.
Working cycle is 10 minutes per block using a maximum spindle speed of 700
revolutions per minute and a feed of 0.00234 inch per revolution. To avoid
scoring the bored surface on withdrawal of the boring heads, the spindles stop
as the head finishes the boring operation. An electrical mechanism then orients
all the spindles so that the cutters are all facing in the same direction, and a
small movement of the heads (0.197 Inch) from left to right is imparted,
relieving the cutters from the machined surface before the spindles withdraw.
The Sverdlov plant in Leningrad specializes in Keller-type copying machines
and a large jig borer so like a Hydroptic that even the plant's director calls it
the Leningrad SIP. This middle-sized (2,500 employees) plant is old fashioned,
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approv@OWF?leAgQQ{/0,/A1&P,fAIA-F?PQ04,4OOO?99020022-5
badly lit, and full of obsolete machines. Yet it still turns out good machine
tools.
About 20 to 25 percent of Sverdiov's output is given over to specials, including
some very heavy boring machines, outsize copying machines, and machines for
work on hydroelectric turbine buckets. While the need for new machine tools
in this plant is urgent, practically all replacements of its obsolete United States,
British, and European machines are being built in Russia. It is certain the
Russians would buy replacements from the West, but the embargo forbids it,
so the Russians must fall back on their own resources.
Of interest at Sverdlov is the heat-treatment shop, which is quite well equipped
with vertical pits for nitriding spindles up to 13.12 feet, with a variety of smaller
baths, and with three ovens.
The Leningrad SIP
Incidentally, the plant director claims that the Leningrad SIP happened simul-
taneously with the actual SIP optical coordinate jig borer. Ile admits he saw
it at the Hanover Fair, but claims Sverdlov had already completed design of its
similar model. Questioned as to whether they copy well-known designs from
other countries, the Russians admit that their machines have the same appear-
ance as Western machines, but as in the case of jig borers and copy millers,
they claim that these are almost classical designs and that it is inevitable that
new models borrow something from them.
Among the specials at Sverdlov :
A heavy copy miller with working dimensions up to 9,186 feet, and a "length
from Moscow to London." Each motion has its own drive, and operation is cen-
tralized in a single level. Pushbuttons are used only to set the motors in
operation.
A special borer (first built in 1951) for turbine reduction gear casings that has
a boring capacity from 16.5 to 13.2 feet diameter, with a bar 13.78 inch diameter
and 26.25 feet long. Machine features automatic positioning on the axial plane,
with the boring cutter fed out radially by means of a screw arrangement within
the spindle. Feed is preset with a dial graduated in 0.00039 inch. Thermorelay
and clutches provide protection against overload. Spindle drive is from a 30-
kilowatt motor.
Moscow.-Grinding machine plants, like all other major Russian machine
tool factories, play a dual production role-turning out special grinding machines
as well as standard ones. Two notable examples of this are the Ilyich grinding
machine factory in Leningrad, which is planning to automate soon, and the Mos-
cow grinding machine plant, which today turns out some 70 different types of
machines and will take on manufacture of specials ranging from gear grinders to
special machines for automatic grinding of plowshares.
The first of these, the Ilyich plant at Leningrad, is noted in Russia for its
production of special machines, including the grinders for the Moscow automatic
bearing plant (AM-Jan 14, 1957, p. 147).
Ready for automation
Dating back to the 1930's insofar as output of grinding machines goes, Ilyich has
its standard production lines laid out in such a way that they can easily be con-
veyorized and automated. In fact, Ilyich today is high on the list of Russian
machine tool plants slated for automation.
Following World War IT, all of Ilyich's old machine tools were replaced and
production was modernized so that the plant's prewar grinding machines, too,
could be completely revamped. By 1948, Ilyich was building a number of special
automatic grinding machines in addition to its regular output of cylindrical, ball-
race, gear hob, saw, tool and cutter, and flexible grinders. High-frequency
spindles made their first appearances in 1949 on an internal grinder for small
bearing races, so did the first optical profile grinder.
Two new universal grinders were introduced into the standard product line
in 1951, one for full taper grinding, and the other a machine that could produce
tapers only to within limited ranges. Also made in 1951 was an automotive
grinder for external grinding of radiused form on ceramic rings, which included
automatic diamond dressing.
By 1955 Llyich's universal grinder had evolved to the present model, which
incorporates a special method spindle balancing and variable speed drives.
Approved For Release 2004/03/11: CIA-RDP64BOO346ROO0500020022-5
 ApprovWor Ik a @0 , t1 it QIA RDR64?R034BRONS00020022-5
Among recently designed specials at Ilyich are crankshaft grinders, super-
polishers, a special grinder for producing helical grooves-and a special grinder
that grinds deep slits (one-quarter to one-half inch and only 0.0079 inch wide)
radiated at equal space around a small part.
Most of Ilyich's machines have been installed as recently as 1955, and 97 per-
cent of them are Soviet made. But because either of a poor general finish or a
casual approach toward cleaning the surfaces, most of the machines look much
older.
The Ilyich machine shop is fairly conventional, equipped with a number of
milling machines and center lathes. Most of the lathes come from the 12,000-
lathes-a-year Krasnoi Proletarii plant, and the milling machines from the
Gorki factory. Turret lathes used at Ilyich were built by the Ordzonikidze
plant in Moscow and by a plant in the Siberian Urals. The Moscow grinding
machine plant has made such machines for use at Ilyich as the thread grinder
shown in figure 1 grinding an oilpump worm for use on Ilyich's cylindrical
grinder assembly operations, and the large slideway grinder shown in figure
2 working casting for a cylindrical grinder.
Ilyich's assembly section for cylindrical grinders is in a well-lit bay with
plenty of room. Lines are laid out for the various models, and each terminates
at the plant's well-appointed paint shop. Ilyich turns out more than 300 cylindri-
cal grinders a year such as those shown in figure 3 in the same bay as a number of
similar but larger machines. Also going through these lines is a production
order for crankpin grinders.
Incidental intelligence : top spindle speed of an Ilyich production model is
30,000 revolutions per minute, although higher speeds have been developed for
specials. One project Ilyich has in mind is the lightening of spindles as soon as
alloys can be found that will maintain stability : another is development of
hollow spindles for grinding.
Moscow grinder plant
The Moscow grinding machine factory is called the department store of the
grinding industry, earnings that title by the wide variety of grinding machines
it can virtually produce from stock. Moscow concentrates on types not made by
Ilyich, turning out some 70 kinds of grinding machines, including surface
grinders, slideway grinders, slotters, machines for grinding pistons, specials
for grinding plowshares, superfinishers, gear and spline grinders.
Moscow is set on its own grounds, is a large plant employing 2,500. With
most machines made on a jobbing basis, production lines naturally are not
clearly defined, with the possible exception of the surface grinder assembly
shop. It has been a grinder plant for the last 15 to 20 years, is divided into
three divisions, turning out surface grinders, specials, and gear grinders.
Within these divisions, many different types and sizes of machines are produced.
Spline grinders, for example, are built with capacities of 0 to 9.842 feet in three
sizes-0 to 3.281 feet, 3.281 to 6.562 feet, and 6.562 to 9.842 feet. Surface
grinders are made either in horizontal types with rectangular tables or with
vertical spindles and rotary tables. On the former, the range extends from tables
11.81 by 29.52 inches to 19.68 by 98.5 inches. Vertical spindle machines are avail-
able with tables from 15.75 to 59.05 inches.
Slideway grinders are made with table lengths up to 26.25 feet, with 52.55-
foot-long beds. Range of gear grinding machines extends from 11.8 to 47.2
inches diameter, up to 16 module.
Employ Western machines
To make these machines, Moscow employs quite a few made-in-the-West ma-
chine tools, mainly from Germany, plus a fair proportion of Russian-built ones.
In the plant's measuring and standards laboratory, all instruments, including
several interesting optical ones, are of Soviet manufacture.
Grinders made in same bay
. Both surface grinders (figure 4) and spline grinders are manufactured in
the same bay, as are the large face grinders shown in figure 5. Internal grinders
are made in variety of types and feeds, many of them automatic. One centerless
internal model is adaptable to either cylindrical or taper grinding, is magazine
loaded and fully automatic. Its cycle includes rough grinding, automatic wheel
dressing, finish grinding, and ejection of the finished component. Cycle time is
adjusted to the diameter of the work, spindle speeds range from 9,000 to 15,000
revolutions per minute.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approve f?f-RRe*a?q ?(AJ/P3/ AT ~ I~g6$B00i34680005g9820022-5
Grinds own ways
Without exception, all ways are ground on machines made by the Moscow
plant, such as the slideway grinder shown in figure 6 reproducing itself. It is a
26.25-foot machine, with a 52.5-foot bed in three sections.
In the gear grinding section at Moscow, all grinders under assembly were
based on the generating principle, with the largest of them having a capacity
up to 49.21 inches, 16 module. Generally, production of gear grinders is con-
ventional, except that a high frequency installation does the work normally done
by flame hardening.
"Semispecial" output
In a plant such as Moscow, it is difficult to assess where the dividing line
lies between "one or two at a time production of standard machines, and specials.
A great many machines building at Moscow could probably best be classed as
semispecials.
One item of interest at Moscow was a multispindle slideway grinder being
built for the Krasnoi Proletarii lathe plant, where it is probably destined to
carry out the grinding of slideways in a single operation on the production
line.
Another special, built at Moscow for face grinding piston rings, has constant
grinding wheel speed, and variable table speed. Table has a diameter of 31.5
inches, with stepless speed variation. The table is so flat that it is tested
within three twenty-five-thousandths of an inch over the whole surface. Also
of note at Moscow : a two-spindle automatic surface grinder for automotive pro-
duction that uses a magnetic table and has automatic magazine feed. The
demagnetizer is fitted to the output chute.
Pace grinder makes handtools
One unusual application of a face grinder at Moscow is for production of
wrenches, spanners, and similar handtools. The components nest in appro-
priately shaped holes in horizontal rotating disks that carry them through the
grinding process. Also seen at Moscow : precision machines for piston grinding
that are claimed to operate consistently to an accuracy within five twenty-five-
thousandths of an inch.
One special developed to grind large plowshares looks clumsy, but it performs
an awkward job on a peculiarly shaped workpiece-grinding the surface, and
sharpening the back, front, and edge of the blade. The machine employs seven
spindles, four of them working on the blade in the first four operations, with the
rest of the spindles coming into play in sharpening the front, back, and edge in
the last three operations. Apart from loading and unloading, the whole cycle
is automatic. Floor-to-floor time is 7 seconds.
Other special types noted : a surface grinder with inclinable table ; and a
special three-spindle slideway grinder for leading ways, which also carries a
normal grinding wheel that can be employed when the slideway spindles aren't
in use. This machine has proved particularly useful in doing maintenance grind-
ing in shops where it needn't be employed full time on slideway grinding.
Also at Moscow is a high-production setup for grinding 8,000 piston rings an
hour. This is done on a two-sided vertical spindle machine that has a high-
precision table. Components are moved through the grinding area by the dif-
ferential forces produced by setting one spindle slightly off center from the
other. This machine works as one of a pair-the second is a vertical spindle
superfinishing machine. Machines of the latter type normally use iron wheels
at Moscow, and it is claimed they provide a surface finish of less than one
twenty-five-thousandths of an inch. An abrasive disk can also be used with
this machine by incorporating a truing device.
PART S. MASS-PRODUCING ENGINEERS FOR SOVIET METALWORKING
Moscow (special to American Machinist).-Soviet technical training has come
in for much newspaper and magazine mention in recent months-ever since it
was discovered that Russia has put such training on a mass production basis in
an effort to outstrip the West.
Just what are the underlying motives behind Russia's drive to create armies
of engineers and scientists? How is- it being done?
To answer these questions it is first necessary to realize that Russia was under-
develoved industrially just three decades ago.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
126 EXPORT OF STRATEGIC MATERIALS TO THE U.S. .
Contrast that with the Russia of today : 6.5 million of its workers have received
either advanced or specialized education. In 1954, the latest year for which
statistics are available, some 1.(million people between the ages of 17 and 35
were enrolled in universities and full-time polytechnical institutes, or were
taking correspondence courses in specialized subjects. And last year there
were more than 1.6 million teachers on the faculties of Russian schools. This
year there are even more.
Two basic Russian attitudes have made this possible. First, there is no more
honored position in the Soviet Union than that of teacher. To the Russian it
is inconceivable that teachers would be so poorly paid and occupy such a low
position on the economic scale that they would be forced, with the exception
of a dedicated few, to go into other occupations.
Second is the attitude of Russian youth toward higher education. As the
head of one of Moscow's leading technological institutes put it, "They would
bring in a bed and sleep here, if it weren't that their parents expect them home.
We are always full. The students come here because that is what they have
made up their minds to do. It is a goal they have achieved."
Technology starts early
Primary schooling is compulsory today in all of Russia, and in the industrial
areas both primary and secondary schooling (ages 7 to 17) is compulsory. The
secondary (high) schools today incorporate technological training. After com-
pletion of the 10 years' compulsory education, these avenues are open to stu-
dents : working toward a degree from one of Russia's 33 universities, or toward
a diploma from a technological college, part-time or evening study at a tech-
nological college; or qualification by examination to take a correspondence
course.
Odessa, for example, a medium-sized city with a fair amount of industry, has
a 2,000-student university, and 16 polytechnical institutes, each specializing in a
different curriculum, ranging from pathology to refrigeration engineering. One
such institute can take as many as 3,000 students.
Industrial plants not only cooperate fully with these schools, they also main-
tain their own trade schools. In one Odessa plant, the trade school has three
grades, teaching all the crafts employed in the plant. A Moscow plant employing
4,000 has a complete 4-year course in theoretical and practical training, plus
evening courses. Some 300 students attend the latter, and 400 attend during
the day as part-time students. The plant has a permanent faculty of 40.
Another plant, employing 2,500, has an apprentice school, evening classes,
and a technical school with a 41/2-year curriculum. It is common practice for
such in-plant schools to accept students from "outside." While this obviously
provides the plant with a source of trained specialists, the outside student is
under no obligation to work there after he finishes his courses. Generally, such,
courses are the equivalent of our apprentice training, but they teach theory
as well as practice.
As an example of what Soviet higher education is doing for metalworking,
let's look at Moscow's Machine Tool Institute, which specializes in training
designers and technicians for the machine tool and small tool industries. Ac-
cording to its director, the "Stankin" (a nickname derived from its initials)
Institute is "the leading one of its kind, not only in the Soviet Union, but in the
world."
He may well be right. Stankin has 2,000 students on full time and 1,000 more
attending evening classes. The full-time course takes 5 years, the evening
course 6 years. During that time, the student devotes 4,500 hours to theory, the
rest to practical work, plus plenty of homework. Even with its capacity for
3,000 students, Stankin is no longer able to accommodate all who want to get in.
What is the secret of Stankin's success in so popularizing a specialized field
of study that it turns students away from its doors? The director explains it
this way :
A. spirit of competition for entry-"only the best" secondary school graduates
win out inopen examinations.
The high caliber of students-each student is examined periodically and those
who won't make the grade are weeded out to make room for others.
Compulsory lecture attendance-by law all students are obliged to attend
theory lectures unless they have a valid excuse for absence.
The right combination of theory and practice.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approv9AFK1R50M%A 0 4E;VQ#-RRP600 P-00010020022-5
Preentry training--students who come to Stankin have had a broad basic edu-
cation, and they have had a sense of the value of scholarship instilled in them.
Stankin is controlled by the Ministry of Higher Education, and is so con-
ceived as to graduate its students with specialized knowledge in all the principal
fields of metalworking : Machine tool design, production engineering, control
operations, automation and transfer mechanisms, presswork, chipless production,
gaging and gaging techniques, and so on.
While the student body is predominantly male, some of the day courses, par-
ticularly the ones dealing with gaging, have 30 percent girl students. This per-
centage is also borne out in the plants themselves, where the precision inspection
departments are largely staffed by women, but not necessarily with those who
have a higher education.
First 21/2 years nonspecialized
Stankin is very much alive to the dangers of overspecialized education. Thus
its curriculum has been designed to give all students as wide a general back-
ground as is possible. There is no specialization in the first 21/2 years. All stu-
dents are taught such general engineering subjects as mathematics, physics,
s,
chemistry, theoretical mechanics, strength of materials, metallurgy,
theory, basic principles of machine tool design, hydraulics, and others.
Stankin has well-equipped workshops for practical work during these years,
with facilities provided for metal cutting, welding, casting, forging, and various
other metalworking techniques.
Specialization and outside experience both begin with the third year, when
each student is assigned to a plant for 5 weeks. Those taking machine tool
classes generally work as machine operators, and are paid for the inplant work
they do. From here on out, the amount of outside work builds up, with many
students working voluntarily in plants during the summer holiday. They re-
place regular workers and are paid at the same rates.
The special subjects a student can take from his third year on out allow a
wide latitude : Theory of metalcutting machinery, theory and practice of cutting
tools, industrial economics, planning of metalworking plants and organization,
calculation and design for metalworking processes, technology of machinery,
buildings and machine foundations, and safety techniques, among others.
In the fourth year, outside practical experience increases to 7 weeks, but
takes a more advanced form-with accent on designing and production engineer-
ing. Students are taken into the design department of plants, where they are
given a job to carry out. According to a student's specialty he may be asked to
carry out a production planning or production engineering project, design cutting
tools for a given job, or in the instrument field be set a task involving design,
selection, and use of measuring instruments. The results of such assignments
are assessed independently by Stankin, and by the chief design engineer of
the plant.
Prediploma practice
Practical training in the fifth and final year increases to 9 weeks. This is
known as prediploma practice, and it must result in a work that is of practical
use to the industry. Not only that, the student must if necessary defend it in his
final examination. But by the time he reaches this stage he will already have
carried out three similar projects during his 5 years' study.
Typical projects: designing machine tool components, designing handling
mechanisms, planning a technical process (if the student is specializing in pro-
duction engineering), or planning a design project.
One such project completed by a student was a design for a hydraulic copying
lathe-complete with working drawings of the hydraulic and electrical system,
gearboxes, etc., to such a degree that the lathe could have been built without
reference to any outside source.
When ready to do his diploma project, the student is sent to a plant to do
the job. This means he's utterly on his own, can't rely on help from fellow
students, or play upon known teaching quirks of instructors.
Projects similar to the design of the hydraulic lathe apply in other fields. If
a student's specialty is production planning, his diploma project might be the
complete production planning for a new high-quality production shop. Of if he
is studying machine design, his task might be to design a new machine tool,
taking into account foreign developments as well as Russian ones.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApproftS For s ?0 Q?L1 d a OrIA F 50020022-5
Stanki-n shop practice
What about shop practice at Stankin? By way of illustration let's look at a
typical student's schedule in advanced cutting tool design. The shop itself has
dynamometers fitted to all its machines to facilitate metal-cutting research.
There are three lathes, milling machines, a surface grinder, and drilling ma-
chines, among others.
This shop is used only by advanced students in cutting tool design and appli-
cation. Each of these students has a special schedule drawn up for him, in
which he is assigned eight workshop jobs that will put his theories into practice.
The shop is also used for advanced research, which may or may not be in the
curriculum. Third year students and upward can use the shop for this purpose.
Pregraduation experiments
As previously mentioned, each student is required to complete eight shop ex-
periments before graduation. In the metal-cutting curriculum, experiments
cover such fields as cutting tool geometry, metal deformation during cutting,
calibration of a lathe dynamometer and use of a dynomometer to measure cut-
ting forces during milling, measurement of temperature during cutting, wear
of cutting tools, influence of cutting techniques and the geometry of cutting tools
on surface finish, geometry of drills, calibration of a dynamometer for a drilling
machine, measurement of cutting forces in drilling and boring, and tool geometry
for milling cutters, broaches, and twist drills.
Stankin Institute insists that "design and technology should cooperate"-that
before a student graduates into a state design bureau, he must have had plant
experience as a machine operator, that he must by his own merit have achieved
the grade of foreman and subsequently shop superintendent.
Proof that close relationship between school and industry practice pays off in
Russia lies in the fact that as many as one-fifth of all diploma projects have
actually been taken up by plants and put into production, or if a planning scheme
is involved, put into actual operation in a plant.
Exam to end all exams
The graduation examination is more than a test of technical ability. It eval-
uates a student's initiative, his ability to defend his own judgment without
preparation, and his ability to deal with subjects "off the cuff." All graduating
students are heard by a state examination commission, which in the case of
machine tools is made up of three or four teachers or specialists, three or four
plant men, a production engineer, a designer, and an industrial economist. The
head of the examining commission more often than not is from a rival school,
which naturally makes it tougher on the student. The actual examination takes
place this way : the student is called into a room before the commission and
without any preliminary must justify his diploma, and explain everything to do
with it-all without leads or questions from the examiners. At the end of 30
minutes he must answer critical questions, not only from the board but from any
member of the public who happens to wander in off the street. Thus, confronted
by someone who knows absolutely nothing about the subject, he has to clarify
what he has said.
If a design student has introduced. something new in his diploma project,
he isn't asked how he solved an equation, or how he applied mathematics to its
design. Rather, he is asked, "Where did you get this from? Do you know
another design like this? Why have you used this one?"
Criticizing the critics
After the questioning, the commission criticizes the student's diploma project
right in front of him. If he doesn't agree with what is said, he can in turn
criticize his critics and gets marks for it.
In reaching final decision, the committee takes into account another indepen-
dent judgment-that of the chief designer or department head of a plant where
the student's project has been sent for criticism. In the final grading, the com-
mission alone can decide the student's classification, which can be one of five
things : Grade 1-"awful," grade 2-"unsatisfactory," grade 3-"fair," grade 4-
"good," and grade 5-"excellent."
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApprovegxFf-v0005q~~20022-5
Failures are few
The number of failures is neglible. Most students fall into the grade 4
("good") classification, and anywhere from 5 to 10 percent into the "excellent"
category. If a student fails the final exam, the commission can place him in a
different technological class, i.e., an engineer could be downgraded to technician.
There are virtually no second chances to go back and retake a course or part of
a course. In Russia, if you flunk you've had it.
WEST EUROPE PACES FREE WORLD GAINS IN MACHINE TOOL OUTPUT
West European countries, including Great Britain, produced almost 40 percent
of the world's output of machine tools in 1960, according to a study made by
the European Committee for the Cooperation of the Machine Tool Industries.
Eastern Europe, plus Communist China, turned out better than 31 percent of
the total. The United States, which in the 1955-57 period built around 40 per-
cent of world production, was just under 25 percent. Last year was the third
straight year in which these relative ratios have been maintained with only
slight variations. The study converts the monetary value of each nation's
shipments into Swiss francs as a common denominator.
Russia boosts output
Russia's manufacture of machine tools rose to 183,500 units last year from
160,000 in 1959 and 152,000 in 1958. Most of the increased output went into
Russian plants. In sheer numbers, even Communist China has been outprodue-
ing the United States. It built an estimated 75,000 machine tools in 1960, about
the same number as in 1959.
Communist bloc production
The Communist bloc (Russia, East Germany, Czechoslovakia, Poland, Hun-
gary, and China) produced 371,000 machine tools in 1960. That compares with
34,000 in the United States (as reported by the National Machine Tool Builders'
Association) ; the European Committee study gave no figure for 1960 U.S. output,
but put shipments in 1958 and 1959 as about 65,000 units each year.
During the past 3 years (1958, 1959, and 1960) the Communist countries, in-
cluding China, have built more than 1 million machine tools. That is more
than the U.S. industry has turned out in all the years since the end of World
War II, including the Korean war period.
West Germany paces Europe
West Germany continued in 1900 to be the principal European producer of
machine tools. It built 43 percent of the total production of countries in the
European Committee, as against 40 percent the previous year. The study noted
increased output of machine tools in Japan (21 percent), in India, and in Brazil.
Orders rise in EC countries
In the four "pilot" countries of the European Committee (West Germany,
Belgium, France, United Kingdom), bookings for 1960 and early 1961 exceed
1957-59 levels by about 90 percent.
West European nations exported in 1960 42 percent of their machine tool pro-
duction (it was 47 percent in West Germany, 26 percent in Britain, 24 percent
in France, 33 percent in Italy, Switzerland 71 percent). That is a gain over the
89.9 percent in 1958 and 38.1 percent in 1959. Germany, Britain, France, and
Italy provided the increase.
About 45 percent of the exports by European Committee countries went to
other nations in the European Committee. Eastern Europe-Russia and her
satellites-took 6.5 percent, the highest in recent years. Asia loomed large, with
16 percent, and Latin America with 9.5 percent. North America (United States
and Canada) accounted for 7 percent.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approv d Foo ,,ell oeF2Q9fflGjj AY>PS6JR09346 q( q00020022-5
U.S. machine tool exports, the survey reveals, were distributed about like this
in 1960: 44 percent to European Committee countries, 21.5 percent to Asia
(mostly Japan), 17.3 percent to Latin America, and 12.5 percent to Canada. Ex-
ports from Russia and other East European nations to destinations outside the
Communist boundaries were very small.
Imports into the United States, the study says, "remain at a low level." In
1960, as in the 2 previous years, they were around 6 percent of total deliveries to
domestic users, with more than 40 percent coming from European Committee
nations. [Dollar value of machine tool imports is based upon the value in the
country of origin. To get at the true value of import figures, it is necessary to
multiply the dollar value of imports by a factor of two and a fraction.-Editor.]
Metal-forming machines gain
The study mentions the increasing importance of metal-forming machines.
U.S. production of machine tools (in value) broke down in 1960 to 78 percent
metal cutting and 22 percent metal forming. In France, based on weight, the
ratio last year was 62 percent metal cutting and 38 percent metal forming.
West German figures on the relationship between cutting and forming types
are the most detailed available anywhere. On the basis of value, they show that
two-thirds of production last year were of metal cutting machines and one-third
of metal forming.
German production of turret lathes and automatic and hydraulic presses is ris-
ing, while production of planers, lathes, and drilling machines appears to be
falling off.
Production of milling machines, gear cutters, grinders, plate formers, and wire-
and bolt-making machines has been quite stable over the last few years in Ger-
many.
Machine tool orders
1957
1958
1959
1960
1st quarter,
1961
West Germany, Belgium, France, United
Kingdom--------------------------------
3.275
3.206
3.981
6.728
1.617
United States a----------------------------
2.821
1.658
2.837
2.830
.744
1 1 Swiss franc= $0.2325.
s European orders are not directly comparable to U.S. orders because of differences in types of machines
covered.
Where United States and European committee tools have been exported
[In percent]
European Committee 1---------------------------------
53.0
45.5
50.0
44.1
Other European countries------------------------------
9.5
6.5
1.8
.9
Eastern Europe----------------------------------------
3.0
7.5
0
Africa--------------------------------------------------
4.5
3. 5
.8
.9
North America I---------------------------------------
8.5
7.0
25.8
12.5
Latin America-----------------------------------------
7.0
9. 5
12. 1
17.3
Asia----------------------------------------------------
10.0
16.0
5.8
21.6
Oceania------------------------------------------------
4.5
5.0
3.7
2.7
1 European Committee nations' exports to other European Committee nations; United States exports
to Canada.
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approves f ffRe a%QAqqW/ TE ?2QE6,M0Rj& 005g0g20022-5
1952
1953
1954
1955
1956
1957
1958
1959
1960
Percent metal cutting -------------------------
75.0
74.0
73.0
70.0
72.0
72.0
69.0
67.0
67.0
Planers ---------------------------------------
7.2
5.7
4.3
3.7
3.6
3.8
3.4
3.3
3.2
Lathes -----------------------------------------
20.7
18.5
17.3
16.7
16.7
16.4
14.9
12.5
13.6
Turret lathes ----------------------------------
6.0
6.6
6.8
7.8
8.4
7.5
7.4
7.9
8.0
Drilling, tapping machines___________________
8.7
8.5
8.5
7.9
8.5
7.0
5.2
5.8
5.5
Milling, boring machines_____________________
10.3
13.1
12.5
10.4
10.4
11.6
11.4
10.0
9.1
Grinders______________________________________
9.9
9.9
10.6
9.9
10.3
10.1
11.0
10.4
10.5
Gear cutters -----------------------------------
3.8
3.5
3.4
3.8
3.6
3.4
3.4
3.7
3.6
Percent metal forming -------------------------
25.0
26.0
27.0
30.0
28.0
28.0
31.0
33.0
33.0
Automatic presses -----------------------------
7.4
6.1
6.6
9.5
8.3
7.6
7.8
10.0
10.2
Hydraulic presses ------------------------------
2.0
2.7
3.1
3.6
3.0
3.6
4.0
4.3
4.7
Plate formers ----------------------------------
4.3
5.1
6.0
5.3
4.8
5.3
5.8
5.5
5.0
Wiremakers -----------------------------------
4.8
5.1
4.9
5.0
4.6
4.5
6.6
6.5
5.4
Boltmakers -----------------------------------
1.5
1.4
1.4
1.3
1.6
1.6
1.7
1.6
1.6
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
INDEX
NoTE.-The Senate Internal Security Subcommittee attaches no significance
to the mere fact of the appearance of the name of an individual or an organi-
zation in this index.
A Page
Adenauer, Konrad---------------------------------------------------- 31
Allis-Chalmers Manufacturing Co-------------------------------------- 98
All-Russian Congress of the Soviets, Eighth_____________________________ 5
All-Union Scientific Research Institute of the Bearing Industry--------- 34.
All-Union Scientific Research Institute of Electromechanics----------- 34
American Machine Tools Distributors Association______________ 7, 13
American Machinist (publication) ---------------- 7-9, 12, 14, 16, 46, 98, 99, 129
American Ordnance Association--------------------------------------- 46
Appendix I (exhibit No. 6). "High Reliability and Durability of Ma-
chinery and Instruments Is a Matter of Paramount Importance"_-__-- 68-73
Appendix II (exhibit No. 7). "Soviet Metal-Cutting Machine Tools : Asser-
tions and Facts"--------------------------------------------------- 73-84
Appendix III. "Appraisal of Soviet Mechanization and Automation"___ 84-94
Appendix IV. Comments received by the subcommittee from persons men-
tioned by Mr. Gwyer and representatives of publications to which he
referred------------------------------------------------------------ 94-131
"Appraisal of Soviet Mechanization and Automation"_________________ 24
B
Battle Act______________________________________ 27,28,38-41,43-46,54,55,57
Bayless, Glen-------------------------------------------------------- 98
Bean, Nevin L------------------------------------------------------- 98
Belgrade Conference------------------------------------------------- 42
Berlin------------------------------------------------------------- 3,26,31
Brandt, Weldon----------------------------------------------------- 98
Bryant grinders-------------------------------------------------- 26-29,33
Buerk, Benjamin ( '-------------------------------------------------- 97
Buerk Tool & Machine Corp., Buffalo_________________________________ 97
Bureau of Census---------------------------------------------------- 20,59
0
Campbell, John R--------------------------------------------------- 97
Central Intelligence Agency ------------------------------------------ 19
"Challenge of Soviet Power, The"----------------------------------- 19
ChinCom------------------------------------------------------------ 44
Christian Science :Monitor___________________________________ 21,23-25,96,97
Co Com (coordinating committee) ------------------ 28,31-33,39,40,43-46,57
Commerce Department______________________________ 7, 20, 28, 35, 48, 54, 58, 59
Communist Party of the Soviet Union, 21st Congress of the______________ 2
Council for Economic & Industry Research--------------------------- 22
D
Defense Department------------------------------------------------- 27,35
DeLany, Walter S----------------------------------------------------- 57
Denmark (re exports)----------------------------------------------- 56
Dillon, Douglas-_ --------------------------------------------- 45, 46, 55-57
Drummond, Roscoe--------------------------------------------------- 54
Dulles, Allen---=---------------------------------------------------- 19,20
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 ApproVed For Release 2004/03/11 : j j DP64B00346R000500020022-5
E Page
"East-West Trade in Europe"_______________________________________59
Economic Gazette_______________________________________------- _- 47-49,52
Economic Planning (publication) -------------- 47
Economic Problems (publication)_____________________________________ 47
Edison Electric Institute_____________________________________________ 19
Ellison, James 0______________________________ 7, 12, 13, 95
Letter to Mr. Sourwine dated 94
European Committee for Cooperation of Machine Tool Industries-------- 97, 98
Experimental Scientific Research Institute of Metal Cutting Machine
Tools-------------------------------------------------------------- 34,98
Export Control Act---------------------------------------------------- 1
F
"Facts for Industry,-------------------------------------------------- 20
Federal Reserve Board----------------------------------------------- 31
'Finney, Burnham-------------------------------------------- 7-10,12,14,99
Letter to Mr. Sourwine dated November 10, 1961_____________ __ 98
Five-year plan, Russia's sixth_______________________
_______________
103-107
Ford Motor Co------------------------------------------------------
98
Fortune magazine--------------------------------------------- ------
96
France (re exports) --------------------------------------------------
56
G
Germany (re exports) ------------------------------------------------
56
Goremykin-----------------------------------------------------------
34
Gorki (Soviet automobile plant)______________________________________
5,9
Gwyer, Joseph A., testimony of_______________________________________
4-68
Harron, Rickard & McCone Co. of Northern California--------------- 11-13 94
"High Reliability and Durability of Machinery and Instruments Is a
Matter of Paramount Importance____________________________________ 68-73
Hodges, Secretary of Commerce Luther__________________________ 26, 30, 31, 54
Humphrey, Senator-------------------------------------------------- 54
I
Industrial Press-----------------------------------------------------
46,95
Italy (re exports) ---------------------------------------------------
57
Izvestiya (publication) -----------------------------------------------
48,49
J
Japan --------------------------------------------------------------- 57
Jones & Lamson-------------------------------------------------- 26,27 98
Jupiter base--------------------------------------------------------- 41
K
Keating, Hon. Kenneth B--------------------------------------------
1
Kennedy, President---------------------------------------------------
96
Kharkovskiy electromechanical plant__________________________________
34
Khrushchev---------------------------------------------------------
2,4,19
King, Frank---------------------------------------------------------
98
Kitchin, Congressman------------------------------------------------
4
Krasny Proletary Works in Moscow__________________________________
97
Kuznetsov, N--------------------------------------------------------
34,49
L
Latta, Congressman--------------------------------------------------
4
Lenin---------------------------------------------------------------
5
Library of Congress-------------------------------------------------
4,22
Linder, Willy--------------------------------------------------------
66
Lipscomb, Hon. Glenard P____________________________________________
4
Luchars, R. B-------------------------------------------------------
95
Approved For Release 2004/03/11: CIA-RDP64B00346R000500020022-5
 Approved For Release 2004/03/$.1bECIA-RDP64B00346R00050090022-5
"McCarthyites and Export"------------------------------------------- 48
,McGraw-Hill -------------------------------------------- 7, 8, 14, 15, 46, 98, 99
M
Machinery (publication) --------------------------------------------- 46,95
Magnitogorsk (Soviet iron and steel center)____________________________ 5
Hall, A. C------------------------------------------------------------ 98
Mandel, Benjamin--------------------------------------------------- 1
Martin Co------------------------------------------------------------ 98
Meauy, George------------------------------------------------------ 31
Metalworking News----------------------------------------------- 29,30, 98
Metalworking Production (publication)____________________________ 14,15,98
MOSCOW ------------------------------------------------------------- 1,53,97
Munitions Control. Act1
Mutual Defense Assistance Act of 1949________________________________ 37
Mutual Defense Assistance Control Act of 1951__________________ 36, 39, 56, 57
N
New York Times--------------------------------------------------- 19,20,95
Nezhdanov----------------------------------------------------------- 34
North Atlantic Treaty Organization___________________________________ 31, 57
0
"On Trading With the Communist East"_______________________________ 65
Ordnance magazine____________________________________________ 11, 21, 46, 95
Ordzhonokidze Machine Building Plant in Moscow_____________________ 98
P
Pauling, Linus-------------------------------------------------------- 53
Peiping-------------------------------------------------------------- 1
Pendleton Woolen Mills--------------------------------------- --- 98
Problems of Communism__________________________________________47
R
Radio Moscow------------------------------------------------------- . 48
"Report on Russia," article from American Machinist__________________ 99-129
Reshetov------------------------------------------------------------- 34
Rusk, Secretary of State Dean_____________________________________ 26,30,31
Rutherford Campbell Engineers, Inc----------------------------------- 97
Schroeder, Frank W------------------------------------------------- 1
Schwartz, Harry----------------------------------------------------- 19,96
Letter to Mr. Sourwine dated November 1, 1961____________________ 96
Singleton, J. L------------------------------------------------------ 98
"Some Critical Aspects of Soviet Mechanization and Automation Program_ 46
Soviet machine-tool production, 1951-55, by types (in percent of total)__ 90
"Soviet Machine Tools" article in Ordnance magazine__________________ 11
"Soviet Metal-Cutting Machine Tools: Assertions and Facts"__ 24, 34, 35, 73-84
Soviet plants which accounted in 1956 for about 40 percent of the total
output of machine tools, list of_____________________________________ 81
Sprishevskiy---------------------------------------------------------- Sputnik --------------------- ----------------------------------------- 5
Stassen, Mr-----?------------------------------------------------- 41
State Department---------------------------------------------------- 35. 56
Stubbs, Norman______________8, 15, 98
Swiss Review of 59, 60
Approved For Release 2004/03/11 : CIA-RDP64B00346R000500020022-5
 Apprved For Release 2004/03/1'DC--RDP64B00346R000500020022-5
T Page
Tass----------------- ----------------------------------------------- 52
Technical and Economic Council of the State Committee on Automation
in Machine Manufacturing in the Soviet Union---------------------- 33,34
Tit -------------------------------------------------------------------- 42
'Tooling for Communism" article------------------------------------- 97
Trippe, Peter------------------------------------------------------ 8,15,98
"U.S. Lead Substantiated," by Harry Schwartz------------------------
19,96
"U.S.S.R.: Economic Giant?, The"-----------------------------------
25
U.S.S.R. Exhibit of Economic Achievement in Moscow-----------------
97
W
Foreign Economy Gearing to `Three Worlds"'__
U
S
"Washington Wire
29
,
.
.
"West Europe Paces Free World Gains in Machine Tool Output"_-_-_ 129-131
Westinghouse Electric----------------------------------------------- 98
White, Nate--------------------------------------------------21,23,24,97
Letter to Mr. Sourwine dated November 1, 1961--------------- 96
Whitmore, H. H----------------------------------------------------- 98
Wolff-Cammaerts, Franz---------------------------------------------- 97
Y
Yugoslavia ----------------------------------------------------------- 42
C
Approved For Release 2004/03/11: CIA-RDPBOQ46R000500020022-5