861.60/299
The Ambassador in the Soviet Union (Davies) to the Secretary of State
[Received April 4.]
Sir: I have the honor to transmit herewith observations on certain factors which are at present observable in connection with the tempo of Soviet industrial production and construction.
[Page 537]An ironic, but by no means surprising, development is discernible in the Soviet Union. At the very time that Stalin is physically destroying the right-oppositional leadership represented by such men as Bukharin and Rykov, he is putting certain of their ideas into practice. Since the inception of the first Five-Year Plan,35 the members of the right opposition have in one way or another criticized the pace of industrialization of the country set by the Kremlin as being both far too rapid and on too large a scale for the primitive basis on which it rested. The Kremlin now appears to be convinced that at least some of the views of the opposition have been correct since it is slowing down the tempo of the country’s industrial development.
It will be recalled that this is not the first time that Stalin has stolen the thunder of his opponents. During 1927 and 1928, when he was fighting the Trotskiist left, he criticized Trotski for over-emphasizing the danger of an individual peasant economy and for advocating planned “over-industrialization.” Almost immediately after the downfall of Trotski, Stalin adopted a program calling for the elimination of the private peasant and for planned rapid industrialization of the country.
Ever since the inception of the first Five-Year Plan it has been the policy of Stalin to endeavor to bring about the industrialization of the country not only as rapidly as possible but also on as large a scale as the most advanced industrial countries, particularly the United States. Many gigantic plants have been constructed and mammoth factories built, largely for the sake of bigness and without giving due consideration to the question of whether the manufacture of a certain article, never before made in the country, should not first be started on a moderate scale. The industrial slogan on everyone’s lips has been “Catch up with and surpass America”, and by that phrase bigness was conjured.
It is noteworthy in this connection that in addition to the right opposition, the members of which were against what they considered to be “superindustrialization”, many of the American engineers who have assisted in the construction of certain of the gigantic plants in the Soviet Union are of the opinion that certain of the difficulties encountered in Soviet industry could have been avoided, or at least considerably lessened, if construction had been carried out on a smaller scale in the beginning with a view to expansion as ability to operate factories in a satisfactory manner was acquired. Such ideas were ridiculed by Stalin and his followers as “defeatist” and as a counterrevolutionary underestimation of the potentialities of Soviet Socialism. Those who held such ideas were termed by the Stalinists “Right Liquidators” and “Panickers.”
[Page 538]As the industrialization, however, of the country proceeded apace at a dizzy tempo and as the difficulties and high cost of production along what were considered American lines became apparent, the Kremlin has apparently gradually been driven to the conclusion that a deceleration of the pace of construction and production might be in the interest of efficiency.
The decision of the Kremlin to slow down the tempo of production and construction may be ascertained from an examination of the 1938 plans for the People’s Commissariats for Heavy Industry, for Machine-Building Industry, and for Food Industry; the conclusion that construction on a colossal scale is undesirable is most evident in a recent decision of the Soviet of People’s Commissars of the Soviet Union relating to the building industry which was apparently reached in the face of the fact that in 1937 the construction plan of the People’s Commissariat for Heavy Industry was executed only by 80.1 per cent and that the cost of installation and building, which should have decreased by 13 per cent, actually increased by 0.9 per cent.
On February 26, 1938, the Soviet of People’s Commissars of the Soviet Union adopted a resolution to establish a “Committee on Construction Affairs” to be under its immediate jurisdiction whose primary functions are to consist of “improving construction work, introducing unity into the norms governing construction and controlling the execution of established norms.” The Soviet of People’s Commissars resolved at the same time to “improve the organization of preparing estimates and financing industrial construction.” The most interesting aspect of this resolution is that, after pointing out a number of serious defects in construction and planning such as the lack of cooperation between neighboring plants, the excessively large amount of floor space in factories, unnecessary marble facing, the overuse of expensive granite, and so on, the following statement is made:*
Finally one of the gravest defects in planning and construction is the mania for mammoth constructions which is widespread among managers and builders. A result of this is the passion for planning industrial giants and complicated industrial combines, regardless of the conditions of the locality and economic necessity, which leads to great delays in construction, to difficulties in mastering production, and the freezing of state funds.
This mania for hugeness in industrial enterprises, which curiously enough is now so vigorously condemned, has been fostered up to the present time by the Soviet authorities in a most thoroughgoing manner. The planners and builders of these giant plants and intricate [Page 539] combines, it appears, have been receiving salaries based on a certain “percentage of the cost” of these expensive constructions.
It would appear that in the future the builders of Soviet enterprises will be remunerated on the basis of accomplishments rather than in proportion to the amount of governmental funds expended.
Respectfully yours,