Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

861.51/3–1149: Telegram

The Chargé in the Soviet Union ( Kohler ) to the Secretary of State

Moscow , March 11, 1949.

621. Soviet press March 11 published Finance Minister Zverev’s¹ report on USSR 1949 budget. Principal categories revenues and expenditures planned 1949 with comparison actual 1948 figures follow in billions rubles.²

Revenues from turnover tax 261.8 vs 247.4; direct taxes on population 36.4 vs 33.2; state loans 22.9 vs 23.9; profits tax 33.9 vs 26.5. (90 billion residual will clarify itself later date.)

Profits of state enterprises and organizations will total 69.6 in 1949 compared 39.3 [in] 1948, of this 41.4 from Industry vs 22.7, from Agriculture 1.6 vs 1.2; Transport and Communications 12.4 vs 3.8; Trade and Procurement 6.7 vs 5.3; other 7.3 vs 6.1.

Expenditures: On national economy 152.5 (36.7 percent) vs 147.5, Social and Cultural 119.2 vs 105.6, Armed Forces 79 (19 percent) vs 66.3, Govt Administration 13.7 vs 13.1.

No detailed breakdown 1949 expenditures national economy.³ Agriculture given as 32.7 vs 20.5. Breakdown Social and Cultural; Education 60.8, Health 21.6, Social Insurance 16.6 vs 14.4, Mothers’ allowances 3.4, Social Security 21.4.

37.4 from internal profits enterprises brings total expenditures national economy to 189.9 billion, 27 billion over 1948. 1949 capital investment allocation from budget 79.8 vs 57.2 plus 25.7 vs 9 from internal resources enterprises.

Total working capital in national economy will be 23.6 vs 17.1, 10.1 from budget and 13.5 from internal revenues enterprises. Total member Republics budgets 92.4 vs 85.4.

Department pass Defense.

Kohler

1. Arseny Grigoryevich Zveryev was Minister of Finance of the Soviet Union, having resumed the position from Alexey Nikolayevich Kosygin in December 1948. His budget report was presented to the Supreme Council of the Soviet Union on the evening of March 10.
2. For a comparable report on the 1948 budget, see telegram 195 from Moscow on February 3, Foreign Relations, 1948, vol. iv, p. 802.
3. In a preliminary and tentative assessment of the budget report in telegram 633 from Moscow on March 11, not printed, the Embassy observed that the “major categories [of] budgetary expenditure reflect little alteration [of] past year’s pattern” and that failure to “provide usual breakdown financing of national economy serves purpose further mask allocations and complicate early analysis.” The speeches by Zveryev and others served to emphasize that “wasteful expenditures, duplication, equipment hoarding, excessive inventories, irrational dispersal resources, excessive staffs, and bureaucratic administrative expenditures” were prime targets for sharp attacks. (861.5151/3–1149) In a later appraisal in telegram 680 from Moscow on March 17, not printed, the Embassy was still uncertain and speculative in its judgments. (861.51/3–1749)