F. Y. P. No. 3

The second Five-Year Plan ended last week, and the Soviet Union entered 1938 by starting on a third. The Gosplan or State Planning Commission made last April the preliminary blanket announcement in Pravda and Izvestia that the second Five-Year Plan had been "over-fulfilled in four years and three months." and public celebrations took place throughout the Soviet Union. Economists of the embassies and legations in Moscow, who had seen this happen before, sat back and waited for the detailed official statistics on the second Five-Year Plan to be issued several months later.

During the summer study of these revealed that in sectors of the Plan in which there had been costly breakdowns the greater-than-expected total cost was cited by the Gosplan as evidence of "over-fulfillment." Copies of the official statistics issued by the state in languages other than Russian were again found to omit qualifying footnotes and other matter the absence of which made the second Five-Year Plan results read more optimistically in English, French or German than in the Russian text.

Latest Moscow official figures last week on F. Y. P. No. 2 show that Soviet production of coal, one of industry's most vital factors, was during the first nine months of 1937 not only definitely below the 1937 Plan figure but also below the production figure for the same period in 1936. The same was true of petroleum, copper and machine tools. On the broad economic front Soviet production is rising, as indeed Tsarist industrial production rose spectacularly in the decade before the Revolution, but Soviet fulfillment of the Plans as a "system of planned economy" or a "planned economic order" cannot be found by neutral economists in Moscow--each of whom has his own pet instances in which he thinks he has caught Gosplan quibbling, contradicting official figures with official figures, or just plain lying.

The Gosplan has been under the disadvantage that the Political Police took away last summer and autumn not only its director, V. I. Mezhlauk, but also the other leading Plan officials, and they have not been heard of since. The June issue of

Planned Economy, an official Soviet organ which the state had scheduled for publication last June, finally came out last week. Accusing "Trotskyist wreckers and spies" of having "wormed their way" into highest officialdom in order to wreck planning at its source, Planned Economy declared: "Wreckers designated the construction of immense industrial enterprises at places far from raw materials, electric power and water resources. They hampered the development of districts possessing huge raw materials, resources and minerals, and they retarded the construction of important military enterprises."

Dispatches last week reported from Moscow that widespread deterioration of machine tools throughout the Soviet Union during 1937 has apparently been due to too great "speedup" efforts under the system called Stakhanovism (TIME, Dec. 16, 1935). The Economic Council of the Soviet Cabinet investigated last week a case in which Joseph Stalin himself had apparently been hoaxed. The Dictator voted in Russia's recent election for a candidate whose claim was that as a Stakhanovite pacesetter he had increased his milling-machine output 9,000%. Last week the successful candidate's Soviet boss and fellow workers were revealed to have helped him to rebuild and alter two milling machines, greatly overspeeded, into whose cutters he jammed work at 20 times the rapidity at which they were designed to cut.

These and other such cases caused the Central Committee of the Communist

Party, whose secretary general is J. Stalin, to cancel last week a proclamation which announced in mid-December that January 1938 had been designated "The Stalinist Month of Stakhanovite Records." Instead, Stalin ordered a complete revision of the whole Stakhanovite system during January and February, set March as the probable month in which a new system of speedups will be tried.

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