Not So Strong As All That

Unbiased .observers of the Soviet Union had long believed, on inconclusive evidence, that official statistics put out by the U.S.S.R. were heavily watered to create an inflated picture of Soviet industrial growth. It remained for a Harvard man to do something conclusive about it.

Economics Professor Seymour Edwin Harris asked five experts to make an analysis of Soviet balance sheets. Each tackled the task individually, using different methods, concentrating on different aspects of Soviet economy. Last week,

Dr. Harris made known the highlights of the five reports.*

From them emerged one solid, unanimous conclusion: the world power potential of the Soviet Union has been grossly exaggerated by official Soviet figures.

In the Best Years. One typical distortion: a League of Nations study (based on Russian figures and released last year) put Soviet industrial output for 1936-38 at more than half that of the U.S. for the same period. Wrong, said Harris' accountants ; it was in reality no better than one-third.

The following two years, 1938-40, are still remembered by ordinary Russians as the best of their post-revolutionary lives, because in these years they were better housed, fed and clothed than before or since. But the experts found: P:Despite glowing Soviet reports of enormous industrial gains, it was not until the second year of the second Five-Year Plan (1934) that Soviet national income returned to its 1913 level. And by 1938 it was only 50% more than it had been in. 1913 (in the same period U.S. national income more than doubled). P:In 1940, the Soviet flow of goods and services was equal in value to 32.5 billion U.S. dollars. (U.S. flow was $100 billion.)

The current Five-Year Plan, formulated in 1946, has as its first aim the restoration of 1940 levels. Hence the report plainly meant that Russia is not so strong as she would like to scare the world into believing.

*The reporters: the Federal Reserve Board's Alexander Gerschenkron of Washington; the Federal Reserve Bank's Paul A. Baran of New York; the Australian Government's financial adviser, Colin Clark; Columbia University's Professor Abram Bergson; Aron Yugow, a free-lance specialist on Soviet industry.

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