861.51/12–1247: Telegram
The Chargé in the Soviet Union (Durbrow) to the Secretary of State
3359. Buyers panic subsided. Some shops including main Mostorg still closed and many shops bare with food difficult obtain and open market prices still as high as reported mytel 3330 December 7.1
[Page 635]Present period can be described as hang-over from spree or lull before storm, with everyone anxious as to how it will affect him personally.
In view statements Malenkov’s Cominform speech published December 9 to effect efforts being made raise standard living through consistent reduction prices and consolidation money circulation and Soviet currency and that rationing will be eliminated, seems possible as reported first paragraph mytel 3321 December 4,2 that impending changes will result in lower nominal prices below present ration price level with some adjustment downward wages. Pattern latter already indicated in reduction payments to award holders and mothers. This will be played up as strengthening of ruble, soundness Soviet economy compared with capitalistic, etc. However, whether the single price is above or below present ration price, it in all probability will be considerably higher than ration prices before drastic price increases September 1946. Significance of average rise of 180 percent in ration prices at that time not realized abroad because of Soviet censorship. We should be prepared expose holes in propaganda claims particularly to European masses. As soon as regulations out will send urgently spot analyses loopholes for use “Voice of America” and if possible to pass to news agencies since correspondents here will not be able give honest appraisal significance changes. All firm rumors point December 15 as effective date.
[Some concluding paragraphs, here omitted, sent along a few current anecdotes about the buyers spree for possible use by the “Voice of America” on the theory that ridicule stings more than cold facts.]