811.42700 (R)/9–2348: Telegram
The Chargé in the Soviet Union (Kohler) to the Secretary of State
2090. Accumulated evidence available to Embassy over recent months gives us impression Soviet urban living standard perhaps slightly better today than year ago (but nothing like fantastic claims of Soviet propaganda) and agricultural standard possibly below 1947. Continuing emphasis in agriculture and reemergence in industry of problem of labor discipline may reflect only present impact of originally planned program to reduce flow of purchasing power to level current consumer goods production. However possibility is even suggested to us that mid-year shift in basic policy to divert greater share national production to military production as consequence deteriorating international situation has necessitated additional deflationary measures.
[Page 919]This opinion based largely on such measures as huge “voluntary” state loan campaign, upward revision working norms, increased agricultural taxation, increased public utility rates, all accompanied by continuing pressure for greater production.
Recommend that Department accord priority to thorough study and analysis these developments. Whether or not study provides statistical substantiation above impressions, continuous nullification promises extended citizenry by Soviet Government at time of monetary reform and first quarter boast of 51 per cent in real wages is certainly open to wide exploitation through VOUSA and other media.
Naturally cognizance must be taken and due weight assigned December 1947 and subsequent price reductions. VOUSA line might offer opinion that several price reductions of more consequence than those cited would be necessary to compensate consumer for purchasing power recently lost and that many more would be required to place Soviet citizen on equal footing with western workers. Such line would undercut future propaganda claims of improved Soviet standard of living. Such claims may, of course, be expected, probably in form additional “price reductions” but evidence points to unlikelihood of anything really substantial in this line in foreseeable future.
Sent Dept 2090, repeated Paris 376 for Ambassador Smith, London 2340. Dept pass Paris and London.