861.9111/6–749: Airgram
The Chargé in the Soviet Union (Kohler) to the Secretary of State
A–587. With reference to the Embassy’s A–136 of February 10, 1949, the number of Soviet press articles published during the past fortnight reveal no slackening of interest in the subject of the “approaching” American economic depression. Federal Reserve Board and Bureau of Labor Statistics reports are cited as evidence of a [Page 617] rapidly worsening economic situation characterized by falling production, rising unemployment and increasing incidence of bankruptcy. The Journal of Commerce is quoted to the effect that the US is experiencing a “cyclic slump” while official government statements that minimize the seriousness of the situation are dismissed as “official optimism”.
Since June 1 there has been almost daily comment in the form of brief Tass bulletins on the slump of the Wall Street stockmarket. The effect of the slump on other Western countries is also noted: Prime Minister Chiffley1 of Australia is reported as saying that the crisis in the US “would certainly be reflected in the economy of the whole world”; to the New Statesman and Nation is attributed the remark that the annual British Labor Party conference will be held “at a time of approaching crisis in the US”.
Comment on the domestic effects of the “crisis” in the US is generally along familiar lines: as the economic position worsens, the American bourgeoisie is strengthening its assault on the working-class; ERP, the “armaments race”, the Truman Doctrine as applied to Greece and Turkey—all are devices, albeit ineffectual, to stave off the economic crisis.2
- Joseph Benedict Chifley was Prime Minister and Treasurer in the Labor Cabinet in Australia.↩
- In a renewal and expansion of these views in airgram A–638 from Moscow on June 18, the Embassy again drew attention to the “heightened interest in the ‘fast-approaching’ economic crisis … advancing on the United States” evinced by the press of the Soviet Union. It had emphasized the theme that the economic difficulties of the United States were “making themselves felt in other countries, and the inference is made quite clear that the whole interrelated capitalist structure is beginning to rock.” The periodical New Times for June 8 “applied the Leninist doctrine of capitalism’s inherent contradictions to the present situation and found world capitalism experiencing an ‘aggravation’ of its general crisis”, from which it concluded that “the capitalist economy is revolving in a vicious circle of contradictions from which it is unable to escape.” (861.9111/6–1849)↩