762B.00/11–251: Telegram
The Director of the Berlin Element of HICOG (Lyon) to the Office of the United States High Commissioner for Germany, at Frankfurt1
776. From Morgan. Ulbricht submitted law on five-year plan to Sov Zone Volkskammer Oct 31 which was unanimously accepted fol day. Nature of revisions of original plan submitted at III SED convention July 20, 1950 revealed by timing of law: 15 months after submission of original plan, 10 months after plan has been in effect, but only five weeks after conclusion long term trade pact with USSR;2 interestingly, however, prior to conclusion of pending long-term trade pacts with satellites. Plan reflects Sov demands on GDR economy.
Preliminary review of new plan targets shows fol highlights: drastic increase of iron ore and pig iron production to 3.65 and 2 million tons respectively (previous goals 1.8 and 1.35 million tons). Crude and finished steel targets on other hand undergo only slight increase. Major upward revision in machine, especially heavy machine and heavy electro-engineering targets (e.g., machine installations for power industry to increase 610 percent over 1950 production compared to 284 percent in previous plan). Targets for basic chemicals have also been raised (e.g., sulphuric acid 450,000 tons (400,000 tons) calcium soda 640,000 tons (380,000 tons) synthetic gasoline 927,000 tons (780,000 tons) diesel oil 650,000 tons (475,000 tons)). Coal industry targets reveal complete failure of hard coal mining and resultant increasing shift to brown coal. Targets for selected consumer goods remain generally same as in previous plan but over-all consumer industry targets appear to be lowered.
With its heavy emphasis on basic and heavy industry at expense of refining and consumer industries, plan is blunt expression of separationist [Page 2023] economic policy in midst of “unity” campaign. On other hand, also reveals number of weaknesses, aggravated by projected plan increases, which can be alleviated only by trade with West.