MEDFOKD MAIL TltlBUNE. MEDFOKD. OUF.GON
THLKSUAY, OCTOBER 3. 1963
B 3
Private Profit Seekers Convicted and Executed for Speculation
By JAY AXELB AN'K
United Press International
MOSCOW (UPI) - During the
past two years more than 220
persons have been executed by
firing squads in the Soviet
Union (or trying to make a fast
buck.
Many of those who died would
be criminals in any country
embezzlers, forgers, swindlers,
bribers and bribe-takers.
But others have been shot for
simply doing what comes na
turally to businessmen in the
United States and other West
ern countries.
In the West, the go-getter
who knows how to make money
because ot a shrewd business
head, resourcefulness or the
right contacts often becomes a
rags-to-riches success. He builds
a house, buys one or more cars,
takes a Caribbean or Riviera
vacation, perhaps becomes
president of his local Rotary
Club.
In the Soviet Union the same
go-getter businessman may be
(and has been) convicted as a
criminal and put to death.
The Soviet government an
nounced Oct. 11 that It Rus
sians were sentenced to death
in two separate trials for op
erating private businesses with
in two government-owned textile
plants.
The doomed men were offi
cials of the plants who diverted
products to the black market
for huge profits, according
to the Soviet press..
Private enterprise is strictly
illegal in the Soviet Union ex
cept for a few minor exceptions
notably farmers who in ad
dition to working on collectives
or state farms sometimes have
private plots and are permitted
to sell the produce, usually a
small-scale operation.
Anybody who employs his tal
ents for making money for
himself instead of the state is
considered a criminal menace
i to society who must be ruthless
ly stamped out.
Small Minority
The Soviet Union long has
been plagued by a minority
and it is a small minority of
"capitalist types" who make or
try to make private fortunes.
In May, 1961, the government
decided to take extreme meas
ures to get rid of them and dis
courage imitators.
- The death penalty was insti
tuted for speculation in state
property, and two months later
speculation in currency also be
came punishable by death be
fore a firing squad. A year la
ter bribery was added to the
official list of capital offenses.
The figure of more than 220
persons executed since May,
1961' is obtained by counting
the cases reported to date in
the Soviet press. The actual fig
ure could be much higher. No
statistics on economic crimes
are published.
Bribery Costly
The magnitude of the prob
lem was underlined by Premier
Nikita Khurshchev himself in
November, 1962, when he re
ported that in the first half of
that year embezzlement, swin
dling and bribery had cost the
country 61 million rubles ($67
million).
To understand how a Russian
can get into private business to
make illegal profits and risk the
firing squad, it is necessary to
know the rudiments of the,
Soviet economic system. )
All means of production as
opposed to personal possessions
such as an overcoat or radio
are state owned. In order to
make a private profit from com
modities one must resort to pil
ferage or theft of state proper
ty. All legal trading, buying and
selling is a state monopoly.
Therefore a man in the west
who might be described as an
enterprising businessmen could
, be a dastardly criminal in this
country accused of embezzle
ment, speculation, theft or brib
ery Private enterprise became
I an alien and criminal holdover
from czarist days. The major
'exceptions were farmers allow
ed to supplement their state
I farm work by growing produce
on their own plots. This was per
mitted in order to bolster badly
needed food supplies. But So
viet authorities have long taken
the position that in a more ideal
communist society free farming
will have to go.
Private Enterprise
In a technical sense, it may
be said there are other areas of
limited private enterprise the .
doctor who is permitted to tend i
u:.. .,: r ....,..
nia piivtue pi aiuie unci aiair
duty hours; mechanics, carpen
ters or electricians who can go
from state repair or work
stores to side jobs after hours,
teachers who may tutor private
ly on their own time, secretaries
who can take on private typing
jobs and domestic workers
who babysit in the evenings.
A carpenter can come to your
apartment to build shelves or a
woman can do private dress
making, but no such entrepre
neur may take on an assistant.
That would be "going into busi
ness" and exploiting labor to
make a profit.
As long as only a person's
labor is involved, and state work
is not neglected, a side job is
legal.
Because a person may never
hire an assistant, the size and
scope of side job earning must
remain very limited. In addi
tion every Soviet citizen must
have a state job or be able to
prove gainful employment if
called upon.
This prevents persons from en
gaging in full time backroom
business. And money derived
from side jobs is heavily taxed.
The tax is so high it amounts to
a fine.
Only the state, in the Soviet
system, can legally make a prof
it through business. A citizen
gets wages or "bonuses" if his
plant or place of business ex
ceeds a norm, a little "pocket
money" from the aforemen
tioned side jobs, or earn interest
on savings accounts, interest
from investment is not permit
ted. Communists Protest
The newspaper Literaturniya
Gazeta (Literary Gazette) on
July 27 reported. a pertinent ex
ample of how abhorrent private
business is to communist leaders.
The chairman of a collective
farm, in this case, had a bumper
crop but no wooden boxes with
which to ship them to market.
Unwilling to see the fruit rot,
he procured wood illegally out
side of official distribution chan
nels, constructed boxes and
shipped the apples off to market
for the benefit ot ms collective
In some countries such re-, nomic criminals are appre
sourcefulness might have been ! hended is through obvious high
applauded. But the director's re- living. Some illegal Soviet "mil
ward was eight years in prison, lionaires" and they have been
even though he pleaded that no so referred to in the press have
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personal profit was involved and
he sought only to help his farm.
tne same newspaper reported
on another collective farm chief
who, when faced with inability
to get pipes to bring water to
the farm, resorted to private
procurement in Moscow, f or
this he was sent to jail for three
years.
A western economics expert
here gave an example of what
constitutes illegal profiteering
in the boviet Union.
not been able to resist the temp
tation to build huge dachas
(country homes), furnish tpart
ments luxuriously and drive big
cars.
Some sample cases w. h 1 c h
have been reported in the Soviet
press :
The chief of a hosiery de
partment of a government store
in Armenia was sentenced to
death for embezzling 76,000
rubles ($83,000) worth of goods
and selling them Uirough a
If, for instance, you want to , large network of bigtime specu-
get rid of a suit or bicycle and lators. This case was made pub-
can sell mem tor as much r
more than you paid for them,
such profit would be permitted.
But if you buy up suits and bi
cycles from acquaintances and
sell them at a profit, you are a
private business m n a n d a
criminal.
Because a speculator the
common Soviet term for a pri
vate businessman often needs
the help of industrial or trading
officials in clandestine opera
tions, such officials frequently
get caught up in the dragnet
against eionomic criminals.
rive bxccutpd
In July of this year, for in
stance, in one 48-hour period
five trade officials in Leningrad
were reported executed in con
nection with the embezzlement
of 162,000 rubles ($180,000) and
It was announced four trade of
ficials in the Crimea were shot
for swindling 104,400 r. u b 1 e s
($216,000) from the state.
One of the ways in which eco-
lic April 4 by the newspaper
"Soviet Trade."
A so-called lipstick King who
clandestinely manufactured cos
metics in a Moscow suburb was
reported in March, 1962, to have
been shot. A Riga factory di
rector, chief engineer and two
bookkeepers, his accomplices,
went to prison.
fays With Life
A fruit store director in Sar
atov and h is accomplices ac
cording to an Oct. 30, 1962, req-
port in the newspaper Soviet
Trade wrote off one-third of
a 30-ton shipment of Mandarin
oranges as rotten. He then sold
them in various shops and
paid for it with his life.
On Feb. 14 this year the
newspaper Soviet Culture re
ported that three men were sen
tenced to death for profiteering
in the manufacture of girls' hair
ribbons. The amount involved
was 99,000 rubles ($110,000).
Five men were sentenced to
Italian Government'
Ideal To Help Solve
Crisis Proves Flop
By ERNEST SAKLER
United Press International
ROME (UPI) An idea
which the government hoped
would solve Italy's agricultural
crisis reduce wheat acreage
in favor of cattle raising has
proved a flop.
If things go on as they are
now, the ox and cow, far from
taking over the scene, may
come to be remembered in Ita
ly as strange, extinct animals.
The changeover from whuat
to cattle became official gov
ernment policy a few years ago
when it grew obvious that the
great postwar land reform had
turned thousands of poor labor
ers Into farmers but hadn't
solved the farm income prob
lem. Continued low prices for
farm products and using prices
of agricultural machinery ac
tually had widened the gap be
tween country people and work
ers in the cities.
The answer, the government
ruled, was a switch to the more
profitable business of cattle
raising. Measures were taken to
encourage the change over and
domestic producers were pro
tected from foreign competition
through me.'it import quotas
that brought indignant protests
from Argentina, Denmark and
other meat-exporting countries.
Bid Kails
It now appears obvious that
the bid to make Italy a
big meat producer has failed.
The Eurostampa news agency
reported recently that the num
ber of cattle in the fertile Po
valley was going down not
up by 1,000 head a day.
In 1961, the agency reported,
there were 9,813,000 head of
cattle In the area, including 4,
950,000 milk cows. The following
year, figures were down to 9,
300,000 head, including 4,700,000
milk cows. On some farms, cat
tle decreased 20 to 25 per cent
in a couple of years and wheat
acreage went up 6 to 7 per cent,
the exact opposite of what the
government had hoped for.
The reasons, Eurostampa said
was increased slaughtering due
to a number of factors. One was
recurrent droughts which this
year reduced fodder production
by 15 to 20 per cent. Another
was the low level of prices com
pared to growing costs. A third
factor was the exodus of man-
I power of the cities.
j Youths Leave
i The agency estimated that
' eight out of 10 young men born
in industrial Lombardy leave
the land. The province of Milan,
it said, needs at leaot 15,800 to
16,000 cow milkors, but enly
! 10.000 to 11,00 are available.
I The one solutioa wuhIH be wid-
;er mechanical milkiiH!, which
however poses technical a(( fi
nancial problems.
j The Mile newtapep II Gior
aa, which toeli a slMifer pesii-
' mistic view, provldoal addi
tional explmtMfi: ItaliM cat
tle farms are far tit smaU to
b profitable.
.What little stallMles there are
II Giorno said, shtw that the
, average Italian cattle farm has
nly 6.16 head. On flatlaids, the
proportion is 9.90 but in the
hills it goes down to 4.98 and
in mountain areas to 3.93.
An extensive study made In
France, II Giorno said, showed
the most profitable cattle farms
were those with 120 head. The
I minimum the French research-
1 ers even considered was 30
head, five times the Italian av-
1 cragc.
The farmer with only a few
head of cattle, even if he had
the know-how and time, could
not use high productivity tech
niques because they wouldn't
be profitable, II Giorno said.
The only partial remedies it
suggested were measures to
stop a further breaking un ot
estates ana encouragement for
owners of small herds to join
torces and set up associated
stables for their cattle.
death in Leningrad for illegally
manufacturing and selling razor
blades, buttons and ballpoint
pens, the newspaper Soviet Rus
sia reported on Feb. 21. Amount
involved: 200,000 rubles ($222,
000). In Sverdlovsk six persons
were sentenced to death for
buying and selling gold. Amount
involved was 324,00 rubles
($360,000), theTass News
Agency reported last March 27.
Finally, one of !he most bi
zarre cases from which two men
I paid with their lives last Feb..
1 15. In Sverdlovsk the men were
caught not puiting the required
amount of fat into meat balls
and selling the excess for their
own profit.
Commentators in western
countries have cited the execu
tions for economic crimes as
proof of the inability of commu
nism to wipe out private profit
motives in individuals.
From Communist China have
come accusations that Russia is
one "big den" of profiteers and
speculators.
Soviet authorities retort that
it takes many years to get rid
of the "lingering traces of capi
talism." In the last analysis there is,
so far as can be determined by
western experts, only one way
to become a millionaire legally
in the Soviet Union and that is
to collect huge royalties from a
successful play or novel. The
few legitimate millionaires in
this country there is no way
for a westerner to know how
many are believed to be writ
ers. The creative Intelligentsia,
including writers, musicians,
doctors, engineers and those
connected with the nation's
vast space program, are not
millionaires but command hand
some rewards and can afford
the luxuries.
The average factory worker
in Russia earns 80 rubles ($88)
a month, the average white col
lar worker 100 rubles ($110).
But a top scientist can pull
down as much as 1,500 rubles
($1,660) a month.
Under communism a Soviet
citizen's chief professed goal
if he's both loyal and legal is
to make the state rich and
prosperous, not himself.
When the state becomes af
fluent the good things in life
will trickle down to one and all,
according to Marxist theory.
And for those impatient souls
who apparently can't wait death
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